<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
BYL 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):
/ / 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>
[BYL BANCORP LOGO]
Dear Shareholder:
You are cordially invited to attend the 1999 Annual Meeting of Shareholders
(the "Meeting") of BYL Bancorp ("Company"), to be held at 5:30 p.m. on June
29, 1999 at the Yorba Linda office of BYL Bank Group, 18206 Imperial Highway,
Yorba Linda, California 92866.
Enclosed are the Secretary's Notice of Annual Meeting, Proxy Statement
and form of Proxy. As described more fully in the Proxy Statement, at the
Meeting you will be asked to elect five (5) directors to serve for a two-year
period until the 2001 Annual Meeting.
The enclosed Proxy Statement contains important information concerning
the matters to be voted on at the Meeting. I urge you to consider carefully
these important matters which are described in the accompanying Proxy
Statement. We hope that you will take the time to study it carefully. Your
vote is very important, regardless of how many shares you own. Even if you
currently plan to attend our Meeting, please complete, sign, date and return
the enclosed Proxy card promptly in accompanying self-addressed envelope. A
prompt response will be appreciated. If you do join us at the Meeting, and
wish to vote in person, you may revoke your proxy at that time.
The other members of the Board of Directors and I look forward to seeing
you at the Meeting.
Sincerely,
/s/ Robert Ucciferri
Robert Ucciferri
President and
Chief Executive Officer
May 17, 1999
PLEASE EXECUTE AND RETURN THE ENCLOSED PROXY CARD WHETHER OR NOT
YOU INTEND TO PRESENT AT THE MEETING
<PAGE>
[BYL BANCORP LOGO]
1875 NORTH TUSTIN AVENUE
ORANGE, CALIFORNIA 92865
------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 29, 1999
5:30 P.M.
------------------------------
NOTICE IS HEREBY GIVEN that the 1999 Annual Meeting (the "Meeting") of
Shareholders of BYL Bancorp, a California corporation (the "Company"), has been
called by the Board of Directors of the Company and will be held at 18206
Imperial Highway, Yorba Linda, California at 5:30 p.m. local time on June 29,
1999 for the following purposes:
1. ELECTION OF DIRECTORS. To elect the following five (5) directors
to the Board of Directors to serve until the 2001 Annual Meeting of Shareholders
and until their successors are elected and have qualified. The Board of
Directors' nominees are the following persons:
Henry C. Cox, II Neil F. Hatcher
H. Rhoads Martin, Jr. John F. Myers
Robert Ucciferri
2. OTHER BUSINESS. To consider and act upon such other business as
may properly come before the Meeting or any adjournment or postponement thereof.
The Bylaws of BYL Bancorp provide for the nomination of directors in
the following manner:
"Nominations for election of members of the board of directors may
be made by the board of directors or by any shareholder of any outstanding
class of capital stock of the corporation entitled to vote for the election
of directors. Notice of intention to make any nominations (other than for
persons named in the notice of the meeting at which such nomination is to be
made) shall be made in writing and shall be delivered or mailed to the
president of the corporation by the later of the close of business 21 days
prior to any meeting of shareholders called for the election of directors or
10 days after the date of mailing of notice of the meeting to shareholders.
Such notification shall contain the following information to the extent known
to the notifying shareholder: (a) the name and address of each proposed
nominee; (b) the principal occupation of each proposed nominee; (c) the
number of shares of capital stock of the corporation owned by each proposed
nominee; (d) the name and residence address of the notifying shareholders;
(e) the number of shares of capital stock of the corporation owned by the
notifying shareholder; (f) with the written consent of the proposed nominee,
a copy of which shall be furnished with the notification, whether the
proposed nominee has ever been convicted of or pleaded nolo contendere to any
criminal offense involving dishonesty or breach of trust, filed a petition in
bankruptcy, or been adjudged
<PAGE>
bankrupt. The notice shall be signed by the nominating shareholder and by
the nominee. Nominations not made in accordance herewith shall be
disregarded by the chairman of the meeting, and, upon his instructions, the
inspectors of election shall disregard all votes cast for each such nominee.
The restrictions set forth in this paragraph shall not apply to nomination of
a person to replace a proposed nominee who has died or otherwise become
incapacitated to serve as a director between the last day for giving notice
hereunder and the date of election of directors if the procedure called for
in this paragraph was followed with respect to the nomination of the proposed
nominee."
Only holders of Common Stock of the Company of record at the close of
business on May 6, 1999 will be entitled to notice of, and to vote at, the
Meeting or any adjournments or postponements thereof.
By Order of the Board of Directors,
/s/ Barry J. Moore
Barry J. Moore,
Assistant Secretary
Orange, California
May 17, 1999
PLEASE MARK, SIGN AND RETURN YOUR PROXY PROMPTLY, WHETHER OR NOT YOU
PLAN TO ATTEND THE MEETING. YOUR PROXY WILL BE REVOCABLE, EITHER IN WRITING OR
BY VOTING IN PERSON AT THE MEETING, AT ANY TIME PRIOR TO ITS EXERCISE BY
FOLLOWING THE PROCEDURES DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT.
PLEASE INDICATE ON THE PROXY WHETHER YOU EXPECT TO ATTEND THE MEETING SO THAT WE
MAY ARRANGE FOR ADEQUATE ACCOMMODATIONS.
<PAGE>
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
OF
BYL BANCORP
To Be Held June 29, 1999
This proxy statement is furnished in connection with the solicitation
of proxies to be used by the Board of Directors of BYL Bancorp (the "Company")
at the 1999 Annual Meeting of Shareholders of the Company currently scheduled to
be held at the Yorba Linda office of BYL Bank Group (the "Bank"), the Company's
wholly-owned subsidiary, located at 18206 Imperial Highway, Yorba Linda,
California on June 29, 1999 at 5:30 p.m., and at any adjournments thereof (the
"Meeting").
The matters to be considered and voted upon at the Meeting will
include:
1. ELECTION OF DIRECTORS. To elect the following five (5) directors
of the Company to serve as directors of the Company until the 2001 Annual
Meeting of Shareholders and until their respective successors shall be elected
and qualified:
Henry C. Cox II John F. Myers
Neil F. Hatcher Robert Ucciferri
H. Rhoads Martin, Jr.
2. OTHER BUSINESS. To consider and transact such other business as
may properly come before the meeting and any adjournment or adjournments
thereof.
This Proxy Statement, the accompanying form of proxy and the Annual
Report to Shareholders for the fiscal year ended December 31, 1998 are being
mailed on approximately May 17, 1999 to all persons who were shareholders as of
May 6, 1999.
REVOCABILITY OF PROXIES
A form of proxy for voting your shares at the Meeting is enclosed.
Any shareholder who executes and delivers a proxy has the right to revoke it at
any time before it is voted by filing with the Secretary of the Company an
instrument revoking it or a duly executed proxy bearing a later date. In
addition, the powers of the proxyholders will be revoked if the person executing
the proxy is present at the Meeting and advises the Chairman of his election to
vote in person. Shares represented by a properly executed proxy received prior
to the Meeting will be voted in accordance with the shareholder's
specifications, as noted on the proxy, or if not otherwise specified, and unless
revoked, such shares will be voted in favor of election of the nominees
specified herein and in favor of the other proposals specified herein.
