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 |_| ss.240.14a-11(c) or |_| ss.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):
|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>
HUMBOLDT BANCORP
701 Fifth Street
Eureka, California 95501
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
May 20, 1999
TO THE SHAREHOLDERS OF HUMBOLDT BANCORP:
The 1999 Annual Meeting of Shareholders of Humboldt Bancorp (the
"Company") will be held at Humboldt Bank, 701 Fifth Street, Eureka, California
95501, at 5:30 p.m., on Thursday, May 20, 1999, for the following purposes:
1. ELECTION OF DIRECTORS. To elect a Board of twelve (12) 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 the Company's financial statements for the fiscal year
ending December 31, 1999;
3. AMENDMENT OF OPTION PLAN. To adopt a further amendment to the
Amended Humboldt Bancorp Stock Option Plan which would allow an
optionee who retires to exercise his or her options up until the
expiration date of the original option grant (as opposed to three
months from the date of retirement), and also would allow
revisions to outstanding options consistent with such amendment;
and
4. OTHER BUSINESS. To consider and act upon such other business as
may properly come before the meeting or any postponement or
adjournment thereof.
Only holders of Common Stock of record as of the close of business on
March 31, 1999, will be entitled to vote at the meeting or any postponement or
adjournment thereof.
By Order of the Board of Directors,
Alan J. Smyth,
Corporate Secretary
April 13, 1999
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 THE COMPANY'S
BOARD OF DIRECTORS. ANY SHAREHOLDER GIVING A PROXY MAY REVOKE IT PRIOR TO THE
TIME IT IS VOTED BY NOTIFYING THE SECRETARY OF THE COMPANY 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>1
HUMBOLDT BANCORP
701 Fifth Street
Eureka, California 95501
PROXY STATEMENT FOR
ANNUAL MEETING OF SHAREHOLDERS
May 20, 1999
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation of
proxies for use at the 1999 Annual Meeting of Shareholders (the "Annual
Meeting") of Humboldt Bancorp (the "Company") to be held on Thursday, May 20,
1999, at 5:30 p.m., at 701 Fifth Street, Eureka, California, and at any and all
postponements or adjournments thereof. Unless otherwise noted, all references to
the Company in this Proxy Statement shall include both Humboldt Bancorp and its
subsidiary, Humboldt Bank.
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, 1999.
PURPOSE OF MEETING
At the Annual Meeting, shareholders will be asked:
1. To elect a Board of twelve ( 12) directors to serve for the
ensuing year;
2. To ratify the appointment of Richardson and Company as
independent certified accountants to audit the Company's
financial statements for the fiscal year ending December 31,
1999;
3. To adopt a further amendment to the Amended Humboldt Bancorp
Stock Option Plan which would allow an optionee who retires to
exercise his or her options up until the expiration date of the
original option grant (as opposed to three months from the date
of retirement), and also would allow revisions to outstanding
options consistent with such amendment; and
4. To consider and act upon such other business as may properly come
before the meeting or any postponement or adjournment thereof.
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
revoke it at any time before it is exercised by filing with the Secretary of the
Company 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.
<PAGE>2
PERSONS MAKING THE SOLICITATION
This solicitation of proxies is being made by the Company'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 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 the Company 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 1,792,584 shares of the Company's
common stock, no par value (the "Common Stock") as of March 31, 1999, 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 1999 fiscal year,
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. With
respect to the adoption of the amendments to the Amended Humboldt Bancorp Stock
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 all 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.
Directors will be elected from nominees receiving the highest number of
affirmative votes cast by the holders of the Company'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 the Company 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 will require the
affirmative vote of the holders of a majority of the shares of the Company'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 on 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.
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 the
<PAGE>
Company'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 Annual
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 shareholder gives such notice, then all shareholders
eligible to vote will be entitled to cumulate their votes in voting for the
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 the Company'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 the Company and/or his
assistant.
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 (5%) of the outstanding shares of the Company'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.
