<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /x/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/x/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
MOUNTAIN BANK HOLDING COMPANY
- --------------------------------------------------------------------------------
(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)(1)
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
filing 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:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE>
March 13, 2000
Dear Shareholders:
You are cordially invited to attend the annual meeting of shareholders of
Mountain Bank Holding Company on Tuesday, March 28, 2000, at 7:00 p.m. at the
VFW Hall, 44426 244th Avenue S.E., Enumclaw, Washington.
At this meeting you will be asked to elect three directors for a term of
three years and to ratify the appointment of accountants for the year 2000.
A proxy is enclosed with the Notice of Meeting and Proxy Statement. Please
indicate your voting instructions and sign, date, and return the proxy promptly
in the postage prepaid envelope provided. Whether or not you plan to attend the
annual meeting in person, it is important that you return the enclosed proxy so
that your shares are voted. A proxy that is returned signed and dated but with
no voting instructions will be voted in favor of the matters and, in appropriate
circumstances, will enable the Company's management to adjourn the meeting to
continue to solicit votes to approve these matters. The proxy may be revoked in
writing by the person giving it at any time before it is exercised by notice of
such revocation to the Secretary of the Company, or by submitting a proxy having
a later date, or by such person appearing at the meeting and electing to vote in
person.
During the meeting, 1999 activities will be reviewed and the Company's plan
for 2000 will be discussed.
Sincerely,
/s/ Roy T. Brooks
Roy T. Brooks
Chairman of the Board of Directors
<PAGE>
MOUNTAIN BANK HOLDING COMPANY
501 ROOSEVELT AVENUE
ENUMCLAW, WASHINGTON 98022
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MARCH 28, 2000
To the Shareholders of Mountain Bank Holding Company:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Mountain
Bank Holding Company (the "Company") will be held at the VFW Hall, 44426 - 244th
Avenue S.E., Enumclaw, Washington, on Tuesday, March 28, 2000, at 7:00 p.m.
local time for the purpose of considering and voting upon the following matters:
1. ELECTION OF DIRECTORS. To elect three (3) Directors to serve for a
term of three years or until their successors have been elected and
qualified.
2. RATIFICATION OF ACCOUNTANTS. To ratify the appointment of Knight Vale
& Gregory PLLC as the Company's independent auditors for the year
ending December 31, 2000.
3. WHATEVER OTHER BUSINESS may properly come before the Annual Meeting or
any adjournments thereof.
Only those shareholders of record at the close of business on February 1,
2000, shall be entitled to notice of, and to vote at, the Annual Meeting or any
adjournments thereof.
Further information regarding voting rights and the business to be
transacted at the Annual Meeting is given in the accompanying Proxy Statement.
Your continued interest as a shareholder in the affairs of the Company, its
growth and development, is genuinely appreciated by the directors, officers and
personnel who serve you.
March 13, 2000 BY ORDER OF THE BOARD OF DIRECTORS
/s/ Roy T. Brooks
Roy T. Brooks, Chairman of the Board
================================================================================
YOUR VOTE IS IMPORTANT
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE SIGN AND DATE YOUR
PROXY CARD AND RETURN IT IN THE ENCLOSED POSTAGE PREPAID ENVELOPE. RETENTION OF
THE PROXY IS NOT NECESSARY FOR ADMISSION TO THE ANNUAL MEETING.
================================================================================
<PAGE>
MOUNTAIN BANK HOLDING COMPANY
501 ROOSEVELT AVENUE
ENUMCLAW, WASHINGTON 98022
(360) 825-0100
PROXY STATEMENT
This Proxy Statement and the accompanying Proxy are being sent to
shareholders on or about March 13, 2000, for use in connection with the Annual
Meeting of Shareholders ("Annual Meeting") of Mountain Bank Holding Company (the
"Company") to be held on Tuesday, March 28, 2000. Only those shareholders of
record at the close of business on February 1, 2000, shall be entitled to vote.
The number of shares of the Company's common stock, par value $1.00 per share
(the "Common Stock"), outstanding and entitled to vote at the Annual
Shareholders Meeting is 924,013.
