SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the Appropriate Box:
[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material pursuant to Rule 14a-11(c) or Rule
14a-12
[ ] Confidential, for use of the Commission only (as permitted
by Rule 14a-6(e)(2))
1ST COMMUNITY 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] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2),
or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] 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:
____________________________________________________________________
(2) Aggregate number of securities to which transaction applies:
____________________________________________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on
which the file fee is calculated and state how it was
determined):
____________________________________________________________________
(4) Proposed maximum aggregate value of transaction:
____________________________________________________________________
(5) Total fee paid:
____________________________________________________________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
____________________________________________________________________
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____________________________________________________________________
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____________________________________________________________________
(4) Date filed:
____________________________________________________________________
[1ST COMMUNITY BANCORP, INC. LOGO]
109 EAST DIVISION
SPARTA, MICHIGAN 49345
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
___________________________________________________________________________
The annual meeting of shareholders of 1st Community Bancorp, Inc. will
be held in the Gymnasium at Sparta Ridgeview Elementary School, 557 South
State Street, Sparta, Michigan, on Tuesday, April 30, 1996, at 7:30 p.m.
local time, for the following purposes:
1. To elect directors.
2. To approve an amendment to the Corporation's Articles of
Incorporation to increase the number of authorized shares of
Common Stock.
3. To transact any other business that may properly come before the
meeting.
Shareholders of record at the close of business on March 8, 1996, are
entitled to notice of and to vote at the meeting and any adjournment of the
meeting. The following Proxy Statement and enclosed form of proxy are
being furnished to holders of 1st Community Common Stock on and after
March 31, 1996.
By Order of the Board of Directors,
/S/ JAE M. MAXFIELD
Jae M. Maxfield
President and Chief Executive Officer
March 31, 1996
__________________________________________________________________________
It is important that your shares be represented at the
meeting. Even if you expect to attend the meeting,
PLEASE SIGN, DATE AND RETURN YOUR PROXY PROMPTLY.
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
OF
1ST COMMUNITY BANCORP, INC.
April 30, 1996
This Proxy Statement and the accompanying form of proxy are being
furnished to holders of common stock, $10 par value ("Common Stock"), of
1st Community Bancorp, Inc. (the "Corporation") on and after March 31,
1996, in connection with the solicitation of proxies by the Corporation's
Board of Directors for use at the annual meeting of the Corporation's
shareholders (the "Annual Meeting") to be held on April 30, 1996, and at
any adjournment of that meeting. The Annual Meeting will be held in the
Gymnasium at Sparta Ridgeview Elementary School, 557 South State Street,
Sparta, Michigan, at 7:30 p.m. local time.
The purpose of the Annual Meeting is to (i) elect directors, and (ii)
consider and vote upon approval of an amendment to the Corporation's
Articles of Incorporation to increase the number of authorized shares of
Common Stock. If a proxy in the form distributed by the Corporation is
properly executed and returned to the Corporation, the shares represented
by that proxy will be voted at the Annual Meeting and at any adjournment of
that meeting. If a shareholder specifies a choice, the proxy will be voted
as specified. If no choice is specified, the shares represented by the
proxy will be voted for the election of all nominees of the Board of
Directors named in this Proxy Statement and for approval of the proposed
amendment to the Corporation's Articles of Incorporation. The
Corporation's management does not know of any other matter to be presented
at the Annual Meeting. If other matters are presented, all shares
represented by the proxy will be voted in accordance with the judgment of
the persons named as proxies with respect to those other matters.
A proxy may be revoked at any time prior to its exercise by written
notice delivered to the Secretary of the Corporation. A proxy may also be
revoked by attending and voting at the Annual Meeting.
Solicitation of proxies will be made initially by mail. Directors,
officers and employees of the Corporation and Sparta State Bank (the
"Bank") may also solicit proxies in person, by telephone or by other means
without additional compensation. In addition, proxies may be solicited by
nominees and other fiduciaries who may mail material to or otherwise
communicate with the beneficial owners of shares held by them. All
expenses of solicitation of proxies will be paid by the Corporation.
ELECTION OF DIRECTORS
The Board of Directors has nominated the following three persons for
reelection to the Corporation's Board of Directors for terms expiring at
the annual meeting of shareholders to be held in 1999:
Jae M. Maxfield
Jon E. Pike
Linda R. Pitsch
Eight other directors are serving terms that will expire in 1997 and
1998. It is the intent of the persons named in the accompanying proxy to
vote for the election of the three nominees listed above. The proposed
nominees are willing to be elected and to serve. In the event that any
nominee is unable to serve or is otherwise unavailable for election, which
is not contemplated, the incumbent Board of Directors may or may not select
a substitute nominee. If a substitute nominee is selected, all proxies
will be voted for the person so selected. If a substitute nominee is not
selected, all proxies will be voted for the election of the remaining
nominees. Proxies will not be voted for a greater number of persons than
the number of nominees named above.
