SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. __)
Filed by the Registrant [X]
Filed by Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
[X] Definitive Proxy Statement Commission Only (as permitted
[ ] Definitive Additional Materials by Rule 14a-6(e)(2))
[ ] Soliciting Materials Pursuant to
Rule 14a-11(c) or Rule 14a-12
METROCORP BANCSHARES, INC.
(Name of Registrant as Specified in Its Charter)
9600 BELLAIRE BOULEVARD, SUITE 252
HOUSTON, TEXAS 77036
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
__________________________________________________________________________
2) Aggregate number of securities to which transaction applies:
__________________________________________________________________________
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
__________________________________________________________________________
4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] 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 fee for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing. 1)
Amount Previously Paid:
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2) Form, Schedule, or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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METROCORP BANCSHARES, INC.
9600 BELLAIRE BOULEVARD, SUITE 252
HOUSTON, TEXAS 77036
NOTICE OF THE 2000 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON FRIDAY, APRIL 28, 2000
Shareholders of MetroCorp Bancshares, Inc.:
The 2000 Annual Meeting of Shareholders (the "Meeting") of MetroCorp
Bancshares, Inc. (the "Company") will be held at 9600 Bellaire Boulevard,
Houston Texas 77036, on Friday, April 28, 2000, beginning at 10:00 a.m. (local
time), for the following purposes:
1. To elect (i) three directors of Class II to serve on the Board of
Directors of the Company until the Company's 2003 Annual Meeting of
Shareholders and until their successors are duly elected and
qualified and (ii) to elect one director of Class III to serve on
the Board of Directors of the Company until the Company's 2001
Annual Meeting of Shareholders and until his successor is duly
elected and qualified;
2. To approve the Company's Executive Bonus Plan;
3. To consider and act upon a proposal to ratify the appointment of
Deloitte & Touche LLP as the independent auditors of the books and
accounts of the Company for the year ending December 31, 2000; and
4. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The close of business on March 13, 2000 has been fixed as the record date
for the determination of shareholders entitled to notice of and to vote at the
Meeting or at any adjournments thereof. A list of shareholders entitled to vote
at the Meeting will be available for inspection by any shareholder at the
offices of the Company during ordinary business hours for a period of at least
ten days prior to the Meeting.
You are cordially invited and urged to attend the Meeting. If you are
unable to attend the Meeting, you are requested to sign and date the enclosed
proxy and return it promptly in the enclosed envelope. If you attend the
Meeting, you may vote in person, regardless of whether you have given your
proxy. Your proxy may be revoked at any time before it is voted.
By order of the Board of Directors,
/s/ Don J. Wang
Don J. Wang
Chairman of the Board and President
Houston, Texas
April 3, 2000
YOUR VOTE IS IMPORTANT.
TO ENSURE YOUR REPRESENTATION AT THE MEETING, YOU ARE URGED TO COMPLETE,
DATE, AND SIGN THE ENCLOSED PROXY AND RETURN IT IN THE ACCOMPANYING ENVELOPE AT
YOUR EARLIEST CONVENIENCE, REGARDLESS OF WHETHER YOU PLAN TO ATTEND THE MEETING.
NO ADDITIONAL POSTAGE IS NECESSARY IF THE PROXY IS MAILED IN THE UNITED STATES.
THE PROXY IS REVOCABLE AT ANY TIME BEFORE IT IS VOTED AT THE MEETING.
METROCORP BANCSHARES, INC.
9600 BELLAIRE BOULEVARD, SUITE 252
HOUSTON, TEXAS 77036
APRIL 3, 2000
------------------------
PROXY STATEMENT
FOR
THE 2000 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON FRIDAY, APRIL 28, 2000
------------------------
SOLICITATION, REVOCABILITY AND VOTING OF PROXIES
This Proxy Statement is being furnished in connection with the
solicitation of proxies by the Board of Directors of MetroCorp Bancshares, Inc.
(the "Company") for use at the 2000 Annual Meeting of Shareholders of the
Company to be held at the Company's principal executive offices at 9600 Bellaire
Boulevard, Houston, Texas 77036, on Friday, April 28, 2000, beginning at 10:00
a.m. (local time), and any adjournment thereof (the "Meeting") for the purposes
set forth in this Proxy Statement and the accompanying Notice of 1999 Annual
Meeting of Shareholders ("Notice of Meeting"). This Proxy Statement, the Notice
of Meeting and the enclosed form of proxy will first be sent to shareholders on
or about April 3, 2000.
VOTING OF PROXIES
Shares represented at the Meeting by an executed and unrevoked proxy in
the form enclosed will be voted in accordance with the instructions contained
therein. If no instructions are given on an executed and returned form of proxy,
the proxies intend to vote the shares represented thereby in favor of each of
the proposals to be presented to and voted upon by the shareholders as set forth
herein.
The Board of Directors knows of no other matters to be presented at the
Meeting. If any other matter should be presented at the Meeting upon which a
vote may be properly taken, shares represented by an executed and unrevoked
proxy received by the Board of Directors may be voted with respect thereto in
accordance with the judgment of the proxies. The proxy also confers on the
proxies the discretionary authority to vote with respect to any matter presented
at the Meeting for which advance notice was not received by the Company in
accordance with the Company's Amended and Restated Bylaws.
REVOCABILITY OF PROXIES
Any proxy given by a shareholder may be revoked by such shareholder at any
time before it is exercised by submitting to the Secretary of the Company a duly
executed proxy bearing a later date, delivering to the Secretary of the Company
a written notice of revocation, or attending the Meeting and voting in person.
SOLICITATION
The cost of this solicitation of proxies is being borne by the Company.
Solicitations will be made only by the use of the mail, except that, if deemed
desirable, officers and regular employees of the Company may
1
solicit proxies by telephone, telegraph or personal calls, without being paid
additional compensation for such services. Brokerage houses, custodians,
nominees and fiduciaries will be requested to forward the proxy soliciting
material to the beneficial owners of the common stock, par value $1.00 per
share, of the Company (the "Common Stock") held of record by such persons, and
the Company will reimburse them for their reasonable expenses incurred in this
connection.
ANNUAL REPORT
The Company's Annual Report to Shareholders, including financial
statements, for the year ended December 31, 1999, accompanies but does not
constitute part of this Proxy Statement.
VOTING SHARES AND VOTING RIGHTS
Only holders of record of Common Stock at the close of business on March
13, 2000 (the "Record Date"), are entitled to notice of and to vote at the
Meeting and any adjournments or postponements thereof. At that time, there were
outstanding 6,959,748 shares of Common Stock, which is the only outstanding
class of voting securities of the Company. A majority of the outstanding shares
of Common Stock must be represented at the Meeting in person or by proxy in
order to constitute a quorum for the transaction of business. Each holder of
Common Stock shall have one vote for each share of Common Stock registered, on
the Record Date, in such holder's name on the books of the Company.
The affirmative vote of the holders of a plurality of the outstanding
shares of Common Stock represented at the Meeting is required to elect the Class
II and Class III nominees to the Board of Directors. The three Class II nominees
and the Class III nominee receiving the highest number of votes cast by the
holders of Common Stock will be elected. There will be no cumulative voting in
the election of directors. Abstentions and shares held of record by a broker or
nominee that are voted on any matter are included in determining whether a
quorum exists. An abstention, a broker non-vote or a withholding of authority to
vote with respect to one or more nominees for director will not have the effect
of a vote against such nominee or nominees.
The affirmative vote of the holders of a majority of the outstanding
shares of Common Stock represented at the Meeting is required to approve the
Executive Bonus Plan and to ratify the appointment of the auditors. An
abstention or a broker non-vote will have the effect of a vote against the
appointment.
ELECTION OF DIRECTORS
ELECTION PROCEDURES; TERM OF OFFICE
The Board of Directors currently consists of nine directors. In accordance
with the Company's Amended and Restated Bylaws, members of the Board of
Directors are divided into three classes, Class I, Class II and Class III. The
members of each class are elected for a term of office to expire at the third
succeeding annual meeting of shareholders following their election. The term of
office of the Class II directors expires at the Meeting. The terms of the Class
III and Class I directors expire at the annual meeting of shareholders in 2001
and 2002, respectively. The three Class II nominees, if elected at the Meeting,
will serve until the annual meeting of shareholders in 2003.
The Board of Directors has nominated May P. Chu, John Lee and Don J. Wang
for election as Class II directors and Mr. Tiong Loi Ang for election as a Class
III director at the Meeting. Ms. Chu and Messrs. John
2
Lee and Wang are currently serving as Class II directors. Mr. Ang was nominated
for election as a Class III director to fill the vacancy left by the resignation
of a Class III director.
The Class II and Class III nominees receiving the affirmative vote of the
holders of a plurality of the shares of Common Stock represented at the Meeting
will be elected. Unless the authority to vote for the election of directors is
withheld as to one or more of the nominees, all shares of Common Stock
represented by proxy will be voted FOR the election of the nominees. If the
authority to vote for the election of directors is withheld as to one or more
but not all of the nominees, all shares of Common Stock represented by any such
proxy will be voted FOR the election of the nominee or nominees, as the case may
be, as to whom such authority is not withheld.
If a nominee becomes unavailable to serve as a director for any reason
before the election, the persons named in the proxy have the right to use their
discretion to vote for such other nominee, if any, as may be designated by the
Board of Directors. The Board of Directors, however, has no reason to believe
that any nominee will be unavailable to serve as a director. All of the nominees
have consented to being named herein and to serve if elected.
Any director vacancy occurring after the election may be filled only by a
majority of the remaining directors, even if less than a quorum of the Board of
Directors. A director elected to fill a vacancy will be elected for the
unexpired portion of the term of his predecessor in office.
NOMINEES FOR ELECTION
The following table sets forth certain information with respect to each
nominee for election as a director of the Company:
NAME AGE POSITION
- ---- --- --------
Tiong Loi Ang.......... 68 Class III Nominee
May P. Chu............. 52 Class II Director of the Company; Director
of MetroBank, N.A. (the "Bank")
John Lee............... 55 Class II Director of the Company; Director
of the Bank
Don J. Wang............ 56 Chairman of the Board, Class II Director
and President of the Company; Chairman
of the Board and Chief Executive Officer
of the Bank
TIONG LOI ANG. Mr. Ang is being nominated as a Class III director of the
Company. Mr. Ang has been involved in real estate development in Malaysia, Hong
Kong, China and the United States for more than the past five years.
