SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
(Amendment No. )
Filed by the Registrant <checked-box>
Filed by a party other than the Registrant <square>
Check the appropriate box:
<square> Preliminary Proxy Statement
<square> Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
<checked-box> Definitive Proxy Statement
<square> Definitive Additional Materials
<square> Soliciting Material Pursuant to <square> <section>240.14a-11(c)
or <square> <section>240.14a-12
HUMBOLDT BANCORP
(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):
<checked-box> No fee required
<square> 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:________________________________________
<square>Fee paid previously with preliminary materials.
<square>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>1
HUMBOLDT BANCORP
701 Fifth Street
Eureka, California 95501
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
May 21, 1998
TO THE SHAREHOLDERS OF HUMBOLDT BANCORP:
The 1998 Annual Meeting of Shareholders of Humboldt Bancorp ("Humboldt")
will be held at Humboldt Bank, 701 Fifth Street, Eureka, California 95501 at
5:00 p.m. on Thursday, May 21, 1998, for the following purposes:
1. ELECTION OF DIRECTORS. To elect a Board of twelve Directors to
serve for the ensuing year.
2. RATIFICATION OF INDEPENDENT AUDITORS. To ratify the appointment of
Richardson and Company as independent certified accountants to
audit Humboldt's financial statements for the fiscal year ending
December 31, 1998.
3. To adopt amendments to the Amended Humboldt Bancorp Stock Option
Plan ("Amended Option Plan") which would, among other things,
(i) increase the number of shares of common stock subject to the
Amended Option Plan to 165,911; (ii) extend the possible
Non-Statutory Option term granted to a director from five years
to ten years; (iii) eliminate the vesting requirement on Non-
Statutory Stock Options; and (iv) allow the Board or the appropriate
committee with discretion to make revisions to outstanding Options
issued under the Amended Option Plan consistent with such plan.
4. OTHER BUSINESS. To consider and act upon such other business as
may properly come before the meeting or any adjournment thereof.
Only holders of Common Stock of record as of the close of business on
March 31, 1998 will be entitled to vote at the meeting or any adjournment
thereof.
By Order of the Board of Directors,
ALAN J. SMYTH
Alan J. Smyth
Corporate Secretary
April 13, 1998
YOU ARE URGED TO VOTE IN FAVOR OF MANAGEMENT'S PROPOSALS BY SIGNING AND
RETURNING THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE, WHETHER OR NOT YOU PLAN
TO ATTEND THE MEETING IN PERSON. THE ENCLOSED PROXY IS SOLICITED BY HUMBOLDT'S
BOARD OF DIRECTORS. ANY SHAREHOLDER GIVING A PROXY MAY REVOKE IT PRIOR TO THE
TIME IT IS VOTED BY NOTIFYING THE SECRETARY OF HUMBOLDT IN WRITING OF SUCH
REVOCATION, BY FILING A DULY-EXECUTED PROXY BEARING A LATER DATE, OR BY
ATTENDING THE ANNUAL MEETING IN PERSON AND VOTING BY BALLOT.
<PAGE>2
HUMBOLDT BANCORP
701 Fifth Street
Eureka, California 95501
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
MAY 21, 1998
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation of
Proxies for use at the 1998 Annual Meeting of Shareholders (the "Annual
Meeting") of Humboldt Bancorp ("Humboldt", and with its subsidiaries the
"Company") to be held on Thursday, May 21, 1998 at 5:00 p.m. at 701 Fifth
Street, Eureka, California, and at any and all adjournments thereof.
It is anticipated that this Proxy Statement and the accompanying Notice and
form of Proxy will be mailed to shareholders eligible to receive notice of and
to vote at the Annual Meeting on or about April 13, 1998.
REVOCABILITY OF PROXIES
A form of Proxy for voting your shares at the Annual Meeting is enclosed.
Any shareholder who executes and delivers such Proxy has the right to, and may,
revoke it at any time before it is exercised, by filing with the Secretary of
Humboldt an instrument revoking it or a duly executed Proxy bearing a later
date. In addition, if the person executing a Proxy is present at the Annual
Meeting, and elects to vote in person, the powers of the Proxy holders will be
superseded as to those Proposals on which the shareholder actually votes at the
Annual Meeting.
PERSONS MAKING THE SOLICITATION
THIS SOLICITATION OF PROXIES IS BEING MADE BY HUMBOLDT'S BOARD OF DIRECTORS.
The expenses of preparing, assembling, printing, and mailing this Proxy
Statement and the materials used in the solicitation of Proxies for the Annual
Meeting will be borne by the Company. It is contemplated that Proxies will be
solicited principally through the use of the mails, but officers, directors,
and employees of the Company and its subsidiaries may solicit Proxies
personally or by telephone, without receiving special compensation therefor.
The Company will reimburse banks, brokerage houses and other custodians,
nominees, and fiduciaries for their reasonable expenses in forwarding these
Proxy materials to shareholders whose stock in Humboldt is held of record by
such entities. In addition, the Company may use the services of individuals or
companies it does not regularly employ in connection with this solicitation of
Proxies if management determines it to be advisable.
VOTING SECURITIES
There were issued and outstanding 1,596,952 shares of Humboldt's common
stock (the "Common Stock") as of March 31, 1998, which date has been fixed as
the record date for the purpose of determining shareholders entitled to notice
of, and to vote at, the Annual Meeting (the "Record Date").
