<PAGE>
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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [_]
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
Farmers & Merchants 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)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
[LOGO OF FARMERS & MERCHANTS]
FARMERS & MERCHANTS BANCORP
121 West Pine Street, Lodi, CA 95240-2184
March 18, 2000
Dear Stockholder:
The Annual Meeting of Stockholders of Farmers & Merchants Bancorp will be
held this year at 121 West Pine Street, Lodi, CA, on Monday, April 17, 2000,
at 4:00 p.m. We look forward to your attendance.
The following Proxy Statement outlines the business to be conducted at the
meeting, which includes the election of directors, the ratification of Arthur
Andersen LLP as independent auditors and any other matters which properly come
before the Meeting.
A copy of the Company's 1999 annual Report to Stockholders is also
enclosed.
We hope you will be able to attend the meeting in person. A tour of the
Bank's new Loan Processing and Operations Service Centers will be held
immediately following the business session of the Annual Stockholders'
meeting. A buffet consisting of hors d'oeuvres and refreshments will be served
after the facility tour. The Directors and Senior Management greatly
appreciate the interest expressed by our stockholders. Whether or not you plan
to attend the meeting, it is important that you are represented and that your
shares are voted. Accordingly, after reviewing the Proxy Statement, we ask you
to complete, sign and date the proxy card and return it as soon as possible in
the postage-paid envelope that has been provided for your convenience.
Sincerely,
/s/ Ole R. Mettler /s/ Kent A. Steinwert
Ole R. Mettler Kent A. Steinwert
Chairman of the Board President and Chief Executive
Officer
<PAGE>
[LOGO OF FARMERS & MERCHANTS]
FARMERS & MERCHANTS BANCORP
121 West Pine Street, Lodi, CA 95240-2184
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be held April 17, 2000
To the Stockholder Addressed:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Farmers &
Merchants Bancorp, a Delaware corporation (the "Company"), will be held at its
Main Office, 121 West Pine Street, Lodi, CA, on Monday, April 17, 2000, at
4:00 p.m. to:
1. Elect the following eleven (11) Directors to serve until the next Annual
Meeting of Stockholders and until their successors are elected and
qualified:
<TABLE>
<C> <S>
Stewart C. Adams, Jr. Harry C. Schumacher
Ralph Burlington Hugh Steacy
Robert F. Hunnell Kent A. Steinwert
Ole R. Mettler Calvin (Kelly) Suess
James E. Podesta Carl A. Wishek, Jr.
George Scheideman
</TABLE>
2. Ratify the appointment of Arthur Andersen LLP by the Board of Directors,
to act as independent auditors for the year ending December 31, 2000.
3. Act upon such other matters as may properly come before such meeting or
any adjournment or postponement thereof.
The Board of Directors has fixed the close of business on February 28, 2000
as the record date for determining the holders of the Common Stock of the
Company entitled to notice of and to vote at the Annual Meeting and any
adjournments thereof. A complete list of stockholders entitled to vote will be
available at the office of the Secretary of the Company at 121 W. Pine Street,
Lodi, CA for ten days prior to the meeting.
You are strongly encouraged to attend the Annual Meeting. Please complete,
sign, date and return, as promptly as possible, the enclosed proxy and
immediately return it in the envelope provided for your use. This is important
whether or not you plan to attend the meeting in person. The giving of such
proxy will not affect your right to revoke such proxy or to vote in person,
should you attend the annual meeting.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Donald H. Fraser
Donald H. Fraser
Secretary
Dated: March 18, 2000
YOUR VOTE IS IMPORTANT
TO INSURE YOUR VOTE IS REPRESENTED, YOU ARE URGED TO COMPLETE, SIGN, DATE
AND PROMPTLY RETURN YOUR PROXY.
<PAGE>
PROXY STATEMENT
FARMERS & MERCHANTS BANCORP
121 West Pine Street, Lodi, CA 95240-2184
This Proxy Statement is furnished to the stockholders of Farmers &
Merchants Bancorp (the "Company") in connection with the solicitation of
proxies by the Board of Directors of the Company to be used in voting at the
Annual Meeting of Stockholders to be held on April 17, 2000, 121 West Pine
Street, Lodi, CA at 4:00 p.m., and at any adjournment or postponement thereof
(the "Meeting"). All expenses incidental to the preparation and mailing, or
otherwise making available to all stockholders of the notice, Proxy Statement
and formal Proxy will be paid by the Company. This Proxy Statement and the
enclosed Proxy are being mailed to the Company's stockholders on or about
March 18, 2000.
This Proxy Statement outlines the business to be conducted at the Annual
Meeting, which, includes the election of directors and the ratification of
Arthur Andersen LLP as independent auditors.
