-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JWvPiTleco+HUMdT8L9z9oadlk6CLCgITaXroQBeHnV4DYi4OjajFftbH1TCWYRY RfVyiH7hKi+jo3eNACDvng== 0000950149-96-000462.txt : 19960625 0000950149-96-000462.hdr.sgml : 19960625 ACCESSION NUMBER: 0000950149-96-000462 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960429 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: SAN FRANCISCO CO CENTRAL INDEX KEY: 0000351238 STANDARD INDUSTRIAL CLASSIFICATION: 6022 IRS NUMBER: 943071255 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-10198 FILM NUMBER: 96553147 BUSINESS ADDRESS: STREET 1: 550 MONTGOMERY ST CITY: SAN FRANCISCO STATE: CA ZIP: 94111 BUSINESS PHONE: 4157817810 MAIL ADDRESS: STREET 1: PO BOX 2887 CITY: SAN FRANCISCO STATE: CA ZIP: 94126 FORMER COMPANY: FORMER CONFORMED NAME: BANK OF SAN FRANCISCO CO HOLDING CO DATE OF NAME CHANGE: 19920703 10-K/A 1 FORM 10-K/A FOR THE YEAR ENDED DECEMBER 31, 1995 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K/A /x/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1995 OR / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 0-10198 THE SAN FRANCISCO COMPANY - - -------------------------------------------------------------------------------- (Exact name of Registrant as specified in its charter) Delaware 94-3071255 - - ---------------------------------- ------------------------------------ (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 550 Montgomery Street, 10th Floor San Francisco, California 94111 - - ---------------------------------- ------------------------------------ (Address of principal executive office) (Zip Code) Registrant's telephone number, including area code: (415) 781-7810 Securities registered pursuant to Section 12(b) of the Act: Title of Class Name of Each Exchange on Which Registered - - ---------------------------------- ------------------------------------ Class A Common Stock, $0.01 Par Value None Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No --- --- Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K [ ]. The aggregate market value of the voting stock held by non-affiliates of the Registrant on March 17, 1996, was $2,018,092 computed by reference to the closing sales price of the Class A Common Stock as reported by Van Kasper & Company. The Registrant had 5,765,978 shares of Class A Common Stock outstanding on March 12, 1996. Documents Incorporated by Reference None 2 THE SAN FRANCISCO COMPANY AMENDMENT TO 1995 ANNUAL REPORT (FORM 10-K/A) TABLE OF CONTENT PART III
Page ---- Item 10. Directors and Executive Officers of the Registrant 1 Item 11. Executive Compensation 2 Item 12. Security Ownership of Certain Beneficial Owners and Management 9 Item 13. Certain Relationships and Related Transactions 9
3 ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT DIRECTORS The following is a list of directors of the Company, their occupation for the previous five years, age and the length of service as a director. Except as stated below, no director of the Company is a director of any company with a class of securities registered pursuant to section 12 of the Securities Exchange Act of 1934, as amended, or subject to the requirements of section 15(d) of such Act or of any company registered as an investment company under the Investment Company Act of 1940, as amended. Except for the Bank, none of the corporations or organizations discussed below is an affiliate of the Company. No director, nominee for director or executive officer of the Company or the Bank has any family relationship with any other director or executive officer of the Company or director or executive officer of the Bank. JAMES E. GILLERAN............................................................... Mr. Gilleran has served as the Chairman and Chief Executive Officer of the Company and the Bank since October 1994. He served as Superintendent of Banks for the state of California from 1989 to 1994. At December 31, 1995, Mr. Gilleran was 62 years of age and he had been serving as a director of the Company since 1994 and a director of the Bank since 1994. STEVEN R. CHAMPION.............................................................. Mr. Champion has served as President and Chief Financial Officer of San Francisco and East Asia Capital Management since January 1995. Mr. Champion was the Vice Chairman and Chief Financial Officer of the Company and the Bank, and Chief Investment Officer of the Bank, from August 1993 to October 1994. He served as Chief International Investment Officer of Bank of America from 1992 to 1993, President and Chief Executive Officer