The proxy also confers discretionary authority to vote the shares
represented thereby on any matter that was not known at the time this Proxy
Statement was mailed which may properly be presented for action at the Meeting
and may include: approval of minutes of the prior annual meeting, which will not
constitute ratification of the actions taken at such meeting; action with
respect to procedural matters pertaining to the conduct of the Meeting; and
election of any person to any office for which a bona fide nominee is named
herein if such nominee is unable to serve or for good cause will not serve.
1
<PAGE>
PERSONS MAKING THE SOLICITATION
The Company's Board of Directors is soliciting the enclosed proxy.
The principal solicitation of proxies is being made by mail, although additional
solicitation may be made by telephone, telegraph or personal visits by
directors, officers and employees of the Company. The Company may, at its
discretion, engage the services of a proxy solicitation firm to assist in the
solicitation of proxies. The total expense of this solicitation will be borne
by the Company and will include reimbursement paid to brokerage firms and others
for their expenses in forwarding soliciting material and such expenses as may be
paid to any proxy soliciting firm engaged by the Company.
VOTING SECURITIES
OUTSTANDING SHARES AND RECORD DATE
Shareholders of record as of the close of business on May 6, 1999
("Record Date") will be entitled to notice of and to vote at the Meeting. As of
such date, the Company had outstanding 2,533,835 shares of common stock, no par
value ("Common Stock").
VOTING RIGHTS
For each matter submitted to the vote of the shareholders, each holder
of Common Stock will be entitled to one vote, in person or by proxy, for each
share of Common Stock he or she held of record on the books of the Company as of
the Record Date. At the 1997 Special Meeting of Shareholders, when the Company
was approved to become a bank holding company for Bank of Yorba Linda, now known
as BYL Bank Group, the Company's Proxy Statement contained a description of the
Company's Articles of Incorporation, as amended, that eliminated cumulative
voting in connection with the Election of Directors.
The presence, in person or by proxy, of a majority of the shares
entitled to vote will constitute a quorum for the Meeting. Votes cast by proxy
or in person at the Meeting will be counted by appointed inspectors of election.
The inspectors of election will treat shares represented by proxies that reflect
abstentions as shares that are present and entitled to vote, for purposes of
determining the presence of a quorum and for purposes of determining the outcome
of any matter submitted to the shareholders for a vote. Abstentions, however,
do not constitute a vote "for" or "against" any matter and thus will be
disregarded in the calculation of a plurality or of "votes cast." The election
inspectors will treat shares referred to as "broker non-votes" (i.e., shares
held by brokers or nominees as to which instructions have not been received from
the beneficial owners or persons entitled to vote or that the broker or nominee
does not have discretionary power to vote on a particular matter) as shares that
are present and entitled to vote for purposes of determining the presence of a
quorum. However, for purposes of determining the outcome of any matter as to
which the broker has physically indicated on the proxy that it does not have
discretionary authority to vote, those shares will be treated as not present and
not entitled to vote with respect to that matter even though those shares are
considered entitled to vote for quorum purposes and may be entitled to vote on
other matters.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of May 6, 1999
pertaining to beneficial ownership of the Company's common stock by persons
known to the Company to own five percent (5%) or more of such
2
<PAGE>
stock, current directors and Executive Officer of the Company, and all
directors and Executive Officers(1) of the Company as a group. The
information contained herein has been obtained from the Company's records and
from information furnished directly by the individual or entity to the
Company. All shares are held with shared voting and investment power except
as otherwise indicated. All addresses of Directors and Executive Officers
are in care of the Company at 1875 North Tustin Avenue, Orange, California.
The table should be read with the understanding that more than one (1)
person may be the beneficial owner or possess certain attributes of beneficial
ownership with respect to the same securities. In addition, shares of Common
Stock issuable pursuant to options which may be exercised within sixty (60) days
of May 6, 1999 are deemed to be issued and outstanding and have been treated as
outstanding in calculating the percentage ownership of those individuals
possessing such interest.
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP(2)
OF COMMON STOCK ON
MAY 6, 1999
NAME TITLE SHARES PERCENT
---- ----- ------ -------
<S> <C> <C> <C>
Henry E. Cox II(3) Director 117,088 (4) 4.62%
Eddie R. Fisher(5) Director 78,117 (6) 3.08%
Neil F. Hatcher(7) Director 108,576 (8) 4.29%
Leonard O. Lindborg Director 11,701 (9) 0.62%
H. Rhoads Martin Director 12,289 (10) 0.49%
</TABLE>
- --------------------------
(1) As used throughout this Proxy Statement, the term "officer" or
"executive officer" refers to the President and Chief Executive
Officer, the Senior Executive Vice President/Chief Operating
Officer/Chief Financial Officer, the Executive Vice President/Chief
Credit Officer, and the Executive Vice President/Chief
Administrative Officer.
(2) Beneficial owner of a security includes any person who, directly or
indirectly, through any contract, arrangement, understanding,
relationship, or otherwise has or shares: (a) voting power which
includes the power to vote, or direct the voting of such security;
and/or the investment power, which includes the power to dispose, or
to direct the disposition, of such security. Beneficial owner also
includes any person who has the right to acquire beneficial
ownership of such security as defined above within sixty (60) days
of May 6, 1999
(3) Mr. Cox was appointed to the Board of Directors of the Company and
its wholly-owned subsidiary upon the merger of DNB Financial with
the Company on May 29, 1998.
(4) Includes 0 shares of common stock which may be acquired by Mr. Cox
upon exercise of stock options.
(5) Mr. Fischer was appointed to the Board of Directors of the Company
and its wholly-owned subsidiary upon the merger of DNB Financial
with the Company on May 29, 1998.
(6) Includes 0 shares of common stock which may be acquired by Mr.
Fischer upon exercise of stock options.
(7) Mr. Hatcher was appointed to the Board of Directors of the Company
and its wholly-owned subsidiary upon the merger of DNB Financial
with the Company on May 29, 1998.
(8) Includes 0 shares of common stock which may be acquired by Mr.
Hatcher upon exercise of stock options.
(9) Includes 5,934 shares of Common Stock which may be acquired by Mr.
Lindborg upon exercise of stock options.
(10) Includes 8,289 shares of Common Stock which may be acquired by Mr.
Martin upon exercise of stock options.
3
<PAGE>
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP
OF COMMON STOCK ON
MAY 6, 1999
NAME TITLE SHARES PERCENT
---- ----- ------- -------
<S> <C> <C> <C>
Barry J. Moore Sr. Executive Vice President/ 34,056 (11) 1.34%
Chief Operating Officer and
Director
Michael H. Mullarky Executive Vice President 27,222 (12) 1.07%
and Chief Credit Officer
John F. Myers Director, Secretary 15,400 (13) 0.61%
Robert Ucciferri President, Chief Executive 69,534 (14) 2.74%
Officer and Director
Gloria J. Van Kampen(15) Executive Vice President/ 46,471 (16) 1.83%
Chief Administrative Officer
Brent W. Wahlberg Director 16,805 (17) 0.66%
All Directors and Executive 537,259 (18) 21.20%
Officers as a Group (11 in number)
</TABLE>
PROPOSAL 1: ELECTION OF DIRECTORS
NUMBER OF DIRECTORS AND DIVISION OF DIRECTORS INTO CLASSES
The Articles of Incorporation and Bylaws of the Company provide that
the number of directors of the Company may be no less than six (6) and no more
than eleven (11), with the exact number to be fixed by a resolution of the Board
of Directors or the shareholders. The Board of Directors has fixed the number
of directors at nine (9).
