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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
MetroCorp Bancshares, Inc.
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(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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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 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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(4) Date Filed:
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Notes:
METROCORP BANCSHARES, INC.
9600 BELLAIRE BOULEVARD, SUITE 252
HOUSTON, TEXAS 77036
NOTICE OF THE 2001 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON FRIDAY, MAY 11, 2001
Shareholders of MetroCorp Bancshares, Inc.:
The 2001 Annual Meeting of Shareholders (the "Meeting") of MetroCorp
Bancshares, Inc. (the "Company") will be held at the Company's principal
executive offices at 9600 Bellaire Boulevard, Suite 252, Houston, Texas 77036,
on Friday, May 11, 2001, beginning at 10:00 a.m. (local time), for the following
purposes:
1. To elect three directors of Class III to serve on the Board of
Directors of the Company until the Company's 2004 Annual Meeting of Shareholders
and until their successors are duly elected and qualified;
2. 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, 2001; and
3. To transact such other business as may properly come before the meeting
or any adjournment thereof.
The close of business on April 16, 2001 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 20, 2001
YOUR VOTE IS IMPORTANT.
To ensure your representation at the Meeting, please 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 20, 2001
________________________
PROXY STATEMENT
FOR
THE 2001 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON FRIDAY, MAY 11, 2001
________________________
INTRODUCTION
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 2001 Annual Meeting of Shareholders of the Company to
be held at the Company's principal executive offices at 9600 Bellaire Boulevard,
Suite 252, Houston, Texas 77036, on Friday, May 11, 2001 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 2001 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 20, 2001.
VOTING OF PROXIES
This Proxy Statement is furnished to the shareholders of the Company for
solicitation of proxies on behalf of the Board of Directors of the Company for
use at the Meeting, and at any and all adjournments thereof. The purpose of the
Meeting and the matters to be acted upon are set forth herein and in the
accompanying Notice of Meeting.
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 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, 2000, 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
April 16, 2001 (the "Record Date"), are entitled to notice of and to vote at the
Meeting and any adjournments or postponements thereof. At April 10, 2001, there
were outstanding 6,981,484 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
III nominees to the Board of Directors. 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 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 ratify the appointment
of the auditors. An abstention or a 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 current Class III directors expires at the Meeting. The terms of
the current Class I and Class II directors expire at the annual meeting of
shareholders in 2002 and 2003, respectively. The three Class III nominees, if
elected at the Meeting, will serve until the annual meeting of shareholders in
2004.
The Board of Directors has nominated Tiong Loi Ang, Tommy F. Chen and Joe
Ting for election as Class III directors at the Meeting. Messrs. Ang, Chen and
Ting are currently serving as Class III directors.
The 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
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of the nominees. If the authority to vote for the election of directors is
withheld as to one or two 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 shares represented by proxy will be voted for such
other person, if any, as may be designated by the Board of Directors. The Board
of Directors has no reason to believe that any nominee will be unavailable to
serve as a director.
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 POSITIONS WITH THE COMPANY AND
---- --- METROBANK, N.A. (THE "BANK")
----------------------------
Tiong Loi Ang.............. 69 Class III Director of the Company
Tommy F. Chen.............. 63 Class III Director of the Company;
Director of the Bank
Joe Ting................... 48 Class III Director of the Company;
Director of the Bank
Tiong Loi Ang. Mr. Ang was elected in April 2000 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. Mr. Ang is the Chairman of the Board and the controlling shareholder of
Gaumnitz, Inc. Gaumnitz, Inc. owns the building in which the Company's
corporate headquarters and the Bank's Bellaire branch is located.
Tommy F. Chen. Mr. Chen is a director of the Company and the Bank and was
an organizing director of the Bank. Mr. Chen serves on the Company's
Compensation Committee. 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
Bachelors degree from the University of Taiwan, 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.
