<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
Northern California Bancorp, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(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 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE>
NORTHERN CALIFORNIA BANCORP, INC.
601 MUNRAS AVENUE, MONTEREY, CALIFORNIA 93940
(831) 649-4600
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JULY 22, 1999
5:00 P.M.
The Annual Meeting of Shareholders of Northern California Bancorp,
Inc. (the "Company") will be held at the Company's office located at 601 Munras
Avenue, Monterey, California 93940, on Thursday, July 22, 1999 at 5:00 p.m., for
the following purposes:
1. To elect the following FIVE (5) nominees to serve as directors of
the Company until the next Annual Meeting of Shareholders and until their
respective successors shall be elected and qualified:
Charles T. Chrietzberg, Jr.
Sandra G. Chrietzberg
Peter J. Coniglio
Carla S. Hudson
John M. Lotz
2. To consider and transact such other business as may properly
be brought before the meeting and any adjournment or adjournments thereof.
Shareholders of record at the close of business on June 30, 1999 are
entitled to notice of and to vote at the meeting.
YOU ARE REQUESTED TO DATE, EXECUTE AND RETURN THE ENCLOSED PROXY
WITHOUT DELAY, WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING. YOU MAY REVOKE
YOUR PROXY AT ANY TIME PRIOR TO THE TIME IT IS VOTED, EITHER BY ATTENDING THE
MEETING AND ELECTING TO VOTE IN PERSON, OR BY FILING WITH THE SECRETARY OF
THE COMPANY PRIOR TO THE MEETING, A WRITTEN NOTICE OF REVOCATION OR A DULY
EXECUTED PROXY BEARING A LATER DATE.
PLEASE INDICATE ON THE PROXY WHETHER YOU EXPECT TO ATTEND THE
MEETING SO THAT WE MAY ARRANGE FOR ADEQUATE ACCOMMODATIONS.
BY ORDER OF THE BOARD OF DIRECTORS
Andre G. Herrera
Secretary
Dated: July 1, 1999
Monterey, California
<PAGE>
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
OF
NORTHERN CALIFORNIA BANCORP, INC.
This statement is furnished in connection with the solicitation
of proxies to be used on behalf of the Board of Directors of Northern California
Bancorp, Inc. (the "Company") at the Annual Meeting of Shareholders of the
Company to be held at the Company's office located at 601 Munras Avenue,
Monterey, California, 93940 on Thursday, July 22, 1999 at 5:00 p.m., and at any
adjournments thereof (the "Meeting").
Management anticipates that this Proxy Statement and the
accompanying form of proxy will be mailed to shareholders on or about July 1,
1999.
A form of proxy for voting your shares at the Meeting is
enclosed. Any shareholder who executes and delivers a proxy has the right to
revoke it at any time before it is voted by filing with the Secretary of the
Company an instrument revoking it or a duly executed proxy bearing a later
date. In addition, the powers of the proxy holders will be revoked if the
person executing the proxy is present at the Meeting and advises the Chairman
of his election to vote in person. Shares represented by a properly executed
proxy received prior to the Meeting will be voted in accordance with the
shareholder's specifications, as noted on the proxy, or if not otherwise
specified, and unless revoked, such shares will be voted in favor of election
of the nominees specified herein and in favor of the other proposals
specified herein.
The proxy also confers discretionary authority to vote the shares
represented thereby on any matter that was not known at the time this Proxy
Statement was mailed which may properly be presented for action at the Meeting
and may include: approval of minutes of the prior annual meeting which will not
constitute ratification of the actions taken at such meeting; action with
respect to procedural matters pertaining to the conduct of the Meeting and
election of any person to any office for which a bona fide nominee is named
herein if such nominee is unable to serve or for good cause will not serve.
The Company's Board of Directors is soliciting the enclosed proxy.
The principal solicitation of proxies is being made by mail, although additional
solicitation may be made by telephone, telegraph or personal visits by
directors, officers and employees of the Company. The Company may, at its
discretion, engage the services of a proxy solicitation firm to assist in the
solicitation of proxies. The total expense of this solicitation will be borne by
the Company and will include reimbursement paid to brokerage firms and others
for their expenses in forwarding soliciting material and such expenses as may be
paid to any proxy soliciting firm engaged by the Company.