A plurality of the shares represented in person or by proxy and voting
at the meeting is required to elect directors. For the purpose of counting
votes on the election of directors, abstentions, broker non-votes and other
shares not voted will not be counted as shares voted, and the number of
shares of which a plurality is required will be reduced by the number of
shares not voted.
YOUR BOARD OF DIRECTORS RECOMMENDS A
VOTE FOR ELECTION OF ALL NOMINEES AS DIRECTORS
AMENDMENT OF THE ARTICLES OF INCORPORATION
The Board of Directors proposes to amend Article III of the
Corporation's Articles of Incorporation to increase the Corporation's
authorized capital stock from 500,000 shares of Common Stock to 1,000,000
shares of Common Stock. The purpose of the amendment is to provide
additional shares for future issuance.
As of March 8, 1996, 485,413 authorized shares of Common Stock were
issued and outstanding. The Board of Directors believes that it is
advisable to have the additional authorized shares available for possible
future stock splits and dividends, employee benefit plans, equity-based
acquisitions, and other corporate purposes that might be proposed in the
future. The Corporation has no present plans or proposals to issue shares
that would be authorized by the proposed amendment. However, the Board of
Directors has authorized the issuance of shares for such purposes in the
past.
-2-
Management continues to seek favorable acquisition opportunities. It
has in the past had, and anticipates that it will from time to time in the
future have, discussions with other organizations that might be interested
in being acquired as well as discussions with larger institutions that have
branches that those institutions may wish to sell. Authorized but unissued
shares of Common Stock, or funds raised in a public offering of shares, may
be used for these purposes.
All of the additional shares resulting from the increase in the number
of authorized shares of the Corporation's Common Stock would be the same
class, with the same dividend, voting and liquidation rights, as the shares
of Common Stock presently outstanding. Shareholders have no preemptive
rights to acquire shares issued by the Corporation under its existing
Articles of Incorporation, and shareholders would not acquire any such
rights with respect to such additional shares under the proposed amendment
to the Corporation's Articles of Incorporation. Under some circumstances,
issuance of additional shares of Common Stock could dilute the voting
rights, equity and earnings per share of existing shareholders.
If the proposed amendment is adopted, the newly authorized shares
would be unreserved and available for issuance. No further shareholder
authorization would be required prior to the issuance of such shares by the
Corporation.
This increase in authorized but unissued Common Stock could be
considered an anti-takeover measure because the additional authorized but
unissued shares of Common Stock could be used by the Board of Directors to
make a change in control of the Corporation more difficult. The Board of
Directors' purpose in recommending this proposal is not as an anti-takeover
measure, but for the reasons discussed above.
The first paragraph of Article III, as amended, would read as follows:
The total authorized capital stock of the corporation is one
million (1,000,000) shares of common stock, par value $10.00 per
share.
Under the Corporation's Articles of Incorporation, the affirmative
vote of holders of two-thirds of the shares entitled to vote at the Annual
Meeting is required to approve the proposed amendment to the Corporation's
Articles of Incorporation. For the purpose of counting votes on this
proposal, abstentions, broker non-votes and other shares not voted have the
same effect as a vote against the proposal.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
APPROVAL OF THE AMENDMENT TO THE CORPORATION'S
ARTICLES OF INCORPORATION
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VOTING SECURITIES
Holders of record of Common Stock at the close of business on March 8,
1996, will be entitled to vote at the Annual Meeting on April 30, 1996, and
any adjournment of that meeting. As of March 8, 1996, there were 485,413
shares of Common Stock issued and outstanding. Each share of Common Stock
is entitled to one vote on each matter submitted for shareholder action.
As of March 8, 1996, no shareholder is known to the Corporation's
management to have been the beneficial owner of more than 5% of the
outstanding shares of Common Stock as of that date.