All properly executed proxies delivered pursuant to this solicitation and
not revoked will be voted at the Annual Meeting in accordance with the
directions given. Regarding the election of directors, shareholders may vote
in favor of all nominees, or withhold their votes as to all nominees, or
withhold their votes as to specific nominees, by following the instructions on
the enclosed proxy card. With respect to the appointment of Richardson and
Company to serve as the Company's independent auditors for the 1998 fiscal
year, shareholders may vote in favor of or against the proposal, or may abstain
<PAAGE>3
from voting, by specifying their choice as indicated on the enclosed proxy
card. With respect to the adoption of the amendments to the Amended Humboldt
Bancorp Stock Option Plan ("Amended Option Plan") shareholders may vote in
favor of, or against the proposal, or may abstain from voting, by specifying
their choice as indicated on the enclosed proxy card. If no specific
instructions are given with respect to any matter to be voted on, the shares
represented by a signed proxy will be voted FOR the election of the Board's
nominees, FOR the appointment of Richardson and Company as independent auditors
and FOR the adoption of the amendments to the Amended Humboldt Bancorp Stock
Option Plan ("Amended Option Plan"). Directors will be elected from nominees
receiving the highest number of affirmative votes cast by the holders of
Humboldt's Common Stock, voting in person or by proxy at the Annual Meeting;
ratification of the appointment of Richardson and Company as independent
auditors will require the affirmative vote of the holders of a majority of the
shares of Common Stock of Humboldt voting on such appointment in person or by
proxy at the Annual Meeting. The adoption of amendments to the Amended
Humboldt Bancorp Stock Option Plan ("Amended Option Plan") will require the
affirmative vote of the holders of a majority of the shares of Humboldt's
Common Stock, voting on such adoption in person or by proxy at the Annual
Meeting. Thus abstentions, because they will be counted in determining whether
a quorum is present for the vote on all matters, will have no effect for the
election of directors, but will have the effect of a no vote for the
ratification of Richardson and Company as the independent accountants and the
adoption of amendments to the Amended Humboldt Bancorp Stock Option Plan
("Amended Option Plan"). Similarly, broker non-votes are also counted towards
a quorum but are not counted for any purpose in determining whether a matter
has been approved, and will have the same effect as an abstention.
On any matter submitted to the vote of the shareholders other than the
election of directors, each holder of Common Stock will be entitled to one
vote, in person or by Proxy, for each share of Common Stock held of record on
Humboldt's books as of the Record Date. In connection with the election of
directors, shares may be voted cumulatively, but only for persons whose names
have been placed in nomination prior to the voting for election of directors
and only if the shareholder holding such shares has given notice at the
Meeting, prior to such voting, of his or her intention to vote cumulatively.
(Notice of intention to vote cumulatively may not be given by simply marking
and returning a proxy.) If any Company shareholder gives such notice, then all
shareholders eligible to vote will be entitled to cumulate their votes in
voting for election of directors. Cumulative voting allows a shareholder to
cast a number of votes equal to the number of shares held in his or her name as
of the Record Date, multiplied by the number of directors to be elected. All
of these votes may be cast for any one nominee, or they may be distributed
among as many nominees as the shareholder sees fit. The nominees receiving the
highest number of affirmative votes, up to the number of directors to be
elected, shall be elected.
If one of Humboldt's shareholders gives notice of intention to vote
cumulatively, the persons holding the proxies solicited by the Board of
Directors will exercise their cumulative voting rights, at their discretion, to
vote the shares they hold in such a way as to ensure the election of as many of
the Board's nominees as they deem possible. This discretion and authority of
the proxy holders may be withheld by checking the box on the proxy card marked
"withhold from all nominees". Such an instruction, however, will also deny the
proxy holders the authority to vote for any or all of the nominees of the Board
of Directors, even if cumulative voting is not called for at the Annual
Meeting, although it will not prevent the proxy holders from voting, at their
discretion, for any other person whose name may be properly placed in
nomination at the Annual Meeting.
A shareholder may choose to withhold from the proxy holders the authority to
vote for any of the individual candidates nominated by the Board of Directors
by marking the appropriate box on the proxy card and striking out the names of
the disfavored candidates as they appear on the proxy card. In that event the
proxy holders will not cast any of the shareholder's votes for candidates whose
names have been crossed out, whether or not cumulative voting is called for at
the Annual Meeting, but they will retain the authority to vote for the
candidates nominated by the Board of Directors whose names have not been struck
out, and for any other candidates who may be properly nominated at the Annual
Meeting. If a shareholder wishes to specify the manner in which his or her
votes are allocated in the event of cumulative voting, he or she must appear
and vote in person at the Annual Meeting. Ballots will be available at the
Annual Meeting for persons desiring to vote in person.
All votes will be tabulated by the Secretary of Humboldt Bancorp and/or his
assistant.
<PAGE>4
SHAREHOLDINGS OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Management of the Company knows of no person who owns, beneficially or of
record, either individually or together with associates, more than five percent
of the outstanding shares of Humboldt's Common Stock, except as set forth
below. Unless otherwise indicated, the persons listed have sole voting and
investment power over the shares beneficially owned.
SECURITIES OWNERSHIP OF MANAGEMENT
The following table sets forth, as of December 31, 1997, the number and
percentage of shares of Humboldt's outstanding Common Stock, which are
beneficially owned, directly or indirectly, by (a) each of Humboldt's directors
and nominees for director; (b) the Chief Executive Officer of Humboldt and
each of the Company's three executive officers other than the Chief Executive
Officer (the "named executive officers"); and (c) Humboldt's directors and the
named executive officers as a group. The Company identifies as its executive
officers the Chief Executive Officer, the Chief Financial Officer, the Senior
Loan Officer and the Chief Administrative Officer of Humboldt who have a
significant impact on the overall direction of financial reporting of the
Company. The shares "beneficially owned" are determined under Securities and
Exchange Commission Rules, and do not necessarily indicate ownership for any
other purpose. In general, beneficial ownership includes shares over which the
indicated person has sole or shared voting or investment power and shares which
he has the right to acquire within 60 days of December 31, 1997. Unless
otherwise indicated, the persons listed have sole voting and investment power
over the shares beneficially owned. Management is not aware of any
arrangements which may, at a subsequent date, result in a change of control of
the Company.
