MCB FINANCIAL CORPORATION
1248 Fifth Avenue
San Rafael, CA 94901
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held May 17, 2000
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 2000 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 17, 2000 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 2001 Annual Meeting of
Shareholders and until their successors are elected and have been qualified:
John Cavallucci Gary T. Ragghianti
Charles O. Hall Michael J. Smith
Timothy J. Jorstad Edward P. Tarrant
Catherine H. Munson Randall J. Verrue
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, 2000.
3. 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 20,
2000 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: MARCH 29, 2000
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Nancy R. Boatright
-----------------------------------------
Nancy R. Boatright, Corporate Secretary
<PAGE>
PROXY STATEMENT OF
MCB FINANCIAL CORPORATION
1248 Fifth Avenue
San Rafael, CA 94901
2000 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 2000 Annual Meeting of
Shareholders of MCB Financial to he held on Wednesday, May 17, 2000 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 7, 2000.
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, 2000 (see "RATIFICATION OF
SELECTION OF INDEPENDENT AUDITORS," herein); and (iii) 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 20, 2000 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 2,030,181 shares of MCB Financial Common Stock outstanding, held by
387 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 of 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 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; and (ii) ratifying the selection of Deloitte & Touche
LLP to serve as MCB Financial's independent auditor for the year ending December
31, 2000.
1
<PAGE>
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>
Security Ownership of Management
<TABLE>
The following table provides certain information, as of March 20, 2000,
with respect to the beneficial ownership of shares of MCB Financial Common Stock
by each MCB Financial director and nominee, each executive officer1, 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.
<CAPTION>
Name and Amount and Nature of Percent
Title of Class Address of Beneficial Owner(2) Beneficial Ownership(3) of Class
- ---------------- ---------------------------------- ----------------------- ----------
<S> <C> <C>
Common Stock John Cavallucci 247,295(4) 11.90%
Common Stock Charles O. Hall 48,733(5) 2.34%
Common Stock Timothy J. Jorstad 72,555(6) 3.57%
Common Stock Catherine H. Munson 44,979(7) 2.21%
Common Stock Gary T. Ragghianti 29,016(8) 1.43%
Common Stock Michael J. Smith 37,415(9) 1.84%
Common Stock Edward P. Tarrant 48,222(10) 2.37%
Common Stock Randall J. Verrue 38,791(11) 1.91%
Common Stock Stephen R. Brodie 7,887(12) *
Common Stock Raymon L. Hanssen 6,946(13) *
Common Stock Patrick E. Phelan 10,166(14) *
Common Stock Current Directors and Executive
Officers as a Group (11 persons) 592,005(15) 27.33%
<FN>
- ------------
(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 20,
2000, the Record Date, by the exercise of stock options vested pursuant to
MCB Financial's 1989 Stock Option Plan, and 1999 Stock Option Plan.
(4) Includes options to acquire 48,405 shares which are exercisable within 60
days of the Record Date.
(5) Includes options to acquire 48,404 shares which are exercisable within 60
days of the Record Date.
(6) Includes 60,478 shares held by Jorstad, Inc., Money Purchase & Profit
Sharing Pension Plan. Also includes options to acquire 2,100 shares which
are exercisable within 60 days of the Record Date. 7 Includes 32,631 shares
held by Lucas Valley Properties, Inc., Money Purchase & Profit Sharing
Pension Plan. Also includes options to acquire 2,100 shares which are
exercisable within 60 days of the Record Date.
(8) Includes 5,786 shares held by Ragghianti & Thomas Profit Sharing Plan. Also
includes options to acquire 4,191 shares which are exercisable within 60
days of the Record Date.
(9) Includes options to acquire 2,100 shares which are exercisable within 60
days of the Record Date. Also includes 3,561 shares which are held in Mr.
Smith's IRA trust accounts.