VOTING SECURITIES
OUTSTANDING SHARES AND RECORD DATE
Shareholders of record as of the close of business on June 30,
1999 (the "Record Date") will be entitled to notice of and to vote at the
Meeting. As of such date, the Company had 937,190 shares of common stock, no par
value ("Common Stock"), outstanding.
<PAGE>
VOTING RIGHTS
Each shareholder of record of Common Stock is entitled to one
vote, in person or by proxy, for each share held on all matters to come before
the Meeting, except that shareholders may have cumulative voting rights with
respect to the election of directors. Pursuant to California law, no shareholder
can cumulate votes unless, prior to the voting at the meeting, a shareholder has
given notice of the shareholder's intention to cumulate the shareholder's votes
at such meeting. If any shareholder has given such notice, all shareholders may
cumulate their votes for candidates in nomination. The Board of Directors does
not presently intend to cumulate votes it may hold pursuant to the proxies
solicited herein, unless shareholders direct otherwise. If, however, other
director nominations are made and any shareholder gives notice of intention to
cumulate votes, the Board of Directors intends to cumulate votes in such a
manner as to elect the maximum number of the Board of Directors' nominees.
Therefore, discretionary authority to cumulate votes in such event is solicited
in this Proxy Statement.
Cumulative voting allows a shareholder to cast a number of votes
equal to the number of directors to be elected multiplied by the number of votes
held in his or her name on the Record Date. This total number of votes may be
cast for one nominee or may be distributed among as many candidates as the
shareholder desires. The five (5) candidates receiving the highest number of
votes are elected.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of the Record Date
pertaining to beneficial ownership of the Company's Common Stock by persons
known to the Company to own 5% or more of such stock, current directors of the
Company, and all directors and officers (1) of the Company as a group. The
information contained herein has been obtained from the Company's records and
from information furnished directly by the individual or entity to the Company.
All of the persons are directors of the Company except for the David S. Lewis
Trust.
The table should be read with the understanding that more than one
person may be the beneficial owner or possess certain attributes of beneficial
ownership with respect to the same securities. Therefore, attention should be
given to the footnote references set forth in the column "Common Stock
Beneficially Held - Amount Held." In addition, shares of Common Stock issuable
pursuant to options which may be exercised within 60 days of the Record Date are
deemed to be issued and outstanding and have been treated as outstanding in
calculating the percentage ownership of those individuals possessing such
interest, but not for any other individuals. Thus, the total number of shares
considered to be outstanding for the purposes of this table may vary depending
upon the individual's particular circumstance. Unless otherwise stated, voting
and investment powers are shared with the spouse of the respective shareholder
under California community property laws.
(continued on following page)
- ---------------------
(1) As used throughout this Proxy Statement, the term "officer" refers to
Executive Officers, which includes the Chairman of the Board, President
and Chief Executive Officer; the Senior Vice President/Chief Operating
Officer and Chief Financial Officer; and the Senior Vice President and
Chief Lending Officer of the Company's wholly-owned subsidiary, Monterey
County Bank (the "Bank").
2
<PAGE>
<TABLE>
<CAPTION>
Amount and Nature of Percent of
Name and Address Beneficial Ownership Class
- ---------------------------------------- ----------------------------- -------------
<S> <C> <C>
Charles T. Chrietzberg, Jr. 453,311 (1)(2)(3) 43.98%
Sandra G. Chrietzberg 453,311 (2)(3) 43.98%
Peter J. Coniglio 45,897 (4)(5) 4.78%
Carla S. Hudson 18,263 (6) 1.92%
John M. Lotz 19,250 (7) 2.02%
All Directors & Executive 565,919 (8) 51.22%
Officers as a Group
(7 in number)
David S. Lewis Trust 121,000 (4) 12.81%
30500 Aurora del Mar
Carmel, CA 93923
</TABLE>
- ----------------------
(1) Includes 93,500 shares subject to his employee stock options. 275,000
shares of the common Stock owned by Mr. Chrietzberg are pledged to secure a
loan from an unaffiliated bank.
(2) The shares include an aggregate of 12,580 shares held beneficially by Mr.
Chrietzberg and Mrs. Chrietzberg in Individual Retirement Accounts, where
voting power is also shared with the custodian of the account.
