<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
CAPITAL CORP OF THE WEST
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
NA
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement):
Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(I)(1) or 14a-6(j)(2).
/ / $500 per each Party to the controversy pursuant to Exchange Act Rule
14a-6(I)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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:
-----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
/ / Set forth the amount on which the filing fee is calculated and state how it
was determined:
/ / 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:
-----------------------------------------------------------------------
(3) Filing Party:
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(4) Date Filed:
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<PAGE>
[LOGO]
CAPITAL CORP OF THE WEST
550 WEST MAIN STREET
MERCED, CA 95340
APRIL 10, 1998
Dear Shareholder:
You are cordially invited to attend the annual meeting of shareholders of
Capital Corp of the West (the "Company") to consider and vote upon (1) a
proposal to elect three directors; (2) such other business as may properly come
before the meeting.
The meeting will take place at 7:00 p.m. local time on Tuesday, May 12,
1998, at the Central Presbyterian Church's Hoffmeister Center, 1920 Canal Street
(20th & Canal), Merced, California.
Enclosed are the Secretary's Notice of this meeting, a Proxy Card, a Proxy
Statement describing the proposals, and a return envelope. Also enclosed is a
copy of the Company's 1997 Annual Report to shareholders.
We encourage you to attend this meeting. Whether or not you are able to
attend, please complete, date, sign, and return promptly the enclosed Proxy Card
so that your shares will be represented at the meeting. I look forward to seeing
you on May 12th.
Very truly yours,
[LOGO]
Thomas T. Hawker
PRESIDENT AND CHIEF EXECUTIVE OFFICER
<PAGE>
CAPITAL CORP OF THE WEST
APRIL 10, 1998
MERCED, CALIFORNIA 95341
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
---------------------
The Annual Meeting of the Shareholders of Capital Corp of the West ("Capital
Corp") will be held on Tuesday, May 12, 1998, at 7:00 p.m. local time at the
Central Presbyterian Church's Hoffmeister Center (20th & Canal), 1920 Canal
Street, Merced, California. The meeting will be held for the following purposes:
1. To elect three directors;
2. To act upon such other matters as may properly come before such meeting
or any adjournment thereof.
Holders of common stock of Capital Corp of record at the close of business
on March 26, 1998, are entitled to notice and to vote at the meeting. The three
candidates for directors who receive the highest number of votes will be
elected.
YOUR VOTE IS IMPORTANT. Please sign and date the enclosed proxy card and
return it promptly in the envelope provided, whether or not you plan to attend
the meeting. This Proxy Statement is being distributed by, and the enclosed
proxy is solicited on behalf of the Board of Directors of Capital Corp. The
Board of Directors recommends a vote FOR the election of the nominees for
director.
By Order of the Board of Directors
[LOGO]
Sheri Comstock
CORPORATE SECRETARY
<PAGE>
CAPITAL CORP OF THE WEST
550 WEST MAIN STREET
MERCED, CA 95340
(209) 725-2269
------------------------
THE ANNUAL MEETING OF SHAREHOLDERS OF
CAPITAL CORP
------------------------
INFORMATION CONCERNING PROXY
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of Capital Corp of the West ("Capital Corp" or the "Company")
of proxies to be voted at the Annual Meeting of Shareholders of Capital Corp
(the "Meeting") and any adjournments or postponements thereof. At the Meeting,
the shareholders of Capital Corp will be asked to (1) elect three directors; and
(2) act upon such other matters as may properly come before such meeting or any
adjournment thereof.
This Proxy Statement and the accompanying form of proxy are being mailed to
shareholders on or about April 10, 1998.
VOTING AND PROXIES
DATE, TIME AND PLACE OF MEETING
The Meeting will be held on May 12, 1998, at 7:00 p.m. at the Central
Presbyterian Church's Hoffmeister Center, 1920 Canal Street (20th & Canal),
Merced, California.
RECORD DATE AND VOTING RIGHTS
Only holders of record of Capital Corp common stock at the close of business
on March 26, 1998 (the "Record Date") are entitled to notice of and to vote at
the Meeting. At the Record Date, there were approximately 2,800 shareholders of
record and 4,381,975 shares of Capital Corp common stock outstanding and
entitled to vote. Directors and executive officers of Capital Corp and their
affiliates owned beneficially as of the Record Date an aggregate of 379,415
shares of Capital Corp common stock (including shares subject to vested
options), or approximately 8.2% of the outstanding Capital Corp common stock.
Each shareholder is entitled to one vote for each share of common stock he
or she owns. The three nominees receiving the greatest number of votes will be
elected for a three-year term. Broker non-votes and abstentions will not be
counted, except for quorum purposes, and will have no effect on the election of
directors.
