<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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
Napa National 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>
NAPA NATIONAL BANCORP
901 MAIN STREET
NAPA, CA 94559
April 30, 1999
To Our Shareholders:
You are cordially invited to attend the Annual Meeting of Shareholders of
Napa National Bancorp, a California corporation (the "Company"), which will be
held at the Company's principal executive office, located at 901 Main Street,
Napa, California 94559 on Tuesday, June 8, 1999, at 8:00 a.m.
You will be asked to elect as directors the ten individuals nominated by
the Board of Directors and ratify the appointment of Ernst & Young LLP as the
Company's independent public accountants. The attached Proxy Statement contains
more detailed information about the nominees and any other matters regarding the
meeting.
Whether or not you plan to attend, please sign and return the accompanying
proxy card in the postage-paid envelope provided as soon as possible so that
your shares will be represented at the meeting. The Board of Directors
recommends that you vote "FOR" each of the proposals listed on the proxy card.
If you attend the meeting and ask to vote in person, you may withdraw your proxy
at that time. It is important that your shares be represented.
W. Clarke Swanson, Jr.
Chairman of the Board
<PAGE>
NAPA NATIONAL BANCORP
901 MAIN STREET
NAPA, CALIFORNIA 94559
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TUESDAY, JUNE 8, 1999
To Our Shareholders:
The Annual Meeting of Shareholders of Napa National Bancorp (the
"Company"), a California corporation and bank holding company for Napa National
Bank (the "Bank"), will be held at the Company's principal executive office,
located at 901 Main Street, Napa, California 94559 on Tuesday, June 8, 1999, at
8:00 a.m. for the following purposes:
1. To elect the following ten directors of the Company to serve until the
next Annual Meeting of Shareholders and until their respective successors shall
be elected and qualified:
William A. Bacigalupi C. Richard Lemon
Dennis D. Groth Joseph G. Peatman
E. James Hedemark A. Jean Phillips
Michael D. Irwin George M. Schofield
Brian J. Kelly W. Clarke Swanson, Jr.
2. To ratify the appointment of Ernst & Young LLP, as the Company's
independent public accountants for the 1999 fiscal year.
3. To consider and transact such other business as may properly come
before the meeting of any adjournment or postponement thereof.
Only shareholders of record at the close of business on April 23, 1999 are
entitled to notice of and to vote at this meeting and any adjournment(s)
thereof.
Provisions of the By-laws of the Company govern nominations for election of
members of the Board of Directors, as follows:
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 Company 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 Company by the later of the close of business twenty-one
(21) days prior to any meeting of shareholders called for the election of
directors or ten (10) days after the date of mailing of notice of the
meeting to shareholder. 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 number of
<PAGE>
shares of capital stock of the Company owned by each proposed nominee; (c)
the name and residence address of the notifying shareholder; (d) the number
of shares of capital stock of the Company owned by the notifying
shareholder; (e) 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 a pleaded nolo contendere to any
criminal offense involving dishonesty or breach of trust, filed a petition
in bankruptcy or been adjudged 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 chairperson of the meeting,
and upon his or her instruction, 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. A copy of
this paragraph shall be set forth in a notice to shareholders of any
meeting at which directors are to be elected.
All shareholders are cordially invited to attend the meeting in person. To
ensure your representation at the meeting you are requested to date, execute and
return the enclosed proxy card, without delay, in the enclosed postage-paid
envelope whether or not you plan to attend. Any shareholder present at the
meeting may vote personally on all matters brought before the meeting, in which
event such shareholder's proxy will not be used.
BY ORDER OF THE BOARD OF DIRECTORS
C. RICHARD LEMON
Secretary
Napa, California
April 30, 1999
WHETHER OR NOT YOU PLAN TO ATTEND THIS MEETING, PLEASE MARK, SIGN, DATE AND
RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN THE ENCLOSED POSTAGE-PAID
ENVELOPE.
<PAGE>
PROXY STATEMENT
INFORMATION CONCERNING PROXY
This statement is furnished in connection with the solicitation of
proxies to be used by the Board of Directors of Napa National Bancorp (the
"Company") at the Annual Meeting of Shareholders of the Company to be held at
the Company's principal executive office, located at 901 Main Street, Napa,
California 94559, on June 8, 1999 at 8:00 a.m., and at any adjournments or
postponements thereof (the "Meeting").
This Proxy Statement and the accompanying proxy are first being mailed
to holders of the Company's common stock ("Common Stock") on or about April 30,
1999.
A form of proxy for voting your shares at the Meeting is enclosed. Any
shareholder who executes and delivers a proxy has the right to revoke it at any
time before it is voted by filing with the Secretary of the Company an
instrument revoking it or a duly executed proxy bearing a later date. In
addition, the powers of the proxy holders will be revoked if the person
executing the proxy is present at the Meeting and advises the Chairman of the
Meeting of his or her election to vote in person. Where a signed proxy that does
not contain voting instructions is submitted to the Company, the proxy holders
will vote the shares represented by such proxy in favor of election of the
nominees specified and in favor of any specified proposals unless such proxy is
later revoked.
