<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 [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
Civic 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:
-------------------------------------------------------------------------
[_] 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.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 7, 1998
To the Shareholders of Civic BanCorp:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Civic
BanCorp will be held at 2101 Webster Street, 1st Floor, Oakland, California on
May 7, 1998 at 4:00 p.m., for the following purposes:
1. Electing directors to serve for ensuing year.
2. Approving an increase in the number of shares available for grants of
stock options.
3. Ratification of the Board of Directors' selection of KPMG Peat Marwick
LLP as independent accountants for the year 1998; and
4. Transacting such other business as may properly come before the meeting
or any adjournment thereof.
The close of business on March 10, 1998 has been fixed as the record date
for the determination of shareholders entitled to notice of and to vote at the
meeting or any adjournment thereof.
Whether or not you plan to attend the meeting, you may vote by completing,
signing and returning the enclosed proxy card promptly. Your proxy card may be
revoked at any time prior to the time it is voted.
By Order of the Board of Directors
Herbert C. Foster
President and Chief Executive
Officer
April 2, 1998
(Approximately mailing date of proxy materials)
Place and Time of Annual Meeting
2101 Webster Street, 1st Floor
Oakland, California 94612
4:00 p.m.
<PAGE>
PROXY STATEMENT
OF
CIVIC BANCORP
2101 WEBSTER STREET
OAKLAND, CALIFORNIA 94612
ANNUAL MEETING OF SHAREHOLDERS
MAY 7, 1998
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Civic BanCorp (the "Company"), a
California corporation, for use at the Annual Meeting of Shareholders to be
held on May 7, 1998 at 4:00 p.m. at 2101 Webster Street, 1st floor, Oakland,
California, and any adjournment thereof. These proxy materials were mailed to
shareholders on or about April 2, 1998.
PURPOSE OF THE MEETING
The meeting is to be held for the purpose of:
1. Electing twelve (12) directors (the entire Board of Directors).
2. Approving an increase in the number of shares available for grants of
stock options.
3. Ratifying the selection of KPMG Peat Marwick LLP as independent public
accountants for the year 1998.
4. Acting upon such other business as may properly come before the meeting
or any adjournment thereof.
GENERAL PROXY STATEMENT INFORMATION
REVOCABILITY OF PROXIES
Any shareholder giving the enclosed proxy has the right to revoke it at any
time before it is exercised by filing with the Company's Secretary, Carolyn
Lashbrook, a written notice of revocation or by presenting at the meeting a
duly executed proxy bearing a later date. A shareholder may also revoke the
proxy by attending the meeting and electing to vote in person before any vote
is taken.
SOLICITATION OF PROXIES
This proxy solicitation is made by the Board of Directors of the Company and
the cost of the solicitation is being borne by the Company. Solicitation is
being made by this Proxy Statement and may also be made by employees of the
Company who may communicate with shareholders or their representatives in
person, by telephone or by additional mailings in connection with proxies,
although no employee will be specifically engaged for that purpose.
OUTSTANDING SECURITIES AND VOTING RIGHTS
As of March 10, 1998, the Company had 4,624,320 shares of common stock, no
par value, issued and outstanding, held by approximately 1,100 shareholders.
Only those shareholders of record of the Company's common stock as of the
record date, March 10, 1998 will be entitled to notice of and to vote in
person or by proxy at the meeting or any adjournment thereof, unless a new
record date is set for an adjourned meeting.
<PAGE>
Each share of common stock is entitled to one vote at the annual meeting,
except with respect to the election of directors. In elections for directors,
California law provides that a shareholder, or his or her proxy, may cumulate
votes; that is, each shareholder has a number of votes equal to the number of
shares owned, multiplied by the number of directors to be elected, and the
shareholder may cumulate such votes for a single candidate, or distribute such
votes among as many candidates as he or she deems appropriate. However, a
shareholder may cumulate votes only for a candidate or candidates whose names
have been properly placed in nomination prior to the voting, and only if the
shareholder has given notice at the meeting, prior to the voting, of his or
her intention to cumulate votes for the candidates in nomination. The proxy
holders are given, under the terms of the proxy, discretionary authority to
cumulate votes represented by shares for which they are named proxy.
In the election of directors, the twelve (12) candidates receiving the
highest number of votes will be elected. Ratification and approval of Proposal
Two to increase the number of shares available for grants of stock options
requires the affirmative vote of holders of a majority of the outstanding
shares of Civic BanCorp's common stock. Ratification of the selection of KPMG
Peat Marwick LLP as independent public accountants requires the affirmative
vote of a majority of the issued and outstanding shares of common stock
represented and voting at the meeting. Broker non-votes and abstentions will
not be counted, except for quorum purposes, and will have no effect on the
election of directors and on Proposal Three, (ratification of the selection of
accountants). In determining whether the requisite shareholder approval has
been received on Proposal Two (increasing the number of shares for which
options may be granted), broker non-votes will have the same effect as a vote
against the matter.
If the enclosed proxy is completed in the appropriate spaces, signed, dated
and returned, the proxy will be voted as specified in the proxy. If no
specification is made, it will be voted FOR the election of directors
nominated by management, FOR approval to increase the number of shares
available for grants of stock options, FOR ratification of KPMG Peat Marwick
LLP as independent public accountants, and will be voted on such other matters
as may come before the meeting at the discretion of the proxy holders.
Management of the Company is not aware of any other matters to come before
the meeting, and recommends that the shareholders vote FOR the election of the
directors nominated by management, FOR ratification and approval to increase
the number of shares available for grants of stock options, FOR ratification
of KPMG Peat Marwick LLP as independent public accountants.
