As Joel Kovner zipped along the freeway, relinquishing the helm of his Southern California business bank was the last thing on his mind.
But the chief executive of Santa Monica's Professional Bancorp got a rude awakening three weeks ago when he answered his car phone and was asked by a lawyer representing a group of shareholders, "Would you like to discuss an exit strategy?"
Dr. Kovner was caught off guard - the bank was coming off its most successful year. He now finds himself locked in a proxy battle, just a week away from Professional's June 19 annual meeting.
Seven dissidents, who together hold nearly 12% of Professional Bancorp's stock are trying to gain control of the unique bank's board of directors and oust Dr. Kovner and others.
Despite several securities filings detailing their aims, Dr. Kovner said the group's motives are somewhat difficult to ascertain. Representatives of the dissidents did not return phone calls seeking comment.
"They intend to fire me, fire the entire board, fire everybody," he said. "The thing is, they have yet to release their proxy material and their allegations are totally groundless."
Dr. Kovner said he could only speculate about motives, but selling the bank was likely to be one.
"Maybe they think the bank is underpriced and they're trying to force a sale," he said. "I'm not really sure what their motivation is."
The $320 million-asset bank had net earnings of more than $23 million in 1995, up from $19 million the year before. Its clients primarily are doctors and small medical service operations.
Dr. Kovner said he became aware of details of the shareholder group's dissatisfaction after one of the dissidents filed a suit against the board of directors late last month.
Dr. Kovner said he knew nothing about the dissident group until May 21, when he received the call on his car phone from James Cummins, a partner with Brown, Cummins & Brown Co., Cincinnati.
Friday, Professional Bancorp's board of directors issued a statement that said the directors believe the "actions of the dissident shareholders are based on false statements concerning the company's operations that have been made by a group of disgruntled former employees who left the company without warning several months ago to start a competing business and a former director who was asked to resign."
The board statement said the dissident shareholders failed to appear at two scheduled meetings between them and the board.
In its securities filing the group expressed a desire to revamp the bank's board of directors and remove one or more of its current executive officers, but did not say why.
The filing stated that the group intends to solicit proxies from the shareholders for the purpose of electing a full slate of director candidates selected by the group, which will constitute a majority of the board of directors. It would then urge the new board to consider replacing "one or more of the current executive officers."
Since the May 10 filing, another investor, Dr. Ray T. Oyakawa, Los Angeles, has joined the dissident group, brings its percentage of stock held to nearly 12%.
It's likely the dissident group will make another SEC filing within the next week, listing its board candidates.