Francis & Dorothy Dutra Family Trust 91,740 Shares
Francis A Dutra Custodian for J. Parker 380 Shares
Francis A Dutra Custodian for K. Parker 380 Shares
Total 92,500 Shares 5.17%
------
<PAGE>4
SECURITIES OWNERSHIP OF MANAGEMENT
The following table sets forth, as of December 31, 1998, the number and
percentage of shares of the Company's outstanding Common Stock, which are
beneficially owned, directly or indirectly, by (a) each of the Company's
directors and nominees for director; (b) the Company's named executive officers
(as defined below under the heading, "Executive Compensation"); and (c) all of
the Company's directors and executive officers as a group. 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/she has the
right to acquire within 60 days of December 31, 1998. 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.
<TABLE>
<CAPTION>
OPTIONS
SHARES EXERCISABLE
HELD BY 3/1/99 TOTAL %
------ ------------ ------ ----
<S> <C> <C> <C> <C>
Ronald F. Angell 23,148 14,629 37,777 1.85
Marguerite Dalianes 7,843 14,140 21,983 1.08
Gary L. Evans 15,787 23,153 38,940 1.91
Lawrence Francesconi 19,188 12,417 31,605 1.55
Clayton R. Janssen 11,729 12,417 24,146 1.18
James O. Johnson 5,807 2,100 7,907 0.39
John McBeth 40,180 4,641 44,821 2.20
Michael Renner 12,141 3,310 15,451 0.76
John R. Winzler 29,769 17,839 47,608 2.33
Jerry L. Thomas 3,719 1,100 4,819 0.24
Edythe E. Vaissade 12,237 25,242 37,479 1.84
Theodore S. Mason 25,478 52,771 78,249 3.84
Alan J. Smyth 3,023 30,686 33,709 1.65
Ronald V. Barkley 2,182 24,409 26,591 1.30
Paul A. Ziegler 0 9,348 9,348 0.46
All Directors & Executive Officers
(16 persons) 213,213 251,377 464,590 22.78
</TABLE>
Former executive officer Richard L. Whitsell was appointed President of Capitol
Valley Bank (In Organization), Roseville, California, a subsidiary of the
Company, in December 1998. Kenneth J. Musante, Vice President and Manager of
Merchant Bankcard, was appointed an Executive Officer in December 1998.
<PAGE>5
PROPOSAL NO. 1: ELECTION OF DIRECTORS
NOMINEES
The Company'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 director since the
Company's last annual meeting of shareholders.
The Company's Bylaws provide that the number of directors of the Company
may not be less than eight (8) nor more than fifteen (15) until changed by an
amendment to the Bylaws adopted by the Company's shareholders, with the exact
number of directors within that range to be set by vote of the Board. At
present, the Company'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 2000 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" 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:
o Ronald F. Angell, 56, Attorney and partner with the firm of Roberts,
Hill, Bragg, Angell & Perlman. Board member since 1989.
o Marguerite Dalianes, 55, President of Dalianes Travel Service. Board
member since 1992.
o Gary L. Evans, 56, Certified Public Accountant associated with the
firm of Aalfs, Evans & Company. Board member since 1989.
o Lawrence Francesconi, 68, Retired Owner of Redwood Bootery. Board
member since 1991.
o Clayton R. Janssen, 73, Attorney and partner with the firm of Janssen,
Malloy, Needham, Morrison & Koshkin LLP. Board member since 1993.
o James O. Johnson, 70, General Contractor and owner of Jim Johnson
Construction. Board member since 1997.
o Theodore S. Mason, 56, President and Chief Executive Officer of
Humboldt Bank since 1989. Board member since 1989.
o John McBeth, 52, President of O & M Industries. Board member since
1991.
o Michael Renner, 46, President of Renner Petroleum. Board member since
1996.
o Jerry L. Thomas, 54, President and General Manager of Eureka
Fisheries. Board member since 1998.
o Edythe E. Vaissade, 61, Retired Bank Executive. Board member since
1998.
o John R. Winzler, 68, Consulting Engineer and President of Winzler &
Kelly. Board member since 1989.