The following table sets forth information concerning the number of
shares of Common Stock held as of March 8, 1996, by each of the
Corporation's directors and nominees for director, each of the named
executive officers and all of the Corporation's directors and executive
officers as a group:
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP OF COMMON STOCK<F1>
SOLE VOTING SHARED
AND VOTING OR TOTAL PERCENT
NAME OF DISPOSITIVE DISPOSITIVE BENEFICIAL OF
BENEFICIAL OWNER POWER POWER<F2> OWNERSHIP CLASS
<S> <C> <C> <C> <C>
Frank G. Berris 2,268 -- 2,268 <F*>
Lawrence D. Bradford -- 7,737 7,737 1.6%
William F. Cutler, Jr. -- 1,593 1,593 <F*>
L. Edmond Eary, Jr., M.D. 2,413 108 2,521 <F*>
Lewis G. Emmons 4,638 -- 4,638 1.0
Stuart Goodfellow 5,682 -- 5,682 1.2
Walter Hill -- 6,323 6,323 1.3
Jae M. Maxfield -- -- -- <F*>
Jon E. Pike 846 -- 846 <F*>
Linda R. Pitsch -- 356 356 <F*>
Andrew Zamiara 231 683 914 <F*>
All directors and
executive officers
as a group 16,078 17,109 33,187 6.8%
<FN>
________________________
<F*> Less than 1%.
<F1> The numbers of shares stated are based on information furnished by
each person listed and include shares personally owned of record by
that person and shares that under applicable regulations are
-4-
considered to be otherwise beneficially owned by that person. Under
these regulations, a beneficial owner of a security includes any
person who, directly or indirectly, through any contract, arrangement,
understanding, relationship or otherwise, has or shares voting power
or dispositive power with respect to the security. Voting power
includes the power to vote or direct the voting of the security.
Dispositive power includes the power to dispose or direct the
disposition of the security. A person will also be considered the
beneficial owner of a security if the person has a right to acquire
beneficial ownership of the security within 60 days.
<F2> These numbers include shares as to which the listed person is legally
entitled to share voting or dispositive power by reason of joint
ownership, trust or other contract or property right, and shares held
by spouses and minor children over whom the listed person may have
substantial influence by reason of relationship.
</FN>
</TABLE>
DIRECTORS AND EXECUTIVE OFFICERS
The Corporation's Board of Directors is divided into three classes,
which are as nearly equal in number as possible. Each class of directors
serves a successive three-year term of office. Directors who are not
employees of the Corporation may not serve for more than five consecutive
three-year terms, nor may they serve after attaining age 70.
Three members of the present Board of Directors are standing for
reelection. Eight other directors are serving terms that will expire in
1997 and 1998.
Biographical information concerning the Corporation's directors and
executive officers, including the three nominees who are nominated for
election to the Board of Directors at the Annual Meeting, is presented
below. Except as otherwise indicated, all directors and executive officers
have had the same principal employment for over five years. All executive
officers are appointed annually and serve at the pleasure of the Board of
Directors. All of the directors of the Corporation also serve as directors
of the Bank.
NOMINEES FOR ELECTION AS DIRECTORS TO TERMS EXPIRING IN 1999
JAE M. MAXFIELD (age 50) has been a director and President
and Chief Executive Officer of the Corporation and the Bank since
January, 1995. From 1993 until January, 1995, Mr. Maxfield
operated Maxfield Associates, an association of financial
advisors engaged in providing financial services to business and
professional occupations. Mr. Maxfield previously served as
President and Chief Executive Officer of Society Bank in Monroe,
-5-
Michigan, formerly a subsidiary of First of America Bank, from
1974 until 1993. Mr. Maxfield is also a director of West Shore
Computer Services, Inc., a data processing company, in which the
Bank owns a 20% interest.
JON E. PIKE (age 54) is a certified public accountant and
Managing Partner of Beene, Garter & Co., certified public
accountants, of Grand Rapids, Michigan. Mr. Pike has been a
director of the Corporation and the Bank since September, 1990.
Mr. Pike is also a director of Wm. A. Rogers & Co., a retail
hardware business in Sparta, Michigan, and President and a
director of B.G. Systems, Inc., a computer software business
affiliated with Beene, Garter & Co.
LINDA R. PITSCH (age 48) has been a director of the
Corporation and the Bank since December, 1994, and Secretary of
the Corporation and the Bank since February, 1995. Ms. Pitsch
is also Senior Vice President and Cashier of the Bank. Ms.
Pitsch has been an employee of the Bank since September, 1969,
serving in various management and executive capacities. Ms.
Pitsch is also a director and President of the Grand Rapids
Chapter of the American Institute of Banking and an instructor at
Davenport College of Business, serving on its Accounting Advisory
Board.
