<PAGE>
================================================================================
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [_]
Filed by a Party other than the Registrant [X]
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
FIRST REPUBLIC BANCORP, INC.
- --------------------------------------------------------------------------------
(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:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
LOGO
388 MARKET STREET
SAN FRANCISCO, CALIFORNIA 94111
(415) 392-1400
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 30, 1997
TO THE STOCKHOLDERS OF FIRST REPUBLIC BANCORP INC.
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the "Annual
Meeting") of First Republic Bancorp Inc., a Delaware corporation ("First
Republic"), will be held on Wednesday, April 30, 1997, at 4:00 PM Eastern
Time, at the New York Yacht Club, 37 West 44th Street, New York, NY 10036 for
the following purposes:
1. To elect four directors to First Republic's Board of Directors, each to
hold office for a three year term; and
2. To approve the amendment and restatement of First Republic's Stock
Option Plan; and
3. To approve First Republic's 1997 Restricted Stock Plan; and
4. To ratify the selection of KPMG Peat Marwick LLP as independent auditors
of First Republic and its subsidiary for the year ending December 31,
1997; and
5. To transact such other business as may properly come before the meeting
or any adjournment thereof.
Pursuant to the By-Laws, the Board of Directors has fixed the close of
business on March 3, 1997 as the record date for the determination of
stockholders entitled to notice of and to vote at the Annual Meeting.
The list of the stockholders entitled to vote at the Annual Meeting will be
available, during ordinary business hours, at 388 Market Street, San
Francisco, CA 94111, beginning on March 31, 1997. The stockholder list will
also be available during the Annual Meeting at the location of the Annual
Meeting.
The above matters are described in detail in the accompanying Proxy
Statement.
By Order of the Board of Directors
/s/ James H. Herbert, II, President
------------------------------------
James H. Herbert, II, President
San Francisco, California
March 14, 1997
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON, PLEASE
COMPLETE AND SIGN THE ENCLOSED PROXY CARD AND RETURN IT PROMPTLY IN THE
ENCLOSED ENVELOPE WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. IF
YOU DO ATTEND THE ANNUAL MEETING AND DESIRE TO WITHDRAW YOUR PROXY AND VOTE IN
PERSON, YOU MAY DO SO.
<PAGE>
FIRST REPUBLIC BANCORP INC.
388 MARKET STREET
SAN FRANCISCO, CALIFORNIA 94111
(415) 392-1400
----------------
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 30, 1997
----------------
This Proxy Statement is being furnished to the holders of Common Stock of
First Republic Bancorp Inc., a Delaware corporation ("First Republic" or the
"Company"), in connection with the solicitation of proxies by the Board of
Directors of the Company for use at the Annual Meeting of Stockholders to be
held on Wednesday, April 30, 1997, at 4:00 PM Eastern Time, at the New York
Yacht Club, 37 West 44th Street, New York, NY 10036, and at any adjournments
or postponements thereof (the "Annual Meeting"), for the purpose of
considering and acting upon the matters specified in the accompanying Notice
of Annual Meeting of Stockholders.
This Proxy Statement, the Notice of Annual Meeting of Stockholders and the
accompanying Form of Proxy are first being mailed to stockholders on or about
March 17, 1997.
The close of business on March 3, 1997 (the "Record Date"), has been
designated as the record date for the determination of stockholders entitled
to notice of and to vote at the Annual Meeting. As of March 3, 1997, 8,925,980
shares of First Republic's Common Stock, par value $.01 per share (the "Common
Stock"), were outstanding and entitled to vote.
Stockholders will be entitled to one vote for each share of Common Stock
held by them of record at the close of business on the record date on any
matter that may be presented for consideration and action by the stockholders
at the Annual Meeting.
All shares represented by properly executed, unrevoked proxies received in
time for the Annual Meeting will be voted in accordance with instructions
specified therein. In the absence of appropriate instructions to the contrary,
shares represented by executed proxies will be voted in favor of the election
of the nominees to the Board of Directors specified herein, in favor of the
amendment and restatement of the Company's Stock Option Plan, in favor of the
adoption of the Company's 1997 Restricted Stock Plan, and in favor of
ratification of the selection of KPMG Peat Marwick LLP as the independent
auditors of First Republic for the fiscal year ending December 31, 1997 and in
accordance with the best judgment of the proxy holders with respect to any
other matters which may properly come before the Annual Meeting. Any proxy may
be revoked at any time prior to being voted by filing a written notice of
revocation with the Secretary of First Republic, by presentation of a proxy of
later date or by voting at the Annual Meeting in person. Abstentions and
broker non-votes are counted for the purpose of determining the presence or
absence of a quorum for the transaction of business, but will not be treated
as having voted for purposes of determining the outcome of a vote. Directors
are elected by a plurality of the votes of the shares present in person or
represented by proxy and entitled to vote, assuming the presence of a quorum,
and approval of the amendment and restatement of First Republic's Stock Option
Plan, of the adoption of First Republic's 1997 Restricted Stock Plan, and of
independent auditors requires a majority of the votes of the shares present in
person or represented by proxy and entitled to vote, assuming the presence of
a quorum.
The cost of soliciting proxies will be paid by First Republic. Arrangements
will be made with brokerage houses and other custodians, nominees and
fiduciaries to forward proxy materials to the beneficial owners of the Common
Stock, and such persons will be reimbursed for their reasonable expenses.
Proxies may be solicited by directors, officers and regular employees of First
Republic in person, by telephone or by telegraph for which such persons will
receive no special compensation.
1
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the beneficial ownership of the Common Stock
as of March 3, 1997 by (i) each person known to First Republic to own more
than five percent of the outstanding shares of the Common Stock, (ii) each
member of the Board of Directors and each executive officer named in the
Summary Compensation Table, and (iii) all directors and officers of First
Republic as a group. The number of outstanding shares of Common Stock, as of
March 3, 1997, was 8,925,980.
<TABLE>
<CAPTION>
BENEFICIAL OWNER SHARES OWNED(1)(2) PERCENT OF CLASS
---------------- ------------------ ----------------
<S> <C> <C>
James H. Herbert, II(3).................... 747,873 7.9%
Katherine August-deWilde(3)................ 307,430 3.4%
Barrant V. Merrill(3)...................... 137,103 1.5%
Willis H. Newton, Jr....................... 111,442 1.2%
Linda G. Moulds............................ 88,352 1.0%
Kenneth W. Dougherty(3).................... 78,136 0.9%
James F. Joy(3)............................ 64,321 0.7%
Frank J. Fahrenkopf, Jr.................... 63,914 0.7%
L. Martin Gibbs............................ 59,540 0.7%
Richard Cox-Johnson(3)..................... 52,932 0.6%
Roger O. Walther(3)........................ 52,693 0.6%
John F. Mangan............................. 20,982 0.2%
All Directors and Officers as a Group
(Currently 14 persons)..................... 1,827,733 17.9%
Wellington Management Company, LLP(4)...... 915,301 10.3%
75 State Street
Boston, MA 02109
T. Rowe Price Associates, Inc.(5).......... 618,710 6.7%
100 E. Pratt Street
Baltimore, MD 21202
Includes:
T. Rowe Price Small Cap Value Fund,
Inc.(6).................................... 585,862 6.4%
100 E. Pratt Street
Baltimore, MD 21202
Dimensional Fund Advisors Inc.(7).......... 582,019 6.5%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
Liberty Investment Management(8)........... 447,171 5.0%
2502 Rock Point Drive, Suite 500
Tampa, FL 33607
</TABLE>
- --------
(1) All shares of Common Stock not outstanding but which may be acquired by a
stockholder listed in the previous table within 60 days of the Record Date
by the exercise of any stock option or any other right, or by the
conversion of First Republic's 7 1/4% Convertible Subordinated Debentures,
due 2002 (the "7 1/4% Debentures"), are deemed to be outstanding for the
purposes of calculating beneficial ownership and computing the percentage
of the class beneficially owned by such stockholder, but not by any other
stockholder. Except as otherwise noted, each stockholder has sole voting
and sole dispositive power with
2
<PAGE>
respect to such stockholder's shares of Common Stock. Included in the
previous table are shares of Common Stock subject to outstanding stock
options that are deemed to be beneficially owned by the holders thereof as
follows: Mr. Herbert--325,473 shares owned directly and 245, 737 shares
owned indirectly in a family partnership; Ms. August-deWilde--244,089
shares; Mr. Newton--96,181 shares; Ms. Moulds--32,127 shares; Mr. Mangan--
20,982 shares; all other directors--44,321 shares each; all directors and
officers as a group--1,335,891 shares. Also included in the above table are
shares of Common Stock issuable upon conversion of the 7 1/4% Debentures
that are deemed to be owned by the holders thereof as follows: Ms. August-
deWilde--4,388 shares; and Mr. Herbert--4,023 shares.
(2) Based solely on its review of the copies of reports of ownership and
changes in ownership provided to First Republic by certain reporting
persons pursuant to Section 16(a) of the Securities Exchange Act of 1934,
or written representations from certain reporting persons, First Republic
believes that during the 1996 fiscal year all Section 16(a) filing
requirements applicable to its officers, directors and greater than ten-
percent beneficial owners were complied with, except that one report by
Ms. August-deWilde indicating the gift in October 1996 of 352 shares to
charity was not filed until November 1996.
(3) Includes shares attributed to: Mr. Herbert from his children (13,234
shares); Ms. August-deWilde from (i) her spouse (5,713 shares) and (ii)
her children (1,400 shares); Mr. Merrill from (i) his wife (43,761
shares), (ii) his children (3,713 shares), and (iii) a trust for his wife
(8,487 shares); Mr. Dougherty from his wife and children (9,282 shares);
Mr. Joy from his wife (20,000 shares); Mr. Cox-Johnson from a family trust
(8,611 shares); and Mr. Walther from his wife (3,312 shares).
(4) Based on Amendment No. 2 to Schedule 13G dated January 24, 1997 which
indicates that Wellington Management Company has sole voting power over no
shares, shared voting power over 255,047 shares, sole dispositive power
over no shares and shared dispositive power over 915,301 shares.
(5) Based on Amendment No. 1 to Schedule 13G dated February 14, 1997 which
indicates that T. Rowe Price Associates, Inc. has sole voting power over
17,848 shares, shared voting power over no shares, sole dispositive power
over 618,710 shares and shared dispositive power over no shares. Included
in the shares reported for T. Rowe Price Associates are 279,310 shares
which may be acquired upon conversion of the 7 1/4% Debentures. Also
included in the shares reported are 585,862 shares with respect to which
T. Rowe Price Small Cap Value Fund, Inc. is also deemed to be a beneficial
owner. See Note 6 below.
(6) Based on Amendment No. 1 to Schedule 13G dated February 14, 1997 which
indicates that T. Rowe Price Small Cap Value Fund, Inc. has sole voting
power over 585,862 shares, shared voting power over no shares, sole
dispositive power over no shares and shared dispositive power over no
shares. T. Rowe Price Associates, Inc. is also deemed to be a beneficial
owner of these shares. See Note 5 above. Included in the shares reported
for T. Rowe Price Small Cap Value Fund are 275,862 shares that may be
acquired upon conversion of the 7 1/4% Debentures.
(7) Based on Amendment No. 3 to Schedule 13G dated February 5, 1997 which
indicates that Dimensional Fund Advisors Inc. ("Dimensional") has sole
voting power over 370,167 shares, shared voting power over 211,852 shares,
sole dispositive power over 582,019 shares and shared dispositive power
over no shares. Dimensional, a registered investment advisor, is deemed to
have beneficial ownership of 582,019 shares, all of which shares are held
in portfolios of (i) DFA Investment Dimensions Group Inc., a registered
open-end investment company, (ii) the DFA Investment Trust Company, a
Delaware business trust, or (iii) the DFA Group Trust and DFA
Participation Group Trust, investment vehicles for qualified employee
benefit plans (all of which Dimensional serves as investment manager).
Dimensional disclaims beneficial ownership of all such shares.
(8) Based on Amendment No. 1 to Schedule 13G dated December 31, 1996 which
indicates that Liberty Investment Management has sole voting power over
447,171 shares, shared voting power over no shares, sole dispositive power
over 447,171 shares and shared dispositive power over no shares.
3
<PAGE>
PROPOSAL 1.--ELECTION OF DIRECTORS
First Republic's Board of Directors consists of ten directors. The directors
of First Republic serve three-year terms which are staggered to provide for
the election of approximately one-third of the Board members each year. At the
Annual Meeting, four directors will stand for reelection.
INFORMATION CONCERNING NOMINEES
The four persons named below are the Company's nominees for election to the
Board of Directors. They are nominated to be Class III directors with terms
expiring in 2000.
<TABLE>
<CAPTION>
DIRECTOR
NAME AND AGE SINCE PRINCIPAL BUSINESS EXPERIENCE
------------ -------- -----------------------------
<C> <C> <S>
James H. Herbert, II 1985 President, Chief Executive Officer and Director.
52 From 1980 to July 1985, Mr. Herbert was
President, Chief Executive Officer and a
director of San Francisco Bancorp. B.S., 1966,
Babson College; M.B.A., 1969, New York
University; and a member of The Babson
Corporation.
James F. Joy 1985 Director. Mr. Joy is Director--European Business
59 Development for CVC Capital Partners Europe
Limited and a non-executive director of Sylvania
Lighting International. B.S., 1959 and B.S.E.E.,
1960, Trinity College; M.B.A., 1964, New York
University.
Barrant V. Merrill 1985 Director. Mr. Merrill is an investor. He is the
66 Managing Partner of Sun Valley Partners.
Previously, he was General Partner of Dakota
Partners and of Galena Partners, and Chairman of
Pershing & Co., Inc., a division of Donaldson,
Lufkin & Jenrette. B.A., 1953, Cornell
University.
Roger O. Walther 1985 Chairman of the Board of Directors. Mr. Walther
61 is Chairman and Chief Executive Officer of ELS
Educational Services, Inc., the largest teacher
of English as a second language in the United
States. Formerly, he served as Chairman of San
Francisco Bancorp. He is a director of Charles
Schwab & Co., Inc. B.S., 1958, United States
Coast Guard Academy; M.B.A., 1961, Wharton
School, University of Pennsylvania; and member
of the Graduate Executive Board of the Wharton
School.
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF MESSRS.
---
HERBERT, JOY, MERRILL, AND WALTHER AS CLASS III DIRECTORS.
4
<PAGE>
INFORMATION CONCERNING OTHER DIRECTORS
The following table sets forth the name of each of the remaining directors
of First Republic (other than those identified under "Election of Directors")
and certain pertinent information about them.
<TABLE>
<CAPTION>
DIRECTOR
NAME AND AGE SINCE PRINCIPAL BUSINESS EXPERIENCE
------------ -------- -----------------------------
<C> <C> <S>
Katherine August-deWilde 1988 Executive Vice President, Chief Operating
49 Officer and Director. Ms. August-deWilde
served as Chief Financial Officer of First
Republic from July 1985 until August 1988.
Previously, Ms. August-deWilde served as
Senior Vice President and Chief Financial
Officer at PMI Corporation A.B., 1969,
Goucher College; M.B.A., 1975 Stanford
University.
Richard M. Cox-Johnson 1986 Director. Mr. Cox-Johnson is a director of
62 Premier Consolidated Oilfields PLC. Graduate
of Oxford University, 1955.
Kenneth W. Dougherty 1985 Director. Mr. Dougherty is an investor and
70 was previously President of Gill & Duffus
International Inc. and Farr Man & Co. Inc.,
international commodity trading companies.