SOLICITATION OF PROXIES. The enclosed Proxy is solicited by and on behalf
of the Board of Directors of the Company, with the cost of solicitation borne by
the Company. Solicitation may be made by directors and officers of the Company
and its bank subsidiary, Mt. Rainier National Bank (the "Bank"). Solicitation
may be made by use of the mails, by telephone, facsimile and personal interview.
The Company does not expect to pay any compensation for the solicitation of
proxies, except to brokers, nominees and similar record holders for reasonable
expenses in mailing proxy materials to beneficial owners.
QUORUM. The presence, in person or by proxy, of at least a majority of the
total number of outstanding shares of Common Stock entitled to vote is necessary
to constitute a quorum at the Annual Meeting. Abstentions will be counted as
shares present and entitled to vote at the Annual Meeting for purposes of
determining the presence of a quorum. Broker non-votes will not be considered
shares present and will not be included in determining whether a quorum is
present.
VOTING RIGHTS
VOTING ON MATTERS PRESENTED. The three nominees for election as Directors
at the Annual Meeting who receive the highest number of affirmative votes will
be elected. Shareholders are not permitted to cumulate their votes for the
election of directors. Votes may be cast FOR or WITHHELD from each nominee.
Votes that are withheld and broker non-votes will have no effect on the outcome
of the election because directors will be elected by a plurality of votes cast.
With respect to the proposal to ratify accountants, stockholders may vote FOR
the proposal, AGAINST the proposal or may ABSTAIN from voting. The affirmative
vote of a majority of the total votes present, in person or by proxy, at the
Annual Meeting is required for the approval to ratify the appointment of the
Company's independent auditors. Holders of record of the Common Stock will be
entitled to one vote per share on any matter that may properly come before the
Annual Meeting.
VOTING OF PROXIES BY BENEFICIAL HOLDER. If your shares are held by a bank,
broker or other holder of record and you want to attend the meeting and vote in
person, you will need to bring an account statement or letter from the nominee
indicating that you were the beneficial owner of the shares on February 1, 2000,
the record date.
1
<PAGE>
VOTING OF PROXIES. If the enclosed Proxy is duly executed and received in
time for the meeting, it is the intention of the persons named in the Proxy to
vote the shares represented in accordance with the instructions indicated on the
Proxy. If no instructions are indicated, such proxies will be voted FOR the
three nominees listed in this Proxy Statement, and FOR the ratification of the
appointment of Knight Vale & Gregory PLLC as the Company's independent auditors
for the year ending December 31, 2000; and in the discretion of the proxy
holder, as to any other matter which may properly come before the Annual
Meeting. Any proxy given by a shareholder may be revoked before its exercise by
notice to the Company in writing, by a subsequently dated proxy, or at the
Meeting prior to the taking of the shareholder vote.
BUSINESS OF THE MEETING
There are two matters being presented for consideration by the shareholders
at the Annual Meeting.
PROPOSAL NO. 1 - ELECTION OF DIRECTORS
GENERAL
The Company's Restated Articles of Incorporation ("Articles") and Bylaws
provide that the number of directors must fall within a range of 5 and 25, the
exact number to be determined by an affirmative vote of a majority of the
directors or by resolution of the shareholders. The Bylaws also provide that the
Board of Directors may fill vacancies created on the Board, within certain
limits, provided that the number of directors shall at no time exceed 25. The
Board of Directors has set the size of the Board at nine persons.
Directors are elected for a term of three years and until their successors
have been elected and qualified. The Company's Articles require that the terms
of the directors be staggered such that one-third of the directors are elected
each year.
In accordance with the above, the Board of Directors has nominated Mr. Roy
T. Brooks, Ms. Susan K. Bowen-Hahto, and Mr. Steve W. Moergeli for election as
directors for three-year terms to expire in the year 2003. If any of Mr. Brooks,
Ms. Bowen-Hahto, or Mr. Moergeli should refuse or be unable to serve, your Proxy
will be voted for such person as shall be designated by the Board of Directors
to replace any such nominee. The Board of Directors presently has no knowledge
that any of the nominees will refuse or be unable to serve.