of the R.O.C. - Taiwan Fund from 1989 to 1992, and President and Chief Executive Officer of International Investment Trust Company in Taipei, Taiwan from 1987 to 1992. At December 31, 1995, Mr. Champion was 50 years of age and he had been serving as a director of the Company since 1993 and a director of the Bank since 1993. KENT D. PRICE................................................................... Mr. Price has served as Executive Vice President of IBM since September 1994. Mr. Price was the Chairman and Chief Executive Officer of the Company and the Bank from September 1993 to August 1994. He served as Executive Vice President, Private Banking and Corporate Development of Bank of America from 1991 to 1993; Chief Financial Officer and Executive Vice President of Bank of New England Corporation from 1990 to 1991; and Chief Operating Officer, Chief Financial Officer and Director of Barr Rosenberg Investment Management in 1990. At December 31, 1995, Mr. Price was 52 years of age and he had been serving as a director of the Company since 1993 and was a director of the Bank from 1993 to 1994. JACKSON SCHULTZ ................................................................ Mr. Schultz is a retired banker who, has provided consulting services to Wells Fargo Bank for more than five years through 1995. Prior to his existing consulting arrangement Mr. Schultz served as a Senior Vice President of Wells Fargo. At December 31, 1995, Mr. Schultz was 70 years of age and he had been serving as a director of the Company since 1996 and a director of the Bank since 1996. WILLARD D. SHARPE............................................................... Mr. Sharpe is a retired economist who, at the time of his retirement in 1987, served as a Vice President of Chase Manhattan Bank and as the Bank's chief economist for Asia. In addition, since 1993, Mr. Sharpe has been a Vice President of two privately held companies involved in efforts to explore prospects for investment in Vietnam. At December 31, 1995, Mr. Sharpe was 72 years of age and he had been serving as a director of the Company since 1993 and a director of the Bank since 1993. GORDON B. SWANSON .............................................................. Mr. Swanson has been Vice President of Real Estate with Levi Strauss & Company since 1993. He served as President of G. B. Swanson & Co., a real estate advisory firm from 1991 to 1992. Mr. Swanson has served as Director Emeritus of the San Francisco Chamber of Commerce since 1986 and as Managing Director of Jones Lang Wootton U.S.A., a commercial real estate investment company, from 1989 to 1991. At December 31, 1995, Mr. 1 4 Swanson was 51 years of age and he had been serving as a director of the Company since 1985 and a director of the Bank since 1985. NICHOLAS UNKOVIC................................................................ Mr. Unkovic has been a partner for the law firm of Graham & James, LLP for more than five years. At December 31, 1995, Mr. Unkovic was 44 years of age and he had been serving as a director of the Company since 1994. EXECUTIVE OFFICERS AND OTHER SIGNIFICANT OFFICERS Each executive officer is selected annually by the Board of Directors pursuant to provisions of the bylaws of the Company and the Bank. The following is a listing of executive officers of the Company and/or Bank, their occupation for the previous five years, age and the length of service as an officer. JAMES E. GILLERAN............................................................... (See position description of Mr. Gilleran's position with the Company and the Bank, and his background under the heading "DIRECTORS"). JOHN McGRATH.................................................................... Mr. McGrath has served as President, Chief Operating Officer and Chief Credit Officer of the Bank since December 1995. He served as President and Chief Executive Officer of Sacramento First National Bank from 1982 to 1995. At December 31, 1995, Mr. McGrath was 53 years of age and he had been servings as a director and officer of the Bank since 1995. ITEM 11 - EXECUTIVE COMPENSATION EXECUTIVE COMPENSATION Decisions on the compensation of the Company's and the Bank's executives are generally made by the four- member Personnel/Compensation Committee. The members of the Personnel/Compensation Committee are members of the Board of Directors of the Company. All decisions by the Personnel/Compensation Committee relating to the compensation of the Company's and the Bank's executive officers are reviewed by the Company's and the Bank's full