DIRECTORS WITH TERMS EXPIRING IN 1998
FRANK G. BERRIS (age 48) is President of and owns American
Gas & Oil, Inc., a distributor of petroleum products and operator
of gas stations. Mr. Berris has been a director of the
Corporation and the Bank since August, 1991. Mr. Berris is also
Past President of West Michigan Oilman's Club and a member of the
Michigan Petroleum Association/Michigan Association of
Convenience Stores.
LAWRENCE D. BRADFORD (age 56) is President of Bradford
Insurance Centre, Ltd., an insurance agency, that was acquired by
the Bank on January 1, 1996. Mr. Bradford was a co-owner of
Bradford Insurance Centre, Ltd. prior to the acquisition. Mr.
Bradford has been a director of the Corporation since 1986 and a
director of the Bank since 1974.
LEWIS G. EMMONS (age 51) is President and a director of
Emmons Development-Real Estate, Special Projects Coordinator for
Great Day Food Stores. Mr. Emmons has been a director of the
Corporation since 1986 and a director of the Bank since 1978.
STUART GOODFELLOW (age 52) owns Goodfellow Blueberry Farms
and Goodfellow Vending Services, a vending company. Mr.
-6-
Goodfellow is also past Vice President and a director of the
Michigan Blueberry Grower's Association. Mr. Goodfellow has been
a director of the Corporation and the Bank since August, 1991.
DIRECTORS WITH TERMS EXPIRING IN 1997
WILLIAM F. CUTLER, JR. (age 48) is the former Vice President
of the H. H. Cutler Company, an apparel manufacturer. Mr. Cutler
joined the H. H. Cutler Company in 1970 and served in various
management and executive capacities until January, 1994. The H.
H. Cutler Company was sold to VF (Vanity Fair) Corporation in
January, 1994. Mr. Cutler has been a director of the Corporation
and the Bank since October, 1993. Mr. Cutler is also President
of the Board of Directors of the Sparta Health Center, of which
he has been a director since 1981, and a trustee of the Rockford
Education Foundation.
L. EDMOND EARY, JR., M.D. (age 67) retired in 1991 after
establishing and operating a solo medical practice for 38 years.
Dr. Eary was an Associate Professor of Family Practice at the
College of Human Medicine at Michigan State University from July,
1972 until June, 1988. Dr. Eary has been a director of the
Corporation since 1986 and a director of the Bank since 1969.
Dr. Eary served as Interim President and Chief Executive Officer
of the Corporation from October 1, 1994 until January 10, 1995.
Dr. Eary has been Chairman of the Board of Directors of the
Corporation and the Bank since May, 1991 and was Vice Chairman of
the Board of Directors of the Corporation and the Bank from May,
1990 until May, 1991. Dr. Eary is also a director of Northwest
Ambulance Corp., a non-profit corporation, and Past President,
director and Treasurer of the Michigan Academy of Family
Physicians.
WALTER HILL (age 69) is a co-owner of Hill Brothers Fruit
Farm and Cider Mill. Mr. Hill has been a director of the
Corporation since 1986 and a director of the Bank since 1983.
Mr. Hill is also a director of Jack Brown Produce and the
Michigan Agricultural Commodities Marketing Association.
ANDREW ZAMIARA (age 54) is a registered pharmacist and
President/Manager of Momber Pharmacy and Gift Shop in Sparta,
Michigan. Mr. Zamiara has been a director of the Corporation and
the Bank since August, 1990.
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
DENIS L. CROSBY (age 53) has been Vice President of the
Corporation since 1991. Mr. Crosby has been Senior Vice
President of Loans at the Bank since 1990 and Vice President of
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Loans at the Bank since 1986. Before that, Mr. Crosby was a
commercial loan officer at various affiliates of Michigan
National Bank since 1972. Mr. Crosby is a member of the Sparta
Downtown Development Authority and member of the Economic
Development Foundation of Western Michigan.
GERALD P. DAVID (age 57) has been Senior Vice President of
the Bank since 1985. Before that, Mr. David served in various
capacities at the Bank in the Operations area since July, 1976.
Prior to employment at the Bank, he was associated with Old Kent
Bank. Mr. David serves as President of the Mid Michigan BAI
Chapter.
THOMAS L. LAMPEN (age 40) has been Chief Financial Officer
of the Bank since 1992 and Treasurer of the Corporation since
1986. Before that, Mr. Lampen worked for Alexander Grant and
Company, a national accounting firm. Mr. Lampen is a Certified
Public Accountant.