B.A., 1948, University of Pennsylvania.
Frank J. Fahrenkopf, Jr. 1985 Director. Mr. Fahrenkopf is President and
57 CEO of the American Gaming Association.
Previously, he was a partner in the law firm
of Hogan & Hartson. From January 1983 until
January 1989, he was Chairman of the
Republican National Committee. B.A., 1962,
University of Nevada-Reno; L.L.B., 1965,
University of California-Berkeley.
L. Martin Gibbs, Esq. 1985 Director. Mr. Gibbs is a partner with the
59 law firm of Rogers & Wells, counsel to the
Company. B.A., 1959, Brown University; J.D.,
1962, Columbia University.
John F. Mangan 1985 Director. Mr. Mangan is an investor and was
60 previously President of Prudential-Bache
Capital Partners, Inc., and a Managing
Director of Prudential-Bache Securities,
Inc. B.A., 1959, University of Pennsylvania.
</TABLE>
MEETINGS AND ORGANIZATION
During the fiscal year ended December 31, 1996, the Board of Directors held
four regularly scheduled meetings and acted by telephonic board meeting three
times. All directors of First Republic attended at least 75% of the meetings
of the Board of Directors and committees on which they served during such
fiscal year, except Mr. Cox-Johnson, who missed one regular meeting for
medical reasons and two telephonic meetings, and Mr. Fahrenkopf, who missed
two telephonic meetings.
COMMITTEES OF THE BOARD OF DIRECTORS
Executive Committee. The primary responsibilities of the Executive Committee
are to advise the Company's management on matters when the full Board of
Directors is unavailable or to conduct business as specifically designated by
the full Board. The members of the Executive Committee are Ms. August-deWilde
and Messrs. Herbert, Merrill and Walther.
Compensation Committee. The primary responsibilities of the Compensation
Committee are to establish and review the compensation, both direct and
indirect, to be paid to First Republic's executive officers and other members
of management; to review and submit to the Board of Directors its
recommendations with respect to executive compensation plans; and to establish
and review periodically First Republic's policies relating to executive
perquisites. The members of the Compensation Committee are Messrs. Cox-
Johnson, Joy, and Merrill.
5
<PAGE>
Audit Committee. The primary responsibilities of the Audit Committee are to
recommend to the Board of Directors a firm of independent certified public
accountants to conduct the annual audit of First Republic's books and records;
to review with such accounting firm the scope and results of the annual audit;
to review the performance by such independent accountants of professional
services in addition to those which are audit related; and to consult with the
internal and independent auditors with regard to the adequacy of First
Republic's systems of internal controls. Mr. Walther chairs the Company's
Audit Committee which also includes two independent directors of the Company's
FDIC insured subsidiary.
During the last fiscal year, there were no meetings of the Executive
Committee, one meeting of the Compensation Committee and three actions taken
by unanimous written consent, and seven meetings of the Audit Committee.
PROPOSAL 2.--AMENDMENT AND RESTATEMENT OF THE COMPANY'S STOCK OPTION PLAN
In 1985, the Company and its stockholders adopted a stock option plan for
the purpose of incentivizing eligible employees. At this Annual Meeting, the
stockholders are being asked to vote on a proposal to continue the stock
option plan and to provide for an additional 100,000 shares for future grants
by amending and restating the Company's Stock Option Plan (the "Stock Option
Plan") which authorizes the grant of non-qualified stock options and incentive
stock options to employees and officers of the Company or its subsidiaries.
The Stock Option Plan was approved by the Company's Board of Directors on
February 5, 1997, subject to approval by the stockholders.
The terms and provisions of the Stock Option Plan are summarized below. This
summary, however, does not purport to be a complete description of the Stock
Option Plan and this description is qualified in its entirety by the terms of
the Stock Option Plan. Copies of the actual plan documents may be obtained by
any stockholder upon written request to the Secretary to the Company.
PURPOSE
The Stock Option Plan is an amendment, restatement and continuation of the
1985 Stock Option Plan which expired in 1995. The purpose of the Stock Option
Plan is to authorize the grant of (i) non-qualified stock options and (ii)
incentive stock options (collectively, "Stock Incentives") to eligible
employees of the Company or any subsidiary thereof. This granting of Stock
Incentives is intended to benefit the Company by giving such eligible
employees a greater personal interest in the success of the enterprise and an
added incentive to continue and advance in their service to the Company and
its subsidiaries.
ADMINISTRATION
The Stock Option Plan will be administered by the Compensation Committee
(the "Committee"). The Committee has exclusive authority to authorize the
granting of Stock Incentives. Any interpretation and construction of any
provision of the Stock Option Plan made by the Committee shall be final,
binding and conclusive on all persons having any interest thereunder.
SECURITIES SUBJECT TO THE STOCK OPTION PLAN
The shares issued upon an exercise of a Stock Incentive under the Stock
Option Plan may be either (i) authorized but unissued shares or (ii) Treasury
shares of Common Stock of the Company. The maximum aggregate number of shares
which may be made the subject of Stock Incentives granted under the Stock
Option Plan may not exceed 100,000. Not more than 50,000 shares may be made
the subject of Stock Incentives granted under the Stock Option Plan to any one
individual on or after February 5, 1997.
6
<PAGE>
ELIGIBILITY
Any employee of the Company or of a subsidiary thereof, including an officer
or director who is also an employee, who in the judgment of the Committee can
contribute significantly to the growth and successful operations of the
Company or a subsidiary may receive a Stock Incentive. At this present time,
the Company does not intend to grant any of the additional 100,000 shares in
the amended and restated Stock Option Plan as Stock Incentives to its
executive management team consisting of the President and Chief Executive
Officer, the Executive Vice President and Chief Operating Officer, and the
Senior Vice President and Chief Financial Officer.
STOCK INCENTIVES
The Stock Incentives will have exercise prices not less than 100% of the
fair market value (as defined in the Stock Option Plan) of the Common Stock at
the date of grant. Unless otherwise provided by the particular Stock
Incentive, the exercise price may be paid, in whole or in part, (i) in cash;
(ii) by certified or cashier's check payable to the order of the Company;
(iii) in shares of Common Stock valued at fair market value at the time of
exercise; or (iv) by payment of cash equal to the par value of each share
multiplied by the number of shares purchased and the remaining proceeds by
promissory note subject to the terms and conditions as authorized by the
Committee in its discretion and as set forth in the initial grant of the Stock
Incentive. As an alternative to payment in full by the recipient of the Stock
Incentive (the "Optionee") of the exercise price, the Committee, in its
discretion, may allow an Optionee, upon exercise of the Stock Incentive, to
receive from the Company cash in an amount equal to the excess of the value of
one share over the exercise price times the number of shares as to which the
Stock Incentive is exercised or the number of whole shares of Common Stock
having an aggregate value not greater than such excess.
The Optionee will be able to exercise Stock Incentives from time to time as
specified in the particular Stock Incentive. The Committee shall determine the
expiration date of the Stock Incentives, which date, with respect to non-
qualified stock options, shall be no later than ten years and one month from
the date of grant or, if earlier, the employee's normal retirement date. With
respect to incentive stock options, such date shall be no later than ten years
from the date of grant or, if earlier, the employee's normal retirement date.
Except in the circumstances described below, the Stock Incentives to be
granted under the amended and restated stock option plan must be exercised
during the period the Optionee is in the employ of the Company. If an
Optionee's service to the Company terminates by reason of Disability (as
defined in the Stock Option Plan), the Optionee may exercise his Stock
Incentives on, or any time within, the 12 months following the date of such
termination to the extent that the Optionee was entitled to exercise the Stock
Incentive at the date of the termination (but in no event after the date of
expiration of the Stock Incentive). If an Optionee dies while in the service
of the Company or within three months after termination of such service, his
Stock Incentive is exercisable by the Optionee's legal representative for the
period of 12 months next succeeding the date of his death, to the extent that
the Optionee was entitled to exercise the Stock Incentive on the date next
succeeding the date of death. Upon voluntary termination of the Optionee's
employment by the Optionee or upon the termination of the Optionee's
employment for cause, all Stock Incentives held by the Optionee shall
automatically expire on the date of such termination. If the Optionee's
employment by the Company terminates for any reason other than death,
Disability (as defined in the Stock Option Plan), for cause, or voluntary
termination by the Optionee, the Optionee may exercise his Stock Incentives
for a period of one month following the termination to the extent that the
Optionee was entitled to exercise the Stock Incentive at the date of the
termination. Subject to the above conditions, the exercise price and duration
of the Stock Incentives will be set by the Committee.
SPECIAL LIMITATIONS FOR INCENTIVE STOCK OPTIONS
As required by law, the Stock Option Plan imposes certain limitations upon
the exercise of incentive stock options, including the following limitations:
(i) The aggregate fair market value (determined at the time the incentive
stock options are granted) of the shares of Common Stock of the Company
with respect to which incentive stock options under the Stock
7
<PAGE>
Option Plan or any other plan are exercisable for the first time by any
Optionee during any calendar year shall not exceed $100,000.
(ii) If an incentive stock option is to be granted to an employee who
immediately before such grant owned 10% or more of the total combined
voting power of all classes of stock of the Company, the exercise price per
share of Common Stock shall be not less than 110% of the fair market value
at the time of the grant of the incentive stock option, and the incentive
stock option shall expire not more than five years from the date of grant.
STOCKHOLDER RIGHTS
No Optionee (individually or as a member of a group), and no beneficiary or
other person claiming under or through him, shall have any right, title, or
interest in or to any shares of Common Stock allocated or reserved for the
Stock Option Plan or subject to any Stock Incentive except as to such shares
of Common Stock, if any, as shall have been previously sold, issued or
transferred to him.
No Stock Incentive or right under the Stock Option Plan shall be assignable
or subject to any encumbrance, pledge or charge of any nature, whether by
operation of law or otherwise. Notwithstanding the foregoing, no Stock
Incentive shall be subject to execution, attachment or similar process or be
transferable other than (i) by will or the laws of descent and distribution
and (ii) in the case of certain non-qualified stock options, by the Optionee
to certain family members or entities created for the benefit of such family
members.
AMENDMENT AND TERMINATION
The Stock Option Plan may be amended by the Board at any time, provided
that, without the approval by the holders a majority of the outstanding shares
of voting stock of the Company, no amendment shall be made which would
increase the aggregate number of shares of common stock which may be made the
subject of Stock Incentives, materially increase the benefits of participants,
or modify the requirements as to eligibility for participation. In any event,
the Board may amend the Stock Option Plan to comply with any requirement of
applicable law or regulation.
No Stock Incentive shall be granted under the Stock Option Plan after ten
years from the earlier of (i) the date of adoption of the Stock Option Plan by
the Board or (ii) the date the Stock Option Plan is approved by the
shareholders.
FEDERAL TAX CONSEQUENCES
In general, neither the grant nor the exercise of an incentive stock option
will result in taxable income to an Optionee or a deduction for the Company.
To receive special tax treatment as an incentive stock option under the
Internal Revenue Code of 1986, as amended (the "Code") as to shares acquired
upon exercise of an incentive stock option, an Optionee must neither dispose
of such shares within two years after the incentive stock option is granted
nor within one year after the transfer of the shares to the Optionee pursuant
to exercise of the option. In addition, the Optionee must be an employee of
the Company or a qualified Company subsidiary at all times between the date of
grant and the date three months (one year in the case of death or disability)
before exercise of the option. Special tax treatment as an incentive stock
option under the Code generally allows the sale of Common Stock received upon
the exercise of an incentive stock option to result in any gain being treated
as a capital gain to the Optionee, but the Company will not be entitled to a
tax deduction. However, the exercise of an incentive stock option (if the
holding period rules described in this paragraph are satisfied) will give rise
to income includable by the Optionee in his or her alternative minimum taxable
income for purposes of the alternative minimum tax in an amount equal to the
excess of the fair market value of the stock acquired on the date of the
exercise of the option over the option price.
If the holding period rules noted above are not satisfied, gain recognized
on the disposition of the shares acquired upon the exercise of an incentive
stock option will be characterized as ordinary income. Such gain will
8
<PAGE>
be equal to the difference between the option price and the fair market value
of the shares at the time of exercise. (Special rules may apply to
disqualifying dispositions where the amount realized is less than the value at
exercise.) The Company will generally be entitled to a deduction equal to the
amount of such gain included by an Optionee as ordinary income. Any excess of
the amount realized upon such disposition over the fair market value at
exercise will generally be long-term or short-term capital gain depending on
the holding period involved. Notwithstanding the foregoing, in the event that
exercise of the Stock Incentive is permitted other than by cash payment of the
exercise price, various special tax rules may apply.
No income will be recognized by an Optionee at the time a non-qualified
stock option is granted. Generally, ordinary income will, however, be
recognized by an Optionee at the time a non-qualified stock option is
exercised in an amount equal to the excess of the fair market value of the
underlying Common Stock on the exercise date over the option price. The
Company will generally be entitled to a deduction for Federal income tax
purposes in the same amount as the amount included in ordinary income by the
Optionee with respect to his or her non-qualified stock option.
Gain or loss on a subsequent sale or other disposition of the shares
acquired upon the exercise of a non-qualified stock option will be measured by
the difference between the amount realized on the disposition and the tax
basis of such shares, and will generally be long-term or short-term capital
gain depending on the holding period involved. The tax basis of the shares
acquired upon the exercise of any non-qualified stock option will be equal to
the sum of the option price of such non-qualified stock option and the amount
included in income with respect to such option. Notwithstanding the foregoing,
in the event that exercise of the Stock Incentive is permitted other than by
cash payment of the exercise price, various special tax rules may apply.
Additional special tax rules may apply to those Optionees who are subject to
Section 16 of the Securities and Exchange Act of 1934, as amended (the
"Exchange Act").
The foregoing tax discussion is a general description of certain expected
Federal income tax results under current law, and all affected individuals
should consult their own advisors if they wish any further details or have
special questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO AMEND AND
---
RESTATE THE COMPANY'S STOCK OPTION PLAN.
PROPOSAL 3.--ADOPTION OF 1997 RESTRICTED STOCK PLAN
The stockholders are being asked to vote on a proposal to adopt the
Company's 1997 Restricted Stock Plan (the "Restricted Stock Plan") which
authorizes the issuance of 233,691 shares of restricted stock to certain
officers, employees and directors. The Restricted Stock Plan was approved by
the Company's Board of Directors on February 5, 1997, subject to approval by
the stockholders.
The terms and provisions of the Restricted Stock Plan are summarized below.
This summary, however, does not purport to be a complete description of the
Restricted Stock Plan and this description is qualified in its entirety by the
terms of the Restricted Stock Plan. Copies of the actual plan documents may be
obtained by any stockholder upon written request to the Secretary to the
Company.
PURPOSE
The purpose of the Restricted Stock Plan is to authorize the grant of
restricted stock to certain officers, employees and directors of the Company
or any subsidiary thereof in order to provide a benefit to those officers,
employees and directors of the Company and its subsidiaries in light of the
fact that they have waived a tax pass-through right in certain non-qualified
stock option agreements, and to induce these officers, employees and directors
of the Company to remain with the Company and its subsidiaries and to provide
them with long-term incentives for sustained high levels of performance.
9
<PAGE>
ADMINISTRATION
The Restricted Stock Plan will be administered by the Compensation Committee
(the "Committee"). The Committee has exclusive authority to authorize the
granting of restricted stock. Any interpretation and construction of any
provision of the Restricted Stock Plan made by the Committee shall be final,
binding and conclusive on all persons having any interest thereunder (subject
to special rules in the event of a Change in Control (as defined below)).