2
<PAGE>
PRINCIPAL SHAREHOLDERS
No persons are known to management to have, directly or indirectly, more
than 5% of the Company's issued and outstanding shares of common stock as of
March 10, 1998 other than as follows:
<TABLE>
<CAPTION>
AMOUNT OF
NAME AND ADDRESS BENEFICIAL PERCENT OF
OF BENEFICIAL OWNER OWNERSHIP CLASS
------------------- ---------- ----------
<S> <C> <C>
C. Donald Carr............................................ 723,729 15.7%
1001 Dry Creek Road
Napa, CA 94558
Paul R. Handlery.......................................... 368,742 8.0%
C/O Handlery Hotels
180 Geary Street
San Francisco, CA 94108
Heine Securities Corporation.............................. 300,209 6.5%
51 JFK Parkway
Short Hills, NJ 07078
Dimensional Fund Advisors, Inc............................ 250,530 5.4%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
</TABLE>
PROPOSALS OF SHAREHOLDERS
Under certain circumstances, shareholders are entitled to present proposals
at shareholders' meetings, provided that the proposal is submitted in a timely
manner and in a form that complies with applicable regulations. For any such
shareholder proposal to be included in the proxy statement to be prepared for
next year's annual meeting, the shareholder must submit the proposal prior to
December 4, 1998 in a form that complies with applicable regulations.
Submission of a proposal does not guarantee its inclusion in a proxy statement
or its presentation at a shareholder meeting. Shareholder proposals are
subject to regulation under Federal securities laws.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than ten percent of
a registered class of the Company's equity securities, to file with the
Securities and Exchange Commission initial reports of ownership and reports of
changes in ownership of common stock and other equity securities of the
Company. Officers, directors and greater than ten percent shareholders are
required by SEC regulation to furnish the Company with copies of all Section
16(a) forms they file.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the year ended December 31, 1997 all Section
16(a) filing requirements applicable to its officers, directors and greater
than ten percent beneficial owners were complied with.
3
<PAGE>
1. PROPOSAL ONE
ELECTION OF DIRECTORS
The Bylaws of the Company provide that the number of directors shall be not
less than eleven (11) nor more than twenty (20). By resolution the Board of
Directors has fixed the number of directors at twelve (12).
NOMINEES TO THE BOARD OF DIRECTORS
The procedure governing nominations for election to the Board of Directors
is set forth in Sections 3.19 and 3.20 of the Bylaws, which provide as
follows:
SECTION 3.19. NOMINATIONS FOR ELECTION OF DIRECTORS. Nominations for
election of members of the Board of Directors may be made by the Board of
Directors (or the nominating committee of the Board of Directors) or by any
holder 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 by the Board of Directors or its nominating
committee) must be made in writing and be delivered or mailed to the
President of the corporation by the later of the close of business: (i) 90
days prior to any meeting of shareholders at which Directors will be
elected or (ii) in case of an annual meeting of shareholders, not later
than 90 days before the anniversary of the previous year's annual meeting.
Such notification must 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 (or business address,
if the notifying shareholder is not a natural person) of the notifying
shareholder; (e) the number of shares of capital stock of the corporation
owned by the notifying shareholder; (f) the number of shares of capital
stock of any bank, bank holding company, savings and loan association or
other depository institution owned beneficially by the nominees and by the
notifying shareholder and the identities and locations of any such
institutions; (g) 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 bankrupt;
and (h) a statement regarding the nominee's compliance with Article Three,
Section 3.20 of these Bylaws. The notification shall be signed by the
nominating shareholder and by each nominee, and shall be accompanied by a
written consent to such nomination from each proposed nominee. Nominations
not made in accordance with these procedures shall be disregarded by the
Chairman of the meeting, and upon his instructions, the inspectors of the
election shall disregard all votes cast for each such nominee. The
foregoing requirements do not apply to the nomination of a person to
replace a proposed nominee who has become unable to serve as a Director
between the last day for giving notice in accordance with this paragraph
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 Article Three, Section 3.19 of these Bylaws will be
provided to any shareholder upon receipt of a written request thereof,
addressed to the President of the corporation.
SECTION 3.20. QUALIFICATIONS OF DIRECTORS. No person shall be a member of
the Board of Directors (a) who is a director, officer, employee, agent,
nominee, attorney or other representative for any other financial
institution, lender or bank holding company, or affiliate or subsidiary
thereof, engaged in business or that proposes to engage in business,
directly or through any parent company, subsidiary or affiliate, in
California or Nevada, or (b) who has, or has been or is the nominee of
anyone who has, any contract, arrangement or understanding with any other
financial institution, lender or bank holding company, or affiliate or
subsidiary thereof, engaged in business or that proposes to engage in
business, directly or through any parent company, subsidiary or affiliate,
in California or Nevada, or with any officer, director, employee, agent,
nominee, attorney or other representative thereof, pursuant to which he or
she will disclose or in any way utilize information obtained as a director
for purposes other than for the benefit of this corporation or that he or
she will, directly or indirectly, attempt to effect or encourage any action
of this corporation for the benefit of any person or entity other than this
corporation, or (c) who has not owned at least $1,000 fair market value of
the corporation's Common Stock for at least 90 days prior to the date of
his or her election as a director.
4
<PAGE>
Subparagraph (c) shall not apply to an individual hired by the
corporation's Board of Directors to be President and Chief Executive
Officer of this corporation until such time as that individual has been
employed by the corporation for a period of two years.