At the 1997 Special Meeting of Shareholders of the Bank, the
shareholders approved the formation of the Company as a bank holding company for
Bank of Yorba Linda, now known as BYL Bank Group.
- --------------------------
(11) Includes 33,556 shares of Common Stock which may be acquired by Mr.
Moore upon exercise of stock options.
(12) Includes 4,167 shares held in the Joseph W. Mullarky Testamentary
Trust dated January 5, 1987, and Mr. Michael Mullarky acts as sole
trustee. Includes 12,223 shares of Common Stock which may be
acquired by Mr. Mullarky upon exercise of stock options.
(13) Includes 8,201 shares of Common Stock which may be acquired by Mr.
Myers upon exercise of stock options.
(14) Includes 32,222 shares of Common Stock which may be acquired by Mr.
Ucciferri upon exercise of stock options
(15) Ms. Van Kampen is not on the Board of the Company or its
wholly-owned subsidiary, but was appointed an Executive Vice
President/Chief Administrative Officer of its wholly-owned subsidiary
upon the merger of DNB Financial with the Company on May 29, 1998
(16) Includes 0 shares of common stock which may be acquired by Ms. Van
Kampen upon exercise of stock options.
(17) Includes 8,201 shares of Common Stock which may be acquired by Mr.
Wahlberg upon exercise of stock options.
(18) Includes 108,626 shares of Common Stock which may be acquired upon
exercise of stock options.
4
<PAGE>
The Company's Articles of Incorporation provides that as a "listed
corporation," i.e., a corporation with outstanding securities designated as
qualified for trading as a national market system security on NASDAQ, the
directors are divided into two classes, Class I and Class II, with the
directors to be divided between the classes as equally as possible. The
Articles of Incorporation also provides that the directors selected for Class
I would be elected at the 1998 Annual Meeting of Shareholders for a two (2)
year term, and the directors selected for Class II would be elected at the
1999 Annual Meeting of Shareholders for a two (2) year term. As a result,
the directors selected for Class II will be elected for a two (2) year term
at the 1999 Annual Meeting of Shareholders.
NOMINEES FOR ELECTION AS DIRECTORS
The Board of Directors has selected Messrs. Cox, Hatcher, Martin,
Myers, and Ucciferri as the directors of Class II, who if elected at the 1999
Annual Meeting of Shareholders, will hold office until the 2001 Annual Meeting
of Shareholders. The Board of Directors has also selected Messrs. Lindborg,
Moore, and Wahlberg as the directors of Class I, who were elected at the 1998
Annual Meeting of Shareholders and will hold office until the 2000 Annual
Meeting of Shareholders. Mr. Fischer, appointed to the Board of Directors of
Company on May 29, 1998, was appointed a member of Class I.
If any nominee should become unable or unwilling to serve as a
director, the proxies will be voted for such substitute nominee as shall be
designated by the Board of Directors. The Board of Directors presently has no
knowledge that any of the nominees will be unable or unwilling to serve.
Additional nominations can be made only by complying with the notice provisions
included in the Notice of Meeting. This Bylaw provision is designed to give the
Board of Directors advance notice of competing nominations, if any, and the
qualifications of nominees, and may have the effect of precluding third-party
nominations if not followed. The five (5) nominees receiving the highest number
of Common Stock votes at the Meeting shall be elected.
The following table provides certain information as of the Record Date
with respect to each person nominated and recommended to be elected by the
current Board of Directors of the Company, as well as all other Directors.
Reference is made to the section entitled "SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT" for information pertaining to stock ownership
of the nominees.
<TABLE>
<CAPTION>
YEAR FIRST
NAME OF DIRECTOR APPOINTED
AND OFFICES HELD BUSINESS EXPERIENCE OR ELECTED
(OTHER THAN DIRECTOR) AGE(1) DURING PAST 5 YEARS DIRECTOR
- --------------------- --- ------------------- --------
<S> <C> <C> <C>
Henry E. Cox II 60 President and CEO, Jurupa Western 1998
Eddie R. Fischer 63 CEO, Vista Paints 1998
Neil F. Hatcher 61 Retired, formerly President and CEO 1998
of DANB
Leonard O. Lindborg 63 Retired, manages investments 1996
H. Rhoads Martin, Jr. 52 President, Martin Companies, a real 1990
estate investment and property
management firm
John F. Myers, 61 Retired Pharmacist, former owner, 1990
Secretary B&B Pharmacy
- -------------------------------
(1) Ages are as of May 6, 1999
5
<PAGE>
YEAR FIRST
NAME OF DIRECTOR APPOINTED
AND OFFICES HELD BUSINESS EXPERIENCE OR ELECTED
(OTHER THAN DIRECTOR) AGE(1) DURING PAST 5 YEARS DIRECTOR
- --------------------- --- ------------------- --------
<S> <C> <C> <C>
Barry J. Moore, 50 Banker(2) 1996
Executive Vice President
Robert C. Ucciferri, 62 Banker(3) 1990
President
Brent W. Wahlberg 77 Retired (formerly Vice President of 1979
Eadington Fruit Company)
</TABLE>
There are no family relationships between any of the directors or
executive officers of the Company.
THE BOARD OF DIRECTORS INTENDS TO VOTE ALL PROXIES HELD BY IT IN FAVOR
OF ELECTION OF EACH OF THE NOMINEES. YOU ARE URGED TO VOTE FOR PROPOSAL 1: TO
ELECT THE FIVE (5) NOMINEES SET FORTH HEREIN TO SERVE UNTIL THE 2001 ANNUAL
MEETING OF SHAREHOLDERS AND UNTIL THEIR RESPECTIVE SUCCESSORS SHALL BE ELECTED
AND QUALIFIED: HENRY C. COX II, NEIL F. HATCHER, H. RHOADS MARTIN, JR, JOHN F.
MYERS, AND ROBERT UCCIFERRI.
THE BOARD OF DIRECTORS AND COMMITTEES
During 1998, the Board of Directors of the Company held twelve (12)
regular meetings and three (3) special meetings. In addition, during 1998, the
Board of Directors of the Bank held twelve (12) regular meetings and three (3)
special meetings. In addition to meeting as a group to review the Company's
business, certain members of the Board of Directors of the Company also devoted
their time and talents to the following standing committees:
The Bank's Audit Committee, currently composed of Directors Hatcher
(Chairman), Fischer, Martin, Myers and Wahlberg , met three (3) times in 1998.
The purpose of this Committee is to direct the audits and credit review
activities and to make certain that these functions are performed with the
necessary freedom and independence to insure the examination of all records, and
to recommend to the Board of Directors the appointment of an outside accounting
firm and to meet with and review the reports of the accounting firm.
