<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
[X] Filed by the Registrant
[ ] 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
MCB FINANCIAL CORPORATION
(Name of Registrant as Specified In Its Charter)
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> 2
MCB FINANCIAL CORPORATION
1248 FIFTH AVENUE
SAN RAFAEL, CA 94901
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 19, 1999
TO THE SHAREHOLDERS OF MCB FINANCIAL CORPORATION:
NOTICE IS HEREBY GIVEN that pursuant to its Bylaws and the call of its
Board of Directors, the 1999 Annual Meeting of Shareholders (the "Meeting") of
MCB Financial Corporation ("MCB Financial") will be held at MCB Financial, 1248
Fifth Avenue, San Rafael, California 94901, on Wednesday, May 19, 1999 at 5:30
p.m., for the purpose of considering and voting on the following matters:
1. Election of Directors. To elect the following eight persons to the Board
of Directors of MCB Financial to serve until the 2000 Annual Meeting of
Shareholders and until their successors are elected and have been qualified:
<TABLE>
<S> <C>
John Cavallucci Gary T. Ragghianti
Charles O. Hall Michael J. Smith
Timothy J. Jorstad Edward P. Tarrant
Catherine H. Munson Randall J. Verrue
</TABLE>
2. Ratification of Independent Auditors. To ratify the selection of
Deloitte & Touche LLP to serve as MCB Financial's independent auditor for the
year ending December 31, 1999.
3. 1999 Stock Option Plan. To approve the MCB Financial Corporation 1999
Stock Option Plan for grants of stock options to directors, officers and
employees of MCB Financial and its subsidiaries.
4. Other Business. To transact such other business as may properly come
before the Meeting and any other adjournment or adjournments thereof.
Only those shareholders of record at the close of business on March 22,
1999 will be entitled to notice of and vote at the Meeting.
IT IS VERY IMPORTANT THAT EVERY SHAREHOLDER VOTE. WE URGE YOU TO SIGN AND
RETURN THE ENCLOSED PROXY AS SOON AS POSSIBLE, WHETHER OR NOT YOU PLAN TO ATTEND
THE MEETING IN PERSON. IF YOU DO ATTEND THE MEETING, YOU MAY THEN WITHDRAW YOUR
PROXY. IF YOU DO NOT ATTEND THE MEETING, YOU MAY REVOKE THE PROXY PRIOR TO THE
TIME IT IS VOTED BY NOTIFYING THE CORPORATE SECRETARY IN WRITING TO THAT EFFECT
OR BY FILING A LATER DATED PROXY.
IN ORDER TO FACILITATE THE PROVISION OF ADEQUATE ACCOMMODATIONS, PLEASE
INDICATE ON THE PROXY WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING.
DATED: April 26, 1999
BY ORDER OF THE BOARD OF DIRECTORS
/s/ NANCY R. BOATRIGHT
--------------------------------------
Nancy R. Boatright, Corporate
Secretary
<PAGE> 3
PROXY STATEMENT OF
MCB FINANCIAL CORPORATION
1248 FIFTH AVENUE
SAN RAFAEL, CA 94901
------------------------
1999 ANNUAL MEETING OF MCB FINANCIAL CORPORATION SHAREHOLDERS
INTRODUCTION
This Proxy Statement is being furnished to MCB Financial Corporation ("MCB
Financial") Shareholders in connection with the solicitation of proxies by the
MCB Financial Board of Directors for use at the 1999 Annual Meeting of
Shareholders of MCB Financial to be held on Wednesday, May 19, 1999 at 5:30 p.m.
at MCB Financial's office, 1248 Fifth Avenue, San Rafael, California 94901, and
at any adjournments thereof ("MCB Financial Meeting"). This Proxy Statement, the
attached notice and the enclosed form of proxy are first being mailed to MCB
Financial Shareholders on or about April 26, 1999.
MATTERS TO BE CONSIDERED
At the MCB Financial Meeting, MCB Financial Shareholders will be asked to
(i) elect a board of eight directors (see "ELECTION OF DIRECTORS," herein); (ii)
ratify the selection of Deloitte & Touche LLP to serve as MCB Financial's
independent auditor for the year ending December 31, 1999 (see "RATIFICATION OF
SELECTION OF INDEPENDENT AUDITORS," herein); (iii) approve the 1999 Stock Option
Plan (see "APPROVAL OF 1999 STOCK OPTION PLAN," herein); and (iv) transact such
other business as may properly come before the MCB Financial Meeting and any and
all other adjournments thereof (see "OTHER MATTERS," herein).
RECORD DATE; VOTING INFORMATION
The close of business on March 22, 1999 was the record date ("Record Date")
for determining which of the MCB Financial Shareholders were entitled to receive
notice of and to vote at the MCB Financial Meeting. On the Record Date, there
were 1,978,605 shares of MCB Financial Common Stock outstanding, held by 407
holders of record. Each holder of MCB Financial Common Stock will be entitled to
one vote, in person or by proxy, for each share of MCB Financial Common Stock
standing in his or her name on the books of MCB Financial as of the Record Date
on any matter submitted to the vote of the MCB Financial Shareholders at the MCB
Financial Meeting, except that, in connection with the election of directors,
the shares are entitled to be voted cumulatively.
Cumulative voting entitles an MCB Financial Shareholder to give one nominee
a number of votes equal to the number of directors to be elected multiplied by
the number of votes to which that shareholder's shares are normally entitled, or
to distribute his votes among as many candidates as the shareholder thinks fit.
However, no shareholder is entitled to cumulate votes for a nominee unless such
nominee's name has been placed in nomination prior to the vote and the
shareholder has given notice before the voting of his or her intention to vote
shares cumulatively. If any shareholder has given such notice, all shareholders
may cumulate their votes for nominees. The Board of Directors does not, at this
time, intend to cumulate the votes it may hold pursuant to the proxies solicited
herein. If, however, other director nominations are made, the Board of Directors
intends to cumulate votes in such a manner as to elect the maximum number of the
Board of Directors' nominees. Therefore, discretionary authority to cumulate
votes in such an event is solicited in this Proxy Statement and in such an event
the accompanying proxy grants discretionary authority to the proxy holders to
cumulate votes for the election or directors.
VOTING OF PROXIES; REVOCABILITY
A proxy for use at the MCB Financial Meeting is enclosed. All shares of MCB
Financial Common Stock represented by properly executed proxies received by MCB
Financial will, unless revoked, be voted at the
<PAGE> 4
MCB Financial Meeting in accordance with the instructions on such proxies. If no
instruction is specified with regard to a matter to be considered, the shares of
MCB Financial Common Stock represented by the proxy will be voted in favor of
(i) electing the eight nominees for directors; (ii) ratifying the selection of
Deloitte & Touche LLP to serve as MCB Financial's independent auditor for the
year ending December 31, 1999; and (iii) approving the 1999 Stock Option Plan.
The proxy also confers discretionary authority to vote the shares
represented thereby in accordance with the recommendations of the MCB Financial
Board of Directors on any matter that was not known at the time this Proxy
Statement was mailed which may properly be presented for action at the MCB
Financial Meeting and the election of any person to any office for which a bona
fide nominee is named herein if such nominee is unable to serve or for good
cause will not serve. If any other business is properly presented at the MCB
Financial Meeting, the proxy will be voted in accordance with the recommendation
of the MCB Financial Board of Directors.
Any MCB Financial Shareholder may revoke his or her proxy at any time
before it is voted by filing with MCB Financial's Corporate Secretary an
instrument revoking it or a duly executed proxy bearing a later date, or by
attending the MCB Financial Meeting and advising the Chairman of his or her
election to vote in person. A proxy may also be revoked if written notice of the
death or incapacity of the MCB Financial Shareholder is received by MCB
Financial before the vote pursuant to that proxy is counted.