The term of office of each director of the Company is one year. None of
the directors were selected pursuant to any arrangement or understanding other
than with the directors and officers of the Company acting within their
<PAGE>6
capacities as such. There are no family relationships between any of the
directors and executive officers of the Company. No director or officer of the
Company 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.
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.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors of the Company held twelve (12) regular and six
(6) special meetings in 1998. All directors attended 75% or more of the
aggregate number of the Board of Directors and committee meetings on which each
director served.
The Board of Directors of the Company has the following committees:
Asset/Liability & Investment Committee, Audit & Capital Plan Committee, Budget &
Finance Committee, Loan Committee, Personnel Committee, Premises Committee,
Special Activities Committee, and Ad Hoc Committees #1 and #2.
The Asset/Liability and Investment Committee was composed of Clayton R.
Janssen (Chairman), Larry Francesconi, Theodore S. Mason, Michael Renner, Alan
J. Smyth, and Ronald V. Barkley. The Committee met four (4) times during 1998.
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), Edythe E. Vaissade, Clayton R. Janssen, and Marguerite Dalianes. The
Committee met five (5) times in 1998 for the purpose of reviewing the overall
operations of the Company. 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 Company,
the quality and integrity of the financial statements of the Company, and the
capital requirements of the Company.
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 Mike Renner as an alternate. The Committee met
forty-eight (48) times in 1998. 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.
<PAGE>7
The Personnel Committee was composed of John R. Winzler (Chairman), Mike
Renner, Marguerite Dalianes, Larry Francesconi, Theodore S. Mason, and Jim
Johnson. The Committee met six (6) times in 1998. As part of its
responsibilities, the Personnel Committee administers the Amended Humboldt
Bancorp Stock Option Plan, the E.S.O.P. Plan, and makes recommendations to the
Board of Directors on personnel matters.
The Premises Committee was comprised of John Winzler (Chairman), Ronald
F. Angell, John McBeth, Marguerite Dalianes, Larry Francesconi, Theodore S.
Mason, and Jim Johnson. The Committee met thirteen (13) times in 1998. As part
of its responsibilities, the Premises Committee reviews the premises
requirements of the Company and makes recommendations on matters relative to
premises to the Board of Directors.
The Special Activities Committee was comprised of John Winzler
(Chairman), Clayton R. Janssen, Larry Francesconi, Edythe E. Vaissade, and
Theodore S. Mason. The Committee met three (3) times in 1998. As part of its
responsibilities, the Special Activities Committee reviews and approves policies
for the Merchant Bankcard Department of the Bank, the Credit Issuing Department
of the Bank, and any other special activities assigned to it by the Board of
Directors.
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 1998. 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.
The Ad Hoc Committee #1 was comprised of Larry Francesconi (Chairman),
Gary L. Evans, Clayton R. Janssen, and Theodore S. Mason. The Committee met
three (3) times in 1998. The Committee was appointed by Board Chairman Ron
Angell at the regular meeting of the Board of Directors on Thursday, September
17, 1998, and was directed to explore the relationships, functions, and
responsibilities of the various boards of directors that would be created by
future acquisitions and becoming a multi-bank holding company.
The Ad Hoc Committee #2 was comprised of Ronald F. Angell (Chairman),
Clayton R. Janssen, John Winzler, and Theodore S. Mason. The Committee met one
(1) time in 1998. This Committee was appointed by the Board of Directors at the
regular meeting of the Board on Thursday, November 19, 1998, and was directed to
investigate and pursue possible mergers and/or acquisitions for the Company.