The Company's Compensation Committee, currently composed of Directors
Cox (Chairman), Martin, Myers and Ucciferri, met two (2) times in 1998. This
Committee makes recommendations to the Board of Directors regarding compensation
matters, some of which may be delegated to this Committee.
The Company does not have a standing Nominating Committee, but the
full Board of Directors
- -------------------------------
(1) Ages are as of May 6, 1999.
(2) Mr. Moore was first employed by the Bank in 1980 as Vice President
Branch Manager/Commercial Lender. He left shortly thereafter to
relocate to San Diego (Torrey Pines Bank). He returned to the Bank
in 1986 as Executive Vice President/Credit Administrator. Mr. Moore
was appointed Chief Financial Officer in 1991 and has served as a
Director since January 1996.
(3) Prior to joining the Company, Mr. Ucciferri served in various
positions with Citizens Bank of Costa Mesa and El Camino Bank, both
owned by the same holding company. His positions included President
of both Companies (at different times) and Executive Vice President
of Citizens Bank
6
<PAGE>
acts as a Nominating Committee.
None of the incumbent Directors attended less than seventy-five
percent (75%) of all Board and committee meetings held during the period for
which he has been a Director.
EXECUTIVE OFFICERS
The following table sets forth as to each of the persons who currently
serves as an executive officer of the Company, such person's age, principal,
occupation, current position with the Company and/or the Bank, and the period
during which the person has served in such position.
<TABLE>
<CAPTION>
BANK COMPANY
BUSINESS EXPERIENCE EXECUTIVE EXECUTIVE
NAME AND POSITION AGE DURING PAST FIVE YEARS OFFICER SINCE OFFICER SINCE
- ----------------- --- ---------------------- ------------- -------------
<S> <C> <C> <C> <C>
Robert Ucciferri 62 President and Chief Executive Officer 1990 1997
Barry J. Moore 50 Senior Executive Vice President, 1986 1997
Chief Operating Officer and Chief
Financial Officer
Michael H. Mullarky(1) 52 Executive Vice President and Chief 1990 Not Applicable
Credit Officer
Gloria Van Kampen(2) 52 Executive Vice President and 1998 Not Applicable
Chief Administrative Officer
</TABLE>
DIRECTOR COMPENSATION
During 1998, the paid compensation equal to $2,000 per month for each
director minus the amount of medical insurance premium payments paid on behalf
of each director if a director elects to be covered under the Company's medical
insurance plan, except that Messrs. Ucciferri and Moore receive $500 per month.
EXECUTIVE COMPENSATION
Executive officers receive no compensation for their services on
behalf of the Company. The following summary compensation table sets forth, for
the last three (3) completed fiscal years, the cash and certain other
compensation paid by the Bank to the Bank's President and Chief Executive
Officer and the other Executive Officers of the Bank whose total annual salary
and bonus for the fiscal year ended December 31, 1998 exceeded $100,000.
- -------------------------------
(1) Executive Vice President and Chief Credit Officer Michael Mullarky
joined the Bank in 1991. Mr. Mullarky has a total of 27 years of
banking experience, primarily in lending and credit administration.
He served at Citizens' Bank of Costa Mesa for 9 years as part of
senior management and was the S.V.P./Loan Administrator at the time
he left to join the Bank.
(2) Executive Vice President and Chief Administrative Officer Gloria
Van Kampen joined the Company's wholly-owned subsidiary on May 29,
1998 as a result of the acquisition of DNB Financial by the Company.
Ms. Van Kampen previously served as Executive Vice President of DNB
Financial ("DNBF") and its wholly-owned subsidiary, De Anza National
Bank ("DANB"), since June 1994. Prior to that time, Ms. Van Kampen
served as Senior Vice President of DANB and DNBF from June 1988
until June 1994, and as Assistant Vice President of DANB from June
1982 until June 1984, and as Vice President from July 1984 until
1988. Ms. Van Kampen served as Chief Financial Officer of DANB since
June 1984 and of DNBF since June 1988.
7
<PAGE>
<TABLE>
<CAPTION>
Long-Term All Other
ANNUAL COMPENSATION Compensation Compensation
------------------- ------------ ------------
(A) (B) (C)(1) (D)(2) (E)(3)
Awards
Stock
Other Annual Options
Name and Principal Position Fiscal Year Salary ($) Bonus ($) Compensation (#) $
- --------------------------- ----------- ---------- --------- ------------ --- -
<S> <C> <C> <C> <C> <C> <C>
Robert Ucciferri 1998 $200,000 $366,405 $-0- 7,000 $55,673 (4)
1997 $149,000 $441,100 $-0- 13,333 $54,338 (5)
1996 $128,000 $95,785 $-0- -0- $19,076 (6)
Barry J. Moore 1998 $ 159,000 $182,115 $-0- 8,500 $25,081 (7)
1997 $110,000 $221,100 $-0- 25,334 $24,420 (8)
1996 $97,000 $43,825 $-0- -0- $20,134 (9)
Michael H. Mullarky 1998 $103,700 $121,893 $-0- 7,500 $18,200 (10)
</TABLE>
- -------------------------------
(1) Total base salary paid for fiscal years 1998, 1997 and 1996 for the
Bank.
(2) The chart reflects the following bonuses earned in 1996 and paid in
1997: Mr. Ucciferri ($95,785), Mr. Moore ($43,825) and Mr. Mullarky
($40,715). The chart also reflects the following bonuses earned in
1997 and paid in 1998: Mr. Ucciferri ($441,100), Mr. Moore
($221,100), and Mr. Mullarky ($170,900). The chart also reflects the
following bonuses earned in 1998 and paid in 1999: Mr. Ucciferri
($366,405), Mr. Moore ($182,115), Mr. Mullarky ($121,893) and Ms.
Van Kampen ($76,885).
(3) Represents the dollar value of other annual compensation not
properly categorized as salary or bonus, including (i) perquisites
and other personal benefits, securities or property unless the
aggregate amount of such compensation is the lesser of either
$50,000 or 10% of the total annual salary and bonus reported for the
named executive officer in columns (C) and (D); (ii) above-market or
preferential earnings on restricted stock, options, stock
appreciation rights ("SARs") or deferred compensation paid during
the fiscal year or payable during that period but deferred at the
election of the named executive officer; (iii) earnings on long-term
incentive plan ("LTIP") compensation paid during the fiscal year or
payable during that period but deferred at the election of the named
executive officer; (iv) amounts reimbursed during the fiscal year
for the payment of taxes; and (v) the dollar value of the difference
between the price paid by a named executive officer for any security
of the Bank purchased from the Bank (through deferral of salary or
bonus, or otherwise), and the fair market value of such security at
the date of purchase, unless that discount is available generally,
either to all security holders or to all salaried employees of the
registrant. None of the named officers had other annual compensation
in excess of 10% of the total annual salary and bonus reported for
any of the last three fiscal years.
(4) Includes $6,000 received from the Bank as director's fees, $39,661
Salary Continuation Agreement accruals paid, and $10,012 in health
and life insurance premiums.
(5) Includes $6,000 received from the Bank as director's fees, $39,661
Salary Continuation Agreement accruals, and $8,677 in health and
life insurance premiums.