SOLICITATION OF PROXIES
This solicitation of MCB Financial Shareholders is being made by the Board
of Directors of MCB Financial. The expense of preparing, assembling, printing
and mailing this Proxy Statement to MCB Financial Shareholders and the materials
used in the solicitation of proxies for the MCB Financial Meeting will be borne
by MCB Financial. MCB Financial contemplates that the proxies will be solicited
principally through the use of the mail, but officers, directors and employees
of MCB Financial may solicit proxies personally or by telephone or facsimile
without receiving special compensation therefor. In addition, MCB Financial may
use the services of individuals or companies, including a proxy solicitation
firm, it does not regularly employ in connection with the solicitation of
proxies if deemed advisable by the MCB Financial Board of Directors. Although
there are no formal agreements to do so, MCB Financial will reimburse banks,
brokerage houses and other custodians, nominees and fiduciaries for their
reasonable expenses in forwarding these proxy materials to MCB Financial
Shareholders, and will reimburse such other expenses as may be incurred by any
proxy solicitation firm engaged by MCB Financial.
REQUIRED VOTE
Except as specifically noted below, each of the proposals described in this
Proxy Statement requires the affirmative vote of a majority of the shares of MCB
Financial's Common Stock represented and voting at the Annual Meeting of
Shareholders where a quorum is present. In the election of directors, the eight
directors receiving the most votes will be elected. If any proposal requires the
affirmative vote of the holders of a specified percentage of MCB Financial's
outstanding shares of Common Stock, abstaining and broker non-votes will have
the same effect as a negative vote.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
With the exception of John Cavallucci, whose beneficial ownership of the
outstanding shares of MCB Financial's common stock is described in the "Security
Ownership of Management" table below, as of the Record Date no individuals known
to the Board of Directors of MCB Financial owned of record or beneficially five
percent or more of the outstanding shares of common stock of MCB Financial.
2
<PAGE> 5
SECURITY OWNERSHIP OF MANAGEMENT
The following table provides certain information, as of March 22, 1999,
with respect to the beneficial ownership of shares of MCB Financial Common Stock
by each MCB Financial director and nominee, each executive officer(1), and by
all of the directors and executive officers of MCB Financial as a group. Unless
otherwise indicated, each person listed has sole investment and voting power
with respect to the shares listed.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT
TITLE OF CLASS NAME AND ADDRESS OF BENEFICIAL OWNER(2) BENEFICIAL OWNERSHIP(3) OF CLASS
- -------------- --------------------------------------- ----------------------- --------
<S> <C> <C> <C>
Common Stock John Cavallucci 281,139(4) 13.90%
Common Stock Charles O. Hall 41,673(5) 2.06%
Common Stock Timothy J. Jorstad 66,149(6) 3.34%
Common Stock Catherine H. Munson 40,839(7) 2.06%
Common Stock Gary T. Ragghianti 25,636(8) 1.29%
Common Stock Michael J. Smith 33,424 1.69%
Common Stock Edward P. Tarrant 43,927(9) 2.22%
Common Stock Randall J. Verrue 37,374(10) 1.88%
Common Stock Stephen R. Brodie 6,512(11) *
Common Stock Raymon L. Hanssen 6,616(11) *
Common Stock Patrick E. Phelan 5,847(12) *
Common Stock Current Directors and Executive
Officers as a Group (11 persons) 589,136(13) 27.94%
</TABLE>
- ---------------
* Less than one percent (*)
(1 )As used throughout this Proxy Statement, unless specified otherwise, the
term "executive officer" means with respect to MCB Financial, the Executive
Officer to the President of Metro Commerce Bank ("Metro Commerce"), the
President and Chief Executive Officer of MCB Financial and Metro Commerce,
the Chief Financial Officer of MCB Financial and Executive Vice
President/Chief Financial Officer of Metro Commerce, the Executive Vice
President/Chief Credit Officer of Metro Commerce and the Executive Vice
President/Chief Administrative Officer of Metro Commerce.
(2 )The address for all persons is c/o MCB Financial Corporation, 1248 Fifth
Avenue, San Rafael, California 94901.
(3 )Includes all shares beneficially owned, whether directly or indirectly,
individually or together with associates. Includes any shares owned,
whether jointly or as community property, with a spouse and any stock of
which beneficial ownership may be acquired within 60 days of March 22,
1999, the Record Date, by the exercise of stock options vested pursuant to
MCB Financial's 1989 Stock Option Plan.
(4 )Includes options to acquire 44,100 shares which are exercisable within 60
days of the Record Date.
(5 )Includes options to acquire 41,454 shares which are exercisable within 60
days of the Record Date.
(6 )Includes 56,646 shares held by Jorstad, Inc., Money Purchase & Profit
Sharing Pension Plan.
(7 )Includes 31,079 shares held by Lucas Valley Properties, Inc., Money
Purchase & Profit Sharing Pension Plan. Also includes options to acquire
8,659 shares which are exercisable within 60 days of the Record Date.
(8 )Includes 5,511 shares held by Ragghianti & Thomas Profit Sharing Plan. Also
includes options to acquire 8,659 shares which are exercisable within 60
days of the Record Date.
(9 )Includes 6,606 shares held by Mr. Tarrant as Custodian for his
grandchildren.
(10 )Includes 6,005 shares which are held in Mr. Verrue's IRA trust account.
Also includes options to acquire 8,659 shares which are exercisable within
60 days of the Record Date.
(11 )Represents vested options exercisable within 60 days of the Record Date.
(12 )Includes options to acquire 5,628 shares which are exercisable within 60
days of the Record Date.
(13 )Includes options held by executive officers and non-employee directors of
MCB Financial which are exercisable within 60 days of the Record Date.
3
<PAGE> 6
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires MCB
Financial's directors and executive officers, and persons who own more than ten
percent of a registered class of MCB Financial's equity securities, to file with
the Securities and Exchange Commission initial reports of ownership and reports
of changes in ownership of common stock and other equity securities of MCB
Financial. Officers, directors and greater than ten percent shareholders are
required by SEC regulation to furnish MCB Financial with copies of all Section
16(a) forms they file.
To MCB Financial's knowledge, based solely on review of the copies of such
reports furnished to MCB Financial and written representations that no other
reports were required during the year ended December 31, 1998 the officers,
directors and greater than ten percent beneficial owners of MCB Financial's
common stock complied with all applicable Section 16(a) filing requirements.
CHANGES IN CONTROL
Management of MCB Financial is not aware of any arrangement which may, at a
subsequent date, result in a change of control of MCB Financial.
RECOMMENDATIONS
MCB Financial's Board of Directors unanimously recommends electing the
eight nominees to the MCB Financial Board of Directors, ratifying Deloitte &
Touche LLP as MCB Financial's independent auditor for the year ending December
31, 1999 and approving the 1999 Stock Option Plan. These proposals are discussed
in greater detail in the following sections of this Proxy Statement.
PROPOSAL ONE:
ELECTION OF DIRECTORS
MCB Financial's Bylaws provide that the number of directors shall be
determined from time to time by the Board of Directors or the shareholders but
may not be less than seven nor more than thirteen. The number of directors is
currently fixed at eight members. MCB Financial Shareholders are being asked to
elect the eight persons named below, who are currently serving as directors of
MCB Financial and are the nominees of the Board of Directors for reelection as
directors of MCB Financial, to serve until the 2000 Annual Meeting of
Shareholders of MCB Financial and until their successors are elected and have
been qualified. Each of the nominees listed below has consented to be named as a
nominee and to serve if elected to the MCB Financial Board of Directors. Votes
will be cast pursuant to the enclosed proxy in such a way as to effect the
election of said eight nominees, or as many thereof as possible under the rules
of cumulative voting. In the event that any of the nominees should be unable to
serve as a director, it is intended that the shares represented by the proxies
solicited will be voted for the election of such substitute nominee, if any, as
shall be designated by the MCB Financial Board of Directors. The MCB Financial
Board of Directors has no reason to believe that any nominees will become
unavailable to serve if elected. Each of the nominees also serves as a director
of Metro
4
<PAGE> 7
Commerce. It is intended that each person elected a director of MCB Financial
will also be elected a director of Metro Commerce.