VOTING BY PROXY; REVOCABILITY OF PROXIES
Shareholders may use the enclosed proxy card if they are unable to attend
the Meeting in person or wish to have their shares voted by proxy even if they
attend the Meeting. All proxies that are properly executed and returned, unless
revoked, will be voted at the Meeting in accordance with the instructions
indicated thereon or, if no direction is indicated, for the election of
management's nominees as directors. The execution of a proxy will not affect the
right of a shareholder to attend the Meeting and vote in person. A person who
has given a proxy may revoke it any time before it is exercised at the Meeting
by filing with the Secretary of the Company a written notice of revocation or a
proxy bearing a later date or by
1
<PAGE>
attendance at the Meeting and voting in person. Attendance at the Meeting will
not, by itself, revoke a proxy.
ADJOURNMENTS
The Meeting may be adjourned, even if a quorum is not present, by the vote
of the holders of a majority of the shares represented at the Meeting in person
or by proxy. In the absence of a quorum at the Meeting, no other business may be
transacted at the Meeting.
Notice of the adjournment of the Meeting need not be given if the time and
place thereof are announced at the Meeting, provided that if the adjournment is
for more than 45 days, or if after the adjournment a new record date is fixed
for the adjourned Meeting, a notice of the adjourned Meeting shall be given to
each shareholder of record entitled to vote at the Meeting. At an adjourned
Meeting, any business may be transacted which might have been transacted at the
original Meeting.
SOLICITATION OF PROXIES
The proxy relating to the Meeting is being solicited by the Board of
Directors of Capital Corp. Capital Corp will pay the cost of printing and
distributing this Proxy Statement. Copies of solicitation material will be
furnished to brokerage houses, fiduciaries and custodians holding in their names
shares of Capital Corp common stock beneficially owned by others to forward to
such beneficial owners. Capital Corp may reimburse such persons representing
beneficial owners of their respective shares for their expenses in forwarding
solicitation material to such beneficial owners. Solicitation of proxies by mail
may be supplemented by telephone, telegram or personal solicitation by
directors, officers or other regular employees of Capital Corp, who will not be
additionally compensated therefor.
PROPOSAL ONE: ELECTION OF DIRECTORS
The Bylaws of Capital Corp provide that the number of directors of Capital
Corp may be no less than six and no more than twelve. The exact number of
directors within this range may be changed by action of the Board of Directors
or the shareholders. The number of directors is currently fixed at ten.
NOMINEES FOR DIRECTOR
The Board of Directors is classified into three classes with staggered
three-year terms. In 1996, Class I Directors were elected for an initial
one-year term; Class II Directors were elected for an initial two-year term; and
Class III Directors were elected for an initial three-year term. The three
persons named below will be nominated for election as Class II Directors to
serve until the Annual Meeting in the year 2001 and until their successors are
duly elected and qualified. The three candidates receiving the greatest number
of votes will be elected for respective three-year terms. If any nominee should
become unable or unwilling to serve as a director, the proxies will be voted for
such substitute nominees as shall be designated by the Board of Directors. The
Board presently has no knowledge that any of the nominees will be unable or
unwilling to serve.
Jack F. Cauwels
John D. Fawcett
Thomas T. Hawker
2
<PAGE>
The following table provides information with respect to each person
nominated and recommended to be elected by the current Board of Directors of
Capital Corp, as well as existing directors of Capital Corp whose terms do not
expire at the time of the Meeting. Reference is made to the section entitled
"Security Ownership of Certain Beneficial Owners and Management" for information
pertaining to stock ownership of the nominees.
<TABLE>
<CAPTION>
NAME/CLASS AGE DIRECTOR SINCE BUSINESS EXPERIENCE DURING PAST FIVE YEARS
- -------------------------------- --- --------------- ----------------------------------------------------------
<S> <C> <C> <C>
Lloyd H. Ahlem, I............... 68 1995 Psychologist
Dorothy L. Bizzini, I........... 63 1992 Owner, Bizzini Real Estate, Co-owner Atwater Veterinary
Clinic
Jerry E. Callister, I........... 55 1991(1) Partner, Callister & Hendricks, Inc., a law firm, and
Chairman and Secretary of Pacific Color Nurseries, a
wholesale nursery
Jack F. Cauwels, II............. 64 1977 Consultant, Interwest Group
John D. Fawcett, II............. 49 1995 President, Fawcett Farms, Inc.
Thomas T. Hawker, II............ 55 1991 President/CEO, Capital Corp and County Bank
Robert E. Holl, III............. 56 1977 Owner, Bob Holl Sheet Metal, an air conditioning
contractor
Bertyl W. Johnson, III.......... 66 1977 Tree crop farmer and nut processor
Tapan Munroe, III............... 62 1996 Chief Economist, Pacific Gas & Electric Company
James W. Tolladay, III.......... 66 1991 President, Tolladay, Fremming & Parson, a civil
engineering consulting firm
</TABLE>
- ------------------------
(1) Previously served on Board of Directors from 1977 to 1985.