Boards of Directors, except for decisions about awards under certain of the Company's stock- based compensation plans, which are made solely by the Committee in order for the grants or awards under such plans to satisfy Rule 16b-3 under the Securities Exchange Act of 1934, as amended. Set forth below is a report of the Personnel/Compensation Committee addressing the Company's compensation policies for 1995 as they affected the Chief Executive Officer of the Company and the Bank serving at the end of 1995, and the one other most highly-compensated officer of the Bank at the end of 1995, and two additional highly-compensated officers who would have qualified for disclosure if they had not terminated employment, (collectively, the "Named Executives") as December 31, 1995. The Named Executives compensation in 1995 is shown in the "Executive Compensation Tables" below. COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION DECISIONS The Company's Personnel/Compensation Committee, which during 1995 consisted of Mrs. Donna Miller Casey, Mr. Gilleran (Chairman and Chief Executive Officer of the Company and the Bank), Mr. Unkovic and Mr. Sharpe, makes decisions with respect to the compensation of executive officers. In 1996, Mr. Schultz filled Mrs. Casey's position as Chairman of the Personnel/Compensation Committee. BOARD OF DIRECTORS' FEES The Company and the Bank pay director fees to each non-employee Director for attendance at Board meetings and Committee meetings which are held monthly. The fee for attendance at a Board meeting is $750 per meeting. The Chairman of each committee receives $300 and each member receives $200 for each committee meeting attended. 2 5 COMPENSATION PHILOSOPHY The compensation policies adopted by the Personnel/Compensation Committee and approved by the Board of Directors of the Company and the Bank in 1992, and continued since then, were designed to provide competitive levels of compensation, reward improvements in corporate performance, recognize above-average individual achievements and initiative, and thereby assist the Bank in attracting and retaining qualified employees. The Personnel/Compensation Committee either approved or recommended to the Board of Directors payment amounts and award levels for all executives of the Bank including the Named Executives. With regard to compensation actions affecting Mr. Gilleran, Chairman and Chief Executive Officer of the Company and Bank, all of the non-employee members of the Board of Directors acted as the approving body. The Company and the Bank experienced significant financial losses from 1991 to 1994, and, in connection therewith, the Named Executives were required to devote a substantial and unusual amount of time and effort in dealing with non-performing assets, raising new capital, responding to regulatory concerns and implementing changes in operating systems and controls. Consequently, the use of traditional corporate performance measures such as earnings per share or increases in book value to determine executive compensation was not considered to be in the Company's best interests. Therefore, there was no direct relationship in 1994 or 1995 between executive compensation and the Company's financial performance, either as compared to the Company's prior performance or as compared to the banking companies with which the Company competes for executive talent. Instead, the 1994 and 1995 executive compensation programs of the Bank were designed to provide compensation which would allow the Bank to attract and retain talented and experienced executives necessary for management of the Bank's turnaround program. The focus of the executive compensation program was on base salary, although some effort was made to provide longer term incentives through the grant of stock options. None of the Named Executives received a cash bonus in 1994 or 1995. Going forward, in addition to the philosophies described above, the Committee will also be guided by the terms of the FDIC Order in setting executive compensation. The FDIC Order provides that, without the prior written approval of the FDIC, the Bank may not (a) pay a bonus to an executive officer, or (b) provide compensation to an executive officer at a rate exceeding his or her average rate of compensation (excluding bonuses, stock options and profit-sharing) during the 12 calendar months preceding the months in which the Bank first became undercapitalized. EXECUTIVE COMPENSATION TABLES SUMMARY OF 1993-1995 COMPENSATION. The following table sets forth the annual compensation, long-term compensation and other compensation paid to each of the Named Executives. Compensation is listed as of 3 6 December 31, 1995, 1994 and 1993. Messrs. Spaulding, Criss, Price, Freed, and Champion, have terminated their employment with the Bank and Company, all other positions listed on the table are positions held by the Named Executives as of December 31, 1995. SUMMARY COMPENSATION TABLE
