SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [ X ] Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] 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 Rule 14a-11(c) or Rule 14a-12
BNCCORP, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ X ] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(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 minimum 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>
BNCCORP, INC.
322 East Main
Bismarck, North Dakota 58501
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
June 7, 2000
The annual meeting of stockholders of BNCCORP, Inc. ("BNC") will be
held at 10:00 a.m. (Central Daylight Time) on Wednesday, June 7, 2000, at the
Holiday Inn, 605 East Broadway Avenue, Bismarck, North Dakota, to consider and
take action upon the following matters:
1. To elect three directors to hold office for three years and until
their respective successors shall have been elected and
qualified; and
2. To ratify the appointment of Arthur Andersen LLP as BNC's
independent public accountants for 2000.
The Board of Directors has set the close of business on Friday, April
14, 2000 as the record date for the determination of the stockholders entitled
to notice of and to vote at the meeting or any adjournments.
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING. HOWEVER, WHETHER OR
NOT YOU PLAN TO BE PERSONALLY PRESENT AT THE MEETING, PLEASE MARK, DATE AND SIGN
THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. A PROXY MAY
BE REVOKED AT ANY TIME PRIOR TO THE VOTING THEREOF.
By Order of the Board of Directors
Annette Eckroth
Secretary
Bismarck, North Dakota
May 8, 2000
<PAGE>
BNCCORP, INC.
322 EAST MAIN
BISMARCK, NORTH DAKOTA 58501
PROXY STATEMENT
This Proxy Statement is furnished to holders of common stock ("Common
Stock") of BNCCORP, Inc. ("BNC" or the "Company"), in connection with the
solicitation on behalf of the Board of Directors (the "Board") of proxies for
use at the annual meeting of stockholders of BNC to be held on June 7, 2000 and
at any adjournments thereof (the "Annual Meeting"). Only stockholders of record
of Common Stock at the close of business on April 14, 2000 (the "Record Date")
will be entitled to notice of and to vote at the Annual Meeting. On the Record
Date, there were 2,399,980 shares of Common Stock outstanding. This proxy
statement and BNC's 1999 Annual Report is being mailed to each stockholder of
record on the Record Date commencing May 8, 2000.
The presence, in person or by proxy, of a majority of the outstanding
shares of Common Stock entitled to vote at the Annual Meeting is necessary to
constitute a quorum. Stockholders are urged to sign the accompanying form of
proxy and return it in the envelope provided for that purpose. Proxies will be
voted in accordance with each stockholder's directions. If no directions are
given, proxies will be voted for the election of the nominees for directors and
for the approval of the independent accountants set forth in this Proxy
Statement. Granting the enclosed proxy does not affect the right to vote in
person at the Annual Meeting and may be revoked at any time before it is voted.
Abstentions and broker non-votes are each included in the determination
of the number of shares present and voting for purposes of determining the
presence or absence of a quorum at the Annual Meeting. The election of directors
requires the plurality of the votes cast by stockholders who are present in
person or represented by proxy at the Annual Meeting. Shares may be voted for or
withheld for each nominee as a director. The ratification of the selection of
independent public accountants requires a majority of the votes cast by
stockholders who are present in person or represented by proxy at the Annual
Meeting. Abstentions are counted as "shares present" at the Annual Meeting for
purposes of determining the presence of a quorum and have the effect of a vote
"against" any matter as to which they are specified. Proxies submitted by
brokers that do not indicate a vote for any or all matters (broker "non-votes")
are not considered "shares present" and will not affect the outcome of the vote.
Under BNC's bylaws, no business other than that stated in the notice of Annual
Meeting may be transacted at the Annual Meeting.
PROPOSAL 1: ELECTION OF DIRECTORS
General
At the Annual Meeting, three directors are to be elected to serve a
three-year term, each to hold office until his successor is elected and
qualified. The Board of Directors consists of three classes, each having a
three-year term of office, with one class being elected each year. The persons
named in the enclosed proxy intend to vote such proxy, unless otherwise
directed, for the election of Messrs. B. Scott and LaBreche and Ms. Rebel as
members of the class to serve until the 2003 annual meeting of stockholders. If,
contrary to present expectations, any of the nominees to be elected at the
Annual Meeting should become unavailable for any reason, the Board of Directors
may reduce the size of the Board or votes may be cast pursuant to the
accompanying form of proxy for a substitute nominee designated by the Board.