OPTIONS
SHARES EXERCISABLE
HELD BY 3/1/97 TOTAL %
Myron Abrahamsen 13,143 13,506 26,649 1.47
Ronald F. Angell 17,217 13,365 30,582 1.69
Marguerite Dalianes 7,131 10,003 17,134 0.95
Francis A. Dutra 82,072 6,241 88,313 4.88
Gary L. Evans 14,352 18,196 32,548 1.80
Lawrence Francesconi 17,448 8,436 25,884 1.43
Clayton R. Janssen 10,663 8,194 18,857 1.04
James O. Johnson 5,280 200 5,480 0.30
John McBeth 29,460 8,436 37,896 2.10
Michael Renner 11,039 640 11,679 0.65
John R. Winzler 22,233 18,196 40,429 2.24
Theodore S. Mason 6,252 62,013 68,265 3.77
Alan J. Smyth 0 29,319 29,319 1.62
Ronald V. Barkley 166 29,319 29,485 1.63
Paul A. Ziegler 0 6,173 6,173 0.34
TOTAL: 236,456 232,237 468,693 25.91
a) Directors 236,290 167,426 403,716 22.32
b) Executive Officers 166 64,811 64,977 3.60
c) Directors &
Executive Officers 236,456 232,237 468,693 25.91
Directors Abrahamsen and Dutra decided not to seek reelection to the Board of
Directors and the Board appointed Directors Vaissade and Thomas in early 1998.
Richard L. Whitsell, Vice President and Branch Administrator was appointed an
Executive Officer in January, 1998.
<PAGE>5
PROPOSAL NO. 1: ELECTION OF DIRECTORS
NOMINEES
Humboldt's directors are elected annually, to serve until the next Annual
Meeting of shareholders and until their respective successors have been
elected. All of the nominees listed below have served as directors since
Humboldt's last Annual Meeting of Shareholders, which was held in April of
1996, with the exception of James O. Johnson who was appointed to the Board in
May 1997.
Humboldt's Bylaws provide that the number of directors of Humboldt may not
be less than eight (8) nor more than fifteen (15) until changed by an amendment
to the Bylaws adopted by Humboldt's shareholders, with the exact number of
directors within that range to be set by vote of the Board. At present,
Humboldt's Board consists of twelve directors, and consequently proxies may be
voted for twelve directors.
The persons named below will be nominated for election as directors at the
Annual Meeting to serve until the 1999 Annual Meeting of Shareholders and until
their successors are duly elected. Unless otherwise instructed, proxy holders
will vote the proxies received by them for the election of the nominees below
(or as many thereof as possible under the rules of cumulative voting). In the
event that any of the nominees should be unable to serve as a director, it is
intended that the Proxy will be voted for the election of such substitute
nominee, if any, as shall be designated by the Board of Directors. The Board
of Directors has no reason to believe that any of the nominees named below will
be unable to serve if elected. Additional nominations for director may only be
made by complying with the nomination procedures which are described under the
heading "Shareholder Proposals and Nominations" at the end of this Proxy
Statement.
The nominees for Director as proposed by management, their ages and their
principal occupations during the past five years are:
* RONALD F. ANGELL, 55, Attorney and Partner with the firm of Roberts,
Hill, Calligan, Bragg, Feeney & Angell. Board member since 1989.
* MARGUERITE DALIANES, 54, President of Dalianes Travel Service. Board
member since 1992.
* GARY L. EVANS, 55, Certified Public Accountant associated with the firm
of Aalfs, Evans & Company. Board member since 1989.
* LAWRENCE FRANCESCONI, 67, Retired Owner of Redwood Bootery. Board
member since 1991.
* CLAYTON R. JANSSEN, 72, Attorney and Partner with the firm of Janssen,
Malloy, Needham, Morrison & Koshkin. Board member since 1993.
* JAMES O. JOHNSON, 69, General Contractor and owner of Jim Johnson
Construction. Board member since May 1997.
* THEODORE S. MASON, 55, President and Chief Executive Officer of
Humboldt Bank since March 1989. Prior to 1989 Mr. Mason was Manager of
the Eureka Main Office of Bank of America for approximately five years.
Board member since 1989.
* JOHN MCBETH, 51, President of O & M Industries. Board member since
1992.
* MICHAEL RENNER, 45, President of Renner Petroleum. Board member since
1996.
* JERRY THOMAS, 53, President and General Manager of Eureka Fisheries.
Board Member since 1998.
* EDYTHE E. VAISSADE, 60, Retired Bank Executive. Board Member since
1998.
* JOHN R. WINZLER, 67, Consulting Engineer and President of Winzler &
Kelly. Board member since 1989.
The term of office of each director of Humboldt is one year. None of the
directors were selected pursuant to any arrangement or understanding other than
with the directors and officers of Humboldt acting within their capacities as
such. There are no family relationships between any of the directors and
executive officers of Humboldt. No director or officer of Humboldt serves as a
director of any company which has a class of securities registered under, or
which is subject to the periodic reporting requirements of, the Securities
Exchange Act of 1934, or of any company registered as an investment company
under the Investment Company Act of 1940.