"Change in Control" means the consummation of any one of the following
transactions during the term of the Restricted Stock Plan:
(i) the Company or any of its subsidiaries merges or consolidates with
any other corporation, other than a merger or consolidation which would
result in beneficial owners of the total voting power in the election of
directors represented by the voting securities ("Voting Securities") of the
Company or any of its subsidiaries (as the case may be) outstanding
immediately prior thereto continuing to beneficially own securities
representing (either by remaining outstanding or by being converted into
voting securities of the surviving entity) more than 50% of the total
Voting Securities of the Company or any of its subsidiaries, or of such
surviving entity, outstanding immediately after such merger or
consolidation;
(ii) the Company or any of its subsidiaries liquidates or dissolves, or
sells, leases, exchanges or otherwise transfers or disposes of all or
substantially all of the Company's assets;
(iii) any person (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act), other than (A) a trustee or other fiduciary holding
securities under an employee benefit plan of the Company or any of its
subsidiaries, (B) a corporation owned directly or indirectly by the
shareholders of the Company in substantially the same proportions as their
beneficial ownership of stock in the Company, or (C) the Company (with
respect to its ownership of the stock of any of the Company's
subsidiaries), is or becomes the beneficial owner (within the meaning of
Rule 13d-3 under the Exchange Act), directly or indirectly, of the
securities of the Company or any of its subsidiaries representing 50% or
more of the Voting Securities; or
(iv)(A)(I) the shareholders of the Company or any of its subsidiaries
approve a merger or consolidation of the Company or any of its subsidiaries
with any other corporation, other than a merger or consolidation which
would result in beneficial owners of Voting Securities of the Company or
any of its subsidiaries (as the case may be) outstanding immediately prior
thereto continuing to beneficially own securities representing (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than 75% of the total Voting Securities of the
Company or any of its subsidiaries, or of such surviving entity,
outstanding immediately after such merger or consolidation, or (II) any
person (as such term is used in Sections 13(d) or 14(d) of the Exchange
Act), other than (x) a trustee or other fiduciary holding securities under
an employee benefit plan of the Company or any of its subsidiaries, (y) a
corporation owned directly or indirectly by the shareholders of the Company
in substantially the same proportions as their ownership of stock in the
Company, or (z) the Company (with respect to the Company's ownership of the
stock of any of the Company's subsidiaries) is or becomes the beneficial
owner (within the meaning of Rule 13d-3 under the Exchange Act), directly
or indirectly, of the securities of the Company or any of its subsidiaries
representing 25% or more of the Voting Securities of such corporation, and
(B) within 12 months of the occurrence of such event, a change in the
composition of the Board occurs as a result of which 60% or fewer of the
directors are Incumbent Directors (as defined in the Restricted Stock
Plan).
SECURITIES SUBJECT TO THE PLAN
The shares awarded under the Restricted Stock Plan will be of Common Stock
and will consist of either (i) authorized but unissued shares or (ii) Treasury
shares. The maximum aggregate number of shares to be issued under the
Restricted Stock Plan shall not exceed 233,691 shares all of which have been
granted as of February 5, 1997. Shares of restricted stock that are forfeited
may not be the subject of further grants of a type for which the shares were
initially available.
10
<PAGE>
The following table sets forth certain information concerning the shares of
Restricted Stock granted to each nominee for director, the executive officers
named in the Summary Compensation Table, all current executive officers of the
Company and its subsididaries as a group, all non-employee directors of the
Company and its subsidiaries as a group, and all non-executive employees of
the Company and its subsidiaries as a group:
NEW PLAN BENEFITS
1997 RESTRICTED STOCK PLAN
<TABLE>
<CAPTION>
NUMBER
NAME AND POSITION OF UNITS(1)
----------------- -----------
<S> <C>
James H. Herbert, II.......................................... 114,929
James F. Joy.................................................. 5,561
Barrant V. Merrill............................................ 5,561
Roger O. Walther.............................................. 5,561
Katherine August-deWilde...................................... 47,270
Willis H. Newton, Jr.......................................... 11,044
Linda G. Moulds............................................... 8,745
All executive officers of the Company and its subsidiaries.... 181,988
All non-employee directors of the Company and its
subsidiaries................................................. 47,372
All non-executive officer employees of the Company and its
subsidiaries................................................. 4,331
</TABLE>
- --------
(1) On February 5, 1997, the date of the grant for the restricted stock
shares, the closing price of the Company's Common Stock was $19.50.
ELIGIBILITY
The Committee has, in its discretion, granted restricted stock to officers,
employees and directors of the Company and its subsidiaries as it deemed
appropriate (the "Grantees"). In determining the eligibility of an officer,
employee and director to receive a grant of restricted stock, the Committee
considered, among other things, the fact that such officer, employee or
director has given up a tax pass-through right under various stock option
agreements with the Company.
PARTICIPATION AND GRANTS OF RESTRICTED STOCK
The Restricted Stock Plan provides for the granting of shares of restricted
stock to eligible officers, employees and directors. The shares of restricted
stock are shares of Common Stock of the Company which are forfeitable and
nontransferable for a specified period of time. Unless otherwise provided in
the applicable award agreement, the restrictions will lapse for 20% of such
shares each year beginning on February 28, 1998 and each February 28th
thereafter. If the Grantee's service to the Company and its subsidiaries is
terminated on account of death or Disability (as defined in the Restricted
Stock Plan) or is terminated by the Company for any reason subsequent to a
Change in Control other than for Cause (as defined in the Restricted Stock
Plan) prior to the lapsing of restrictions, such restrictions shall lapse. If
a Grantee's service to the Company is terminated by the Company for Cause (as
defined in the Restricted Stock Plan) or is terminated by the Grantee for any
reason prior to the lapsing of restrictions, shares of Common Stock still
subject to such restrictions shall be forfeited. With respect to a Grantee who
is a non-employee director at the time of grant, in the event that the Grantee
ceases to be a director (and is not an employee at that time), other than (i)
for Cause, (ii) on account of the Director's voluntary resignation or (iii) on
account of the Grantee's choosing not to seek reelection, during the
applicable period of forfeiture, restrictions will immediately lapse on all
restricted stock granted to the applicable Grantee.
11
<PAGE>
STOCKHOLDER RIGHTS
Subject to the restrictions discussed above, a Grantee shall have, in
respect of the shares of restricted stock granted to such Grantee, all of the
rights of a stockholder of the Company, including the right to vote the
shares, and the right to receive any cash dividends, which dividends shall be
held by the Company (unsegregated as a part of its general assets) until the
restrictions with respect to such shares lapse and shall be forfeited if the
underlying shares are forfeited.
AMENDMENT AND TERMINATION
The Restricted Stock Plan shall terminate on, and no restricted stock shall
be granted hereunder on or after, the ten-year anniversary of the approval of
the Restricted Stock Plan by the shareholders. However, the Board may, at any
time prior to that date, terminate the Restricted Stock Plan.
The Board may amend the Restricted Stock Plan as it shall deem advisable,
except that no amendment may adversely affect a Grantee with respect to
restricted stock previously granted unless such amendments are required in
order to comply with applicable laws. However, the Board may not make any
amendment in the Restricted Stock Plan that would, if not approved by the
shareholders, cause the Restricted Stock Plan to fail to comply with any
requirement of applicable law or regulation, unless and until the approval of
the shareholders is obtained.
FEDERAL TAX CONSEQUENCES
There will be no tax consequences as a result of the grant of restricted
stock until the restricted stock is no longer subject to a substantial risk of
forfeiture or is transferable (free of such risk). Generally, when the
restrictions are lifted, the holder will recognize ordinary income, and the
Company will be entitled to a deduction, equal to the difference between the
fair market value of the stock at such time and the amount, if any, paid by
the holder for the restricted stock. Subsequently realized changes in the
value of the stock generally will be treated as long-term or short-term
capital gain or loss, depending on the length of time the shares are held
prior to disposition of such shares. Special tax rules would apply if the
recipient of a restricted stock grant were to timely make an election under
Section 83(b) of the Code.
Additional special tax rules may apply to those Grantees who are subject to
Section 16 of the Exchange Act. The foregoing tax discussion is a general
description of certain expected Federal income tax results under current law,
and all affected individuals should consult their own advisor if they wish any
further details or have special questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO ADOPT
---
THE 1997 RESTRICTED STOCK PLAN.
PROPOSAL 4.--APPROVAL OF SELECTION OF AUDITORS
A resolution will be presented at the Annual Meeting to ratify the Board of
Directors' appointment of KPMG Peat Marwick LLP as independent auditors to
audit the Company's financial statements for the year ending December 31,
1997. KPMG Peat Marwick LLP has audited the Company's financial statements for
each year since 1989.
During 1996, First Republic made no changes in, and had no disagreements
with, its independent auditors on accounting and financial disclosure. A
representative of KPMG Peat Marwick LLP is expected to be present at the
Annual Meeting, and will have the opportunity to make a statement if he
desires to do so. It is expected that such representative will be available to
respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF
---
THE SELECTION OF AUDITORS.
12
<PAGE>
EXECUTIVE COMPENSATION
COMPENSATION OF DIRECTORS
Each non-employee director of the Company receives a fee for each regularly
scheduled meeting of the Board of Directors that he attends, except that First
Republic pays Mr. Walther, who does not receive a fee per board meeting
attended, a consulting fee for his services in marketing First Republic's
banking services, including its deposit gathering and loan programs, and for
his consulting services with respect to the management, administration,
operations and financing of First Republic. For 1996, Mr. Walther received a
consulting fee of $5,417 per month. Non-employee directors received $1,500 per
meeting attended in 1996. Effective February 5, 1997, non-employee directors
receive $2,500 per meeting attended. The members of the Board of Directors are
also reimbursed for their out-of-pocket expenses incurred in connection with
attendance at Board and committee meetings in accordance with Company policy.
In the fiscal year ended December 31, 1996, the Board of Directors held four
regularly scheduled meetings and the total cash compensation paid to non-
employee directors was $105,500, including $65,000 of consulting fees paid to
Mr. Walther.
In lieu of paying higher cash directors' fees to its non-employee directors,
to more closely match their long term interests with those of other
stockholders, and to properly compensate for the responsibilities and risk,
both business and regulatory, of being on the board of a holding company of a
federally insured institution, First Republic has from time to time granted
stock options to each non-employee director of the Company. During 1996, 7,500
stock options were granted to each non-employee director of the Company and its
subsidiary; such grants were conditioned upon stockholder approval which was
obtained at the 1996 Annual Meeting.
COMPENSATION OF EXECUTIVE OFFICERS
The following table shows for the fiscal years ending December 31, 1996,
1995, and 1994, certain compensation paid by the Company, including salary,
bonuses, stock options, and certain other compensation, to its Chief Executive
Officer and its three other most highly compensated executive officers for the
fiscal year ended December 31, 1996:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
-------------------------- ------------
OPTIONS BY ALL OTHER
PERFORMANCE NUMBER OF COMPEN-
NAME & PRINCIPAL POSITION YEAR SALARY(1) BONUS(2) SHARES(3) SATION(4)
------------------------- ---- --------- ----------- ------------ ---------
<S> <C> <C> <C> <C> <C>
James H. Herbert, II......... 1996 $379,500 $509,926 -- $19,785
President and Chief Executive
Officer 1995 $379,500 -- 170,000 $28,119
1994 $379,500 $290,686 -- $25,294
Katherine August-deWilde..... 1996 $192,500 $258,655 -- $15,874
Executive Vice President and
Chief Operating Officer 1995 $192,500 -- 75,000 $28,119
1994 $192,500 $147,448 -- $25,294
Willis H. Newton, Jr......... 1996 $159,500 $214,241 -- $16,458
Senior Vice President and
Chief Financial Officer 1995 $159,500 -- 45,000 $28,119
1994 $159,500 $122,129 -- $25,294
Linda G. Moulds(5)........... 1996 $101,200 $135,928 -- $15,423
Vice President, Controller
and Secretary 1995 $101,200 -- 25,000 $22,628
1994 $101,200 $ 77,487 -- $25,294
</TABLE>
- --------
(1) Includes amounts earned but deferred into the Company's 401(k) plan at the
election of the executive.
(2) Under the Company's Executive Performance Bonus Pool Program, senior
executives share in the performance bonus pool which is equal to 5% of the
Company's earnings before taxes and bonuses. In 1995,
13
<PAGE>
no bonus was paid because the Company's pre-tax, pre-bonus earnings did not
exceed a specified minimum threshold. See "Compensation Committee Report to
Stockholders--The Executive Performance Bonus Pool Program-Tied To
Earnings."
(3) Options by Number of Shares for 1995 represents the maximum total number
of shares as to which the named optionees were granted 1995 Performance-
Based Contingent Stock Options during 1995, including all shares that vest
only if the Company achieves the performance levels specified in those
options. Upon grant, 20% of the 1995 options vested and an additional 27%
vested in 1996 as a result of the Company meeting its goals; approximately
53% of such 1995 option grants have not vested as of March 3, 1997. See
"Compensation Committee Report to Stockholders--Long-Term Incentives."
(4) Consists of the Company's matching payments under its 401(k) plan and the
dollar value at year end of shares earned under the Company's Employee
Stock Ownership Plan ("ESOP"). The amounts under these two plans in 1996
were $7,500 and $7,923, respectively for each of Mr. Herbert, Ms. August-
deWilde, Mr. Newton and Ms. Moulds. The amounts under these two plans in
1995 were $7,500 and $20,619, respectively, for each of Mr. Herbert, Ms.
August-deWilde, and Mr. Newton; and $6,038 and $16,590 for Ms. Moulds. The
amounts under these two plans in 1994 were $7,500 and $17,794,
respectively for each of Mr. Herbert, Ms. August-deWilde, Mr. Newton, and
Ms. Moulds. Additionally, in 1996 all other compensation includes the
estimated dollar value of the benefit from Company paid split-dollar life
insurance premiums equal to $4,513 for Mr. Herbert, $602 for Ms. August-
deWilde, and $1,186 for Mr. Newton.
(5) Effective February 28, 1997, Linda G. Moulds resigned from her position
with the Company. Ms. Moulds will continue as a director of the Company's
subsidiary, First Republic Savings Bank. In February 1997, Ms. Moulds
exercised stock options covering 38,191 shares of common stock.
OPTION EXERCISES AND YEAR-END VALUES
None of the executive officers named in the Summary Compensation Table
exercised any stock options during the year ended December 31, 1996. The
following table presents information concerning options held at December 31,
1996 by such named executive officers.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
<TABLE>
<CAPTION>
NUMBER OF VALUE OF
UNEXERCISED UNEXERCISED IN-THE-
OPTIONS AT MONEY OPTIONS
SHARES FISCAL YEAR-END AT FISCAL YEAR-
ACQUIRED ON VALUE EXERCISABLE/ END($) EXERCISABLE/
NAME EXERCISE(#) REALIZED($) UNEXERCISABLE(1) UNEXERCISABLE(1)(2)
---- ----------- ----------- --------------- -------------------
<S> <C> <C> <C> <C>
James H. Herbert, II.... -- -- 571,210/147,805 $3,385,572/$437,110
Katherine August-
deWilde................. -- -- 244,089/64,308 $1,356,054/$191,123
Willis H. Newton, Jr.... -- -- 96,181/33,689 $ 449,703/$105,324
Linda G. Moulds......... -- -- 70,318/19,395 $ 385,947/$ 59,809
</TABLE>
- --------
(1) The only unexercisable options outstanding at December 31, 1996 were the
unvested 1995 Performance-Based Contingent Stock Options discussed above
and certain 1992 Performance-Based Contingent Stock Options discussed
below under "Compensation Committee Report to Stockholders--Long-Term
Incentives."