The Corporation's Board of Directors has, among others, the following
standing committees:
AUDIT COMMITTEE. The members of the Audit Committee as of March 8,
1996, were Jon Pike (Chairman), L. Edmond Eary, M.D., Lewis Emmons and
Stuart Goodfellow. The Audit Committee is responsible for causing a
suitable examination of the financial records and operations of the
Corporation and the Bank to be made by the internal auditor of the
Corporation through a program of continuous internal audits. The Audit
Committee recommends to the Corporation's Board of Directors independent
certified public accountants for employment to examine the financial
statements of the Corporation and make such additional examinations as the
committee deems advisable. The Audit Committee also reviews reports of
examination of the Corporation and the Bank received from regulatory
authorities, and reports to the Board of Directors at least once each
calendar year the results of examinations made and such conclusions and
recommendations as the committee deems appropriate, reviewing the scope of
the Corporation's and the Bank's procedures for internal auditing and the
results thereof. The Audit Committee met five times during 1995.
PERSONNEL AND BENEFITS COMMITTEE. The members of the Personnel and
Benefits Committee as of March 8, 1996, were Andrew Zamiara (Chairman),
William F. Cutler, Jr., Lewis Emmons, Stuart Goodfellow, Walter Hill and
Jae Maxfield. The Personnel and Benefits Committee performs the function
of a compensation committee and receives recommendations from senior
management and makes recommendations to the Board of Directors concerning
the compensation and benefits of the officers of the Corporation and the
Bank. The Personnel and Benefits Committee also monitors the provisions of
the Personnel Manual and sets the parameters for the Bank's incentive bonus
plan. This committee also administers the Bank's pension plan. The
Personnel and Benefits Committee met three times during 1995.
-8-
EXECUTIVE AND LOAN REVIEW COMMITTEE. The members of the Executive and
Loan Review Committee as of March 8, 1996, were L. Edmond Eary, M.D.
(Chairman), Frank Berris, Lawrence Bradford, William F. Cutler, Jr., Lewis
Emmons, Stuart Goodfellow, Walter Hill, Jae Maxfield, Jon Pike, Andrew
Zamiara and Denis Crosby. Mr. Crosby is an executive officer of the Bank.
This committee reviews all aspects of loan activity for the Bank for the
preceding month, including new loans of $25,000 or more, problem loans and
loans classified by examiners, loans 60 days or more past due and non-accrual
loans. This committee also approves loan charge-offs and
extensions of credit of up to 15% of the capital and surplus of the Bank.
It may also act in other capacities as authorized by the Board of
Directors. The Executive and Loan Review Committee met seventeen times in
1995.
BRANCHING AND ACQUISITIONS COMMITTEE. The members of the Branching
and Acquisitions Committee as of March 8, 1996, were Frank Berris, Lawrence
Bradford, William F. Cutler, Jr., L. Edmond Eary, M.D., Jae Maxfield and
Jon Pike. The purpose of this committee is to consider potential
acquisitions by the Bank and/or the Corporation. The Branching and
Acquisitions Committee met three times in 1995.
The Corporation does not have a standing nominating committee of the
Board of Directors. During 1995, the Corporation's Board of Directors held
twelve regular and special meetings. All directors attended at least 75%
of the aggregate number of meetings of the Board of Directors and meetings
of committees on which they served during the year.
SECTION 16(A) REPORTING DELINQUENCIES
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires directors and officers of the Corporation and persons beneficially
owning more than 10% of the outstanding shares of Common Stock to file
reports of beneficial ownership and changes in beneficial ownership of
shares of Common Stock with the Securities and Exchange Commission.
Directors, officers and greater than 10% beneficial owners are required by
Securities and Exchange Commission regulations to furnish the Corporation
with copies of all Section 16(a) reports they file. Based on its review of
the copies of such reports received by it or written representations from
certain reporting persons that no Forms 5 were required for those persons,
the Corporation believes that all applicable Section 16(a) reporting and
filing requirements were satisfied from January 1, 1995, through December
31, 1995.
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
The following table shows certain information concerning the
compensation earned by each individual who served as Chief Executive
-9-
Officer of the Corporation during 1995 for services rendered to the
Corporation or the Bank during each year in the three-year period ended
December 31, 1995 in which such individual served as an executive officer
of the Corporation or Bank. No other executive officer of the Corporation
had cash compensation in excess of $100,000 during 1995. Mr. Maxfield was
compensated by the Bank in the capacity indicated in the table.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
NAME AND
PRINCIPAL ANNUAL COMPENSATION ALL OTHER
POSITION<F1> YEAR SALARY<F2> BONUS<F3> COMPENSATION<F4>
<S> <C> <C> <C> <C>
Jae M. Maxfield 1995 $ 100,800 $ 30,900 $ 7,797
Director, President and Chief
Executive Officer of the
Corporation and the Bank<F5>
L. Edmond Eary, Jr., M.D. 1995 $ 6,490 -- --
Chairman of the Board, Interim 1994 10,550 -- --
President and Chief Executive
Officer of the Corporation<F5>
<FN>
_____________________
<F1> Capacities indicated are those in which a majority of compensation was
paid if capacities changed during the year. All of the Corporation's
executive officers also serve as executive officers of the Bank.