MAY P. CHU. Ms. Chu is a Class II director of the Company and an
organizing director of the Bank. Ms. Chu serves on the Executive Committee,
Asset Liability Committee and Directors Credit Committee of the Bank. She has
been the President and founder of Signet Consulting, a bank management
consulting firm specializing in regulatory issues for more than the past five
years. She received a Bachelors degree in Physics from the University of
California at Berkeley and a Ph.D. in Economics from Case Western Reserve
3
University. Ms. Chu was employed at Texas Commerce Bank and Texas Commerce
Bancshares, Inc. for more than five years, first in the Economics Division and
subsequently in Mergers/Acquisitions.
JOHN LEE. Mr. Lee is a Class II director of the Company and an organizing
director of the Bank. He has been an Executive Vice President of Alpha Seafood
Enterprises, Inc. for more than the past five years and serves as the Treasurer,
Director and co-founder of United Oriental Capital Corporation, a Specialized
Small Business Investment Company. For six years, Mr. Lee served as President
and manager for numerous motels in the Houston area. Mr. Lee received a
Bachelors degree in Economics from National Chung Hsing University. He is a
member of the Taiwanese Chamber of Commerce of North America. Mr. Lee is the
brother-in-law of Mr. David Tai. Mr. Lee is not related to Mr. George M. Lee.
DON J. WANG. Mr. Wang is a Class II director of the Company and an
organizing director of the Bank. Mr. Wang has served as Chairman of the Board
and President of the Company since its formation and Chairman of the Board and
Chief Executive Officer of the Bank since 1987. Mr. Wang has also been Chairman
of the Board of New Era Life Insurance Company since 1989. Mr. Wang served as
President of the Taiwanese Chamber of Commerce of North America in 1992 and
currently sits on the Advisory Board. He has served as a Board member of the
Greater Houston Partnership since 1994. Mr. Wang serves on the Harris County
Hospital District Board of Managers, the Board of Directors of the Hope
Shelter/Abused Children Program and the Advisory Board of the Chinese Community
Center. He is Chairman of the Chinese Senior Estates/Senior Housing Project and
Co-Chairman of the Asian and Pacific Island Division of the United Way. Mr. Wang
also served on the Advisory Committee of the Ex-Im Bank in 1998 and is active in
the Houston Image Group. He received a Bachelors of Science degree from National
Chung Hsing University and a Masters in Science degree from Utah State
University. Mr. Wang is the brother of Ms. Helen F. Chen.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF EACH OF THE
NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS.
CONTINUING DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information with respect to the
Company's Class I and Class III directors, whose terms of office do not expire
at the Meeting, and certain officers of the Company and the Bank (other than Mr.
Don J. Wang):
NAME POSITION AGE
---- -------- ---
Helen F. Chen........ Class I Director of the Company; Director of 52
the Bank
Tommy F. Chen........ Class III Director of the Company; Director of 62
the Bank
George M. Lee........ Class I Director of the Company; Director of 50
the Bank
Ruth E. Ransom....... Senior Vice President and Chief Financial 46
Officer of the Company and the Bank
4
David Tai............ Class I Director, Executive Vice President and 48
Secretary of the Company; President and Vice
Chairman of the Board of the Bank
Joyce Tee............ Senior Vice President and Chief Credit Officer 34
of the Bank
Joe Ting............. Class III Director of the Company; Director of 47
the Bank
HELEN F. CHEN. Ms. Chen is a Class I director of the Company and was
elected as a member of the Board of Directors of the Bank in 1989. She is the
President of Metro Investment Group, Inc., an investment company that holds
shares of Common Stock of the Company as its principal asset. She is the
President-elect of the Houston Chinese Schools Association and the Principal of
the Houston Northwest Chinese School, where she served as Chairman of the Board
from 1991 to 1997. A member of various civic organizations in Houston, Ms. Chen
focuses her volunteer efforts in the Chinese community. Ms. Chen is the sister
of Don J. Wang. Ms. Chen is not related to Mr. Tommy F. Chen.
TOMMY F. CHEN. Mr. Chen is a Class III director of the Company and an
organizing director of the Bank. Mr. Chen serves on the Executive Committee,
Asset Liability Committee and Directors Credit Committee of the Bank. Since
1983, he has been the owner of the Downtown Texaco (Subway) Station. He was an
aerospace engineer at NASA for three years and worked for Chevron Oil Company
and Amoco Oil Company for six years. Mr. Chen has held a real estate brokers
license in Texas since 1981. He received a Masters degree in Physics from Clark
University in Worcester, Massachusetts and a Masters degree and a Ph.D. in
Electrical Engineering from the University of Oklahoma. Mr. Chen serves as a
director on the Chinatown Community Development Board and is a member of the
Taiwanese Chamber of Commerce of North America. Mr. Chen is not related to Ms.
Helen F. Chen.
GEORGE M. LEE. Mr. Lee was appointed as a Class I director of the Company
and a director of the Bank in March 1999. Mr. Lee is the Senior Vice President
of Marketing and Sales for Higher Dimensions Research in St. Paul, Minnesota,
where he is responsible for marketing and sales strategy. Prior to that, he
served from 1995 to 1997 as the Chief Operating Officer of the Noel Group
Companies, a travel insurance company and its four subsidiaries. From 1991 to
1994, Mr. Lee was a Senior Vice President of Fingerhut Companies and
concurrently served as the President and Chief Operating Officer of its largest
subsidiary, Comb Corporation. From 1987 to 1990, Mr. Lee was a Group Vice
President of Hanover Direct, where he was responsible for four divisions and new
business development. He received a Bachelors of Science in Econometrics from
the University of Wisconsin. Mr. Lee is a resident of Minnesota. Mr. Lee is not
related to Mr. John Lee.
RUTH E. RANSOM. Ms. Ransom was named Senior Vice President and Chief
Financial Officer of the Bank in November 1999 and Senior Vice President and
Chief Financial Officer of the Company in February 2000. Ms. Ransom has over 20
years experience in bank financial planning, reporting, reorganization and
analysis. Prior to joining the Company, she served as a Senior Financial
Planning Consultant with Chase Texas (formerly Texas Commerce Bank) for 20
years, where she managed financial consultants who were responsible for profit
improvements of more than 100 branch locations. Before that, she served as a
Financial Planning Manager for Chase Texas and coordinated the annual financial
planning process of over 70 branch locations. While at Chase Texas, she worked
with bank acquisition analysis, conversions and "de novo" bank organization. Ms.
Ransom received a Bachelors of Arts and a Bachelors of Business Administration
from the University of Texas at Austin. She is active with the Alley Theater and
the Boy Scouts. She was the Treasurer
5
and a Trustee for the Awty International School from 1990 until 1998 and is
active with several international student exchange programs.
DAVID TAI. David Tai is a director of the Company and was elected as a
member of the Board of Directors of the Bank in 1988. Mr. Tai is the Executive
Vice President and Secretary of the Company and the President and Vice Chairman
of the Board of the Bank, where he serves on the Directors Credit Committee. Mr.
Tai was elected as President of the Bank in March 1999. Mr. Tai is a leader in
the Asian-American community through his active involvement in several
organizations. He is currently the President of the Taiwanese Chamber of
Commerce of Greater Houston. He is the Executive Advisor of the Taiwanese
Chamber of Commerce of North America, an organization that has members in 25
cities across the United States, Canada and Mexico. He is also active in the
World Taiwanese Chamber of Commerce and serves as its Executive Consular. He
received a Bachelors of Business Administration degree from Fu-Jen Catholic
University in Taiwan in 1974 and a Masters in Business Administration degree
from Murray State University in 1977. Mr. Tai is a member of the Asian Realtors
Association, the Asian Chamber of Commerce and the United Way. He is a Counselor
at the Taiwanese Cultural Center. Mr. Tai is the brother-in-law of Mr. John Lee.
JOYCE TEE. Ms. Tee joined the Bank in 1992 as a SBA Loan Officer and
Assistant Vice President and was named Senior Vice President and Chief Credit
Officer of the Bank in 1999. Prior to joining the Bank, Ms. Tee worked at
Standard Chartered Bank, American International Group and Grant Thornton LLP.
She has served on the First City Bank Small Business Advisory Board, the United
States Small Business Week Advisory Board, the Houston Minority Business Council
Finance Advisory Board and the City of Houston Small Business Advisory
Committee. Ms. Tee is a member of the Asian American Association, the Asia
Society and the Asian/Pacific American Heritage Association. She received a
Master of Business Administration degree and a Bachelor of Science degree from
the University of Oregon.
JOE TING. Mr. Ting is a Class III director of the Company and was elected
as a member of the Board of Directors of the Bank in 1989. Mr. Ting serves on
the Executive Committee, Asset Liability Committee and the Directors Credit
Committee of the Bank. He has been the President of West Plaza Management, Inc.,
a real estate management company for more than the past five years. Mr. Ting has
extensive knowledge in the plastic manufacturing industry and real estate
investments. Mr. Ting is a member of the Taiwanese Chamber of Commerce of North
America. He received a Masters in Business Administration degree from the
Florida Institute of Technology.
Each officer of the Company is elected by the Board of Directors of the
Company and holds office until his successor is duly elected and qualified or
until his or her earlier death, resignation or removal.
OPERATION OF THE BOARD OF DIRECTORS
The Board of Directors of the Company held twelve (12) meetings during
1999. There was no director who attended less than 75% of the aggregate of the
(i) total number of meetings of the Board and (ii) total number of meetings held
by committees on which he served.
The Board of Directors has established Audit and Compensation Committees.
The Audit Committee reviews the general scope of the audit conducted by the
Company's independent auditors and matters relating to the Company's internal
control systems. In performing its function, the Audit Committee meets
separately with representatives of the Company's independent auditors and with
representatives of senior management. During 1999, the Audit Committee held four
(4) meetings. The Audit Committee is comprised of Ms. Kwan and Messrs. George
Lee (Chairman) and John Lee, each of whom is an outside director.
6
The Compensation Committee is responsible for making recommendations to
the Board of Directors with respect to the compensation of the Company's
executive officers and is responsible for the establishment of policies dealing
with various compensation and employee benefit matters. The Compensation
Committee also administers the Company's stock option plan and the Executive
Bonus Plan, and makes recommendations to the Board of Directors as to option
grants to Company employees and stock and option grants to executive officers
under such plans. During 1999, the Compensation Committee held two (2) meetings.