Joe Ting. Mr. Ting is a director of the Company, was elected as a member
of the Board of Directors of the Bank in 1989 and was elected Vice Chairman of
the Bank's Board of Directors in 1999. Mr. Ting serves on the Company's
Compensation Committee. 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.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF EACH OF THE
NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS
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CONTINUING DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information with respect to the
Company's Class I and Class II directors, whose terms of office do not expire at
the Meeting, and certain officers of the Company:
NAME POSITIONS AGE
---- --------- ---
Helen F. Chen.......... Class I Director of the Company, Director of 53
the Bank
May P. Chu............. Class II Director of the Company; Director of 53
the Bank
Allen L. Cournyer...... Executive Vice President and Chief 52
Information Officer of the Company; Executive
Vice President, Chief Operations Officer and
Chief Information Officer of the Bank
George M. Lee.......... Class I Director of the Company; Director of 51
the Bank
John Lee............... Class II Director of the Company; Director of 57
the Bank
Ruth E. Ransom......... Senior Vice President and Chief Financial 47
Officer of the Company and the Bank
David Tai.............. Class I Director, Executive Vice President 49
and Secretary of the Company; President and
Vice Chairman of the Board of the Bank
Don J. Wang............ Class II Director, Chairman of the Board and 57
President of the Company; Chairman of the
Board and Chief Executive Officer of 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 of the Houston Chinese Schools Association and the Principal of the
Houston Northwest Chinese School, where she served as Chairman of the Board from
1977 to 1991. A member of various civic organizations in Houston, Ms. Chen
focuses her efforts on the Chinese community. Ms. Chen is the sister of Don J.
Wang. Ms. Chen is not related to Mr. Tommy F. Chen.
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 Company's Compensation
Committee and Audit Committee. She is the founder of Signet Consulting, a bank
management consulting firm specializing in regulatory issues and has served as
its President 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 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.
-4-
Allen L. Cournyer. Mr. Cournyer was named Executive Vice President, Chief
Information Officer and Chief Operations Officer of the Bank in April 2000 and
Executive Vice President and Chief Information Officer of the Company in October
2000. Mr. Cournyer is responsible for the Bank's branch operations and
technology for its 14 full-service branches. Before joining the Bank, Mr.
Cournyer was President of Extraco Institutional Services a $630 million
financial services company, located in Temple, Texas, where he was responsible
for technology, deposit and loan operations. From 1996 until 1998, he was
partner and President of Platform Technologies, a company which provides retail
banking software to community banks. Prior to this, Mr. Cournyer worked with a
Texas subsidiary of JP Morgan Chase (formally Texas Commerce Bank) for more than
20 years where he last served as a Senior Vice President and manager of retail
banking for the technology, operations and administration groups until his
departure in 1995. He began his career with Cullen Frost Bank in San Antonio in
1967.
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 has served as the Senior Vice
President of Marketing and Sales, responsible for marketing and sales strategy,
for Higher Dimensions Research in St. Paul, Minnesota since 1997. Prior to
this, from 1995 to 1997, he served as the Chief Operating Officer of the Noel
Group Companies, a travel insurance company. 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.
John Lee. Mr. John Lee is a Class II director of the Company and an
organizing director of the Bank. He is Executive Vice President of Alpha Seafood
Enterprises, Inc. 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. John Lee is the brother-in-law of Mr. David Tai.
Mr. John Lee is not related to Mr. George M. 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 a Texas subsidiary of J. P. Morgan Chase (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 and
coordinated the annual financial planning process of over 70 branch locations.
While at Chase, she worked with bank acquisition analysis, conversions and "de
novo" bank organization. Ms. Ransom received a Bachelors of Arts and a Bachelor
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 and a
Trustee for the Awty International School from 1990 through 1998 and is active
with several international student exchange programs.