In accordance with the Company's Bylaws, other nominations, if any, may be
made only in accordance with the prior notice provisions contained in the
Company's Bylaws. Such notice provisions require that a shareholder provide the
Company with written notice (containing the information required by the Bylaws)
at least 14 days but not more than 50 days prior to the Annual Meeting (or, if
the Company provides less than 21 days' public notice of such meeting, no later
than 7 days after the date of the Company's notice).
2
<PAGE>
INFORMATION WITH RESPECT TO NOMINEES AND
DIRECTORS WHOSE TERMS CONTINUE
The following tables set forth certain information with respect to the
nominees for director and for directors whose terms continue, including the
number of shares of common stock beneficially held. Beneficial ownership is a
technical term broadly defined by the SEC to mean more than ownership in the
usual sense. In general, beneficial ownership includes any shares a director or
executive officer can vote or transfer and stock options that are exercisable
currently or become exercisable with 60 days. Except as noted below, each holder
has sole voting and investment power for all shares shown as beneficially owned
by them. Where beneficial ownership was less than one percent of all outstanding
shares, the percentage is not reflected in the table.
<TABLE>
<CAPTION>
SHARES AND
PERCENTAGE OF
COMMON STOCK
PRINCIPAL OCCUPATION BENEFICIALLY
NAME, AGE AND OF DIRECTOR DURING OWNED AS OF
TENURE AS DIRECTOR LAST FIVE YEARS JANUARY 15, 2000
------------------ --------------- ----------------
(1)(2)
<S> <C> <C>
NOMINEES FOR DIRECTOR FOR THREE-YEAR TERM EXPIRING IN 2003
Roy T. Brooks, 59 Chairman and CEO of the Company; 29,695(3)
Since 1993 Chairman of the Bank; CEO, Chairman 3.20%
and part owner of Westmark
Electronics
Susan K. Bowen-Hahto, 51 Real Estate and Land Developer 15,000(4)
Since 1993 1.61%
Steve W. Moergeli, 46 President and CEO of the Bank; 12,145
Since 1997 former Vice-President and Credit 1.30%
Administrator of the Bank
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE NOMINEES TO BE
ELECTED AS DIRECTORS.
(1) Shares held directly with sole voting and sole investment power, unless
otherwise indicated.
(2) Share amounts include stock options which are exercisable within 60 days as
follows: Mr. Brooks 4,000 shares; Ms. Bowen-Hahto 6,000 shares; Mr.
Gallagher 6,000 shares; Mr. Jones 6,000 shares; Mr. Kombol 4,000 shares;
Mr. Moergeli 7,000 shares; Mr. Raeder 6,000 shares; Mr. Van Beek 6,000
shares; and Mr. Zurcher 6,000 shares.
(3) Includes 3,816 shares held jointly with spouse.
(4) Includes 1,000 shares held jointly with spouse and 1,200 shares held in
trusts for the benefit of Ms. Bowen-Hahto's children.
3
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
DIRECTORS WITH TERM EXPIRING 2001
Barry C. Kombol, 49 Vice-Chairman of the Company; 13,500
Since 1993 Attorney in private practice 1.45%
John W. Raeder, 63 Chairman, Universal Refrigeration, 19,736
Since 1993 Inc. 2.12%
Garrett S. Van Beek, 64 Owner, Van Beek & Sons Dairy 22,028(5)
Since 1993 2.37%
DIRECTORS WITH TERM EXPIRING 2002
Brian W. Gallagher, 50 President and Principal Owner, 30,713(6)
Since 1993 Northern Transport, Inc. 3.30%
Michael K. Jones, Sr., 57 Certified Public Accountant,
Since 1993 Principal Owner, Jones & 28,599(7)
Associates, Inc., P.S. 3.08%
Hans R. Zurcher, 63 Partner, Zurcher Dairy 25,414
Since 1993 2.73%
</TABLE>
(5) Includes 2,743 shares held by Mr. Van Beek's spouse and 5,285 held jointly
with his spouse.
(6) Includes 3,857 shares held in trust for the benefit of Mr. Gallagher's
children; 1,062 held by Mr. Gallagher's spouse; and 1,002 held by Mr.
Gallagher's children.