COMPENSATION OF DIRECTORS
Directors of the Company who are also employees of the Company or its
subsidiaries do not receive compensation for their service on the Company's
Board of Directors. During 1998, for the period January through May,
non-employee directors of the Company received a fee of $400 per board meeting
attended and $200 per board meeting not attended; Loan Committee members
received $150 per meeting attended; and all other committee members received
$100 per meeting attended. For the period June through December, non-employee
directors of the Company received a fee of $700 per board meeting attended, $200
per board meeting not attended, $450 per special board meeting attended, and
$200 per meeting for all committee meetings attended.
<PAGE>8
EXECUTIVE OFFICERS
The following are the names of the executive officers of the Company and
certain information concerning each of them:
Name and Age Business Experience
Theodore S. Mason, 56 President and Chief Executive Officer of Humboldt
Bank since its inception in 1989 and of the Company
since 1996.
Alan J. Smyth, 65 Senior Vice President, Chief Financial Officer, and
Board Secretary of Humboldt Bank since its inception
in 1989 and of the Company since 1996.
Ronald V. Barkley, 62 Senior Vice President and Loan Administrator of
Humboldt Bank since its inception in 1989 and of
the Company since 1996.
Paul A. Ziegler, 40 Senior Vice President and Chief Administrative
Officer of Humboldt Bank since 1994 and of the
Company since 1996. Prior to that time he was
employed with U.S. Bank for five years as a Senior
Vice President and Area Manager.
Kenneth J. Musante, 33 Vice President and Manager of Humboldt Bank's
Merchant Bankcard Department since 1993 and of the
Company since 1998.
EXECUTIVE COMPENSATION
As to the Company's Chief Executive Officer and each other executive
officer of the Company who received total compensation in excess of $100,000 in
1998 (the "named executive officers"), the following table sets forth all cash
and non-cash compensation (including bonuses, other annual compensation,
deferred compensation, and options granted) received from the Company for
services performed in all capacities during the last three years.
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
------------------- ----------------------
OTHER
ANNUAL DEFERRED OPTIONS
NAME YEAR SALARY BONUS(2) COMP(3) COMP(4) GRANTED
- ---- ---- ------ -------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Theodore S. Mason(1) 1998 $125,000 $58,809 $2,434 $150,000 2,000
Theodore S. Mason 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
Alan J. Smyth 1998 $85,000 $12,932 $3,704 $90,000 -0-
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
Ronald V. Barkley 1998 $85,000 $35,550 $2,279 $45,000 -0-
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
Paul A. Ziegler 1998 $77,000 $51,340 $738 -0- -0-
Paul A. Ziegler 1997 $77,000 $25,825 $554 -0- 5,000
Paul A. Ziegler 1996 $70,000 $24,600 $631 -0- 1,000
</TABLE>
<PAGE>9
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. The term of such agreement was extended on December 10,
1996, 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.
STOCK OPTION PLAN
On April 17, 1996, pursuant to the recommendation of the Board of
Directors, the shareholders approved the adoption of the Humboldt Bancorp Stock
Option Plan (the "Option Plan") in order to attract and retain the best
personnel and to give option recipients a greater personal stake in the success
of the business. On May 21, 1998, an amendment to the Option Plan increased the
number of shares available for the granting of options and certain vesting
provisions with respect to the granting of options to directors were eliminated
(the "Amended Option Plan").
Under the Amended Option Plan, both incentive and non-statutory stock
options, as defined under the Internal Revenue Code, may be granted. Options
representing 165,911 shares of the Company's issued and outstanding no par value
Common Stock may be granted under the Amended Option Plan by the Board of
Directors to directors, officers, and key, full-time employees at an exercise
price not less than the fair market value of the shares on the date of grant.
Options may have an exercise period of not longer than 10 years and the options
are subject to different vesting schedules from 0 to 3 years for incentive stock
options. Non-statutory stock options vest immediately.