<F2> Includes compensation deferred under the Bank's 401(k) Retirement
Savings Plan and director fees paid by the Corporation and the Bank.
<F3> Includes compensation deferred under the Bank's 401(k) Retirement
Savings Plan.
<F4> All other compensation for Mr. Maxfield includes: (i) a housing
allowance for relocation of Mr. Maxfield; and (ii) amounts paid by the
Bank for life and disability insurance. The amounts included for each
such factor during 1995 are: (i) $7,200; and (ii) $597.
<F5> Dr. Eary served as Interim President and Chief Executive Officer of
the Corporation from October 1, 1994 until January 10, 1995. Mr.
Maxfield was appointed President and Chief Executive Officer of the
Corporation on January 11, 1995.
<F6> Compensation reported in this table does not include amounts paid
under the Corporation's defined benefit plans.
</FN>
</TABLE>
-10-
Mr. Maxfield has an employment agreement with the Bank. Under this
agreement, Mr. Maxfield shall be employed as President and Chief Executive
Officer of the Bank and the Corporation unless his employment is terminated
by him or he is dismissed at the pleasure of the Board of Directors of the
Bank. Under this agreement, Mr. Maxfield is entitled to a base salary to
be reviewed annually by the Board of Directors of the Bank, participation
in the Bank's Incentive Bonus Plan, payment of directors fees normally
payable to directors of the Corporation and the Bank for meetings attended,
and other benefits generally available to all Bank employees. Mr. Maxfield
has agreed not to compete in any way with the business of the Bank and
Corporation while in the employ of the Bank and for one year after
termination of his employment with the Bank.
401(K) PLAN. The Sparta State Bank 401(k) Retirement Savings Plan
(the "Savings Plan") is a 401(k) plan established as of July 1, 1992. The
Savings Plan is qualified under Section 401(a) of the Internal Revenue
Code.
The purpose of the Savings Plan is to permit Bank employees, including
Mr. Maxfield, to save for retirement on a pre-tax basis. In addition to
the pre-tax contributions by Bank employees, the Bank may make
discretionary matching and/or profit-sharing contributions to the Savings
Plan. If matching and/or profit-sharing contributions are made to the
Savings Plan, a participant is fully vested in those contributions after
six years of vested service.
Each participant in the Savings Plan has an account to record his or
her interest in the plan. The amount of the contributions made by or on
behalf of the participants are credited to their accounts. A participant's
benefit from the Savings Plan is equal to the vested amount in his or her
account under the plan when he or she terminates employment with the Bank.
INCENTIVE BONUS PLAN. The Bank's Incentive Bonus Plan (the "Bonus
Plan") was established for all of the Bank's officers in 1985. The Bonus
Plan has applied to all employees (both officer and non-officer personnel)
since the 1986 fiscal year. The purposes of the Bonus Plan are to (i)
motivate all personnel of the Bank, (ii) encourage growth of profits and
maximization of return on equity of the Bank, and (iii) provide an
opportunity for participants to be rewarded for individual effort and
performance that is considered by the Personnel and Benefits Committee to
be above average.
The Bonus Plan was revised in 1995 and was based on return on equity
instead of return on assets. A funding range of 9.0% through 10.0% was
established. If return on equity was below 9.0%, or the "threshold," no
bonus based on Bank profits would be paid. Bonuses payable under the Bonus
Plan would begin to accrue at 9.0% return on equity. One quarter of the
targeted bonus amount would be payable for each one quarter of one
percentage point increase in return on equity above 9%, with 100% of the
-11-
targeted bonus amount payable at 10.0% return on equity. There was no
maximum bonus payable under the Bonus Plan such that any increase in return
on equity over 10.0% provided a bonus greater than 100% of the targeted
bonus.
Determinations of eligibility, funding, allocations and amounts of
awards are subject to the review and final approval of the Board of
Directors of the Bank. The Bank's executive officers, as a group, who are
also executive officers of the Corporation received incentive bonuses
totaling $74,123 under the Bonus Plan for the 1995 fiscal year.