Voting Rights and Vote Required
Only stockholders of record at the close of business on February 28, 2000
(the "Record Date"), will be entitled to vote in person or by proxy. On that
date, there were 660,154 shares of Common Stock outstanding and entitled to
vote.
Stockholders of Common Stock of the Company are entitled to one vote for
each share held, except that in the election of Directors, because of the
application of Section 2115 of the California Corporation law, each
stockholder may be eligible to exercise cumulative voting rights and may be
entitled to as many votes as shall equal the number of shares of Common Stock
held by such stockholder multiplied by the number of Directors to be elected,
and such stockholder may cast all of such votes for a single nominee or may
distribute them among two or more nominees. For example, if you own 10 shares
and 11 directors are being elected, you have 110 votes--you can cast all of
them for one or more directors if you so choose. No stockholder, however,
shall be entitled to cumulate votes (i.e., cast for any one or more candidates
a number of votes greater than the number of stockholder's shares) unless the
name(s) of the candidate(s) has (have) been placed in nomination prior to the
commencement of the voting in accordance with Article III, Section 3.4 of the
Company's By-Laws (which requires that nominations made other than by the
Board of Directors be made by notification in writing delivered or mailed to
the President of the Company not less than 30 days or more than 60 days prior
to any meeting of stockholders) and in accordance with Article II, Section 2.9
of the Company's By-Laws, a stockholder has given at least two days written
notice to the Secretary of the Company of an intention to cumulate votes prior
to the voting. If any stockholder has given such notice, all stockholders may
cumulate their votes for candidates in nomination, in which event votes
represented by Proxies delivered pursuant to this Proxy Statement may be
cumulated, in the discretion of the proxy holders, in accordance with the
recommendation of the Board of Directors. Discretionary authority to cumulate
votes in such event is, therefore, solicited in this Proxy Statement.
In the election of directors, the 11 nominees receiving the highest number
of votes will be elected. Approval of the selection of the independent
auditors and on such other matters, if any, will require the affirmative vote
of a majority of the shares represented and voting at the meeting provided the
quorum provisions of Article II, Section 2.7 of the By-Laws are met.
Abstentions will not count as votes in favor of the election of directors or
any of the other proposals.
Voting of Proxies--Quorum
The shares represented by all properly executed proxies received in time
for the Meeting will be voted in accordance with the stockholders' choices
specified therein; provided, however, that where no choices have been
specified, the shares will be voted "FOR" the election of the 11 nominees for
Director recommended by the Board of Directors, "FOR" the ratification of the
appointment of Arthur Andersen LLP as independent auditors, and on such other
matters, if any, which may properly come before the Meeting (including any
proposal to
1
<PAGE>
adjourn the Meeting). A majority of the shares entitled to vote represented
either in person or by a properly executed Proxy, will constitute a quorum at
the Meeting. Abstentions and broker "non-votes" are each included in the
determination of the number of shares present and voting for purposes of
determining the presence of a quorum. A broker "non-vote" occurs when a
nominee holding shares for a beneficial owner does not have discretionary
voting power with respect to that item and has not received instructions from
the beneficial owner. Abstentions will be included in tabulations of the votes
cast on proposals presented to the stockholders and therefore will have the
effect of a negative vote. Broker "non-votes" will not be counted for purposes
of determining the number of votes cast for a proposal.
Revocability of Proxy
A stockholder using the enclosed proxy may revoke the authority conferred
by the proxy at any time before it is exercised by delivering written notice
of revocation to the Secretary of the Company or a duly executed proxy bearing
a later date, or by appearing and voting by ballot in person at the Meeting.
In the event that signed proxies are returned without voting instructions,
proxies will be voted in favor of the actions to be voted upon.
2
<PAGE>
PROPOSAL 1
ELECTION OF DIRECTORS
At the Meeting it will be proposed to elect eleven (11) Directors of the
Company, each to hold office until the next annual meeting and until
successors shall be elected and qualified. It is the intention of the proxy
holders named in the enclosed Proxy to vote such Proxies (except those
containing contrary instructions) for the 11 nominees named below.
The following table sets forth each of the nominees for election as a
Director, their age, their principal occupation for the past five years and
the period during which they have served as Director of the Company.
