Vineyard National Bancorp Comments on Board Candidates Proposed by Messrs. Morales and Salmanson
SOURCE:
Vineyard National Bancorp
2008-04-02 04:30:00
Vineyard National Bancorp Comments on Board Candidates Proposed by Messrs. Morales and Salmanson
CORONA, CA–( EMWNews – April 1, 2008) – The Board of Directors of Vineyard National
Bancorp (the “Company”) (
N.A. (“Vineyard”) and other subsidiaries, commented on the candidates that
have been proposed to take over the Company’s Board of Directors (“Board”).
The candidates were announced by the Company’s former Chief Executive
Officer (“CEO”), Norman Morales, and a stock broker, Jon Salmanson. The
pair is seeking shareholders’ consent for a change in the Company’s Bylaws
so they may submit these candidates to a shareholder vote.
The Company’s Board noted that Messrs. Morales and Salmanson may have
inadequately disclosed important information about their candidates.
Although the Company is not aware of all important undisclosed information,
it is aware of the following:
-- Dev Ogle: The public statements by Messrs. Morales and Salmanson failed to disclose that, while Mr. Morales was CEO, Vineyard paid fees of $257,363 to The Ken Blanchard Companies for Mr. Ogle's services, which included acting as Mr. Morales' "executive coach." -- Glen Terry: Mr. Terry was not the President, CEO, or a director of SierraWest Bank, as indicated in the public statements by Messrs. Morales and Salmanson. The public statements also failed to disclose that, at the time of Mr. Morales' termination as CEO of the Company, he was preparing to hire Mr. Terry to lead a large expansion of Vineyard's Northern California operation. At the time that Messrs. Morales and Salmanson announced their proposed candidates, Mr. Terry was employed at Umpqua Bank -- a competitor of Vineyard in Northern California. -- David Hardin: The public statements did not disclose that Mr. Morales and his wife worked with Mr. Hardin at Hawthorne Savings. Mr. Hardin's limited board experience was marked by a weak commitment to shareholders: on March 16, 2008, he resigned after 11 months from the Board of Pacific Premier Bancorp, citing a desire to "help a friend who has a need I cannot turn my back on..." -- Lester Strong: The public statements did not disclose that the Company's Nominating Committee previously considered Mr. Strong as a Board candidate on the recommendation of George Crosby, a stock broker in Santa Maria, Calif. Although Mr. Crosby has been involved in soliciting consents with Messrs. Morales and Salmanson, he has not been disclosed as a "participant" in the Consent Solicitation filings with the U.S. Securities and Exchange Commission. -- Cynthia Harriss: The public statements did not disclose that, while Mr. Morales was CEO, he was negotiating the potential hire of Ms. Harriss to manage a private banking group in Southern California for Vineyard. She has no prior banking experience.
“The potentially inadequate disclosures are a red flag warning to those who
care about good corporate governance,” said James LeSieur, Chairman and
Interim CEO. “The campaign by Messrs. Morales and Salmanson is not about
shareholder rights — it is a transparent attempt by a former CEO to return
to power with the help of his friends and associates.”
The Company, on Jan. 23, 2008, accepted the resignation of Mr. Morales from
the Board and his employment as President and Chief Executive Officer was
terminated. The Board agreed to make severance payments to Mr. Morales of
more than $1 million.
“The proposed Bylaw change, by allowing prospective Board candidates to
avoid a careful review process before a shareholder vote, would open the
door to a former executive’s entrenchment behind a new Board with weak
qualifications or independence,” Mr. LeSieur added. “In fact, most of the
proposed candidates have personal or business ties to Mr. Morales and lack
the substantive background, ownership stakes or knowledge that one tends to
find among independent, objective and effective stewards for the
shareholders of a publicly traded financial institution. In contrast, five
of the six current Board members are independent of management and together
own approximately 7 percent of the Company’s stock.