================================================================================================================================= ANNUAL COMPENSATION LONG TERM COMPENSATION - - --------------------------------------------------------------------------------------------------------------------------------- AWARDS - - --------------------------------------------------------------------------------------------------------------------------------- OTHER ALL ANNUAL RESTRICTED OTHER COMPEN- STOCK COMPEN NAME AND PRINCIPAL SALARY BONUS SATION AWARD(S) OPTIONS/ -SATION POSITION YEAR ($) ($) ($) ($)(7) SARS(#) ($) (4) - - --------------------------------------------------------------------------------------------------------------------------------- (a) (b) (c) (d) (e) (f) (g) (i) - - --------------------------------------------------------------------------------------------------------------------------------- Chairman/CEO 1995 262,507 0 0 0 0 0 1994 51,681 0 7,936(1) 0 313,369(6) 0 James E. Gilleran 1993 0 0 0 0 0 0 - - --------------------------------------------------------------------------------------------------------------------------------- President/COO/CCO - 1995 0 0 11,308(1) 0 0 0 Bank 1994 0 0 0 0 0 0 John McGrath 1993 0 0 0 0 0 0 - - --------------------------------------------------------------------------------------------------------------------------------- EVP - Former 1995 142,339 0 0 0 0 29,327 1994 150,000 0 0 0 0 0 Stephen V. R. Spaulding 1993 25,096 0 17,692(1) 0 0 0 - - --------------------------------------------------------------------------------------------------------------------------------- EVP/CCO - Former 1995 48,217 0 0 0 0 0 1994 125,000 8,624 0 0 0 0 C. William Criss, Jr. 1993 125,000 63,097 3,000(2) 0 0 1,014 - - --------------------------------------------------------------------------------------------------------------------------------- Vice Chairman/CFO - 1995 0 0 0 0 0 0 Former 1994 184,708 0 0 0 125,348(5) 4,650 Steven R. Champion 1993 55,000 0 55,000(1) 0 0 - - --------------------------------------------------------------------------------------------------------------------------------- President/COO - Former 1995 0 0 0 0 0 0 1994 190,512 0 0 0 0 204,250 Rodney D. Freed 1993 178,077 0 4,180(3) 0 0 759 - - --------------------------------------------------------------------------------------------------------------------------------- Chairman/CEO - Former 1995 0 0 0 0 0 0 1994 128,333 0 0 0 62,674(5) 1,886 Kent D. Price 1993 55,000 0 31,026(1) 0 0 170 =================================================================================================================================
(1) "Other annual compensation" consists solely of consulting fees paid for consulting services prior to formal appointment into designated positions. (2) Consists solely of auto allowance expense of $500 per month. All auto allowances were eliminated as of July 1, 1993. (3) During the 1993 fiscal year Mr. Freed's "Other annual compensation" consisted primarily of allowances for an auto allowance at a rate of $500 per month. All auto allowances were eliminated as of July 1, 1993. Mr. Freed was also reimbursed for moving costs related to his relocation from Singapore. (4) "All other compensation" consists of group term life insurance coverage and severance expenses related to the termination of employment. (5) These options were granted pursuant to separation agreements described below. (6) These options were granted pursuant to Mr. Gilleran's employment described below. (7) The options granted are out-of-the-money with an exercise price of $5.68 per share. 