The Board of Directors of this corporation or a committee thereof, shall
make the determination whether any person who seeks to become a director
complies with the provisions of this Section 3.20.
Each of management's nominees to the Board of Directors of the Company has
served as a director of the Company and its subsidiary CivicBank of Commerce
(Bank") since 1984 except Herbert C. Foster, who was appointed in March, 1993,
and Wayne S. Doiguchi. If appointed, Mr. Doiguchi's election will become
effective on May 27, 1998 when the required holding period for ownership of
Civic BanCorp stock is satisfied, as stated in the Bylaws.
The 12 persons named below will be nominated for election as directors to
serve until the next Annual Meeting and until their successors are duly
elected and qualified. Votes by the Company's proxy holders will be cast in
such a way as to effect the election of all nominees or as many as possible
under the rules of cumulative voting. If any nominee should become unable or
unwilling to serve as a director, the proxies will be voted for such
substitute nominees as shall be designated by the Board of Directors. The
Board presently has no knowledge that any of the nominees will be unable or
unwilling to serve. There are no family relationships among any of the
nominees for director or any of the executive officers of the Company.
The following list of directors provides information with respect to each
person nominated and recommended to be elected by the current Board of
Directors of the Company. Reference is made to the section "Security Ownership
of Management" for information pertaining to stock ownership of the nominees.
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE SINCE BUSINESS EXPERIENCE DURING PAST FIVE YEARS
---- --- -------- ------------------------------------------
<S> <C> <C> <C>
David L. Cutter 69 1984 Former Chairman of Cutter Laboratories, Inc.; Director of
CHAD Therapeutics, Inc.; member of American Institute of
Certified Public Accountants.
Edward G. Mein 68 1984 Owner of Mein Investment Co., a real estate management,
development and lending company.
Edward G. Roach 59 1984 President of ER Development, a real estate development
firm.
Paul R. Handlery 77 1984 Chairman and Chief Executive Officer of Handlery Hotels,
Inc. of San Francisco, California, a hotel, real estate
and investment management firm.
James C. Johnson 64 1984 President of JAE Properties, Inc., a real estate broker,
property manager, developer and syndicator.
Dale D. Reed 66 1984 Chairman and Chief Executive Officer of Buran & Reed,
Inc., a diversified investment company; member of the San
Leandro Planning Commission, and a past president and
current trustee of the San Leandro Scholarship
Foundation; director of Goodwill Industries of East Bay;
chairman of the San Leandro Industrial Roundtable.
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE SINCE BUSINESS EXPERIENCE DURING PAST FIVE YEARS
---- --- --------- ------------------------------------------
<S> <C> <C> <C>
Barclay Simpson 76 1984 Chairman of Simpson Manufacturing Co., Inc., a
manufacturer of construction products; owner of Barclay
Simpson Fine Arts Gallery in Lafayette; director of
Calendar-Robinson Insurance Co. San Francisco; former
director and president of the Bay Area Rapid Transit
District (BART); trustee of the California College of
Arts and Crafts and the University Art Museum,
Berkeley.
C. Donald Carr 66 1984 Chairman of the Company since July, 1995; owner of the
Carr Company, a real estate brokerage and development
business.
Herbert C. Foster 58 1993 President and Chief Executive Officer of the Company
and Chairman and Chief Executive Officer of the Bank
since March, 1993; President and Chief Executive
Officer of Pacific Bay Bank, San Pablo, CA during 1992
and President of University National Bank & Trust
Company, Palo Alto, CA from 1983 to 1991.
John W. Glenn 69 1984 Founder, consultant, and retired CEO of John W. Glenn
Adjustors and Administrators, Inc.; former director and
president of San Francisco Bay Area Rapid Transit
District (BART); member President's Council, Southeast
Missouri State University; past president of East Bay
Claims Association; past president of California
Association of Independent Insurance Adjusters.
Paul C. Kepler 54 1984 President of The Kepler Co., a private investment firm;
former Chief Executive Officer of LINC Capital
Corporation, an equipment leasing and real estate
financing company from 1986 to 1993; owner of the
Seascape Sports Club; director of the United States
Tennis Association (USTA) - Northern California
Section.
Wayne S. Doiguchi 48 (nominee) President and CEO of Park Investment Company, a venture
capital company since 1993; former chief credit officer
from January 1990 to December 1992 and acting president
and CEO from December 1992 to June 1993 of American
Bank and Trust, San Jose, which was placed in
receivership by the FDIC in June 1993 and eventually
liquidated; President of Japanese American Chamber of
Commerce; Board of Trustees, Yu-Ai-Kai, Community
Senior Service; Board of Directors, Community Youth
Service.
</TABLE>
6
<PAGE>
The enclosed proxy will be voted in favor of the election of the above-named
nominees as directors, unless authority to vote for directors is withheld. If
any of the nominees should be unable or decline to serve, which is not
anticipated, discretionary authority is reserved for the proxy holders to vote
for a substitute, to be designated by the present Board of Directors. In the
event that additional persons are nominated as directors, the proxy holders
intend to vote all the proxies received by them in such manner in accordance
with cumulative voting as will assure the election of as many of the nominees
listed above as possible and, in that event, the specific nominees to be voted
for will be determined by the proxy holders in their sole discretion. If he is
elected, Mr. Doiguchi may not assume the duties of a director until May 27,
1998, the date on which he will have satisfied the share ownership holding
period requirement for directors. The Board expects to confirm his appointment
at that time.
CERTAIN COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors of the Company has an Audit Committee, composed of
John W. Glenn (Chairman), David L. Cutter, Paul R. Handlery and James C.