PENSION PLAN. The Sparta State Bank Pension Plan (the "Pension Plan")
is a defined benefit plan adopted as of April 1, 1968. The Pension Plan is
qualified under Section 401(a) of the Internal Revenue Code. The cost of
the Pension Plan is borne entirely by the Bank. The purpose of the Pension
Plan is to provide retirement benefits to Bank employees. Each participant
is fully vested after six years of vested service.
Subject to certain minimums, the monthly normal retirement benefit is
equal to 1.1% of the participant's average monthly compensation multiplied
by his or her years of vested service (without limit on amount), plus 0.6%
of the participant's average monthly compensation in excess of covered
compensation multiplied by his or her years of vested service (up to a
maximum of 35 years). "Average monthly compensation" means the monthly
average of the participant's compensation during the five consecutive plan
years in which the participant was most highly compensated during the ten
plan years immediately preceding his or her termination of employment.
"Covered compensation" means the greater of (i) $1,000, or (ii) one
twenty-fourth (1/24) of the covered compensation (determined under regulations
issued by the Internal Revenue Service) of an individual who attains social
security retirement age in the plan year in which the benefit is
calculated. Election of available joint and survivor benefits, early
retirement benefits and other payment options would reduce monthly
retirement benefits.
Since retirement benefits under the Pension Plan are based in
substantial part upon compensation during the ten years before termination
of employment, it is not possible to predict accurately the annual
retirement benefits to be paid to any participant. The Pension Plan Table
set forth below shows estimated annual benefits payable under the Pension
Plan upon retirement to persons in the compensation and years-of-service
classifications listed in the table.
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<TABLE>
PENSION PLAN TABLE
<CAPTION>
AVERAGE
REMUNERATION YEARS OF BENEFIT SERVICE
35 OR
10 15 20 25 30 MORE
<S> <C> <C> <C> <C> <C> <C> <C>
$ 20,000 $ 2,622 $ 3,934 $ 5,245 $ 6,556 $ 7,867 $ 9,178
40,000 6,022 9,034 12,045 15,056 18,067 21,078
60,000 9,422 14,134 18,845 23,556 28,267 32,978
80,000 12,822 19,234 25,645 32,056 38,467 44,878
100,000 16,222 24,334 32,445 40,556 48,667 56,778
120,000 19,622 29,434 39,245 49,056 58,867 68,678
140,000 23,022 34,534 46,045 57,556 69,067 80,578
160,000 26,422 39,634 52,845 66,056 79,267 92,478
</TABLE>
As of March 8, 1996, Mr. Maxfield had one year of service under the
Pension Plan. Covered compensation for the individuals named in the
Summary Compensation Table above is substantially the same as the aggregate
amount reported as "Annual Compensation" in that table.
During 1995, the Corporation compensated its directors at the rate of
$50 per meeting attended and directors who were not employees of the
Corporation or the Bank received $60 per hour for each meeting of any
committee of the Board of Directors on which they served other than the
Executive and Loan Review Committee. During 1995, the Bank compensated its
directors at the rate of $350 per meeting attended. The Chairman of the
Board of the Bank received an additional $100 per meeting attended.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Directors, nominees for director and executive officers of the
Corporation and members of their immediate families were customers of and
had transactions with the Bank in the ordinary course of business between
January 1, 1995, and March 8, 1996. It is anticipated that such
transactions will take place in the future in the ordinary course of
business. All loans and commitments included in such transactions were
made on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable transactions
with other persons and did not involve more than the normal risk of
collectibility or present other unfavorable features.
On May 22, 1990, the Bank opened a branch on the corner of Division
Street and Ida Red Avenue in Sparta, Michigan. Bradford Insurance Centre,
Ltd. (the "Agency") entered into a Lease and Option to Purchase with the
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Bank providing for the lease and/or purchase of a portion of the land and
building which is occupied by the branch. Mr. Bradford, a director of the
Corporation and the Bank and President of the Agency (now a wholly owned
subsidiary of the Bank), and two of Mr. Bradford's brothers were the
stockholders (each owning a 33 1/3% interest) of the Agency during 1994 and
1995. The Lease and Option to Purchase was negotiated by the Bank and the
Agency on an arm's-length basis and contains terms and conditions
comparable to other lease/purchase arrangements in the area. The Lease and
Option to Purchase terminated on May 31, 1995, and the Agency rented the
space occupied by the Agency on a month to month basis thereafter. During
1994 and 1995, the Agency made aggregate payments under this arrangement to
the Bank of $39,327 and $37,555, respectively.