All key full-time salaried employees and officers, and directors
(excluding emeritus directors) who are not full-time salaried employees
("Eligible Directors") of the Company or its subsidiaries are eligible for
grants of options under the Amended Option Plan. Eligible Directors may only
participate in the Amended Option Plan pursuant to a formula. The Board, or the
committee appointed by the Board to administer the Amended Option Plan (the
"Committee") in the case of grants to officers, is responsible for the operation
of the Amended Option Plan and has the sole discretion, subject to the express
terms of the Amended Option Plan, to make all determinations regarding (i) the
selection of the eligible individuals, except directors, who are to receive
option grants under the Amended Option Plan and (ii) the terms and conditions of
each option grant. Directors of the Company who are not serving on the Committee
and who are not full-time salaried employees are eligible to receive 1,000
options upon initially 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.
<PAGE>10
The following tables set forth the number of options granted to the
Company's executive officers during 1998 and the number and value of unexercised
options held by such executive officers as of the end of 1998.
Option Grants in 1998
<TABLE>
<CAPTION>
% OF TOTAL POTENTIAL
OPTIONS REALIZABLE VALUE
GRANTED EXERCISE AT ASSUMED ANNUAL
TO PRICE RATES OF STOCK
OPTION EMPLOYEES PER EXPIRATION PRICE APPRECIATION
NAME GRANTED IN 1998 SHARE DATE FOR OPTIONS TERM
---- ------- ------- ----- ---- ----------------
5% 10%
-- ---
<S> <C> <C> <C> <C> <C> <C>
Theodore S. Mason 2,000 100% $19.77 May 9, 2008 $64,406 $102,557
</TABLE>
Aggregated Option Exercises in 1998
<TABLE>
<CAPTION>
NUMBER OF
UNEXERCISED VALUE OF
OPTIONS AT YEAR- UNEXERCISED
SHARES END IN-THE-MONEY
ACQUIRED ON VALUE (EXERCISABLE/ (EXERCISABLE/
NAME EXERCISE REALIZED UNEXERCISABLE) UNEXERCISABLE)
- ---- ------------ -------- ---------------- --------------
<S> <C> <C> <C> <C>
Theodore S. Mason 16,910 $99,938 51,078 / 4,700 $413,639 / $98,667
Alan J. Smyth 3,023 $16,234 29,839 / 1,984 $223,034 / $50,004
Ronald V. Barkley 3,000 $16,140 29,862 / 1,984 $233,158 / $40,004
Paul A. Ziegler -0- -0- 8,501 / 4,184 $109,069 /$100,504
</TABLE>
INCENTIVE BONUS PLAN
The Bank has an Incentive Bonus Plan for its employees, officers, vice
presidents, and higher ranking officers. Under the Incentive 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 Senior 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.
<PAGE>11
DEFINED CONTRIBUTION RETIREMENT PLAN
The Bank has a defined contribution retirement plan covering
substantially all of the Bank's employees. 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
The Company has adopted the Humboldt Bank Director Fee Plan (the "Fee
Plan"). The Fee Plan permits each Company 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 Company director ("deferral"). If
deferral is elected, the amount of the director's fees shall be credited to an
account on behalf of the director; however, such crediting shall constitute a
mere promise on the part of the Bank and Company to pay/distribute on this
account. The account is otherwise unsecured, unfunded, and subject to the
general claims of creditors of the Bank and Company. The Fee Plan provides for
the issuance of up to 40,000 shares of Bancorp Common Stock.
POST-EMPLOYMENT BENEFIT PLAN AND LIFE INSURANCE POLICIES
The Bank has purchased single premium life insurance policies in
connection with the implementation of salary continuation and deferred
compensation plans for certain key employees. The policies provide protection
against the adverse financial effects from the death of an essential employee
and provide income to offset expenses associated with the plans. The specified
employees are insured under the policies, but the Bank is the owner and
beneficiary. The plans are unfunded and provide for the Bank to pay the
employees specified amounts for specified periods after retirement and allow the
employees to defer a portion of current compensation in exchange for the Bank's
commitment to pay a deferred benefit at retirement. If death occurs prior to or
during retirement, the Bank will pay the employee's beneficiary or estate the
benefits set forth in the plans.