<TABLE>
<CAPTION>
METRO MCB
PRESENT POSITION(S) WITH COMMERCE FINANCIAL
MCB FINANCIAL DIRECTOR DIRECTOR
NAME AGE AND METRO COMMERCE SINCE SINCE
---- --- ------------------------ -------- ---------
<S> <C> <C> <C> <C>
John Cavallucci 57 Chairman of MCB Financial and Metro Commerce 1991 1993
Charles O. Hall 44 Director, President and Chief Executive 1995 1999
Officer of MCB Financial and Metro Commerce
Timothy J. Jorstad 47 Director 1989 1993
Catherine H. Munson 71 Director 1989 1993
Gary T. Ragghianti 55 Vice Chairman 1989 1993
Michael J. Smith 58 Director 1989 1993
Edward P. Tarrant 55 Director 1989 1993
Randall J. Verrue 55 Director 1989 1993
</TABLE>
There are no family relationships among any of the nominees for director or any
of the executive officers of MCB Financial.
BIOGRAPHICAL INFORMATION OF DIRECTORS
The following sets forth certain biographical information, present
occupation and business experience for at least the past five years, of each of
the nominees for director.
John Cavallucci Director of Metro Commerce since November 1991; Chairman
of Metro Commerce and MCB Financial since May 1996;
Executive Officer to the President of Metro Commerce since
January 1999; Chief Executive Officer of Metro Commerce
from December 1995 to December 1998; President and Chief
Executive Officer of Metro Commerce from January 1992 to
December 1995; Director, President and Chief Executive
Officer of MCB Financial from January 1993 to December
1998.
Charles O. Hall Director of Metro Commerce since December 1995; Director
of MCB Financial since January 1999; Executive Vice
President and Chief Credit Officer of Metro Commerce from
March 1992 to December 1995; President, Chief Operating
Officer, and Chief Credit Officer of Metro Commerce from
December 1995 to April 1998; President and Chief Operating
Officer of Metro Commerce from April 1998 to December
1998; President and Chief Executive Officer of Metro
Commerce since January 1999; President and Chief Executive
Officer of MCB Financial since January 1999.
Timothy J. Jorstad President and certified public accountant, Jorstad, Inc.,
a certified public accounting firm.
Catherine H. Munson President, Lucas Valley Properties, Inc., a real estate
firm; also General Partner, McInnis Park Golf Center.
Gary T. Ragghianti Attorney and President, Gary T. Ragghianti, Inc.
Michael J. Smith General Partner, Shimek/Smith, a car care business; broker
and owner, Waterford Associates, LLC, a real estate firm.
Edward P. Tarrant Principal and Owner, Tarrant-Bell Properties, a property
development and management company.
Randall J. Verrue President and Chief Executive Officer, HCV Pacific
Partners, a real estate company.
5
<PAGE> 8
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES OF MCB FINANCIAL
The Board of Directors of MCB Financial held eleven meetings during 1998.
MCB Financial does not have a Personnel Committee or a Nominating Committee; the
Board of Directors performs such functions. The entire Board of Directors also
serves as the Audit Committee. During 1998 all of the directors of MCB Financial
attended at a minimum 75 percent of all meetings of the Board of Directors and
of the committees of MCB financial and Metro Commerce on which they served.
The Board of Directors of Metro Commerce held fifteen meetings during 1998.
The Board of Directors of Metro Commerce has an Audit Committee and a Personnel
Committee. Metro Commerce does not have a Nominating Committee; the Board of
Directors performs such functions.
The Audit Committee currently consists of Timothy J. Jorstad, Chairman,
Michael J. Smith, Edward P. Tarrant and Randall J. Verrue. The Audit Committee
held four meetings during 1998. The Audit Committee's function is to monitor
Metro Commerce's financial organization and financial reporting, monitor and
analyze the results of external and regulatory examinations and recommend the
appointment of and oversee the independent auditor.
The Personnel Committee currently consists of Catherine H. Munson,
Chairwoman, Charles O. Hall, and Gary T. Ragghianti. The Personnel Committee
held one meeting during 1998. The Personnel Committee's function is to review
compensation of executive officers and make recommendations to the Board of
Directors regarding compensation.
During 1998, all of the directors of Metro Commerce attended a minimum 75
percent of all meetings of the Board of Directors.
COMPENSATION OF DIRECTORS
Each Metro Commerce director, with the exception of Charles O. Hall,
receives an annual retainer of $12,000 for his or her services.
EXECUTIVE OFFICERS
The following table sets forth certain information, as of March 22, 1999,
with respect to the current executive officers of MCB Financial and Metro
Commerce.
<TABLE>
<CAPTION>
PRESENT POSITION(S) WITH
NAME AGE MCB FINANCIAL AND METRO COMMERCE
---- --- --------------------------------
<S> <C> <C>
John Cavallucci 57 Chairman of MCB Financial; Chairman and Executive Officer
to the President of Metro Commerce
Charles O. Hall 44 Director, President and Chief Executive Officer of MCB
Financial and Metro Commerce
Stephen R. Brodie 53 Executive Vice President and Chief Credit Officer of
Metro Commerce
Raymon L. Hanssen 55 Executive Vice President and Chief Administrative Officer
of Metro Commerce
Patrick E. Phelan 35 Chief Financial Officer of MCB Financial; Executive Vice
President and Chief Financial Officer of Metro Commerce
</TABLE>
6
<PAGE> 9
BUSINESS EXPERIENCE
The following sets forth the business experience, for at least the past
five years, of each of MCB Financial's and Metro Commerce's executive officers
other than Mr. Cavallucci and Mr. Hall, whose experience is set forth above.
<TABLE>
<S> <C>
Stephen R. Brodie Executive Vice President/Chief Credit Officer of Metro
Commerce since April 1998; Senior Vice President/Loan
Administration of Metro Commerce from January 1998 to April
1998; Senior Vice President/ Construction Loan Officer of
Metro Commerce from June 1996 to January 1998; Senior Vice
President/Loan Officer of Metro Commerce from June 1993 to
June 1996.
Raymon L. Hanssen Executive Vice President/Chief Administrative Officer of
Metro Commerce since February 1999; Senior Vice
President/Branch Manager of Metro Commerce from May 1994 to
February 1999; Senior Vice President/Loan Officer of Metro
Commerce from May 1991 to May 1994.
Patrick E. Phelan Chief Financial Officer of MCB Financial since May 1997;
Executive Vice President/Chief Financial Officer of Metro
Commerce since December 1998; Senior Vice President/Chief
Financial Officer of Metro Commerce from May 1997 to
December 1998; Vice President/Finance of Metro Commerce from
December 1996 to May 1997; Assistant Vice President and
Controller of Metro Commerce from April 1994 to December
1996.
</TABLE>
7
<PAGE> 10
EXECUTIVE COMPENSATION OF MCB FINANCIAL AND METRO COMMERCE
The following table sets forth compensation information with respect to MCB
Financial's and Metro Commerce's Chief Executive Officer and the three other
most highly compensated executive officers of Metro Commerce who served as such
at year end 1998 and whose total annual salary and bonus exceeded $100,000
("Named Officers"). Comparative data is also provided for the two previous
fiscal years, where applicable. No cash compensation was paid by MCB Financial
to any Named Officer; however, each Named Officer of MCB Financial also serves
as an executive of Metro Commerce and receives compensation from Metro Commerce
for services rendered in his or her capacity as such.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL
COMPENSATION OTHER LONG TERM
NAME AND PRINCIPAL ---------------- ANNUAL COMPENSATION ALL OTHER
POSITION SALARY BONUS COMPENSATION AWARDS OPTIONS COMPENSATION(1)
AT DECEMBER 31, 1998 YEAR ($) ($) ($) (#) ($)
-------------------- ---- ------- ------ ------------ -------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
John Cavallucci.................. 1998 142,000 47,900 2,863
Chief Executive Officer 1997 132,000 38,057 2,162
1996 120,000 25,890 2,541
Charles O. Hall.................. 1998 142,000 47,900 7,271
President 1997 132,000 38,057 7,925
Chief Operating Officer 1996 120,000 25,890 13,230 5,204
Stephen R. Brodie................ 1998 89,934 14,000 5,000 1,700
Executive Vice President/ 1997 N/A N/A N/A
Chief Credit Officer 1996 N/A N/A N/A
Raymon L. Hanssen................ 1998 89,435 12,768 2,400
Senior Vice President/ 1997 N/A N/A N/A
Branch Manager 1996 N/A N/A N/A
</TABLE>
- ---------------
(1) Includes automobile compensation and matching contributions to the Executive
Deferred Compensation Plan.