<TABLE>
<CAPTION>
Principal Occupation During Past Director
Name Age Five Years Since
---- --- -------------------------------- --------
<C> <C> <S> <C>
Stewart C. Adams, Jr...... 62 Attorney 1997
Ralph Burlington.......... 76 Retired, Former Co-owner San Joaquin
Sulfur Co. 1968
Robert F. Hunnell......... 79 Retired, Former Owner, Hunnell's
Pharmacy 1970
Ole R. Mettler............ 82 Chairman of the Board and Retired
Bank President 1973
James E. Podesta.......... 79 Orchardist 1980
George Scheideman......... 80 Retired, Former Produce Buyer 1973
Harry C. Schumacher....... 79 Retired since 1997, prior thereto
President of the Bank 1997
Hugh Steacy............... 89 Retired, Former President, Henderson
Bros. Co., Inc. (plumbing,
contracting and hardware) 1964
Kent A. Steinwert......... 47 President and Chief Executive
Officer (since August 1997, prior
thereto, a senior officer with Bank
of America National Trust and
Savings Association) 1998
Calvin (Kelly) Suess...... 64 Co Owner, Lodi Nut Company, Inc. 1990
Carl A. Wishek, Jr........ 61 Assistant Vice President of the Bank 1988
</TABLE>
None of the directors of the Company were selected pursuant to arrangements
or understandings other than with the directors and stockholders of the
Company acting within their capacity as such. There are no family
relationships between any of the directors, and none of the directors serves
as a director of any company which has a class of securities registered under,
or subject to periodic reporting requirements of, the Securities Exchange Act
of 1934, as amended, or any company registered as an investment company under
the Investment Company Act of 1940.
The Board does not anticipate that any of the nominees will be unable to
serve as a director of the Company, but if that should occur before the
Meeting, the proxy holders, in their discretion, upon the recommendation of
the Company's Board of Directors, reserve the right to substitute as nominee
and vote for another person of their choice in the place and stead of any
nominee unable so to serve. The proxy holders reserve the right to cumulate
votes for the election of directors and cast all of such votes for any one or
more of the nominees, to the exclusion of the others, and in such order of
preference as the proxy holders may determine in their discretion, based upon
the recommendation of the Board of Directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES LISTED ABOVE.
3
<PAGE>
Board of Directors Meetings
During the calendar year ending December 31, 1999, the Board of Directors
of the Company met eight (8) times and the Board of Directors of the Bank met
fifty-one (51) times. Each incumbent attended more than 75% of the Meetings of
the Board of Directors and Committees on which they served, with the exception
of the Chair of the Year 2000 Committee.
Committees of the Board of Directors
The Company's principal asset and only investment is its wholly owned
subsidiary, Farmers & Merchants Bank of Central California (the "Bank"). The
directors of the Company are also directors of the Bank. As such, Bank
Committees supervise and review the activities of the Bank, which in turn
report to the Company's Board of Directors.
Neither the Bank nor the Company has a nominating committee.
Audit Committee
The Audit Committee of the Bank directs the activities of the internal and
independent auditors of the Company to ensure compliance with applicable laws.
The Audit Committee examines the affairs of the Bank through reports of
examinations made by the independent auditors, internal auditors and
regulatory agencies. The committee reviews the examinations of Bank
operations, loans and credits and reports the results to the Bank's Board of
Directors. The Committee met 13 times in 1999 and is comprised of the
following members: Messrs. Hunnell (Chairperson), Burlington, and Scheideman.
Expense Committee
The Expense Committee of the Bank reviews and examines all Company expenses
on a monthly basis comparing the results with the annual budget, the previous
month and prior year, and proposes recommendations for management on
controllable expenses. The Committee met 12 times in 1999 and is comprised of
the following voting members: Messrs. Podesta (Chairperson), Suess and Wishek.
Mr. Mettler is an Ex Officio member.
CRA Committee (Community Reinvestment Act)
The CRA Committee reviews the Bank's efforts and responsibilities in
accordance with the Community Reinvestment Act. The Committee makes
recommendations to the Board of Directors to assure the Bank is meeting the
credit, investment and service needs of all segments of the communities it
serves. The Committee met 12 times in 1999 and is comprised of the following
voting members: Messrs. Suess (Chairperson), Podesta and Wishek. Mr. Mettler
is an Ex Officio member.
Year 2000 Committee
The Year 2000 Committee of the Bank addresses the issues of: (a) computer
system readiness, (b) continued vendor product and service support, (c)
evaluation of credit risk of major Bank borrowers and (d) investment and
Asset/Liability exposure. The Committee reviewed and monitored the Company's
progress on this important compliance issue. The committee met 4 times in
1999. The committee is chaired by Mr. Ralph Burlington with officers of the
Bank.
Personnel Committee
The Committee is comprised of the following voting members: Messrs. Steacy
(Chairperson), Schumacher and Adams. Mr. Mettler is an Ex Officio member. The
Committee met seven times in 1999.