David Tai. David Tai is a Class I 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. Mr. Tai is a leader in the Asian-American
community through his active involvement in several organizations. He has served
as the President of the Taiwanese Chamber of Commerce of Greater Houston and 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. In 1999, Mr. Tai was appointed as a director of the
State Bar of Texas Chief Disciplinary Council's Houston Region Grievance
Council. He received a Bachelor 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.
-5-
Don J. Wang. Mr. Wang is a Class II director of the Company and an
organizing director of the Bank. Mr. Wang serves as Chairman of the Board and
President of the Company and Chairman of the Board and Chief Executive Officer
of the Bank. 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 as a Board Member of the
Greater Houston Partnership. Mr. Wang has served 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. On April 29, 1993, former Mayor Bob Lanier proclaimed "Don J. Wang
Day" in Houston in honor of Mr. Wang's abundant achievements in the realm of
Asian community relations. 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.
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 eight meetings during 2000. No
director 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, except Tiong Loi Ang.
Audit Committee. The Board of Directors has established Audit and
Compensation Committees. The primary purpose of the Audit Committee is to
provide independent and objective oversight with respect to the Company's
financial reports and other financial information provided to shareholders and
others, the Company's internal controls and the Company's audit, accounting and
financial reporting processes generally. The Audit Committee reports to the
Board of Directors concerning such matters. The Company's Board of Directors
has adopted a written charter for the Audit Committee and a copy of the charter
is attached as APPENDIX A to this Proxy Statement. During 2000, the Audit
Committee held four meetings. The Audit Committee is comprised of Messrs. Ang
and George Lee, and Ms. Chu, each of whom is an independent director of the
Company as defined and required by The Nasdaq Stock Market, Inc. listing
standards.
Compensation Committee. 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
and stock award plans and makes recommendations to the Board of Directors as to
option and award grants to Company employees under such plans. During 2000, the
Compensation Committee held one meeting.
The Compensation Committee is comprised of Ms. Chu and Messrs. Chen and
Ting, each of whom is an outside director. No officers of the Company
participate in Compensation Committee deliberations concerning their
compensation or other matters.
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 of the Company. During 2000, no
member of the Compensation Committee was an officer or employee of the Company
or the Bank and no member formerly has served as an officer of the Company or
the Bank during the past five years.
-6-
DIRECTOR COMPENSATION
Directors of the Company do not receive a fee for attending each scheduled
Board of Directors meeting; however, for the 2000 fiscal year, the Company's
directors received a fee of $300 for each Company committee meeting attended.
For the 2001 fiscal year, the Company's directors receive a fee of $500 for each
Company committee meeting attended. The Board of Directors of the Bank meets
monthly. For the 2000 fiscal year, non-employee directors of the Bank received
a fee of $500 for each meeting of the Bank's Board of Directors attended and a
fee of $300 for each Bank committee meeting attended. For the 2001 fiscal year,
non-employee directors of the Bank receive a fee $850 for each meeting of the
Bank's Board of Directors attended and a fee of $500 for each Bank 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 replaced this director bonus
policy with the Non-Employee Director Stock Bonus Plan ("Non-Employee Director
Plan"). The Executive Bonus Plan was established in 2000 ("Executive Plan").
The Company does not plan to pay cash bonuses to directors in the future and
will only pay stock bonuses to directors and, and directors who are also
officers, pursuant to the Non-Employee Director Plan and the Executive Plan,
respectively.
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 average 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 applicable year. Subsequent to the ratification of the
Company's return on average equity performance by the Company's independent
auditors for the years ended December 31, 1998 and 1999, there have been an
aggregate of 24,000 shares issued under this plan. Based on the Company's
return on average equity for the year ended December 31, 2000, there will be no
shares issued for that year.
The Executive Plan authorizes the issuance of up to 50,000 shares of Common
Stock to Don Wang as Chairman of the Board and Chief Executive Officer of the
Bank and David Tai as President of the Bank as long as such executive officer is
serving in his above stated capacity with the Bank. Messrs. Wang and Tai also
serve as directors of the Company. The Executive Plan is discussed further under
"Board Compensation Committee Report on Executive Compensation."