1
<PAGE>
Information about Nominees, Directors and Executive Officers
The following table provides certain information, as of April 15, 2000,
with respect to each nominee, each other director whose term will continue after
the Annual Meeting and each executive officer of the Company. Unless otherwise
indicated, each person has been engaged in the principal occupation shown for
the past five years.
<TABLE>
<CAPTION>
Principal Occupation, Period of Service Board Committee
Name and Age as a Director, Business Experience and Memberships
Other Information
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
NOMINEES:
LaBreche, James D. 53 James D. LaBreche, who has been a director of BNC since September 1999, N/A
became President and Chief Operating Officer of BNC National Bank of
Minnesota ("BNC - Minnesota") in February 1999. From 1994 to 1999, he
served as Vice President - Business Development for National City Bank,
Minneapolis, MN. From 1991 to 1994, Mr. LaBreche served as Senior Vice
President and Senior Lending Officer for Marquette Bank Golden Valley.
Rebel, Brenda L. 41 Brenda L. Rebel, a Certified Public Accountant, has been a director of BNC N/A
since September 1999 and has served as Chief Financial Officer and Senior
Vice President since January 1998. She served as Vice President -
Corporate Controller from August 1995 to January 1998 and as Vice
President - Regulatory Compliance from June 1991 to July 1995.
Scott, Brad J. 42 Brad J. Scott, who has been a director of BNC since May 1994, serves as N/A
BNC National Bank's ("BNC--North Dakota") Executive Vice President. He
served as BNC's Chief Credit Officer between July 1992 and January 1997.
He joined BNC C North Dakota in January 1991 as the Senior Vice President
of Commercial Lending.
OTHER DIRECTORS:
Cleveland, Gregory K. 52 Gregory K. Cleveland, a Certified Public Accountant, has served as an Member of
executive officer and director of BNC since its inception in 1987. He has Executive
served as President of BNC since March 1995 and as Chief Operating Officer Committee
since January 1998. He served as Chief Financial Officer of BNC from
February 1994 to January 1998. Mr. Cleveland's term on the Board of
Directors will expire in 2001.
Hipp, John A., M.D. 53 John A. Hipp, M.D., who has been a director of BNC since 1988, has Member of
practiced medicine in Bismarck since 1980 as a principal in Pathology Compensation
Consultants, a professional corporation specializing in medical laboratory Committee
and computer consulting services. Dr. Hipp is board certified in anatomic
and clinical pathology by the American Board of Pathology. Dr. Hipp's term
on the Board of Directors will expire in 2001.
Johnsen, Richard M., Jr. 55 Richard M. Johnsen, Jr., who has been a director of BNC since June 1995, Member of Audit
has served since 1979 as Chairman of the Board and Chief Executive Officer Committee
of Johnsen Trailer Sales, Inc., which sells and services trailers in
Bismarck and Fargo, North Dakota. Since 1990, Mr. Johnsen has also been a
partner in Johnsen Real Estate Partnership, which owns and operates rental
property in Bismarck and Fargo, North Dakota. Mr. Johnsen's term on the
Board of Directors will expire in 2002.
Scott, Tracy J. 52 Tracy J. Scott, a Certified Public Accountant, has served as Chairman of Member of
the Board, Chief Executive Officer and a director of BNC since he and Executive
Gregory K. Cleveland founded BNC in 1987. Mr. Scott's term on the Board of Committee
Directors will expire in 2001.
2
<PAGE>
Shaffer, John M. 53 John M. Shaffer, who has been a director of BNC since June 1995, has served Member of the
since 1988 as President of Atlas, Inc., a ready mix concrete producer and Audit Committee
concrete construction company based in Bismarck, North Dakota. Since 1979,
Mr. Shaffer has also been a partner in Capital Investments, which invests
in property and equipment in North Dakota. Mr. Shaffer's term on the Board
of Directors will expire in 2002.