Compensation Committee Interlocks and Insider Participation
The personnel committee is made up of three members of the Board of
Directors, none of which are officers or employees of the Company.
4
<PAGE>
Executive Officers
Set forth below is certain information regarding the executive officers of
the Bank, with the exception of Mr. Steinwert whose information is set forth
under "--Nominees":
<TABLE>
<CAPTION>
Principal Occupation During the Past
Name and Position(s) Age Five Years
-------------------- --- ------------------------------------
<C> <C> <S>
Richard S. Erichson................. 52 Executive Vice President and Senior
Executive Vice President & Senior Credit Officer of the Bank since
Credit Officer (Beginning Dec. 14, December 1998, prior thereto,
1998) Senior Vice President/Senior
Commercial Banking Manager, Bank of
America National Trust and Savings
Association.
Donald H. Fraser.................... 63 Executive Vice President and Chief
Executive Vice President & Chief Operating Officer of the Bank since
Operating Officer, and Secretary April 1996, prior thereto, Senior
Vice President and Chief Operating
Officer of the Bank.
John R. Olson....................... 47 Executive Vice President and Chief
Executive Vice President & Chief Financial Officer of the Bank since
Financial Officer, and Treasurer April 1996, prior thereto, Senior
Vice President and Chief Financial
Officer of the Bank.
Douglas E. Eddy..................... 52 First Vice President and Credit
Senior Vice President, Branch Administrator of the Bank (April
Administration/Sales Management 1996 to Dec 1998), prior thereto,
(beginning Jan. 1999) Vice President and Credit
Administrator of the Bank.
</TABLE>
Compensation of Directors and Executive Officers
A Director who is not a Bank employee receives a monthly fee and a fee for
each Bank Board or Bank Committee Meeting attended. The monthly fee is $291.84
for each Director, the Board Meeting fee is $400.00, and the Committee Meeting
fee is $175.00. In addition, each outside director received a $4,000 bonus in
1999. Directors may elect to defer receipt of some or all Directors' fees.
Directors who are not active officers in the Bank do not participate in
either the Defined Benefit Pension Plan or the Profit Sharing Plan.
Directors are permitted to participate in the Bank's group insurance plan
along with salaried employees. This plan is funded 70% by the Bank and 30% by
the Directors who are employees and 100% by Directors who are not employees.
The Bank plans to continue the payment of such fees for regular Meetings of
the Board and of the Committees of the Board.
5
<PAGE>
The following table sets forth the aggregate remuneration for the services
in all capacities paid by the Bank during 1997, 1998 and 1999 to the Chief
Executive Officer and each of the four highest paid Executive Officers of the
Bank whose total annual salary and bonus exceeded $100,000.
<TABLE>
<CAPTION>
Annual Long Term Compensation
Compensation Awards
----------------- -----------------------
Profit Deferred
Name Title Year Salary Bonus Sharing Plan Bonus Plan
---- ----- ---- -------- -------- ------------ ----------
<C> <S> <C> <C> <C> <C> <C>
K. A. Steinwert.... President & Chief 1999 $220,368 $125,000 $11,933 $61,096
Executive Officer 1998 201,405 50,000 12,267 53,439
(Effective Aug. 18, 1997 75,000 -- -- 20,335
1997)
R.S. Erichson...... Executive Vice President 1999 $152,129 $ 45,000 $11,933 $14,560
& Senior Credit Officer 1998 -- -- -- --
D.H. Fraser........ Executive Vice President 1999 $146,150 $ 32,000 $11,933 $14,560
& Chief Operating 1998 135,575 -- 9,885 --
Officer Secretary 1997 127,385 8,000 9,402 --
J.R. Olson......... Executive Vice President 1999 $144,419 $ 32,000 $11,933 $14,560
& Chief Financial 1998 137,083 -- 10,032 --
Officer, and Treasurer 1997 128,758 8,000 9,526 --
D. R. Maas......... First Vice President 1999 $ 93,624 $ 16,000 $ 9,905 --
Special Assets (Retired 1998 92,357 -- 5,671 --
as of 12/31/99) 1997 91,487 3,000 5,706 --
D.E. Eddy.......... Senior Vice President & 1999 $ 92,209 $ 15,000 $ 6,675 --
Branch Administration/ 1998 73,313 -- 3,814 --
Sales Management
</TABLE>
Deferred Bonus Plan
Participants under the Deferred Bonus Plan are entitled to receive cash
payments based on the long-term cumulative profitability of the Bank and its
subsidiaries and a bonus factor determined for each participant. Deferred
bonuses become payable to eligible participants after either the participant
has become vested and his or her employment at the Bank terminates or there
has been a "Change in Control" as defined in the Plan.