(2) Based upon fair market value of the Company's Common Stock at December 31,
1996.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
The following performance graph depicts the value of investment (change in
the stock price plus reinvested dividends) for each monthly period from
January 1, 1992 to December 31, 1996 for the Company, the S&P 500 and a group
of peer institutions whose investment has been weighted based on market
capitalization (price times shares outstanding). Companies in the peer group
are as follows: Bay View Capital Corp., California Financial
14
<PAGE>
Holding Corp., Citadel Holding Corp., Coast Savings Financial, Inc., Downey
Savings & Loan Association, FirstFed Financial Corp., SFFed Corp., and
Westcorp, Inc. These companies are publicly traded holding companies of
California-based savings and loan institutions and have been selected by
senior management, with assistance from an independent party, based on
similarities in geographic location, asset size and type of business activity.
The stock performance graph assumes $100 invested on January 1, 1992 in First
Republic Common Stock, the S&P 500 and the group of peer institutions. There
has been no change in either index used in this graph from those presented in
the Company's proxy statements for 1996, 1995 or 1994, except that SFFed Corp.
was removed for the 1996 calendar year due to its acquisition.
The historical stock prices shown in the graph are not necessarily
indicative of future price performance.
FIRST REPUBLIC BANCORP INC.
STOCK PRICE PERFORMANCE WITH DIVIDEND REINVESTED
LOGO
COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN
AMONG FIRST REPUBLIC
S&P 500 INDEX AND INDUSTRY GROUP
PERFORMANCE GRAPH APPEARS HERE
<TABLE>
<CAPTION>
Measurement Period FIRST S&P INDUSTRY
(Fiscal Year Covered) REPUBLIC 500 INDEX GROUP
- --------------------- -------- --------- ----------
<S> <C> <C> <C>
Measurement Pt-12/31/1991 $100.00 $100.00 $100.00
87.50 98.14 103.54
90.28 99.41 115.74
94.44 97.47 113.38
84.72 100.34 108.92
81.25 100.83 114.13
79.86 99.33 108.59
85.41 103.39 104.37
75.00 101.27 90.94
69.44 102.46 80.97
61.11 102.81 84.04
65.28 106.31 90.89
FYE 12/31/1992 $ 63.19 $107.62 $100.64
70.83 108.52 121.25
77.25 110.00 127.01
74.39 112.32 126.72
67.95 109.60 107.90
71.53 112.53 108.96
74.39 112.86 111.83
73.67 112.41 117.12
77.96 116.68 126.90
93.70 115.78 135.47
87.98 118.18 133.37
82.97 117.05 117.74
FYE 12/31/1993 $ 81.54 $118.46 $118.00
89.41 122.49 113.31
93.56 119.17 111.33
86.20 113.97 105.69
77.36 115.43 109.81
81.78 117.33 120.05
85.46 114.45 125.90
81.04 118.21 123.57
86.20 123.06 127.26
78.83 120.05 124.10
73.67 122.75 111.76
61.88 118.28 97.59
FYE 12/31/1994 $ 66.31 $120.03 $ 97.29
59.67 123.14 97.47
61.15 127.94 109.14
65.57 131.72 115.28
71.46 135.60 131.33
77.36 141.02 134.81
75.15 144.29 139.64
74.41 149.08 148.13
81.04 149.45 176.30
76.62 155.76 169.04
72.94 155.20 163.05
66.31 162.01 179.52
FYE 12/31/1995 $ 77.36 $165.13 $184.55
78.83 170.76 174.64
76.62 172.34 179.28
72.20 174.00 187.84
86.93 176.56 188.71
87.67 181.12 191.99
90.62 181.81 192.00
75.15 173.77 192.74
78.83 177.44 205.52
92.09 187.43 210.87
90.62 192.59 224.53
105.35 207.15 239.34
FYE 12/31/1996 $ 98.72 $203.05 $236.85
</TABLE>
COMPENSATION COMMITTEE REPORT TO STOCKHOLDERS
The Compensation Committee of the Board of Directors (the "Compensation
Committee") consists of Mr. Richard Cox-Johnson, Mr. Barrant V. Merrill, and
Mr. James F. Joy, none of whom are currently officers or employees of the
Company. The Compensation Committee is responsible for setting and
administering the Company's policies governing senior executive compensation,
subject to approval by the Board of the Directors of the Company. Mr. Joy is a
trustee for the Company's Employee Benefit Plans, including its Employee Stock
Ownership Plan ("ESOP"), its Employee Stock Option Plan, and its Employee
Stock Purchase Plan. The Compensation Committee evaluates the performance of
the senior executives and determines compensation policies, programs, and
levels for the senior executive officers. The full Board of Directors reviews
the Compensation Committee's recommendations regarding the compensation of
executive officers.
15
<PAGE>
COMPENSATION PHILOSOPHY
The Compensation Committee's compensation philosophy is based upon the
belief that executive compensation should strongly reflect the achievement of
results as measured by key indicators of Company performance, including both
short term and longer term. The Compensation Committee has developed executive
compensation programs designed to incentivize and reward executives for their
contribution to Company performance that creates value for stockholders. The
Company has adopted an Executive Bonus Pool Program that ties annual cash
bonus awards to the Company's annual earnings.
Since May 1992, the Company's executives also have participated in a long-
term incentive program under which Performance-Based Contingent Stock Options
are directly linked to significant, targeted increases in the Company's
tangible book value per share.
The Compensation Committee believes that earnings growth and increases in
tangible book value per share are the primary determinants in creating value
for stockholders over time.
The Company's executive compensation is based upon the following goals and
policies:
. A significant portion of executive compensation should be incentive
compensation that is directly linked to the Company's annual performance.
. Incentive compensation should be based on measures of Company performance
that are most meaningfully related to the creation of value for
stockholders, specifically the level of earnings and tangible book value
per share, over time.
. Compensation programs should support the long term strategic goals and
objectives of the Company.
. Compensation programs should incentivize and reward individuals for
outstanding contributions to the Company's success.
. Short-term and long-term compensation play a critical role in attracting,
retaining and motivating well qualified, performance-orientated executives
who function as a team.
In addition, the Compensation Committee believes that executive compensation
is intended to reward the Company's senior executives for continuing efforts
to build a high-quality, customer driven, stable banking institution. Since
the founding of the Company in 1985, First Republic Savings Bank, the
operating subsidiary, has become the 29th largest financial institution in
California and Nevada. Over the past five years, including difficult and
recessionary economic conditions, the Company has grown substantially while
maintaining asset-quality and capital strength levels that exceed industry
standards.
The Company's earnings for 1996 increased significantly from the prior
year's earnings which were adversely affected by the continuing recession in
California, the lingering effects of the 1994 Northridge earthquake on the
Company's multifamily loan portfolio in Los Angeles and the delayed effects of
rapidly rising interest rates. In 1996, the Company experienced an improved
level of asset quality, higher loan originations, expansion of the deposit
franchise and sound core earnings.
In 1996, the Company achieved the following results:
. Total assets exceeded $2.1 billion, an increase of 13% for the year.
. Net income of $12.5 million was a new record for the Company, more than
ten times 1995 net income.
. Tangible book value per share increased by $1.70 during the year to
$16.46 at December 31, 1996. This level represents a 72% increase
achieved over the past five years or a compounded annual growth rate of
11.4% after taxes.
. Total capital passed $204 million, or 14.8% of risk-adjusted assets and
well above regulatory requirements.
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. Loan originations increased 45% to $848 million in 1996.
. Customer deposits grew 19% to $1.35 billion, reflecting an expanding
deposit franchise, which now includes thirteen branch offices in four
major metropolitan markets.
. The Company completed the merger of its two thrift and loan subsidiaries.
. Average assets per full-time employee at the end of 1996 were $12.9
million.
. Nonaccruing loans and REO at December 31, 1996 declined 33% from mid-year
levels and represented only 1.32% of total assets.
. General and administrative expenses for 1996, as a percentage of assets,
remained at an efficiently low level of 1.17%.
The Compensation Committee believes that since inception, the Company has
relied heavily on a team of highly-motivated senior executives to produce
results. The Compensation Committee further believes that the Company's
emphasis on high quality customer service, cost-efficient operations, combined
with capital strength and prudent risk management will continue to require
significant efforts by its senior executives, and that those efforts are a
major contributing factor to the Company's success. The results produced by the
senior executives have been achieved during a period of significant uncertainty
and risk in the savings and loan and banking industries and recent difficult
and recessionary economic conditions and natural disasters in the Company's
California markets. The Company's compensation policies are intended to
encourage superior efforts by its executives.
The Company's executive compensation consists primarily of three components,
which taken together are intended to implement the Compensation Committee's
overall compensation philosophy.
BASE SALARY
Base salaries for executives are reviewed by the Compensation Committee on an
annual basis. There has been no increase in base salary for any of the
executive officers named in the Summary Compensation Table, including the
President and Chief Executive Officer (the "President and CEO"), since January
1994. In October 1996, the Compensation Committee decided that the Company's
four senior executives will receive an increase in base salary of approximately
8.5% for 1997, representing a cost of living adjustment for the effects of
inflation over the prior three years. The last prior increase in base salaries
was approved by the Compensation Committee in October 1993 for the 1994 fiscal
year. Additionally, as a result of her promotion to Chief Operating Officer of
the Company, Ms. August-deWilde has received an incremental raise in her base
salary for 1997 of approximately 15%.
Except for the inflationary and promotion-related adjustments described
above, the determination that no increase in base salary would be made in 1997
over the base salary levels established for 1994 to 1996 reflects the
Compensation Committee's belief that incentive compensation directly tied to
Company performance should continue to constitute a significant portion of each
executive's total compensation (approximately 57% during 1996 and 43% during
1994).
Base salaries for the executive officers named in the Summary Compensation
Table, including the President and CEO, have been established at levels that
are competitive with salaries for executives performing similar duties for
banking and thrift institutions of comparable size. For the purpose of
establishing these levels, the Compensation Committee has compared the Company
to a self-selected group of companies with generally similar characteristics.
The comparison group is subject to change as the Company or its competitors
change their focus, merge or are acquired, or as new competitors emerge.
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THE EXECUTIVE BONUS POOL PROGRAM-TIED TO EARNINGS
The Executive Bonus Pool Program was designed in 1990 to reflect the
Compensation Committee's belief that maximizing earnings contributes
significantly to stockholder value. Accordingly, the plan is funded from a
pre-set portion of the Company's earnings before taxes and bonuses adjusted
for loan loss experience. The bonus payments are based upon earnings and all
actual loan losses directly reduce the amount of the bonuses, thereby creating
a very direct incentive for senior executives to work to maintain asset
quality. The pool has been set at 5% of pre-tax, pre-bonus earnings after all
loan losses and reserves. Individual bonus payments for senior executives are
based upon relative base salary levels. Also under the bonus program, in
effect from 1990 through 1995, no bonus was paid unless pre-tax, pre-bonus
earnings exceeded a specified minimum threshold.
The threshold earnings level was established prior to the beginning of each
fiscal year and was $9,000,000 for 1994. For 1995, the threshold earnings
level was increased to $10,000,000. In 1995, the Company's pretax earnings
were below the minimum threshold level, primarily due to the lingering effects
of the Northridge earthquake and the delayed effects of the rapid rise in
interest rates which occurred in 1994 but adversely impacted the Company's net
interest income in 1995. Therefore, no amounts were earned under the Executive
Bonus Pool Program and no cash compensation other than base salary was paid to
the executive officers named in the Summary Compensation Table.
In the fall of 1995, the Compensation Committee engaged the independent
consulting firm of Deloitte & Touche to review the Company's Executive Bonus
Pool Program in comparison to peer group companies. Following this review,
Deloitte & Touche recommended modifications to the Company's program. As a
result of this process, the Compensation Committee recommended and the Board
of Directors adopted certain changes to the Executive Bonus Pool Program for
1996, 1997 and future years. The pool will be retained as 5% of pre-tax, pre-
bonus earnings; however, the minimum threshold has been eliminated, allowing
for the payment of some bonus at various levels of results. Additionally, the
pool has been divided into three independently measured components. For 1996
and 1997, 65% of the bonus pool is based on pretax earnings, 20% is based on
meeting an asset quality standard and 15% is based on a subjective assessment
to be determined by the Board. If nonperforming loans and REO exceed 2.50% of
total assets or $50 million on average for each quarter-end, the asset quality
measures will not be met. If, in the view of the Board, the Company does not
achieve the goals, objectives, and standards sufficient to meet the subjective
assessment, then up to 15% of the bonus pool will not be earned. The
Compensation Committee determined that the quantitative asset quality standard
was met for 1996 and that the Company exceeded the criteria established for
the subjective component; accordingly, 100% of the executive bonus pool for
1996 was paid to the four executive officers named in the Summary Compensation
Table.
The Compensation Committee believes that the Company's Executive Bonus Pool
Program, including the modifications adopted for 1996 and future years,
provides an excellent and direct link between the value created for
stockholders and the incentive compensation to be paid to executives.
LONG-TERM INCENTIVES
Long-term incentive compensation is provided through grants of stock options
to the four senior executives and others. This component of compensation is
intended to retain and motivate executives to improve long-term results and
ultimately tangible book value and stock performance. Stock options have been
granted at or above the market price of the Company's Common Stock on the date
of grant and will only have value if the Company's stock price increases.
The four executive officers named in the Summary Compensation Table are
eligible to receive stock options under the Company's Stock Option Plan, first
adopted in 1985. Since inception of that plan, an aggregate of 803,797 options
have been granted to employees, including 278,486 to the President and CEO and
154,889 to the remaining three named executive officers. Since May 1991, the
Company has not awarded any options to such named executive officers under the
Stock Option Plan.
18
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In 1991, the Company granted non-qualified, ten-year stock options covering
53,045 shares of the Company's common stock to the President and CEO and
covering an aggregate of an additional 53,045 shares to the other three named
executive officers.
In May 1992, the Compensation Committee approved the creation of non-
qualified, ten-year, Performance-Based Contingent Stock Options (the "1992
Performance-Based Contingent Stock Options") covering an aggregate of 477,405
shares of the Common Stock. Options covering a total of 424,360 shares of the
Common Stock were granted on May 7, 1992 to the named executive officers at an
exercise price of $14.84 per share, the closing price of the Company's Common
Stock on the date of grant, including options on 249,311 shares granted to the
President and CEO.
One of the features of the 1992 Performance-Based Contingent Stock Options
was the incentive vesting provision, which operated so that the options may be
exercised only to the extent that they have vested. The options vested as to
20% of the underlying shares immediately upon grant, but provide that the
vesting as to the remaining 80% of the underlying shares occurs upon the
achievement of significant, targeted annual increases in the Company's net
tangible book value per share on or before December 31, 1995, or upon the
occurrence of certain events prior to May 2002 relating to extraordinary
transactions, including a merger or consolidation of the Company, a sale,
lease, exchange or other disposition of all or substantially all of the assets
of the company, a liquidation or dissolution of the Company, or the
acquisition of, or offer for, 25% or more of the Company's issued and
outstanding Common Stock by any person or group. As a result of the Company
achieving an actual tangible book value per share in excess of the targeted
amounts at December 31, 1992, 1993, and 1994, 76.9% of the 1992 Performance-
Based Contingent Stock Options were vested as of February 15, 1995. Because
the final target amount was not achieved by December 31, 1995, 97,943 shares
of 1992 Performance-Based Contingent Stock Options granted to the Company's
named executive officers remain unvested, subject to the occurrence of certain
events discussed above.