Woodcox, Jerry R. 57 Jerry R. Woodcox, who has been a director of BNC since June 1995, has Member of the
served since 1970 as President of Arrowhead Cleaners and Laundry, Inc., a Compensation
laundry and dry cleaning services business operating in Bismarck, North Committee
Dakota. Mr. Woodcox's term on the Board of Directors will expire in 2002.
OTHER EXECUTIVE OFFICERS:
Peiler, Mark E. 29 Mark E. Peiler has served as Investment Officer for BNC since May 1998. N/A
From 1997 to 1998, Mr. Peiler served as Assistant Vice President/Asset
Liability Management with MidAmerica Bank, and from 1996 to 1997 as
Financial Analyst with BancServices Company, MidAmerica's parent company.
From 1995 to 1996, he was a Registered Representative with Prudential
Preferred in St. Louis Park, Minnesota.
Sorum, David J. 44 David J. Sorum has served as President of BNC National Bank's branch office N/A
in Fargo, North Dakota since November 1998. Prior to joining BNC, he
served as Senior Vice President for Community First National Bank, Fargo,
ND, from 1997 to 1998, and as Market Manager for American Federal Bank from
1995 to 1997. From 1993 to 1995 he served as Senior Vice President /
District Manager of Metropolitan Federal Bank, fsb, Fargo, North Dakota.
</TABLE>
There are no family relationships among any of the directors or executive
officers of BNC.
Board of Directors Meetings and Committees
During 1999, the Board held 12 regular meetings. The Board has
established three committees, the Executive Committee, Audit Committee and
Compensation Committee, each of which is briefly described below. During 1999,
the Audit Committee met three times and the Compensation Committee and Executive
Committee did not meet. During 1999, each director attended at least 75 percent
of the total of the Board and committee meetings which he was obligated to
attend, other than Dr. Hipp whose professional responsibilities require
occasional travel outside of the Bismarck area.
The members of the Executive Committee are Tracy J. Scott (Chairperson) and
Gregory K. Cleveland. The Executive Committee is authorized to exercise all
powers of the Board of Directors to the extent permitted by Delaware law. All
actions taken by the Executive Committee are submitted to the full Board for
ratification.
The Audit Committee, on which Messrs. Johnsen and Shaffer serve, is
responsible for: (i) making recommendations to the Board concerning the
engagement of independent public accountants, (ii) consulting with the
independent public accountants with regard to the plan of audit, (iii)
consulting directly with BNC's Chief Financial Officer on any matter that the
Audit Committee or the Chief Financial Officer deems appropriate in connection
with carrying out the audit, (iv) reviewing the results of audits of BNC by its
independent public accountants and certain regulatory agencies, (v) discussing
audit recommendations with management and reporting results of its reviews to
the Board of Directors, (vi) reviewing all related party transactions and all
other potential conflict of interest situations, and (vii) performing such other
functions as may be prescribed by the Board.
The Compensation Committee is responsible for administering BNC's 1995
Stock Incentive Plan and Incentive Bonus Plan and performing such other
functions as may be prescribed by the Board. The current members of the
Compensation Committee are Messrs. Hipp and Woodcox.
3
<PAGE>
Director Compensation
Each director who is not an employee of BNC is paid a director's fee of
$7,200 per year and fees of $500 for each committee meeting attended. Directors
are reimbursed for expenses incurred in attending board and committee meetings.
Principal Stockholders
The following table sets forth, as of April 1, 2000, certain
information regarding beneficial ownership of the Common Stock by (i) each
stockholder known by BNC to be the beneficial owner of more than 5 percent of
the outstanding Common Stock, (ii) each director of BNC, (iii) each executive
officer of BNC listed in the Summary Compensation Table set forth elsewhere
herein, and (iv) all of BNC's directors and executive officers as a group.
Unless otherwise indicated, BNC believes that the stockholders listed below have
sole investment and voting power with respect to their shares based on
information furnished to BNC by such owners.