Profit Sharing Plan
Benefits pursuant to the Profit Sharing Plan vest 0% during the first three
years of participation 20% per year thereafter, and after seven years such
benefits are fully vested.
Employment Contracts and Termination of Employment and Change in Control
Arrangements
The Bank entered into an employment agreement on July 8, 1997 with Kent A.
Steinwert as its President and Chief Executive Officer. The agreement, which
expires on August 18, 2000, provides for a minimum base salary of $200,000
annually, annual salary increases at the discretion of the Board of Directors
based upon performance, use of a Bank-owned automobile and certain insurance
benefits. Under certain circumstances in the event of termination of
employment, Mr. Steinwert will be entitled to receive severance compensation
set forth in the agreement.
The Bank entered into an employment agreement on December 1, 1998 with
Richard S. Erichson as its Executive Vice President and Senior Credit Officer.
The agreement, which expires on November 30, 2001, provides for a minimum base
salary of $150,000, a bonus of $40,000 for 1998 as compensation for forfeiture
of a 1998 bonus with Mr. Erichson's previous employer, and annual salary
increases at the discretion of the Board of Directors based upon a review of
his performance during the previous year. Under certain circumstances in the
event of termination of employment, particularly in connection with a change
of control of the Bank, Mr. Erichson will be entitled to receive severance
compensation set forth in the agreement.
The Bank has not entered into any other employment agreements.
6
<PAGE>
Defined Benefit Pension Plan
The amount of accrued contribution to the Bank's Defined Benefit Pension
Plan cannot readily be separately calculated at this time by the plan
actuaries. The Bank's contribution requirement to the plan in 1999 was
$666,746 as determined by the actuaries. The maximum annual retirement
benefits, which any of the above named individuals would be entitled to
receive, as Officers of the Bank, assuming that all applicable conditions of
the plan are met, is $18,000 annually. Mr. Mettler elected to withdraw his
respective vested interest the year he reached normal retirement age 65 and is
no longer a participant in the Defined Benefit Pension Plan. Current rules
permit the inclusion of a pension plan table demonstrating benefits payable
upon retirement. Since the maximum compensation payable to any employee,
including Executive Officers is $18,000 per year, a pension table has been
excluded.
Certain Relationships and Related Transactions
The Bank has had and expects to have in the future, loan transactions with
many of its officers and Directors and their related interests on the same
terms (including interest rates and collateral) as those prevailing for
comparable transactions with others. Such loan transactions are subject to the
limitations and requirements of Regulation O of the Federal Reserve Board and
other applicable law. In management's opinion, all loans and commitments to
lend included in said transactions were made in compliance with applicable
laws on substantially the same terms, including interest rates and collateral,
as those prevailing for comparable contemporaneous transactions with other
persons of similar creditworthiness, and did not involve more than a normal
risk of collection or present other unfavorable features. The aggregate amount
of all such loans made during 1999 amounted to $476,000, including renewals of
previous loans. The balance of these loans and loans made in prior years
outstanding at December 31, 1999 amounted to $1,105,000.
Report of the Personnel Committee
of the Board of Directors on Executive Compensation
The Personnel Committee of the Bank reviews and establishes the general
employment and compensation practices and policies of the Bank and approves
procedures for the administration thereof. The Board of Directors of the Bank,
operating through its Personnel Committee, establishes annual executive
compensation for the Chief Executive ("CEO") and the other executive officers
based on performance and regulatory publications that indicate compensation
paid by other Banks of similar size. This annual evaluation process
establishes a competitive base salary for each executive and offers incentive
compensation, which can provide additional compensation if established
performance measures are achieved.
As described in the Summary Compensation Table, each named executive
receives a monthly base salary, and is eligible to receive an annual cash
bonus. Bank performance measures are established each year based on the Bank's
profit objectives. The extent to which these objectives are achieved
determines if and what size the annual cash bonus and merit increases will be.
In evaluating the CEO's annual salary, the Personnel Committee uses a
subjective evaluation as a basis for its decisions and considers: the Bank's
net income, comparative executive compensation levels of similar peer groups,
safety and soundness criteria, and current economic conditions. The
performance measures used in determining the CEO's annual cash bonus is based
on the same income objectives as all Company employees.
Respectfully Submitted,
Hugh Steacy
Stewart C. Adams, Jr.