(6) Includes $2,400 received from the Bank as director's fees, $8,668
Salary Continuation Agreement accruals, and $8,008 in health and
life insurance premiums.
(7) Includes $6,000 received from the Bank as director's fees, $8,668
Salary Continuation Agreement accruals, and $10,413 in health and
life insurance premiums.
(8) Includes $6,000 received from the Bank as director's fees, $8,668
Salary Continuation Agreement accruals, and $9,752 in health and
life insurance premiums.
(9) Includes $2400 received from the Bank as director's fees, $8,668
Salary Continuation Agreement accruals, and $9,066 in health and
life insurance premiums.
(10) Includes $11,040 in health and life insurance premiums and $7,160
Salary Continuation Agreement accruals.
8
<PAGE>
<TABLE>
<CAPTION>
Long-Term All Other
ANNUAL COMPENSATION Compensation Compensation
------------------- ------------ ------------
(A) (B) (C) (D) (E)
Awards
Stock
Other Annual Options
Name and Principal Position Fiscal Year Salary ($) Bonus ($) Compensation (#) $
- --------------------------- ----------- ---------- --------- ------------ --- -
<S> <C> <C> <C> <C> <C> <C>
Mike Mullarky 1997 $ 85,000 $170,900 $-0- 3,334 $10,150 (11)
1996 $ 85,000 $ 40,715 $-0- -0- $ 9,445 (12)
Gloria Van Kampen 1998 $112,000 $ 76,885 $-0- 8,000 $ 2,346 (13)
</TABLE>
EMPLOYMENT AGREEMENTS
On November 28, 1995, the Bank and Mr. Ucciferri executed a five (5)
year employment agreement commencing January 1, 1996 at a base salary of
$120,000 per annum, which will be reviewed annually by the Board. Mr.
Ucciferri's base salary for 1998 was $200,000. Mr. Ucciferri is also entitled
to the use of a car, and Mr. Ucciferri may also participate in any bonus,
pension or profit sharing plan or other employee benefit plan that is or may be
adopted by the Bank. Mr. Ucciferri is also entitled to five (5) weeks vacation
per year and appropriate medical and dental insurance. If Mr. Ucciferri is
terminated without cause, he will be entitled to twelve (12) months severance
pay, and if Mr. Ucciferri is terminated within nine (9) months of a merger, or
change of control of more than 25% of the issued and outstanding stock of the
Bank, Mr. Ucciferri will be entitled to twenty-four (24) months severance pay.
The agreement also contains provisions regarding disability and dispute
resolution procedures.
On November 28, 1995, the Bank and Mr. Moore executed a five (5) year
employment agreement commencing January 1, 1996 at a base salary of $85,000 per
annum, which will be reviewed annually by the Board. Mr. Moore's base salary
for 1998 was $159,000. Mr. Moore is also entitled to the use of a car, and Mr.
Moore may also participate in any bonus, pension or profit sharing plan or other
employee benefit plan that is or may be adopted by The Bank. Mr. Moore is also
entitled to five (5) weeks vacation per year and appropriate medical and dental
insurance. If Mr. Moore is terminated without cause, he will be entitled to
twelve (12) months severance pay, and if Mr. Moore is terminated within nine (9)
months of a merger, or change of control of more than 25% of the issued and
outstanding stock of the Bank, Mr. Moore will be entitled to twenty-four (24)
months severance pay. The agreement also contains provisions regarding
disability and dispute resolution procedures.
On November 28, 1995, the Bank and Mr. Mullarky executed a five (5)
year employment agreement commencing January 1, 1996 at a base salary of $85,000
per annum, which will be reviewed annually by the Board. Mr. Mullarky's base
salary for 1998 was $103,700. Mr. Mullarky is also entitled to the use of a
car, and Mr. Mullarky may also participate in any bonus, pension or profit
sharing plan or other employee benefit plan that is or may be adopted by the
Bank. Mr. Mullarky is also entitled to five (5) weeks vacation per year and
appropriate medical and dental insurance. If Mr. Mullarky is terminated without
cause, he will be entitled to twelve (12) months severance pay, and if Mr.
Mullarky is terminated within nine (9) months of a merger, or change of control
of more than 25% of the issued and outstanding stock of the Bank, Mr. Mullarky
will be entitled to twenty-four (24) months severance pay. The agreement also
contains provisions regarding disability and dispute resolution procedures.
- -------------------------------
(11) Includes $10,150 in health and life insurance premiums.
(12) Includes $9,445 in health and life insurance premiums.
(13) Includes $2,346 in health and life insurance premiums.
9
<PAGE>
On May 29, 1998, the Bank and Ms. Van Kampen executed a three (3) year
employment agreement commencing May 29, 1998 at a base salary of $112,000 per
annum, which shall be reviewed annually by the Board. Ms. Van Kampen's base
salary for 1998 is $112,000. Ms. Van Kampen is also entitled to the use of a
car, and Ms. Van Kampen may also participate in any bonus, pension or profit
sharing plan or other employee benefit plan that is or may be adopted by the
Bank. Ms. Van Kampen is also entitled to five (5) weeks vacation per year and
appropriate medical and dental insurance. If Ms. Van Kampen is terminated
without cause, she will be entitled to twelve (12) months severance pay, and if
Ms. Van Kampen is terminated within nine (9) months of a merger, or change of
control of more than 25% of the issued and outstanding stock of the Bank, Ms.
Van Kampen will be entitled to twenty four (24) months severance pay. The
agreement also contains provisions regarding disability and dispute resolution
procedures.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Bank's Compensation Committee is comprised of directors Cox
(Chairman), Martin, Myers, and Ucciferri. Mr. Ucciferri served as an executive
officer of the Bank during 1998. All of the above directors have had loans
outstanding from the Bank during 1998, except for Mr. Ucciferri.
Mr. Ucciferri did not participate in the discussion of his respective
compensation or performance when such matter was addressed by the committee.
COMPENSATION COMMITTEE REPORT
The compensation committee meets annually to review the salaries and
bonuses of all officers of the Bank. Upon their recommendation, the Bank's full
board then approves salary modifications and bonuses, if any, for all Bank
executive officers. While all officers are reviewed, particular emphasis is
placed upon the salaries paid to executive officers.
The goal of the compensation program is to align compensation with
business objective and performance, and to enable the Bank to attract and reward
executive officers whose contributions are critical to the long-term success of
the Bank. The Bank is committed to maintaining a pay program that helps attract
and retain the best people in the industry. To ensure that pay is competitive,
the Bank regularly compares its pay practices with those of other leading
independent banks and sets its pay parameters based upon this review.
Executive officers are rewarded based upon corporate performance and
individual contribution. Bank performance is evaluated by reviewing the extent
to which strategic and business plan goals have been met. Individual
contribution is evaluated by reviewing the progress of the Bank against set
objectives in the individuals area of responsibility.