<TABLE>
Percent of
Number of shares outstanding
Name of beneficial owner (1) beneficially owned Common Stock
---------------------------- ------------------ ------------
<S> <C> <C>
Tracy J. Scott.............. 135,145 (2)(3)(4)(5) 5.6%
Gregory K. Cleveland........ 117,982 (2)(3)(4)(6) 4.9%
Brad J. Scott............... 46,245 (2)(3)(4) 1.9%
David A. Erickson........... 161,691 (2)(7) 6.7%
David J. Sorum.............. 5,601 (3) *
James D. LaBreche........... 7,190 (3) *
Brenda L. Rebel............. 5,928 (2)(3)(4) *
John A. Hipp, M.D........... 88,150 (4)(8) 3.7%
Richard M. Johnsen, Jr...... 5,650 (4) *
John M. Shaffer............. 7,150 (4) *
Jerry R. Woodcox............ 3,150 (4) *
BNC National Bank, as Trustee
(the "Trustee") of the
BNCCORP, Inc. 401(k)
Savings Plan (9).......... 184,576 7.7%
All directors and executive
officers as a group
(11 persons).............. 422,887 (2)(3)(4) 17.3%
</TABLE>
- --------------------
* Less than 1 percent.
(1) The address of Mr. T. Scott, Mr. Erickson, and the "other named
executive officers" is c/o BNCCORP, Inc., 322 East Main, Bismarck,
North Dakota 58501, and the address of the Trustee is 322 East Main,
Bismarck, North Dakota 58501.
(2) Includes the following number of shares allocated to such individual's
accounts as of April 1, 2000 under the Company's 401(k) Savings Plan:
Mr. T. Scott (16,483 shares), Mr. Cleveland (3,988 shares), Mr. B.
Scott (20,149 shares), Mr. Erickson (38,871 shares), Ms. Rebel (3,022),
and all directors and executive officers as a group (43,738 shares).
(3) Includes the following number of shares of restricted stock under the
1995 Stock Incentive Plan: Mr. T. Scott (7,508), Mr. Cleveland (7,257),
Mr.B.Scott (2,533), Mr. Sorum (5,500), Mr. LaBreche (5,000), Ms. Rebel
(601), and all directors and executive officers as a group (28,399).See
"Stock Incentive Plan."
(4) Includes shares that may be acquired within 60 days through exercise of
stock options: Mr. T. Scott (10,834), Mr. Cleveland (15,257), Mr. B.
Scott (7,413), Ms. Rebel (2,105), Dr. Hipp (650), Mr. Johnsen (650),
Mr. Shaffer (650), Mr. Woodcox (650) and all directors and executive
officers as a group (38,209).
(5) Includes 1,000 shares owned by Mr. Scott's children.
(6) Includes 78,480 shares owned by Mr. Cleveland's wife and 13,000 shares
under Gregory K. Cleveland PC Employees' Defined Benefit Plan.
(7) Includes 38,820 shares owned by Mr. Erickson's wife.
(8) Includes 80,000 shares owned by John A. Hipp and Barbara K. Hipp
LLLP#2, a limited liability limited partnership, and 7,500 shares owned
by Dr. Hipp's children.
(9) Each participant of the Company's 401(k) Savings Plan is entitled
to direct the Trustee as to the manner in which to vote the shares
allocated to the participant's account.
4
<PAGE>
Compensation of Executive Officers
The following table summarizes the compensation that BNC paid to its
chief executive officer and each of its most highly compensated executive
officers during the three year period ended December 31, 1999 whose total annual
salary and bonus exceeded $100,000.
<TABLE>
Summary Compensation Table
<CAPTION>
Long-Term Compensation
--------------------------------------------
Annual compensation Awards Payouts
-------------------- ---------------------------- -------------
Securities Long-Term
Restricted Underlying Incentive All other
Name and principal Stock Options Plan compensation
position Year Salary Bonus Awards ($) (#) Payouts ($) (3)(4)
-------------------------- ------ --------- ------- -------------- ----------- ------------- -------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Tracy J. Scott........... 1999 $200,000 $ - - - - $6,398
Chairman of The Board 1998 200,000 - - 12,000 - 6,434
and Chief Executive 1997 178,000 - - - - 6,220
Officer
Gregory K. Cleveland..... 1999 175,000 - - - - 6,398
President and Chief 1998 175,000 - - 24,000 - 6,434
Operating Officer 1997 150,000 - - - - 5,970
Brad J. Scott............ 1999 120,000 48,234 - - - 5,198
Executive Vice 1998 120,000 12,263 - 9,000 - 5,234
President, 1997 120,000 - - - - 5,020
BNC National Bank
David J. Sorum........... 1999 100,000 - 59,125(1) - - 198
President of BNC 1998 20,513 - - - - -
National Bank's 1997 - - - - - -
Fargo Branch (5)
James D. LaBreche........ 1999 119,359 - 46,250(2) - - 116
President of BNC 1998 - - - - - -
National Bank of 1997 - - - - - -
Minnesota (6)
</TABLE>
- --------------------
(1) 5,500 shares of restricted stock were granted in 1999 to the named
individual and were valued at $32,313 as of December 31, 1999 (based on
the closing price of the Company's Common Stock at December 31, 1999 of
$5.875 per share). This restricted share award will vest in 10 percent
increments through 2008.