4 7 EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL ARRANGEMENTS EMPLOYMENT AGREEMENT OF MR. GILLERAN. The Company and the Bank entered into an employment agreement with Mr. Gilleran dated October 1, 1994 which provided, among other things, for Mr. Gilleran to receive an annual salary of at least $250,000 per year, payable in accordance with the Bank's usual payment practices. Mr. Gilleran's annual base salary will be increased to $300,000 upon the conclusion of the Company's third consecutive profitable quarter, subject to regulatory approval. In addition, the employment agreement provides for an annual cash performance bonus of between 0% and 100% of base salary, and a special incentive one-time bonus of $150,000 at such time that the condition of the Company and Bank are deemed satisfactory. The employment contract expires on September 30, 1998. The agreement provides that the Board of Directors shall grant Mr. Gilleran options under the 1993 Executive Stock Option plan to acquire shares of the Company's Class A Common Stock equal to 5% of the fully-diluted shares of Common Stock, with additional options to be granted in the future as necessary to maintain the 5% interest. For purposes of determining the number of fully-diluted shares, Warrants would not be counted until they become exercisable. Effective October 1, 1994, options to acquire 313,369 shares of Common Stock were granted to Mr. Gilleran pursuant to his employment agreement. The exercise price of these options is $5.68 per share. Based on the capitalization of the Company as of March 31, 1996 and assuming the conversion of Series D Preferred Stock into Common Stock, Mr. Gilleran would receive additional options to purchase 862,970 shares of Common Stock. The options granted to Mr. Gilleran vest over a three-year period, with one-third vesting on the each anniversary of the employment agreement. The exercise price of the options to be granted would be $0.34 per share (the effective price of the Second Quarter 1995 Investment by Mr. Masagung), and the exercise price of subsequent anti-dilution options would be the then-current fair market value of the Common shares or the price per share for shares issued to others prior to a public offering. Assuming the conversion of the Series D Preferred Stock into Common Stock and the granting of other anti-dilution stock options under existing employment and separation agreements, as of March 31, 1996, Mr. Gilleran would hold an option to acquire a total of 1,176,339 shares of Common Stock. Under the employment agreement, Mr. Gilleran is indemnified by the Company and the Bank from any liability or expense arising as a result of actions taken by the Company or the Bank, or events relating to the business of the Company or the Bank, occurring prior to the execution of the employment agreement. Subject to certain limitations, Mr. Gilleran is also indemnified by the Company and the Bank from any liability or expense arising as a result of actions taken by the Company or the Bank, or events relating to the business of the Company or the Bank, occurring after the execution of the employment agreement, unless such liability or expense is due to the officer's bad faith or gross negligence. EMPLOYMENT AGREEMENT OF MR. MCGRATH. The Bank entered into an employment agreement with Mr. McGrath dated November 27, 1995 which provides, among other things, for Mr. McGrath to receive an annual salary of at least $170,000 per year, payable in accordance with the Bank's usual payment practices. In addition, the employment agreement provides for an annual cash performance bonus of between 0% and 50% of base salary. The employment contract expires on November 27, 1998. The agreement provides that the Board of Directors shall grant Mr. McGrath options under the 1993 Executive Stock Option plan to acquire shares of the Company's Common Stock equal to 1% of the fully-diluted shares of Class A Common Stock, with additional options to be granted in the future as necessary to maintain the 1% interest. For purposes of determining the number of fully-diluted shares, Warrants would not be counted until they become exercisable. The initial grant of options to acquire 63,455 shares of Common Stock are to be granted effective December 1, 1995. Based on the capitalization of the Company as of March 31, 1996 and assuming the conversion of the Series D Preferred Stock into Common Stock, Mr. McGrath will receive additional options to purchase 171,813 shares of Common Stock. The options to be granted to Mr. McGrath will vest over a three-year period, with one-third vesting on each anniversary of the employment agreement. The exercise price of the options to be granted will be $0.34 per share (the effective price of the Second Quarter 1995 Investment by Mr. Masagung), and the exercise price of subsequent anti-dilution options would be the then-current fair market value of the Common shares or the price per share for shares issued to others prior to a public offering. Assuming the conversion of the Series D Preferred Stock into Class A Common Stock and the granting of other stock options under existing employment and separation agreements, as of March 31, 1996, Mr. McGrath would hold an option to acquire a total of 235,268 shares of Common Stock. 