<PAGE>6
VOTE REQUIRED FOR THE ELECTION OF DIRECTORS
Directors will be elected from the nominees receiving the highest number of
affirmative votes of the shares of Common Stock present and voting at the
Annual Meeting. Each share of Common Stock which is represented, in person or
by proxy, at the Annual Meeting will be accorded one vote on each nominee for
director, unless one or more shareholders express an intention to exercise the
right of cumulative voting, in which case all shares will be accorded the
cumulative voting rights described under the caption "Voting Securities",
above.
The Board of Directors recommends a vote FOR each of the nominees for
director described above.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors of Humboldt held 12 regular and 16 special meetings
in 1997. All directors attended 75% or more of the aggregate number of the
Board of Directors and committee meetings on which each director served, except
Marguerite Dalianes whose attendance was 68%.
The Board of Directors of Humboldt has the following committees:
Asset/Liability & Investment Committee, Audit & Capital Plan Committee, Budget
& Finance Committee, Loan Committee, Personnel Committee, Premises Committee
and Special Activities Committee.
The Asset/Liability and Investment Committee was composed of Clayton R.
Janssen (Chairman), Francis A. Dutra, Larry Francesconi, Theodore S. Mason,
Michael Renner, Alan J. Smyth and Ronald V. Barkley. The Committee met four
(4) times during 1997. As part of its responsibilities, the Asset/Liability
and Investment Committee establishes philosophy and policy regarding the
productive employment of excess funds and reserves in prudent investments
consistent with liquidity requirements and regulatory prohibitions and reviews
liquidity, capital, interest, market and credit risks to produce consistent,
high quality earnings.
The Audit & Capital Plan Committee was composed of Gary L. Evans (Chairman),
Myron T. Abrahamsen and Marguerite Dalianes with Theodore S. Mason and Ronald
V. Barkley as non-voting members. The Committee met two (2) times in 1997 for
the purpose of reviewing overall operations of the Bank. As part of its
responsibilities, the Audit & Capital Plan Committee provides assistance to the
Directors in fulfilling their responsibility to the shareholders, potential
shareholders and the investment community relating to corporate accounting,
reporting practices of the corporation, the quality and integrity of the
financial statements of the corporation, and the capital requirements of the
corporation.
The Loan Committee was composed of Gary L. Evans (Chairman), Ronald F.
Angell, John Winzler, John McBeth, Theodore S. Mason, Clayton R. Janssen and
Larry Francesconi with Myron Abrahamsen as an alternate. The Committee met 48
times in 1997. As part of its responsibilities, the Loan Committee establishes
loan policy, examines and approves loans, delegates lending authority, makes
periodic reviews of the Loan Portfolio, reviews declined loans and reviews all
classified loans or other identified loan problems.
The Personnel Committee was composed of Francis A. Dutra (Chairman), Myron
Abrahamsen, Marguerite Dalianes, Larry Francesconi, Theodore S. Mason and John
Winzler. The Committee met one (1) time in 1997. As part of its
responsibilities, the Personnel Committee administers the Stock Option Plan,
the E.S.O.P. Plan and makes recommendations to the Board of Directors on other
Personnel matters.
The Premises Committee was comprised of John Winzler (Chairman), Ronald F.
Angell, John McBeth, Marguerite Dalianes and Theodore S. Mason. The Committee
met seven (7) times in 1997. As part of its responsibilities, the Premises
Committee reviews the premises requirements of the Bank and makes
recommendations on matters relative to premises to the Board of Directors.
The Special Activities Committee was comprised of Larry Francesconi
(Chairman), Clayton R. Janssen, Ronald F. Angell, Gary L. Evans and Theodore S.
Mason. The Committee met three (3) times in 1997. As part of its
responsibilities, the Special Activities Committee reviews and approves
policies for the Merchant BankCard Department, the Credit Issuing Department
and any other Special Activities assigned to it by the Board of Directors.
<PAGE>7
The Budget & Finance Committee was comprised of John Winzler (Chairman),
John McBeth, Mike Renner and Larry Francesconi with Alan Smyth and Paul Ziegler
as non-voting members. The Committee met two (2) times in 1997. As part of
its responsibilities, the Budget & Finance Committee reviews and approves the
annual budget and financial accounting procedures and makes recommendations to
the Board of Directors on financial matters.
COMPENSATION OF DIRECTORS
Directors of Humboldt or its subsidiaries who are also employees of the
Company do not receive compensation for their service on such Boards of
Directors. During 1997, non-employee directors of Humboldt received a fee of
$400 per Board meeting attended, $200 per Board meeting not attended; Loan
Committee Board members received $150 per meeting attended; all other Board
committees received $100 per meeting attended.
EXECUTIVE OFFICERS
The following are the names of the executive officers of the Bank and
certain information concerning each of them:
NAME AND AGE BUSINESS EXPERIENCE
Theodore S. Mason, 55 President and Chief Executive Officer of the Bank
since its inception in 1989.
Alan J. Smyth, 64 Senior Vice President, Chief Financial Officer and
Board Secretary of the Bank since its inception in
1989.
Ronald V. Barkley, 61 Senior Vice President and Loan Administrator of the
Bank since its inception in 1989.
Paul A. Ziegler, 39 Vice President and Chief Administrative Officer of
the Bank since 1994. Prior to that time he was
employed with U.S. Bank for five years as a Senior
Vice President and Area Manager.
<PAGE>8
EXECUTIVE COMPENSATION
The following table sets forth all cash and non-cash compensation (including
bonuses, other annual compensation, deferred compensation and options granted)
paid or accrued to the named executive officers as of December 31, 1997, for
services rendered to the Company during the periods indicated.