(2) 5,000 shares of restricted stock were granted in 1999 to the named
individual and were valued at $29,375 as of December 31, 1999 (based on
the closing price of the Company's Common Stock at December 31, 1999 of
$5.875 per share). This restricted share award will vest 60 percent in
2002 and an additional 20 percent in each of 2003 and 2004.
(3) Consists of (i) the Company's matching contributions to the Company's
401(k) Savings Plan in the following amounts: Mr. T. Scott ($5,000 in
1999, $5,000 in 1998, and $4,750 in 1997), Mr. Cleveland ($5,000 in
1999, $5,000 in 1998, and $4,500 in 1997), and Mr. B. Scott ($5,000 in
1999, $5,000 in 1998, and $4,750 in 1997); and (ii) premium payments
for life insurance policies providing death benefits to the executive
officers' beneficiaries in the following amounts: Mr. T. Scott ($1,398
in 1999, $1,434 in 1998, and $1,470 in 1997), Mr. Cleveland ($1,398 in
1999, $1,434 in 1998, and $1,470 in 1997), Mr. B. Scott ($198 in 1999,
$234 in 1998, and $270 in 1997), Mr. Sorum ($198 in 1999), and Mr.
LaBreche ($116 in 1999).
(4) Perquisites and other personal benefits are not included because the
aggregate amount of such compensation does not exceed the lesser of
$50,000 or 10 percent of the total of annual salary and bonus reported
for the named executive officers.
(5) Mr. Sorum joined the Company in October 1998.
(6) Mr. LaBreche joined the Company in February 1999.
5
<PAGE>
Options/SAR Grants During 1999
There were no stock options or stock appreciation rights granted
during the year ended December 31, 1999 to any of the named executive officers.
Aggregated Option/SAR Exercises in Last Fiscal Year And Year-end Option/SAR
Values
The number and value of unexercised stock options held by the Company's
chief executive officer and each of its most highly compensated executive
officers at December 31, 1999, whose annual salary and bonus exceeded $100,000,
is set forth in the following table. The Company has not granted any stock
appreciation rights. No stock options were exercised by these individuals during
the year ended December 31, 1999.
Value of Unexercised
Number of Unexercised In-the-Money Options
Name Options at December 31, 1999 at December 31, 1999 (1)
- ---- ------------------------------- ---------------------------
------------------------------- ---------------------------
Exercisable Unexercisable Exercisable Unexercisable
------------ -------------- ------------ -------------
Tracy J. Scott 8,434 9,600 $ 0 $ 0
Gregory K.
Cleveland 10,457 19,200 0 0
Brad J. Scott 5,613 7,200 0 0
David J. Sorum 0 0 0 0
James D. LaBreche 0 0 0 0
- --------------------
(1) Calculated based on the market price at December 31, 1999, less the share
price to be paid upon exercise.
Compensation Committee Interlocks and Insider Participation
No executive officer of the Company served in 1999 as a director, or member of
the compensation committee, of another entity one of whose executive officers
served as a director, or on the Compensation Committee, of the Company.
Compensation Committee's Report on Executive Compensation
The Compensation Committee of the Board of Directors, which is comprised of two
non-employee directors, Messrs. Hipp and Woodcox (the "Committee"), provides
overall guidance as to the Company's executive compensation programs and
administers the Company's stock option plan.