EMPLOYMENT AGREEMENTS
Mr. Cavallucci and Mr. Hall are each employed by Metro Commerce pursuant to
written employment agreements.
Mr. Cavallucci
Mr. Cavallucci's current agreement for employment as Executive Officer to
the President of Metro Commerce commenced on January 1, 1999 and expires
December 31, 2001. Mr. Cavallucci is entitled to receive payment of (i) an
initial annual base salary of $70,000, payable semi-monthly, increased annually
in accordance with a change in the consumer price index for the San Francisco
Bay Area and increased otherwise at the sole discretion of Metro Commerce's
Board of Directors, and (ii) an annual bonus equal to three-fourths of one
percent ( 3/4%) of Metro Commerce's pre-tax income if Metro Commerce's return on
beginning equity equals or exceeds 10 percent during the fiscal year. Mr.
Cavallucci is also entitled to be paid directors fees in an amount equal to such
fees paid to other members of the Board of Directors so long as he remains a
Director. Among other things, pursuant to his employment agreement, Mr.
Cavallucci has been provided with an automobile, Metro Commerce's standard
health insurance coverage provided to all Metro Commerce employees, vacation
leave and a golf club membership.
In the event Mr. Cavallucci's employment is terminated for any reason other
than death, disability, voluntary retirement or cause he will be entitled to
receive severance payment in an amount equal to his then base salary for 36
months in one lump sum. If Mr. Cavallucci's employment is terminated for reasons
of death, medical disability which would preclude performing duties as the
Executive Officer to the President of Metro Commerce for a period of six months
or voluntary retirement, he will not be entitled to any severance payment;
provided, however, that if such termination occurs as a result of a medical
disability, he will be
8
<PAGE> 11
entitled to receive severance payment in an amount equal to 150 percent of his
annual base salary then in effect. In the event Mr. Cavallucci's employment is
terminated for cause, he will not be entitled to any severance payment.
Mr. Hall
Mr. Hall's current employment agreement commenced on January 1, 1996. Mr.
Hall is entitled to receive payment of (i) an initial base salary in the amount
of $120,000, payable not less often than monthly, increased annually by the
percentage increase in the CPI for the San Francisco Bay Area as well as at the
discretion of the Board of Directors, and (ii) an annual bonus equal to one and
one-half percent of Metro Commerce's pre-tax income if Metro Commerce's return
on beginning equity equals or exceeds 10 percent during the fiscal year. Mr.
Hall has been provided with an automobile, Metro Commerce's standard health
insurance coverage provided to all Metro Commerce employees, vacation leave and
a tennis club membership. Mr. Hall also participates in Metro Commerce's
Deferred Compensation Plan For Executives into which Mr. Hall may elect to defer
a portion of his current compensation and Metro Commerce agrees to contribute up
to 50 percent of the amount of his deferral. Mr. Hall vests 50 percent in Metro
Commerce contributions after completing all of his contractual deferrals and
vests the remaining 50 percent upon reaching retirement age.
In the event Mr. Hall's employment is terminated for any reason other than
death, disability, voluntary retirement or cause he will be entitled to receive
severance payment in an amount equal to his then base salary for 36 months in
one lump sum. If Mr. Hall's employment is terminated for reasons of death,
voluntary retirement or cause he will not be entitled to any severance payment.
If termination occurs as a result of a medical disability, he will be entitled
to receive severance payment in an amount equal to 25% of his then annual base
salary.
The following table sets forth information on the issuance of stock options to
the Named Officers during the year ended December 31, 1998.
STOCK OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
PERCENT OF TOTAL
OPTIONS
NUMBER OF GRANTED EXERCISE EXPIRATION
SHARES DURING 1998 PRICE DATE
--------- ---------------- -------- ----------
<S> <C> <C> <C> <C>
Stephen R. Brodie.................................. 5,000 48.8% $9.50 10/22/08
</TABLE>
The following table presents information regarding the 1998 fiscal year end
value of unexercised stock options held by the Named Officers. There were no
option exercises by the Named Officers during the 1998 fiscal year. The market
value of MCB Financial's Common Stock as of December 31, 1998 was $9.50 per
share.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUE
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS OPTIONS
AT 1998 AT 1998
YEAR-END(#) YEAR-END($)
EXERCISABLE/ EXERCISABLE/
NAME UNEXERCISABLE UNEXERCISABLE
---- ---------------- --------------
<S> <C> <C>
John Cavallucci........................ 44,100/0 234,612/N/A
Charles O. Hall........................ 38,808/5,292 215,737/32,281
Stephen R. Brodie...................... 6,512/4,000 19,898/0
Raymon L. Hanssen...................... 6,616/0 34,337/N/A
</TABLE>
9
<PAGE> 12
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
REGARDING MCB FINANCIAL AND METRO COMMERCE
Certain of the directors and executive officers of MCB Financial and Metro
Commerce, the companies or organization with which they are affiliated, and
members of their immediate families are customers of, and had banking
transactions with Metro Commerce in the ordinary course of Metro Commerce's
business during 1998, and Metro Commerce expects to have banking transactions
with such persons in the future. All loans and commitments to lend to such
persons were made on substantially the same terms, including interest rates,
repayment terms and collateral, as those prevailing at the time for comparable
transactions with other persons of similar creditworthiness and, in the opinion
of management of Metro Commerce, did not involve more than a normal risk of
collectibility or present other unfavorable features. All of such loans are
current as to both principal and interest. As of February 28, 1999, extensions
of credit to MCB Financial directors, executive officers and beneficial owners
of more than five percent of MCB Financial Common Stock, and their affiliates,
as a group, was approximately $2,619,226 which represents approximately 20.0% of
the equity capital of MCB Financial as of that date. The maximum aggregate
amount of credit extended to directors and executive officers of MCB Financial
or Metro Commerce at any one time during 1998 was approximately $2,661,337.
PROPOSAL TWO:
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board of Directors of MCB Financial has selected and appointed Deloitte
& Touche LLP, independent auditors, to audit the financial statements of MCB
Financial for the year ending December 31, 1999. Deloitte & Touche LLP has
served as MCB Financial's independent auditors since 1991. In recognition of the
important role of the independent auditors, the Board of Directors has
determined that its selection of the independent auditors should be submitted to
the shareholders for review and ratification on an annual basis.
Deloitte & Touche LLP had no interest, financial or otherwise, in MCB
Financial or Metro Commerce.
In the event the appointment is not ratified through the affirmative vote
of a majority of the outstanding shares, the adverse vote will be deemed to be
an indication to the Board of Directors that it should consider selecting other
independent auditors for 1999. Because of the difficulty and expense of making
any substitution of accounting firms after the beginning of the current year, it
is the intention of the Board of Directors that the appointment of Deloitte &
Touche LLP for the 1999 fiscal year will stand unless for other reasons the
Board of Directors deems it necessary or appropriate to make a change. The Board
of Directors also retains the power to appoint another independent public
accounting firm to replace an accounting firm ratified by the shareholders in
the event the Board of Directors determines that the interests of MCB Financial
require such a change.
A representative of Deloitte & Touche is expected to be present at the MCB
Financial Meeting. The representative will have an opportunity to make a
statement if he or she desires to do so and will be available to respond to
appropriate questions of shareholders.