In May 1995, the Company's stockholders approved the 1995 Performance-Based
Contingent Stock Option Plan covering 350,000 shares for senior executives and
management of the Company for the years 1996 through 1998. The 1995
Performance-Based Contingent Stock Options are designed to continue the long-
term, performance-based incentives to the Company's senior executives and
other key members of management which was initiated with the 1992 Performance-
Based Contingent Stock Options.
The 1995 Performance-Based Contingent Stock Options vested as to 20% of the
underlying shares upon grant, but will only vest as to the remaining 80% of
the underlying shares upon the achievement of significant, targeted annual
increases in the Company's net tangible book value per share on or before
December 31, 1998, or upon the occurrence of certain events relating to
extraordinary transactions, including a merger or consolidation of the
Company, a sale, lease, exchange or other disposition of all or substantially
all of the assets of the company, a liquidation or dissolution of the Company,
or the acquisition of, or offer for, 25% or more of the Company's issued and
outstanding Common Stock by any person or group. The 1995 Performance-Based
Contingent Stock Options were granted on December 31, 1995 with an exercise
price of $13.125, the closing price of the Company's stock on December 29,
1995, the last business day of the year. Vesting of 80% of the options granted
under the 1995 Plan is contingent upon the future achievement of a minimum 11%
per annum, after tax growth in tangible book value per share for each of the
years ending December 31, 1996, 1997 and 1998. Each of the target amounts is
subject to adjustment to eliminate the dilutive effect to book value per share
that would result from the conversion of the Company's 7 1/4% Debentures. If
the target amount is achieved or surpassed, contingent option shares vest at a
pro-rata amount based upon the percentage increase achieved toward the final
target amount. As a result of the Company achieving an actual tangible book
value per share of $16.46 at December 31, 1996 (an increase of 11.5% since
December 31, 1995), and in accordance with adjustments provided for in the
1995 Performance-Based Contingent Stock Option agreements, the options vested
as to an additional 26.9% of the underlying shares on February 15, 1997.
In order for the Company's management to achieve complete vesting under the
1995 Performance-Based Contingent Stock Options, the Company's tangible book
value per share must increase at least 36.7% over the
19
<PAGE>
three year period covered. Any 1995 Performance-Based Contingent Stock Options
shares that have not vested in a prior year may vest in a subsequent year if
the cumulative targeted amount for that subsequent year, through year-end
1998, is achieved or surpassed. If the final target amount is not achieved by
December 31, 1998, then any shares that have not vested in 1996 or 1997 will
remain unvested, unless one of the above-described extraordinary events occurs
prior to the date of option expiration.
As of December 31, 1996, the 350,000 shares of 1995 Performance-Based
Contingent Stock Options had been granted as follows: James H. Herbert, II-
170,000 shares; Katherine August-deWilde-75,000 shares; Willis H. Newton, Jr.-
45,000 shares; Linda G. Moulds-25,000 shares; other key members of management-
35,000 shares.
The Company's Performance-Based Contingent Stock Options Programs are
designed to create an incentive for the senior executives to produce
substantial growth in the Company's tangible book value per share. The
Compensation Committee believes that because tangible book value per share is
a key determinant of stockholder value in financial institution valuations,
this Contingent Stock Options program creates an extremely strong correlation
between results for stockholders and executive compensation because the
executives' reward depends directly upon both growth in book value per share
and growth in share price. The targeted growth rates of tangible book value
per share compare very favorably with recent results for banks generally and
with California thrift institutions in particular. In addition, by providing
for more rapid vesting if results can be achieved sooner than the targeted
goals, both executives and stockholders could receive value on an accelerated
basis.
All employees of the Company who have been employed by the Company for more
than six months, including each of the four executive officers named in the
Summary Compensation Table, participate in the Company's Employee Stock
Ownership Plan (the "ESOP") and are eligible to participate in the Company's
401(k) Plan. Under the ESOP, employees are allocated shares of the Company's
Common Stock each year, in a pro-rata amount based upon the ratio of the
employees' salary to the aggregate amount of salaries paid by the Company to
all employees in that year. The number of shares that were allocated in 1996
to the four executive officers named in the Summary Compensation Table were
computed in accordance with Federal regulations that govern the ESOP and the
401(k) Plan. Such regulations establish an annual limit of $30,000 on the sum
of the cost of ESOP shares allocated, the amount of any voluntary employee
deferred compensation contributed to the 401(k) Plan and the amount of the
Company match under the 401(k) Plan. Shares earned under the ESOP are vested
after a five-year period of employment. The Compensation Committee believes
that participation by the named executive officers in the ESOP provides
additional long-term incentive for the creation of stockholder value.
In October 1995, the non-management directors of First Republic, upon
recommendation by the Board's Compensation Committee, unanimously approved the
adoption of a split dollar life insurance plan (the "insurance plan") for
certain key members of management, including each of the four executives named
in the Summary Compensation Table. Under the insurance plan, the Company pays
life insurance premiums for selected employees and retains the cash value of
the insurance policy as collateral. Each employee will receive the benefit of
having an insurance policy in place and will pay income tax each year on a
portion of the premium for this insurance. In April 1996, 11 employees
(including Mr. Herbert, Ms. August-deWilde and Mr. Newton) completed the
application process for the insurance policies and the Company made the first
annual insurance payment which totalled $210,000 for all policies in the
insurance plan. At December 31, 1996, the aggregate amount of the cash
surrender value of all insurance policies was approximately equal to the total
premiums paid by the Company. The Company believes that the long-term benefits
provided by the insurance plan will assist in the attraction and retention of
highly qualified management personnel.
On February 4, 1997, the Compensation Committee recommended for Board of
Director approval the 1997 Restricted Stock Plan, a Change in Control
Severance Benefits Plan Agreement ("the Severance Agreement") and a Retention
Bonus and Insurance Benefits Plan Agreement. The Restricted Stock Plan, which
is more fully described in Proposal 3 to this Proxy Statement, is subject to
stockholder approval and is designed to grant restricted shares of Common
Stock to holders of most of the Company's nonqualified stock options who have
20
<PAGE>
given up certain tax pass-through rights in their option agreements. Under the
Restricted Stock Plan, which was approved by the Company's Board of Directors
on February 5, 1997, the directors of the Company and its subsidiary and
certain executive and other officers receive an aggregate of 233,691 shares of
restricted Common Stock. These restricted shares vest 20% per year beginning
February 28, 1998 and for the next four February 28th's thereafter, and
immediately upon certain conditions, including death, disability, failure of a
director to be reelected or upon a Change in Control of the Company.
One of the main assets of a financial institution is the people who perform
the personalized service offered to customers. On February 5, 1997, the Board
of Directors approved a Severance Agreement covering all Company employees in
the event of a Change in Control. Under the Severance Agreement, an amount
varying from 4 weeks to 28 weeks of current pay depending upon years of
Company service would be paid to hourly employees and an amount varying from 9
months to two years of total annual compensation for the most recent year
would be paid to exempt salaried employees, including the executives named in
the Compensation Table, solely in the event of a Change in Control and
provided that an employee's employment is terminated, as defined in the
Severance Agreement, within 12 months following such Change in Control. The
Severance Agreement also provides that, upon a Change in Control and without
regard to whether a termination of employment occurs, all loans from the
Company to an employee pursuant to the insurance plan will be deemed paid in
full and shares in the Company's ESOP shall become fully vested (to the extent
not already vested). The Board of Directors also adopted a Retention Bonus and
Insurance Benefits Plan Agreement under which all employees, except certain
members of executive management, would receive a bonus of 15% of their annual
compensation provided that the employee continues employment for at least four
months after a change in control. The excluded executives would be guaranteed
continuous health insurance and certain other current insurance-related
benefits until age 65, regardless of their future employment status, upon a
Change in Control.
Additionally, the Compensation Committee recommended and the Board of
Directors has approved an amendment to most of the Company's outstanding non-
qualified stock option agreements ("the Amendment"). The Amendment provides
the option holder with the ability to transfer the option to immediate family
members or entities solely owned by such family members and, in the event of a
Change in Control (as defined), eliminates the limitations on exercisability
under the option agreements which would otherwise apply upon termination or
other cessation of employment or service as a director (other than for cause).
TOTAL COMPENSATION
For the four corporate executive officers named in the Summary Compensation
Table, including the President and CEO, 41% of the total cash compensation on
average for the past three years was paid under the Executive Bonus Pool
Program and is therefore directly tied to the Company's performance. The
Compensation Committee believes that, together with the potential future value
of all of their stock options, a very significant portion of each of such
executive officers' compensation, including the President and CEO's
compensation, is from incentive based compensation plans which the
Compensation Committee believes are linked directly to stockholder value
creation.
A publicly held corporation may not, subject to limited exceptions, deduct
for federal income tax purposes certain compensation paid to certain
executives in excess of $1 million in any taxable year (the "Deduction
Limitation"). It is not expected that compensation to executives of the
Company will exceed the Deduction Limitation in the foreseeable future
(except, possibly, with respect to the Company's President and Chief Executive
Officer), and therefore, the Company generally has not attempted to qualify
any of its existing compensation plans, programs and arrangements for any of
the exceptions to the Deduction Limitation. However, even though it is not
expected that compensation to executives of the Company will exceed the
Deduction Limitation in the foreseeable future, the Company has endeavored to
qualify options granted under the amendment and restatement of the Company's
Stock Option Plan, and certain previously granted options, for such an
exception.
February 28, 1997
COMPENSATION COMMITTEE
Richard Cox-Johnson James F. Joy Barrant V. Merrill
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COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
As noted above, the Company's Compensation Committee consists of Mr. Cox-
Johnson, Mr. Joy, and Mr. Merrill. Mr. Joy serves on the Compensation
Committee of Sylvania Lighting International.
STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the 1998 Annual
Meeting of Stockholders must be received by First Republic not later than
November 14, 1997. Any such proposal should be communicated in writing to the
Secretary of First Republic at the address set forth on the first page of this
Proxy Statement.
OTHER MATTERS
The Board of Directors is not aware of any matter that may properly be
presented for action at the Annual Meeting other than the matters set forth in
the accompanying Notice of Annual Meeting. Should any business not specified
in the accompanying Notice of Annual Meeting of Stockholders properly come
before the Annual Meeting, the persons voting the proxies solicited by
Management will vote thereon in accordance with their best judgment.
A COPY OF THE COMPANY'S FORM 10-K (FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION) IS AVAILABLE WITHOUT CHARGE TO ANY STOCKHOLDER. REQUESTS SHOULD BE
DIRECTED TO THE CHIEF FINANCIAL OFFICER, WILLIS H. NEWTON, JR., AT FIRST
REPUBLIC BANCORP INC., 388 MARKET STREET, SAN FRANCISCO, CALIFORNIA 94111,
TELEPHONE NO. (415) 392-1400.
By Order of the Board of Directors
/s/ James H. Herbert, II, President
------------------------------------
James H. Herbert, II, President
San Francisco, California
March 14, 1997
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LOGO
Printed on Recycled Paper
<PAGE>
EXHIBIT A
FIRST REPUBLIC BANCORP INC.
AMENDED AND RESTATED STOCK OPTION PLAN
FIRST REPUBLIC BANCORP INC., a corporation organized under the laws of
the State of Delaware, hereby adopts this Amended and Restated Stock Option
Plan.
SECTION 1. PURPOSE
The Plan is an amendment, restatement and continuation of the 1985
Stock Option Plan. The purpose of the Plan is to authorize the grant to Key
Employees of the Company, or any Parent or Subsidiary thereof, of (i) Non-
Qualified Stock Options and (ii) Incentive Stock Options and thus benefit the
Company by giving such persons a greater personal interest in the success of the
enterprise and an added incentive to continue and advance in their employment or
other service to the Company and its Parents and Subsidiaries.
SECTION 2. DEFINITIONS
The following terms, when used in the Plan, shall have the meanings
set forth in this Section 2:
2.1 BOARD: The Board of Directors of the Company.
-----
2.2 CODE: The Internal Revenue Code of 1986, as amended.
----
2.3 COMMITTEE: Such committee as shall be appointed by the Board
---------
pursuant to the provisions of Section 10.1 hereof.
2.4 COMMON STOCK: The Common Stock of the Company, par value $.01
------------
per share, or such other class of shares or other securities as may be
applicable pursuant to the provisions of Section 4 hereof.
2.5 COMPANY: First Republic Bancorp Inc., a Delaware corporation, or
-------
any successor thereto by way of merger, transfer of assets or otherwise.
2.6 DISABILITY: Inability of an individual to perform the services
----------
normally rendered by such individual due to any physical or mental impairment
that can be expected either to persist for a continuous period for 12 months or
more or to result in death, as determined by the Committee on the basis of
appropriate medical evidence.
2.7 FAIR MARKET VALUE: As applied to the Common Stock on any day,
-----------------
the closing market price of such stock on the last preceding day, if such stock
is listed on a
<PAGE>
national securities exchange; the average of the bid and ask
prices on the last preceding day, if such stock is traded over-the-counter; or,
if not so listed or traded, such per share price as the Committee shall in good
faith determine, but in no event less than the book value per share of the
Company on the last preceding month end.
2.8 INCENTIVE STOCK OPTION: An option to purchase shares of Common
----------------------
Stock as set forth in Section 6 hereof.
2.9 KEY EMPLOYEE: Any employee of the Company or of a Parent or
------------
Subsidiary, including an officer or director who is also an employee, who in the
judgment of the Committee can contribute significantly to the growth and
successful operations of the Company or a Parent or Subsidiary.
2.10 NON-QUALIFIED STOCK OPTION: An option to purchase shares of Com
--------------------------
mon Stock as set forth in Section 5 hereof.
2.11 NORMAL RETIREMENT DATE: The first day of the calendar month
----------------------
next following the individual's 65th birthday or, if different, the normal
retirement date as defined in any retirement plan for salaried employees which
is now in effect or which the Company may hereafter put into effect.
2.12 OPTIONEE: A person to whom the Non-Qualified Stock Option or
--------
Incentive Stock Option has been granted under the Plan.
2.13 PARENT: A corporation which owns, directly or indirectly, at
------
least 50% of the issued and outstanding voting stock of the Company.
2.14 PLAN: The Amended and Restated Stock Option Plan, as amended
----
from time to time.
2.15 SERVICE: Employment by the Company, a Parent or Subsidiary.
-------
2.16 STOCK INCENTIVE: A stock incentive granted under the Plan in
---------------
one of the forms provided in Section 3 hereof.
2.17 SUBSIDIARY: A corporation at least 50% of whose issued and out
----------
standing voting stock is owned, directly or indirectly, by the Company.
2.18 VOLUNTARY TERMINATION: Termination of Service by an employee on
---------------------
his own volition.
SECTION 3. GRANTS OF STOCK INCENTIVES
-2-
<PAGE>
3.1 Subject to the provisions set forth in the Plan, the Committee
may at any time, or from time to time, grant Stock Incentives under the Plan to,
and only to, Key Employees.
3.2 Stock Incentives may be in the following forms:
(a) Non-Qualified Stock Options, in accordance with Section 5
hereof, or
(b) Incentive Stock Options, in accordance with Section 6
hereof.