ANNUAL COMPENSATION LONG TERM COMPENSATION
OTHER
ANNUAL DEFERRED OPTIONS
NAME YEAR SALARY BONUS(2) COMP(3) COMP(4) GRANTED
Theodore S. Mason(1) 1997 $125,000 $45,990 $1,782 $125,000 2,000
Theodore S. Mason 1996 $105,000 $70,906 $1,658 $100,000 2,000
Theodore S. Mason 1995 $105,000 $52,001 $1,464 $60,000 3,000
Alan J. Smyth 1997 $85,000 $1,865 $2,107 $75,000 2,000
Alan J. Smyth 1996 $70,000 $68,017 $2,331 $50,000 1,000
Alan J. Smyth 1995 $70,000 $55,410 $2,506 $31,668 500
Ronald V. Barkley 1997 $85,000 $34,991 $1,882 $60,000 2,000
Ronald V. Barkley 1996 $70,000 $12,926 $2,250 $45,000 1,000
Ronald V. Barkley 1995 $70,000 $48,884 $1,750 $31,703 500
Paul A. Ziegler 1997 $77,000 $25,825 $554 -0- 5,000
Paul A. Ziegler 1996 $70,000 $24,600 $631 -0- 1,000
Paul A. Ziegler 1995 $55,070 $14,015 $553 -0- 500
1. Humboldt Bank entered into an employment agreement with Mr. Mason on May
1, 1989 whereby Mr. Mason agreed to serve as the Bank's President and
Chief Executive Officer, which Agreement on December 10, 1996 was
extended a third time to January 1, 2001. Under the terms of the
Agreement, Mr. Mason is entitled to receive a base salary of $125,000.00
per year and an incentive bonus based on a percentage ranging from 4% to
2.5% of the Bank's pre-tax net profits pursuant to an incentive bonus
plan. During his term of employment, Mr. Mason may be reimbursed for
travel, meals, entertainment expenses, service to charitable
organizations, and membership in certain committees and other
organizations. In addition, he is eligible for typical employee benefits
such as paid vacation, sick leave, medical insurance and the use of an
automobile owned by the Bank.
2. Includes amounts paid to Mr. Mason, Mr. Smyth, Mr. Barkley and Mr.
Ziegler pursuant to the Bank's Incentive Bonus Plan.
3. Includes amounts imputed to Mr. Mason, Mr. Smyth, Mr. Barkley and Mr.
Ziegler as income for tax purposes pursuant to the Bank's automobile
program and the Bank's life insurance program.
4. Includes amounts of salary or bonus deferred by Mr. Mason, Mr. Smyth and
Mr. Barkley pursuant to the Bank's Deferred Compensation Plan. The
amounts in this column are not included in the Salary and Bonus columns.
<PAGE>9
STOCK OPTION PLAN
To attract and retain highly qualified personnel for the Bank, Bancorp
has adopted the Humboldt Bancorp Stock Option Plan ("Option Plan"). The Option
Plan provides for the granting of options for the issuance of up to 87,484
shares of Bancorp Common Stock. All key full-time salaried employees, key
full-time salaried officers, and directors (including emeritus directors) who
are not full-time salaried employees ("Eligible Directors") of Bancorp are
eligible to be granted options under the Option Plan. Eligible Directors may
only participate in the Option Plan pursuant to a formula. The Board, or the
Committee in the case of grants to officers, is responsible for the operation
of the Option Plan and has the sole discretion, subject to the express terms of
the Option Plan, to make all determinations regarding (i) the selection of the
eligible individuals, except directors, who are to receive option grants under
the Option Plan and (ii) the terms and conditions of each option grant.
Directors of Bancorp who are not serving on the Committee and who are not full
time salaried employees are eligible to receive 1,000 Options upon joining the
Board and 1,000 Options upon completion of a full year of service on the Board
as of December 31st of each year.
The option price per share shall be determined by the Board, or
Committee, in its sole discretion and shall be specified in the agreement
relating to such option. The option price shall not be less than 100% of the
market value of the Common Stock on the date of grant. The Option Plan
automatically terminates 10 years after the date the Board approved the Option
Plan. However, the Option Plan can be terminated at any time by the Board of
Directors. During 1997, Messrs. Mason, Smyth, Barkley and Ziegler received
2,000, 2,000, 2,000 and 5,000 options, respectively, under the Option Plan.
OTHER STOCK OPTIONS
In addition, the Bank had issued 291,469 shares under a Bank Stock Option
Plan and these options were assumed by the Bancorp.
INCENTIVE BONUS PLAN
The Bank has an Incentive Bonus Plan for its employees, officers, vice
presidents and higher ranking officers.
Under the Bonus Plan, the Bank is required to grant incentive bonuses to
the following employees in the following amounts based on the amount of the
Bank's annual pre-tax profits, less any gain on investment securities sold, and
plus any loss on investment securities sold: the President and Chief Executive
Officer-4% of the first $2,000,000, 3% of the next $2,000,000 and 2.5% on
amounts in excess of $4,000,000; the Senior Vice President and Chief Financial
Officer-2% of the first $2,000,000, 1.5% of the next $2,000,000 and 0.5% on
amounts in excess of $4,000,000; the Senior Vice President and Senior Loan
Officer-2% of the first $2,000,000, 1.5% of the next $2,000,000 and 0.5% on
amounts in excess of $4,000,000; and the Vice President and Chief
Administrative Officer-0.5%.
The Bank may also grant incentive bonuses to the other employees for an
amount not exceeding 6.5% of the Bank's pre-tax net profits upon the
recommendation of the Bank's President.
DEFINED CONTRIBUTION RETIREMENT PLAN
The Bank has a defined contribution retirement plan covering
substantially all of the Bank's employees. The Bank contributions to the plan
are made at the discretion of the Board of Directors in an amount not to exceed
the maximum amount deductible under the profit sharing plan rules of the
Internal Revenue Service. Employees may elect to have a portion of their
compensation contributed to the plan in conformity with the requirements of
Section 401(k) of the Internal Revenue Code.