Johnson. The Audit Committee met eight times in 1997 for the purpose of
reviewing overall operations of the Company. As part of its duties, the Audit
Committee examines the results of the financial statements and reports
prepared by the Company's independent auditors and makes recommendations
thereon to the Board of Directors.
The Board of Directors of the Company has a Personnel Committee whose
members in 1997 were Barclay Simpson (Chairman), David L. Cutter, James C.
Johnson, and Paul C. Kepler. The Personnel Committee met five times in 1997 to
consider the hiring and compensation of officers and employees of the Company
and the Bank. The Personnel Committee acted as Stock Option Committee under
the Stock Option Plan and in this capacity granted stock options under the
Stock Option Plan to officers and other employees. The Personnel Committee
also functions as the compensation committee and as the nominating committee
in connection with the election of directors. The Personnel Committee will
consider nominees recommended by shareholders if such recommendations are
accompanied by a complete biographical and financial statement of the nominee
in such form as the Personnel Committee shall require and, for a
recommendation made in connection with an annual meeting of shareholders, the
recommendation is submitted by November 30 of the preceding year.
The Board of Directors of the Bank has an Audit Committee and Personnel
Committee. These committees consist of the same members as indicated above for
the Company and met the same number of times. Each committee had duties at the
Bank level similar to those for committees of the Company.
In addition, the Board of Directors of the Bank has a Directors' Loan
Committee composed of Dale D. Reed (Chairman), C. Donald Carr, Herbert C.
Foster, Paul R. Handlery, Edward G. Mein, Paul C. Kepler and Edward G. Roach.
This committee met twenty-three times in 1997. The function of the Directors'
Loan Committee is to review certain loans and recommend ratification, when
appropriate, to the Board of Directors, and in certain cases to review and
approve or disapprove loan applications when the amount requested is above
certain thresholds or the applicant is affiliated with the Company or the
Bank. The members of the Directors' Loan Committee also serve as the members
of the Risk Management Committee. The Risk Management Committee met twelve
times in 1997 and is responsible for monitoring the Bank's investment
activities and the overall interest rate risk profile.
Neither the Company nor the Bank has a separate compensation committee or
nominating committee; the Personnel Committee of each serves these functions.
MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors of the Bank met in 1997 in regular meetings for a
total of nine meetings. The Board of Directors of the Company held nine
regular meetings during 1997. No nominee for director, while serving as a
director of the Bank and the Company during 1997, attended fewer than 75% of
the total number of meetings of the Board and of the committees of which he
was a member.
7
<PAGE>
DIRECTOR FEES
In 1997 the Bank paid fees to non-employee directors for their services as
directors. The payment schedule provides for non-employee directors to be paid
a quarterly retainer of $2,500 with the Chairman to receive $3,000 per
quarter. Additionally, $750 per quarter will be paid to each director if the
Company achieves the business plan. Chairmen of the Audit, Loan and Personnel
Committees were paid an additional $350 per committee meeting attended.
Committee members were paid $250 per meeting attended. Directors who were
executive officers were not paid director fees in 1997. Total director fees
paid in 1997 were $134,500.
EXECUTIVE OFFICERS
The following are the names of the principal executive officers of the
Company and the Bank and certain information concerning each of them:
<TABLE>
<CAPTION>
NAME AND AGE BUSINESS EXPERIENCE DURING PAST FIVE YEARS
------------ ------------------------------------------
<S> <C>
Herbert C. Foster, 58... President and Chief Executive Officer of the Company
and Chairman and Chief Executive Officer of the Bank
since March, 1993; President and Chief Executive
Officer of Pacific Bay Bank, San Pablo, CA during
1992 and President of University National Bank &
Trust Company, Palo Alto, CA from 1983 to 1991.
John E. Lindstedt, 64... President of the Bank since February, 1994; formerly
with Wells Fargo Bank, N.A., San Francisco since
1965; Executive Vice President in capacity of senior
loan officer of Corporate Banking Group from 1988 to
1994.
Paul A. Grossberg, 47... Executive Vice President of the Bank since 1994,
Senior Vice President, Branch Office Administrator of
the Bank since 1991, Vice President of the Bank since
1985.
</TABLE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth the number of the Company's common shares
owned, as of March 10, 1998, by the present directors who are also among
management's nominees for reelection, by the sole nominee who is not currently
a director, by executive officers and by the directors, nominees and officers
of the Company as a group:
SHARES OF COMMON STOCK BENEFICIALLY OWNED
<TABLE>
<CAPTION>
PERCENT OF
NAME OF BENEFICIAL OWNER NUMBER (1) CLASS
------------------------ ---------- ----------
<S> <C> <C>
C. Donald Carr................................ 731,079(2) 15.08%
David L. Cutter............................... 20,737(3) .43
Wayne S. Doiguchi (nominee)................... -- .00
Herbert C. Foster............................. 144,602(4) 2.98
John W. Glenn................................. 34,340(5) .71
Paul A. Grossberg............................. 43,053(6) .89
Paul R. Handlery.............................. 370,242(7) 7.64
James C. Johnson.............................. 33,556(8) .69
Paul C. Kepler................................ 32,844(9) .68
John E. Lindstedt............................. 74,382(10) 1.53
Edward G. Mein................................ 68,369(11) 1.41
Dale D. Reed.................................. 56,231(12) 1.16
Edward G. Roach............................... 29,030(13) .60
Barclay Simpson 86,219(14) 1.78
All directors, nominees and officers as a
group (15 persons) 1,741,081 35.91%
</TABLE>
8
<PAGE>
(1) Includes all shares beneficially owned, whether directly or indirectly,
individually or together with associates. Includes any shares owned,
whether jointly or as community property with a spouse and any shares of
which beneficial ownership may be acquired within 60 days of March 10,
1998 by the exercise of stock options.