No family relationships exist among any of the directors or executive
officers of the Company.
No director or person nominated or chosen by the Board of Directors to
become a director of the Company is a director of any other company with a class
of securities registered pursuant to Section 12 of the Securities and 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.
RECOMMENDATION OF MANAGEMENT
THE BOARD OF DIRECTORS INTENDS TO VOTE ALL PROXIES HELD BY IT IN FAVOR OF
ELECTION OF EACH OF THE NOMINEES. YOU ARE URGED TO VOTE FOR PROPOSAL 1: TO ELECT
THE THREE NOMINEES SET FORTH HEREIN TO SERVE UNTIL THE NEXT ANNUAL MEETING OF
SHAREHOLDERS AND UNTIL THEIR RESPECTIVE SUCCESSORS SHALL BE ELECTED AND
QUALIFIED: JACK F. CAUWELS, JOHN D. FAWCETT, THOMAS T. HAWKER. IF NO
INSTRUCTIONS IS GIVEN THE BOARD OF DIRECTORS INTENDS TO VOTE FOR EACH NOMINEE
LISTED.
COMMITTEES OF THE BOARD OF DIRECTORS; DIRECTOR ATTENDANCE
For 1997, the Capital Corp Board of Directors held 12 regularly scheduled
and 4 special meetings. Each director attended at least 75% of the aggregate of
the total number of meetings of the Board of Directors and the total number of
meetings of committees of the Board on which they served (during the period for
which they served).
3
<PAGE>
The Executive Committee functions as the Compensation Committee. Ahlem
(Chairman), Callister, Fawcett, and Johnson are members of the Executive
Committee, and Hawker is a non-voting member as it relates to compensation
matters. During 1997, the Executive Committee held a total of 11 meetings. The
primary function of the Executive Committee is to act as an vehicle for
communication between the Board and the President and Chief Executive Officer.
It also establishes compensation for the Chief Executive Officer and evaluates
and recommends to the Board compensation for other executive officers of Capital
Corp upon the recommendation of the Chief Executive Officer.
The Company does not have a standing Audit Committee. The entire Board of
Directors performs the functions of an Audit Committee.
The Company does not have a Nominating Committee. The entire Board of
Directors performs the functions of a nominating committee.
During 1997, non-employee directors received $200 per meeting for their
attendance at regular Board meetings, $300 per meeting for attendance at special
Board meetings, $165 per committee meetings, a $400 monthly retainer fee, and a
$50 monthly car allowance. The Chairman of the Board receives $600 per month in
addition to fees received for attendance at Board and Committee meetings.
Employee directors and Committee members do not receive fees. Capital Corp paid
a total of $129,595 in directors' fees during 1997.
EXECUTIVE OFFICERS OF CAPITAL CORP
Set forth below is certain information with respect to each of the executive
officers of Capital Corp.
<TABLE>
<CAPTION>
EXECUTIVE
OFFICER
NAME AGE POSITIONS AND OFFICES SINCE
- ---------------------------------- --- ------------------------------------------------------------- -----------
<S> <C> <C> <C>
Thomas T. Hawker.................. 55 President, Chief Executive Officer and Director 1991
Janey Boyce....................... 37 Senior Vice President and Chief Financial Officer 1992
</TABLE>
Set forth below is certain information with respect to the executive
officers of subsidiaries of Capital Corp.
<TABLE>
<CAPTION>
EXECUTIVE
OFFICER
NAME AGE POSITIONS AND OFFICES SINCE
- -------------------------------- --- --------------------------------------------------------------- -----------
<S> <C> <C> <C>
Carol L. Wix.................... 61 Executive Vice President and Chief Operating Officer, County 1992
Bank
Michael D. Wells................ 42 Senior Vice President and Chief Credit Officer, County Bank 1996
Robert W. Perry................. 48 President/CEO, Town & Country 1997
</TABLE>
A brief summary of the background and business experience of the executive
officers of Capital Corp and its subsidiaries is set forth below.
THOMAS T. HAWKER became County Bank's President and Chief Executive Officer
in 1991 and President and Chief Executive Officer of Capital Corp in 1995. Prior
to that he served as President and Chief Executive Officer of Concord Commercial
Bank from 1986 to 1991.
JANEY E. BOYCE became County Bank's Chief Financial Officer in 1992 and
Capital Corp's Senior Vice President and Chief Financial Officer in 1995. Prior
to that she served as the Bank's controller since 1989 and in other capacities
since 1984.
4
<PAGE>
CAROL L. WIX became County Bank's Chief Operating Officer in 1996 and
Executive Vice President and Chief Credit Officer in 1994 prior to this she
served as Senior Vice President and Chief Credit Officer to the Bank from 1992
to 1994. Prior to that she served as Regional Vice President and Manager of
First National Bank of Central California and as the Executive Vice President
and Senior Loan Officer of Pajaro Valley Bank, which merged with First National
in 1991, from 1982 to 1992.