DIRECTOR FEE PLAN
Bancorp has adopted the Humboldt Bank Director Fee Plan (the "Fee Plan").
The Fee Plan provides for the issuance of up to 40,000 shares of Bancorp Common
Stock.
The Fee Plan permits each Bank director to elect to receive his/her
directors' fees in the form of Bancorp common stock, cash, or a combination of
Bancorp common stock and cash, and to elect to defer the receipt of any of the
foregoing until the end of his/her term as a Bank director ("deferral"). If
deferral is elected, the amount of the director's fees shall be credited to an
<PAGE>10
account on behalf of the director; however, such crediting shall constitute a
mere promise on the part of the Bank and Bancorp to pay/distribute on this
account. The account is otherwise unsecured, unfunded and subject to the
general claims of creditors of the Bank and Bancorp.
The following tables set forth the number of options granted to the
Company's executive officers during 1997 and the number and value of
unexercised options held by such executive officers as of the end of 1997.
OPTION GRANTS IN 1997
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
% OF TOTAL ANNUAL RATES OF
OPTIONS STOCK PRICE
GRANTED TO EXERCISE APPRECIATION FOR
OPTIONS EMPLOYEES PRICE EXPIRATION OPTION TERM
NAME GRANTED IN 1997 PER SHARE DATE 5% 10%
10%
<S> <C> <C> <C> <C> <C> <C>
Theodore S. Mason 2,000 6.3% $19.77 February 18, 2007 $24,860.00 $63,020.00
Alan J. Smyth 1,000 3.1% $19.77 February 18, 2007 $12,430.00 $31,150.00
Alan J. Smyth 1,000 3.1% $30.25 December 18, 2007 $19,020.00 $48,210.00
Ronald V. Barkley 1,000 3.1% $19.77 February 18, 2007 $12,430.00 $31,150.00
Ronald V. Barkley 1,000 3.1% $30.25 December 18, 2007 $19,020.00 $48,210.00
Paul A. Ziegler 1,000 3.1% $19.77 February 18, 2007 $12,430.00 $31,150.00
Paul A. Ziegler 4,000 12.5% $30.25 December 18, 2007 $76,080.00 $192,840.00
</TABLE>
AGGREGATED OPTION EXERCISES IN 1997
NUMBER OF
UNEXERCISED VALUE OF
OPTIONS AT UNEXERCISED
SHARES YEAR-END IN-THE-MONEY
ACQUIRED ON VALUE (EXERCISABLE/ (EXERCISABLE/
NAME EXERCISE REALIZED UNEXERCISABLE) UNEXERCISABLE)
Theodore S. Mason -0- -0- 60,473 / 5,144 $474,008 / $59,193
Alan J. Smyth -0- -0- 28,548 / 3,129 $224,149 / $65,063
Ronald V. Barkley -0- -0- 28,548 / 3,129 $224,149 / $65,063
Paul A. Ziegler -0- -0- 5,402 / 6,129 $53,737 / $155,813
The Bank pays the cost of premiums on life insurance policies insuring
all employees, including executive officers, in amounts approximating two times
their annual salaries. The policies are payable to the officers' designated
beneficiaries. A portion of the premium paid by the Bank is imputed as income
for tax purposes for the executive officers. Such amounts are included in the
cash compensation set forth in the executive compensation table above.
SUPPLEMENTAL BENEFIT PLAN
Humboldt Bank has adopted Salary Continuation Plans which act as
supplemental benefit plans for senior management and certain other personnel.
The Policy authorizes Humboldt and its subsidiaries to enter into individual
agreements with selected officers, providing them certain retirement benefits.
The Plans are approved by Humboldt's Board of Directors.
<PAGE>11
As authorized, the Company has entered into Salary Continuation
Agreements with Messrs. Mason, Smyth, Barkley, Ziegler and others. Each of
these agreements, which are similar in form, provide that upon retirement the
officer will receive, for a period of fifteen years (Mr. Smyth, Mr. Barkley,
Mr. Ziegler and others for ten years) after the date of his/her retirement, a
specified annual retirement payment, payable in equal monthly installments. In
the event that the officer dies after his or her retirement, but before the end
of the 15 year period (Mr. Smyth, Mr. Barkley, Mr. Ziegler and others for 10
years), the Company will continue to make such payments to the officer's
designated beneficiary. If the officer should die prior to his/her retirement
as described above, his/her designated beneficiary will receive, for a period
of 15 years (Mr. Smyth, Mr. Barkley, Mr. Ziegler and others for 10 years), the
same yearly benefit, payable in equal monthly installments.
The agreements also provide that if any person or company acquires 25% or
more of Humboldt's outstanding shares, through a tender offer, merger, or
otherwise, or if Humboldt should sell substantially all of its assets to
another bank or corporation which is not a wholly-owned subsidiary, and within
two years thereafter the officer's employment by the Company is terminated or
his/her salary or authority is materially reduced, the executive or officer
will be entitled to receive an amount equal to the currently vested portion of
his/her annual retirement benefit.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires Humboldt's
officers and directors, and persons who own more than 10% of a registered class
of Humboldt's equity securities, to file reports of ownership on Form 3 and
changes of ownership on Form 4 or Form 5 with the Securities and Exchange
Commission (the "SEC"). They are also required by SEC rules to furnish
Humboldt with copies of all Section 16(a) forms that they file.
Based solely on its review of the copies of such forms received by
Humboldt, or written representations from certain reporting persons that no
Forms 5 were required for the officers, directors and ten-percent stockholders,
Humboldt believes that during 1997 its officers, directors and ten-percent
stockholders complied with all applicable Section 16(a) filing requirements.