(7) Includes 5,000 shares held by Mr. Jones' spouse; 2,000 shares held in
trusts for the benefit of Mr. Jones' children, and 601 held by Mr. Jones'
children.
INFORMATION REGARDING THE BOARD OF DIRECTORS AND ITS COMMITTEES
The following sets forth information concerning the Board of Directors and
Committees of the Company during the fiscal year 1999.
4
<PAGE>
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors met ten times during the fiscal year. In addition to
meetings of the full Board, directors attended meetings of Board committees.
When the need arose, the full Board served as the Nominating Committee and the
Compensation Committee. The Audit and Executive Committees are established by
the Board of Directors of the Bank and act on behalf of the Company. Each
director attended at least 75% of the meetings of the Board and of the
committees on which he served, except Mr. Kombol who was unable to attend the
one Executive Committee meeting held. The following table shows the membership
of the Audit and Executive Committees during the fiscal year.
COMMITTEE MEMBERSHIP
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------
NAME AUDIT EXECUTIVE
---------------------------------------------------------------------------------
<S> <C> <C>
Roy T. Brooks |X| |X| *
---------------------------------------------------------------------------------
Brian W. Gallagher |X|
---------------------------------------------------------------------------------
Barry C. Kombol |X| * |X|
---------------------------------------------------------------------------------
Steve W. Moergeli |X|
---------------------------------------------------------------------------------
John W. Raeder |X|
---------------------------------------------------------------------------------
Garrett S. Van Beek |X|
---------------------------------------------------------------------------------
Hans R. Zurcher |X|
---------------------------------------------------------------------------------
</TABLE>
* Chairman
AUDIT COMMITTEE. The main function of the Audit Committee includes
reviewing the plan, scope, and audit results of the independent auditors, as
well as reviewing and approving the services of the independent auditors. The
Audit Committee reviews or causes to be reviewed the reports of bank regulatory
authorities and reports its conclusions to the Board of Directors. The Audit
Committee also reviews procedures with respect to the Company's records and its
business practices, and reviews the adequacy and implementation of the internal
auditing, accounting and financial controls. The Committee held five meetings
during the year.
EXECUTIVE COMMITTEE. The main function of the Executive Committee is to
establish the agenda for the Company's Board of Directors meetings, to receive
reports from the Executive Officers regarding their activities and the
implementation of the Company's business plan, and to ensure the Company's
strategic planning process is being followed. The Committee met once during the
year.
5
<PAGE>
COMPENSATION OF DIRECTORS
The Company and the Bank have established a program by which non-employee
directors receive compensation as follows:
COMPANY. The Directors receive no retainers, nor fees for meetings
attended.
BANK. The Chairman of the Board receives no separate compensation for
serving as Chairman. During 1999, each non-employee Director (other than the
Chairman) received an annual retainer of $9,000; and each non-employee committee
member received a fee of $125 for each meeting attended, except non-employee
Audit Committee members who received a fee of $200 for each meeting attended.
DIRECTOR STOCK OPTION PLANS
1990 DIRECTOR STOCK OPTION PLAN. At the first Annual Meeting of
Shareholders of the Bank, the shareholders approved the 1990 Director Stock
Option Plan (the "1990 Director Plan"). The 1990 Director Plan was assumed and
adopted by the Company. Under the 1990 Director Plan, a grant of 6,000 shares
was made to an outside director upon his or her initial election to the Board of
Directors at an exercise price equal to the fair market value of the Common
Stock at the date of grant. The options are exercisable on a cumulative basis in
annual installments of one third each on the third, fourth and fifth anniversary
of the date of grant. The service as a director must be continuous for such
vesting to occur. No option can be exercised after the expiration of 15 years
from the date of grant. A total of 60,000 shares of the Company's Common Stock
were available for issuance under the 1990 Director Plan, of which only 6,000
remain available for grant. Accordingly, as described below, in 1999 the Board
and shareholders approved the 1999 Director Stock Option Plan.