(2) Includes 723,729 shares held by Mr. Carr jointly with his spouse and 7,350
shares which may be owned within 60 days of March 10, 1998 by the exercise
of stock options.
(3) Includes 7,350 shares which may be owned within 60 days of March 10, 1998
by the exercise of stock options.
(4) Includes 93,450 shares which may be owned within 60 days of March 10, 1998
by the exercise of stock options.
(5) Includes 26,990 shares held by Mr. Glenn jointly with his spouse, 3,889
shares held in trust, John W. Glenn, Trustee, and 7,350 shares which may
be owned within 60 days of March 10, 1998 by the exercise of stock
options.
(6) Includes 27,967 shares which may be owned within 60 days of March 10, 1998
by the exercise of stock options.
(7) Includes 272,225 shares held by Handlery Hotels, Inc. and 1,500 shares
which may be owned within 60 days of March 10, 1998 by the exercise of
stock options.
(8) Includes 26,206 shares held by Mr. Johnson jointly with his spouse, 2,925
shares held by his spouse of which 151 are held by her as custodian under
the California Uniform Gift to Minors Act, and 7,350 shares which may be
owned within 60 days of March 10, 1998 by the exercise of stock options.
(9) Includes 7,350 shares which may be owned within 60 days of March 10, 1998
by the exercise of stock options.
(10) Includes 28,350 shares which may be owned within 60 days of March 10,
1998 by the exercise of stock options.
(11) Includes 61,019 shares held by Mr. Mein jointly with his spouse and 7,350
shares which may be owned within 60 days of March 10, 1998 by the
exercise of stock options.
(12) Includes 28,942 shares held by Mr. Reed jointly with his spouse and 7,350
shares which may be owned within 60 days of March 10, 1998 by the
exercise of stock options.
(13) Includes 6,379 shares held in trust, Edward G. Roach, Trustee and 7,350
shares which may be owned within 60 days of March 10, 1998 by the
exercise of stock options.
(14) Includes 78,869 shares held by Mr. Simpson jointly with his spouse and
7,350 shares which may be owned within 60 days of March 10, 1998 by the
exercise of stock options.
CHANGE IN CONTROL
Management is not aware of any arrangements, including the pledge by any
person of shares of the Company, the operation of which may at a subsequent
date result in a change in control of the Company.
9
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth the compensation of the named executive
officers for each of the Company's last three fiscal years whose total annual
cash compensation exceeded $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM
NAME AND PRINCIPAL --------------------------- COMPENSATION ALL OTHER
POSITION YEAR SALARY BONUS (1) OPTIONS COMPENSATION (2)
------------------ ---- ----------- ---------- ------------ ----------------
<S> <C> <C> <C> <C> <C>
Herbert C. Foster....... 1997 $190,000.00 $94,000.00 21,000 shs. $122,718.52
President and Chief 1996 190,000.00 71,014.00 None 17,486.96
Executive Officer
of the Company and 1995 190,000.00 22,042.00 None 7,661.70
Chairman and
Chief Executive Officer
of the Bank
John M. Lindstedt....... 1997 160,000.00 51,700.00 10,500 shs. 22,340.80
President of the Bank 1996 160,000.00 35,507.00 None 9,183.40
1995 160,000.00 11,021.00 None 6,078.10
Paul A. Grossberg....... 1997 103,000.00 42,300.00 10,500 shs. 14,562.88
Executive Vice 1996 103,000.00 35,507.00 None 5,771.60
President
of the Bank 1995 103,000.00 11,021.00 2,625 shs. 5,643.70
</TABLE>
- --------
(1) Represents cash bonus in year earned.
(2) Represents Company contributions to the Profit Sharing Retirement Plan,
Company matching contributions under the 401(k) Plan, imputed value of
life insurance premiums paid by the Company, and for Mr. Foster, the
expense in 1997 associated with a deferred compensation plan of
$101,198.52.
The Company pays the cost of premiums on life insurance policies insuring
all employees, including executive officers, in amounts approximating two
times their annual salaries. The policies are payable to the officers'
designated beneficiaries. A portion of the premium paid by the Bank is imputed
as income for tax purposes for the executive officers. Such amounts are
included in the compensation table above.
Pursuant to a deferred compensation agreement dated December 1, 1996 between
Mr. Foster and the Bank, Mr. Foster is entitled to salary continuation
benefits of $100,000 per year for 15 years commencing at retirement or if
there is a change in control as defined within the agreement. The benefit
vests at the rate of 20% per year commencing after the fifth through ninth
years unless there is a change in control at which time the benefit is 100%
vested.
Messrs. Foster, Lindstedt and Grossberg receive automobile allowances in
connection with the performance of their duties. Mr. Foster also has a club
membership paid by the Bank in connection with the performance of his duties.
Management is unable to determine, without unreasonable effort and expense,
the extent or value of the personal benefit, if any, which might be derived
from these payments, and the value of any such benefits is not included in the
amounts set forth above. It is management's opinion that such benefits have
not been material in amount and did not exceed 10% of salary and bonus for Mr.
Foster.