PROPOSAL THREE:
APPROVAL OF 1999 STOCK OPTION PLAN
The Board of Directors has adopted the MCB Financial Corporation 1999 Stock
Option Plan (the "Plan"). The purpose of the Plan is to encourage officers,
employees and directors of MCB Financial to acquire stock in MCB Financial and
to provide those persons with an additional incentive to promote the financial
success of MCB Financial, thereby creating shareholder value. A copy of the Plan
is attached as Exhibit A to this Proxy Statement. The following discussion is
only a summary. You should read the entire Plan for all of its terms.
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<PAGE> 13
The Plan is designed to replace the Marin Community Bank, N.A. 1989 Stock
Option Plan (the "1989 Plan"). The 1989 Plan became the stock option plan of
Metro Commerce when Marin Community Bank changed its name in 1993, and the 1989
Plan was subsequently adopted by MCB Financial upon MCB Financial's organization
as the bank holding company for Metro Commerce in 1993.
The 1989 Plan, as amended, provides for the grant of options to purchase 475,508
shares of MCB Financial's Common Stock to organizers, directors, officers and
employees of MCB Financial and its affiliates. The 475,508 shares reserved for
grants of options pursuant to the 1989 Plan are equal to approximately 24
percent of the total number of shares of MCB Financial Common Stock outstanding
as of the Record Date. As of April 1, 1999, 87,299 of the 475,508 shares
originally reserved for grants of options pursuant to the 1989 Plan (equal to
approximately 4 percent of the total number of shares of MCB Financial Common
Stock outstanding as of the Record Date) remained available for distribution
pursuant to the 1989 Plan. The 1989 Plan expires in December 1999, and the Plan
is designed to replace the 1989 Plan at that time.
This Plan authorizes MCB Financial to grant options that qualify as
incentive stock options ("ISO") under the Internal Revenue Code of 1986 and
nonqualified stock options ("NQSO") to officers and employees of MCB Financial.
Nonemployee directors are eligible to receive only NQSOs. To the extent that the
aggregate fair market value of stock with respect to which ISOs are exercisable
for the first time by any individual during any calendar year exceeds $100,000
such options will be treated as NQSOs. If the Plan is approved by MCB
Financial's shareholders, approximately 58 persons will be eligible to receive
grants of options under the Plan.
The Plan sets aside 395,700 authorized, but unissued, shares of MCB
Financial's Common Stock for grant at not less than the fair market value of MCB
Financial's Common Stock on the date the option is granted. In addition, if an
ISO is granted to an officer or employee of MCB Financial who, at the time of
grant, owns more than 10 percent of MCB Financial's Common Stock, the exercise
price of the options must be not less than 110 percent of the fair market value
of MCB Financial's Common Stock at the time the option is granted. The 395,700
shares reserved for grants of options under the Plan are equal to approximately
20 percent of the total number of shares of MCB Financial Common Stock currently
outstanding.
Upon receipt of cash which equals the total consideration for the exercise
of a stock option, share certificates will be issued to the exercising optionee.
Options will expire as specified in the Plan, or on such date as the Board of
Directors may determine at the time MCB Financial grants the option; provided,
however, an option may not have a term in excess of ten years.
Options granted under the Plan may only be transferred by will or the laws
of descent and distribution, and only the optionee may exercise an ISO during
the optionee's lifetime. All options granted pursuant to the Plan become
exercisable in full in the event of (i) the termination of the employee's or
nonemployee director's service because of death or total and permanent
disability, or (ii) a change in control with respect to MCB Financial.
The Board of Directors may amend, suspend or terminate the Plan at any time
and for any reason. Amendment, suspension or termination of the Plan will not,
without the consent of the optionee, alter or impair any rights or obligations
under any option previously granted pursuant to the Plan. In addition,
amendments to the Plan which would increase the number of shares which may be
purchased under the Plan (either in the aggregate or by an individual), change
the minimum option price, increase the maximum term of options, or permit
options to be granted to anyone other than directors, officers and employees of
MCB Financial are subject to required shareholder approval.
Unless the Board of Directors terminates the Plan earlier, the Plan will
terminate on April 22, 2009. MCB Financial may not grant any options under the
Plan after the termination date, but termination will not affect any option
previously granted by MCB Financial.
The Board of Directors administers the Plan. The Board has the authority to
construe and interpret the Plan; define the terms used in the Plan: prescribe,
amend and rescind rules and regulations related to administration of the Plan;
select from the eligible class of individuals and make decisions concerning the
individuals to whom and the times at which options should be granted, the terms
of stock option agreements
11
<PAGE> 14
and the number of shares subject to each option; and make all other
determinations necessary or advisable for administration of the Plan. Also, the
Board may adopt such rules or guidelines as it deems appropriate to implement
the Plan. The determinations of the Board of Directors under the Plan are final
and binding on all persons.
Neither the optionee nor MCB Financial will incur any federal tax
consequences as a result of the grant of an option. The optionee will have no
taxable income upon exercising an ISO (except that the alternative minimum tax
may apply), and MCB Financial will receive no deduction when an ISO is
exercised. Upon exercising an NQSO, the optionee generally must recognize
ordinary income equal to the "spread" between the exercise price and the fair
market value of MCB Financial's Common Stock on the date of exercise; MCB
Financial will be entitled to a business expense deduction for the same amount.
In the case of an employee, the option spread at the time an NQSO is exercised
is subject to income tax withholding, but the optionee generally may elect to
satisfy the withholding tax obligation by having shares of Common Stock withheld
from those purchased under the NQSO. The tax treatment of a disposition of
option shares acquired under the Plan depends on how long the shares have been
held and on whether the shares were acquired by exercising an ISO or by
exercising an NQSO. MCB Financial will not be entitled to a deduction in
connection with a disposition of option shares, except in the case of a
disposition of shares acquired under an ISO before the applicable ISO holding
period has been satisfied.
SHAREHOLDER PROPOSALS
MCB Financial's 2000 Annual Meeting of Shareholders is currently scheduled
for May 17, 2000. To be included in MCB Financial's 1998 Proxy Statement,
proposals of shareholders intended to be presented at the 2000 Annual Meeting
must be received by MCB Financial no later than December 20, 1999.
OTHER MATTERS
Management does not know of any matters to be presented at the MCB
Financial Meeting other than those set forth above. However, if other matters
come before the MCB Financial Meeting, it is the intention of the persons named
in the accompanying proxy to vote said proxy in accordance with the
recommendation of the MCB Financial Board of Directors on such matters.
Discretionary authority to do so is included in the proxy.
12
<PAGE> 15
EXHIBIT A
MCB FINANCIAL CORPORATION
1999 STOCK OPTION PLAN
1. PURPOSE OF PLAN
The MCB Financial Corporation 1999 Stock Option Plan is intended to
encourage officers, employees and directors of MCB Financial Corporation, a
registered bank holding company under the Bank Holding Company Act ("MCB"), and
its Subsidiaries to acquire stock in MCB and to provide such persons with an
additional incentive to promote the financial success of MCB.
2. DEFINED TERMS
Capitalized terms used in this Plan have the following meanings:
(a) "Board of Directors": The Board of Directors of MCB.
(b) "Change of Ownership": Any (i) merger, consolidation, share exchange or
reorganization of MCB with any other corporation in which MCB is not the
surviving corporation, (ii) dissolution or complete liquidation of MCB, (iii)
sale of all or substantially all of the assets of MCB, or (iv) a transaction (or
series of related transactions) in which there is a change in the beneficial
ownership, directly or indirectly, of securities of MCB representing 50 percent
or more of the combined voting power or value of MCB's then outstanding equity
securities. The term "equity securities" shall have the meaning set forth in
Section 3(a)(11) of the Securities Exchange Act of 1934.
(c) "Code": The Internal Revenue Code of 1986, as amended, together with
all regulations.
(d) "Common Stock": The Common Stock of MCB, or such other class or kind of
shares or other securities as may be applicable pursuant to the provisions of
Section 5(b) hereof.
(e) "MCB": MCB Financial Corporation, a California corporation and a
registered bank holding company under the Bank Holding Company Act.