The Compensation Committee is comprised of Ms. Chu and Messrs. Chen and Ting,
each of whom is an outside director.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee consists of May P. Chu, Tommy F. Chen and Joe
Ting, each of whom is an outside director. During 1999, no member of the
Compensation Committee was an officer or employee of the Company or the Bank and
no member has formerly served as an officer of the Company or the Bank.
DIRECTOR COMPENSATION
Directors of the Company do not receive a fee for attending each monthly
Board of Directors meeting attended, however, they receive a fee of $300 for
each committee meeting attended. The Board of Directors of the Bank also meets
monthly. Outside directors of the Bank receive a fee of $500 for each meeting of
the Bank's Board of Directors attended and a fee of $300 for each Bank Board
Committee meeting attended. In addition, Mr. Tommy F. Chen receives a fee of
$3,000 per month for analysis and evaluation of proposed loans secured by real
estate.
Historically, the Company paid its directors, including directors who were
officers of the Company, an annual bonus based on the Company's performance
during the previous year. In 1998, the Company has replaced this director bonus
policy with the Non-Employee Director Stock Bonus Plan ("Non-Employee Director
Plan"). The Company does not plan to pay cash bonuses to directors in the future
and will only pay stock bonuses to directors pursuant to the Non-Employee
Director Plan.
The Non-Employee Director Plan provides for the grant of up to 12,000
shares of Common Stock annually for each of the 1998 through 2002 calendar years
if the Company achieves a return on equity of 13.0% or greater for that year.
The shares are allocated among the non-employee directors by the Company's
Non-Employee Director Bonus Committee, based on each director's performance
during the year. An aggregate of 12,000 shares were issued to the non-employee
directors in May 1999 as a bonus for their performance during 1998, and upon
completion of the independent audit of the Company's 1999 financial statements,
12,000 shares will be issued to the non-employee directors as a bonus for their
performance during 1999.
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EXECUTIVE COMPENSATION AND OTHER MATTERS
SUMMARY COMPENSATION TABLE
The following table provides certain summary information concerning
compensation paid or accrued by the Company to or on behalf of the Company's
Chairman of the Board and President, each of the other three most highly
compensated executive officers of the Company and the Bank (the "Named Executive
Officers") for each of the three fiscal years ended December 31, 1999:
OTHER ANNUAL ALL OTHER
NAME AND COMPENS COMPENS
PRINCIPAL POSITION YEAR SALARY BONUS ATION(1) ATION(2)
- ------------------------------------------------- ---- -------- -------- -------- --------
Don J. Wang ..................................... 1999 $130,000 $ -- $ 6,000 $ 5,440
Chairman of the Board and President of the ... 1998 126,670 5,417 6,000 5,524
Company; Chairman of the Board and Chief .... 1997 105,000 -- 22,308(3) 57,667(4)
Executive Officer of the Bank
David Tai ....................................... 1999 127,500 20,000 6,000 6,140
Executive Vice President and Secretary of the 1998 116,667 5,000 6,000 5,107
Company; President and Vice Chairman of the . 1997 98,750 -- 10,465(3) 56,944(4)
Board of the Bank
Attilio F. Galli (5) ............................ 1999 99,593 2,000 -- 4,063
Senior Vice President and Chief Financial .... 1998 40,771 3,958 -- --
Officer of the Company and the Bank .......... 1997 -- -- -- --
Ruth E. Ransom (6) .............................. 1999 12,500 -- -- --
Senior Vice President and Chief Financial .... 1998 -- -- -- --
Officer of the Company and the Bank .......... 1997 -- -- -- --
Joyce Tee ....................................... 1999 102,147 10,000 -- 4,486
Senior Vice President and Chief Credit Officer 1998 98,666 4,167 -- 4,113
of the Bank .................................. 1997 82,800 12,000 3,400(3) 3,928
- ----------------------------------
(1) The amounts in this column include the amount paid to compensate such
officers for car allowance.
(2) The amounts in this column include contributions by the Company to the
401(k) plan.
(3) Represents the amount paid to compensate such officers for car allowance and
sick pay. Upon adoption of a new sick pay policy in 1997, the Company paid all
employees their cumulative sick pay balances.
(4) In February 1998, 6,848 shares of Common Stock with an aggregate value of
$52,575 were issued to each of Mr. Wang and Mr. Tai as 1997 director performance
bonuses. See "--Director Compensation."
(5) Mr. Galli joined the Company on July 29, 1998 and resigned effective
November 23, 1999.
(6) Ms. Ransom joined the Company on November 15, 1999.
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OPTION GRANTS DURING 1999
The following table sets forth certain information concerning stock
options granted to the Named Executive Officers during fiscal 1999:
OPTION GRANTS IN LAST FISCAL YEAR
---------------------------------------------
INDIVIDUAL GRANTS
POTENTIAL REALIZABLE
PERCENT OF VALUE AT ASSUMED
NUMBER OF TOTAL OPTIONS ANNUAL RATES OF STOCK
SECURITIES GRANTED TO PRICE APPRECIATION
UNDERLYING EMPLOYEES EXERCISE FOR OPTION TERM (1)
OPTIONS IN FISCAL PRICE PER EXPIRATION --------------------
NAME GRANTED YEAR SHARE DATE 5% 10%
- --------------- -------- -------- -------- -------- -------- --------
Ruth E. Ransom 3,000 6.42% $ 8.3125 12/21/06 $ 8,728 $ 17,456
Joyce Tee ..... 4,000 8.56% $ 8.3125 12/21/06 $ 11,638 $ 23,275
- -----------------------
(1) These amounts represent certain assumed rates of appreciation based on the
actual option term and annual compounding from the date of the grant. Actual
gains, if any, on stock option exercises and Common Stock holdings are dependent
on future performance of the Common Stock and overall stock market conditions.
There can be no assurance that the stock appreciation amounts reflected in this
table will be achieved.
STOCK OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUES
The following table sets forth certain information concerning the number
and value of unexercised options held by the Named Executive Officers at
December 31, 1999:
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE MONEY OPTIONS
SHARES DECEMBER 31, 1999 AT DECEMBER 31, 1999 (2)
ACQUIRED ON VALUE ---------------------------- ----------------------------
NAME EXERCISE REALIZED(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------ ------------ ------------ ------------ ------------ ------------ ------------
Ruth E. Ransom ... -- $ -- -- 3,000 $ -- $ --
Joyce Tee ........ -- -- -- 4,000 -- --
Don J. Wang ...... -- -- 20,000 -- -- --
- --------------------------------
(1) The "value realized" represents the difference between the exercise price of
the option shares and the market price of the option shares on the date of
exercise without considering any taxes which may have been owed.
(2) No value is given because the exercise price of the unexercised options are
greater than the closing price of the Common Stock as reported on the Nasdaq
Stock Market on December 31, 1999.
STOCK PLANS
The Company's stock option and stock purchase plans were originally
developed and instituted by the Bank and assumed by the Company in the holding
company formation in 1998. Except for a non-qualified stock option plan for the
six founding directors of the Bank, each of the plans was approved by the
shareholders of the Bank in 1998.
9
The Company has outstanding options issued to five of the six founding
directors of the Bank to purchase 100,000 shares of Common Stock pursuant to the
1998 Director Stock Option Agreement ("Founding Director Plan"). Pursuant to the
Founding Director Plan, each of the five participants were granted non-
qualified options to purchase 20,000 shares of Common Stock at a price of $11.00
per share. A total of 20,000 options which were initially granted to one of the
founding directors were canceled upon his resignation as a director. The options
must be exercised by July 24, 2003. Of the six founding directors of the Bank,
the five participants (Tommy F. Chen, May P. Chu, John Lee, David Tai and Don J.
Wang) currently serve as directors of the Company and the Bank.
The Company's 1998 Stock Incentive Plan ("Incentive Plan") authorizes the
issuance of up to 200,000 shares of Common Stock under both "non-qualified" and
"incentive" stock options and performance shares of Common Stock. Non-qualified
options and incentive stock options will be granted at no less than the fair
market value of the Common Stock and must be exercised within ten years.
Performance shares are certificates representing the right to acquire shares of
Common Stock upon the satisfaction of performance goals established by the
Company. Holders of performance shares have all of the voting, dividend and
other rights of shareholders of the Company, subject to the terms of the award
agreement relating to such shares. If the performance goals are achieved, the
performance shares will vest and may be exchanged for shares of Common Stock. If
the performance goals are not achieved, the performance shares may be forfeited.
There are currently 46,700 options granted under the Incentive Plan.
The Company's 1998 Employee Stock Purchase Plan ("Purchase Plan")
authorizes the offer and sale of up to 200,000 shares of Common Stock to
employees of the Company and its subsidiaries. The Purchase Plan will be
implemented through ten annual offerings. Each year the Board of Directors will
determine the number of shares to be offered under the Purchase Plan; provided
that in any one year the offering may not exceed 20,000 shares plus any
unsubscribed shares from prior years. The offering price per share will be an
amount equal to 90% of the closing price of a share of Common Stock on the
Nasdaq National Market on the business day immediately prior to the commencement
of such offering. In each offering, each employee may purchase a number of whole
shares of Common Stock that are equal to 20% of the employee's base salary
divided by the offering price. Pursuant to the Purchase Plan, the employee pays
for the Common Stock either immediately or through a payroll deduction program
over a period of up to one year, at the employee's option. The first annual
offering under the Purchase Plan began in the second quarter of 1999.
In October 1995, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 123, ACCOUNTING FOR STOCK-BASED
COMPENSATION ("SFAS 123"). This statement established fair value based
accounting and reporting standards for all transactions in which a company
acquires goods or services by issuing its equity investments, which includes
stock-based compensation plans. Under SFAS 123, compensation cost is measured at
the grant date based on the value of the award and is recognized over the
service period, which is usually the vesting period. Fair value of stock options
is determined using an option- pricing model. This statement encourages
companies to adopt as prescribed the fair value based method of accounting to
recognize compensation expense for employee stock compensation plans. Although
it does not require the fair value based method to be adopted, a company must
comply with the disclosure requirements set forth in the statement. The Company
has continued to apply accounting in Accounting Principles Board Opinion No. 25,
ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES, ("APB 25") and related
Interpretations, and, accordingly, provides the pro forma disclosures of net
income and earnings per share.