10
<PAGE>
AGGREGATED OPTIONS/EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTIONS VALUES
<TABLE>
<CAPTION>
(A) (B) (C) (D) (E)
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
12-31-97 12-31-97
------------- -------------------
SHARES
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE (#) REALIZED ($) UNEXERCISABLE UNEXERCISABLE
---- ------------ ------------ ------------- -------------------
<S> <C> <C> <C> <C>
Herbert C. Foster.. None None 93,450/32,550 $1,275,524/$366,475
John E. Lindstedt.. None None 28,350/ 8,400 373,825/ 72,803
Paul A. Grossberg.. 2,179 $14,633 27,966/13,650 377,152/ 146,425
</TABLE>
INCENTIVE RESERVE/BONUS PLAN
The Bank has an Incentive Reserve/Bonus Plan for its vice presidents and
higher ranking officers (16 persons as of December 31, 1997), including
Messrs. Foster, Lindstedt and Grossberg. The Bank paid bonuses of $358,375
under this plan for 1997.
PROFIT SHARING RETIREMENT PLAN
The Board of Directors of the Bank has adopted a Profit Sharing Retirement
Plan ("PSRP") available to all employees. The PSRP is intended to provide a
tax-deferred compensation and savings vehicle to its participants, and has
been ruled by the Internal Revenue Service to comply with requirements for the
deductibility of contributions for tax purposes. The PSRP provides for three
types of contributions: voluntary contributions by employees; partial matching
contributions on a percentage basis determined by the Bank (set at 50% for
1997); and profit-sharing contributions by the Bank at the discretion of its
Board of Directors based on earnings of the Bank. The Board did allocate a
profit sharing contribution of 3.00% of base compensation to the PSRP for
1997.
Employee contributions are fully vested at all times. Employees become
vested in profit-sharing contributions and Bank matching contributions at a
rate of 20% per year beginning two years after employment. Contributions are
paid to a trustee which receives and pays funds, safeguards and values trust
assets, invests trust funds and carries out the directions of the
Administrative Committee. The trustee under the PSRP is Wells Fargo Bank. The
Administrative Committee consists of members appointed by the Board of
Directors and acts as administrator of the PSRP. The committee may retain an
investment manager or other advisors as it considers necessary to discharge
its duties.
The trustees and the Administrative Committee are subject to fiduciary
duties imposed on them by the Employee Retirement Income Security Act of 1974
(ERISA) and the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA).
Participants may begin receiving benefits under the PSRP upon reaching age 59-
1/2, or earlier upon a showing of hardship. A participant may elect to receive
benefits in a lump sum, in installments, as an annuity providing for
guaranteed income for a period certain or in any combination of the foregoing
methods.
TRANSACTIONS WITH DIRECTORS AND OFFICERS
The Bank has had in the ordinary course of business, and expects to have in
the future, banking transactions with certain of its directors, officers,
shareholders, and their associates, including transactions with corporations
of which such persons are directors, officers or controlling shareholders. In
the opinion of management, such transactions involving loans have been and
will be entered into with such persons in accordance with applicable laws and
(1) in the ordinary course of business (2) on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with other persons, and (3) on terms not
11
<PAGE>
involving more than the normal risk or collectability or presenting other
unfavorable features. For additional reference see Note 11 to the Consolidated
Financial Statements for the year ended December 31, 1997 attached to and a
part of Civic BanCorp Form 10-K for fiscal year ended December 31, 1997, and
included in the Company's Annual Report to Shareholders.
COMPENSATION COMMITTEE REPORT
The Compensation Committee in accordance with applicable requirements has
provided the following report to the Board of Directors of the Company.
REPORT ON EXECUTIVE COMPENSATION
BY THE PERSONNEL COMMITTEE OF THE BOARD OF DIRECTORS
The Report of the Personnel Committee shall not be deemed incorporated by
reference by any general statement incorporating by reference this Proxy
statement into any filing under the Securities Act of 1933 or under the
Securities Exchange Act of 1934, except to the extent that the Company
specifically incorporates the information contained in the report by
reference, and shall not otherwise be deemed filed under such acts.
The Company's executive compensation is determined by the Personnel
Committee of the Board of Directors. The Committee usually meets a minimum of
three times per year. Salaries are reviewed and determined at the Committee
meeting in February. Any increases are approved by the Board of Directors and
are effective March 1. Incentive bonus awards are also reviewed and determined
at the same meeting. Stock options are generally awarded in February
subsequent to the receipt of audited financial statements for the prior fiscal
year. Compensation for a newly-hired executive may be established by the
Committee at a special meeting.
The compensation policy of the Company is designed to attract and retain
highly qualified personnel and to provide meaningful incentives for measurable
performance. The components of executive compensation include base salary, an
incentive bonus plan, non-plan bonuses and stock options.
The Company's general compensation strategy for executive officers including
the Chief Executive Officer, is to pay annual and long term compensation which
is competitive with other executives compensation of peer group companies,
adjusted for the Company's financial condition and performance relative to
that peer group. In determining compensation levels, the Company obtains
salary survey information regarding executive salary levels for comparable
companies through many sources, including banking industry associates and
independent compensation consultants. Additionally, the Company ties incentive
compensation levels to the financial performance goals of the Company, and
specifically return on assets.
The Company has an annual incentive bonus plan for executives based on
achieving certain financial performance goals, primarily the return on assets,
which are established by the Personnel Committee and approved by the Board of
Directors as part of the annual budgeting process. Other criteria used to
determine incentive awards include asset quality and earnings results. The
Board also considers professional experience and past and potential future
contributions to the Company. Each executive's percentage of an incentive
bonus pool is determined at the beginning of the year by the Personnel
Committee and is payable subject to satisfactory performance and contingent on
approval of the Board of Directors after the calendar year is complete. The
maximum amount any executive can earn from the incentive bonus plan is equal
to or less than 100% of the executive's base salary.