(f) "Effective Date": The date on which the Plan shall become effective as
set forth in Section 10.
(g) "Fair Market Value": As applied to a specific date, the fair market
value of the Common Stock on such date as determined in good faith by the Board
of Directors in the following manner:
(1) If the shares of Common Stock are then listed on any national or
regional stock exchange, the Fair Market Value shall be the mean between
the high and low sales price on the date in question, or if there are no
reported sales on such date, on the last preceding date on which sales were
reported;
(2) If the shares of Common Stock are not listed, then the Fair Market
Value shall be the mean between the bid and ask prices quoted by a market
maker or other recognized specialist in the shares of Common Stock at the
close of the date in question;
(3) In the absence of either of the foregoing, the Fair Market Value
shall be determined by the Board of Directors in its absolute discretion
after giving consideration to the book value, the earnings history and the
prospects of MCB in light of market conditions generally.
The Fair Market Value determined in such manner shall be final, binding and
conclusive on all parties.
(h) "ISO": A stock option intended to meet the requirements of an
"incentive stock option," as defined in Section 422 of the Code or any statutory
provision that may replace such Section.
(i) "NQSO": A stock option (i) not intended to be an ISO and designated a
non qualified stock option by the Board of Directors, (ii) in excess of the
aggregate fair market value limitations set forth in Section 3(c) of this Plan,
or (iii) intended to be an incentive stock option but which does not meet the
requirements of incentive stock options.
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<PAGE> 16
(j) "Option": Any stock option, either an ISO or NQSO, granted from time to
time under the Plan.
(k) "Optionee": An officer, employee or director of MCB or any of its
Subsidiaries who has been granted an Option, and those heirs, legatees or legal
representatives of such officer, employee or director who may exercise an Option
pursuant to Section 7(b).
(l) "Plan": This MCB Financial Corporation 1999 Stock Option Plan, as it
may be amended from time to time.
(m) "Stock Option Agreement": A stock option agreement evidencing an Option
in a form adopted by the Board pursuant to Section 10(b).
(n) "Subsidiary": A "subsidiary corporation" as defined in Section 424(f)
of the Code, including any subsidiary corporation which becomes such after the
Effective Date of the Plan.
3. INCENTIVE STOCK OPTIONS.
(a) ELIGIBILITY. Officers and employees of MCB or a Subsidiary shall be
eligible for selection to receive ISOs. No director of MCB who is not also an
officer or employee of MCB or a Subsidiary may be granted an ISO under this
Plan. Subject to the express provisions of the Plan, the Board of Directors
shall select from the eligible class of officers and employees the individuals
to whom ISOs shall be granted, the terms and provisions of the respective
Incentive Stock Option Agreements, the times at which such ISOs shall be
granted, and the number of shares subject to each ISO. An individual who has
been granted an ISO hereunder may, if he or she is otherwise eligible, be
granted additional ISOs if the Board shall so determine.
(b) LIMITATION ON VALUE OF ISOS. The aggregate fair market value
(determined as of the time the ISO is granted) of stock with respect to which
ISOs are exercisable for the first time by an individual during any calendar
year (under all plans of MCB and its Subsidiaries, if any) shall not exceed
$100,000, plus any greater amount as may be permitted under subsequent
amendments to the Code.
(c) PURCHASE PRICE OF ISOS. The purchase price of stock subject to each ISO
shall be determined by the Board of Directors, but shall not be less than the
Fair Market Value of such stock at the time such option is granted. If, however,
any Optionee, at the time of grant, owns stock possessing more than 10 percent
of the total combined voting power of all classes of stock of MCB or any
Subsidiary, computed as set forth in Sections 422(b)(6) and 424(d) of the Code,
the exercise price of any ISO granted to the Optionee must be at least 110
percent of the Fair Market Value of the shares of Common Stock subject to the
Option, and the Option by its terms is not exercisable after the expiration of
five years from the date of grant.
4. NONQUALIFIED STOCK OPTIONS
(a) ELIGIBILITY. Officers (including officers who are also directors) and
employees of MCB or a Subsidiary shall be eligible for selection to receive
NQSOs. Subject to the express provisions of the Plan, the Board of Directors
shall select from the eligible class of individuals the individuals to whom
NQSOs shall be granted, the terms and provisions of the respective Nonqualified
Stock Option Agreements (which need not be identical), the times at which such
NQSOs shall be granted, and the number of shares subject to each NQSO. An
individual who has been granted a NQSO may, if he or she is otherwise eligible,
be granted additional NQSOs if the Board of Directors shall so determine.
(b) PURCHASE PRICE OF NQSOS. The purchase price of stock subject to each
NQSO shall be determined by the Board of Directors, but shall not be less than
the Fair Market Value of such stock at the time such option is granted.
5. SHARES SUBJECT TO PLAN
(a) MAXIMUM SHARES. The maximum number of shares of Common Stock that may
be subject to Options and which are reserved for the Plan is 395,700 shares of
Common Stock, subject to adjustment as provided in Section 5(b). If an Option
expires or terminates for any reason without having been fully exercised, the
unpurchased shares of Common Stock shall be added to the shares of Common Stock
available
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<PAGE> 17
for Options. The unpurchased shares of Common Stock shall not increase the
maximum number of shares of Common Stock which may be subject to Options.
(b) ADJUSTMENT OF SHARES AND PRICE. In the event that the Common Stock is
changed into or exchanged for a different kind or number of shares of stock or
securities of MCB as the result of any stock dividend, stock split, combination
of shares, exchange of shares, merger, consolidation, reorganization,
recapitalization or other change in capital structure, then, unless the change
results in the termination of outstanding Options pursuant to Section 7(d), the
number of shares of Common Stock subject to this Plan and to outstanding Options
and the exercise price for such shares shall be equitably adjusted by the Board
of Directors to prevent the dilution or enlargement of rights. Any new stock or
securities into which the Common Stock has been changed or for which it has been
exchanged shall be substituted for the Common Stock subject to this Plan and to
outstanding Options; provided, however, that fractional shares may be deleted
from the adjustment or substitution. Any determination made by the Board of
Directors pursuant to this Selection shall be conclusive.
6. GRANTING OF OPTIONS
The Board of Directors shall from time to time, in its sole discretion but
subject to this Plan, determine:
(a) the persons who will be granted Options;
(b) the number of shares of Common Stock subject to each Option; and
(c) whether the Option will be an ISO or an NQSO.
An Option shall be considered to be granted on the date on which the Board
of Directors authorizes the grant, provided that the Optionee executes a Stock
Option Agreement in the form required by the Board of Directors. New Options may
not be granted after the tenth anniversary of the Effective Date; provided,
however, that the Board of Directors may, in its sole discretion, suspend or
cease granting Options at an earlier date.
7. EXERCISE OF OPTIONS
(a) EXERCISE RIGHTS. Subject to Sections 7(b), 7(c) and 7(d), at the time
of grant of the Option the Board of Directors shall determine and set forth in
the Stock Option Agreement the time or times the Option may be exercised, the
period or periods during which the Option may be exercised, and the number of
shares subject to the Option, except that
(i) no Option shall be exercisable prior to the date the Plan is
approved by MCB's shareholders pursuant to Section 10.
(ii) no Option shall be exercisable after the expiration of 10 years
from the date of grant; and
(iii) the calculation of the vesting period shall be suspended during
any leave of absence at the request, or with the approval, of MCB or a
Subsidiary.
(b) EXERCISE OF ISOS FOLLOWING TERMINATION OF EMPLOYMENT. Subject to
earlier termination of an ISO pursuant to Section 7(a)(ii), 7(d), or 11, an
Optionee who is an employee of MCB or a Subsidiary shall have the right, within
the following periods of time following termination of the Optionee's employment
with MCB or a Subsidiary, to exercise the Optionee's ISO for up to the same
number of shares that the Optionee would have been able to exercise on the date
immediately preceding the date the Optionee's employment was terminated (without
regard to any severance pay, vacation pay or other payments upon termination):
(i) one year when termination is caused by the death or disability
(meaning the Optionee is unable to engage in any substantial gainful
activity by reason of a medically determinable physical or mental
impairment which can be expected to result in death or which has lasted or
can be expected to last for a continuous period of not less than 12
months); or
(ii) three months after termination for any reason other than the
death or disability of the Optionee.