CERTAIN TRANSACTIONS
Some of the Company's directors and executive officers and their
immediate families, as well as the companies with which they are associated or
of which they are customers, have had banking transactions with Humboldt in the
ordinary course of the Company's business. In addition, the Company expects to
have banking transactions with such persons in the future. In management's
opinion, all loans and commitments to lend included in such transactions were
made in compliance with applicable laws on substantially the same terms,
including interest rates and collateral, as those prevailing for comparable
transactions with other persons of similar creditworthiness and, in the opinion
of management, did not involve more than a normal risk of collectability or
present other unfavorable features. The Company has a strong policy regarding
review of the adequacy and fairness to the Company of loans to its directors
and officers. The outstanding balance under extensions of credit to directors
and executive officers of the Company and other companies with which such
individuals are associated was $4,898,000 as of December 31, 1997.
PROPOSAL NO. 2: RATIFICATION OF INDEPENDENT AUDITORS
Upon the recommendation of Humboldt's Audit Committee, consisting of
Chairman Gary Evans, Marguerite Dalianes and Myron T. Abrahamsen, the Board of
Directors has appointed Richardson and Company as the Company's independent
accountants to audit the consolidated financial statements of Humboldt and its
subsidiaries for the 1998 fiscal year.
Richardson and Company served as the Company's auditors for the fiscal
year ended December 31, 1997, and during the course of that fiscal year they
were also engaged by the Company to provide certain tax and consulting
services. The affirmative vote of a majority of the shares of Common Stock
present and voting at the Annual Meeting is required to ratify the appointment.
<PAGE>12
The Board of Directors recommends a vote FOR Proposal No. 2, Ratification
of the Appointment of Richardson and Company as the Company's independent
auditors for the succeeding year. If the appointment is not ratified,
Humboldt's Board of Directors will select other independent auditors.
Representatives of Richardson and Company will be present at the Annual Meeting
to respond to appropriate questions from the shareholders and will be given the
opportunity to make a statement should they desire to do so.
PROPOSAL NO. 3: ADOPTION OF THE AMENDED HUMBOLDT BANCORP STOCK OPTION PLAN
On April 17, 1996, the shareholders approved the adoption of the Humboldt
Bancorp Stock Option Plan (the "Option Plan"). The Option Plan provides for
the granting of Options for the issuance of up to 87,484 shares of Bancorp
Common Stock. Also, under the Option Plan, directors of Bancorp who are not
serving on the committee that administers the Option Plan ("Committee") and who
are not full-time salaried employees are eligible to receive Non-Statutory
Options but only under certain conditions including that the Options vest 20%
on the date of grant and 20% each year thereafter; and that the Options expire
five (5) years after the date of grant. The Option Plan also provides for
additional Option grants resulting from future stock issuances for both current
and former directors and employees holding outstanding Options.
The purpose of the Option Plan is to attract and retain the best
personnel to Bancorp and to give Option recipients a greater personal stake in
the success of the business. All key full-time salaried employees and
officers, and directors (excluding emeritus directors) who are not full-time
salaried employees ("Eligible Directors") of Bancorp or its subsidiary are
eligible for grants of Options under the Option Plan. The Board, or the
Committee in the case of grants to officers, is responsible for the operation
of the Option Plan and has the sole discretion, subject to the express terms of
the Option Plan, to make all determinations regarding (i) the selection of the
eligible individuals, except directors, who are to receive Option grants under
the Option Plan and (ii) the terms and conditions of each Option grant.
Directors of Bancorp who are not serving on the Committee and who are not full-
time salaried employees are eligible to receive Non-Statutory Options under the
Option Plan. The Option price per share shall be determined by the Board, or
Committee, in its sole discretion and shall be specified in the agreement
relating to such Option. The Option price shall not be less than 100% of the
market value of the Common Stock on the date of grant.
On February 25, 1998, the Board of Directors approved amendments to the
Option Plan. The Amended Humboldt Bancorp Stock Option Plan (the "Amended
Option Plan") provides for an increase in the number of Bancorp Common Stock
available under the Option Plan to 165,911. The Amended Option Plan also
eliminates the vesting requirement on NonStatutory Options granted to directors
of Bancorp, and extends the possible expiration date to ten (10) years after
the date of grant. Also, under the Amended Option Plan, additional Option
grants resulting from future stock issuances shall only be available for
current, and not former, directors and employees holding outstanding Options.
Subject to an Option holder's approval, Bancorp intends to amend outstanding
Options to be consistent with the terms of the Amended Option Plan.
Adoption of the Amended Option Plan is subject to (1) the approval by the
affirmative vote of the holders of a majority of the outstanding shares of
Bancorp's Common Stock, present in person or by proxy at a meeting of the
Shareholders and entitled to vote thereon, and (2) the approval of applicable
regulatory agencies, including the California Department of Corporations (DOC)
pursuant to an application to amend the permit granted to the Bancorp for the
Amended Option Plan. Upon shareholder approval of the Amended Option Plan, the
future grants of stock Options thereunder will be exempt from Section 16(b) of
the 1934 Act dealing with short-swing profit liability so long as the Amended
Option Plan is otherwise in compliance with 16b-3 of the 1934 Act.
If the Amended Option Plan is adopted, all Directors of Bancorp owning
Options to acquire shares of Common Stock will be affected by the amendments.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS ADOPT THE
AMENDED HUMBOLDT BANCORP STOCK OPTION PLAN.