(3) Includes shares of spouse pursuant to California's community property laws.
(4) Sole voting power.
(5) Includes 22,000 shares subject to the respective director's stock options.
Of the remaining shares 18,122 are held in a family trust controlled by Mr.
Coniglio, as to which he has sole voting and investment power, while 5,775
shares are held by Hudson, Martin, Ferrante & Street, a partnership of
which Mr. Coniglio is the managing partner, with voting and investment
power.
(6) Includes 13,750 shares subject to the respective director's stock options.
The remaining shares are held jointly with family members, other than 1,100
shares held in a corporate pension, as to which Ms. Hudson has voting and
investment power.
(7) Includes 16,500 shares subject to the respective director's stock options.
The remaining shares are held jointly with family members, with shared
voting and investment power.
(8) Includes all options included above, plus 7,198 shares of stock owned by,
and 22,000 shares subject to options held by, executive officers who are
not also directors.
PROPOSAL 1
3
<PAGE>
ELECTION OF DIRECTORS
The Articles of Incorporation and Bylaws of the Company provide that
the number of directors of the Company may be no less than five (5) and no more
than nine (9), with the exact number to be fixed by a resolution of the Board of
Directors or the shareholders. The number of directors is presently fixed at
five (5).
The persons named below have been nominated for election as
directors to serve until the next Annual Meeting and until their successors are
duly elected and qualified. Votes will be cast in such a way as to effect the
election of all nominees or as many as possible under the rules of cumulative
voting. If any nominee should become unable or unwilling to serve as a director,
the proxies will be voted for such substitute nominee as shall be designated by
the Board of Directors. The Board of Directors presently has no knowledge that
any of the nominees will be unable or unwilling to serve. Additional nominations
can be made only by complying with the notice provisions included in the Notice
of Meeting. This Bylaw provision is designed to give the Board of Directors
advance notice of competing nominations, if any, and the qualifications of
nominees, and may have the effect of precluding third-party nominations if not
followed. The five (5) nominees receiving the highest number of votes at the
Meeting shall be elected.
The following table provides information as of the Record Date with
respect to each person nominated and recommended to be elected by the current
Board of Directors of the Company. Year first appointed or elected refers to the
year first appointed or elected as a director of the Company or its predecessor,
the Bank. 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>
Yr. 1st
Appointed
Business Experience Or Elected
Name of Director Age During Past 5 Years Director
- ---------------- --- ------------------- --------
<S> <C> <C> <C>
Charles T. Chrietzberg, Jr. 57 President, Chairman and CEO of the Company, 1985
and its predecessor, Monterey County Bank
since 3/87.
1988
Sandra G. Chrietzberg 55 Investor; formerly President and CEO, Queen
of Chardonnay, Inc., dba La Reina Winery,
1984-1993
Peter J. Coniglio 69 Attorney/Partner - Hudson Martin, Ferrante & 1976
Street, Monterey, CA.
Carla S. Hudson, CPA 45 Partner, Huey & Hudson CPAs, Monterey, CA. 1994
John M. Lotz 57 President and CEO of Couroc of Monterey 1992
(1997), Real Estate developer 1991-1996
</TABLE>
Directors of the Company serve in similar capacities with the Bank.
There are no family relationships between any two or more of the directors, or
officers, except that Sandra G. Chrietzberg and Charles T. Chrietzberg, Jr. are
spouses and Andre G. Herrera, Vice President and Corporate Secretarv of the
Company, is their son-in-law.
4
<PAGE>
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 FIVE (5) NOMINEES SET FORTH HEREIN TO SERVE UNTIL THE NEXT ANNUAL
MEETING OF SHAREHOLDERS AMD UNTIL THEIR RESPECTIVE SUCCESSORS SHALL BE ELECTED
AND QUALIFIED: CHARLES T. CHRIETZBERG, JR., SANDRA G. CHRIETZBERG, PETER J,
CONIGLIO, CARLA S. HUDSON AND JOHN M. LOTZ.