The Company's executive compensation policy seeks to ensure that the base and
cash bonus compensation of the Company's executive officers and other key
employees of the Company should be competitive with other similar size companies
in the financial services industry while, within the Company, being fair and
discriminating on the basis of individual performance. Annual awards of stock
options are intended to retain executives and key employees and to motivate them
to improve long-term stock market performance.
Compensation for Company executives consists of both cash and equity based
opportunities. The annual cash compensation consists of base salary and
incentive bonuses. Equity based opportunities are provided on a long-term basis
under the 1995 Stock Incentive Plan.
Base Salary. The Committee believes that base salary ranges should reflect the
competitive employment market and the relative internal responsibilities of the
executive's position. An executive's position within a salary range is based
upon his or her past performance, job duties, scope of responsibilities and
expected future contributions. Most recent past performance is a prime
determinant. The Committee considers salaries of executive officers within the
context of an external survey of executive compensation of peer banks.
Individual salary increases are based upon an assessment of the peer group
average salary, the salary budget for the Company and the executive's
performance. The Company's base salaries are generally within the range of
comparable average salaries in the peer group.
6
<PAGE>
There were no increases in the base salaries of the named executive officers
during 1999 due to the Company's recent financial performance and the
Committee's determination that base salaries are competitive and reflective of
executive officer responsibilities.
Incentive Bonuses. In June 1995, the Company adopted an Incentive Bonus Plan
(the "Incentive Plan") to provide annual incentive cash bonuses to BNC's
employees. Under the Incentive Plan, each full-time employee of BNC is eligible
to receive a cash bonus based on a percentage of his or her salary to be
calculated according to a formula based on elements of the Company's performance
during the annual performance period. Key performance indicators are generally
balanced between growth, profit, asset quality and productivity. Additionally,
the Incentive Plan includes performance "triggers" which, even though individual
key performance targets may be achieved, preclude the payment of bonuses if
overall targets, such as average return on stockholders' equity, are not
achieved. Designated individuals are also eligible to receive an additional
annual cash bonus based on a percentage of their annual salary according to a
formula based on an increase in the Company's stock price during the annual
performance period.
No incentive bonuses were paid to executive officers during 1999 because the
Company did not achieve its targeted financial performance. The bonus paid to
Mr. B. Scott during 1999 was a production-based bonus paid under the Company's
lender compensation program.
Stock Incentive Plan. In June 1995, BNC adopted the 1995 Stock Incentive Plan
(the "Stock Plan") to provide long-term incentives to its key employees,
including officers and directors who are employees of BNC (the "Eligible
Employees"). Under the Stock Plan, which is administered by the Committee, BNC
may grant Eligible Employees incentive stock options, non-qualified stock
options, restricted stock, stock awards or any combination thereof. The
Committee establishes the exercise price of any stock options granted under the
Stock Plan, provided that the exercise price may not be less than the fair
market value of a share of Common Stock on the date of grant.
There were no equity-based incentives granted under the Stock Plan during 1999.
The restricted stock grants to Messrs. Sorum and LaBreche were granted in
connection with their recruitment and vest in accordance with the schedules
presented in the summary compensation table above.
Compensation of the Chief Executive Officer. The Committee makes recommendations
to the Board regarding the compensation of the Chief Executive Officer (the
"CEO"). The CEO does not participate in discussions about his compensation
matters or in the making of recommendations by the Committee of his
compensation. The Board must approve all compensation actions regarding the CEO.
The Board approved all transactions that were recommended by the Committee
related to the compensation of the CEO for the 1999 fiscal year. The CEO's base
salary was not adjusted during 1999. Additionally, no cash or equity-based
incentive bonuses were paid or granted due to the fact that the Company did not
achieve its targeted financial performance.
Submitted by the Compensation Committee:
John A. Hipp, M.D.
Jerry R. Woodcox
7
<PAGE>
Performance Graph
The graph below compares the cumulative total stockholder return of
BNC's Common Stock from December 31, 1995 to December 31, 1999 with the
cumulative total return on the S&P 500 Index and the Nasdaq Bank Stock Index.