In 1995, 1996 and 1997, based upon the Company's return on assets, incentive
plan bonuses were paid for those years. The size of the bonus pool is directly
tied to improvements in the Company's return on assets capping at a 1.60 ROA.
12
<PAGE>
The total cash compensation including cash bonuses paid to the Company's
executive officers for 1995, 1996 and 1997 ranked just below average for the
total cash compensation paid to executive officers for banks in our asset size
in California.
Executive officers are permitted to participate in other Company and Bank
employee benefit plans including the Bank's 401(k) Savings Plan.
Long term incentive awards consisting of stock options are considered to be
a substantial portion of the compensation package of the executive officers
and provide incentive to increase shareholder value. In 1995, Mr. Grossberg
was awarded stock options. There were no stock option awarded in 1996. In
1997, stock options were awarded to Messrs. Foster, Lindstedt and Grossberg.
Barclay Simpson, Chairman
Paul C. Kepler
David L. Cutter
James C. Johnson
PERSONNEL COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No member of the Personnel Committee is a former or current officer or
employee of the Company or its subsidiaries.
13
<PAGE>
PERFORMANCE GRAPH
The following graph compares the stock performance of the Company to the
performance of a specific industry index, the SNL Securities L.P. Northern
California (greater than sign) $1 Billion Independent Bank Proxy and to the
Standard & Poor's 500 index over the past five calendar year period.
<TABLE>
<CAPTION>
Period Ending
----------------------------------------------------------------------------------------
Index 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Civic BanCorp 100.00 93.48 95.65 130.44 176.27 356.10
S&P 500 100.00 110.08 111.53 153.44 188.52 251.44
(greater than sign) Indepen-
dent Western Banks 100.00 128.54 121.70 168.48 248.78 442.97
</TABLE>
14
<PAGE>
2. PROPOSAL TWO:
INCREASE IN THE NUMBER OF SHARES
AVAILABLE FOR GRANTS OF STOCK OPTIONS
SUMMARY OF PROPOSAL:
Proposal Two provides for an amendment to the Company's stock option plan to
increase the authorized number of shares of common stock for which options may
be granted by 250,000, from 682,500 at present to 932,500 shares.
In 1994, the Board of Directors adopted the 1994 Civic BanCorp Stock Option
Plan (the "1994 Plan"). The 1994 Plan was approved by the Company's
shareholders at the 1995 annual meeting. In 1995, the Board of Directors
approved the 1995 Non-Employee Director Stock Option Plan (the "1995 Plan")
which reserved stock options from the 1994 Civic BanCorp Stock Option Plan for
issuance to non-employee directors. The 1995 Plan was approved by Company's
shareholders at the 1996 annual meeting. The purposes of these Plans are to
encourage stock ownership by employees and directors, to enable the Company to
attract and retain highly qualified personnel and directors, and to promote
the long term success of the Company and the enhancement of shareholder value.
The 1994 Plan authorizes the Bank to grant options that qualify as incentive
stock options ("ISO") under the Internal Revenue Code of 1986 and nonqualified
stock options ("NSO") to key employees of the Bank. Non-employee directors are
only eligible to receive NSO's under the 1995 Plan.
The Plan set aside 682,500 authorized but unissued shares of the Bank's
Common Stock ("Shares") for grant at an amount per share that approximates the
fair market value of the Company's common stock on the date the option was
granted. As of March 2, 1998, the last reported sale price for the Company's
common stock was at $18.50 per share. All options expire no later than ten
years from the date of grant. To the extent that the aggregate fair market
value of stock with respect to ISO's exercisable by any individual during any
calendar year exceeds $100,000, such excess options shall be treated as NSO's.
The Personnel Committee which is appointed by the Board administers the Plan.
Neither the optionee or the Company will incur any Federal tax consequences
as a result of the grant of an option. The optionee will have no taxable
income upon exercising an ISO (except that the alternative minimum tax may
apply), and the Bank will receive no deduction when an ISO is exercised. Upon
exercising an NSO, the optionee generally must recognize ordinary income equal
to the "spread" between the exercise price and the fair market value of the
Company's common stock on the date of exercise. The Company will be entitled
to a business expense deduction for the same amount. The tax treatment of a
disposition of option shares acquired under the 1994 or 1995 Plan depends on
how long the shares have been held and whether such shares were acquired by
exercising an ISO or NSO. The Company will not be entitled to a tax deduction
in connection with a disposition of option shares, except in the case of a
disposition of shares acquired under an ISO before the applicable ISO holding
period has been satisfied.
As of the date of this Proxy Statement, options to purchase 481,740 shares
have been granted by the Board of Directors, options to purchase an additional
157,796 shares have been exercised by option holders, and 42,000 shares have
been reserved for issue to non-employee directors in accordance with the 1995
Plan, leaving 964 shares of the original 682,500 shares, as adjusted for stock
dividends, available for future grant under the 1994 Plan. The Board of
Directors is seeking shareholder approval to increase the number of options
authorized in the Plan in order to ensure that sufficient options will be
available to adequately compensate the Company's employees and directors as
the Company expands its business and adds additional employees. The Board
therefore requests that shareholders authorize the issuance of an additional
250,000 options, which would bring the number of options available under the
Plan to 932,500 of which 250,964 (plus any currently outstanding options that
expire or are otherwise terminated without being exercised) would be available
for grant in the future. Proposal Two, if adopted would not increase the
number of shares for which options could be granted
15
<PAGE>
under the 1995 Plan. The Board of Directors has not designated the persons to
whom options will be granted or determined the number of options that will be
granted to any individual or group of individuals in the event this proposal
is approved by the Company's shareholders. The 481,740 options now outstanding
under the Plan are equal to 10.4% of the total number of shares currently
outstanding. If the proposal is approved, the number of options outstanding or
available under the Plan would be increased to 732,704 which would equal 15.8%
of the Company's outstanding shares.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF PROPOSAL TWO.