BENEFIT PLAN
The Company has established a defined contributory profit sharing plan
pursuant to Internal Revenue Code Section 401(k) covering substantially all
employees (the "Plan"). The Plan provides for pretax employee contributions of
up to 6% of annual compensation plus any additional discretionary after-tax
employee contributions. The Company matches each participant's contributions to
the Plan of up to 4% of such
10
participant's salary. The Company made contributions before expenses to the Plan
of $271,000, $235,000 and $248,000 in 1999, 1998 and 1997, respectively.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors is responsible for
developing and making recommendations to the Board with respect to the Company's
executive compensation policies. The following is a report from the Compensation
Committee which sets forth the components of the Company's executive officer
compensation program and describes the basis on which the 1999 compensation
determinations were made with respect to the executive officers of the Company
and the Bank.
COMPENSATION POLICY
The Company's executive compensation policy incorporates the basic
principle that executive compensation should be related directly to corporate
performance and increases in shareholder value, while ensuring that key
employees are motivated and retained. The following objectives guide the
decision-making for the Compensation Committee:
o The Company must provide a competitive total compensation package to
attract and retain key executives;
o The compensation packages and programs must be strategically aligned
with the annual budget as well as the Company's long-term business
objectives; and
o There must be a variable or performance component in the
compensation package to ensure a link between executive remuneration
and the Company's overall performance, thereby aligning executive
compensation with the interest of shareholders.
EXECUTIVE COMPENSATION
The Company's basic compensation programs are comprised of the following
four components:
(1) BASE PAY. Base salary levels are determined mainly by comparison with
salaries of executive officers in similarly situated positions at banking
organizations of a size similar to the Company's with some attention given
to the geographic location of such banking organizations. Surveys are
utilized to assist in determining the base salary ranges of those persons
having similar responsibilities at other financial institutions.
Individual performance evaluations are considered, including a perception
of the executive's potential to increase responsibilities. Changes in the
cost of living are also taken into account. All executive base salary
levels, which are generally reviewed annually, are considered by the
Compensation Committee to be competitive and in the median range of
comparative salaries of other banking organizations.
(2) CASH BONUS. In 1999, the Company's Executive Vice President was
awarded a cash bonus of $20,000. The Compensation Committee has paid cash
bonuses in varying amounts to executive officers in the past based on the
Committee's evaluation of such officer's individual performance.
(3) CONTRIBUTORY SAVINGS 401(K) PLAN. The Company provides for a 401(k)
tax-deferred profit sharing plan for all employees, including executive
officers, pursuant to which the Company matches each participant's
contributions up to a maximum of 4% of such employee's annual
compensation.
11
(4) STOCK OPTIONS. During 1998, the shareholders of the Company approved
the 1998 Stock Incentive Plan which authorizes the issuance of up to
200,000 shares of Common Stock under "non-qualified" and "incentive"
stock options and performance shares of Common Stock to certain key
officers. Such options will be exercisable based on a vesting schedule.
The Compensation Committee believes that these key officers will carry the
main responsibility for increased growth, asset quality and profitability
of the Company into the future. Options to acquire 46,700 shares of Common
Stock were granted to key employees in 1999, 7,000 of which were granted
to Named Executive Officers.
Through the above mentioned programs, the Compensation Committee believes
that a significant portion of the remuneration packages of executive officers
are linked to the Company's performance and shareholder interests. The
Compensation Committee will continue to review the elements of the plans in
place and adjust these plans as needed to ensure that the total compensation
program meets the Company's objectives and philosophy as described above.
1999 COMPENSATION OF THE CHAIRMAN OF THE BOARD AND PRESIDENT
During 1999, Mr. Don Wang served as the Chairman of the Board and
President of the Company and the Chairman of the Board and Chief Executive
Officer of the Bank. Mr. Wang's base salary for 1999 of $130,000 was determined
by the Compensation Committee after reviewing the salary levels of persons in
similar positions at banks of comparable size in the Houston and Gulf Coast
areas. Mr. Wang also received a car allowance of $6,000 and $5,440 as a matching
contribution to the Company's 401(k) plan.
The Compensation Committee
Tommy F. Chen
May P. Chu
Joe Ting
INTERESTS OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS
Don J. Wang, the Company's Chairman of the Board and President, is a
principal shareholder in New Era Insurance Company ("New Era"). New Era is the
agency used by the Company for the insurance coverage the Company provides to
employees of the Company and the Bank and their dependents. The insurance
coverage consists of medical, dental, life, accidental death and dismemberment
and long-term disability insurance. The Company paid New Era $1,098,000 for such
insurance during the year ended December 31, 1999.
Tiong Loi Ang, a nominee for Class III director, is Chairman of the Board
and the controlling shareholder of Gaumnitz, Inc. Gaumnitz, Inc. owns the
buildings in which the Company's corporate headquarters and the Bank's Bellaire
branch are located and has entered into lease agreements for these locations
with the Company. During 1999, the Company paid Gaumnitz, Inc. $379,500 with
respect to such leases.
Many of the directors, executive officers and principal shareholders of
the Company (I.E., those who own 10% or more of the Common Stock) and their
associates, which include corporations, partnerships and other organizations in
which they are officers or partners or in which they and their immediate
families have at least a 5% interest, are customers of the Company. During 1999,
the Company made loans in the ordinary
12
course of business to many of the directors, executive officers and principal
shareholders of the Company and their associates, all of which were on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with persons unaffiliated
with the Company and did not involve more than the normal risk of collectibility
or present other unfavorable features. Loans to directors, executive officers
and principal shareholders of the Company are subject to limitations contained
in the Federal Reserve Act, the principal effect of which is to require that
extensions of credit by the Company to executive officers, directors and
principal shareholders satisfy the foregoing standards. On December 31, 1999,
all of such loans aggregated $5.0 million which was approximately 9.0% of the
Company's Tier 1 capital at such date. The Company expects to have such
transactions or transactions on a similar basis with its directors, executive
officers and principal shareholders and their associates in the future.
13
BENEFICIAL OWNERSHIP OF COMMON STOCK BY
MANAGEMENT OF THE COMPANY AND PRINCIPAL SHAREHOLDERS
The following table sets forth certain information regarding the
beneficial ownership of the Company Common Stock as of the Record Date, by (i)
directors and the Named Executive Officers, (ii) each person who is known by the
Company to own beneficially 5% or more of the Common Stock and (iii) all
directors and executive officers as a group. Unless otherwise indicated, based
on information furnished by such shareholders, each person has sole voting and
dispositive power over the shares indicated as owned by such person and the
address of each shareholder is the same as the address of the Company.
NUMBER PERCENTAGE
NAME OF SHARES BENEFICIALLY OWNED(1)
- --------------------------- -------------- -----------------------
PRINCIPAL SHAREHOLDERS
Metro Investment Group,
Inc.(2).................. 484,128 6.96%
Siam Chin Leong(3)......... 460,000 6.61%
Leslie Looi Meng(4)........ 385,992 5.55%
Shou Chiun Ting(5)......... 371,768 5.34%
DIRECTORS AND EXECUTIVE
OFFICERS
Tiong Loi Ang.............. 99,436(6) 1.43%
Helen F. Chen.............. 557,584(7) 8.01%
Tommy F. Chen.............. 186,400(8) 2.67%
May P. Chu................. 113,264(9) 1.62%
Attilio F. Galli........... -(10) *
George M. Lee.............. 1,000(11) *
John Lee................... 80,772(12) 1.16%
Ruth E. Ransom............. - *
David Tai.................. 253,780(13) 3.64%
Joyce Tee.................. 500(14) *
Joe Ting................... 71,728(15) 1.03%
Don J. Wang................ 533,592(16) 7.64%
Directors and Executive
Officers as a Group
(10 persons)............ 1,897,556 26.84%
- ------------------------
* Indicates ownership which does not exceed 1.0%.
(1) The percentage beneficially owned was calculated based on 6,959,748 shares
of Common Stock issued and outstanding. The percentage assumes the
exercise by the shareholder or group named in each row of all options for
the purchase of Common Stock held by such shareholder or group and
exercisable within 60 days.
(2) Metro Investment Group, Inc.'s address is 16607 Southern Oaks Drive,
Houston, Texas 77068. Director Helen F. Chen is the President of Metro
Investment Group, Inc. and has voting and investment control of the
shares.
(3) Siam Chin Leong's address is c/o Vincent, Ltd., 321 Orchard Rd., 8-06
Singapore 239-193.
(4) Leslie Looi Meng's address is 327 River Valley Road #16-02, Casuarina Yong
An Park, Singapore 238-359.
14
(5) Mr. Shou Chiun Ting's address is P.O. Box 96906, Houston, Texas 77213.
Includes 168,076 held of record by Luxor Holding Corporation over which
Mr. Shou Chiun Ting has voting and investment control. Shou Chiun Ting is
the father of Director Joe Ting.
(6) Includes 38,340 shares held of record by Mr. Ang's spouse and 25,404
shares held of record by Gaumnitz, Inc., of which Mr. Ang is Chairman of
the Board and has voting and investment control.
(7) Includes 484,128 shares held of record by Metro Investment Group, Inc. of
which Ms. Chen is the President and has voting and investment control and
900 shares which may be acquired within 60 days pursuant to the
Non-Employee Director Plan.
(8) Includes 20,000 shares which may be acquired within 60 days pursuant to
the Founding Director Plan, 3,000 shares which may be acquired within 60
days pursuant to the Non-Employee Director Plan and 76,030 shares held of
record by Mr. Chen's spouse.
(9) Includes 20,000 shares which may be acquired within 60 days pursuant to
the Founding Director Plan and 2,600 shares which may be acquired within
60 days pursuant to the Non-Employee Director Plan.
(10) Mr. Galli resigned from the Company effective November 23, 1999.
(11) Includes 900 shares which may be acquired within 60 days pursuant to the
Non-Employee Director Plan.
(12) Includes 20,000 shares which may be acquired within 60 days pursuant to
the Founding Director Plan, and 900 shares which may be acquired within 60
days pursuant to the Non-Employee Director Plan.
(13) Includes 20,000 shares which may be acquired within 60 days pursuant to
the Founding Director Plan.
(14) Consists of 500 shares held of record by Ms. Tee's spouse.
(15) Includes 2,600 shares which may be acquired within 60 days pursuant to the
Non-Employee Director Plan and 2,200 shares held of record by each of Mr.