The enclosed form of 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, including but not limited to: approval of minutes of the prior annual
meeting which will not constitute ratification of the actions taken at such
meeting; action with respect to procedural matters pertaining to the conduct of
the Meeting; and election of any person to any office for which a bona fide
nominee is named herein if such nominee is unable to serve or for good cause
will not serve.
The enclosed proxy is being solicited by the Company's Board of
Directors. The principal method of proxy solicitation for the Meeting will be by
mail, although additional solicitation may be made by telephone, telegraph or
personal visits by directors, officers and employees of the Company and its
subsidiary, Napa National Bank (the "Bank"). The Company may, at its discretion,
engage the services of a proxy solicitation firm to assist in the solicitation
of proxies but has not done so as of April 30, 1999. The total expense of the
Board of Directors' proxy solicitation for the Meeting will be borne by the
Company and will include reimbursement paid to brokerage firms and others for
their expenses in forwarding soliciting material to beneficial owners of Common
Stock and such expenses as may be paid to any proxy solicitation firm engaged by
the Company.
<PAGE>
VOTING SECURITIES
Shareholders of record as of the close of business on April 23, 1999
(the "Record Date") will be entitled to notice of and to vote at the Meeting. As
of such date, the Company had 792,675 shares of Common Stock outstanding.
Each shareholder of record is entitled to one vote, in person or by
proxy, for each share held on all matters to come before the Meeting, except
that shareholders may have cumulative voting rights with respect to the election
of directors. Cumulative voting allows a shareholder to cast a number of votes
equal to the number of directors to be elected (ten) multiplied by the number of
votes held in his or her name on the Record Date. This total number of votes may
be cast for one nominee or may be distributed among as many candidates as the
shareholder desires.
Pursuant to California law, no shareholder can cumulate votes unless
prior to the voting at the Meeting, a shareholder has given notice of his or her
intention to cumulate votes at the Meeting and the nominee for which he or she
intends to cumulate votes has properly been nominated. If any shareholder gives
notice of his or her intent to cumulate votes at the Meeting, all shareholders
may cumulate their votes for candidates in nomination. The Board of Directors
does not, at this time, intend to give such notice or to cumulate the votes it
may hold pursuant to the proxies solicited herein unless the required notice by
a shareholder is given, 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.
Therefore, discretionary authority to cumulate votes in such event is solicited
in this Proxy Statement.
The ten candidates for election of directors receiving the highest
number of votes will be elected, whether or not votes are cumulated. The
ratification of the appointment of Ernst & Young LLP as the Company's
independent public accountants for the 1999 fiscal year requires the approval of
a majority of the shares of Common Stock present or represented by proxy and
voting at the meeting.
Shares which abstain from voting and "broker non-votes" (shares as to
which brokerage firms have not received voting instructions from their clients
and therefore do not have the authority to vote at the Meeting) will be counted
for purposes of determining a quorum. Abstentions or broker non-votes will not
count as votes in favor of the election of directors, the ratification of the
appointment of the Company's independent public accountant, or any other
proposal.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of the Record Date
pertaining to beneficial ownership of the Company's Common Stock by each of the
persons known to the Company to own 5% or more of the Company's Common Stock,
current directors of the Company (all of whom are nominees to be elected to the
Board of Directors), each of the current executive officers,1 and all of the
directors of the Company and the named executive officers as a group. The
information contained herein has been obtained from the Company's records, from
information furnished directly by the individual or entity to the Company, or
from various filings made by the named individuals with the Securities and
Exchange Commission (the "SEC").
The table should be read with the understanding that more than one
person may be the beneficial owner or possess certain attributes of beneficial
ownership with respect to the same securities. Therefore, careful attention
should be given to the footnote references set forth in the column "Amount and
Nature of Beneficial Ownership." In addition, shares issuable pursuant to
options which may be exercised within 60 days of the Record Date are deemed to
be issued and outstanding and have been treated as outstanding in calculating
the percentage ownership of those individuals possessing such interest, but not
for any other individuals. Thus, the total number of shares considered to be
outstanding for the purposes of this table may vary depending upon an
individual's particular circumstances. For additional information, see the
section entitled "INFORMATION PERTAINING TO ELECTION OF DIRECTORS."
_________________
/1/ As used throughout this Proxy Statement, the term "executive officers"
refers to the Company's Chief Executive Officer, the Company's President and
Chief Operating Officer and the Bank's President, Chief Information Officer,
Chief Financial Officer and Chief Credit Officer. The Bank's Chief Credit
Officer resigned in January 1999.