1999 DIRECTOR STOCK OPTION PLAN. At the 1999 Annual Meeting, the
shareholders approved the 1999 Director Stock Option Plan (the "1999 Director
Plan"), in which 20,000 additional shares of stock were reserved for issuance to
directors. Under the terms of the 1999 Director Plan, non-qualified stock
options to purchase shares of the Company's Common Stock may be granted to
non-employee directors at a price not less than the greater of (i) the fair
market value, or (ii) the net book value of such shares on the date of grant. No
options will be granted under the 1999 Director Plan until all shares available
under the 1990 Director Plan are granted. During 1999, no options to purchase
shares were granted to directors under either plan.
6
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth a summary of certain information concerning
compensation awarded to or paid by the Company or the Bank for services rendered
in all capacities during the last three fiscal years to the Chief Executive
Officer and executive officers of the Company or the Bank earning $100,000 or
more during fiscal year 1999.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
==============================================================================================================
Annual Compensation Long Term Compensation
-----------------------------------------------------------
Awards Payouts
-------------------------
Other Annual Securities
Name and Salary Bonus Compensation Underlying LTIP All Other
Principal Position Year (1) (2) (3) Options Payouts Compensation
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Roy T. Brooks 1999 $50,331 $ 0 $ 0 0 0 $ 0
Chairman, CEO 1998 48,000 0 0 0 0 0
& President 1997 46,700 0 0 5,000(4) 0 0
- --------------------------------------------------------------------------------------------------------------
Steve W. Moergeli, 1999 $96,142 $10,800 $ 0 2,500 0 $ 3,208(5)
President and 1998 87,142 1,950 0 0 0 2,673
CEO of Bank 1997 72,925 0 0 7,500 0 2,188
==============================================================================================================
</TABLE>
(1) Represents annual compensation paid to Mr. Brooks for his duties in 1998
and 1997 as a consultant to the Company and the Bank prior to his
appointment as President and CEO.
(2) Includes bonuses paid or to be paid during the subsequent year but
attributable to the year indicated.
(3) Does not include amounts attributable to miscellaneous benefits received by
executive officers, including the use of company-owned automobiles and the
payment of certain club dues. In the opinion of management, the costs to
the Company or the Bank of providing such benefits to any individual
executive officer during the year ended December 31, 1999, did not exceed
the lesser of $50,000 or 10% of the total of annual salary and bonus
reported for the individual.
(4) Mr. Brooks was granted options for 5,000 shares in recognition of his role
as President of Mt. Rainier National Bank from the time of the former
President's resignation in December 1996 until the Bank's new President was
appointed in March 1997.
(5) Includes contributions to the Company's 401(k) Plan.
7
<PAGE>
STOCK OPTIONS
OPTION GRANTS IN LAST FISCAL YEAR. The following table sets forth
information concerning the grant of stock options to the Chief Executive Officer
and the named executive officers during the fiscal year ended December 31, 1999.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
==============================================================================================================
POTENTIAL REALIZABLE
VALUE AT
ASSUMED ANNUAL RATES
OF STOCK PRICE
APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM (2)
- --------------------------------------------------------------------------------------------------------------
% OF TOTAL
NUMBER OF OPTIONS
SHARES GRANTED TO
UNDERLYING EMPLOYEES EXERCISE
OPTIONS IN FISCAL PRICE EXPIRATION
NAME GRANTED (1) YEAR ($/SHARE) DATE 5% 10%
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Roy T. Brooks 0 0 0 0 0 0
- --------------------------------------------------------------------------------------------------------------
Steve W. Moergeli 2,500 9.3% $17.50 6/15/09 $27,562 $69,562
==============================================================================================================
</TABLE>
(1) Each option granted vests at the rate of approximately one-third per annum,
beginning June 15, 2002. Options will become immediately exercisable in the
event of a change in control of the Company. Each option has an exercise
price equal to the greater of (i) the fair market value; or (ii) the net
book value of the Common Stock on the date of grant. The options were
granted on June 15, 1999.
(2) The hypothetical dollar gains under these columns result from calculations
required by the SEC rules. The gains are based on assumed rates of annual
compound stock price appreciation of 5% and 10% from the date the options
were granted over the full option term. The actual value, if any, that the
executive officers may realize will depend on the spread between the market
price and the exercise price on the date the option is exercised. Actual
gains, if any, on stock options exercised and common stock holding are
dependent upon future performance of the Company and overall stock market
conditions. There can be no assurance that the amounts reflected in this
table will be achieved.