Ting's three minor children.
(16) Includes 20,000 shares which may be acquired within 60 days pursuant to
the Founding Director Plan, 422,048 shares held of record by two trusts,
3,092 shares held of record by Mr. Wang's spouse and 9,407 shares held of
record by a non-profit corporation over which Mr. Wang has voting and
investment control.
15
STOCK PERFORMANCE GRAPH
The following Stock Performance Graph compares the cumulative total
shareholder return on the Company's Common Stock for the period from December
16, 1998, when the Common Stock was first listed on the Nasdaq National Market,
to December 31, 1999, with the cumulative total return of the Nasdaq Stock
Market (Total US) Index ("Nasdaq Index"), the Nasdaq Bank Index and the SNL $1
Billion to $5 Billion Bank Asset- Size Index ("SNL Index") for the same period.
Dividend reinvestment has been assumed. The Stock Performance Graph assumes $100
invested on December 16, 1998 in the Company's Common Stock, the Nasdaq Index,
the Nasdaq Bank Index and the SNL Index. The Company has selected the SNL Index
to replace the Nasdaq Bank Index going forward. Management believes that the SNL
Index includes banks and bank holding companies which are more similar in asset
size to, and therefore, more representative of, the Company. The historical
stock price performance for the Company's stock shown on the graph below is not
necessarily indicative of future stock performance.
COMPOSITE OF PARTIAL PERIOD CUMULATIVE TOTAL RETURN
THE NASDAQ INDEX, THE NASDAQ BANK INDEX,
THE SNL INDEX AND METROCORP BANCSHARES, INC.
[PERFORMANCE GRAPH]
INDEX 12/16/98 12/31/98 03/31/99 06/30/99 09/30/99 12/31/99
- --------------------------------- ---------- ---------- ---------- ---------- ---------- ----------
MetroCorp Bancshares, Inc. ...... $ 100.00 $ 96.10 $ 87.14 $ 78.11 $ 81.51 $ 75.75
NASDAQ - Total US Index ......... 100.00 109.24 122.19 133.69 136.74 197.35
NASDAQ Bank Index ............... 100.00 105.04 100.82 108.21 98.48 100.96
SNL $1B-$5B Bank Asset-Size Index 100.00 102.90 93.87 102.81 96.25 94.57
16
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors and executive officers and
persons who own more than 10% of the outstanding Common Stock to file initial
reports of ownership and reports of changes in ownership of Common Stock and
other equity securities of the Company with the Securities and Exchange
Commission (the "Commission"). Officers, directors and greater than 10%
shareholders are required by regulation to furnish the Company with copies of
all Section 16(a) forms they file.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company, during the year ended December 31, 1999, all
Section 16(a) reporting requirements applicable to the Company's officers,
directors and greater than 10% shareholders were complied with except that Mr.
Chen was late in filing one report covering two transactions, Ms. Jane Kwan was
late in filing one report covering two transactions, Mr. Wang was late in filing
two reports covering three transactions and each of Ms. Ransom, Mr. Tai and Mr.
Wang was late in filing an initial statement of beneficial ownership on Form 3.
After discovery of the inadvertent omissions in reporting such transactions, the
necessary filings have been made with the Commission.
PROPOSAL TO APPROVE EXECUTIVE BONUS PLAN
The Board of Directors is seeking shareholder approval of the Company's
Executive Bonus Plan (the "Executive Plan"). The Executive Plan was adopted by
the Compensation Committee on March 22, 2000 and approved by the Board of
Directors on March 31, 2000. The Executive Plan is intended to provide
additional incentive and reward opportunities designed to enhance the profitable
growth of the Company to Don J. Wang, the Bank's Chairman of the Board and Chief
Executive Officer, and David Tai, the Bank's President (individually, an
"Executive Officer" and collectively, the "Executive Officers"), as long as such
Executive Officer is serving in his above stated capacity with the Bank. The
Executive Plan authorizes the issuance of up to 10,000 shares of Common Stock
annually over a five year period (50,000 shares total) pursuant to options
("Options") which are either incentive stock options ("Incentive Stock Options")
within the meaning of the Section 422(b) of the Internal Revenue Code of 1986,
as amended ( the "Code") or options which do not constitute Incentive Stock
Options ("Nonqualified Stock Options"), awards of Common Stock ("Awards"), or
any combination thereof if the Company meets certain performance criteria.
The following summary of the material features of the Executive Plan is
qualified in its entirety by reference to the copy of the Executive Plan
attached as Appendix A to this Proxy Statement.
ADMINISTRATION
The Executive Plan will be administered by the Compensation Committee of
the Board of Directors which shall be (i) constituted so as to permit the
Executive Plan to comply with Rule 16b-3 promulgated by the Commission under the
Exchange Act and (ii) composed solely of outside directors within the meaning of
section 162(m) of the Code. The Compensation Committee is authorized to
interpret the Executive Plan and prescribe such rules and regulations relating
to the Executive Plan as it may consider advisable, determine the number of
Options or Awards to be granted to each Executive Officer each year subject to
the terms of the Executive Plan and to make all other determinations necessary
or advisable for the administration of the Executive Plan.
17
SHARES AVAILABLE FOR ISSUANCE
The aggregate number of shares of Common Stock that may be issued pursuant
to the Executive Plan is 50,000. The number of shares is subject to adjustment
upon the occurrence of certain events such as stock splits and stock dividends,
as provided in the Executive Plan. To the extent an Option lapses or the rights
of the Executive Officer to an Option or Award terminates, the shares of Common
Stock subject to the Option or Award will become available for issuance in
connection with a future Option or Award.
ELIGIBILITY
An Executive Officer shall be eligible to participate in the Executive
Plan during a calendar year only if the Executive Officer served in such
position during the entire year and was serving in such position on December 31
of that year.
TERMS AND CONDITIONS OF OPTIONS AND AWARDS
The Executive Plan became effective as of March 31, 2000, the date of its
adoption by the Board of Directors, subject to approval by the Company's
shareholders within 12 months thereafter. The Executive Plan shall be effective
from the date of its adoption through the year 2004, unless terminated earlier
in accordance with the terms of the Executive Plan. For each of the five
calendar years beginning in 2000 through 2004, an aggregate of 10,000 shares of
Common Stock shall be issuable to the Executive Officers collectively pursuant
to the grant of Options or Awards if the Company achieves a Return on Equity in
excess of 13.0% for such calendar year. The Return on Equity for any calendar
year will be determined by the Company's independent public accounting firm
after such firm has completed its audit of the Company's financial statements
for that year. The number of shares issuable in any year shall be divided among
the Executive Officers based on the determination by the Compensation Committee
of that individual's contributions to the Company's performance during that
year.
STOCK OPTIONS. An Option grants the holder the right to purchase Common
Stock in the future at a price fixed at the time the Option is granted. The
Executive Plan will provide for two types of options: Incentive Stock Options
and Nonqualified Stock Options. The Compensation Committee will designate the
Executive Officers to receive the Options, the number of shares subject to the
Options, and the terms and conditions of each Option granted under the Executive
Plan. The term of any Option granted under the Executive Plan shall be
determined by the Compensation Committee; provided, however, that the term of
any Incentive Stock Option cannot exceed ten years from the date of the grant
and any Incentive Stock Option granted to an employee who possesses more than
10% of the total combined voting power of all classes of shares of the Company
or of its subsidiary within the meaning of Section 422(b)(6) of the Code must
not be exercisable after the expiration of five years from the date of grant. No
option may be exercised earlier than six months from the date of grant. The
exercise price per Common Stock of options granted under the Executive Plan will
be determined by the Compensation Committee, provided, however, that the
exercise price for an Incentive Stock Option cannot be less than the fair market
value of a Common Stock on the date such option is granted (subject to
adjustments ). Further, the exercise price of any Incentive Stock Option granted
to an employee who possesses more than 10% of the total combined voting power of
all classes of shares of the Company or of its subsidiaries within the meaning
of Section 422(b)(6) of the Code must be at least 110% of the fair market value
of the share at the time such option is granted. The exercise price of options
granted under the Executive Plan will be paid in full in a manner prescribed by
the Compensation Committee.
AWARDS OF COMMON STOCK. An Award of Common Stock grants the Executive
Officer immediate ownership of the specified number of shares of Common Stock.
Upon issuance, the shares of Common Stock will be deemed fully paid and
nonassessable.
18
FEDERAL INCOME TAX CONSEQUENCES
The federal income tax consequences to the Executive Officer and the
Company of Options or Awards granted differ depending on whether an Award,
Incentive Stock Option or Nonqualified Stock Option was granted.
INCENTIVE STOCK OPTIONS. No federal income tax is imposed on an optionee
upon the grant or exercise of an Incentive Stock Option. However, the exercise
of an Incentive Stock Option may subject the optionee to alternative minimum tax
liability. If the optionee does not dispose of the Common Stock acquired upon
exercise of an Incentive Stock Option within two years from the date the Option
was granted or within one year after the shares were transferred to him, any
gain or loss realized upon a subsequent disposition of the Common Stock will be
treated as a long-term capital gain or loss. In such event, the Company would
not be entitled to any deduction in connection with the grant or exercise of the
Option or the disposition of the shares so acquired.
NONQUALIFIED STOCK OPTIONS. No federal income tax is imposed on an
optionee upon the grant of a Nonqualified Stock Option. However, upon the
exercise of a Nonqualified Stock Option, the optionee will recognize ordinary
taxable income on the amount by which the fair market value of the Common Stock
on the date of exercise exceeds the option price. The Company is entitled to a
federal income tax deduction for compensation in an amount equal to the ordinary
income so realized by the optionee, provided that the Company withholds federal
income tax with respect to the amount of such compensation. Upon the subsequent
sale of the shares acquired pursuant to a Nonqualified Stock Option, any gain or
loss will be capital gain or loss, assuming the shares represent a capital asset
in the hands of the optionee, although there will be no tax consequences for the
Company.
AWARDS OF COMMON STOCK. A participant who receives an Award must include
in his or her ordinary taxable income the fair market value of the shares of
Common Stock related to such Award on the date the shares of Common Stock are
issued to such person. The amount of ordinary taxable income recognized by the
participant of an Award is deductible by the Company.