<PAGE>
<TABLE>
<CAPTION>
AMOUNT AND NATURE
OF BENEFICIAL PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER/1/ OWNERSHIP/2/ CLASS
<S> <C> <C>
William A. Bacigalupi 10,200/3/ 1.2%
Dale A. Brain 2,000/4/ *
Dennis D. Groth 7,600/5/ *
E. James Hedemark 10,100/3/ 1.2%
Michael D. Irwin 12,000/3/ 1.5%
Brian J. Kelly 12,725/6/ 1.6%
C. Richard Lemon 11,300/7/ 1.4%
Joseph G. Peatman 10,125/3/ 1.3%
A. Jean Phillips 10,100/3/ 1.3%
George M. Schofield 10,200/8/ 1.3%
W. Clarke Swanson, Jr. 517,456/9/ 64.5%
Rodney M. Wiessner 1,000/10/ *
All directors, nominees and current executive 686,617/11/ 77.0%
officers as a Group (12 persons)
Napa National Bancorp Stock Participation Plan 71,311/12/ 9.0%
(the "Stock Plan")
Robert Fanucci 71,311/12/ 9.0%
</TABLE>
____________________________
* Indicates that the percentage of outstanding shares beneficially owned is
less than one percent (1%).
/1/ The address for all natural persons is: c/o Napa National Bancorp, 901 Main
Street, Napa, CA 94559. the stock plan's address is: Napa National Bancorp
stock participation plan, Mr. Robert Fanucci, Trustee, 901 Main Street,
Napa, CA 94559.
/2/ Includes shares beneficially owned, directly and indirectly, together with
associates. Subject to applicable community property laws and shared voting
or investment power with a spouse, the persons listed have sole voting and
investment power with respect to such shares unless otherwise noted.
/3/ Includes 10,000 shares which may be acquired upon the exercise of stock
options.
/4/ Includes 2,000 shares which may be acquired upon the exercise of stock
options.
/5/ Includes 7,500 shares which may be acquired upon the exercise of stock
options.
/6/ Includes 12,500 shares which may be acquired upon the exercise of stock
options.
/7/ Includes 10,000 shares which may be acquired upon the exercise of stock
options. Includes 800 shares held in an individual retirement account.
/8/ Includes 6,000 shares which may be acquired upon the exercise of stock
options. Includes 4,000 shares held in an individual retirement account.
/9/ Includes 10,000 shares which may be acquired upon the exercise of stock
options. Mr. Swanson may be deemed to be a "control person" of the
Company within the meaning of the rules and regulations of the SEC by
virtue of his ownership interest in the Company.
/10/ Consists of 1,000 shares which may be acquired upon the exercise of stock
options.
/11/ Includes 100,000 shares which may be acquired within 60 days of the
Record Date upon the exercise of stock options. Also includes 1,000
shares beneficially owned by a former executive officer who resigned
prior to the Record Date
/12/ Voting and investment power with respect to the shares beneficially
owned by the Stock Plan is entrusted to Mr. Robert Fanucci, independent
trustee, who disclaims beneficial ownership of all of said shares.
<PAGE>
PROPOSAL 1: ELECTION OF DIRECTORS
DIRECTORS AND NOMINEES
The By-laws of the Company provide that the number of directors of the
Company may be no less than eight and no more than fifteen, with the exact
number within such range to be fixed by amendment of the By-laws or by a
resolution duly adopted by the shareholders or by the Board of Directors. The
number of directors is presently fixed at ten.
The persons named below, all of whom are currently serving one-year
terms as members of the Company's Board of Directors, have been nominated for
election as directors to serve until the next Annual Meeting of Shareholders and
until their successors are duly elected and qualified. Proxies will be voted in
such a way as to effect the election of all nominees or as many as possible. If
any nominee should become unable or unwilling to serve as a director, proxies
will be voted for such substitute nominees 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. The ten nominees receiving the
highest number of votes at the Meeting shall be elected.
The following table sets forth certain information with respect to
those persons nominated by the Board of Directors for election as directors,
which information is based on data furnished by each such nominee.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION, BUSINESS
DIRECTOR EXPERIENCE DURING PAST FIVE
NOMINEE AGE SINCE YEARS AND OTHER INFORMATION
- ------- --- ----- ---------------------------
<S> <C> <C> <C>
William A. Bacigalupi 61 1990 Political and Governmental Advisor for, and
former President of, Napa Garbage Services, Inc., and Napa
Valley Disposal Services, Inc. Former President of American
Canyon Disposal, Inc.
Dennis D. Groth 56 1996 President of Groth Vineyards & Winery
Michael D. Irwin 56 1987 Chief Financial Officer of the Company since 1989;
Executive Vice President, Chief Financial Officer and
Director of The Compass Group since 1993; Chief Financial
Officer and Director of Wild Planet Toys, Inc. since 1996.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION, BUSINESS
DIRECTOR EXPERIENCE DURING PAST FIVE
NOMINEE AGE SINCE YEARS AND OTHER INFORMATION
- ------- --- ----- ---------------------------
<S> <C> <C> <C>
E. James Hedemark 50 1995 Director/CEO of Southern Pacific Funding
Corporation since 1998/1/; Formerly, Director
of ITT Federal Bank from April 1994 to
September 1995; President and Chief
Executive Officer of Napa Valley Bank from
June 1992 to May 1993; various positions
at Bank of America from 1972 to 1992.
Brian J. Kelly 48 1988 Director of the Company since 1988;
President and Chief Operating Officer of the Company since
1992; President and Chief Executive Officer of the Bank
since September 1989.