MICHAEL D. WELLS became County Bank's Senior Vice President and Chief Credit
Officer in August 1996. He served as the Bank's Vice President, Credit
Administration since October 1994. Prior to that he served as Senior Vice
President of Country National Bank and in various banking positions for over 20
years.
ROBERT W. PERRY became Town & Country's President/CEO in August, 1997. He
served as the Chief Banking Officer of County Bank from December 1994 until
August 1997. Prior to that he served as the Bank's Vice President, Senior Branch
Manager since March of 1993 and as the Los Banos Manager since 1989. Prior to
that he worked as a branch manager for First Interstate Bank for six years and
for ten years in various other positions with First Interstate Bank.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table shows the number and percentage of shares beneficially
owned (including shares subject to options exercisable currently or within 60
days of Record Date) by each nominee, as well as by each person who has been a
director or executive officer of the Company since January 1, 1997.
<TABLE>
<CAPTION>
BENEFICIALLY OWNED(1)
------------------------
NAME OF BENEFICIAL OWNER AMOUNT PERCENTAGE
- -------------------------------------------------- ------------ -----
<S> <C> <C>
Lloyd H. Ahlem.................................... 12,839(2) *
Dorothy L. Bizzini................................ 33,199(3) *
Jerry E. Callister................................ 19,175(4) *
Jack F. Cauwels................................... 25,340(5) *
John D. Fawcett................................... 10,583(6) *
Thomas T. Hawker.................................. 80,290(7) 1.7%
Robert E. Holl.................................... 59,982(8) 1.3%
Bertyl W. Johnson................................. 63,982(9) 1.4%
Tapan Munroe...................................... 6,586(10) *
James W. Tolladay................................. 21,921(11) *
All Directors and Executive Officers of Capital
Corp as a group 14 in number.................... 379,415 8.2%
</TABLE>
- ------------------------
The address for all persons is: Capital Corp of the West, 550 West Main St.,
P.O. Box 351, Merced, California 95341-0351.
* Indicates that the percentage of outstanding shares beneficially owned is
less than one percent (1%).
(1) Includes shares beneficially owned ( including options exercisable within 60
days of the Record Date), directly and indirectly together with associates.
Subject to applicable community property laws and shared voting and
investment power with a spouse, the persons listed have sole voting and
investing power with respect to such shares unless otherwise noted.
(2) Includes 7,406 shares held in the Ahlem Family Living Trust and 5,433 shares
in stock options which are exercisable currently or within 60 days of March
26, 1998.
(3) Includes 6,672 shares held jointly with her spouse in the Atwater/Merced
Veterinary Clinic Pension Fund; 18,454 shares held as trustee in the Bizzini
Family Trust; and 8,073 shares in stock options which are exercisable
currently or within 60 days of March 26, 1998.
5
<PAGE>
(4) Includes 4,742 shares held as trustee in the Callister Family Trust and
14,433 shares in stock options which are exercisable currently or within 60
days of March 26, 1998.
(5) Includes 10,907 shares held as trustee in the Cauwels Family Trust and
14,433 shares in stock options which are exercisable currently or within 60
days of March 26, 1998.
(6) Includes 2,575 shares held individually; 2,575 shares held through Fawcett
Farms, Inc.; and 5,433 shares of stock options which are exercisable
currently or within 60 days of March 26, 1998.
(7) Includes 15,337 shares held individually; 3,075 shares held by his spouse;
1,539 shares held by his daughter; 2,621 shares held through ESOP; 7,093 in
the company 401(k); and 50,625 shares of stock options which are exercisable
currently or within 60 days of March 26, 1998.
(8) Includes 47,484 shares held in joint tenancy with his spouse and 12,498
shares of stock options which are exercisable currently or within 60 days of
March 26, 1998.
(9) Includes 4,887 shares held individually in an IRA; 45,413 shares held in
joint tenancy with spouse; 1,555 shares held individually by his spouse in
an IRA; and 12,127 shares of stock options which are exercisable currently
or within 60 days of March 26, 1998.
(10) Includes 1,992 shares held individually ; 1,050 shares held jointly with
his spouse; and 3,544 shares of stock options which are exercisable
currently or within 60 days of March 26, 1998.
(11) Includes 4,998 shares held individually in an IRA; 2,490 shares held
jointly with his spouse as trustee; and 14,433 shares of stock options which
are exercisable currently or within 60 days of March 26, 1998.