SECTION 4. STOCK SUBJECT TO THE PLAN
4.1 Subject to such adjustments as are provided in Section 8 hereof,
the aggregate number of shares of Common Stock which may be made the subject of
Stock Incentives granted under the Plan shall not exceed 100,000. Charges
against such aggregate number are governed by the provisions of Sections 4.3,
5.10 and 7.4 hereof.
4.2 Shares of Common Stock issued upon the exercise of Stock
Incentives may be either authorized but unissued shares or Treasury shares.
4.3 If any Stock Incentive shall terminate without exercise, in whole
or in part, then the shares of Common Stock as to which such Stock Incentive was
not exercised shall no longer be charged against the aggregate limitation in
Section 4.1 and may again be made subject to the grant of Stock Incentives.
SECTION 5. NON-QUALIFIED STOCK OPTIONS
Stock Incentives in the form of Non-Qualified Stock Options shall be
subject to the following provisions:
5.1 The exercise price per share specified in a Stock Incentive shall
be not less than the Fair Market Value at the time of the grant of the Stock
Incentive.
5.2 Subject to the provisions of Sections 5.6 and 11.1 (relating to
absence on leave) hereof, a Stock Incentive granted under the Plan may not be
exercised unless, at the time of such exercise, the Optionee shall be in the
employ of the Company, a Parent or a Subsidiary.
5.3 Each Stock Incentive shall expire at such time as the Committee
may determine at the time that the Stock Incentive is granted, but not later
than ten years and one month from the date of grant or, if earlier, the
employee's Normal Retirement Date.
5.4 Each Stock Incentive shall be exercised solely by the person to
whom granted (or by his guardian or legal representative), except as provided in
Sections 5.6(a) and 11.7.
5.5 After completion of any required period of employment or
association specified in a particular Stock Incentive, the Stock Incentive may
be exercised, in whole or in part, at any time or from time to time during the
balance of the term of the Stock Incentive
-3-
<PAGE>
(including provisions regarding exercise in installments). The minimum number
of shares of Common Stock as to which any Stock Incentive shall be exercisable
is ten unless the number of shares purchasable thereunder is less than ten.
5.6 Subject to the exceptions listed in (a), (b), (c) and (d)
immediately below, an Optionee whose Service terminates may exercise his Stock
Incentive on the date of such termination or at any time within the one month
period next succeeding such termination (but in no event after the date of
expiration of his Stock Incentive) as to any or all shares of Common Stock
purchasable on the date of his termination of Service. In the event of (a)
death, (b) Disability, (c) termination of the individual's Service "for cause,"
or (d) voluntary termination by an individual of his Service to the Company, the
final exercise dates for Stock Incentives shall be determined as follows:
(a) If the Optionee shall die while in the Service of the
Company, a Parent or a Subsidiary or within three months after
termination of such Service, any Stock Incentive previously granted to
him may be exercised by his executor or administrator or the person or
persons to whom his rights under the Stock Incentive are transferred
by will or by the laws of descent and distribution within, but only
within, the period of twelve months next succeeding the date of his
death (but in no event after the date of expiration of the Stock
Incentive) and then only as and to the extent that the Optionee was
entitled to exercise the Stock Incentive on the date next succeeding
the date he terminated Service.
(b) If an Optionee's Service terminates prior to retirement by
reason of Disability, the Optionee may exercise his Stock Incentive
on, or any time within the 12 months next succeeding, the date of such
termination by Disability (but in no event after the date of
expiration of the Stock Incentive) and then only as and to the extent
that the Optionee was entitled to exercise the Stock Incentive at the
date he terminated Service by reason of Disability.
(c) Except as otherwise provided for in a Stock Incentive granted
to an Optionee, if an Optionee's Service to the Company, its Parent or
its Subsidiaries terminates "for cause," all Stock Incentives held by
such Optionee shall automatically expire. For this purpose, an
Optionee's Service shall be considered terminated upon receipt of
written notice of termination. If an Optionee is not available for
service of notice, then an Optionee's Service shall be considered
terminated upon posting by registered mail of such notice. Termination
"for cause" shall be determined by the Board in its sole discretion
and shall include termination for malfeasance or gross misfeasance in
the performance of duties or conviction for illegal activity in
connection therewith or any conduct detrimental to the interests of
the Company or any affiliate, or the definition of "for cause" in a
written employment agreement, if applicable, by which the Optionee is
employed, and in any event, a determination of the Board with respect
thereto shall be final, binding and conclusive.
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<PAGE>
(d) Except as otherwise provided for in a Stock Incentive granted
to an Optionee, if the Optionee voluntarily terminates his Service to
the Company, all Stock Incentives held by such Optionee shall
automatically expire upon the date of termination. For this purpose,
the date of termination shall be considered the date written notice of
termination is given by the Optionee to the Company.
5.7 A person electing to exercise a Stock Incentive shall give
written notice to the Company of such election and of the number of shares of
Common Stock to which such election relates.
5.8 The Committee may impose such conditions on the grant and/or
exercise of any Stock Incentives as may be required to satisfy the requirements
of Rule 16b-3, promulgated by the Securities and Exchange Commission pursuant to
the Securities Exchange Act of 1934, as amended (or any successor provision in
effect at the time).
5.9 Shares of Common Stock purchased upon exercise of a Stock
Incentive shall be paid in full by one or a combination of the following
methods: in cash; by certified or cashier's check payable to the order of the
Company; in shares of Common Stock valued at Fair Market Value (as defined in
Section 2.7 hereof) at the time of exercise; or by payment of cash equal to the
par value of each share multiplied by the number of shares purchased and the
remaining proceeds by promissory note, subject to the terms and conditions as
authorized by the Committee in its discretion and as set forth in the initial
grant of the Incentive Stock Option or Non-Qualified Stock Option. The Committee
shall be precluded from authorizing terms and conditions of the promissory note
which would violate the requirements of Sections 5.1 and 6.1 hereof.
5.10 The forms of Incentive Stock Option and Non-Qualified Stock
Option may contain such additional covenants, conditions, restrictions and other
provisions as the Committee shall deem advisable. Without limiting the
foregoing, and if so authorized by the Committee, the Company may, with the
consent of the Optionee, and at any time or from time to time, cancel all or a
portion of any Stock Incentive granted under the Plan and then subject to
exercise, and discharge its obligation in respect of such Stock Incentive either
(i) by payment to the Optionee of an amount of cash equal to the excess, if any,
of the aggregate Fair Market Value, at such time, of the shares of Common Stock
subject to the portion of the Stock Incentive so canceled over the aggregate
exercise price of such shares under the terms of the Stock Incentive, (ii) by
the issuance or transfer to the Optionee of shares of Common Stock with an
aggregate Fair Market Value, at such time, equal to any such excess, or (iii) by
a combination of cash and shares of Common Stock. The number of shares subject
to the portion of the Stock Incentive so canceled shall not thereafter be
available for other grants of Stock Incentives.
5.11 Notwithstanding anything herein to the contrary, exercise of
Stock Incentives shall be subject to (i) approval of the Plan by the holders of
a majority of the outstanding
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<PAGE>
shares of voting stock of the Company, and (ii) compliance by the Company with
any applicable federal and state securities laws.
5.12 The number of shares of Common Stock that may be made the
subject of Stock Incentives granted under the Plan to any one Key Employee over
the term of the Plan from February 5, 1997, forward shall not exceed 50,000.
SECTION 6. INCENTIVE STOCK OPTIONS
6.1 Except as otherwise provided in this Section 6, Stock Incentives
in the form of Incentive Stock Options shall be subject to the same provisions
as Non-Qualified Stock Options as set forth in Section 5.1 through 5.11 hereof.
6.2 If an Incentive Stock Option is to be granted to a Key Employee
who immediately before such grant owned stock representing more than 10% of the
voting power of all classes of stock of the Company or any of its Parents or
Subsidiaries, the exercise price per share of Common Stock shall be not less
than 110% of the Fair Market Value at the time of the grant of the Incentive
Stock Option and the Incentive Stock Option shall expire not more than five
years from the date of grant.
6.3 The aggregate Fair Market Value (determined at the time the
Incentive Stock Options are granted) of the shares of Common Stock or shares of
stock of any Parent or Subsidiary of the Company with respect to which Incentive
Stock Options under the Plan or any other plan are exercisable for the first
time by any Key Employee during any calendar year shall not exceed $100,000.
6.4 Any Incentive Stock Options granted during any calendar year
which exceed the limitation set forth in Section 6.3 hereof, or which upon final
determination by the Internal Revenue Service do not for whatever reason qualify
as Incentive Stock Options under the Code, are intended by the Company to be,
and shall be, treated as and subject to the provisions for Non-Qualified Stock
Options under the Plan.
6.5 Each Incentive Stock Option shall expire at such time as the
Committee may determine at the time that such Incentive Stock Option is granted,
but not later than ten years from the date of grant or, if earlier, the
employee's Normal Retirement Date.
6.6 Incentive Stock Options granted under the Plan are intended to
qualify as "Incentive Stock Options" under Section 422 of the Code.
Accordingly, the Board, subject to
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<PAGE>
Section 13 hereof, may at any time amend or revise this Section 6 to impose or
remove such conditions on the grant, exercise or other provisions of any
unissued Incentive Stock Options as may be required to comply with Section 422
of the Code (or any successor provision in effect at the time).
SECTION 7. ALTERNATIVE SETTLEMENT METHODS
7.1 As an alternative to payment in full by the Optionee of the
option price for the number of shares of Common Stock in respect of which a
Stock Incentive is exercised as provided for under Section 5.9 hereof and the
issuance or conveyance of such shares of the Optionee, the Committee may provide
alternative settlement methods as follows:
(a) The Committee, in its discretion may provide in the initial
grant of any Stock Incentive that the Optionee may elect either of the
alternative settlement methods set forth in subsection (b) below.
(b) The alternative settlement methods are for the Optionee, upon
exercise of the Stock Incentive, to receive from the Company: (1) cash
in an amount equal to the excess of the value of one share over the
option price times the number of shares as to which the option is
exercised; or (2) the number of whole shares of Common Stock having an
aggregate value not greater than the cash amount calculated under
Section 7.1(b)(1). For purposes of determining the amount of the
alternative settlement, the value per share shall be the "Fair Market
Value" determined under Section 2.7 hereof applied as of the date of
the exercise of the option.
7.2 An election of one of the alternative settlement methods provided
for under Section 7.1(b) shall be in writing and will be binding on the Optionee
when made. The Optionee may elect to what extent the alternative settlement
method elected shall be paid in cash, in Common Stock, or partially in Common
Stock, provided that the aggregate value of the payment shall not be greater
than the cash amount calculated under Section 7.1(b)(1). No fractional shares
of Common Stock shall be issued, and the Committee shall determine whether cash
shall be paid in lieu of such fractional share interest or whether such
fractional share interest shall be eliminated.
7.3 The alternative settlement methods provided above in Section
7.1(b) shall not be available unless the cash amount calculated thereunder shall
be positive, i.e., when the value of one share shall exceed the option price per
-----
share.
7.4 The number of shares subject to the Stock Incentive as to which
the alternative settlement method is elected shall not thereafter be available
for other grants of Stock Incentives.
7.5 To the extent that the exercise of options by one of the
alternative settlement methods provided for in Section 7.1(b) results in
compensation income to the Optionee, the Company will withhold from the amount
due to the Optionee utilizing such alternative settlement method an appropriate
amount for federal, state and local taxes.
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<PAGE>
SECTION 8. ADJUSTMENT PROVISIONS
8.1 The Stock Incentives granted under the Plan shall contain such
provisions as the Committee may determine with respect to adjustments to be made
in the number and kind of shares covered by such Stock Incentives and in the
exercise price in the event of a reorganization, recapitalization, stock split,
stock dividend, combination of shares, merger, consolidation, rights offering or
any other change in the corporate structure or shares of the Company and, in the
event of any such change, in the aggregate number and kind of shares available
under the Plan shall be appropriately adjusted.
8.2 Adjustments under this Section 8 shall be made by the Board,
whose determination as to the adjustments to be made, and the extent thereof,
shall be final, binding and conclusive. No fractional shares of Common Stock
shall be issued under the Plan on account of any such adjustment.
SECTION 9. TERM
The Plan shall become effective immediately upon adoption thereof by
the Board, provided, however, that no shares of Common Stock may be issued
-------- -------
pursuant to Stock Incentives granted without, among other things, compliance
with the conditions set forth in Section 5.11 hereof. No Incentive Stock shall
be granted under the Plan after ten years from the earlier of (i) the date of
adoption of the Plan by the Board or (ii) the date the Plan is approved by the
shareholders.
SECTION 10. ADMINISTRATION
10.1 The Plan shall be administrated by a Committee of directors to
be appointed from time to time by the Board and shall consist of not fewer than
two of the then members of the Board. For purposes of grants to Key Employees
who are subject to the provisions of Section 16(b) of the Securities Exchange
Act of 1934, the Committee shall consist of the entire Board or not fewer than
two "non-employee directors" as such term is defined in Rule 16b-3, promulgated
by the Securities and Exchange Commission pursuant to the Securities Exchange
Act of 1934, as amended (or any successor provision in effect at the time).
10.2 The Committee shall select one of its members as its Chairman
and shall hold its meetings at such times and places as it shall deem advisable.
The greater of two members or one-third of the entire Committee shall constitute
a quorum, and the act of a majority of the members present shall be the act of
the Committee. Any decision or determination reduced to writing, signed by all
members of the Committee and filed with the minutes of the proceedings of the
Committee, shall be fully as effective as if made by a unanimous vote at a
meeting duly called and held. The Committee may appoint a Secretary, shall keep
minutes of its meetings and shall make such rules and regulations for the
conduct of its business and for the carrying out of the Plan as it shall deem
appropriate.
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<PAGE>
10.3 Stock Incentives under the Plan shall be granted in accordance
with the Committee's determinations pursuant to the Plan, by execution and
prompt delivery to the Optionee of instruments approved by the Committee. Any
such grant shall be effective on the date of such determination or, if later,
on the date specified in the instrument evidencing the grant.
10.4 The interpretation and construction by the Committee of any
provision of the Plan and of any Stock Incentives granted hereunder shall,
unless otherwise determined by the Board, be final, binding and conclusive on
all persons having any interest thereunder.
SECTION 11. GENERAL PROVISIONS
11.1 Absence on leave approved by an officer of the Company, a
Parent or a Subsidiary authorized to give such approval shall not be considered
an interruption or termination of Service for any purpose of the Plan, or Stock
Incentives granted here under, except that no Stock Incentives may be granted to
an employee while he is absent on leave.
11.2 Stock Incentives may be granted under the Plan from time to
time in substitution for stock options held by employees of other corporations
who are or are about to become employees of the Company, a Parent or a
Subsidiary as a result of a merger or consolidation of the employing corporation
with the Company, a Parent or a Subsidiary, or the acquisition by the Company, a
Parent or a Subsidiary of the assets of the employing corporation, or the
acquisition by the Company, a Parent or a Subsidiary of stock of the employing
corporation as the result of which it becomes a Subsidiary. The terms and
conditions of the substitute Stock Incentives so granted may vary from the terms
and conditions set forth in Sections 5 and 6 hereof to such extent as the Board
may deem appropriate to conform, in whole or in part, to the provisions of the
substituted stock options.
11.3 Nothing in the Plan or in any instrument executed pursuant
thereto shall confer upon any employee any right to continue in the Service of
the Company, a Parent or a Subsidiary.