C. Richard Lemon 55 1981 Secretary of the Company and the Bank since 1982;
Director and Partner of Dickenson, Peatman &
Fogarty since 1979; President of Exchange Holding Corp.
since 1979; President of Temecula Vineyards,
Inc. since 1994; Partner of Silverado Partners since
1995.
Joseph G. Peatman 65 1994 Founding Partner and Director of Dickenson,
Peatman & Fogarty since 1964.
A. Jean Phillips 54 1995 Owner of Screaming Eagle Winery since 1986;
Partner and owner of Phillips & Harris Land
Brokers since 1979.
George M. Schofield 60 1990 President of George M. Schofield Co., financial
consultant since 1984; President of Unique
Wines, Inc. since 1984; Chief Financial Officer
and Director of Folie A Deux Winery since 1995;
Director of Delicato Vineyards since 1996; Director
of Vintage Directions since 1997.
</TABLE>
__________________________
/1/ Southern Pacific Funding Group on October 1, 1998 filed a petition for
reorganization under Chapter 11 of the Bankruptcy Code in the United States
Bankruptcy Court for the District of Oregon (Case No. 398-37613). This
bankruptcy proceeding is still pending before the Bankruptcy Court as of the
date of this Proxy Statement and Southern Pacific Funding Group continues to
manage its business as debtor in possession. Director Hedemark was the Chief
Executive Officer and a director of Southern Pacific Funding Group on the date
of filing of its bankruptcy petition. Management of the Company does not believe
that director Hedemark's position with Southern Pacific Funding Group, in light
of its pending bankruptcy proceeding, is material to an evaluation of director
Hedemark as a director of the Company.
<PAGE>
<TABLE>
<S> <C> <C> <C>
W. Clarke Swanson, Jr. 60 1987 Chairman of the Board of the Company since 1994;
Chief Executive Officer of the Company since
1988; President of Swanson Vineyards and Winery
since 1986.
</TABLE>
EXECUTIVE OFFICERS
In addition to Directors Irwin, Kelly and Swanson, discussed above,
executive officers of the Company and Bank during 1998 included Dale A. Brain
(age 51), Frederick C. Hoey (age 56) and Rodney M. Wiessner (age 37). All
executive officers of the Company and the Bank serve at the pleasure of the
Board of Directors.
Mr. Brain became the Bank's Senior Vice President and Chief Information
Officer in November 1996. Prior to that time, Mr. Brain was Manager, Planning &
Control at Kaiser Permanente Medical from 1992 to 1996. Mr. Brain had previously
been in a variety of management positions with Bank of America from 1969 to
1992.
In March, 1997, the Bank expanded its senior management by hiring
Frederick C. Hoey. Mr. Hoey became the Bank's Senior Vice President and Chief
Credit Officer. Prior to joining the Bank, Mr. Hoey was with American Investors
Company as a regional representative since 1996, with Westamerica Bancorporation
as a Vice President from 1992 to 1996, and in a variety of management positions
with various financial institutions prior to 1992. Mr. Hoey resigned from his
position effective January 31, 1999.
In July 1997, the Bank hired Rodney M. Wiessner as the Bank's Senior
Vice President, Chief Financial Officer, Treasurer and Cashier. He is also the
Treasurer/ Cashier and Assistant Secretary of the Company. Prior to joining the
Bank, Mr. Wiessner had been Chief Financial Officer of Mid Valley Bank since
1995. Prior to joining Mid Valley Bank, Mr. Wiessner was an Audit Manager with
Perry-Smith and Company from 1990 to 1995.
CERTAIN RELATIONSHIPS
All of the members of the Company's Board of Directors also serve as
the directors of the Bank. Director Lemon also serves as the sole director of
the Company's inactive and wholly-owned leasing subsidiary, Napa National
Leasing Company.
There is no family relationship among any of the Company's directors
(all of whom are nominees to be elected as Directors at the Meeting) and current
executive officers.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS INTENDS TO VOTE ALL PROXIES HELD BY IT IN FAVOR
OF THE ELECTION OF EACH OF THE NOMINEES. YOU ARE URGED TO VOTE FOR PROPOSAL 1:
TO ELECT THE TEN NOMINEES SET FORTH HEREIN TO SERVE UNTIL THE NEXT ANNUAL
MEETING OF SHAREHOLDERS AND UNTIL THEIR RESPECTIVE SUCCESSORS SHALL BE ELECTED
AND QUALIFIED.
<PAGE>
PROPOSAL 2: RATIFICATION OF APPOINTMENT OF
INDEPENDENT PUBLIC ACCOUNTANTS
The firm of Ernst & Young LLP, which served the Company as independent
public accountants since September 19, 1996, has been selected by the Audit
Committee of the Board of Directors of the Company as the Company's independent
public accountants for the 1999 fiscal year. Ernst & Young LLP has no interest,
financial or otherwise, in the Company.
A representative of Ernst & Young LLP is expected to attend the Meeting
with the opportunity to make a statement if he or she desires to do so and
respond to appropriate questions from shareholders present at the Meeting.