Harry C. Schumacher
7
<PAGE>
Indemnification
The Company's Certificate of Incorporation and By-Laws provide for
indemnification of officers, directors, employees and agents to the fullest
extent permitted by Delaware law. Delaware law generally provides for the
payment of expenses, including attorneys' fees, judgments, fines and amounts
paid in settlement reasonably incurred by the indemnitees provided such person
acted in good faith and in a manner he or she reasonably believed not to be
opposed to the best interests of the corporation and with respect to any
criminal action or proceeding if he or she had no reasonable cause to believe
his or her conduct was unlawful. However, in derivative suits, if the suit is
lost, no indemnification is permitted in respect of any claim as to which the
prospective indemnitee is adjudged to be liable for misconduct in the
performance of his or her duty to the company and then only if, and only to
the extent that, a court of competent jurisdiction determines the prospective
indemnitee is fairly and reasonably entitled to indemnity for such expenses as
the court deems proper. Finally, no indemnification may be provided in any
action or suit in which the only liability asserted against a director is
pursuant to a statutory provision outlawing loans, dividends, and distribution
of assets under certain circumstances.
The provisions regarding indemnification may not be applicable under
certain federal banking and securities laws and regulations.
Compliance With Section 16(a) of The Exchange Act
Section 16(a) of the Securities Exchange Act of 1934, as amended, required
the Company's executive officers and directors, and persons who own more than
ten percent of a registered class of the Company's equity securities, to file
reports of ownership on Forms 3, 4 and 5 with the Securities Exchange
Commission. Officers, directors and greater than ten percent stockholders are
required by regulation to furnish the Company with copies of all Forms 3, 4
and 5 they file. Based solely on the Company's review of the copies of such
forms it has received, the Company believes that all of its officers,
directors and greater than ten percent beneficial owners complied with all
filing requirements applicable to them with respect to transactions during
1999.
Performance Graphs
The following graph compares the yearly percentage change in the Company's
cumulative total shareholder return on Common Stock with (i) the cumulative
total return of the American Stock Exchange market index, and (ii) a published
index comprised by Media General Financial Services, Inc. of banks and bank
holding companies throughout the United States (the industry group line
depicted below). The graph assumes an initial investment of $100 and
reinvestment of dividends. Points on the table represent the performance as of
the last business day of each of the years indicated. The graph is not
necessarily indicative of future price performance.
The graph shall not be deemed filed or incorporated by reference into any
filing under the Securities Act of 1933 or under the Securities Exchange Act
of 1934, except to the extent that we specifically incorporate this table by
reference.
Period ended December 31, 1994 through December 31, 1999
[PERFORMANCE GRAPH APPEARS HERE]
COMPARISON OF SIX YEAR CUMULATIVE TOTAL RETURN
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998 1999
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Farmers & Merchants Bancorp.... 100.00 110.32 122.64 133.30 160.81 242.89
Industry Index................. 100.00 139.50 182.78 263.30 276.62 257.70
AMEX Market Index.............. 100.00 128.90 136.01 163.66 161.44 201.27
</TABLE>
8
<PAGE>
Security Ownership of Certain Beneficial Owners and Management
To the knowledge of the Company, as of the Record Date, no person or entity
was the beneficial owner of more than five percent (5%) of the outstanding
shares of the Company's Common Stock except as provided below and in the
following tables. For the purpose of this disclosure and the disclosure of
ownership shares by management, shares are considered to be "beneficially"
owned if the person has or shares the power to vote or direct the voting of the
shares, the power to dispose of or direct the disposition of the shares, or the
right to acquire beneficial ownership (as so defined) within 60 days of
December 31, 1999.
<TABLE>
<CAPTION>
Title of Name and Address Amount and Nature of Percent
Class of Beneficial Owner Beneficial Ownership(1) of Class
-------- ------------------- ----------------------- --------
<S> <C> <C> <C>
Common Stock Sheila M. Wishek(2) 50,930 7.71%
1704 Vallejo
San Francisco, CA 94123
Common Stock C.A. Wishek, Jr. 44,207 6.69%
P.O. Box 906
Lodi, CA 95241
Common Stock Bruce Mettler 33,308 5.05%
17901 N. Cherry Road
Lodi, CA 95240
</TABLE>
- --------
(1) Shares are beneficially owned, directly and indirectly, together with
spouses, and unless otherwise indicated, holders share voting power with
their spouses.
(2) Includes 7,126 shares of Common Stock (representing 1.09% of the
outstanding Common Stock) for which Ms. Wishek holds a Power of Attorney.
9
<PAGE>
The following table shows the number of common shares and the percentage of
the common shares beneficially owned (as previously discussed) by each of the
current directors, by each of the nominees for election to the office of
director, by the Chief Executive Officer and the four other most highly
compensated executive officers (whose annual compensation exceeded $100,000)
and by all directors and executive officers of the Company as a group as of
December 31, 1999.