11.4 No Optionee (individually or as a member of a group), and no
beneficiary or other person claiming under or through him, shall have any right,
title or interest in or to any shares of Common Stock allocated or reserved for
the Plan or subject to any Stock Incentive except as to such shares of Common
Stock, if any, as shall have been previously sold, issued or transferred to him.
11.5 The Company, a Parent or a Subsidiary may make such provisions
as it may deem appropriate for the withholding of any taxes which the Company, a
Parent or a Subsidiary determines it is required to withhold in connection with
any Stock Incentive.
11.6 In order to facilitate the accumulation of funds to enable him
to exercise his options, each Optionee shall have the right, if he so elects, to
direct the Company or any
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<PAGE>
Parent or Subsidiary to withhold regular amounts from his compensation and to
hold such amounts subject to the directions of the Optionee or his personal
representative. Amounts so held shall not bear interest.
11.7 No Stock Incentive or right under the Plan, contingent or
otherwise, (i) shall be assignable or subject to any encumbrance, pledge or
charge of any nature, whether by operation of law or otherwise, (ii) shall be
subject to execution, attachment or similar process or (iii) shall be
transferable other than by will or the laws of descent and distribution, and
every Stock Incentive and all rights under the Plan shall be exercisable during
the Optionee's lifetime only by him or by his guardian or legal representative.
Notwithstanding the foregoing, a Non-Qualified Stock Option may be transferred
by the Optionee to (i) the spouse, children, or grandchildren of the Optionee
("Im mediate Family Members"), (ii) a trust or trusts for the exclusive benefit
of such Immediate Family Members, (iii) a partnership in which such Immediate
Family Members are the only partners or (iv) a corporation wholly owned by such
Immediate Family Members, provided that (x) there may be no consideration paid
for any such transfer, and (y) subsequent transfers of transferred Non-Qualified
Stock Options shall be prohibited except as otherwise permitted by this Section
11.7.
11.8 Nothing in the Plan is intended to be a substitute for, or
shall preclude or limit the establishment or continuation of, any other plan,
practice or arrangement for the payment of compensation or fringe benefits to
any employee which the Company or any Parent or Subsidiary now has or may
hereafter put into effect, including without limitation any retirement, pension,
savings, thrift, insurance, death benefit, stock purchase, incentive
compensation or bonus plan.
SECTION 12. REGULATIONS AND APPROVALS
12.1 The obligation of the Company to sell shares with respect to
Stock Incentives granted under the Plan shall be subject to all applicable
laws, rules and regulations, including all applicable federal and state
securities laws, and the obtaining of all such approvals by governmental
agencies as may be deemed necessary or appropriate by the Board.
12.2 The Board may make such changes to the Plan as may be necessary
or appropriate to comply with the rules and regulations of any government
authority or to obtain tax benefits applicable to Stock Incentives.
12.3 Each Stock Incentive shall be subject to the requirement that,
if at any time the Board determines, in its sole discretion, that the listing,
registration or qualification of shares issuable pursuant to the Plan is
required by any securities exchange or under any state or federal law, or the
consent or approval of any governmental regula tory body is necessary or
desirable as a condition of, or in connection with, the grant of an option or
the issuance of shares, no Stock Incentive shall be granted or payment made or
shares issued, in whole or in part, unless listing, registration, qualification,
consent or approval has been effected or obtained free of any conditions in a
manner acceptable to the Board.
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<PAGE>
12.4 In the event that the disposition of stock acquired pursuant to
the Plan is not covered by a then current registration statement under the
Securities Act of 1933, as amended (the "Securities Act"), and is not otherwise
exempt from such registration, such shares shall be restricted against transfer
to the extent required under the Securities Act, and the Board may require any
individual receiving shares pursuant to the Plan, as a condition precedent to
receipt of such shares, to represent to the Company in writing that the shares
acquired by such individual are acquired for investment only and not with a view
to distribution and that such shares will be disposed of only if registered for
sale under the Securities Act or if there is an available exemption for such
disposition.
SECTION 13. AMENDMENT OR DISCONTINUANCE OF PLAN
13.1 The Plan may be amended by the Board at any time, provided
that, without the approval by the holders of a majority of the outstanding
shares of voting stock of the Company, no amendment shall be made which (i)
increases the aggregate number of shares of Common Stock which may be made the
subject of Stock Incentives as provided in Section 4.1 hereof, (ii) materially
increases the benefits accruing to participants under the Plan, (iii) modifies
the requirements as to eligibility for participation in the Plan, (iv) amends
Section 9 to extend the term of the Plan or (v) amends this Section 13. In any
event, the Board may amend the Plan to comply with any requirement of applicable
law or regulation.
13.2 The Board may discontinue the Plan at any time.
13.3 No amendment or discontinuance of the Plan shall adversely
affect, except with the consent of the holder, any Stock Incentive theretofore
granted.
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<PAGE>
EXHIBIT B
FIRST REPUBLIC BANCORP INC.
1997 RESTRICTED STOCK PLAN
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
1. Definitions......................................................... 2
-----------
2. Effective Date and Termination of Plan.............................. 6
--------------------------------------
3. Administration of Plan.............................................. 6
----------------------
4. Eligibility for and Grant of Restricted Stock; Committee Authority.. 7
------------------------------------------------------------------
5. Number of Shares Subject to the Plan................................ 8
------------------------------------
6. Certain Restrictions................................................ 8
--------------------
7. Tax Withholding..................................................... 10
---------------
8. Regulations and Approvals .......................................... 11
-------------------------
9. Interpretation and Amendments; Other Rules.......................... 12
------------------------------------------
10. Changes in Capital Structure........................................ 14
----------------------------
11. Notices ............................................................ 15
-------
12. No Rights to Employment or Other Service............................ 15
----------------------------------------
13. Exculpation and Indemnification..................................... 15
-------------------------------
14. Captions............................................................ 16
--------
</TABLE>
1
<PAGE>
FIRST REPUBLIC BANCORP INC.
1997 RESTRICTED STOCK PLAN
--------------------------
First Republic Bancorp Inc., a corporation organized under the laws of
the State of Delaware, wishes to provide a benefit to certain officers,
employees and Directors of the Company and its Subsidiaries, in light of the
fact that, among other things, they have given up a tax offset feature in
certain non-qualified stock option agreements, to induce these officers,
employees and Directors to remain with the Company and its Subsidiaries, and to
provide them with long-term incentives for sustained high levels of performance.
In furtherance thereof, the First Republic Bancorp Inc. 1997 Restricted Stock
Plan is designed to provide Restricted Stock to officers, employees and
Directors of the Company and its Subsidiaries.
1. Definitions.
-----------
Whenever used herein, the following terms shall have the meanings set
forth below:
"Award Agreement" means a written agreement in a form approved by the
Committee to be entered into by the Company and the Grantee of Restricted Stock
as provided in Section 4.
"Board" means the Board of Directors of the Company.
"Cause" means the occurrence of one of the following:
(i) the commission by the Grantee of an act of deliberately criminal or
fraudulent misconduct in the line of duty to the Company or any of its
Subsidiaries (including but not limited to, fraud, misappropriation,
embezzlement or the wilful violation of any material law, rule,
regulation, or cease and desist order applicable to the Grantee, the
Company or any of its Subsidiaries), or a deliberate, wilful breach of
fiduciary duty owed by the Grantee to the Company or any of its
Subsidiaries;
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<PAGE>
(ii) intentional, continued failure by the Grantee to perform stated
duties (including but not limited to chronic absenteeism), gross
negligence, or gross incompetence in the performance of stated duties;
or
(iii) the Grantee's removal from his or her office with the Company
pursuant to an effective order under Section 8(e) of the Federal
Deposit Insurance Act, as amended.
"Change in Control" means the consummation of any one of the following
transactions:
(i) the Company or any of its Subsidiaries merges or consolidates with
any other corporation, other than a merger or consolidation which would
result in beneficial owners of the total voting power in the election
of directors represented by the voting securities ("Voting Securities")
of the Company or any of its Subsidiaries (as the case may be)
outstanding immediately prior thereto continuing to beneficially own
securities representing (either by remaining outstanding or by being
converted into voting securities of the surviving entity) more than 50%
of the total Voting Securities of the Company or any of its
Subsidiaries, or of such surviving entity, outstanding immediately
after such merger or consolidation;
(ii) the Company or any of its Subsidiaries liquidates or dissolves, or
sells, leases, exchanges or otherwise transfers or disposes of all or
substantially all of the Company's assets;
(iii) any person (as such term is used in Sections 13(d) and 14(d) of
the Exchange Act), other than (A) a trustee or other fiduciary holding
securities under an employee benefit plan of the Company or any of its
Subsidiaries, (B) a corporation owned directly or indirectly by the
shareholders of the Company in substantially the same proportions as
their beneficial ownership of stock in the Company, or (C) the Company
(with respect to its ownership of the stock of any of the Company's
Subsidiaries), is or becomes the beneficial owner (within the meaning
of Rule 13d-3 under the Exchange Act), directly or indirectly, of the
securities of the Company or any of its Subsidiaries representing 50%
or more of the Voting Securities; or
(iv) (A) (I) the shareholders of the Company or any of its
Subsidiaries, approve a merger or consolidation of the Company or
any of its Subsidiaries with any other corporation, other than a
merger or consolidation which would result in beneficial owners of
Voting Securities of the Company or any
3
<PAGE>
of its Subsidiaries (as the case may be) outstanding immediately
prior thereto continuing to beneficially own securities
representing (either by remaining outstanding or by being
converted into voting securities of the surviving entity) more
than 75% of the total Voting Securities of the Company or any of
its Subsidiaries, or of such surviving entity, outstanding
immediately after such merger or consolidation, or (II) any person
(as such term is used in Sections 13(d) or 14(d) of the Exchange
Act), other than (x) a trustee or other fiduciary holding
securities under an employee benefit plan of the Company or any of
its Subsidiaries, (y) a corporation owned directly or indirectly
by the shareholders of the Company in substantially the same
proportions as their ownership of stock in the Company, or (z) the
Company (with respect to the Company's ownership of the stock of
any of the Company's Subsidiaries) is or becomes the beneficial
owner (within the meaning of Rule 13d-3 under the Exchange Act),
directly or indirectly, of the securities of the Company or any of
its Subsidiaries representing 25% or more of the Voting Securities
of such corporation, and
(B) within 12 months of the occurrence of such event, a change in
the composition of the Board of Directors of the Company or any of
its Subsidiaries occurs as a result of which 60% or fewer of the
directors are Incumbent Directors.
"Code" means the Internal Revenue Code of 1986, as amended.
"Committee" means the Compensation Committee of the Board.
"Common Stock" means the Company's Common Stock, par value $.01 per
share, either currently existing or authorized hereafter.
"Company" means First Republic Bancorp Inc., a Delaware corporation.
"Disability" means the inability of an individual to perform the
services normally rendered by such individual due to any physical or mental
impairment that can be expected to persist for a continuous period for 12 months
or more or to result in death, as determined by the Committee on the basis of
appropriate medical evidence.
"Director" means a non-employee director of the Company or its
Subsidiaries.
4
<PAGE>
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fair Market Value" per Share as of a particular date means (i) if
Shares are then listed on a national stock exchange, the closing sales price per
Share on the exchange for the last preceding date on which there was a sale of
Shares on such exchange, as determined by the Committee; (ii) if Shares are not
then listed on a national stock exchange but are then traded on an over-the-
counter market, the average of the closing bid and asked prices for the Shares
in such over-the-counter market for the last preceding date on which there was a
sale of such Shares in such market, as determined by the Committee; or (iii) if
Shares are not then listed on a national stock exchange or traded on an over-
the-counter market, such value as the Committee in its discretion may in good
faith determine; provided that, where the Shares are so listed or traded, the
Committee may make discretionary determinations where the Shares have not been
traded for 10 trading days.
"Grantee" means an officer, employee or Director of the Company to whom
Restricted Stock is granted.
"Incumbent Directors" means directors who either
(i) are directors of the Company and its Subsidiaries as of the date
hereof;
(ii) are elected, or nominated for election, to the Board of Directors
of the Company and its Subsidiaries with the affirmative votes of at
least a majority of the directors of the Company and its Subsidiaries
who are Incumbent Directors described in clause (i) above at the time
of such election or nomination; or
(iii) are elected, or nominated for election, to the Board of Directors
of the Company or its Subsidiaries with the affirmative votes of at
least a majority of the directors of the Company or any of its
Subsidiaries who are Incumbent Directors described in clause (i) or
(ii) above at the time of such election or nomination.
Notwithstanding the foregoing, "Incumbent Directors" shall not include an
individual whose election or nomination to the Board of Directors of the Company
or its Subsidiaries occurs in order to provide representation for a person or
group of related persons who have initiated or encouraged an actual or
threatened proxy contest relating to the election of directors of the Company or
its Subsidiaries.
"Plan" means the Company's 1997 Restricted Stock Plan, as set forth
herein and as the same may from time to time be amended.
5
<PAGE>
"Restricted Stock" means an award of Shares that are subject to
restrictions hereunder.
"Securities Act" means the Securities Act of 1933, as amended.
"Shares" means shares of Common Stock of the Company.
"Subsidiary" means any corporation (other than the Company) that is a
"subsidiary corporation" with respect to the Company under Section 424(f) of the
Code. In the event the Company becomes a subsidiary of another company, the
provisions hereof applicable to subsidiaries shall, unless otherwise determined
by the Committee, also be applicable to any Company that is a "parent
corporation" with respect to the Company under Section 424(e) of the Code.
2. Effective Date and Termination of Plan.
--------------------------------------
The effective date of the Plan is that date on which the Plan is
adopted by the Board subject to approval by the shareholders of the Company.
The Plan shall not become effective unless and until it is so approved. The
Plan shall terminate on, and no Restricted Stock shall be granted hereunder on
or after, the 10-year anniversary of the approval of the Plan by the
shareholders of the Company; provided, however, that the Board may at any time
prior to that date terminate the Plan.
3. Administration of Plan.
----------------------
The Plan shall be administered by the Committee. The Committee shall
consist of at least two individuals each of whom shall be a "nonemployee
director" as defined in Rule 16b-3 as promulgated by the Securities and Exchange
Commission under the Exchange Act. The acts of a majority of the members
present at any meeting of the Committee at which a quorum is present, in person
or by phone, or acts approved in writing by a majority of the entire Committee,
shall be the acts of the Committee for purposes of the Plan; provided that the
otherwise applicable procedures of the
6
<PAGE>
Committee, to the extent inconsistent with the provisions of this sentence,
shall control. If and to the extent applicable, no member of the Committee may
act as to matters under the Plan specifically relating to such member.
4. Eligibility for and Grant of Restricted Stock; Committee
--------------------------------------------------------
Authority.
---------
Subject to the provisions of the Plan, the Committee shall, in its
discretion as reflected by the terms of the Award Agreements: (i) authorize the
granting of Restricted Stock to officers, employees and Directors of the Company
and its Subsidiaries; (ii) determine the number of Shares subject to each grant
of Restricted Stock; (iii) determine the restrictions applicable to Restricted
Stock; and (iv) determine or impose other conditions to the grant of Restricted
Stock under the Plan as it may deem appropriate. In determining the eligibility
of an officer, employee or Director to receive a grant of Restricted Stock, as
well as in determining the number of Shares to be granted to any officer,
employee or Director, the Committee will consider the value of the tax offset
feature which the Grantee has given up, and may consider the position and
responsibilities of the Grantee, the nature and value to the Company of the
Grantee's services and accomplishments whether directly or through its
Subsidiaries and such other factors as the Committee may deem relevant. The
Award Agreement shall contain such other terms, provisions and conditions not
inconsistent herewith as shall be determined by the Committee. The Grantee
shall take whatever additional actions and execute whatever additional documents
the Committee may in its reasonable judgment deem necessary or advisable in
order to carry out or
7
<PAGE>
effect one or more of the obligations or restrictions imposed on the Grantee
pursuant to the express provisions of the Plan and the Award Agreement.