All Proxies will be voted for ratification of the appointment of Ernst &
Young LLP, unless authority to vote for the ratification of such selection is
withheld or an abstention is noted. If Ernst & Young LLP should for any reason
decline or be unable to act as independent public accountants, the Proxies will
be voted for a substitute independent public accounting firm to be designated by
the Audit Committee of the Board of Directors.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS INTENDS TO VOTE ALL PROXIES HELD BY IT IN FAVOR OF
THE RATIFICATION OF ERNST & YOUNG L.L.P. YOU ARE URGED TO VOTE FOR PROPOSAL 2:
TO RATIFY THE APPOINTMENT OF ERNST & YOUNG LLP AS THE COMPANY'S INDEPENDENT
PUBLIC ACCOUNTANTS FOR THE 1999 FISCAL YEAR.
INFORMATION PERTAINING TO ELECTION OF DIRECTORS
COMMITTEES OF THE BOARD OF DIRECTORS; DIRECTOR ATTENDANCE
The Board of Directors of the Bank maintains an Audit Committee which
consists of the following individuals: Directors Hedemark, Irwin, Kelly,
Peatman, Phillips and Swanson. The functions of the Audit Committee are to
recommend the appointment of and oversee a firm of independent public
accountants who audit the books and records of the Company for the fiscal year
for which they are appointed, to approve each professional service rendered by
such accountants, and to evaluate the possible effect of each such service on
the independence of the Company's accountants. The Audit Committee met five
times during 1998.
The Board of Directors maintains a Compensation Committee which consists of
Directors Peatman, Bacigalupi, Kelly, and Swanson. Mr. Peatman is the Chairman
of the Committee. The function of the Compensation Committee is to review
director and executive compensation of the Company and recommend to the Board of
Directors both director and executive officer compensation packages. The
Compensation Committee did not meet during 1998. Accordingly, the Board of
Directors performed the functions of the Compensation Committee during 1998 and
let the compensa-
<PAGE>
tion for the Chairman, and directors stand for 1999. The President and Chief
Operating Officer's salary increased from $135,000 to $150,000 a year in 1999.
No bonuses were awarded during 1998.
During 1998, the Company did not have a standing Nominating Committee. The
Executive Committee of the Board of Directors of the Company performs the
functions of this committee and consists of the following individuals: Directors
Kelly and Swanson. The Executive Committee did not meet during 1998, and the
Company's nominees to the Board of Directors for 1999 were selected by the
current Board of Directors. Nominations by shareholders will be considered by
the Executive Committee provided such nominations comply with the Company's By-
laws and the notice provisions included in the Notice of Meeting which
accompanies this Proxy Statement. This By-law provision is designed to give the
Board of Directors advance notice of third-party nominations, if any, and the
qualifications of such nominees, and may have the effect of precluding third-
party nominations if not followed.
The Board of Directors of the Company held 12 regular meetings and one
organizational and one special meeting during 1998. Each director of the
Company attended at least 75% of the following meetings with the exception of
C. R. Lemon, 50% and J. G. Peatman, 68%, of the following meetings: (i) the
total number of meetings of the Board of Directors and (ii) the total number of
meetings of committees of the Board on which he or she served (during the period
for which he or she served).
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, (the
"Exchange Act") requires the Company's directors and executive officers and
persons who beneficially own more than ten percent of a registered class of the
Company's equity securities to file with the Securities and Exchange Commission
("SEC") initial reports of ownership and reports of changes in beneficial
ownership of Common Stock and other equity securities of the Company.
Directors, certain officers and greater than ten percent shareholders are
required by SEC regulations to furnish the Company with copies of all Section
16(a) forms they file with the SEC.
To the Company's knowledge, based solely on a review of such reports
furnished to the Company and written representations furnished to the Company by
such directors, officers and ten percent shareholders, during the fiscal year
ended December 31, 1998, all Section 16(a) filing requirements applicable to its
directors, officers and ten percent shareholders were complied with.
<PAGE>
EXECUTIVE COMPENSATION
The following Summary Compensation Table sets forth for service in all
capacities to the Company and the Bank for the periods indicated the
compensation with respect to the Company's Chief Executive Officer and those
executive officers of the Company and the Bank whose salary and bonus exceeded
$100,000 in 1998.
SUMMARY COMPENSATION TABLE
--------------------------
<TABLE>
<CAPTION>
Securities
Other Annual Underlying All Other
Name and Principal Position Year Salary Bonus Compensation/1/ Options Compensation
- -------------------------- ---- ------ ----- -------------- ------- ------------
<S> <C> <C> <C> <C> <C> <C>
W. Clarke Swanson, Jr., 1998 $124,200/2/ $ 0 $ 2,520 10,000/3/ $ 0
CEO 1997 124,800/2/ 0 2,425 0 0
1996 125,300/2/ 0 2,770 0 0
Brian J. Kelly, 1998 $135,000/4/ 0 7,723 2,500/3/ 10,696/6/,/7/
President and COO 1997 135,000/4/ 0 9,600 0 8,489/6/,/7/
1996 135,000/4/ 20,500 8,834 0 12,788/6/
Dale A. Brain, SVP, Chief 1998 96,000/4/ 7,500 6,710 0 9,209/6/,/7/
Information Officer, of the 1997 105,667/4/ 8,500/5/ 3,000 0 3,203/6/,/7/
Bank 1996 10,625/4/ 0 0 5,000 0
Frederick C. Hoey, Chief 1998 94,167/4/ 7,500 0 0 7,137/6/,/7/
Credit Officer, of the 1997 67,298/4/ 0 0 5,000 0
Bank/8/
Rodney M. Wiessner, Chief 1998 94,167/4/ 3,750 4,350 0 8,809/6/,/7/
Financial Officer, of the 1997 36,585/4/ 0 0 5,000 0
Bank
</TABLE>
________________
/1/ Consists of country club membership for Mr. Swanson in the amount of
$2,520; country club membership and auto allowance for Mr. Kelly in the
amount of $1,560 and $6,163 respectively; country club membership and auto
allowance for Mr. Brain in the amount of $3,110 and $3,600 respectively;
country club membership for Mr. Wiessner in the amount of $4,350.