-7-
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 and each of the other three most highly
compensated executive officers of the Company (determined as of the end of the
last fiscal year) (the "Named Executive Officers") for each of the three fiscal
years ended December 31, 2000:
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------------------------------ ---------------------
NAME AND OTHER ANNUAL SECURITIES UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION (1) OPTIONS COMPENSATION (2)
------------------ ---- -------- ------- ----------------- --------------------- ---------------
Don Wang..................................... 2000 $130,000 $- $6,000 - $5,440
Chairman of the Board and President and 1999 130,000 - 6,000 - 5,440
of the Company; Chairman of the Board 1998 126,670 5,417 6,000 20,000 5,524
and Chief Executive Officer of the Bank
David Tai.................................... 2000 130,000 - 6,000 - 5,440
Executive Vice President and Secretary of the 1999 127,500 20,000 6,000 - 6,140
Company; President and Vice Chairman of the 1998 116,667 5,000 6,000 20,000 5,107
Board of the Bank
Allen Cournyer(3)............................ 2000 113,021 1,788 9,000 10,000 47,318 (5)
Executive Vice President, Chief Information 1999 - - - - -
Officer of the Company and Executive Vice 1998 - - - - -
President, Chief Operations Officer and Chief
Information Officer of the Bank
Ruth E. Ransom(4)............................ 2000 100,000 5,208 - - 2,208
Senior Vice President and Chief Financial 1999 12,500 - - 3,000 -
Officer of the Company and the Bank 1998 - - - - -
Joyce Tee(6)................................. 2000 110,000 14,584 - - -
Senior Vice President and Chief Credit Officer 1999 102,147 10,000 - 4,000 4,486
of the Bank 1998 98,666 4,167 - - 4,113
______________
(1) Represents the amount paid to compensate such officers for car allowances.
(2) The amounts in this column include contributions made by the Bank to the
401(k) plan.
(3) Mr. Cournyer joined the Bank on April 10, 2000.
(4) Ms. Ransom joined the Company on November 15, 1999.
(5) Consists of a signing bonus of $44,742 and contributions made by the Bank
to the 401(k) plan of $2,576.
(6) Ms. Tee resigned effective December 31, 2000.
-8-
OPTION GRANTS DURING 2000
The following table sets forth certain information concerning stock options
granted during fiscal 2000:
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 FOR
UNDERLYING EMPLOYEES EXERCISE OPTION TERM(1)
OPTIONS IN FISCAL PRICE PER EXPIRATION -------------------------
NAME GRANTED YEAR SHARE DATE 5% 10%
- -------------------------- ------------ --------------- ----------- -------------- --------- ----------
Allen L. Cournyer......... 10,000 100.00% $7.250 April 10, 2007 $29,515 $68,782
- --------------------------
(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, 2000:
Number of Securities
Underlying Unexercised Value of Unexercised
Options at In-the-Money Options
Shares December 31, 2000 at December 31, 2000(2)
Acquired on Value --------------------------------- --------------------------------
Name Exercise Realized(1) Exercisable Unexercisable Exercisable Unexercisable
- ---------------------- ------------ ----------- -------------- --------------- -------------- ---------------
Allen L. Cournyer..... - $ - - 10,000 $ - $26,250
Ruth E. Ransom........ - - 900 2,100 1,406 3,281
David Tai............. - - 20,000 - -(4) -
Joyce Tee(3).......... - - 1,200 2,800 1,875 4,375
Don J. Wang........... - - 20,000 - -(4) -
___________________________
(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)The value of the unexercised options is calculated based on the closing price
of the Common Stock as reported on the Nasdaq National Market on December 31,
2000 of $9.875.
(3) Ms. Tee resigned effective December 31, 2000.
(4) 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, 2000.