Effective January 1, 1996, the Bank, through a merger of a wholly
owned subsidiary of the Bank, acquired all of the outstanding stock of the
Agency. Mr. Bradford and his two brothers each received 6,870 shares of
the Corporation's Common Stock, valued at approximately $259,350 for
purposes of the transaction, in exchange for the outstanding shares of the
Agency. In connection with the transaction, Mr. Bradford, his son and his
nephew each entered into an employment agreement with the Agency. Under
the terms of these agreements, each individual will be employed for an
initial term of three years, will receive a base salary and will
participate in a bonus pool based on the income of the Agency as compared
to the Bank's investment in the Agency. In return, each individual agreed
to certain covenants, including covenants not to compete with the Agency
for specified periods of time.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Crowe, Chizek and Company LLP, certified public accountants, served as
the Corporation's principal accountant for 1995. The Board of Directors
has not yet selected the Corporation's principal accountant for 1996 and is
currently soliciting competitive bids from several accounting firms.
Representatives of Crowe, Chizek and Company LLP are not expected to be
present at the Annual Meeting. If a representative of Crowe, Chizek and
Company LLP attends the meeting, the representative will have an
opportunity to make a statement and will be expected to be available to
respond to appropriate questions.
PROPOSALS OF SHAREHOLDERS
Proposals of shareholders intended to be presented at the 1997 annual
meeting of shareholders must be received by the Corporation for
consideration for inclusion in its proxy statement and form of proxy
relating to that meeting by December 1, 1996. Proposals of shareholders
should be made in accordance with Securities and Exchange Commission
Rule 14a-8.
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FORM 10-K REPORT AVAILABLE
THE CORPORATION'S FORM 10-KSB ANNUAL REPORT TO THE SECURITIES AND
EXCHANGE COMMISSION, INCLUDING FINANCIAL STATEMENTS AND FINANCIAL STATEMENT
SCHEDULES, WILL BE PROVIDED WITHOUT CHARGE TO SHAREHOLDERS UPON WRITTEN
REQUEST. REQUESTS SHOULD HE DIRECTED TO MR. THOMAS L. LAMPEN, TREASURER,
1ST COMMUNITY BANCORP, INC., 109 EAST DIVISION, SPARTA, MICHIGAN 49345.
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1ST COMMUNITY BANCORP, INC.
P R O X Y 109 EAST DIVISION P R O X Y
SPARTA, MICHIGAN 49345
ANNUAL MEETING OF SHAREHOLDERS - APRIL 30, 1996
The undersigned shareholder appoints L. Edmond Eary, Jr., M.D.,
and Lawrence D. Bradford, or either of them, each with the power to
appoint his substitute, attorneys and proxies to represent the
shareholder and to vote and act, with respect to all shares that the
shareholder would be entitled to vote at the annual meeting of shareholders
of 1st Community Bancorp, Inc. referred to above and at any adjournment of
that meeting, on all matters that come before the meeting.
1. Election of Directors
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY
(except as indicated below) to vote for all nominees
listed below
Jae M. Maxfield Jon E. Pike Linda R. Pitsch
(Instruction: To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided below.)
___________________________________________________________
YOUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR ALL NOMINEES
2. Proposal to Approve an Amendment to the Corporation's Articles of
Incorporation to Increase the Number of Authorized Shares of Common
Stock
[ ] FOR [ ] AGAINST [ ] ABSTAIN
YOUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THIS PROPOSAL
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS. IF THIS PROXY
IS PROPERLY EXECUTED AND DELIVERED, THE SHARES REPRESENTED BY THIS PROXY
WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE, THE SHARES WILL
BE VOTED FOR ELECTION OF ALL NOMINEES NAMED ON THIS PROXY AND FOR THE
PROPOSAL TO APPROVE AN AMENDMENT TO THE CORPORATION'S ARTICLES OF
INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN THE DISCRETION OF THE
PROXIES ON ANY OTHER MATTERS THAT MAY COME BEFORE THE MEETING OR ANY
ADJOURNMENT OF THE MEETING.
Dated: _________________, 1996 Please sign exactly as your name appears
on this proxy. If signing for estates,
trusts or corporations, title or
capacity should be stated. IF SHARES
ARE HELD JOINTLY, EACH HOLDER SHOULD
SIGN.
________________________________________
Signature
________________________________________
Signature if held jointly
IMPORTANT -- PLEASE MARK, SIGN, DATE AND RETURN PROMPTLY
IN THE ENCLOSED ENVELOPE