/2/ Includes payments for attending meetings of the Board of Directors and the
committees thereof.
/3/ See discussion under "Option Grants in Last Fiscal Year" below for a
discussion of the extension during 1998 of certain options previously
granted to Messrs. Swanson and Kelly.
/4/ Includes amounts contributed by Mr. Kelly, Mr. Brain, Mr. Hoey and Mr.
Wiessner to the Stock Plan.
/5/ Includes moving bonus.
/6/ Consists of contributions by the Company to the Stock Plan for the benefit
of Mr. Kelly, Mr. Brian, Mr. Hoey and Mr. Wiessner.
/7/ Includes unpaid vacation for Mr. Kelly, Mr. Brain, Mr. Hoey and Mr.
Wiessner.
/8/ Mr. Hoey resigned in January 1999.
<PAGE>
The following table provides certain information concerning options granted
to the Company's Chief Executive Officer and those executive officers executive
officers of the Company and the Bank whose salary and bonus exceeded $100,000 in
1998:
OPTION GRANTS IN LAST FISCAL YEAR
---------------------------------
<TABLE>
<CAPTION>
Percent of
Total Number
Number of of Options Market
Securities Granted to Price on
Underlying Employees Exercise Date of Expiration
Name Options in 1998 Price Grant Date
- ---- ---------- ------------ -------- ------- ----------
<S> <C> <C> <C> <C> <C>
W. Clarke 10,000 29% $8.00 $16.00 September 16, 2000
Swanson, Jr. CEO
Brian J. Kelly, 2,500 7% $8.00 $16.00 September 16, 2000
President and COO
</TABLE>
The options noted in the above table were treated as granted by action of
the Board of Directors on August 18, 1998 as a result of its decision to extend
for a period of two years under the Napa National Bancorp 1998 Amended and
Restated Stock Option Plan certain non-statutory stock options previously
granted to Messrs. Swanson (10,000 shares), Kelly (2,500 shares), Irwin (10,000
shares) and Lemon (10,000 shares) under the Napa National Bancorp 1982 Stock
Option Plan (the "Options"). See also "Compensation of Directors" below.
Because the per share exercise price for the Options was below the per share
market price on the date of grant ($16.00, based on an independent third party
evaluation), the extension of the exercise periods for the Options resulted in
the Company taking a charge against 1998 earnings in the amount of $153,400.
This amount was offset, however, by an increase in the Company's shareholders
equity of $106,600 due to a future tax benefit of $106,600 that the Company will
be able to realize.
<PAGE>
The following table sets forth the options exercised in 1998 and the
December 31, 1998, unexercised value of both vested and unvested options for the
Company's Chief Executive Officer and those executive officers of the Company
whose salary and bonus exceeded $100,000 in 1998.
AGGREGATE OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUES
------------------------------------------------------------
<TABLE>
<CAPTION>
Number of Shares of Common Value of Unexercised
Stock Underlying Unexercised In-The-Money Options
Options at December 31, 1998 at December 31, 1998 /1/
---------------------------- ------------------------
Shares Acquired Value
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
W. Clarke
Swanson, Jr., CEO 0 0 10,000 0 $ 90,000 0
Brian J. Kelly,
President and COO 0 0 12,500 0 111,600 0
Dale A. Brain,
SVP, Chief
Information Officer, 0 0 2,000 3,000 3,300 4,950
of the Bank
Frederick C. Hoey,
SVP, Chief Credit
Officer, of the Bank 0 0 1,000 4,000 1,650 0
Rodney M. Wiessner,
SVP, Chief Financial
Officer, of the Bank 0 0 1,000 4,000 1,500 6,000
</TABLE>
_________________
/1/ The per share fair market value of the Company's Common Stock as of
December 31, 1998 was $17.00, based upon an independent evaluation, dated
February 1, 1999, prepared by L.F. Sherman Evaluation Research Consultants.
<PAGE>
COMPENSATION OF DIRECTORS
In January 1999, the Board of Directors of the Company left the director
compensation package unchanged from the 1998 plan.
The 1998 director compensation package included paying each director $200
for every board or committee meeting he or she attends. Mr. Kelly, as a full-
time employee of the Company, does not receive director compensation.