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<PAGE> 18
In the event of the death of an Optionee, the Optionee's heirs, legatees or
legal representatives shall have the right to exercise the Optionee's ISOs for
up to the same number of shares that the Optionee would have been able to
exercise on the date immediately preceding the date the Optionee's employment
was terminated (without regard to any severance pay, vacation pay or other
payments upon termination). To the extent the ISOs remains unexercised as of the
end of the applicable period of time following termination of the Optionee's
employment, the ISOs shall automatically terminate.
A leave of absence at the request, or with the approval, of MCB or a
Subsidiary shall not be deemed a termination for purposes of this Section 7(b),
so long as the period of such leave does not exceed 90 days, or, if longer, so
long as the Optionee's right to reemployment with MCB (or a Subsidiary) is
guaranteed by contract.
Likewise, termination of an Optionee's employment with MCB to accept
employment with either a Subsidiary or Parent of MCB shall not be deemed a
termination of employment for the purposes of this Section 7.
(c) CHANGE OF OWNERSHIP. In the event of a Change of Ownership consisting
of a merger or consolidation in which MCB will not be the surviving corporation,
each Option then outstanding shall become fully exercisable upon adoption by the
Board of Directors of a plan or arrangement for such transaction; provided, the
original vesting schedule shall be restored if the transaction is not completed.
If the surviving corporation does not provide for the assumption of any Option
or a substitution of a new option for any Option, MCB may cancel any Option not
exercised prior to or as of the consummation of the Change in Ownership.
To the extent not inconsistent with any applicable law, MCB shall use its
best efforts to give at least 15 days advance notice of any proposed Change of
Ownership transaction to each Optionee who has outstanding unexercised Options,
which notice shall describe the transaction in general terms, and notify the
Optionee of any action which MCB and the surviving corporation, if other than
MCB, have decided to take pursuant to this Section 7(c) with respect to that
Optionee's Options.
(d) TERMINATION FOR CAUSE. If the Optionee is determined by the Board of
Directors to have committed an act of embezzlement, fraud, dishonesty or breach
of fiduciary duty to MCB, or to have deliberately disregarded the rules of MCB
which resulted in loss, damage or injury to MCB, or if the Optionee makes any
unauthorized disclosure of any of the secrets or confidential information of
MCB, induces any client or customer of MCB to break any contract with MCB or
induces any principal for whom MCB acts as agent to terminate such agency
relationship, or engages in any conduct which constitutes unfair competition
with MCB, or if the Optionee is removed from any office of MCB by any regulatory
agency, neither the Optionee nor the Optionee's estate shall be entitled to
exercise any Option whatsoever, whether or not after termination of employment
and whether the Optionee may receive any other benefits, including severance or
salary continuation payments for any period.
8. EXERCISE PROCEDURE AND PAYMENT
(a) EXERCISE PROCEDURE. To exercise an Option, an Optionee must give
written notice to MCB in form satisfactory to MCB specifying the number of whole
shares, but in increments of not less than 100 (unless the Optionee is
exercising all Options held), that the Optionee elects to purchase. MCB shall
specify a closing date, which shall be not more than 30 days after the date of
the Optionee's notice, for the payment of the exercise price and the issuance of
the Common Stock being purchased. If any purchase of shares requires the consent
of or a filing with or notice to the Securities and Exchange Commission or any
other applicable federal or state agency charged with the administration of
applicable securities laws, the time period specified for the closing shall be
extended for such periods as the necessary consent, filing or notice period is
pending. The date of exercise shall be the date on which the written notice is
received by MCB. On or before the closing date, the Optionee must deliver to MCB
in form satisfactory to MCB all documents required under the Plan, the Stock
Option Agreement and applicable laws and regulations with regard to the purchase
of the shares of Common Stock, together with full payment of the exercise price
and payment in cash of such amount as may be required to pay any and all
applicable withholding taxes. Payment of the exercise price shall be made either
(i) in cash (including check, bank draft or money order), or (ii) with the
consent of the Board of Directors
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and subject to Section 8(b), by delivering shares of Common Stock already owned
by the Optionee, or (iii) by a combination of these forms of payment. Subject to
compliance with this Plan and with any requirements imposed by the Board of
Directors under this Plan, MCB shall issue and deliver to the Optionee on the
specified closing date or at the earliest practicable date after the specified
closing date one or more certificates for the number of shares of Common Stock
purchased. No Optionee shall have any rights of a shareholder with respect to
any shares of Common Stock until certificates for the shares have been issued.
(b) PAYMENT WITH STOCK. With the consent of the Board of Directors, the
Optionee may deliver Common Stock already owned by the Optionee, valued at Fair
Market Value as of the closing date, in full or partial payment of the exercise
price of the shares of Common Stock subject to any Option; provided, however,
that no Common Stock already owned by the Optionee which is "statutory option
stock" as defined in Section 424(c)(3) of the Code may be delivered in payment
of the exercise price if the applicable holding period requirements for such
Common Stock under Sections 422(a)(1) or 423(a)(1) of the Code have not been met
at the time of exercise.
(c) CASHLESS EXERCISE With the consent of the Board of Directors and
subject to the applicable holding periods after grant of an Option, an Optionee
may engage, through a broker, in a "cashless exercise," pursuant to which the
Optionee sells all or some of the shares acquired substantially simultaneously
with the exercise of the Option and remits to MCB net proceeds of the sale equal
to the exercise price, and in such case MCB shall cooperate with the Optionee in
this process; provided, the Optionee shall bear any costs of such process.
9. RESTRICTIONS ON TRANSFERS; SECURITIES LAW COMPLIANCE
(a) TRANSFERABILITY OF OPTIONS. No Option shall be transferable otherwise
than by will or under the laws of descent and distribution, nor shall any Option
be sold, pledged, assigned, hypothecated, or encumbered. Each Option shall be
exercisable, during the lifetime of the Optionee, only by the Optionee.
(b) COMPLIANCE WITH SECURITIES AND OTHER LAWS. MCB may require investment
or residency representations from an Optionee or impose other restrictions prior
and as a condition to issuance of shares to the Optionee or transfer of Shares
by the Optionee. Shares of Common Stock shall not be issued to any Optionee
until MCB has obtained any required approval of any governmental authority or of
any stock exchange on which the Common Stock is then listed and MCB and its
counsel are satisfied that the proposed issuance complies with all applicable
federal and state securities and other laws. Shares of Common Stock purchased
under Options may not be transferred, sold, pledged, hypothecated or encumbered
except in accordance with all applicable federal and state securities laws,
rules and regulations and the provisions of this Plan and the Stock Option
Agreements, and the certificates for the shares of Common Stock issued may bear
a legend to that effect. Under no circumstances shall MCB be obligated to
register or qualify the shares of Common Stock purchased under Options with the
Securities and Exchange Commission or with applicable state securities agencies.
10. EFFECTIVE DATE
The Effective Date of the Plan shall be the date of its adoption by the
Board of Directors; provided, however, that no Option shall be exercisable prior
to the approval of the Plan by the holders of a majority of the shares of Common
Stock of MCB represented at a meeting of the shareholders at which the Plan is
considered. If shareholder approval is not obtained within one year after the
Effective Date, then the Plan and all Options shall automatically terminate on
the first anniversary of the Effective Date.
11. AMENDMENT AND TERMINATION
(a) THE PLAN.
(i) AMENDMENT. The Board of Directors may amend the Plan from time to
time in its sole discretion; provided, however, that no amendment shall,
without the approval of the shareholders of MCB in the manner provided in
Section 10 and in accordance with Section 422 of the Code, (a) change the
class of persons eligible to receive Options or otherwise materially modify
the requirements as to
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eligibility for participation in the Plan; (b) increase the aggregate
number of shares of Common Stock which may be purchased upon exercise of
Options and issued under the Plan; or (c) materially increase the benefits
accruing to Optionees under the Plan. Any amendment in violation of these
restrictions shall be void and of no effect. Furthermore, no amendment
shall impair the rights of any Optionee under any Option, without the
Optionee's consent.