5 8 Under the Employment Agreement, Mr. McGrath is indemnified by the Bank from any liability or expense arising as a result of actions taken by the Bank or the Company, or events relating to the business of the Bank or the Company, occurring prior to the execution of the Employment Agreement. Subject to certain limitations, Mr. McGrath is also indemnified by the Bank from any liability or expense arising as a result of actions taken by the Bank or the Company, or events relating to the business of the Bank or the Company, occurring after the execution of the Employment Agreements, unless such liability or expense is due to the officer's bad faith or gross negligence. SEPARATION AGREEMENTS WITH CERTAIN FORMER EXECUTIVE OFFICERS OF THE BANK. During 1994 certain executive officers resigned from their employment with the Bank. Effective September 16, 1994, Mr. Price resigned as Chairman and Chief Executive Officer of the Bank and the Company. Effective November 1, 1994, Mr. Champion resigned as Vice Chairman and Chief Financial Officer of the Bank and the Company. Separation agreements Messrs. Price and Champion provide for the termination of prior employment agreements. In consideration for the termination of such employment agreements, the Board of Director's granted each of Messrs. Price and Champion options under the 1993 Executive Stock Option Plan to acquire shares of the Company's Common Stock equal to 1% and 2%, respectively of the fully-diluted shares of Common Stock, with additional options to be granted in the future as necessary to maintain the 1% and 2% interest, respectively. For purposes of determining the number of fully-diluted shares, Warrants would not be counted until they become exercisable. As of December 31, 1995, the total options granted to Messrs, Price and Champion are 62,674 and 125,348, respectively. The exercise price of these options is $5.68 per share. Based on the capitalization of the Company as of March 31, 1996 and assuming the conversion of Series D Preferred Stock, each of Mr. Price and Mr. Champion would receive additional options to purchase 172,594 and 345,187 shares, respectively of the Company. The options granted to Messrs. Price and Champion vest immediately. The exercise price of the options to be granted is $0.34 per Common Share (the effective price of the Second Quarter 1995 Investment by Mr. Masagung), and the exercise price of subsequent anti-dilution options would be the then-current fair market value of the Common shares or the price per share for shares issued to others prior to a public offering. Assuming the conversion of the Series D Preferred Stock into Common Stock and the granting of other anti-dilution stock options under existing separation agreements, as of March 31, 1996, Messrs. Price and Champion would hold an option to acquire a total of 235,268 and 470,535 shares of Common Stock. DESCRIPTION OF BENEFIT PLANS 401(K) PROFIT SHARING PLAN. In 1986 the Company established a 401(k) Profit Sharing Plan (the "Plan") which is intended to qualify under Sections 401(a) and 401(k) of the Internal Revenue Code. The Plan permits each participating employee with six months of service to contribute to the Plan through payroll deductions ("salary deferral contributions") of from 2% to 16% of the participant's eligible compensation from the Company and its subsidiaries, thereby deferring taxes on all or a portion of these amounts. Under the Plan, the Company currently will match a participant's tax deferred contributions by an amount equal to 100% of such contribution for each year, except that the matching contribution by the Company for the participant may not exceed 2% of the participant's eligible compensation for that year. The Company may also make additional contributions to the Plan in such amounts as may be determined by the Company's Board of Directors. Any such additional contributions are allocated among Plan participants based upon their compensation levels. The Company's contribution vests 100% after a participant has completed five years of participation in the Plan, with vesting of 20% per year for each of years one through five. In addition, the Company's contribution vests upon a participant's retirement at age 65 or upon a participant's death or permanent disability. Participants are entitled to receive their salary deferral contributions and vested benefits under the Plan upon termination of employment, retirement, death or disability. Participants have the right to allocate their salary deferral contributions among four different investment funds. 