CEO COMPENSATION
Robert Ucciferri has been President and Chief Executive Officer
("CEO") of the Bank since 1990, and President and CEO of the Company since it
was formed in 1997. In setting Mr. Ucciferri's compensation, the Compensation
Committee made an overall assessment of Mr. Ucciferri's leadership in achieving
the Company's long-term strategic and business goals. During 1998, particular
emphasis was placed on enhancing shareholders' value. The Committee paid
specific attention to variation in budget projections as well as executive
compensation surveys from the California Banking Association, Department of
Financial Institutions and banks headquartered in the Company's local market
area. Mr. Ucciferri's salary reflects a consideration of both competitive
forces and the Company's performance.
10
<PAGE>
COMPENSATION COMMITTEE
Henry C. Cox II
H. Rhoads Martin
John F. Myers
Robert Ucciferri
PERFORMANCE GRAPH
The chart shown below compares the Company's cumulative total
shareholder return from June 11, 1996 with both the NASDAQ Composite Index
and an index developed by SNL Securities LC that represents Western Banks.
Comparison from June 11, 1996 Cumulative Total Return
Among the Company, NASDAQ Index and SNL Western Bank Index
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
PERIOD ENDING
------------------------------------------------------------
INDEX 6/11/96 12/31/96 6/30/97 12/31/97 6/30/98 12/31/98
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
BYL Bancorp 100.00 125.55 178.85 233.95 251.06 203.03
NASDAQ-Total U.S. 100.00 104.71 117.16 128.26 154.19 180.73
SNL Western Bank Index 100.00 122.35 149.21 180.36 201.64 184.81
</TABLE>
11
<PAGE>
SALARY CONTINUATION AGREEMENTS
On November 28, 1995, the Bank approved a Salary Continuation
Agreement for Mr. Ucciferri effective January 1, 1996 that would provide an
annual sum of $64,700 in equal monthly installments over a ten (10) year period
upon his retirement at age 67. The Bank has purchased single premium life
insurance to cover the retirement benefits. The Bank must accrue increasing
amounts every year in order to fund various provisions of the Agreement,
including provisions regarding death after retirement, death prior to
retirement, and disability prior to retirement provisions. In 1998, the Bank
accrued $39,661 for Mr. Ucciferri's benefit, and the Bank has accrued a total of
$118,983 through December 31, 1998 for Mr. Ucciferri's benefit. If Mr.
Ucciferri voluntarily terminates his employment, he will receive the accrued
amount under the Agreement within two (2) years of the termination. If Mr.
Ucciferri is terminated without cause, Mr. Ucciferri will begin receiving the
amount accrued in the year of termination at age sixty-seven (67) in equal
monthly installments spread over ten (10) years. Mr. Ucciferri will receive no
benefits under the Agreement if Mr. Ucciferri's employment is terminated for
cause.
On November 28, 1995, the Bank approved a Salary Continuation
Agreement for Mr. Moore effective January 1, 1996 that would provide an annual
sum of $64,800 in equal monthly installments over a ten (10) year period upon
his retirement at age sixty-five (65). The Bank has purchased single premium
life insurance to cover the retirement benefits. The Bank must accrue
increasing amounts every year in order to fund various provisions of the
Agreement, including provisions regarding death after retirement, death prior to
retirement, and disability prior to retirement provisions. In 1998, the Bank
accrued $8,668 for Mr. Moore's benefit, and the Bank has accrued a total of
$26,004 through December 31, 1998 for Mr. Moore's benefit. If Mr. Moore
voluntarily terminates his employment, he will receive the accrued amount under
the Agreement within two (2) years of the termination. If Mr. Moore is
terminated without cause, Mr. Moore will begin receiving the amount accrued in
the year of termination at age sixty-five (65) in equal monthly installments
spread over ten (10) years. Mr. Moore will receive no benefits under the
Agreement if Mr. Moore's employment is terminated for cause.
Effective July 21, 1998, the Bank entered into a Salary Continuation
Agreement for Mr. Mullarky that would provide an annual sum of $60,100 in equal
monthly installments over a ten (10) year period upon his retirement at age
sixty-five (65). The Bank has purchased single premium life insurance to cover
the retirement benefits. The Bank must accrue increasing amounts every year in
order to fund various provisions of the Agreement, including provisions
regarding death after retirement, death prior to retirement, and disability
prior to retirement provisions. In 1998, the Bank accrued $7,160 for Mr.
Mullarky's benefit, and the Bank has accrued a total of $7,160 through December
31, 1998 for Mr. Mullarky's benefit. If Mr. Mullarky voluntarily terminates his
employment, he will receive the accrued amount under the Agreement within two
(2) years of the termination. If Mr. Mullarky is terminated without cause, Mr.
Mullarky will begin receiving the amount accrued in the year of termination at
age sixty-five (65) in equal monthly installments spread over ten (10) years.
Mr. Mullarky will receive no benefits under the Agreement if Mr. Mullarky's
employment is terminated for cause.
BANK BONUS POOL
In December 1991, the Board of Directors established a Bonus Pool
which takes effect only if certain threshold tests are met. The Bonus Pool is
calculated based on the Banks return on equity, loan losses and income after
taxes. In 1994, the 1991 Bonus Pool called for payment of $170,982 although
actual payment was only $28,020 of which $20,000 was paid to the three Executive
Officers and $8,020 was distributed among 42 staff members. The $142,962
difference between the calculated and actual bonus was not accepted by executive
management in order to maintain an adequate Tier 1 capital ratio. In 1995, the
1991 Bonus Pool accrued a total of $448,092; $177,370 was paid in 1995 and the
balance of $270,722 was paid in February 1996. Of the $448,092 total, $412,032
was paid to the three Executive Officers and $36,090 was distributed among 42
employees.
12
<PAGE>
In April 1996, the Board of Directors adopted the 1996 Executive
Incentive Plan for the top executive officers of the Bank. The performance
criteria includes return on average shareholders equity and average loan. In
order to be eligible for incentive payout, the Bank must be satisfactorily
rated by its regulatory agencies. In 1997, the 1996 Executive Incentive Plan
accrued a total of $860,000. The sum of $836,100 was paid January 15, 1998
to the top three executive officers of the Bank. In 1998, the 1996 Executive
Incentive Plan accrued a total of $715,000. The sum of $747,298 was paid
March 18, 1999 to the top four executive officers of the Bank.
401(k) PLAN
Effective February 1, 1992, the Bank adopted a 401(k) Plan that allows
eligible employees to contribute, as deferred compensation, between one percent
(1%) and fifteen percent (15%) of their salary to a trust established pursuant
to the 401(k) Plan. The Bank may match contributions up to a given percentage
of each participant's compensation. In addition, the Bank may make additional
contributions on a discretionary basis as a profit sharing contribution.
Contributions by the Bank vest immediately. In 1998, the Bank matched dollar
for dollar contributed up to a maximum of 4% of an individual's salary or
$4,000 dollars, whichever was less.
COMPANY 1997 STOCK OPTION PLAN
Shareholders of the Bank, as prospective shareholders of the Company,
approved in October 1997 the Company's 1997 Stock Option Plan (the "Plan"),
which was adopted by the Board of Directors of the Company on April 23, 1997,
subsequently amended on July 23, 1997 and February 18, 1998. The purpose of the
Plan is to strengthen the Company by providing an additional means of attracting
and retaining competent managerial personnel and by providing to participating
officers, key employees, directors and consultants added incentive for high
levels of performance and for unusual efforts to increase the earnings of the
Company and the Bank. The Plan seeks to accomplish these purposes and achieve
these results by providing a means whereby such officers, key employees,
directors and consultants may purchase shares of Company Common Stock pursuant
to options granted in accordance with the Plan.