8
<PAGE>
OPTION EXERCISES. The following table sets forth certain information
concerning stock options held by the named executive officers. No stock options
were exercised during the year ended December 31, 1999.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND YEAR END OPTION VALUES
<TABLE>
<CAPTION>
==========================================================================================================
Shares Number of Value of
Acquired on Value Unexercised Unexercised Options at
Name Exercise Realized Options at Year End Year End (1)
---------------------------------------------------------
Exercisable Unexercisable Exercisable Unexercisable
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Roy T. Brooks 0 0 4,000 5,000 $ 52,000 $ 27,500
- ----------------------------------------------------------------------------------------------------------
Steve W. Moergeli 0 0 7,000 10,000 89,750 42,500
==========================================================================================================
</TABLE>
(1) On December 31, 1999, the closing price of the Common Stock was $18.00. For
purposes of the foregoing table, stock options with an exercise price less
than that amount are considered to be "in-the-money" and are considered to
have a value equal to the difference between this amount and the exercise
price of the stock option multiplied by the number of shares covered by the
stock option.
1999 OFFICER INCENTIVE COMPENSATION PLAN
The Company operates an Officer Incentive Compensation Plan (the "Incentive
Plan") for the benefit of officers of the Bank. The purpose of the Incentive
Plan is to reward individuals who make significant contributions to the Bank's
success and to provide performance-based competitive pay opportunities.
Participants are selected by the President and confirmed by the Board of
Directors, and must be in a position to materially affect the Bank's
performance. Under the terms of the Incentive Plan, each participant is assigned
a specific dollar incentive based on their job description, overall
responsibility and direct influence on overall operating results. The percentage
of such dollar amount that is actually paid to the participant is based on the
Bank's return on average assets for that fiscal year, as well as the individual
goals set for each participant.
EMPLOYEE STOCK OPTION PLANS
At the first Annual Meeting of Shareholders of the Bank, the shareholders
approved the 1990 Employee Stock Option Plan (the "1990 Employee Plan"). The
1990 Employee Plan was assumed and adopted by the Company. A total of 60,000
shares were authorized for issuance under the 1990 Employee Plan. At December
31, 1999, all shares of Common Stock available under the 1990 Employee Plan had
been granted.
9
<PAGE>
At the 1999 Annual Meeting, the shareholders approved the 1999 Employee
Stock Option Plan (the "1999 Employee Plan"), in which 40,000 additional shares
of stock were reserved for issuance to employees. Like the 1990 Employee Plan,
both incentive and non-qualified options may be granted to key employees of the
Bank. The exercise price of the options must be not less than the greater of (i)
the fair market value, or (ii) the net book value of the shares of the Company
on the date in which the option is granted. In general, an incentive stock
option may be exercised during a period of not more than 10 years from the date
of grant, although a shorter period may be specified, and in such amounts as the
Board may determine. A non-qualified stock option may be exercised during the
period specified by the Board. The Board has the authority to thereafter
accelerate the period within which any option may be exercised. During 1999,
options to purchase 26,750 shares were granted under the respective plans,
leaving a total of 20,751 shares available for grant under the 1999 Employee
Plan.
DEFERRED COMPENSATION PLANS
In 1993, the Bank established a deferred compensation agreement with
Director Kombol under which the director may defer his director's fees. The Bank
has also purchased a whole-life insurance policy which may be used to fund
benefits under the deferred compensation agreement.
401(k) PLAN
The Company's 401(k) Plan allows for pre-tax employee contributions up to
IRS maximum limits with a Company match of 50% of the first 6% of employee
contribution. Employee elective contributions are 100% vested at all times.
Matching contributions have a two year vesting schedule, and beginning the third
year, are 100% vested.
As a result of the tax qualification of the 401(k) Plan, employees are not
subject to federal or state income taxation on the employee elective
contributions, employer contributions or earnings thereon until those amounts
are distributed from the 401(k) Plan, although the Company continues to receive
a compensation expense deduction for compensation paid.