Chairpersons for the committees receive $300 for each meeting they chair. This
fee structure is intended to compensate the Chairpersons for their additional
time and effort required in fulfilling this role. This fee schedule was
effective for all of 1998. During 1998, the Board of Directors as a group
received a total of $74,700 for attendance at all meetings.
As discussed under "Option Grants in Last Fiscal Year," the Board of
Directors on August 18, 1998 extended for a period of two years certain Options
previously granted to directors Swanson, Kelly, Irwin and Lemon.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
PURCHASE RIGHT
In 1987, Mr. Swanson acquired 300,701 shares of the Company's common stock
("Common Stock") through a tender offer at $11.00 per share (the "Tender
Offer"), net to the sellers in cash. The Tender Offer was made pursuant to the
terms of an agreement with the Company, dated as of February 5, 1987 (the
"Purchase Agreement").
As disclosed to shareholders in materials related to the Tender Offer, the
Purchase Agreement provides, among other things, certain protections against
dilution of Mr. Swanson's stock ownership by requiring that if the Company
should desire to issue any Equity Securities (as defined below), it shall give
Mr. Swanson first right to purchase (the "Purchase Right") a portion of such
Equity Securities up to an amount which will enable Mr. Swanson to maintain the
same percentage of ownership of the outstanding Common Stock as held by Mr.
Swanson on the date immediately following his purchases in the Tender Offer
(i.e., 60.14%). In the event that the number of shares of Common Stock owned by
Mr. Swanson should decline due to Mr. Swanson's failure to purchase shares
pursuant to such right or sales of shares of Common Stock by Mr. Swanson, the
Purchase Agreement provides that the Purchase Right entitles Mr. Swanson to
purchase a portion of new issuances of Equity Securities up to an amount which
will enable Mr. Swanson to maintain his percentage ownership of the outstanding
Common Stock as computed immediately prior to each issuance of such Equity
Securities.
The Purchase Right also applies to issuances of Equity Securities to
employees, officers and directors under stock option plans approved by the Board
of Directors of the Company, provided, however, that Common Stock shall be
deemed to have been issued only upon the exercise of an employee stock option.
The Purchase Agreement further states that if Mr. Swanson has a right to
purchase Common Stock due to the exercise of a stock option by an employee,
officer or director of the Company, the purchase price of such Common Stock
purchasable by Mr. Swanson shall be equal to the exercise price of such option.
<PAGE>
The term "Equity Securities" is defined in the Purchase Agreement to mean
Common Stock, rights, options (except stock options issued pursuant to stock
option plans), warrants to purchase Common Stock, any security other than Common
Stock having voting rights in the election of the Board of Directors which are
not contingent upon a failure to pay dividends, any security convertible into or
exchangeable for any of the foregoing, and any agreement or commitment to issue
any of the foregoing.
The Purchase Right terminates when Mr. Swanson ceases to own in excess of
10% of the then outstanding shares of Common Stock.
CERTAIN TRANSACTIONS
Directors Lemon and Peatman are directors of the Bank and of the Company.
Both are shareholders in Dickenson, Peatman & Fogarty, a Professional Law
Corporation, which provided legal services to the Company and the Bank during
1997 and 1998 and from which the Company expects to receive legal services
during 1999. The amount of fees and expenses paid to Dickenson, Peatman &
Fogarty in 1998 for legal services rendered was $89,203.80.
INDEBTEDNESS OF MANAGEMENT
Some of the Company's directors and executive officers, as well as their
immediate family and associates, are customers of, and have had banking
transactions with, the Bank in the ordinary course of the Bank's business, and
the Bank expects to continue to have such ordinary banking transactions with
these persons in the future. In the opinion of management of the Company, all
loans and commitments to lend included in such transactions were made in the
ordinary course of business on substantially the same terms, including interest
rates and collateral, as those prevailing for comparable transactions with other
persons of similar creditworthiness, and did not involve more than a normal risk
of collectibility or present other unfavorable features. Although the Bank does
not have any limits on the aggregate amount it would be willing to lend to
directors and officers as a group, loans to individual directors and officers
must comply with the Bank's respective lending policies and statutory lending
limits, and prior approval of the Bank's board of directors is required for
these types of loans.
SHAREHOLDER PROPOSALS
Under certain circumstances, shareholders are entitled to present proposals
at shareholder meetings. For any such proposal to be considered for inclusion in
the proxy statement prepared for the 2000 Annual Meeting of Shareholders, the
proposal must be received at the Company's principal executive offices at 901
Main Street, Napa, California 94559 prior to December 31, 1999. Any such
proposal received by the Company's principal executive offices after such date
will be considered untimely and may be excluded from the proxy statement and
form of proxy. The deadline for submission of stockholder proposals to be
presented at the 2000 Annual Meeting of Stockholders, but which will not be
included in the proxy statement and form of proxy relating to such meeting, is
March 16, 2000. Any such proposal received by the Corporation's principal
executive offices after such date will be considered untimely and the persons
named in the proxy for such meeting may exercise their discretionary voting
power with respect to such proposal.