16
<PAGE>
3. PROPOSAL THREE:
RATIFICATION OF SELECTION OF INDEPENDENT
PUBLIC ACCOUNTANTS
KPMG Peat Marwick LLP has served as the Company's independent certified
public accountants since 1994. The Company engaged KPMG Peat Marwick LLP as
its independent public accountants by letter dated June 14, 1994 between KPMG
Peat Marwick LLP and the Audit Committee of the Board of Directors. The
Company, has had no disagreements with its accountants with respect to
accounting principles or practices of financial statement disclosure.
At the 1998 Annual Meeting of Shareholders the following resolution will be
subject to ratification by a simple majority vote of shares represented at the
meeting:
RESOLVED, that the selection of KPMG Peat Marwick LLP as the independent
certified public accountants of Civic BanCorp and its subsidiary, CivicBank
of Commerce, for the fiscal year ending December 31, 1998 is hereby
ratified.
If ratification is not achieved, the selection of an independent certified
public accountant will be reconsidered and made by the Board of Directors.
Even if selection is ratified, the Board of Directors reserves the right and,
in its discretion, may direct the appointment of any other independent
certified public accounting firm at any time if the Board decides that such a
change would be in the best interests of the Company and its shareholders.
The services provided by KPMG Peat Marwick LLP include the examination and
reporting of the financial status of the Company and Bank. These services have
been furnished at customary rates and terms. There are no existing direct or
indirect agreements or understandings that fix a limit on current or future
fees for these audit services.
A representative of KPMG Peat Marwick LLP is expected to attend the 1998
Annual Meeting of Shareholders with the opportunity to make a statement, if
desired, and is expected to be available to respond to shareholders'
inquiries.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF PROPOSAL THREE.
17
<PAGE>
4. OTHER BUSINESS
If any other matters come before the meeting, not referred to in this Proxy
Statement, including matters incident to the conduct of the meeting, the proxy
holders will vote the shares represented by proxies in accordance with their
best judgment. Management is not aware of any other business to come before
the meeting and, as of the date of the preparation of this Proxy Statement, no
shareholder has submitted to management any proposal to be acted upon at the
meeting.
ADDITIONAL INFORMATION AND DOCUMENTS INCORPORATED BY REFERENCE.
Each shareholder has received the Company's 1997 Form 10-K as filed with the
Securities and Exchange Commission containing financial statements, including
the report of its independent public accountants.
18
<PAGE>
- --------------------------------------------------------------------------------
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
CIVIC BANCORP
PROXY FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MAY 7, 1998
The undersigned hereby appoints Paul R. Handlery, Edward G. Roach and C.
Donald Carr, and each of them, Proxies, with the full power of substitution to
vote all of the stock of the undersigned at the Annual Meeting of Shareholders
of Civic BanCorp to be held on Thursday, May 7, 1998 at 4:00 p.m. at 2101
Webster Street, 1st floor, Oakland, California, and at any adjournment thereof,
in the manner indicated and in their discretion on any other business which may
properly come before said meeting, all in accordance with and as more fully
described in the Notice and accompanying Proxy Statement for said meeting,
receipt of which is hereby acknowledged. The share represented by this Proxy
shall be voted as specified below.
(CONTINUED, AND TO BE MARKED, DATED AND SIGNED, ON THE REVERSE SIDE)
- --------------------------------------------------------------------------------
. FOLD AND DETACH HERE.
<PAGE>
This proxy will be voted as directed. In the absence of contrary directions,
this proxy will be voted FOR the election of the directors listed above and FOR
proposals 2, 3 and 4.
Please mark
votes
[ X ] as this
1. ELECTION OF DIRECTORS:
FOR the WITHHOLD
election as authority (as to
Director of all all nominees)
nominees. listed below
[ ] [ ]
Instruction: To withhold authority to vote for any individual nominee(s), strike
a line through that nominee's name in the list below:
C. Donald Carr, David L. Cutler, Wayne S. Doiguchi, Herbert C. Foster, John W.
Glenn, Paul R. Handlery, James C. Johnson, Paul C. Kepler, Edward G. Mein, Dale
D. Reed, Edward G. Roach and Barclay Simpson.
2. Ratification and approval of proposal to amend the 1994 Stock Option Plan
to increase the number of shares available for grants of stock options.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. Ratification of selection of KPMG Peat Marwick, LLP as independent
accountants for 1998.
I plan to
attend the
meeting
[ ] [ ] [ ] [ ]
4. OTHER MATTERS: In their discretion, upon such other matters as may properly
come before the meeting at this time the Board of Directors is not aware of
any other matters that will be presented if no direction is given, this
Proxy will be voted for the election of nominees set forth above, for
ratification and approval of proposal to amend the 1994 Stock Option Plan
to increase the number of shares available for grants of stock options and
for the ratification of the selection of KPMG Peat Marwick, LLP.
PLEASE DATE AND RETURN IN
THE ENCLOSED ENVELOPE.
Signature(s)________________________________________________ Date ____________
Please sign exactly as your name appears above. When signing as a custodian for
a minor, executor, administrator, attorney, trustee or guardian please give your
full title as such.
- --------------------------------------------------------------------------------
. FOLD AND DETACH HERE .