5. Number of Shares Subject to the Plan.
------------------------------------
Subject to adjustments pursuant to Section 10, no more than an
aggregate of 233,691 Shares may be the subject of Grants. Shares of Restricted
Stock that are forfeited may not be the subject of the grant of further Grants
of a type for which the Shares were initially available. Shares of Common Stock
issued hereunder may consist, in whole or in part, of authorized and unissued
shares or treasury shares.
6. Certain Restrictions.
--------------------
(a) Each Grantee shall be issued a stock certificate in respect of
Shares of Restricted Stock awarded under the Plan. Such certificate shall be
registered in the name of the Grantee. The certificates for Shares issued
hereunder may include any legend which the Committee deems appropriate to
reflect any restrictions on transfer hereunder or under the Award Agreement, or
as the Committee may otherwise deem appropriate, and, without limiting the
generality of the foregoing, shall bear a legend referring to the terms,
conditions, and restrictions applicable to such award, substantially in the
following form:
The transferability of this certificate and the shares
of stock represented hereby are subject to the terms and
conditions (including forfeiture) of the First Republic
Bancorp Inc. 1997 Restricted Stock Plan and an Agreement
entered into between the registered owner and First Republic
Bancorp Inc. Copies of such Plan and Agreement are on file
in the offices of the First Republic Bancorp Inc. at 388
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Market Street, Second Floor, San Francisco, California 94111.
(b) The Committee shall require that the stock certificates evidencing
such Shares be held in custody by the Company until the restrictions thereon
shall have lapsed, and that, as a condition of any Restricted Stock award, the
Grantee shall have delivered a stock power, endorsed in blank, relating to the
stock covered by such award. If and when such restrictions so lapse, the stock
certificates shall be delivered by the Company to the recipient or his or her
designee.
(c) Restrictions and Conditions.
Unless otherwise provided by the Committee, the Shares of Restricted
Stock awarded pursuant to the Plan shall be subject to the following
restrictions and conditions:
(i) Subject to the provisions of the Plan and the Award Agreements,
during a period commencing with the date of such award and ending on
the date the period of forfeiture with respect to such Shares lapses,
the Grantee shall not be permitted voluntarily or involuntarily to
sell, transfer, pledge, anticipate, alienate, encumber or assign Shares
of Restricted Stock awarded under the Plan (or have such Shares
attached or garnished). Subject to the provisions of the Award
Agreements and clauses (ii), (iii) and (iv) below, the period of
forfeiture with respect to Shares granted hereunder shall lapse for 20%
of such Shares each year beginning February 28, 1998 and each February
28th thereafter.
(ii) Except as provided in the foregoing clause (i), the Grantee shall
have, in respect of the Shares of Restricted Stock, all of the rights
of a stockholder of the Company, including the right to vote the
Shares, and the right to receive any cash dividends, which dividends
shall be held by the Company (unsegregated as a part of its general
assets) until the period of forfeiture lapses (and shall be forfeited
if the underlying Shares are forfeited). Certificates for shares of
Stock (not subject to restrictions) shall be delivered to the Grantee
promptly after, and only after, the period of
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<PAGE>
forfeiture shall lapse without forfeiture in respect of such Shares of
Restricted Stock.
(iii) Subject to the provisions of the Award Agreement and clauses (iv)
and (v) below, if the Grantee's employment or service as a Director
with the Company and its Subsidiaries is terminated by the Company and
its Subsidiaries for Cause, or by the Grantee for any reason, during
the applicable period of forfeiture, then all Shares still subject to
restriction shall thereupon, and with no further action, be forfeited
by the Grantee.
(iv) In the event the Grantee's employment or service as a Director
with the Company and its Subsidiaries is terminated on account of death
or Disability, or is terminated by the Company and its Subsidiaries for
any reason other than Cause, or in the event of a Change in Control
(regardless of whether a termination follows thereafter), during the
applicable period of forfeiture, then restrictions will immediately
lapse on all Restricted Stock granted to the applicable Grantee.
(v) With respect to a Grantee who is a Director at the time of grant,
in addition to the events set forth in clause (iv) above, in the event
that the Grantee ceases to be a Director (other than merely on account
of the Director's becoming an employee in addition to continuing to
serve as a Director), other than (A) because of termination for Cause,
(B) on account of the Director's voluntary resignation or (C) on
account of the Grantee's choosing not to seek reelection, during the
applicable period of forfeiture, then restrictions will immediately
lapse on all Restricted Stock granted to the applicable Grantee.
(vi) Cessation of service as an officer, employee or Director shall not
be treated as a cessation of employment (or other service) for purposes
of this Section 6 if the Grantee continues without interruption to
serve thereafter in another one (or more) of such other capacities.
7. Tax Withholding.
---------------
The Committee may, in its discretion, require the Grantee to pay to the
Company at the time of vesting of any Restricted Stock (or other income
recognition event, such as election under Section 83(b) of the Code) the amount
that the Committee deems necessary to satisfy the Company's obligation to
withhold federal,
10
<PAGE>
state or local income or other taxes incurred by reason of the vesting (or other
such event). Upon vesting (or such other event), the Grantee may, if approved
by the Committee in its discretion, make a written election to have Shares
withheld by the Company from the Shares otherwise to be released from
restriction, or to deliver previously owned Shares (not subject to restrictions
hereunder), in order to satisfy the liability for such withholding taxes. In
the event that the Grantee makes, and the Committee permits, such an election,
the number of Shares so withheld or delivered shall have an aggregate Fair
Market Value on the date of exercise sufficient to satisfy the applicable
withholding taxes. Notwithstanding anything contained in the Plan to the
contrary, the Grantee's satisfaction of any tax-withholding requirements imposed
by the Committee shall be a condition precedent to the release of any
restrictions as may otherwise be provided hereunder, and the failure of the
Grantee to satisfy such requirements with respect to the vesting of Restricted
Stock (or another income recognition event) shall cause the applicable
Restricted Stock to be forfeited.
8. Regulations and Approvals.
-------------------------
(a) The Committee may make such changes to the Plan as may be
necessary or appropriate to comply with the rules and regulations of any
government authority or to obtain tax benefits applicable to restricted stock.
(b) Each grant of Restricted Stock is subject to the requirement that,
if at any time the Committee determines, in its discretion, that the listing,
registration or qualification of Shares issuable pursuant to the Plan is
required by any securities
11
<PAGE>
exchange or under any state or federal law, or the consent or approval of any
governmental regulatory body is necessary or desirable as a condition of, or in
connection with, the issuance of Shares of Restricted Stock or other Shares, no
payment shall be made or Shares issued or grant of Restricted Stock made, in
whole or in part, unless listing, registration, qualification, consent or
approval has been effected or obtained free of any conditions in a manner
acceptable to the Committee.
(c) In the event that the disposition of stock acquired pursuant to
the Plan is not covered by a then current registration statement under the
Securities Act, and is not otherwise exempt from such registration, such Shares
shall be restricted against transfer to the extent required under the Securities
Act, and the Committee may require any individual receiving Shares pursuant to
the Plan, as a condition precedent to receipt of such Shares, to represent to
the Company in writing that such Shares will be disposed of only if registered
for sale under the Securities Act or if there is an available exemption for such
disposition, and may provide for a legending of such Shares to that effect.
9. Interpretation and Amendments; Other Rules.
------------------------------------------
The Committee may make such rules and regulations and establish such
procedures for the administration of the Plan as it deems appropriate. Without
limiting the generality of the foregoing, the Committee may (i) determine the
extent, if any, to which Shares (whether or not Shares of Restricted Stock)
shall be forfeited (whether or not such forfeiture is expressly contemplated
hereunder); (ii) interpret the Plan and the Award Agreements
12
<PAGE>
hereunder, with such interpretations to be conclusive and binding on all persons
and otherwise accorded the maximum deference permitted by law, provided that the
Committee's interpretation shall not be entitled to deference on and after a
Change in Control except to the extent that such interpretations are made
exclusively by members of the Committee who are individuals who served as
Committee members before the Change in Control; and (iii) take any other actions
and make any other determinations or decisions that it deems necessary or
appropriate in connection with the Plan or the administration or interpretation
thereof. Unless otherwise expressly provided hereunder, the Committee, with
respect to any grant, may exercise its discretion hereunder at the time of the
award or thereafter. In the event of any dispute or disagreement as to the
interpretation of the Plan or of any rule, regulation or procedure, or as to any
question, right or obligation arising from or related to the Plan, the decision
of the Committee, except as provided in clause (ii) of the foregoing sentence,
shall be final and binding upon all persons. The Board may amend the Plan as it
shall deem advisable, except that no amendment may adversely affect a Grantee
with respect to Restricted Stock previously granted unless such amendments are
required in order to comply with applicable laws; provided that the Board may
not make any amendment in the Plan that would, if such amendment were not
approved by the holders of the Common Stock, cause the Plan to fail to comply
with any requirement of applicable law or regulation, unless and until the
approval of the holders of such Common Stock is obtained.
13
<PAGE>
10. Changes in Capital Structure.
----------------------------
If (i) the Company or its Subsidiaries shall at any time be involved in
a merger, consolidation, dissolution, liquidation, reorganization, exchange of
shares, sale of all or substantially all of the assets or stock of the Company
or its Subsidiaries or a transaction similar thereto, (ii) any stock dividend,
stock split, reverse stock split, stock combination, reclassification,
recapitalization or other similar change in the capital structure of the Company
or its Subsidiaries, or any distribution to holders of Common Stock other than
cash dividends, shall occur or (iii) any other event shall occur which in the
judgment of the Committee necessitates action by way of adjusting the terms of
the outstanding Restricted Stock, then the Committee may forthwith take any such
action as in its judgment shall be necessary to preserve the Grantees' rights
substantially proportionate to the rights existing prior to such event, and to
maintain the continuing availability of Shares under Section 5 (if Shares are
otherwise then available) in a manner consistent with the intent hereof,
including, without limitation, adjustments in (x) the number and kind of shares
subject to Grants, and (y) the number and kind of shares available under Section
5. To the extent that such action shall include an increase or decrease in the
number of shares subject to outstanding Grants, the number of shares available
under Section 5 above shall be increased or decreased, as the case may be,
proportionately.
If a Change in Control shall occur, then the Committee, as constituted
immediately before the Change in Control, may make
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<PAGE>
such adjustments as it, in its discretion, determines are necessary or
appropriate in light of the Change in Control, provided that the Committee
determines that such adjustments do not have an adverse economic impact on the
Grantee as determined at the time of the adjustments.
The judgment of the Committee with respect to any matter referred to in
this Section 10 shall be conclusive and binding upon each Grantee without the
need for any amendment to the Plan.
11. Notices.
-------
All notices under the Plan shall be in writing, and if to the Company,
shall be delivered to the Board or mailed to its principal office, addressed to
the attention of the Board; and if to the Grantee, shall be delivered personally
or mailed to the Grantee at the address appearing in the records of the Company.
Such addresses may be changed at any time by written notice to the other party
given in accordance with this Section 11.
12. No Rights to Employment or Other Service.
----------------------------------------
Nothing in the Plan or in Restricted Stock granted pursuant to the Plan
shall confer on any individual any right to continue in the employ or other
service of the Company or its Subsidiaries or interfere in any way with the
right of the Company or its Subsidiaries and its shareholders to terminate the
individual's employment or other service at any time.
13. Exculpation and Indemnification.
-------------------------------
To the maximum extent permitted by law, the Company shall indemnify and
hold harmless the members of the Board and the members of the Committee from and
against any and all liabilities,
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<PAGE>
costs and expenses incurred by such persons as a result of any act or omission
to act in connection with the performance of such person's duties,
responsibilities and obligations under the Plan.
14. Captions.
--------
The use of captions in this Plan is for convenience. The captions are
not intended to provide substantive rights.
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<PAGE>
PROXY
PROXY SOLICITED ON BEHALF OF BOARD OF DIRECTORS OF
FIRST REPUBLIC BANCORP INC.
FOR 1997 ANNUAL MEETING OF STOCKHOLDERS
The undersigned stockholder of First Republic Bancorp Inc. (the "Company")
hereby constitutes and appoints Roger O. Walther, James H. Herbert, II and
Katherine August-deWilde, and each of them, with full power of substitution,
attorneys and proxies of the undersigned to attend each of them, with full power
of substitution, attorneys and proxies of the undersigned to attend and act for
the undersigned at the 1997 Annual Meeting of Stockholders of the Company to be
held on April 30, 1997, at 4:00 PM Eastern Time, at the New York Yacht Club,
37 West 44th Street, New York, NY 10036 and at any adjournments or postponements
thereof, and to represent and vote as designated below all of the shares of
Common Stock of the Company that the undersigned would be entitled to vote with
respect to the matters described in the accompanying Notice of Annual Meeting of
Stockholders and Proxy Statement receipt of which is hereby acknowledged.
WHEN THIS PROXY IS PROPERLY EXECUTED AND RETURNED, THE SHARES IT REPRESENTS
WILL BE VOTED AS DIRECTED. IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED
IN FAVOR OF THE ELECTION OF THE NOMINEES NAMED, IN FAVOR OF THE AMENDMENT AND
RESTATEMENT OF FIRST REPUBLIC'S STOCK OPTION PLAN, IN FAVOR OF FIRST REPUBLIC'S
1997 RESTRICTED STOCK PLAN, IN FAVOR OF THE SELECTION OF KPMG PEAT MARWICK LLP
AS THE COMPANY'S INDEPENDENT AUDITORS, AND IN ACCORDANCE WITH THE BEST JUDGMENT
OF THE PROXY HOLDERS WITH RESPECT TO ANY OTHER MATTERS WHICH MAY PROPERLY COME
BEFORE THE 1997 ANNUAL MEETING.
(CONTINUED, AND TO BE MARKED, DATED AND SIGNED, ON THE REVERSE SIDE)
- --------------------------------------------------------------------------------
. FOLD AND DETACH HERE .
<PAGE>
PLEASE MARK
YOUR VOTES [X]
AS INDICATED
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF FIRST REPUBLIC
BANCORP INC.
WITHHOLD
FOR AUTHORITY
1. Election of Directors to term expiring in 2000. [_] [_]
2. To approve the amendment and restatement of First Republic's Stock Option
Plan.
FOR [_] AGAINST [_] ABSTAIN [_]
3. To approve the adoption of First Republic's 1997 Restricted Stock Plan.
FOR [_] AGAINST [_] ABSTAIN [_]
4. To ratify the selection of KPMG Peat Marwick LLP as independent auditors of
First Republic and its subsidiary for the year ending December 31, 1997.
FOR [_] AGAINST [_] ABSTAIN [_]
PLEASE COMPLETE, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE SO THAT IT MAY BE COUNTED AT THE ANNUAL MEETING
Signature(s) _______________________________________ Dated _____________, 1997
Please sign exactly as name(s) appear hereon. If shares are held jointly, each
holder should sign. When signing as attorney, executor, administrator, trustee,
guardian or corporate officer, please give full title. If a partnership, please
sign in partnership name by authorized person.
- --------------------------------------------------------------------------------
. FOLD AND DETACH HERE .