PRINCIPAL SHAREHOLDERS
As of March 26, 1998, no individuals known to the Board of Directors of
Capital Corp owned of record or beneficially five percent or more of the
outstanding shares of common stock of Capital Corp, except as described below:
<TABLE>
<CAPTION>
NUMBER OF SHARES
BENEFICIALLY PERCENTAGE OF OUTSTANDING
NAME AND ADDRESS OWNED STOCK BENEFICIALLY OWNED
- ---------------------------------------------------------------------- ----------------- -------------------------
<S> <C> <C>
Capital Corp of the West ESOP ........................................ 106,247 6.1%
P.O. Box 351,
Merced, CA 95341
1867 Western Financial Corporation ................................... 490,434 11.26%
P.O. Box 1110
Stockton, CA 95201-1110
Basswood Partners LP ................................................. 226,756 5.20%
52 Forest Ave
Parmus, NJ 07652
David L. Babson Inc. ................................................. 222,500 5.11%
One Memorial Dr., Suite 1300
Cambridge, MA 02142-1300
</TABLE>
6
<PAGE>
COMPENSATION AND OTHER TRANSACTIONS WITH MANAGEMENT
CASH COMPENSATION
The following information is furnished with respect to the aggregate cash
compensation paid to the Chief Executive Officer of Capital Corp and Chief
Operating Officer of County Bank during 1997. No other executive officer of
Capital Corp or its subsidiaries received aggregate cash compensation of
$100,000 or more in 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
---------------------------------------
ANNUAL COMPENSATION
----------------------------------- AWARDS PAYOUTS
OTHER* -------------------------- -----------
NAME AND ANNUAL RESTRICTED LTIP
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION STOCK AWARDS OPTIONS PAYOUTS
- ------------------------------ --------- ---------- --------- ------------ ------------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Thomas T. Hawker, ............ 1997 $ 152,542 $ 12,868 $ 7,317 -- -- --
President and CEO, Capital 1996 $ 149,796 $ 32,768 $ 15,457 -- -- --
Corp 1995 $ 147,406 $ 36,000 $ 15,675 -- -- --
Carol L. Wix, ................ 1997 $ 91,725 $ 6,682 $ 5,600 -- -- --
COO, County Bank 1996 $ 89,896 $ 7,984 $ 4,942 -- -- --
1995 $ 84,212 $ 13,200 $ 4,747 -- -- --
<CAPTION>
NAME AND ALL OTHER
PRINCIPAL POSITION COMPENSATION
- ------------------------------ -----------------
<S> <C>
Thomas T. Hawker, ............ --
President and CEO, Capital --
Corp --
Carol L. Wix, ................ --
COO, County Bank --
--
</TABLE>
- ------------------------
* (Includes Company contributions to ESOP and 401(k) plans)
In the interests of attracting and retaining qualified personnel, the
Company furnishes to executive officers certain incidental personal benefits.
The incremental cost to the Company of providing such benefits to Mr. Hawker and
Ms. Wix did not, for the fiscal year ended December 31, 1997, exceed 10% of the
compensation to either of them reported above.
Pursuant to his employment contract effective March 1, 1997, through
December 31, 2000, Mr. Hawker receives a base salary of $167,000, adjusted
annually for cost of living allowances and other salary increases if approved,
use of a Company-owned automobile, various forms of insurance benefits and
participation in the Company's other compensation plans such as its incentive
compensation program, 401(k) plan, stock option plan and ESOP plan. Pursuant to
such employment contract, should Mr. Hawker be terminated for reasons other than
"for cause," Mr. Hawker would receive a severance payment equal to one year's
then-current salary. In addition, in the event of acquisition of Capital Corp,
Mr. Hawker's employment contract will automatically terminate and Mr. Hawker
will receive an acquisition payment equal to six month's then-current salary.
Ms. Wix does not have an employment contract.
In addition, Capital Corp provides Mr. Hawker and Ms. Wix with a salary
continuation plan. This is a non-qualified executive benefit plan in which the
Company has agreed to pay retirement benefits to them in return for continued
satisfactory performance of the executives. It is an unfunded plan; the
executive has no rights under the agreement beyond those of a general creditor
of the Company. If the executive leaves the Company's employ, either voluntarily
or involuntarily, the agreement terminates and the executive receives no
benefits except those already vested. The Plan is informally linked with single
premium universal life insurance policies. The Company is the owner and
beneficiary of the policies.
As of the date of this report, Mr. Hawker and Ms. Wix are 60% vested
respectively in the retirement benefit payments. They shall become vested
thereafter in an additional 10% of said payments for each full succeeding year
of employment thereafter and be 100% vested on August 21, 2001 provided they
have been continuously employed for ten full years. Mr. Hawker's benefits from
this plan are $98,600 per year for a period of fifteen years. Ms. Wix's benefits
from this plan are $50,400 per year for a period of fifteen years.
7
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table shows the options granted in 1997 to each person who has
been an executive officer of the Company since January, 1 1997.