1993 EXECUTIVE STOCK OPTION PLAN. Awards under the Executive Plan will be discretionary and will be based on the performance of the Company, the officer's job performance, the importance of his or her position, and his or her contribution to the organization's goals for the award period (which goals in the short term are likely to focus more on capital raising, compliance with regulatory requirements, and improvements in financial performance than on financial performance comparative to other bank holding companies). No grants were made in 1995. 6 9 The following table shows outstanding grants made as of December 31, 1995 for the individuals and groups set forth below under the Executive Plan:
OPTIONS GRANTED UNDER THE 1993 EXECUTIVE STOCK OPTION PLAN -------------------------------- NUMBER OF SHARES OF CLASS A COMMON STOCK UNDERLYING NAME AND POSITION OPTIONS GRANTED THROUGH ----------------- ----------------------- 1995 (4)(5) ----------- James E. Gilleran (1) 313,369 Director of the Company and the Bank John McGrath(2) -- Director of the Bank Kent D. Price(3) 62,674 Director of the Company and the Bank Stephen R. Champion(3) 125,348 Director of the Company and the Bank Executive Officer Group 501,391 Non-Executive Officer Director Group 0 Non-Executive Officer Employee Group 0
- - --------------------- (1) The options granted effective October 1, 1994. See Employment Agreement - Mr. Gilleran above. (2) Options will be granted with an effective date of December 1, 1995. See Employment Agreement - Mr. McGrath above. (3) The options were granted in 1994 and are 100% vested. (4) The table does not include options to be granted Mr. McGrath nor the additional options required to be granted pursuant to the anti-dilution provisions of the employment and/or separation agreements described above which as of March 31, 1996 totaled 1,616,180. All options included are out-or-the-money with an exercise price of $5.68 per share. (5) The table does not include additional anti-dilution options to be granted related to the options to be granted to the Company's majority shareholder pursuant to the February 26, 1996 agreement between the Company and the majority shareholder. 7 10 1993 NON-EMPLOYEE OPTION PLAN. No grants of options were made during 1995 under the Directors Plan. The following table shows grants outstanding as of December 31, 1995 for the individuals and groups set forth below under the Directors Plan:
OPTIONS GRANTED UNDER THE 1993 NONEMPLOYEE DIRECTORS STOCK PLAN THROUGH DECEMBER 31, 1995 ------------------------- NUMBER OF SHARES OF CLASS A COMMON STOCK UNDERLYING OPTIONS GRANTED THROUGH NAME AND POSITION DECEMBER 1995(1) ----------------- ---------------- Donna Miller Casey 1,250 Former Director of the Company and Bank Nicholas Unkovic (2) -- Director of the Company David R. Holbrooke 1,250 Former Director of the Company and Bank Willard D. Sharpe (2) 2,500 Director of the Company and Bank Kent D. Price (3) -- Director of the Company Steven R. Champion (3) -- Director of the Company and Bank Gordon B. Swanson(2) 2,500 Director of the Company and Bank Executive Officer Group 0 Non-Executive Officer Director Group 7,500 Non-Executive Officer Employee Group 0
- - --------------------- (1) The options were granted effective April 1, 1994 and are currently out-of-the-money. The options vest over a two-year period, with 50% vesting on the expiration of one full year of service as a Nonemployee Director following the date of the grant of such stock option, and the remaining 50% vesting on the expiration of two full years of service as a Nonemployee Director following the date of the grant of such option. (2) Options to purchase 3,377 shares, effective April 1, 1995, are to be granted under the Non-employee director plan. Effective April 1, 1996, additional options of 7,147 will be granted. (3) Messrs Price and Champion are not eligible to participate under this plan. 8 11 ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following sets forth information regarding the beneficial ownership of the Class A Common Stock by Mr. Putra Masagung, Mr. Latief and by all other shareholders as December 31, 1995. The address of Mr. Masagung is 55 MH Thamrin, Jakarta, Indonesia. The address of Mr. Latief is Tamara Center, 20th Floor, Jl Jend. Sudirman Kav.24, Jakarta, Indonesia. The information does not assume the conversion of any of the Company's preferred stock.