At December 31, 1998, liabilities recorded for the estimated present
value of future salary continuation and deferred compensation benefits totaled
approximately $2,038,000. Salary continuation benefits may be paid if
termination is without cause or due to a change in control of the Bank.
Otherwise no benefits are paid upon termination. Deferred compensation is vested
as to the amounts deferred. In the event of death or under certain other
circumstances, the Bank is contingently liable to make future payments greater
than the amounts recorded as liabilities. Based on present circumstances, the
Bank does not consider it probable that such a contingent liability will be
incurred or that in the event of death, such a liability would be material after
consideration of life insurance benefits.
EMPLOYEE STOCK BONUS PLAN
The Company has an Employee Stock Bonus Plan which is funded annually at
the discretion of the Board of Directors and/or management. Funds are invested
in Company Common Stock, when available, and is purchased at the current market
price on behalf of all employees except the executive officers of the Company.
<PAGE>12
PERSONNEL COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Personnel Committee of the Board of Directors has furnished the
following report on executive compensation:
The Company has developed and implemented compensation polices, plans,
and programs which attempt to enhance the profitability of the Company, and thus
shareholder value, by aligning closely the financial interests of the Company's
executive officers with those of its shareholders. For the Company, earnings per
share growth and return on average shareholders' equity are critical elements in
the establishment of long-term incentive programs. The process involved in the
executive compensation determination for fiscal 1998 is summarized below:
Compensation for each of the persons named in the Executive Compensation
Table, as well as other senior executives, consists of a base salary, an annual
bonus, and long-term incentive compensation. Long- term incentives consist of
salary continuation plans and grants of incentive stock options.
The Board, pursuant to recommendations made by the Personnel Committee,
determines base salaries and annual bonuses after a subjective evaluation of
various factors, including salaries paid to senior managers with comparable
qualifications, experience, and responsibilities at other institutions,
individual job performance, local market conditions, and the Board's perception
of the overall financial performance of the Company (particularly operating
results), without considering specific performance targets or objectives, and
without assigning particular weights to individual factors. As to executive
officers other than the Chief Executive Officer, the Board also considers the
recommendations made by the Chief Executive Officer.
Personnel Committee
John R. Winzler (Chairman) Larry Francesconi
Mike Renner Theodore S. Mason
Marguerite Dalianes Jim Johnson
Personnel Committee Interlocks and Insider Participation
Although Theodore Mason is a member of the Personnel Committee, he does
not participate in any decisions with respect to his own compensation package.
[the remainder of this page has been intentionally left blank]
<PAGE>13
PERFORMANCE GRAPH AND TABLE
The graph and table below compare the total shareholder return on the
Company's Common Stock for the period from January 1, 1994 through December 31,
1998 with (i) the NASDAQ Stock Index; and (ii) a peer group index of Pacific
Regional Banks. The graph and table assume $100 invested on December 31, 1993 in
the Company(1), the NASDAQ Market Index, and the Media General Pacific Regional
Bank Group Index. The graph and table further assume reinvestment of all
dividends.
COMPARISON OF CUMULATIVE TOTAL RETURN OF
COMPANY, BANK PEER GROUP, AND BROAD MARKET
[GRAPHIC OMITTED]
<TABLE>
<CAPTION>
Fiscal Year Ending
1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Humboldt Bancorp(1) $100.00 114.08 139.02 203.46 326.85 328.16
Pacific Regional Banks $100.00 100.61 160.77 201.43 362.71 339.70
NASDAQ Market Index $100.00 104.99 136.18 169.23 207.00 291.96
</TABLE>
(1) Prior to 1996, the indicated figures reflect the value of the common stock
of Humboldt Bank.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who own more than 10% of a
registered class of the Company'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 the Company with copies of all Section 16(a) forms that they
file. Based solely on its review of the copies of such forms received by the
<PAGE>14
Company or representations from officers and directors, the Company believes
that during 1998 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 Bank in
the ordinary course of the Bank's business. In addition, Humboldt Bank 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. Humboldt Bank has a strong policy regarding
review of the adequacy and fairness to Humboldt Bank of loans to its directors
and officers. The outstanding balance under extensions of credit by Humboldt
Bank to directors and executive officers of the Company and to the companies
with which such directors and executive officers are associated was $6,451,000
as of December 31, 1998.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR EACH OF THE
NOMINEES FOR DIRECTOR ON THE ENCLOSED PROXY CARD.