INFORMATION PERTAINING TO ELECTION OF DIRECTORS
COMMITTEES OF THE BOARD OF DIRECTORS: DIRECTOR ATTENDANCE
Due to the compact size of the Board of Directors, most functions
allocated to committees on a larger Board of Directors are handled by the Board
as a whole at the Company. The Company did not maintain separate loan or
nominating committees in 1998. In 1998, the only committee which was active was
the following:
The Audit Committee reviews and conducts (through outside
consultants) an independent audit of policies and procedures of the Company. The
Audit Committee, consisting of directors Coniglio, Hudson, and Lotz, met 1 time
in 1998.
During 1998, the Board of Directors of the Company held 21
regularly scheduled meetings and special meetings. Each director attended at
least 75% of the aggregate of: (1) the total number of meetings of the Board of
Directors; and (2) the total number of meetings of committees of the Board of
Directors on which the director served (during the period for which the director
served).
CASH COMPENSATION
The following information is furnished with respect to executive
officers of the Company whose aggregate cash compensation from the Company
during 1998 exceeded $100,000. All compensation was paid by the Bank; the
Company does not separately pay its officers. No restricted stock awards or LTIP
payouts were made.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION AWARDS
---------------------------------- -------------------------------------------
Other Restricted Securities All
Annual Stock Underlying Other
Name & Principal Position Year Salary Bonus Compensation Award Options/ SARs Compensation
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Charles T. Chrietzberg, Jr. 1998 $156,020 $160,000 $5,343 (1) None 25,000 $2,199 (2)
Chairman, President & 1997 150,938 $160,000 $5,197 (1) None None $7,530 (2)
CEO 1996 164,360 130,000 3,555 (1) None None 16,088 (2)
Bruce N. Warner 1998 74,254 28,358 None None 5,000 None
Senior Vice President, 1997 67,268 18,020 None None 10,000 None
Chief Financial Officer, 1996 61,147 15,000 None None None None
Chief Operating Officer
</TABLE>
(1) Represents personal use of company automobile and insurance premiums on
life insurance policy as described below.
(2) Represents the expense accrued in the Salary Continuation Plan as more
fully described in the Long Term Incentive Plan Table.
5
<PAGE>
Until June 1, 1990 the Bank furnished certain executive officers
with a taxable car allowance. The Bank discontinued car allowances on June 1,
1990 and purchased a bank owned automobile for the use of its Chief Executive
Officer (the value of his personal use of the automobile is included above). The
Bank furnishes, on a nondiscriminatory basis, to the employees: (i) insurance
benefits; and (ii) other benefits. The value of these benefits (excluding
non-discriminatory plan benefits) was less than the lesser of $50,000 or ten
percent of the compensation shown above for the respective persons or group, and
is not included in the table.
The Board of Directors of the Bank authorized the Bank to enter
into a three year employment contract with Mr. Chrietzberg, effective January 1,
1997. It provided for a base salary of $150,000 per year, a Bank furnished
automobile or automobile allowance, and a bonus based on profits. The minimum
bonus, not to exceed $160,000 annually, will equal $10,000 for each 0.1 percent
that the Bank's profits exceed 0.8 percent return on average assets plus $10,000
for each 1 percent that the Bank's return on equity exceeds 9.0 percent. Under
the terms of the contract, if Mr. Chrietzberg is terminated other than for cause
(as defined in the contract), he is entitled to severance compensation for his
monthly salary plus a pro rated incentive bonus for the lesser of 24 months or
the remaining term of his contract (which ends in December, 1999); however, if
the termination follows within six (6) months after a change in control
transaction (as defined in the contract), he is entitled to such severance
compensation for the greater of 24 months or the remainder of the term of the
contract. In addition, the Bank provides Mr. Chrietzberg with insurance on his
life, owned by the Bank but payable to his beneficiary, in the amount of
$1,000,000 in excess of the amounts provided on a non-discriminatory basis to
other employees. Mr. Chrietzberg's beneficiary has agreed to reimburse the Bank
out of the proceeds of such policy an amount equal to the greater of the cash
value of such policy at the time of Mr. Chrietzberg's death, or the amount of
premiums paid by the Bank.
The following table sets forth certain information regarding the
long term incentive plans provided for Mr. Chrietzberg.
<TABLE>
<CAPTION>
Performance or Estimated Future Payouts under
Number of Other Period Non-Stock Price-Based Plans
Shares, Units Until ---------------------------------
or Other Rights Maturation or Threshold Target Maximum
Name (#) Payment ($ or #) ($ or #) ($ or #)
- ---- --------------- ----------------------------- --------- -------- ---------
<S> <C> <C> <C> <C> <C>
Charles T. Salary Retirement at age 65, subject None None 75,000/yr.