<TABLE>
<CAPTION>
% OF TOTAL
OPTIONS
GRANTED TO EXERCISE OR
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION 5%(2) 10%(2)
NAME GRANTED(1) FISCAL YEAR ($/SH) DATE ($) ($)
- ----------------------------------------- ----------- ------------- ----------- ----------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Thomas T. Hawker......................... 12,000 22.0% $ 12.25 3/01/07 $ 92,447 $ 234,280
</TABLE>
- ------------------------
(1) Mr. Hawker's grant of stock options as set forth above reflects the three
for two split which occurred in May, 1997.
(2) In accordance with applicable regulations, the potential realizable values
shown represent the product of the market price at the time of grant
multiplied by the sum of one plus the assumed stock appreciation rate
compounded annually over the term of the option, less the exercise price,
but without any discount to present value.
The following table shows information about options and stock appreciation
rights exercised in 1997 and the value of unexercised options held by persons
included in the Summary Compensation Table.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND DECEMBER 31, 1997 OPTION VALUES
The following table shows the stock options exercised in 1997 and the number
and estimated value of the exercisable and those not yet exercisable for the
Chief Executive Officer of Capital Corp and Chief Operating Officer of County
Bank.
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS/ DECEMBER
DECEMBER 31, 1997 31, 1997
----------------- -------------------
SHARES ACQUIRED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE (#) VALUE REALIZED ($) UNEXERCISABLE UNEXERCISABLE
- ------------------------------------- ------------------- --------------------- ----------------- -------------------
<S> <C> <C> <C> <C>
Thomas T. Hawker..................... -- -- 50,625/7,200 $ 460,379/$59,375
Carol L. Wix......................... -- -- 17,842/985 $ 164,533/$9,268
</TABLE>
EMPLOYEE STOCK OWNERSHIP PLAN
The Board of Directors of Capital Corp has established, under Sections
401(a) and 501(a) of the Internal Revenue Code of 1986, a qualified Employee
Stock Ownership Plan ("ESOP") effective December 31, 1984. The purpose of the
ESOP is to provide all eligible employees with an additional incentive to
maximize their job performance by providing them with an opportunity to acquire
or increase their proprietary interest in Capital Corp and to provide
supplemental income upon retirement. The ESOP is designed primarily to invest
Capital Corp's contributions in shares of Capital Corp's Common Stock. All
assets of the ESOP are held in trust for the exclusive benefit of participants
and are administered by a committee appointed by the directors of Capital Corp.
However, each participant has the right to direct the trustees as to the manner
in which those shares of Capital Corp's stock which are credited to the account
of each participant are to be exercised with respect to a corporate matter or
the Bylaws of Capital Corp. The company has made and in the future intends to
make periodic contributions to the ESOP in amounts determined by the Board of
Directors. It is anticipated that as contributions are made by Capital Corp,
shares of Capital Corp's Common Stock will be acquired from time to time through
open market purchases and privately negotiated transactions. Any effect on the
market quotations of, or on the market
8
<PAGE>
in general for, Capital Corp's common stock which could result from the fact
that the ESOP may make acquisitions of Capital Corp's shares in the future is
not possible to determine in advance. The amount of contributions for the
benefit of Mr. Hawker and Ms. Wix is included in the Summary Cash Compensation
table in the column entitled "Other Annual Compensation."
401(k) PLAN
The Board of Directors has established an employee profit sharing plan under
Section 401(k) of the Internal Revenue Code of 1986. The purpose of the employee
profit sharing plan is to provide all eligible employees with supplemental
income upon retirement and increase their proprietary interest in Capital Corp.
Eligible employees may make contributions to the plan subject to the limitations
of Section 401(k) of the Internal Revenue Code of 1986. The company provides a
discretionary matching contribution equal to a percentage of the amount the
employee elected to contribute. For the 1997 year, the Bank and Capital Corp
provided a 25% matching contribution not to exceed 6% of the employee's salary,
made payable in the form of Capital Corp common stock subject to the limitation
of Section 401(k) of the Internal Revenue Code of 1986. The Plan trustees,
consisting of members of Bank management, administer the Plan. The amount of
contributions for the benefit of Mr. Hawker and Mrs. Wix is included in the
Summary Cash Compensation table in the column entitled "Other Annual
Compensation."
9
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STOCK PERFORMANCE GRAPH
The following graph compares the change on an annual basis in Capital Corp's
cumulative total return on its common stock with (a) the change in the
cumulative total return on the stocks included in the Nasdaq Composite Index for
U.S. Companies and (b) the change in the cumulative total return on the stocks
included in the SNL Securities "Western Bank Index," a peer industry group,
assuming an initial investment of $100 on December 31, 1992. All of these
cumulative total returns are computed assuming the reinvestment of dividends at
the frequency with which dividends were paid during the period. The common stock
price performance shown below should not be viewed as being indicative of future
performance.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
CAPITAL CORP OF THE WEST
TOTAL RETURN PERFORMANCE
INDEX VALUE
CAPITAL CORP OF THE WEST NASDAQ - TOTAL US SNL WESTERN BANK INDEX
<S> <C> <C> <C>
12/31/92 100.00 100.00 100.00
12/31/93 131.24 114.80 114.57
12/31/94 162.49 112.21 113.43
12/31/95 183.27 158.70 190.22
12/31/96 246.18 195.19 270.43
12/31/97 335.19 239.53 398.65
</TABLE>
COMPENSATION COMMITTEE REPORT
The following is the report of Capital Corp's Executive Committee with
respect to compensation of executive officers of the company.