(ii) TERMINATION. The plan shall terminate automatically on the tenth
anniversary of the Effective Date, and MCB may terminate the Plan at any
earlier time. Upon termination of the Plan, no additional Options shall be
granted; provided, however, that the terms of the Plan and Stock Option
Agreements shall continue in full force and effect with respect to
outstanding and unexercised Options and shares of Common Stock issued under
the Plan.
(b) OPTIONS. Subject to the terms and conditions and the limitations of the
Plan, the Board of Directors may in its sole discretion modify, extend or renew
outstanding Options or accept the surrender of outstanding Options (to the
extent not exercised) and authorize the granting of new Options in substitution
(to the extent not exercised). Notwithstanding the preceding sentence, no
modification of an Option shall, without the consent of the Optionee, impair any
rights or obligations under any Option previously granted.
12. MISCELLANEOUS
(a) EMPLOYMENT. Neither the establishment of the Plan or any amendments,
nor the granting of any Options, shall in any way modify or affect, or evidence
any intention or understanding as to, the terms of employment of any Optionee
with MCB, or any Subsidiary or Parent, including the duration of such
employment.
(b) MULTIPLE OPTIONS. Subject to the terms and restrictions set forth in
the Plan, an Optionee may hold more than one Option.
(c) WRITTEN NOTICE. Any notices required under the Plan shall be in writing
and shall be given on the forms, if any, provided or specified by the Board of
Directors. Written notice shall be effective upon actual receipt by the person
to whom such notice is to be given; provided, however, that in the case of
notices to Optionees and their assigns, heirs, legatees and legal
representatives, notice shall be effective upon delivery if delivered personally
or three business days after mailing, registered first class postage prepaid to
the last known address of the person to whom notice is given. Written notice
shall be given to MCB at the following address or such other address as may be
specified from time to time:
MCB Financial Corporation
1248 Fifth Avenue
San Rafael, CA 94901
Attention: Chief Financial Officer
(d) APPLICABLE LAW; SEVERABILITY. The Plan shall be governed by and
construed in all respects in accordance with the laws of the State of California
and, with respect to ISOs, shall be interpreted and administered in accordance
with Section 422 of the Code. If any provision regarding an ISO is susceptible
of more than one interpretation, it shall be interpreted in a manner consistent
with the Option being treated as an ISO for federal income tax purposes. If any
provisions of the Plan shall be held by a court of competent jurisdiction to be
invalid or unenforceable, the remaining provisions shall continue to be fully
effective.
(e) WITHHOLDING TAXES. At or after the time an Option is exercised, in
whole or in part, MCB may withhold from other payments due to Optionee, and if
the payments are not sufficient, upon request of MCB the Optionee shall make
adequate provision for federal and state income tax withholding obligations, if
any, of MCB, any Subsidiary or the Parent which arise as a result of the
exercise of the Option; provided, however, that the Board of Directors may
permit an employee who exercises a NQSO to satisfy all or part of his or her
withholding tax obligations by having MCB withhold a portion of the shares that
otherwise would be issued to him or her upon exercise of the NQSO.
A-6
<PAGE> 21
(f) FINANCIAL INFORMATION FOR OPTIONEES. Not less often than annually, MCB
shall provide each Optionee with a copy of the annual financial statements of
MCB.
* * *
The undersigned, being the duly elected and acting Corporate Secretary of
MCB, hereby certifies that the foregoing Plan was adopted by the Board of
Directors on April 22, 1999, and approved by the shareholders in accordance with
Section 10 of the Plan on , 1999.
/s/ NANCY R. BOATRIGHT
--------------------------------------
Nancy R. Boatright, Corporate
Secretary
A-7
<PAGE> 22
MCB FINANCIAL CORPORATION
PROXY
PROXY FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 19, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints the Messrs. Jorstad, Tarrant and Verrue, and
each of them, the attorneys, agents and proxies of the undersigned, with full
powers of substitution to each, to attend and act as proxy or proxies of the
undersigned at the 1999 Annual Meeting of Shareholders of MCB Financial
Corporation to be held at MCB Financial Corporation, 1248 Fifth Avenue, San
Rafael, California 94901, on Wednesday, May 19, 1999, at 5:30 p.m. or any
adjournment thereof, and to vote as specified herein the number of shares which
the undersigned, if personally present, would be entitled to vote.
IMPORTANT -- PLEASE SIGN ON OTHER SIDE
/SEE REVERSE SIDE/
<PAGE> 23
FOR WITHHOLD
all nominees AUTHORITY
(except as indicated to to vote for
the contrary below) all nominees
/ / / /
1. Election of Directors
To elect the eight persons named below
to the Board of Directors to serve until
the 2000 Annual Meeting of
Shareholders and until their successors are elected and have been qualified.
Nominees: John Cavallucci, Charles O. Hall, Timothy J. Jorstad, Catherine H.
Munson, Gary T. Ragghainti, Michael J. Smith, Edward P. Tarrant and Randall J.
Verrue.
A vote FOR will result in votes being cast to effect the election of the eight
nominees or as many thereof as possible under the rules of cumulative voting.
(INSTRUCTION: To withhold authority for any individual nominee, write that
nominee's name in the space below)
_____________________________________________________________________________
2. Ratification of Independent Auditors. To ratify FOR AGAINST ABSTAIN
the selection of Deloitte & Touche LLP to serve / / / / / /
as MCB Financial Corporation's independent
auditors for the year ending December 31, 1999.
3. 1999 Stock Option Plan. To approve the MCB / / / / / /
Financial Corporation 1999 Stock Option Plan.
4. Other Business. To transact such other business as may properly come
before the 1999 Annual Meeting of Shareholders and any other adjournments
thereof.
THIS PROXY WILL BE VOTED AS DIRECTED BY THE SHAREHOLDER OF, IF NO INSTRUC-
TIONS ARE GIVEN BY THE SHAREHOLDER, THE PROXY HOLDERS WILL VOTE "FOR" EACH
OF THE FOREGOING PROPOSALS.
PLEASE SIGN AND DATE BELOW.
The Board of Directors recommends a vote "FOR" the election of directors, the
ratification of independent auditors, approval of the MCB Financial Corporation
1999 Stock Option Plan, adjournment of the meeting to further solicit proxies,
if necessary, and the transaction of other business. The proxy confers
authority to vote and shall be voted in accordance with such recommendations
unless a contrary instruction is indicated, in which case the shares
represented by the proxy will be voted in accordance with such instruction. If
no instruction is specified with respect to a matter to be acted upon, the
shares represented by the proxy will be voted in accordance with the
recommendations of the Board of Directors. If any director nominee is unable
to serve or for good cause will not serve, this proxy confers authority to and
shall be voted for a substitute nominee designated by the Board of Directors.
This proxy confers authority to cumulate votes for the election of directors.
If any other business is presented at the meeting, this proxy confers authority
to and shall be voted in accordance with the recommendations of the Board of
Directors.
________________________
(Number of Shares)
________________________
(Please print your name)
________________________
(Please print your name)
Signature: _________________ Dated: ____________, 1999
Signature: _________________ Dated: ____________, 1999
(Please date this Proxy and sign your name as if appears on your stock
certificiates. Executors, administrators, trustees, etc., should give their
full titles. All joint owners should sign.) Please indicate if you are planning
to attend the Meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND MAY BE REVOKED
PRIOR TO ITS EXERCISE BY FILING, WITH THE CORPORATE SECRETARY OR MCB FINANCIAL
CORPORATION, A DULY EXECUTED PROXY BEARING A LATER DATE OR AN INSTRUMENT
REVOKING THIS PROXY, OR BY ATTENDING THE MEETING AND ELECTING TO VOTE IN PERSON.