AMENDMENT AND TERMINATION
The Board of Directors may amend or terminate the Executive Plan at any
time, except that it may not make any change to a previously granted option
which would impair the holder's rights without the holder's consent. However,
the Board of Directors may not amend the Executive Plan without shareholder
approval, to (i) increase the maximum number of shares which may be issued on
exercise or surrender of an Option, except as provided in Section IX of the
Executive Plan, (ii) change the Option price, (iii) change the individuals
eligible to receive Options or Awards or materially increase the benefits
accruing to the Executive Officers under the Executive Plan, (iv) to extend the
maximum period during which Options or Awards may be granted under the Executive
Plan, (v) modify materially the requirements as to eligibility for participation
in the Executive Plan or (vi) decrease any authority granted to the Compensation
Committee under the Executive Plan in contravention of Rule 16b-3 of the
Exchange Act.
PLAN BENEFITS
Because Options and Awards under the Executive Plan are only granted if
the Company achieves a certain Return on Equity, and the number of Options or
Awards granted to each Executive Officer is at the discretion of the
Compensation Committee, it is not possible for the Company to determine and
disclose the amount of Options and/or Awards that may be granted to the Named
Executive Officers if the Executive Plan is approved.
19
REQUIRED VOTE
The affirmative vote of the holders of a majority if the shares of Common
Stock present, in person or by proxy, and entitled to vote at the Annual
Meeting, is required to approve the adoption of the Executive Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO APPROVE THE
EXECUTIVE PLAN.
PROPOSAL TO RATIFY APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has appointed Deloitte & Touche LLP as the
independent auditors of the books and accounts of the Company for the year
ending December 31, 2000. At the Meeting, the shareholders will be asked to
consider and act upon a proposal to ratify the appointment of Deloitte & Touche
LLP. The ratification of such appointment will require the affirmative vote of
the holders of a majority of the outstanding shares of Common Stock entitled to
vote and present in person or represented by proxy at the Meeting.
Representatives of Deloitte & Touche LLP are expected to be present at the
Meeting, will be given an opportunity to make a statement (if they desire to do
so) and will be available to respond to appropriate questions.
Deloitte & Touche LLP was selected as the Company's independent auditors
on March 12, 1999 following the dismissal of Pricewaterhouse Coopers LLP. The
decision to change accountants was recommended by the Audit Committee and was
approved by the Company's Board of Directors.
None of the reports of PricewaterhouseCoopers LLP for the two years ended
December 31, 1998 contained any adverse opinion or disclaimer of opinion, or was
qualified or modified as to uncertainty, audit scope or accounting principles.
In connection with the audits of the Company's financial statements during the
two fiscal years ended December 31, 1998 and subsequent interim period prior to
their dismissal, there were no disagreements between the Company and
PricewaterhouseCoopers LLP on any matters of accounting principles or practices,
financial statement disclosure or auditing scope and procedures which, if not
resolved to the satisfaction of PricewaterhouseCoopers LLP, would have caused
PricewaterhouseCoopers LLP to make reference to the matter in their reports.
During the Company's two fiscal years ended December 31, 1998 and
subsequent interim period prior to the dismissal of Pricewaterhouse Coopers LLP,
Pricewaterhouse Coopers LLP did not advise the Company with respect to any of
the matters listed in paragraphs (a)(1)(v)(A) through (D) of Item 304 of
Regulation S-K.
During the Company's two fiscal years ended December 31, 1998 and
subsequent interim period prior to the engagement of Deloitte & Touche LLP,
neither the Company, nor anyone on its behalf, consulted Deloitte & Touche LLP
regarding the application of accounting principles to a specified completed or
proposed transaction or the type of opinion that Deloitte & Touche LLP might
render on the Company's financial statements.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO
RATIFY SUCH APPOINTMENT.
20
DATE FOR SUBMISSION OF SHAREHOLDER PROPOSALS
In order for shareholder proposals submitted pursuant to Rule 14a-8 of the
Exchange Act to be presented at the Company's 2001 Annual Meeting of
Shareholders and included in the Company's proxy statement and form of proxy
relating to such meeting, such proposals must be submitted to the Secretary of
the Company at the Company's principal executive offices not later than December
4, 2000. Shareholder proposals should be submitted to the Secretary of the
Company at 9600 Bellaire Boulevard, Suite 252, Houston, Texas 77036.
In addition, the Company's Amended and Restated Bylaws provide that only
such business which is properly brought before a shareholder meeting will be
conducted. For business to be properly brought before a meeting or nominations
of persons for election to the Board of Directors to be properly made at a
meeting by a shareholder, notice must be received by the Secretary of the
Company at the Company's offices not later than the close of business on the
60th day prior to the meeting. Such notice to the Company must also provide
certain information set forth in the Amended and Restated Bylaws. A copy of the
Amended and Restated Bylaws may be obtained upon written request to the
Secretary of the Company.
OTHER MATTERS
The Board of Directors does not intend to bring any other matter before
the Meeting. Additionally, no shareholder of the Company has complied with the
advance notice provisions contained in the Company's Amended and Restated
Bylaws, which preclude the bringing of matters before a meeting of shareholders
unless such provisions are complied with. Accordingly, no other matter is
expected to be brought before the Meeting. However, if any other matter does
properly come before the Meeting, the proxies will be voted in accordance with
the discretion of the person or persons voting the proxies.
ANNUAL REPORT ON FORM 10-K
A copy of the Annual Report on Form 10-K for the year ended December 31,
1999, as filed with the Securities and Exchange Commission, is available without
charge to any shareholder upon written request to Ruth E. Ransom, Senior Vice
President and Chief Financial Officer, MetroCorp Bancshares, Inc., 9600 Bellaire
Boulevard, Suite 252, Houston, Texas 77036.
You are cordially invited to attend the Meeting. Regardless of whether you
plan to attend the Meeting, you are urged to complete, date, sign and return the
enclosed proxy in the accompanying envelope at your earliest convenience.
By order of the Board of Directors,
/s/ DON J. WANG
Don J. Wang
Chairman of the Board and President
21
APPENDIX A
METROCORP BANCSHARES, INC.
EXECUTIVE BONUS PLAN
I. PLAN PURPOSE
The purpose of the Executive Bonus Plan (the "Plan") is to provide a means
through which METROCORP BANCSHARES, INC., a Texas corporation, (the "Company"),
may provide additional incentive and reward opportunities designed to enhance
the profitable growth of the Company to Don J. Wang, Chairman of the Board and
Chief Executive Officer of MetroBank, N.A., a national banking association and
wholly owned subsidiary of the Company (the "Bank") and David Tai, President of
the Bank (individually, an "Executive Officer" and collectively, "Executive
Officers"), upon whom the responsibilities of the successful administration and
management of the Bank and the Company rest, as long as the Executive Officers
are serving in their above-stated capacities. Accordingly, the Plan provides for
the annual award of Incentive Stock Options, Non- Qualified Stock Options,
shares of Common Stock, or any combination of the foregoing, as is best suited
to the circumstances, if a certain Return on Equity is achieved for that year as
provided herein.
II. DEFINITIONS
2.1 "Award" means, individually or collectively, any Option or award of
Common Stock.
2.2 "Bank" means MetroBank, N.A.
2.3 "Board" means the Board of Directors of the Company.
2.4 "Change of Control" means the occurrence of any of the following
events: (i) the Company shall not be the surviving entity in any merger,
consolidation or other reorganization (or survives only as a subsidiary of an
entity other than a previously wholly-owned subsidiary of the Company), (ii) the
Company's subsidiary bank is merged or consolidated into, or otherwise acquired
by, an entity other than a wholly-owned subsidiary of the Company, (iii) the
Company sells, leases or exchanges all or substantially all of its assets to any
other person or entity (other than a wholly-owned subsidiary of the Company),
(iv) the Company is to be dissolved and liquidated, (v) any person or entity,
including a "group" as contemplated by Section 13(d)(3) of the 1934 Act,
acquires or gains ownership or control (including, without limitation, power to
vote or control the voting) of more than 50% of the outstanding shares of the
Company's voting stock (based upon voting power), or (vi) as a result of or in
connection with a contested election of directors, the persons who were
directors of the Company before such election shall cease to constitute a
majority of the Board.
2.5 "Change of Control Value" shall mean (i) the per share price offered
to shareholders of the Company in any such merger, consolidation,
reorganization, sale of assets or dissolution transaction, (ii) the price per
share offered to shareholders of the Company in any tender offer or
exchange offer whereby a Change of Control takes place, or (iii) if such Change
of Control occurs other than pursuant to a tender or exchange offer, the Fair
Market Value per share of the shares into which Awards are exercisable, as
determined by the Committee, whichever is applicable. In the event that the
consideration offered to shareholders of the Company consists of anything other
than cash, the Committee shall determine the fair cash equivalent of the portion
of the consideration offered which is other than cash.
2.6 "Code" means the Internal Revenue Code of 1986, as amended. Reference
in the Plan to any section of the Code shall be deemed to include any amendments
or successor provisions to any section and any regulations under such section.
2.7 "Committee" means the Compensation Committee of the Board which shall
be (i) constituted so as to permit the Plan to comply with Rule 16b-3 and (ii)
composed solely of "outside directors," within the meaning of section 162(m) of
the Code and applicable interpretive authority thereunder.
2.8 "Common Stock" means the Company's Common Stock, $1.00 par value per
share.
2.9 "Company" means MetroCorp Bancshares, Inc.
2.10 "1934 Act" means the Securities Exchange Act of 1934, as amended.
2.11 "Executive Officers" means Don J. Wang, while serving as Chairman of
the Board and Chief Executive Officer of the Bank, and David Tai, while serving
as President of the Bank.
2.12 "Fair Market Value" means, as of any specified date, the mean of the
high and low sales prices of the Common Stock (i) reported by the any
interdealer quotation system on which the Common Stock is quoted on that date or
(ii) if the Common Stock is listed on a national stock exchange, reported on the
stock exchange composite tape on that date; or, in either case, if no prices are
reported on that date, on the last preceding date on which such prices of the
Common Stock are so reported. If the Common Stock is traded over the counter at
the time a determination of its fair market value is required to be made
hereunder, its fair market value shall be deemed to be equal to the average
between the reported high and low or closing bid and asked prices of Common
Stock on the most recent date on which Common Stock was publicly traded. In the
event Common Stock is not publicly traded at the time a determination of its
value is required to be made hereunder, the determination of its fair market
value shall be made by the Committee in such manner as it deems appropriate.