460,519 unissued shares of the Company, or approximately 30% of the
then issued and outstanding shares of the Company, were originally reserved for
issuance to directors, officers, employees, and consultants ("Eligible
Participants"). Options granted pursuant to the Plan may be non-qualified
options or incentive stock options within the meaning of Section 422A of the
Internal Revenue Code.
The Plan is administered by the Board of Directors of the Company or
by a committee appointed from time to time by the Board. The Board of Directors
or the committee will determine with respect to the Eligible Participants in the
Plan and the extent of their participation.
The purchase price of stock subject to each option shall be not less
than one hundred (100%) of the fair market value of such stock at the time such
option is granted. An Eligible Participant owning more than ten percent (10%)
of the total combined voting power of all classes of Company stock may only be
granted an option with an exercise price at least 110% of the fair value of
Common Stock at the date of grant. The purchase price of any shares exercised
shall be paid in full in cash or, with the prior written approval of the
committee, in shares of the Company or on a deferred basis evidenced by a
promissory note. In addition, the optionee shall have the right upon exercise
of an option to surrender for cancellation a portion of the option for the
number of shares exercised. Options may be granted pursuant to the Plan for a
term of up to ten (10) years. Each option shall be exercisable according to the
determination of the Board or committee, except that options granted to
employees that are not directors or officers shall be exercisable at a minimum
of 20% per year over a five year period.
13
<PAGE>
Options granted under the Plan shall not be transferable by the
optionee during the optionee's lifetime. In the event of termination of
employment as a result of the optionee's disability or in the event of an
employee's death during the exercise period, to the extent the option is
exercisable on the date employment terminates or the date the employee dies, the
option shall remain exercisable for up to one (1) year (but not beyond the end
of the original option term) by the disabled optionee or, in the event of death
of the optionee, a non-qualified option shall be exercisable by the person or
persons to whom rights under the option shall have passed by will or the laws of
descent and distribution.
If an optionee's employment is terminated, unless termination was by
reason of disability or death, the optionee shall have the right, for a 3-month
period after termination, to exercise that portion of the option which was
exercisable immediately prior to such termination. If an optionee's employment
is terminated for cause, except for options granted to consultants and business
advisors, the optionee shall have the right for a 30 day period after
termination, to exercise that portion of the option which was exercisable
immediately prior to such termination. In no event may the option be exercised
after the end of the original option term.
In the event of certain changes in the outstanding Company Common
Stock without receipt of consideration by the Company, such as stock dividends,
stock splits, recapitalization, reclassification, reorganization, merger, stock
consolidation, or otherwise, appropriate and proportionate adjustments shall be
made in the number, kind and exercise price of shares covered by any unexercised
or partially unexercised options which were already granted. Optionees will
receive prior notice of any pending dissolution or liquidation of the Company,
or reorganization, merger or dissolution or liquidations of the Company, or
reorganization, merger or consolidation where the Company is not the surviving
corporation or sale of substantially all the assets of the Company or other form
of corporate reorganization in which the Company is not a surviving entity, or
the acquisition of stock representing more than 50% of the voting power of the
stock of the Company then outstanding ("Terminating Event"). Optionees have
thirty (30) days from the date of mailing of such notices to exercise any option
in full. After such thirty (30) days, any option not exercised shall terminate
and upon the occurrence of the Terminating Event, the Plan shall terminate,
unless some other provision is made in connection with the Terminating Event.
The Board reserves the right to suspend, amend, or terminate the Plan,
and, with the consent of the optionee, make such modifications, of the terms and
conditions of his or her option as it deems advisable, such as changing the
number of shares or the period such shares are vested, except that the Board may
not, without further approval of a majority of the shares, increase the maximum
number of shares covered by the Plan, change the minimum option price, increase
the maximum term of options under the Plan or permit options to be granted to
any one other than an officer, employee, director, or consultant of the Company.
Unless previously terminated by the Board of Directors, the Plan shall
terminate ten years from the date the Plan was originally adopted by the Board
of Directors of the Company, or April 23, 2007.
The Company has received a permit from the California Commissioner
of Corporations and has registered the Common Stock reserved for issuance
under the Plan with the SEC.
14
<PAGE>
AGGREGATED OPTIONS EXERCISED IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS
AT FY-END (#) AT FY-END (#)
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE (#) REALIZED ($) UNEXERCISABLE UNEXERCISABLE(1)
- ---- --------------- ------------ ------------- ----------------
<S> <C> <C> <C> <C>
Robert Ucciferri 10,000 N/A 32,222/11,444 $539,719/191,687
Barry J. Moore -0- N/A 33,556/16,945 $562,063/283,829
Michael H. Mullarky 6,666 N/A 12,223/8,612 $204,735/144,251
Gloria Van Kampen -0- N/A 0 /8,000 $ 0/134,000
</TABLE>
As of December 31, 1998, there were options outstanding to purchase a
total of 413,102 shares of the Company's Common Stock.
On December 8, 1998 stock options were granted to certain employees,
officers and directors. Mr. Ucciferri was granted 7,000 shares, 8,500 shares to
Mr. Moore, 8,000 shares to Ms. Van Kampen and 7,500 shares to Mr. Mullarky.
CERTAIN TRANSACTIONS
During the previous three (3) years, the Company has had, and expects
to have in the future, banking transactions in the ordinary course of its
business with directors, officers and their associates. These transactions have
been (and those in the future are intended to be) on substantially the same
terms, including interest rates, collateral and repayment terms on extensions of
credit, as those prevailing at the same time for comparable transactions with
others and did not involve more than the normal risk of collectibility or
present other unfavorable features. During the period from January 1, 1998
through December 31, 1998, the maximum aggregate extensions of credit to
directors, executive officers and persons with which they are financially or
otherwise closely associated was approximately $2,322,327 or 10% of the
Company's equity capital.
Loans to directors, officers and employees or their related interests
are permitted, but must be made in compliance with all applicable laws and
regulations including Regulation O, Section 215.4(b) of the Financial
Institutions Regulatory and Interest Rate Control Act of 1978, and Section 3372
of the California Financial Code. These laws require that all director and
director related loan requests are granted with interest rates and terms based
on the same criteria as comparable credit risks within the Company. All loans
to executive officers and directors must be approved by the Senior Loan
Committee prior to submission to the Board of Directors. All loans made to any
member of the Board of Directors or the Executive Officers of the Company on
behalf of himself or any related entity, or immediate family member requires
prior approval of the majority of the full Board of Directors. At December 31,
1998, the Company had $2,241,298 in loan commitments to directors and executive
officers with an aggregate outstanding balance of $2,234,298.
- -------------------------------
(1) As a result of trades on December 31, 1998 at $16.75 per share.
15
<PAGE>
The Bank leases its Riverside main branch office from a partnership,
two of whose partners are directors of the Company and the Bank. This branch
was acquired in the 1998 acquisition of DNB Financial and DeAnza National Bank.