Chrietzberg, Jr Continuation to provisions for earlier 15 years
Agreement payout described below
</TABLE>
In December, 1993, the Board of Directors approved a Salary
Continuation Agreement for the benefit of Mr. Chrietzberg that provided for
payments of $75,000 per year, for 15 years, if he remains with the Bank until
normal retirement commencing age 65. After consideration of the impact of such
an agreement on the Bank's income, the Bank amended the Agreement to provide for
one half the original benefit amounts, but adopted Surviving Income Agreements
which provide benefits upon the death of the executive to his beneficiary in a
single payment, in an amount equal to the retirement benefit. The Salary
Continuation Agreement provides for lesser payments in the event of early
retirement, generally designated to coincide with increases in the anticipated
surrender value for the life insurance policies described below. The Bank's
obligations under the Salary Continuation Agreement are not secured by any
segregated amounts, but are informally funded by the purchase of single-premium
life insurance policies. The salary continuation expense accrued in 1998, 1997
and 1996 was $2,199, $7,530 and $11,776, respectively. Based upon the current
projected earnings of the insurance used to fund the Bank's obligations under
the Agreement, and the anticipated salary continuation expense to be booked, net
of tax benefits, the Bank anticipates (based upon current tax laws and
assumptions regarding the yield on alternative investment(s) that the cost of
the benefits to be provided under the agreement will not have a material adverse
impact on the Bank's net income after taxes in the future, although no assurance
can be given in this regard. Additionally, since the Surviving Income Agreement
has been adopted to provide part of the benefits upon the death of the
executive, the total amount of payout can not be precisely determined. However,
the information represents the best estimate of Management based on the terms of
the plan.
6
<PAGE>
The following table sets forth certain information concerning the grant
of stock options under the Company's 1998 Stock Option Plan to the named
executive officers during the year ended December 31, 1998.
Option/SAR Grants in Last fiscal Year
<TABLE>
<CAPTION>
Number of Percent of
Securities total options/
Underlying SARs granted Exercise or
Options/Sars to employees base price Expiration
Name granted (#) in fiscal year ($/Sh) date
- ----------------------------- -------------------- ----------------------- ------------------ ----------------
<S> <C> <C> <C> <C>
Charles T. Chrietzberg, Jr. 25,000 39.68% 3.30 10/1/03
Bruce N. Warner 5,000 7.94% 3.00 10/1/03
</TABLE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END
OPTIONS/SAR VALUES
No options or SARs were exercised during 1998. The following table
provides information regarding unexercised options held by each of the named
executive officers (all such options are currently exercisable):
<TABLE>
<CAPTION>
Value of
Number of Unexercised
Unexercised in-the-Money
Shares Options/SARs at Options/SARs at
Acquired on Value FY-End(#) FY-End ($) 1/
Name Exercise (#) Received ($) Exercisable Unexercisable Exercisable Unexercisable
- -------------------------- ------------- --------------- -------------- ------------- --------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Charles T. Chrietzberg, Jr. None None 93,500 None 66,000 None
Bruce N. Warner None None 22,000 None 11,000 None
</TABLE>
1/ The value of unexercised options was calculated based on a trade in the
stock of the Company at $3.00 on December 23, 1998, the trade closest to
1998 fiscal year end. Trading in the stock of the Company is infrequent,
and may not be an accurate indicator of the true value of shares of stock
in the Company.
COMPENSATION OF DIRECTORS
In 1998, each director received a standard fee of $500 per regular
board meeting of the Bank attended and $150 for each committee meeting of the
Bank attended.
1998 STOCK OPTION PLAN
On April 16, 1998 the Board of Directors adopted, and on June 12, 1998,
shareholders of the Company approved, the Northern California Bancorp 1998 Stock
Option Plan (the "1998 Plan"). The 1998 Plan provides that the Company may grant
options to purchase shares of common stock to certain employees or directors at
a price equal to or greater than the market value on the date of grant. The
terms applicable to these various types of Options, including those terms that
may be established by the Committee when making or administering particular
Options, are set forth in detail in the 1998 Plan. The aggregate number of
shares of common stock that may be issued under the 1998 Plan shall not exceed
250,000 shares, subject to adjustment as provided in the 1998 Plan. The
Committee may grant Options under the 1998 Plan until April 15, 2008. The 1998
Plan will remain in effect until all options granted under the 1998 Plan have
been satisfied or expired.