<PAGE>
FORM 10-KSB
If any shareholder would like a copy of the Company's Annual Report to the
SEC on Form 10-KSB, for the fiscal year ended December 31, 1998, including
financial statements and financial statement schedules, it may be obtained
without charge. Exhibits to the Form 10-KSB will be furnished upon payment of
reasonable charges. Written requests should be directed to Napa National
Bancorp, 901 Main Street, Napa, CA 94559.
OTHER MATTERS
Management is not aware of any other matters to come before the Meeting.
If any other matter not mentioned in this Proxy Statement is brought before the
Meeting, the persons named in the enclosed form of proxy will have discretionary
authority to vote all proxies with respect thereto in accordance with their
judgment.
By Order of the Board of Directors
C. Richard Lemon, Secretary
Dated: April 30, 1999
Napa, California
<PAGE>
PROXY PROXY
NAPA NATIONAL BANCORP
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF NAPA NATIONAL BANCORP
FOR THE ANNUAL MEETING OF SHAREHOLDERS, JUNE 8, 1999
The undersigned holder of Common Stock acknowledges receipt of a copy of
the Notice of Annual Meeting of Shareholders of Napa National Bancorp and the
accompanying Proxy Statement dated April 30, 1999, and revoking any proxy
heretofore given, hereby constitutes and appoints Michael D. Irwin, Brian J.
Kelly and C. Richard Lemon, and each of them, each with full power of
substitution, as attorneys, agents and proxies to represent and vote, as
designated on the reverse side, all shares of Common Stock of Napa National
Bancorp (the "Company"), which the undersigned would be entitled to vote at the
Annual Meeting of Shareholders of the Company to be held at 901 Main Street,
Napa, California 94559 on Tuesday, June 8, 1999, at 8:00 A.M., or at any
postponement or adjournment thereof, upon the matters set forth in the Notice of
Annual Meeting of Shareholders and Proxy Statement and upon such other business
as may properly come before the meeting or any postponement or adjournment
thereof. All properly executed proxies will be voted as indicated.
(Continued and to be signed on reverse side.)
<PAGE>
THIS PROXY IS SOLICITED BY, AND ON BEHALF OF, THE BOARD OF DIRECTORS OF THE
CORPORATION AND MAY BE REVOKED PRIOR TO ITS EXERCISE.
Please mark your votes as indicated in this example. [X]
1. To elect as Directors the nominees set forth below.
[_] FOR ALL nominees listed below (except as marked to the contrary
below).
[_] WITHHOLD AUTHORITY to vote for all nominees listed below.
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A
LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW. ANY PROXY WHICH DOES NOT
WITHHOLD AUTHORITY TO VOTE FOR THE ELECTION OF ANY NOMINEE SHALL BE DEEMED TO
GRANT SUCH AUTHORITY.
Nominees: William A. Bacigalupi C. Richard Lemon
Dennis Groth Joseph G. Peatman
E. James Hedemark A. Jean Phillips
Michael D. Irwin George M. Schofield
Brian J. Kelly W. Clarke Swanson, Jr.
2. To ratify the appointment of Ernst & Young LLP as independent public
accountants for the Company's 1999 fiscal year.
[_] FOR [_] AGAINST [_] ABSTAIN
3. IN THEIR DISCRETION, THE PROXY HOLDERS ARE AUTHORIZED TO VOTE UPON SUCH
OTHER BUSINESS AS MAY PROPERLY COME BEFORE THIS MEETING, OR AT ANY
POSTPONEMENT OR ADJOURNMENT THEREOF.
I/We do [_] or do not [_] expect to attend this meeting.
_______________________
Number of Common Shares
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF DIRECTORS
NOMINATED BY THE BOARD OF DIRECTORS AND "FOR" RATIFICATION OF THE APPOINTMENT OF
ERNST & YOUNG LLP AS INDEPENDENT PUBLIC ACCOUNTANTS OF THE COMPANY FOR 1999.
WHEN THE PROXY IS PROPERLY EXECUTED, SHARES REPRESENTED BY THE PROXY WILL BE
VOTED AS DIRECTED. IF NO DIRECTION IS GIVEN IN THE PROXY, SHARES REPRESENTED BY
THE PROXY WILL BE VOTED "FOR" THE ELECTION OF DIRECTORS NOMINATED BY THE BOARD
OF DIRECTORS, "FOR" RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS
INDEPENDENT PUBLIC ACCOUNTANTS OF THE CORPORATION FOR 1999, AND, IN THE
DISCRETION OF THE PROXY HOLDERS, ON ALL OTHER MATTERS WHICH MAY PROPERLY COME
BEFORE THE MEETING, OR AT ANY POSTPONEMENT OR ADJOURNMENT THEREOF.
Signature(s) _______________________________________ Date _______________
Please mark, date and sign exactly as your name(s) appear(s) above. When signing
as attorney, executor, administrator, trustee or guardian, please give full
title. If there is more than one trustee, all should sign. All joint owners must
sign. WHETHER OR NOT YOU PLAN TO ATTEND THIS MEETING, PLEASE SIGN AND RETURN
THIS PROXY AS PROMPTLY AS POSSIBLE IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