<PAGE>13
SHAREHOLDER PROPOSALS
Under certain circumstances, shareholders are entitled to present
proposals at shareholders' meetings, provided that the proposal is submitted in
a timely manner and in a form that complies with applicable regulations. For
any such shareholder proposal to be included in the proxy statement to be
prepared for next year's annual meeting, the shareholder must submit the
proposal prior to October 16, 1998 in a form that complies with applicable
regulations.
OTHER MATTERS
Management does not know of any matters to be presented at the Annual
Meeting other than those set forth above. However, if other matters come
before the Annual Meeting, it is the intention of the persons named in the
accompanying Proxy to vote the shares represented by the Proxy in accordance
with the judgment of the person or persons authorized to vote the Proxy, and
discretionary authority to do so is included in the Proxy.
ALAN J. SMYTH
Alan J. Smyth
Corporate Secretary
Dated: April 13, 1998
The Annual Report to Shareholders for the fiscal year ended December 31,
1997 is being mailed concurrently with this Proxy Statement to all shareholders
of record as of March 31, 1998.
A COPY OF HUMBOLDT'S MOST RECENT ANNUAL REPORT TO THE SECURITIES AND
EXCHANGE COMMISSION ON FORM 10-KSB WILL BE PROVIDED TO SHAREHOLDERS WITHOUT
CHARGE UPON WRITTEN REQUEST TO: CORPORATE SECRETARY, HUMBOLDT BANCORP, P. O.
BOX 1007, EUREKA, CALIFORNIA 95502-1007.
<PAGE>
HUMBOLDT BANCORP
ANNUAL MEETING OF SHAREHOLDERS
MAY 21, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned appoint(s) Alan J. Smyth and Cindy Cabeceira, and each of
them, as proxies for the undersigned, with full power of substitution and
revocation, to represent and to vote, as designated below, all shares of Common
Stock of Humboldt Bancorp (the "Company") that the undersigned would be
entitled to vote if personally present, at the Annual Meeting of Shareholders
of the Company to be held at 701 Fifth Street, Eureka, California, on May 21,
1998 at 5:00 p.m., local time, upon the following items as set forth in the
Notice of Annual Meeting and Proxy Statement, and according to their discretion
upon all other matters that may be properly presented for action at the Annual
Meeting, or any adjournment thereof. The undersigned may revoke this Proxy at
any time prior to its exercise.
IF ANY SHAREHOLDER GIVES PROPER NOTICE AT THE ANNUAL MEETING OF HIS/HER
INTENTION TO CUMULATE HIS/HER VOTES IN THE ELECTION OF DIRECTORS, THE PROXY
HOLDERS WILL HAVE THE FULL DISCRETION AND AUTHORITY TO VOTE CUMULATIVELY AND TO
ALLOCATE VOTES AMONG ANY OR ALL OF THE NOMINEES OF THE BOARD OF DIRECTORS IN
SUCH ORDER AS THEY MAY DETERMINE UNLESS THE SHAREHOLDER HAS OTHERWISE INDICATED
BY MARKING THE BOXES ON THE OTHER SIDE OF THIS CARD. SEE THE "VOTING
SECURITIES" SECTION OF THE PROXY STATEMENT FOR MORE INFORMATION.
THIS PROXY, WHEN PROPERLY EXECUTED AND RETURNED TO THE COMPANY, WILL BE VOTED
IN THE MANNER DIRECTED ON THIS CARD. IN THE EVENT THAT NO SUCH DIRECTION IS
GIVEN HEREON AND THIS PROXY IS NOT SUBSEQUENTLY REVOKED OR SUPERSEDED, THE
PROXYHOLDERS NAMED ABOVE INTEND TO VOTE FOR THE ELECTION OF EACH OF THE
NOMINEES FOR DIRECTOR LISTED ON THE REVERSE AND FOR EACH OF THE OTHER PROPOSALS
LISTED ON THE REVERSE.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE FOR EACH OF THE
PROPOSALS LISTED ON THIS CARD.
_
PLEASE MARK YOUR VOTES AS INDICATED IN THIS EXAMPLE: /X/
1. Proposal to elect the following nominees to serve as directors, each to hold
office until the 1999 Annual Meeting of Shareholders or until his/her
successor has been duly elected and qualified:
Nominees: Ronald F. Angell, Marguerite Dalianes, Gary L. Evans, Lawrence
Francesconi, Clayton R. Janssen, James O. Johnson, Theodore S. Mason,
John McBeth, Michael Renner, Jerry Thomas, Edythe E. Vaissade and John R.
Winzler.
_ _
/_/ /_/
FOR ALL WITHHOLD FROM
NOMINEES ALL NOMINEES
(INSTRUCTION: To withhold authority to vote for any individual nominee, strike
a line through his/her name in the list above.)
2. Proposal to ratify the appointment of Richardson and Company as
independent auditors to audit the Company's financial statements for the
fiscal year ended December 31, 1998.
_ _ _
/_/ /_/ /_/
FOR AGAINST ABSTAIN
3. Proposal to adopt amendments to the Amended Humboldt Bancorp Stock
Option Plan ("Amended Option Plan").
_ _ _
/_/ /_/ /_/
FOR AGAINST ABSTAIN
<PAGE>
I/we ___ do ___ do not expect to attend this meeting.
TO ASSURE A QUORUM, YOU ARE URGED TO DATE, COMPLETE, AND SIGN THIS PROXY AND
MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO ADDITIONAL POSTAGE
IF MAILED IN THE UNITED STATES.
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
INTEND TO ATTEND THE ANNUAL MEETING, PLEASE SIGN AND RETURN THIS PROXY AS
PROMPTLY AS POSSIBLE IN THE ENCLOSED ENVELOPE.
SHAREHOLDER(S):
__________________________________________________
(SIGNATURE)
__________________________________________________
(SIGNATURE)
DATE: ______________________________, 1998.