<TABLE>
<CAPTION>
Number of Shares
Name and Address of Beneficial of Common Stock
Owner(1) Beneficially Owned(2) Percent of Class
------------------------------ --------------------- ----------------
<S> <C> <C>
Stewart C. Adams, Jr................ 1,186 *
Ralph Burlington.................... 1,948 *
Douglas E. Eddy..................... 90 *
Richard S. Erichson................. 66 *
Donald H. Fraser.................... 680 *
Robert F. Hunnell................... 1,323 *
Ole R. Mettler...................... 20,387 3.08%
John R. Olson....................... 500 *
James R. Podesta.................... 790 *
George Scheideman................... 2,419 *
Harry C. Schumacher................. 4,066 *
Hugh Steacy......................... 2,023 *
Kent A. Steinwert................... 3,502 *
Calvin (Kelly) Suess................ 617 *
Carl A. Wishek, Jr.................. 44,207 6.69%
All directors and executive officers
as a group (16 persons)............ 83,804 12.69%
</TABLE>
- --------
* Indicates less than 1%.
(1) Unless otherwise indicated, the business address for each of the persons
listed in the table is 121 West Pine Street, Lodi, CA, 95240-2184.
(2) Shares are beneficially owned, directly and indirectly, together with
spouses, and, unless otherwise indicated, holders share voting power with
their spouses.
PROPOSAL 2
RATIFICATION OF AUDITORS
At the Meeting a vote will be taken on a proposal to ratify the appointment
of Arthur Andersen LLP, by the Board of Directors, to act as independent
auditors of the Company for the year ending December 31, 2000. Arthur Andersen
LLP are independent accountants and auditors who have audited the Company
annually since 1985. Representatives of Arthur Andersen LLP are not expected
to be present at the Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF ARTHUR ANDERSEN
LLP AS INDEPENDENT AUDITORS.
10
<PAGE>
STOCKHOLDER PROPOSALS
Under the Rules of the Securities and Exchange Commission, if a stockholder
wants to include a proposal in the Company's Proxy Statement and form of proxy
for presentation at the Company's 2001 Annual meeting of Stockholders, the
proposal must be received by the Company at its principal executive offices by
November 20, 2000.
Article III, Section 3.4 of the By-Laws of the Company provides a procedure
for nomination for election of members of the Board of Directors: nominations
for election to the Board of Directors may be made by the Board of Directors
or by any holder of any outstanding class of capital stock of the Company
entitled to vote for the election of directors. Nominations, other than those
made by the Board of Directors, shall be made by notification in writing
delivered or mailed to the President of the Company not less than thirty (30)
days or more than sixty (60) days prior to any meeting of stockholders called
for election of directors, provided, however, that if less than twenty-one
(21) days' notice of the meeting is given to stockholders, such nomination
shall be mailed or delivered to the President of the Company not later than
the close of business on the seventh (7th) day following the day on which the
notice of meeting was mailed. The Company's Annual Meeting of Stockholders is
expected to be held on April 16, 2001. Accordingly, any stockholder nomination
for the 2001, Annual Meeting of Stockholders, to be timely, must be received
by the Company not later than March 17, 2001 and not earlier than February 15,
2001. Notification must contain certain information as to each proposed
nominee and as to each person acting alone or in conjunction with one or more
persons, in making such nomination or in organizing, directing or financing
such nomination. If the Chairman of the meeting acknowledges the nomination of
a person not made in accordance with the foregoing procedures, the persons
named as proxies in the proxy materials relating to the meeting will use their
discretion in voting the proxies when the nomination is made at the meeting. A
copy of the By-Laws of the Company can be obtained by written request to the
Secretary of the Company, Donald H. Fraser, 121 W. Pine Street Lodi,
California.
According to Article II, Section 2.6 of the Company's By-Laws, in order for
business to be properly brought before a meeting by a stockholder, the
stockholder must have given timely notice thereof in writing to the Secretary
of the Company and must have been a stockholder of record at the time such
notice is given. To be timely, a stockholder's notice shall be delivered to or
mailed (by United States registered mail, return receipt requested) and
received at the principal executive offices of the Company not less than
seventy (70) days nor more than ninety (90) days prior to the first
anniversary date of the preceding year's annual meeting; provided, however,
that in the event that the date of the annual meeting is advanced by more than
twenty (20) days, or delayed by more than seventy (70) days, from such
anniversary date, notice by a stockholder to be timely must be so delivered or
mailed (by U.S. registered mail, return receipt requested) and received not
earlier than the close of business on the later of the seventieth (70th) day
prior to such annual meeting or the tenth (10th) day following the day on
which public announcement of the date of such meeting is first made. The
Company's 2001 Annual Meeting of Stockholders is expected to be held on April
16, 2001. Accordingly, any stockholder proposal, to be timely, must be
received by the Company no later than February 5, 2001, and no earlier than
January 16, 2001. Such stockholder's notice to the Secretary must contain
certain additional information, which is more particularly described in
Article II, Section 2.6 of the Company's By-Laws. No business shall be
conducted at an annual meeting of stockholders unless proposed in accordance
with the foregoing procedures. The Chairman of the meeting shall, if the
factors warrant, determine and declare to the meeting that business was not
properly brought before the meeting in accordance with the foregoing procedure
and such business shall not be transacted.