The Executive Committee serves as the compensation committee for the
Company. It is the duty of the Executive Committee to administer the
Company's incentive program, benefits plans, stock option plan and
long-term compensation programs. In addition, the Committee reviews the
compensation levels of members of management, provides input on the
performance of management and considers management succession and
related matters.
The Committee reviews the reasonableness of compensation paid to senior
officers of the Company. In doing so, the members of the Committee
review surveys from various sources in regards to compensation levels
for those senior officers.
10
<PAGE>
The Company's Chief Executive Officer's base salary and other benefits
for 1997 were based principally on the terms established under his
employment agreement with the Company dated March 1, 1997 as described
in the Company's proxy statement.
The Company's incentive program is based upon the achievement of certain
financial objectives. Those financial objectives are established by
Management and approved by the Board of Directors prior to the start of
the fiscal year. For the year 1997, the incentive program was based in
part on the level of return on equity achieved by the Company excluding
the impact of the Company's wholly owned real estate subsidiary. In
addition for the senior officers of the Bank, incentive compensation
levels were established based upon a series of multiple goals for the
Company which included net interest margin, loan and deposit growth, a
productivity target, certain loan quality targets and strategic planning
objectives. The Committee also has the authority to provide additional
incentive compensation based upon the Committee's overall assessment of
the Company's performance and the individual officer's performance. In
the case of the Company's Chief Executive Officer, the incentive
compensation level is determined upon the basis of the Company's overall
achievement of the financial objectives previously discussed as well as
data provided in regards to the incentive awards provided to other CEOs
of comparable institutions based upon surveys and other various studies
and the Board of Directors' overall assessment of the performance of the
Company's Chief Executive Officer.
The granting of stock options is determined based upon the officer's
responsibilities and relative position in the Company.
No voting member of the Committee is a former or current officer of the
Company or any of its subsidiaries. The Company's Chief Executive
Officer is a non-voting member of the compensation committee.
Lloyd H. Ahlem
Jerry E. Callister
John Fawcett
Bertyl W. Johnson
Thomas T. Hawker
INDEBTEDNESS OF MANAGEMENT
Some of Capital Corp's directors and executive officers, as well as their
immediate family, associates and companies in which they have a financial
interest, are customers of, and have had banking transactions with, the Bank in
the ordinary course of the Bank's business, and the Bank expects to have such
ordinary banking transactions with these persons or entities in the future. In
the opinion of the Bank's management, the Bank made all loans and commitments to
lend included in such transactions in compliance with applicable laws and on
substantially the same terms, including interest rates and collateral, as those
prevailing for comparable transactions with other persons or entities of similar
credit worthiness, and these loans do not involve more than a normal risk of
collectibility or present other unfavorable features.
TRANSACTIONS WITH MANAGEMENT
There are no other existing or proposed material transactions between
Capital Corp and any of its directors, executive officers, nominees for election
as a director, or the immediate family or associates of any of the foregoing
persons except as follows:
In accordance with its policies, Capital Corp obtains competitive bids for
the kinds of products and services referred to above from independent parties
before selecting a vendor of such products and services.
11
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REPORTS REQUIRED UNDER SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 ("Exchange Act")
requires of each person (I) who owns more than 10% of any class of security
which is registered or (ii) who is a director or an officer of the issuer of
such security to file with the Securities and Exchange Commission certain
reports regarding the beneficial ownership of such person of the registered
security. Capital Corp has established a procedure to aid persons who are
officers and directors of Capital Corp in timely filing reports required by the
Exchange Act.
The Board of Directors is required to disclose unreported filings from prior
years of which the Board of Directors has knowledge. For the fiscal year of 1997
the Board is aware of the following inadvertent late transactions: Tom Van
Groningen- late filing of Form 3 with respect to a nil transaction. Tapan
Munroe-three late filings of Form 4 transactions totaling 1,100 shares; Jerry
Callister- one late filing of Form 4 for transactions involving 105 shares.
CHANGE OF CONTROL
Management is not aware of any arrangements, including the pledge by any
person of shares of Capital Corp, the operation of which may at a subsequent
date result in a change of control of Capital Corp.