(10) Includes 11,031 shares held by Mr. Tarrant as Custodian for his
grandchildren. Also includes options to acquire 2,100 shares which are
exercisable within 60 days of the Record Date.
3
<PAGE>
(11) Includes 7,354 shares which are held in Mr. Verrue's IRA trust accounts.
Also includes options to acquire 2,100 shares which are exercisable within
60 days of the Record Date.
(12) Represents vested options exercisable within 60 days of the Record Date.
(13) Represents vested options exercisable within 60 days of the Record Date.
(14) Includes options to acquire 9,937 shares which are exercisable within 60
days of the Record Date.
(15) Includes options held by executive officers and non-employee directors of
MCB Financial which are exercisable within 60 days of the Record Date.
</FN>
</TABLE>
Compliance With Section 16(a) of the Securities Exchange 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, 1999, the
executive officers, directors and greater than ten percent beneficial owners of
MCB Financial's common stock complied with all applicable Section 16(a) filing
requirements, except for certain stock option grants and exercises and one stock
purchase transaction. These transactions were reported on Form 3 and/or Form 5
and filed with the Securities and Exchange Commission on various dates between
February 11, 2000 and March 2, 2000.
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 and ratifying Deloitte &
Touche LLP as MCB Financial's independent auditor for the year ending December
31, 2000. These proposals are discussed in greater detail in the following
sections of this Proxy Statement.
4
<PAGE>
PROPOSAL ONE:
ELECTION OF DIRECTORS
<TABLE>
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 2001 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 Commerce. It is intended that each person elected a director of MCB
Financial will also be elected a director of Metro Commerce.
<CAPTION>
Metro MCB
Present Position(s) Commerce Financial
with MCB Financial Director Director
Name Age and Metro Commerce Since Since
---- --- ------------------ ----- -----
<S> <C> <C> <C> <C>
John Cavallucci ............ 58 Chairman of MCB Financial and 1991 1993
Metro Commerce
Charles O. Hall ............ 45 Director, President and 1995 1999
Chief Executive Officer of MCB
Financial and Metro Commerce
Timothy J. Jorstad ......... 48 Director 1989 1993
Catherine H. Munson ........ 72 Director 1989 1993
Gary T. Ragghianti ......... 56 Vice Chairman 1989 1993
Michael J. Smith ........... 59 Director 1989 1993
Edward P. Tarrant .......... 56 Director 1989 1993
Randall J. Verrue .......... 56 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.
5
<PAGE>
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.
Meetings of the Board of Directors and Committees of MCB Financial
The Board of Directors of MCB Financial held twelve meetings during
1999. 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 1999 all of the directors
of MCB Financial attended at a minimum 75 percent of the aggregate 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 fourteen meetings during
1999. 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 1999. 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 no meetings during 1999. The Personnel Committee's function is to review
compensation of executive officers and make recommendations to the Board of
Directors regarding compensation.
6
<PAGE>
During 1999, all of the directors of Metro Commerce attended at a
minimum 75 percent of the aggregate of all meetings of the Board of Directors
and of the committees on which they serve, except Michael J. Smith, who attended
70% of the meetings.
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 20,
2000, with respect to the current executive officers of MCB Financial and Metro
Commerce.
Present Position(s) with
Name Age MCB Financial and Metro Commerce
---- --- --------------------------------
John Cavallucci ....... 58 Chairman of MCB Financial; Chairman and Executive
Officer to the President of Metro Commerce
Charles O. Hall ....... 45 Director, President and Chief Executive Officer of
MCB Financial and Metro Commerce
Stephen R. Brodie ..... 54 Executive Vice President and Chief Credit Officer
of Metro Commerce
Raymon L. Hanssen ..... 56 Executive Vice President and Chief Administrative
Officer of Metro Commerce
Patrick E. Phelan ..... 36 Chief Financial Officer of MCB Financial; Executive
Vice President and Chief Financial Officer of
Metro Commerce
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.
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.