2.13 "Holder" means an Executive Officer who has been granted an Award.
2.14 "Incentive Stock Option" means an incentive stock option within the
meaning of section 422(b) of the Code, commonly known as "qualified" stock
options.
2.15 "Nonqualified Stock Option" means an option granted under Section
VIII of the Plan to purchase Common Stock which does not constitute an Incentive
Stock Option.
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2.16 "Option" means an award granted under Section VIII of the Plan and
includes both Incentive Stock Options to purchase Common Stock and Nonqualified
Stock Options to purchase Common Stock.
2.17 "Option Agreement" means a written agreement between the Company and
a Holder with respect to an Option.
2.18 "Plan" means the MetroCorp Bancshares, Inc. Executive Bonus Plan, as
amended from time to time.
2.19 "Return on Equity" means for any year the net income of the Company
as reflected on the Company's audited Statement of Income for such year divided
by the average amount of shareholder's equity outstanding during such year.
Return on Equity shall be expressed as a percentage to the second decimal point.
2.20 "Rule 16b-3" means SEC Rule 16b-3 promulgated under the 1934 Act, as
such may be amended from time to time, and any successor rule, regulation or
statute fulfilling the same or a similar function.
III. ADMINISTRATION
3.1 The Committee shall be responsible for the administration of the Plan.
3.2 Subject to the provisions of the Plan, the Committee, by majority
action of its members, is authorized to interpret the Plan, prescribe, amend,
and rescind rules and regulations relating to the Plan, provide for conditions
and assurances deemed necessary or advisable to protect the interests of the
Company, and make all other determinations necessary or advisable for the
administration of the Plan. The determinations, interpretations, and other
actions of the Committee pursuant to the provisions of the Plan shall be binding
and conclusive for all purposes and on all persons.
3.3 The Committee shall have sole authority, in its discretion, to
determine the type of Award to be granted and the number of Options or shares of
Common Stock which may be issued to each Executive Officer each year. In making
such determination, the Committee may take into account the Executive Officer's
contributions to the Company's performance.
IV. SHARES AUTHORIZED FOR ISSUANCE
4.1 Subject to Section IX, the aggregate number of shares of Common Stock
that may be issued under the Plan shall not exceed 50,000. The Common Stock
issued under this Plan shall be authorized and unissued or treasury shares of
Common Stock of the Company. Shares of Common Stock shall be deemed to have been
issued under the Plan only to the extent actually issued and delivered pursuant
to an Award. To the extent that an Award lapses or the rights of the Executive
Officer to the Award terminate or the Award is paid in cash, any shares of
Common Stock subject to such Award shall again be available for the grant of an
Award. Separate stock certificates
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shall be issued by the Company for those shares acquired pursuant the exercise
of an Incentive Stock Option and for those shares acquired pursuant to the
exercise of a Nonqualified Stock Option.
V. ANNUAL BONUS; PROCEDURES
5.1 For each of the five calendar years beginning with 2000 and ending
with 2004, up to an aggregate of 10,000 shares of Common Stock shall be issuable
to the Executive Officers collectively subject to Options or pursuant to awards
of Common Stock, subject to the following terms and conditions:
(a) For each calendar year, an aggregate of 10,000 shares of Common
Stock is issuable pursuant to the grant of options or awards of Common
Stock to the eligible Executive Officers collectively, but only in the
event the Company shall have achieved a Return on Equity in excess of
13.0% for such calendar year.
(b) Return on Equity for any calendar year shall be determined by
the independent public accounting firm of the Company after such firm has
completed its audit of the Company's financial statements for such
calendar year. The determination of such firm for any calendar year shall
be final, binding and conclusive for all purposes.
(c) The total shares issuable to the Executive Officers as a group
for any calendar year (as determined pursuant to subparagraph 5.1(c)
above) shall be divided among such Executive Officers based on the
determination of the Compensation Committee, in its sole discretion, of
each individual's contributions to the Company's performance for that
calendar year.
5.2 Any shares of Common Stock issued to an Executive Officer pursuant to
the Plan for any calendar year shall be deemed to be fully paid and
nonassessable shares of Common Stock on the date of issuance. Only whole shares
of Common Stock shall be issued; fractional shares shall be rounded up to the
nearest whole share.
VI. EFFECTIVE DATE AND TERM OF PLAN
6.1 The Plan shall become effective upon the date of its approval by the
Company's Board of Directors, subject to approval of the Plan by the Company's
shareholders within 12 months thereafter.
6.2 The Plan shall be effective for five calendar years beginning in 2000
and ending in 2004.
VII. ELIGIBILITY
7.1 Awards may be granted to Executive Officers once per calendar year in
accordance with the provisions set forth in Section V hereof. An Executive
Officer shall be eligible to
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participate in the Plan during a calendar year only if the Executive Officer
served in such position during the entire calendar year and on December 31 of
such calendar year. Subject to the limitations set forth in the Plan, such Award
may include an Incentive Stock Option, a Nonqualified Stock Option, a stock
award or any combination thereof.
VIII. STOCK OPTIONS
8.1 Option Period. The term of each Option shall be as specified by the
Committee at the date of grant.
8.2 Limitations on Exercise of Option. An Option shall be exercisable in
whole or in such installments and at such times as determined by the Committee.
8.3 Special Limitations on Incentive Stock Options. To the extent that the
aggregate Fair Market Value (determined at the time the respective Incentive
Stock Option is granted) of Common Stock with respect to which Incentive Stock
Options are exercisable for the first time by an individual during any calendar
year under all incentive stock option plans of the Company and its parent and
subsidiary corporations exceeds $100,000, such Incentive Stock Options shall be
treated as Nonqualified Stock Options as determined by the Committee. The
Committee shall determine, in accordance with applicable provisions of the Code,
Treasury Regulations and other administrative pronouncements, which of an
optionee's Incentive Stock Options will not constitute Incentive Stock Options
because of such limitation and shall notify the optionee of such determination
as soon as practicable after such determination. No Incentive Stock Option shall
be granted to an individual if, at the time the Option is granted, such
individual owns stock possessing more than 10% of the total combined voting
power of all classes of stock of the Company or of its parent or subsidiary
corporation, within the meaning of section 422(b)(6) of the Code, unless (i) at
the time such Option is granted the option price is at least 110% of the Fair
Market Value of the Stock subject to the Option and (ii) such Option by its
terms is not exercisable after the expiration of five years from the date of
grant.
8.4 Option Agreement. Each Option shall be evidenced by an Option
Agreement in such form and containing such provisions not inconsistent with the
provisions of the Plan as the Committee from time to time shall approve,
including, without limitation, provisions to qualify an Incentive Stock Option
under section 422 of the Code. An Option Agreement may provide for the payment
of the option price, in whole or in part, by the delivery of a number of shares
of Common Stock (plus cash if necessary) having a Fair Market Value equal to
such option price. Each Option Agreement shall provide that the Option may not
be exercised earlier than six months from the date of grant and shall specify
the effect of termination of employment on the exercisability of the Option.
Moreover, an Option Agreement may provide for a "cashless exercise" of the
Option by establishing procedures whereby the Holder, by a properly-executed
written notice, directs (i) an immediate market sale or margin loan respecting
all or a part of the shares of Common Stock to which he is entitled upon
exercise pursuant to an extension of credit by the Company to the Holder of the
option price, (ii) the delivery of the shares of Stock from the Company directly
to a brokerage firm and (iii) the delivery of the option price from the sale or
margin loan proceeds from the brokerage firm
-5-
directly to the Company. Such Option Agreement may also include, without
limitation, provisions relating to (i) vesting of Options, subject to the
provisions hereof accelerating such vesting on a Change of Control, (ii) tax
matters (including provisions (y) permitting the delivery of additional shares
of Common Stock or the withholding of shares of Common Stock from those acquired
upon exercise to satisfy federal or state income tax withholding requirements
and (z) dealing with any other applicable employee wage withholding
requirements), and (iii) any other matters not inconsistent with the terms and
provisions of this Plan that the Committee shall in its sole discretion
determine. The terms and conditions of the respective Option Agreements need not
be identical.
8.5 Option Price and Payment. The price at which a share of Common Stock
may be purchased upon exercise of an Option shall be determined by the
Committee, but (i) such purchase price shall not be less than the Fair Market
Value of Stock subject to an Incentive Stock Option on the date the Incentive
Stock Option is granted and (ii) such purchase price shall be subject to
adjustment as provided in Section IX. The Option or portion thereof may be
exercised by delivery of an irrevocable notice of exercise to the Company. The
purchase price of the Option or portion thereof shall be paid in full in the
manner prescribed by the Committee.
8.6 Shareholder Rights and Privileges. The Holder shall be entitled to all
the privileges and rights of a shareholder only with respect to such shares of
Common Stock as have been purchased under the Option and for which certificates
of stock have been registered in the Holder's name.
IX. RECAPITALIZATION OR REORGANIZATION
9.1 The shares with respect to which Awards may be granted are shares of
Common Stock as presently constituted, but if, and whenever, prior to the
expiration of an Award theretofore granted, the Company shall effect a
subdivision or consolidation by the Company, the number of shares of Common
Stock with respect to which such Award may thereafter be exercised or satisfied,
as applicable, (i) in the event of an increase in the number of outstanding
shares shall be proportionately increased, and the purchase price per share
shall be proportionately reduced, and (ii) in the event of a reduction in the
number of outstanding shares shall be proportionately reduced, and the purchase
price per share shall be proportionately increased.
9.2 If the Company recapitalizes or otherwise changes its capital
structure, thereafter upon any exercise or satisfaction, as applicable, of an
Award theretofore granted the Holder shall be entitled to (or entitled to
purchase, if applicable) under such Award, in lieu of the number of shares of
Common Stock then covered by such Award, the number and class of shares of stock
and securities to which the Holder would have been entitled pursuant to the
terms of the recapitalization if, immediately prior to such recapitalization,
the Holder had been the holder of record of the number of shares of Common Stock
then covered by such Award.