SHAREHOLDER PROPOSALS
Subject to regulations promulgated under the Exchange Act, proposals of
shareholders intended to be presented at Capital Corp's 1998 Annual Meeting must
be received by Capital Corp not later than December 12, 1998 in a form that
complies with applicable regulations, to be included in the 1998 proxy
statement. Shareholder proposals may not be included in the Proxy Statement for
the 1999 Annual Meeting or presented at the shareholders meeting unless certain
conditions are met. Shareholders proposals are subject to regulation under
federal securities laws.
INDEPENDENT PUBLIC ACCOUNTANTS
Management has selected KPMG Peat Marwick as the independent certified
public accountants of Capital Corp for the fiscal year ending December 31, 1997.
A representative of KPMG Peat Marwick is expected to attend the Meeting. The
representative will have the opportunity to make a statement, if desired, and is
expected to be available to respond to shareholder inquires.
OTHER MATTERS
The Board of Directors of Capital Corp know of no other matters which will
be brought before the Meeting, but if such matters are properly presented,
proxies solicited hereby relating to the Meeting will be voted in accordance
with the judgment of the persons holding such proxies. All shares represented by
duly executed proxies will be voted at the Meeting.
IF ANY SHAREHOLDER WOULD LIKE A COPY OF CAPITAL CORP'S ANNUAL REPORT ON FORM
10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997, IT CAN BE OBTAINED WITHOUT
CHARGE (EXCEPT FOR CERTAIN EXHIBITS) BY CONTACTING SHERI COMSTOCK, CORPORATE
SECRETARY, CAPITAL CORP OF THE WEST, 550 WEST MAIN ST., P.O. BOX 351, MERCED,
CALIFORNIA 95341-0351.
12
<PAGE>
CAPITAL CORP OF THE WEST
PROXY FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MAY 12, 1998
THE PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
REVOCABLE PROXY
The undersigned holder of common stock acknowledges receipt of the
Notice of Annual Meeting of Shareholders of Capital Corp of the West, a
California corporation (the "Company"), and the accompanying Proxy Statement
dated April 10, 1998, and revoking any proxy heretofore given, hereby
constitutes and appoints Thomas T. Hawker and Janey E. Boyce, or either of
them, with full power of substitution, as attorney and proxy to appear and
vote all of the shares of common stock of the Company standing in the name of
the undersigned which the undersigned could vote if personally present and
acting at the Annual Meeting of the Shareholders of the Company to be held at
Merced, California, on May 12, 1998, at 7:00 p.m. local time or at any
adjournments thereof, upon the following items as set forth in the Notice of
Meeting and more fully described in the Proxy Statement.
1. Election of Directors. To vote for the election of the
following persons as Class II Directors of the Company, to serve three-year
terms or until their successors are elected and qualified:
Jack F. Cauwels, John D. Fawcett and Thomas T. Hawker.
- -------------------------------------------------------
[Instructions: To withhold a vote for one or more nominees, strike a
line through that nominee's name above. To vote for all nominees except one
whose name is struck, check "FOR" below. To vote against or withhold a vote as
to all nominees, check "WITHHOLD" below.]
FOR WITHHOLD
-------- -------
2. Other Business. The proxies are authorized to vote in their
discretion on such other business as may properly come before the Meeting or
any adjournment thereof.
FOR AGAINST ABSTAIN
------- ------ ------
<PAGE>
THE PROXY IS SOLICITED BY, AND ON BEHALF OF, THE BOARD OF DIRECTORS
AND MAY BE REVOKED PRIOR TO ITS EXERCISE.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION AS
DIRECTORS OF THE NOMINEES NAMED ABOVE. THE PROXY, WHEN PROPERLY EXECUTED AND
RETURNED TO CAPITAL CORP OF THE WEST, WILL BE VOTED IN THE MANNER DIRECTED.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED "FOR" THE ELECTION AS
DIRECTORS OF THE NOMINEES NAMED ABOVE. IF OTHER BUSINESS IS PRESENTED, THIS
PROXY SHALL BE VOTED IN ACCORDANCE WITH THE BEST JUDGMENT OF THE PROXY
HOLDERS.
SHAREHOLDER(S)
------------------------------------------------
(Signature)
------------------------------------------------
(Signature)
------------------------------------------------
(Number of Common Shares)
Date , 1998
--------------------------------------
I/WE do ____ or do not ____ expect to attend this
meeting.
Please sign exactly as your name(s) appear(s). When signing as attorney,
executor, administrator, trustee, officer, partner, or guardian, please give
full title. If more than one trustee, all should sign. WHETHER OR NOT YOU
PLAN TO ATTEND THIS MEETING, PLEASE SIGN AND RETURN THIS PROXY AS PROMPTLY AS
POSSIBLE IN THE ENCLOSED POST-PAID ENVELOPE.
To assure a quorum, you are urged to date and sign this Proxy and mail it
promptly in the enclosed envelop, which requires no additional postage if
mailed in the United States or Canada.