PROPOSAL NO. 2: RATIFICATION OF INDEPENDENT AUDITORS
Upon the recommendation of the Company's Audit Committee, consisting of
Chairman Gary L. Evans, Marguerite Dalianes, Edythe E. Vaissade, and Clayton R.
Janssen, the Board of Directors has appointed Richardson and Company as the
Company's independent certified accountants to audit the consolidated financial
statements of the Company and its subsidiaries for the 1999 fiscal year.
Richardson and Company served as the Company's auditors for the fiscal
year ended December 31, 1998, 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. If the
appointment is not ratified, the Company'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.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR RATIFICATION OF
THE APPOINTMENT OF RICHARDSON AND COMPANY AS THE COMPANY'S INDEPENDENT CERTIFIED
ACCOUNTANTS ON THE ENCLOSED PROXY CARD.
<PAGE>15
PROPOSAL NO. 3: ADOPTION OF AMENDMENT TO THE AMENDED HUMBOLDT
BANCORP STOCK OPTION PLAN
On March 18, 1999, the Board of Directors of the Company approved a
resolution to approve amendments to the Amended Option Plan, subject to
shareholder approval, so as to allow an optionee who retires and holds an option
that would be treated as an incentive stock option (as such term is defined
under the Internal Revenue Code) if exercised within three (3) months of
termination of employment, to exercise the option within the maximum granted
term of the option (or one year in the event of permanent disability or death).
Retirement is defined as termination of employment that entitles the individual
to early or normal retirement benefits under any then existing pension or salary
continuation plans of the Company or a subsidiary of the Company, excluding
401(k) participants (except as otherwise covered under other pension or salary
continuation plans of the Company or subsidiary). The Board of Directors of the
Company further approved a resolution to allow modification of all existing
outstanding options in conformity with the foregoing amendment.
Adoption of the proposed amendments is subject to the approval by the
affirmative vote of the holders of a majority of the outstanding shares of the
Company's Common Stock, present in person or by proxy at a meeting of the
shareholders and entitled to vote thereon.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE ADOPTION OF
THE AMENDMENTS TO THE AMENDED HUMBOLDT BANCORP STOCK OPTION PLAN ON THE ENCLOSED
PROXY CARD.
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 November 18, 1999, in a form that complies with applicable regulations.
[the remainder of this page intentionally left blank]
<PAGE>16
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.
By Order of the Board of Directors,
Alan J. Smyth,
Corporate Secretary
Dated: April 13, 1999
The Annual Report to Shareholders for the fiscal year ended December 31,
1998, is being mailed concurrently with this Proxy Statement to all shareholders
of record as of March 31, 1999.
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 20, 1999
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 20, 1999, at
5:30 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 postponement or 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 PROXY
HOLDERS 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 2000 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 L. 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
certified accountants to audit the Company's financial statements for the fiscal
year ended December 31, 1999.
|_| |_| |_|
FOR AGAINST ABSTAIN
<PAGE>
3. Proposal to adopt amendments to the Amended Humboldt Bancorp Stock Option
Plan which would allow an optionee who retires to exercise his or her options up
until the expiration date of the original option grant (as opposed to three
months from the date of retirement), and also would allow revisions to
outstanding options consistent with such amendment.
|_| |_| |_|
FOR AGAINST ABSTAIN
The proxy holders will consider and act upon such other business as may
properly come before the meeting or any postponement or adjournment thereof.
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: ______________________________, 1999.