“We believe the proposed Bylaw amendments would primarily serve the
personal interests of Messrs. Morales and Salmanson rather than
shareholders generally. The narrow rights in the proposed Bylaw amendments
may be triggered only in the rare occasion that a director, President or
CEO leaves office within a narrow period, as did Mr. Morales,” said Mr.
LeSieur. “The financial issues now facing the Company began well before Mr.
Morales resigned. Before he resigned, the Board considered and rejected his
proposed strategies, deciding instead to emphasize more prudent strategies
in response to the changes in the economic climate and the Company’s
operating environment.”
If you have any questions about giving your consent revocation or require
assistance, please call:
D.F. KING & CO. INC. 48 Wall Street New York, New York 10005 Shareholders Call Toll-Free at: 800-967-7921 Banks and Brokers Call Collect at: 212-269-5550
Important Additional Information
The Company filed a Definitive Consent Revocation Statement on Schedule 14A
with the SEC on March 13, 2008 (the “Definitive Consent Revocation
Statement”) relating to the solicitation of consent revocations from
shareholders of the Company, and in the future will file a proxy statement
relating to the election of directors of the Company (the “Proxy
Statement”). Investors and security holders are advised to read the
Definitive Consent Revocation Statement, the Proxy Statement and other
materials filed by the Company related to the Definitive Consent Revocation
Statement and Proxy Statement solicitations, when available, because they
contain important information. Investors and security holders may obtain a
free copy of the Definitive Consent Revocation Statement, the Proxy
Statement and all other related materials filed by the Company with the SEC
(when they are filed and become available) free of charge at the SEC’s
website at www.sec.gov or by contacting D.F. King & Co., Inc., 48 Wall
Street, New York, New York 10005, 1-800-967-7921. The Company also will
provide a copy of these materials without charge on its website at
The Company, its Board and one or more of its executive officers may be
deemed to be participants in the Definitive Consent Revocation Statement
and Proxy Statement solicitations. Information regarding the names of the
Company’s Board and executive officers and their respective interests in
the Company is set forth in the Definitive Consent Revocation Statement.
About Vineyard National Bancorp
The Company is a $2.5 billion financial holding company headquartered in
Corona and the parent company of Vineyard, 1031 Exchange Advantage Inc.,
and 1031 Funding & Reverse Corp (collectively, “the exchange companies”).
Vineyard, also headquartered in Corona, operates through 16 full-service
banking centers and three regional financial centers in the counties of Los
Angeles, Marin, Orange, Riverside, San Bernardino, San Diego, Santa Clara
and Ventura, CA. The exchange companies are headquartered in Encinitas, CA.
The Company’s common stock is traded on the NASDAQ Global Market System
under the symbol “VNBC.” For additional information on the Company visit
www.vnbcstock.com or for additional information on Vineyard and to access
internet banking, please visit www.vineyardbank.com. For additional
information on the exchange companies visit www.1031exchangeadvantage.com.
Forward-Looking Statements
Certain matters discussed herein may constitute forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995
and the Federal securities laws. Although the Company believes that the
expectations reflected in such forward-looking statements are based upon
reasonable assumptions it can give no assurance that its expectations will
be achieved. Forward-looking information is subject to certain risks,
trends and uncertainties that could cause actual results to differ
materially from those projected. Many of these factors are beyond the
Company’s ability to control or predict. Important factors that may cause
actual results to differ materially and could impact the Company and the
statements contained herein can be found in the Company’s filings with the
SEC including quarterly reports on Form 10-Q, current reports on Form 8-K,
annual reports on Form 10-K, and the Consent Revocation Statement on
Schedule 14A. For forward-looking statements herein, the Company claims the
protection of the safe harbor for forward-looking statements contained in
the Private Securities Litigation Reform Act of 1995 and other protections
under the Federal securities laws. The Company assumes no obligation to
update or supplement any forward-looking statements whether as a result of
new information, future events or otherwise.