The performance graph assumes $100 invested in BNC's Common Stock and each of
the S&P 500 Index and the Nasdaq Bank Stock Index on December 31, 1995 and, for
the two indices, the reinvestment of dividends.
[GRAPH OMITTED]
12/31/95 12/31/96 12/31/97 12/31/98 12/31/99
----------- ----------- ----------- ----------- ----------
The Company $ 100.00 $ 123.46 $ 161.73 $ 106.17 $ 58.02
S & P 500 Index 100.00 123.18 164.36 212.08 256.78
Nasdaq Bank
Stock Index 100.00 132.03 221.06 219.46 210.97
Employment Agreements
BNC has employment agreements with each of Tracy J. Scott, Gregory K.
Cleveland, David J. Sorum and James D. LaBreche, (the "Executives"). Each of the
Executives' employment agreements provides for a minimum annual salary and an
annual incentive bonus as may, from time to time, be fixed by the Committee. The
employment agreements with Messrs. Scott and Cleveland, each entered into in May
1995, provide for minimum annual salaries of $156,000 and $128,000,
respectively. Mr. Sorum's employment agreement, entered into in October 1998,
provides for a minimum annual salary of $100,000. The agreement for Mr.
LaBreche, entered into in March 1999, provides for a minimum annual salary of
$140,000. Each of the employment agreements has an initial term of three years
and thereafter automatically renews for consecutive one-year terms unless either
the Company or the Executive terminates the agreement upon 90 day's notice prior
to such automatic renewal.
Under the employment agreements, each Executive receives such benefits
as the Company provides under its employee benefits plan for its employees
generally, or for its senior executive officers in particular, on the same terms
as are applicable to other senior executives of the Company. If either Mr.
Scott's or Mr. Cleveland's employment is terminated for any reason other than
death, disability, or cause (as defined in the agreements), or if they terminate
their employment for good reason (as defined in the agreements), or following a
change in control (as defined in the agreements), then the Company must pay them
a lump-sum amount equal to three times their current annual compensation. If the
employment of the other Executives is terminated following a change of control
(as defined in the agreements) of the Company, then these Executives will be
paid a lump-sum payment equal to three times their current annual compensation.
If the employment of Mr. LaBreche is terminated for any reason other than death,
disability, or cause, or if he terminates his employment for good reason, except
in the event of a change in control of the Company, then he will be paid a
lump-sum equal to 1/12 of his current annual compensation multiplied by the
number of months remaining under the employment agreement.
8
<PAGE>
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires BNC's
executive officers, directors, and persons who own more than 10 percent of the
Common Stock to file reports of ownership and changes in ownership on Forms 3,
4, and 5 with Nasdaq Stock Market. BNC believes that all of the persons
obligated to file these reports complied with all the filing requirements
applicable to them with respect to transactions during 1999, other than Mr.
Woodcox, a director of the Company, who made a late filing in 1999 reporting a
purchase of shares of Common Stock.
CERTAIN RELATIONSHIPS AND TRANSACTIONS
The executive officers, directors and principal stockholders of BNC and
members of their immediate families and businesses in which they hold
controlling interests are customers of BNC - North Dakota and BNC - Minnesota,
(the "Banks"), and it is anticipated that such parties will continue to be
customers of the Banks in the future. All outstanding loans and extensions of
credit by the Banks to these parties were made in the ordinary course of
business in accordance with applicable laws and regulations and on substantially
the same terms, including interest rates and collateral, as those prevailing at
the time for comparable transactions with other unaffiliated persons, and in the
opinion of management do not involve more than the normal risk of collectibility
or present other unfavorable features. At December 31, 1999, the aggregate
balance of the Banks' loans and advances under existing lines of credit to these
parties was approximately $1 million or .38% of the Banks' total loans.
PROPOSAL 2: APPROVAL AND RATIFICATION OF
INDEPENDENT PUBLIC ACCOUNTANTS
Upon the recommendation of the Audit Committee, the Board of Directors
has, subject to ratification by the stockholders, appointed Arthur Andersen LLP
to act as principal independent accountants for BNC for the fiscal year ending
December 31, 2000. The firm has audited the financial statements of BNC for the
past six fiscal years and has advised BNC that neither the firm nor any of its
partners has any connection during the past six years with BNC, in any capacity
other than that of independent accountants and auditors. The firm will have
representatives at the Annual Meeting who will have an opportunity to make a
statement and will be available to respond to appropriate questions.