7
<PAGE>
Options granted under the 1998 Plan may be options that are intended to
qualify as "incentive stock options" within the meaning of Section 422 of the
Internal Revenue Code or options that are not intended to so qualify. An
Incentive Stock Option may only be granted to an individual who is an employee
at the time the option is granted. No Incentive Stock Option may be granted to
an individual if, at the time the option is granted, such individual owns stock
possessing more than 10% of the total combined voting power of all classes of
stock of the Company (or of its parent or subsidiary corporation, within the
meaning of Section 422(b)(6) of the Code), unless (i) at the time such option is
granted the option price is at least 110% of the Market Value per Share of the
common stock subject to the option and (ii) such option by its terms is not
exercisable after the expiration of five years from the date of grant. In all
other cases, options are required to have an exercise period of not longer than
10 years.
1987 AMENDED STOCK OPTION PLAN
On May 31, 1989 the Board of directors adopted, and on June 14, 1989,
shareholders of the Company approved, the Amended 1987 Stock Option Plan (the
"amended 1987 Plan"). The Amended 1987 Plan replaced the 1977 Stock Option Plan
(which expired, by its terms, in 1987). The Amended 1987 Plan authorizes the
granting of (1) options which qualify as "incentive stock options" under the
Internal Revenue Code ("Code") and (2) nonstaturtory stock options. The Amended
1987 Plan provides that incentive stock options and nonstatutory stock options
representing up to 30% of the Company's authorized but unissued shares will be
available to directors and full-time salaried officers and employees of the
Company. The Company may not issue an options to any individual if the issuance,
when added to the aggregate outstanding amount of options previously issued to
the individual would exceed 10 percent of the number of shares outstanding at
the time of the issuance of the option. The exercise price must be not less than
100 percent of the fair market value of the shares on the date of grant.
However, an incentive stock option granted to an individual owning 10 percent or
more of the Company's stock after such grant must have an exercise price of at
least 110 percent of such fair market value and an exercise period of not more
than 5 years. In all other cases, options are required to have an exercise
period of not longer than 10 years. No incentive stock option may be granted to
a director who is not otherwise eligible as a full-time officer or employee.
OTHER COMPENSATORY PLANS
In 1995, the Company established an Employee Stock Ownership Plan (the
"ESOP") to invest in the Company's common stock for the benefit of eligible
employees. However, the Company has made no contributions to the Trust
established for the ESOP.
The Bank maintains a salary reduction plan under Section 401(k) of the
Internal Revenue Code of 1986. The 401(k) plan covers substantially all
full-time employees who have completed four months of service with the Bank.
Employees may defer up to a maximum of the lesser of 15% of annual compensation
income, or $10,500. The Bank has the discretion to make contributions which
match a portion of the employee contributions. No contributions were made by the
Bank during the years 1995-1998.
CERTAIN TRANSACTIONS
The Bank has had, and expects to have in the future, banking
transactions in the ordinary course of its business with directors, officers,
principal shareholders and their associates (including members of their
immediate families, certain related trusts and estates and corporations in which
they are executive officers, partners or holders of ten percent or more of any
class of equity securities). Management of the Bank believes that these
transactions have been (and those in the future are intended to be) on
substantially the same terms, including interest rates, collateral and repayment
terms on extensions of credit, as those prevailing at the same time for
comparable transactions with others and did not involve more than the normal
risk of collectibility or present other unfavorable features. Management does
not believe that any such loans are outside the ordinary course of business.
Loans to such borrowers (or guaranteed or endorsed by them) as of December 31,
1998 amounted to approximately $167,742. The total of such loans represents
approximately 4.88% of the Bank's total capital accounts.