EMPLOYEE STOCK PURCHASE PLAN
In order to encourage and facilitate the purchase of Company Common Stock
by employees, the Board adopted and shareholders approved at the 1996 Annual
Meeting, the 1995 Employee Stock Purchase Plan (the "Purchase Plan"). The
Purchase Plan makes available 20,000 shares of Company Common Stock for purchase
by eligible employees through a payroll deduction method. The purchase price is
the lower of the market price of the Company's Common Stock at the beginning or
end of the plan year. At December 31, 1999, 14,654 shares remained available for
issuance under the Purchase Plan.
10
<PAGE>
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table provides certain information with respect to executive
officers and directors as a group. The Company is not aware of any person who at
December 31, 1999, beneficially owned more than five percent of its outstanding
Common Stock.
OWNERSHIP OF MANAGEMENT
<TABLE>
<CAPTION>
SHARES AND PERCENTAGE OF
NAME COMMON STOCK BENEFICIALLY OWNED
- ---- ------------------------------
<S> <C>
Executive officers and directors as a group 206,082 (20.99%)(1)
(11 individuals)
</TABLE>
(1) Includes 58,000 shares subject to options that could be exercised within 60
days.
MANAGEMENT
EXECUTIVE OFFICERS
The following table sets forth information with respect to executive
officers who are not directors or nominees for director of the Company, and are
not otherwise named in the compensation table.
<TABLE>
<CAPTION>
RELATIONSHIP WITH THE COMPANY AND
NAME AND AGE BUSINESS EXPERIENCE DURING THE LAST FIVE YEARS
- ------------ ----------------------------------------------
<S> <C>
Sheila M. Brumley, 45 Chief Financial Officer and Secretary; Senior Vice
President, Secretary and Cashier of the Bank
Sterlin E. Franks, 53 Vice President and Credit Administrator of the Bank; Bank
branch management and bank administration
</TABLE>
TRANSACTIONS WITH MANAGEMENT
Various of the directors and officers of the Company, members of their
immediate families, and firms in which they had an interest were customers of
and had transactions with the Bank during 1999 in the ordinary course of
business. Similar transactions may be expected to take place in the ordinary
course of business in the future. All outstanding 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, in the opinion of management,
involve more than the normal risk of collectibility nor present other
unfavorable features.
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<PAGE>
COMPLIANCE WITH SECTION 16(a) FILING REQUIREMENTS
Section 16(a) of the Securities Exchange Act of 1934, as amended, ("Section
16(a)") requires that all executive officers and directors of the Company and
all persons who beneficially own more than 10 percent of the Company's Common
Stock file reports with the Securities and Exchange Commission with respect to
beneficial ownership of the Company's Securities. The Company has adopted
procedures to assist its directors and executive officers in complying with the
Section 16(a) filings.
Based solely upon the Company's review of the copies of the filings which
it received with respect to the fiscal year ended December 31, 1999, or written
representations from certain reporting persons, the Company believes that all
reporting persons made all filings required by Section 16(a) in a timely manner.
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
At the Annual Meeting, stockholders of the Company will be asked to ratify
the appointment of Knight Vale & Gregory PLLC as the Company's independent
auditors for the year ending December 31, 2000. This appointment was recommended
by the Audit Committee of the Bank and approved by the Board of Directors of the
Company and the Bank. If the stockholders of the Company do not ratify the
appointment of Knight Vale & Gregory PLLC, the appointment will be reconsidered
by the Board of Directors of the Company.
Knight Vale & Gregory PLLC has audited the Company since its formation and
the Bank for many years. Audit services performed by Knight Vale & Gregory PLLC
include examinations of the financial statements of the Company, limited reviews
of interim financial information, services related to filings with regulatory
authorities and consultations on matters related to accounting and financial
reporting.
A representative of Knight Vale & Gregory PLLC will be present at the
Annual Meeting and available to respond to appropriate questions and will be
given an opportunity to make a statement if the representative chooses to do so.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE BY STOCKHOLDERS FOR
RATIFICATION OF KNIGHT VALE & GREGORY PLLC AS THE COMPANY'S INDEPENDENT AUDITORS
FOR THE YEAR ENDING DECEMBER 31, 2000. THE AFFIRMATIVE VOTE OF THE HOLDERS OF A
MAJORITY OF THE SHARES OF COMMON STOCK PRESENT IN PERSON OR BY PROXY AT THE
ANNUAL MEETING IS REQUIRED TO APPROVE THIS PROPOSAL.