7
<PAGE>
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 four other
most highly compensated executive officers of Metro Commerce who served as such
at year end 1999 and whose total annual salary and bonus exceeded $100,000
("Named Officers"). Comparative data is also provided for the two previous
fiscal years, where applicable. No cash compensation was paid by MCB Financial
to any Named Officer; however, each Named Officer of MCB Financial also serves
as an executive of Metro Commerce and receives compensation from Metro Commerce
for services rendered in his or her capacity as such.
<TABLE>
Summary Compensation Table
<CAPTION>
Annual Long Term
Compensation Other Compensation
Name and ---------------------- Annual Awards All Other
Principal Position at Salary Bonus Compensation Options Compensation(1)
December 31, 1999 Year ($) ($) ($) (#) ($)
--------------------- ---- ------- ------ ------------ ------- ---------------
<S> <C> <C> <C> <C> <C>
John Cavallucci .............. 1999 70,000 34,594 10,500 3,856
Executive Officer to the 1998 142,000 47,900 2,863
President 1997 132,000 38,057 2,162
Charles O. Hall .............. 1999 153,360 69,188 10,500 7,901
President/ 1998 142,000 47,900 7,271
Chief Executive Officer 1997 132,000 38,057 7,925
Stephen R. Brodie ............ 1999 96,342 16,000 1,900
Executive Vice President/ 1998 89,934 14,000 5,250 1,700
Chief Credit Officer 1997 N/A N/A N/A
Raymon L. Hanssen ............ 1999 97,635 21,020 4,715
Executive Vice President/ 1998 89,435 12,768 2,400
Chief Administrative 1997 N/A N/A N/A
Officer
Patrick E. Phelan ............ 1999 91,081 16,500 4,100
Executive Vice President/ 1998 N/A N/A N/A
Chief Financial Officer 1997 N/A N/A N/A
<FN>
- ------------
(1) Includes automobile compensation and matching contributions to the
Executive Deferred Compensation Plan.
</FN>
</TABLE>
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 a 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
8
<PAGE>
reasons of death, medical disability which would preclude him from 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 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 a 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, 1999.
Stock Option Grants in Last Fiscal Year
Percent of
Total Options
Number of Granted During Exercise Expiration
Name Shares 1999 Price Date
---- ------ ---- ----- ----
John Cavallucci ....... 10,500 12.05% $7.62 07/22/2009
Charles O. Hall ....... 10,500 12.05% $7.62 07/22/2009
9
<PAGE>
The following table presents information regarding the 1999 fiscal year
end value of unexercised stock options held by the Named Officers. There were no
option exercises by the Named Officers during the 1999 fiscal year. The market
value of MCB Financial's Common Stock as of December 31, 1999 was $11.00 per
share.
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option
Values
Value of
Number of Unexercised
Unexercised In-the-Money
Options Options
at 1999 at 1999
Year-End (#) Year-End ($)
Exercisable/ Exercisable/
Name Unexercisable Unexercisable
---- ------------- -------------
John Cavallucci ............. 48,405 / 8,400 332,115 / 28,400
Charles O. Hall ............. 45,626 / 11,178 323,950 / 49,963
Stephen R. Brodie ........... 7,887 / 3,150 35,291 / 6,150
Raymon L. Hanssen ........... 6,946 / 0 47,891 / N/A
Patrick E. Phelan ........... 7,011 / 3,131 45,129 / 18,947
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 1999, 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 29, 2000, 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 $3,727,417 which represents approximately 26.1% 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 1999 was approximately $3,393,670.
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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, 2000. 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 2000. 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 2000 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.
SHAREHOLDER PROPOSALS
MCB Financial's 2001 Annual Meeting of Shareholders is currently
scheduled for May 16, 2001. To be included in MCB Financial's 2001 Proxy
Statement, proposals of shareholders intended to be presented at the 2001 Annual
Meeting must be received by MCB Financial no later than December 20, 2000.
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.
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