8
<PAGE>
<TABLE>
<CAPTION>
Outstanding as of
Maximum Amount December 31, 1998
---------------------------- ----------------------------
Percent of Percent of
Equity Equity
Name Amount Capital Amount Capital
- ----------------------------------- ----------- -------------- ----------- --------------
<S> <C> <C> <C> <C>
Peter J. Coniglio 90,725 2.96% 0 0.00%
Carla S. Hudson 56,000 1.63% 56,000 1.63%
John M. Lotz 119,307 3.66% 108,298 3.15%
Directors, Principal 271,793 8.87% 167,742 4.88%
Shareholder, and Officers
as a Group (8 in number)
</TABLE>
During 1998, the law firm of Hudson, Martin, Ferrante & Street, of
which Mr. Peter J. Coniglio is a partner, performed legal services for the Bank,
for which the Bank paid $3,045. The Board of Directors has determined that it
obtained those legal services at no less favorable rates than could have been
obtained from a non-affiliated law firm.
ACCOUNTANTS
Hutchinson & Bloodgood LLP served as the Company's and the Bank's principal
accountant during 1998, and it is anticipated that such firm will be retained in
the same capacity in 1999. A representative of the firm is expected at the
Meeting, to be available to answer appropriate questions from shareholders in
attendance and to make any statement the representative desires.
ANNUAL REPORT ON FORM 10-KSB
The annual report of the Company on Form 10-KSB for the fiscal year
ended December 31, 1998 is included with this mailing to shareholders.
PROPOSALS BY SHAREHOLDERS AT 2000 ANNUAL MEETING
If any shareholder of the Company timely notifies the Company of his
intention to present a proposal for action at a forthcoming meeting of the
Company's shareholders, the Company will set forth the proposal in its proxy
statement or information statement. Any shareholder desiring to submit a
proposal for action at the 2000 Annual Meeting of Shareholders should submit
such proposal in writing to the Company at its principal place of business no
later than January 31, 2000.
OTHER MATTERS
Management does not know of any matters to be presented to the Meeting
other than those set forth above. However, if other matters properly come before
the Meeting, it is the intention of the persons named in the accompanying proxy
to vote said proxy in accordance with the recommendation of management and
authority to do so is included in the proxy.
Northern California Bancorp, Inc.
Monterey, California
July 1, 1999 By:
--------------------------------
Andre G. Herrera, Secretary
9
<PAGE>
PROXY
NORTHERN CALIFORNIA BANCORP, INC.
ANNUAL MEETING OF SHAREHOLDERS
The undersigned shareholder of Northern California Bancorp, Inc. (the
"Company") hereby nominates, constitutes and appoints Charles T. Chrietzberg,
Jr., and Peter J. Coniglio, and each of them, the attorney, agent and proxy of
the undersigned, with full power of substitution, to vote all stock of the
Company which the undersigned is entitled to vote at the Annual Meeting of
Shareholders of the Company to be held at the Company's office located at 601
Munras Avenue, Monterey, California at 5:00 PM. on July 22, 1999, and any
adjournments thereof, as fully and with the same force and effect as the
undersigned might or could do if personally present, as follows:
1. ELECTION OF DIRECTORS. To elect as directors the nominees set forth below:
[ ] FOR all nominees listed (except as marked to the contrary below).
[ ] WITHHOLD AUTHORITY to vote for all nominees listed below.
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE(S),
STRIKE A LINE THROUGH THE NOMINEE'S NAME(S) IN THE LIST BELOW:
Charles T. Chrietzberg, Jr.
Sandra G, Chrietzberg
Peter J. Coniglio
Carla S. Hudson
John M. Lotz
2. To transact such other business as may properly come before the meeting.
EXECUTION OF THIS PROXY CONFERS AUTHORITY TO VOTE "FOR" PROPOSAL 1
LISTED ABOVE UNLESS THE SHAREHOLDER DIRECTS OTHERWISE. IF ANY OTHER BUSINESS IS
PRESENTED AT SAID MEETING, THIS PROXY SHALL BE VOTED IN ACCORDANCE WITH THE
RECOMMENDATIONS OF THE BOARD OF DIRECTORS.
When signing as attorney, executor, administrator, trustee or guardian,
please give full title. If more than one trustee, all should sign. All joint
owners must sign.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL 1. THIS PROXY
IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND MAY BE REVOKED PRIOR TO ITS
EXERCISE.
I/we do [ ] do not [ ] expect to attend this meeting.
Dated: ,1999
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Signature of Shareholder(s)
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Signature of Shareholder(s)