11
<PAGE>
ANNUAL REPORT
Together with this Proxy Statement, Farmers & Merchants Bancorp has
distributed to each of its stockholders an annual report for the year ended
December 31, 1999. The annual report contains the consolidated financial
statements of the Company and its subsidiary and the report thereon of Arthur
Andersen LLP, the Company's independent public accountants.
Upon written request by any person entitled to vote at the Meeting,
addressed to Donald H. Fraser, Secretary of the Company, at 121 W. Pine
Street, Lodi, California 95240, we will provide, without charge, a copy of the
Company's 1999 annual report on form 10-K, including the financial statements
and the schedules filed with the Securities and Exchange Commission pursuant
to the Securities Exchange Act of 1934.
OTHER MATTERS
The management of the Company is not aware of any other matters to be
presented for consideration at the Meeting or any adjournments or
postponements thereof. If any other matters should properly come before the
Meeting, it is intended that the persons named in the enclosed Proxy will vote
the shares represented thereby in accordance with their best business
judgment, pursuant to the discretionary authority granted therein.
BY ORDER OF THE BOARD OF DIRECTORS
Donald H. Fraser
Secretary
12
<PAGE>
[X] PLEASE MARK VOTES REVOCABLE PROXY
AS IN THIS EXAMPLE FARMERS & MERCHANTS BANCORP
<TABLE>
<CAPTION>
<S> <C>
With For All
For hold Except
ANNUAL MEETING OF STOCKHOLDERS 1. ELECTION OF DIRECTORS of all [____] [____] [____]
APRIL 17, 2000 nominees listed (except as marked
to the contrary below):
This Proxy is solicited on behalf of the Board of Directors.
Stewart C. Adams, Jr., Ralph Burlington, Robert F. Hunnell,
The undersigned hereby appoint(s) Ole R. Mettler, Ralph Ole R. Mettler, James E. Podesta, George Scheideman,
Burlington and Kent A. Steinwert and any of them, each with Harry C. Schumacher, Hugh Steacy, Kent A. Steinwert,
full power of substitution as Proxy of the undersigned, to Calvin (Kelly) Suess and Carl A. Wishek, Jr.
attend the Annual Meeting of Stockholders of Farmers &
Merchants Bancorp to be held at Lodi, California, at 4.00
p.m., on April 17, 2000 and any adjournment thereof, and to INSTRUCTION: To withhold authority to vote for any individual
vote the number of shares the undersigned would be entitled nominee, mark "For All Except" and write that nominee's name in
to vote if personally present as indicated hereon: the space provided below.
----------------------------------------------------------------
For Against Abstain
2. PROPOSAL TO RATIFY THE [____] [____] [____]
APPOINTMENT OF ARTHUR ANDERSEN
LLP as independent public
accountants of the Bancorp.
3. In their discretion, the Proxies are authorized to vote upon
such other business as may properly come before the meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE
MANNER DIRECTED BY THE UNDERSIGNED TO STOCKHOLDER. IF NO
------------------------ DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR ALL NOMINEES
Please be sure to sign and date Date LISTED UNDER ITEM 1 AND IN FAVOR OF ITEM 2. THIS PROXY CONFERS
this Proxy in the box below. ON THE PROXYHOLDERS THE POWER OF CUMULATIVE VOTING AS DIRECTED
- --------------------------------------------------------------- IN SUCH PROXY STATEMENT.
Please sign exactly as name appears herein. When shares are
- ---- Stockholder sign above------------Co-holder (if any) sign- held by joint tenants, both should sign. When signing as
above attorney, executor, administrator, trustee or guardian, please
give full title as such. If a corporation, please sign in full
corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized
person.
Detach above card, sign, date and mail in postage paid envelope provided.
FARMERS & MERCHANTS BANCORP
- ------------------------------------------------------------------------------------------------------------------------------------
PLEASE MARK, DATE, SIGN AND RETURN THE PROXY
PROMPTLY USING THE ENCLOSED ENVELOPE.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