9.3 In the event of a Change of Control, all outstanding Options shall
immediately vest and become exercisable or satisfiable, as applicable. Further,
in the event of a Change of Control, the Committee, in its discretion shall act
to effect one or more of the following alternatives with
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respect to outstanding Options, which may vary among individual Holders and
which may vary among Options held by any individual Holder: (i) determine a
limited period of time on or before a specified date (before or after such
Change of Control) after which specified date all unexercised Options and all
rights of Holders thereunder shall terminate, (ii) require the mandatory
surrender to the Company by selected Holders of some or all of the outstanding
Options held by such Holders (irrespective of whether such Options are then
exercisable under the provisions of the Plan) as of a date, before or after such
Change of Control, specified by the Committee, in which event the Committee
shall thereupon cancel such Options and the Company shall pay to each Holder an
amount of cash per share equal to the excess, if any, of the Change of Control
Value of the shares subject to such Option over the exercise price(s) under such
Options for such shares, (iii) make such adjustments to Options then outstanding
as the Committee deems appropriate to reflect such Change of Control (provided,
however, that the Committee may determine in its sole discretion that no
adjustment is necessary to Options then outstanding) or (iv) provide that
thereafter upon any exercise of an Option theretofore granted the Holder shall
be entitled to purchase under such Option, in lieu of the number of shares of
Common Stock then covered by such Option the number and class of shares of stock
or other securities or property (including, without limitation, cash) to which
the Holder would have been entitled pursuant to the terms of the agreement of
merger, consolidation or sale of assets and dissolution if, immediately prior to
such merger, consolidation or sale of assets and dissolution the Holder has been
the holder of record of the number of shares of Common Stock then covered by
such Option. The provisions contained in this paragraph shall be inapplicable to
an Award granted within six (6) months before the occurrence of a Change of
Control if the Holder of such Award is subject to the reporting requirements of
Section 16(a) of the 1934 Act. The provisions contained in this paragraph shall
not terminate any rights of the Holder to further payments pursuant to any other
agreement with the Company following a Change of Control.
9.4 In the event of changes in the outstanding Common Stock by reason of
recapitalization, reorganizations, mergers, consolidations, combinations,
exchanges or other relevant changes in capitalization occurring after the date
of the grant of any Option and not otherwise provided for by this Section IX,
any outstanding Options and any agreements evidencing such Options shall be
subject to adjustment by the Committee at its discretion as to the number and
price of shares of Common Stock or other consideration subject to such Options.
In the event of any such change in the outstanding Common Stock, the aggregate
number of shares available under the Plan may be appropriately adjusted by the
Committee, whose determination shall be conclusive.
9.5 The existence of the Plan and the Awards granted hereunder shall not
affect in any way the right or power of the Board or the shareholders of the
Company to make or authorize any adjustment, recapitalization, reorganization or
other change in the Company's capital structure or its business, any merger or
consolidation of the Company, any issue of debt or equity securities ahead of or
affecting Stock or the rights thereof, the dissolution or liquidation of the
Company or any sale, lease, exchange or other disposition of all or any part of
its assets or business or any other corporate act or proceeding.
9.6 Any adjustment provided for in Section 9.1 through 9.4 inclusive shall
be subject to any required shareholder action.
-7-
9.7 Except as hereinbefore expressly provided, the issuance by the Company
of shares of stock of any class or securities convertible into shares of stock
of any class, for cash, property, labor or services, upon direct sale, upon the
exercise of rights or warrants to subscribe therefor, or upon conversion of
shares of obligations of the Company convertible into such shares or other
securities, and in any case whether or not for fair value, shall not affect, and
no adjustment by reason thereof shall be made with respect to, the number of
shares of Stock subject to Awards theretofore granted or the purchase price per
share, if applicable.
X. AMENDMENT AND TERMINATION OF THE PLAN
The Board in its discretion may terminate the Plan at any time with
respect to any shares for which Awards have not theretofore been granted. The
Board shall have the right to alter or amend the Plan or any part thereof from
time to time; provided that no change in any Option theretofore granted may be
made which would impair the rights of the Holder without the consent of the
Holder (unless such change is required in order to cause the benefits under the
Plan to qualify as performance-based compensation within the meaning of section
162(m) of the Code and applicable interpretive authority thereunder), and
provided, further, that the Board may not, without approval of the shareholders,
amend the Plan:
(a) to increase the maximum number of shares which may be issued on
exercise or surrender of an Option, except as provided in Section IX;
(b) to change the Option price;
(c) to change the individuals eligible to receive Awards or
materially increase the benefits accruing to the Executive Officers under
the Plan;
(d) to extend the maximum period during which Awards may be granted
under the Plan;
(e) to modify materially the requirements as to eligibility for
participation in the Plan; or
(f) to decrease any authority granted to the Committee hereunder in
contravention of Rule 16b-3.
XI. TRANSFER RESTRICTIONS; INTENTION TO COMPLY
WITH APPLICABLE SECURITIES LAWS
11.1 Any shares of Common Stock issued pursuant to the Plan may not be
resold for a period of six months following the issuance of such shares of
Common Stock, or such longer period as may be required to comply with federal or
state securities laws.
-8-
11.2 It is intended that the Plan and any award of Common Stock made to an
Executive Officer pursuant to the Plan meet all of the requirements of Rule
16b-3 of the Securities Exchange Act of 1934, as amended. If any provision of
the Plan or any such award of Common Stock would disqualify the Plan or the
award of Common Stock hereunder, or would otherwise not comply with Rule16b-3,
such provision or award of Common Stock shall be construed or deemed amended to
conform to Rule 16b-3.
11.3 All transactions pursuant to the terms of the Plan shall only be
effective at such time as counsel to the Company shall have determined that such
transaction will not violate federal or state securities or other laws. The
Committee may, in its sole discretion, defer the effectiveness of such
transaction to pursue whatever actions may be required to ensure compliance with
such federal or state securities or other laws.
11.4 All certificates for shares of Common Stock delivered under the Plan
shall be subject to such stock transfer orders and other restrictions as the
Company may deem advisable under the rules, regulations and other requirements
of the Company, any stock exchange upon which the Common Stock is then listed
and any applicable federal or state securities laws, and the Company may cause a
legend or legends to be put on any such certificates to make appropriate
reference to such restrictions.
XII. WITHHOLDING TAXES
12.1 Whenever the Company issues shares of Common Stock under the Plan,
the Company shall have the right to require the Executive Officer to remit to
the Company an amount sufficient to satisfy any federal, state and/or local
withholding tax requirements prior to the delivery of any certificate or
certificates for such shares. Alternatively, at the Company's discretion, the
Company may issue only such number of shares of Common Stock net of the number
of shares sufficient to satisfy the withholding tax requirements. For
withholding tax purposes, the shares of Common Stock shall be valued at their
Fair Market Value on the date the withholding obligation is incurred.
XIII. MISCELLANEOUS
13.1 This Plan shall be construed in accordance with the laws of the State
of Texas.
13.2 No Right to An Award. Neither the adoption of the Plan by the Company
nor any action of the Board or the Committee shall be deemed to give an
Executive Officer any right to be granted an Award to purchase Common Stock, an
Award to receive shares of Common Stock or any of the rights hereunder except as
may be evidenced by an Award or by an Option Agreement on behalf of the Company,
and then only to the extent and on the terms and conditions expressly set forth
therein. The Plan shall be unfunded. The Company shall not be required to
establish any special or separate fund or to make any other segregation of funds
or assets to assure the payment of any Award.
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13.3 Restrictions on Transfer. An Option shall not be transferable
otherwise than by will or the laws of descent and distribution or pursuant to a
"qualified domestic relations order" as defined by the Code or Title I of the
Employee Retirement Income Security Act of 1974, as amended, or the rules
thereunder, and shall be exercisable during the Holder's lifetime only by such
Holder or the Holder's guardian or legal representative.
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PROXY
METROCORP BANCSHARES, INC.
2000 ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON FRIDAY, APRIL 28, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The 2000 Annual Meeting of Shareholders of MetroCorp Bancshares, Inc. (the
"Company") will be held at 9600 Bellaire Boulevard, Houston, Texas 77036, on
Friday, April 28, 2000, beginning at 10:00 a.m. (local time). The undersigned
hereby acknowledges receipt of the related Notice of 2000 Annual Meeting of
Shareholders and Proxy Statement dated April 3, 2000 accompanying this proxy.
The undersigned hereby appoints Don J. Wang and Ruth E. Ransom and each of
them, attorneys and agents, with full power of substitution, to vote as proxy
all shares of Common Stock, par value $1.00 per share, of the Company owned of
record by the undersigned and otherwise to act on behalf of the undersigned at
the 2000 Annual Meeting of Shareholders and any adjournment thereof in
accordance with the directions set forth herein and with discretionary authority
with respect to such other matters, as may properly come before such meeting or
any adjournment thereof, including any matter presented by a shareholder at such
meeting for which advance notice was not received by the Company in accordance
with the Company's Amended and Restated Bylaws.
This proxy is solicited by the Board of Directors and will be voted in
accordance with the undersigned's directions set forth herein. If no direction
is made, this proxy will be voted FOR the election of all nominees for director
named herein to serve on the Board of Directors, FOR the proposal to approve the
Company's Executive Bonus Plan and FOR the ratification of the appointment of
Deloitte & Touche LLP as the independent auditors of the books and accounts of
the Company for the year ending December 31, 2000.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY
AND WILL BE VOTED FOR THE FOLLOWING PROPOSALS UNLESS OTHERWISE INDICATED.
1. ELECTION OF three Class II Directors and one Class III Director.
/ / FOR all nominees listed (except as otherwise indicated*)
/ / WITHHOLD AUTHORITY for all nominees listed
* INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY
NOMINEE, DRAW A LINE THROUGH THE NAME OF SUCH NOMINEE IN
THE LIST BELOW.
Tiong Loi Ang May P. Chu John Lee Don J. Wang
2. PROPOSAL TO APPROVE the MetroCorp Bancshares, Inc. Executive Bonus Plan
as more fully described in the Proxy Statement.
/ / FOR / / AGAINST / / ABSTAIN
3. RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP as the
independent auditors of the books and accounts of the Company for the year
ending December 31, 2000.
/ / FOR / / AGAINST / / ABSTAIN
Please sign your name exactly as it appears below. If shares are held
jointly, all joint owners should sign. If shares are held by a corporation,
please sign the full corporate name by the president or any other authorized
corporate officer. If shares are held by a partnership, please sign the full
partnership name by an authorized person. If you are signing as attorney,
executor, administrator, trustee or guardian, please set forth your full title
as such.
___________________________________
___________________________________
Signature(s) of Shareholder(s)
Date: _____________________, 2000