STOCK PLANS
Except for the Executive Plan, the Company's stock option, stock purchase
and stock award 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 and
the Executive Bonus Plan, each of the remaining stock option and stock purchase
plans was approved by the shareholders of the Bank in
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1998. The Executive Plan was adopted by the Board of Directors in 2000 and
approved by shareholders at the Company's 2000 annual meeting of shareholders.
The Company has options issued and outstanding 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 was 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 Non-Employee Director Stock Bonus Plan ("Non-Employee
Director Plan") authorizes the issuance of up to 60,000 shares of Common Stock
to the directors of the Company who do not serve as an officer of the Company.
Under the Non-Employee Director Plan, up to 12,000 shares of Common Stock may be
issued each year for a five year period if the Company achieves certain return
on equity ratios with no shares to be issued if the Company's return on equity
is below 13.0%. Shares will be allocated among the non-employee directors by
the Company's Non-Employee Director Bonus Committee, based on each director's
performance during the applicable year. There have been an aggregate of 24,000
shares issued under the Non-Employee Director Plan for the years ended December
31, 1999 and 1998.
The Executive Plan authorizes the issuance of up to 50,000 shares of Common
Stock to Don Wang as Chairman of the Board and Chief Executive Officer of the
Bank and David Tai as President of the Bank as long as such executive officer is
serving in his above stated capacity with the Bank. The Executive Plan is
discussed further under "Board Compensation Committee Report on Executive
Compensation."
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 seven 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. As of December 31, 2000, there were options to acquire 50,200 shares
of Common Stock outstanding under the Incentive Plan. Options to acquire 10,000
shares of Common Stock were granted under the Incentive Plan in 2000.
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 trading price of a share of Common Stock 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. As of December 31, 2000,
there have been 11,640 shares issued under this plan.
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
-10-
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 up
to 15% of annual compensation. The Company matches each participant's
contributions to the Plan up to 4% of such participant's salary. The Company
made contributions before expenses to the Plan of $291,000, $271,000, and
$235,000 in 2000, 1999 and 1998, 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 2000
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:
. The Company must provide a competitive total compensation package to
attract and retain key executives;
. The compensation packages and programs must be strategically aligned with
the annual budget as well as the Company's long-term business objectives;
and
. The compensation packages must include a variable or performance component
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 compensation programs for executive officers are comprised of
five parts as follows:
(1) Base Pay. Base salary levels are determined mainly through
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.
-11-
(2) Cash Bonus. Although the Company does not have a bonus program, the
Compensation Committee may pay discretionary bonuses to executive officers,
including Named Executive Officers, based on their individual performance in a
particular year. For the year ended December 31, 2000, discretionary bonuses
were paid to certain executive officers based on such persons performance during
2000.
(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.
(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 employees. Such
options will be exercisable based on a vesting schedule. The Compensation
Committee believes that these key employees will carry the main responsibility
for increased growth, asset quality and profitability of the Company into the
future. There were options to acquire 10,000 shares of common stock granted to a
Named Executive Officer during 2000.
(5) Executive Bonus Plan. The Company's Executive Plan authorizes the
issuance of up to 50,000 shares of Common Stock to Don Wang as Chairman of the
Board and Chief Executive Officer of the Bank and David Tai as President of the
Bank as long as such executive officer is serving in his above stated capacity
with the Bank. Mr. Wang also serves as Chairman of the Board and President of
the Company and Mr. Tai also serves as Executive Vice President and Secretary of
the Company. The Executive Plan authorizes the issuance of up to 10,000 shares
of Common Stock annually over a five-year period from 2000 to 2004 pursuant to
options to acquire shares of Common Stock, awards of Common Stock or any
combination thereof if the Company meets certain performance criteria.
Specifically, the Company must achieve a return on equity in excess of 13.0% for
a particular calendar year in order for any options or awards to be granted
under the Executive Plan. The number of shares issuable in any year will be
allocated to the executive officers based on the determination by the
Compensation Committee of that individual's contributions to the Company's
performance during the applicable year. Because the Company did not achieve a
return on equity in excess of 13.0% in 2000, no options or awards were granted
under the Executive Plan for the year ended December 31, 2000.