OTHER BUSINESS
The Board of Directors knows of no other matters to be brought before the
shareholders at the Annual Meeting. In the event other matters are presented for
a vote at the Meeting, the proxy holders will vote shares represented by
properly executed proxies in their discretion in accordance with their judgment
on such matters.
At the Meeting, management will report on the Company's business and
shareholders will have the opportunity to ask questions.
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INFORMATION CONCERNING SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the 2001 annual
shareholder's meeting must be received by the Secretary of the Company before
November 4, 2000, for inclusion in the 2001 Proxy Statement and form of proxy.
In addition, if the Company receives notice of a shareholder proposal after
January 18, 2001, the persons named as proxies in such proxy statement and form
of proxy will have discretionary authority to vote on such shareholder proposal.
ANNUAL REPORT TO SHAREHOLDERS
ANY SHAREHOLDER MAY OBTAIN WITHOUT CHARGE A COPY OF THE COMPANY'S ANNUAL
REPORT ON FORM 10-KSB FILED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER
THE SECURITIES EXCHANGE ACT OF 1934 FOR THE YEAR ENDED DECEMBER 31, 1999,
INCLUDING FINANCIAL STATEMENTS. Written requests for the Form 10-KSB should be
addressed to Sheila Brumley, CFO, Mountain Bank Holding Company, 501 Roosevelt
Avenue, Enumclaw, Washington 98022.
March 13, 2000 BY ORDER OF THE BOARD OF DIRECTORS
/s/ Roy T. Brooks
Roy T. Brooks, Chairman of the Board
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MOUNTAIN BANK HOLDING COMPANY
PROXY
PLEASE SIGN AND RETURN IMMEDIATELY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Garrett S. Van Beek and Hans R. Zurcher and
each of them (with full power to act alone) as Proxies, with full power of
substitution, and hereby authorizes them to represent and to vote, as designated
below, all the shares of common stock of Mountain Bank Holding Company held of
record by the undersigned on February 1, 2000, at the annual meeting of
shareholders to be held on March 28, 2000, or any adjournment of such Meeting.
1. ELECTION OF DIRECTORS
A. I vote FOR all nominees listed below (except as marked to the contrary
below) / /
B. I WITHHOLD AUTHORITY to vote for any individual nominee whose name I
have struck a line through in the list below / /
Roy T. Brooks / / Susan K. Bowen-Hahto / / Steve W. Moergeli
2. RATIFICATION OF INDEPENDENT AUDITORS. Ratification of the appointment of
Knight Vale & Gregory PLLC as the Company's independent auditors for the
year ending December 31, 2000.
FOR / / AGAINST / / ABSTAIN / /
3. WHATEVER OTHER BUSINESS may properly be brought before the meeting or any
adjournment thereof.
THIS PROXY CONFERS AUTHORITY TO VOTE "FOR" AND WILL BE VOTED "FOR" THE
PROPOSITIONS LISTED UNLESS AUTHORITY IS WITHHELD OR A VOTE AGAINST OR AN
ABSTENTION IS SPECIFIED, IN WHICH CASE THIS PROXY WILL BE VOTED IN
ACCORDANCE WITH THE SPECIFICATION SO MADE.
Management knows of no other matters that may properly be, or which are
likely to be, brought before the Meeting. However, if any other matters are
properly presented at the Meeting, this Proxy will be voted in accordance with
the recommendations of management.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE LISTED PROPOSITIONS.
_______________________________, 2000
_____________________________________
_____________________________________
WHEN SIGNING AS ATTORNEY, EXECUTOR,
ADMINISTRATOR, TRUSTEE OR GUARDIAN,
PLEASE GIVE FULL TITLE. IF MORE
THAN ONE TRUSTEE, ALL SHOULD SIGN.
ALL JOINT OWNERS MUST SIGN.