Directors and Mr. Putra Executive All Masagung Mr. Latief Officers Others -------- ---------- ------------- ------ Class A Common Shares 5,076,126 525,000 2,938 160,914 Percentage ownership 88.0% 9.1% 0.0% 2.9%
The following sets forth information regarding the beneficial ownership of the Series D Preferred Stock by Mr. Putra Masagung as December 31, 1995.
Mr. Putra All Masagung Mr. Latief Others -------- ---------- ------ Series D Preferred Shares 215,000 - - Percentage ownership 100.0% - -
The following sets forth information regarding the beneficial ownership of the Series B Preferred Stock as December 31, 1995.
Number of Shares Percentage of Beneficially of Owned Class ---------------- ---------- Gordon Swanson 7,200 44.2% John A. Beal 2,143 13.2 John Volckman 3,500 21.5 All directors and current executive officers as a group 7,200 44.2
The address of Mr. Beal is 101 Rock Cove Court, Folsom, California 95630 and Mr. Volckman is 127 Alta Vista, Atherton, California 94027, and the address of Mr. Swanson for the purpose of his ownership of the Series B Preferred stock is the principal executive office of the Company. ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS CERTAIN TRANSACTIONS The Bank has had and expects to continue to have banking transactions with many of the directors and executive officers of the Company and the Bank (and their associates). Loans by the Bank to any director or executive officer of the Company or any of its subsidiaries (or any associate of such persons) have been made in the ordinary course of business on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other persons, and, except as set forth in the following 9 12 paragraph, have not involved more than the normal risk of collection or presented other unfavorable features. Loans by the Bank to any director, executive officer or principal stockholder of the Company or any of its subsidiaries (as such persons are defined by regulation) are subject to limitations under California and federal law. Among other things, a loan by the Bank to a director, executive officer, or principal stockholder of the Company or any of its subsidiaries must be on non-preferential terms and, if all loans to a given person exceed $25,000, such loans must be approved in advance by the Bank's Board of Directors. The aggregate balance of such loans at December 31, 1995 was zero. The Company and the Bank have engaged the law firm of Graham & James, LLP to perform the function of General Counsel. Total fees paid to Graham & James, LLP in 1995 for legal services rendered were $38,600. Mr. Unkovic, a director of the Company, is a partner with Graham & James, LLP. The Company entered into an indemnification agreement with Mr. Unkovic and Graham & James, LLP dated December 16, 1994. The indemnification agreement provides that Mr. Unkovic is indemnified from and against any and all liabilities or expenses arising with respect to any action or inaction taken in the course of his duties as a director of the Company, and that Graham & James, LLP is indemnified against any and all liabilities and expenses against Graham & James, LLP arising by reason of Mr. Unkovic serving as a director of the Company. The indemnification does not include legal services Mr. Unkovic or Graham & James, LLP may render to the Company or its subsidiaries, affiliates, directors, officers or stockholders. Under their employment agreements, Messrs. Gilleran and McGrath would be indemnified by the Company and/or the Bank from any liability or expense arising as a result of actions taken by the Company or the Bank, or events relating to the business of the Company or the Bank, occurring prior to the execution of the employment agreements. See "Employment Contracts and Termination of Employment and Change-in-Control Arrangements" for additional information on indemnification agreements. The Bank entered into an indemnification agreement with Mr. Thayer Prentice, former Chairman of the Board, President and Chief Executive Officer of the Company and the Bank. The Bank obtained an irrevocable standby letter of credit in the amount of $300,000 issued by Transpacific National Bank on December 30, 1995 on behalf of Thayer T. Prentice as collateral for the Bank's obligations under its indemnification agreement. The indemnification agreement expires August 31, 1997. 10 13 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. THE SAN FRANCISCO COMPANY /s/ James E. Gilleran Chairman of the Board and April 29, 1996 - - ----------------------------- Chief Executive Officer ------------------ James E. Gilleran (Principal Executive Officer) /s/ Keary L. Colwell Senior Vice President April 29, 1996 - - ----------------------------- (Principal Accounting Officer) ------------------ Keary L. Colwell
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