The initial term of the lease commenced in 1982, and the lease expires in 2002,
with two ten-year renewal options. Monthly rental expense is currently $14,166,
and it is adjusted for cost of living increases every three years. The Bank
also pays its pro-rata share of taxes and common operating expenses.
COMPLETION OF ACQUISITION OF DNB FINANCIAL
Following the receipt of all necessary regulatory approvals, the
Company completed the acquisition of DNB Financial ("DNBF") on May 29, 1998
pursuant to the terms of the Agreement and Plan of Reorganization dated January
29, 1998 in which DNBF was merged with and into the Company, and De Anza
National Bank, the wholly-owned subsidiary of DNBF, was merged with an into the
Bank.
As a result of the calculations required by the Agreement, each share
of DNBF common stock was converted in the right to receive 4.1162 shares of the
Company common stock, resulting in the issuance of approximately 956,699 shares
of Company common stock to the shareholders of DNBF. The acquisition of DNBF by
the Company increased the total assets of the Company and its subsidiaries to
approximately $270 million and total shareholders' equity to approximately $23
million as of the consummation of the transaction.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act requires the Company's officers and
directors, and persons who own more than ten percent (10%) of a registered class
of the Company's equity securities, to file with the Securities and Exchange
Commission reports of ownership of common stock and other equity securities of
the Company. Because of the complexity of the reporting rules, the Company has
assumed responsibility for preparing and filing all reports required to be filed
under Section 16(a) by the directors and executive officers. The Company
believes that during the last fiscal year, all Section 16(a) filing requirements
applicable to its directors and executive officers were complied with.
ACCOUNTANTS
The financial statements of the Company for the years ended December
31, 1998 and 1997, to the extent and for the periods indicated in their report
included herein, have been examined by Vavrinek, Trine, Day & Co., independent
certified public accountants. Such financial statements, to the extent
described in the preceding sentence, have been included herein in reliance upon
the report of such firm. It is anticipated that such firm will be retained in
the same capacity in 1999. It is anticipated that a representative of such firm
will be in attendance at the Meeting and available to respond to questions
regarding the Company's financial statements at that time.
PROPOSALS BY SHAREHOLDERS AT 1999 ANNUAL MEETING
In order to be eligible for inclusion in the Company's proxy
statement and proxy card for the next Annual Meeting of Shareholders pursuant
to Rule 14a-8 under the Exchange Act, shareholder proposals must be received
by the Secretary of the Company at its principal executive offices no later
than December 31, 1999. However, in order for such shareholder proposals to
be eligible to be brought before the shareholders at the next annual meeting,
the shareholder submitting such proposals must also comply with the
procedures, including the deadlines, required by Article II of the Company's
Bylaws. Shareholder nominations of Directors are not shareholder proposals
within the meaning of Rule 14a-8 and are not eligible for inclusion in the
Company's proxy statement.
16
<PAGE>
OTHER BUSINESS
Management does not know of any matters to be presented to the Meeting
other than those set forth above. However, if other matters properly come
before the Meeting, it is the intention of the persons named in the accompanying
proxy to vote said proxy in accordance with the recommendation of management and
authority to do so is included in the proxy.
BYL BANCORP
/s/ Barry J. Moore
Barry J. Moore
Assistant Secretary
May 17, 1999
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF DIRECTORS
PLEASE PROMPTLY VOTE, DATE, SIGN AND RETURN THE ENCLOSED PROXY, WHETHER OR NOT
YOU EXPECT TO ATTEND THE MEETING. A RETURN SELF-ADDRESSED ENVELOPE IS ENCLOSED
FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED WITHIN THE UNITED STATES.
A PROMPT RESPONSE IS HELPFUL AND YOUR COOPERATION WILL BE APPRECIATED. AT ANY
TIME BEFORE A VOTE AT THE ANNUAL MEETING YOU MAY REVOKE YOUR PROXY BY (1) A
LATER DATED PROXY OR A WRITTEN NOTICE OF REVOCATION DELIVERED TO THE INSPECTOR
OF ELECTIONS OR THE SECRETARY OF THE COMPANY OR (2) ADVISING THE INSPECTOR OF
ELECTIONS OR THE SECRETARY OF THE COMPANY AT THE MEETING THAT YOU ELECT TO VOTE
IN PERSON. ATTENDANCE AT THE MEETING WILL NOT IN AND OF ITSELF REVOKE A PROXY.
THE ANNUAL MEETING IS ON JUNE 29, 1999. PLEASE RETURN YOUR PROXY IN TIME.
17
<PAGE>
PROXY [BYL BANCORP LOGO] PROXY
ANNUAL MEETING OF SHAREHOLDERS
JUNE 29, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder acknowledges receipt of the Notice of Annual Meeting
of Shareholders of BYL Bancorp (the "Company") and the accompanying Proxy
Statement dated May 17, 1999, and revoking any proxy heretofore given, hereby
appoints Robert Ucciferri, John F. Myers, and Neil F. Hatcher, or any one of
them, with full power to act alone, my true and lawful attorney(s), agent(s) and
proxy, with full power of substitution, for me and in my name, place and stead
to vote and act with respect to all shares of common stock of the Company which
the undersigned would be entitled to vote at the Annual Meeting of Shareholders
to be held on June 29, 1999, at 5:30 p.m., in the Lobby of the Yorba Linda
Office, BYL Bank Group, 18206 Imperial Highway, Yorba Linda, California 92886
and at any and all adjournment or adjournments thereof, with all the powers that
the undersigned would possess if personally present, as follows:
1. ELECTION OF DIRECTORS.
To elect for a two (2) year term as directors the nominees set forth
below:
/ / FOR all nominees listed below (except as indicated to the contrary
below).
/ / WITHHOLD AUTHORITY to vote for all nominees listed below.
Henry C. Cox II John F. Myers
Neil F. Hatcher Robert Ucciferri
H. Rhoads Martin, Jr.
- --------------------------------------------------------------------------------
(Instruction: To withhold authority to vote for any individual nominee(s), write
the nominee(s) name in the space below:)
- --------------------------------------------------------------------------------
2. OTHER BUSINESS.
To transact such other business as may properly come
before the meeting.
Execution of this proxy confers authority to vote "FOR" each proposal listed
above unless the shareholder directs otherwise. If any other business is
presented at said meeting, this proxy shall be voted in accordance with the
recommendations of the Board of Directors. When signing as attorney, executor,
administrator, trustee or guardian, please give full title. If more than one
trustee, all should sign. All joint owners SHOULD sign.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE LISTED PROPOSALS.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND MAY BE REVOKED
PRIOR TO ITS EXERCISE.
I/WE DO / / or I/WE DO NOT / / expect to attend the meeting.
- --------------------------------------------------------------------------------
If no label is affixed here, please complete:
Please print your name exactly as it appears on your stock certificate.
Please print your name exactly as it appears on your stock certificate.
- --------------------------------------------------------------------------------
Dated: ___________, 1999 ________________
(Number of Shares)
- --------------------------------------------
Signature of Shareholder(s)
- --------------------------------------------
Signature of Shareholder(s)