The Board of Directors unanimously recommends a vote FOR ratification
of the appointment of Arthur Andersen LLP as independent auditors for 2000.
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AVAILABILITY OF FORM 10-K
A copy of the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1999, as filed with the Securities and Exchange Commission,
is available without charge upon written request to:
Gregory K. Cleveland
President & COO
BNCCORP, INC.
322 East Main
Bismarck, ND 58501
MISCELLANEOUS
The cost of soliciting proxies will be borne by the Company. The
solicitation will be primarily by mail. In addition to the use of the mails,
some of the officers, directors and regular employees of the Company and its
subsidiaries may solicit proxies by telephone, telegram or personal interview
without additional remuneration therefor. The Company will reimburse banks,
brokerage houses and other institutions, custodians, nominees and fiduciaries
for reasonable expenses in forwarding proxy material to their principals.
Regardless of the number of shares you hold, it is important that your
Common Stock be represented at the Annual Meeting in order that the presence of
a quorum can be secured. If you are unable to attend the Annual Meeting, you are
urged to date and sign your proxy and return it without delay in the enclosed
addressed envelope. The Common Stock represented by each proxy so signed and
returned will be voted in accordance with the stockholder's directions.
Stockholder Proposals
Eligible stockholders who desire to present a proposal qualified for
inclusion in the proxy materials relating to the 2001 annual meeting of BNC,
pursuant to regulations of the Securities and Exchange Commission, must forward
such proposals to the Secretary of BNC at the address listed on the first page
of this Proxy Statement in time to arrive at BNC prior to January 3, 2001.
Under BNC's By-laws, advance notice of stockholder proposals must be
received by March 24, 2001 in order to be considered at the 2001 annual meeting.
The notice must give the following information with respect to any business the
stockholder wishes to bring before the meeting: the name and address of the
stockholder proposing the business, as they appear on BNC's stock records; class
and number of shares of BNC Common Stock which the stockholder holds of record
or beneficially, the dates upon which such shares were acquired, and documentary
support for a claim of beneficial ownership; a copy of the proposal and
supporting statement limited to not more than an aggregate of 500 words; and any
material interest of the stockholder in the business.
By Order of the Board of Directors
Annette Eckroth
Secretary
Bismarck, North Dakota
May 8, 2000
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PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
BNCCORP, INC.
The undersigned hereby appoints Tracy J. Scott and Gregory K. Cleveland, or each
of them, as proxies, each with full power of substitution, to vote all of the
shares of Common Stock, par value $.01 per share, of BNCCORP, Inc., which the
undersigned is entitled to vote at the Annual Meeting of Stockholders to be held
on June 7, 2000 at 10:00 A.M., local time, and at any adjournments thereof, upon
the following matters set forth in the notice of such meeting.
The Board of Directors recommends a vote FOR the nominee(s) listed below.
1. Election of Directors.
FOR [ ] The nominee(s) listed below (except as marked to the contrary below)
WITHHOLD AUTHORITY [ ] to vote for the nominee listed below.
INSTRUCTIONS: To withhold authority to vote for any nominee, strike a
line through the nominee's name below:
James D. LaBreche
Brenda L. Rebel
Brad J. Scott
2. Ratify selection of Arthur Andersen LLP as the Company's independent public
accountants for 2000.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(Please See Reverse Side)
This Proxy, when properly executed, will be voted as specified above. If not
otherwise specified, this Proxy will be voted FOR the election of the nominees
of the Board of Directors named in Proposal 1, and FOR Proposal 2.
Date: , 2000
Signature of Stockholder
Signature if held jointly
Please sign exactly as name appears on the certificate or certificates
representing shares to be voted by this proxy, as shown on the label to
the left. When signing as executor, administrator, attorney, trustee,
or guardian please give full title as such. If a corporation, please
sign full corporation name by president or other authorized officer. If
a partnership, please sign in partnership name by authorized persons.
Please mark, sign, date and return this proxy promptly using the enclosed
envelope.