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.
2000 COMPENSATION OF THE CHAIRMAN OF THE BOARD-AND PRESIDENT
During 2000, Don J. 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 2000 of $130,000 was determined by the
Compensation Committee after a review of the factors set forth in this report
with respect to executive officers, including 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
-12-
AUDIT COMMITTEE REPORT
In accordance with its written charter adopted by the Company's Board of
Directors, which is attached to this Proxy Statement as APPENDIX A, the
Company's Audit Committee assists the Board in fulfilling its responsibility for
oversight of the quality and integrity of the accounting, auditing and financial
reporting practices of the Company. During the year ended December 31, 2000,
the Chairman of the Audit Committee, as representative of the Audit Committee,
reviewed the interim financial information contained in the quarterly earnings
announcements with the Chief Financial Officer and the independent auditors
before their release to the public.
Notwithstanding anything to the contrary set forth in any of the Company's
previous or future filings under the Securities Act of 1933 or the Securities
Exchange Act of 1934 that might incorporate this Proxy Statement or future
filings with the Securities and Exchange Commission, in whole or in part, the
following report shall not be deemed to be incorporated by reference into any
such filing.
In discharging its oversight responsibility as to the audit process, the
Audit Committee obtained from the independent auditors a formal written
statement describing all relationships between the auditors and the Company that
might bear on the auditor's independence consistent with Independence Standards
Board Standard No. 1, "Independence Discussions with Audit Committees,"
discussed with the auditors any relationships that may impact their objectivity
and independence and satisfied itself as to the auditor's independence. The
Audit Committee also discussed with management, the internal auditors and the
independent auditors the quality and adequacy of the Company's internal
controls. The Audit Committee reviewed with both the independent and the
internal auditors their audit plans, audit scope and identification of audit
risks. The Audit Committee is comprised of Messrs. Ang and George Lee, and Ms.
Chu, each of whom is an independent director of the Company as defined and
required by The Nasdaq Stock Market, Inc. listing standards.
The Audit Committee discussed and reviewed with the independent auditors
all communications required by generally accepted auditing standards, including
those described in Statement on Auditing Standards No. 61, as amended.
"Communication with Audit Committees" and, with and without management present,
discussed and reviewed the results of the internal audit examinations.
The Audit Committee reviewed the audited financial statements of the
Company as of and for the year ended December 31, 2000 with management and the
independent auditors. Management has the responsibility for the preparation of
the Company's financial statements and the independent auditors have the
responsibility for the examination of those statements.
Based on the above-mentioned review and discussions with management and the
independent auditors, the Audit Committee recommended to the Board that the
Company's audited financial statements be included in its Annual Report on Form
10-K for the year ended December 31, 2000, to be filed with the Securities and
Exchange Commission. The Audit Committee also recommended the reappointment,
subject to shareholder ratification, of the independent auditors and the Board
concurred in such recommendation.
The Audit Committee
George M. Lee, Chairman
Tiong Loi Ang
May P. Chu
-13-
PRINCIPAL ACCOUNTING FIRM FEES
AUDIT FEES
The aggregate fees billed to the Company for professional services rendered
by Deloitte & Touche LLP in connection with the audit of the Company's
consolidated financial statements as of and for the year ended December 31, 2000
and limited reviews of the Company's unaudited consolidated interim financial
statements included in the Company's Quarterly Reports on Form 10-Q for the
fiscal year ending December 31, 2000 were $140,000.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
During the year ended December 31, 2000, Deloitte & Touche did not render
any professional services to the Company in connection with the design and
implementation of financial information systems.
ALL OTHER FEES
In addition to the fees described above, the aggregate fees billed to the
Company for services rendered by Deloitte & Touche LLP during the year ended
December 31, 2000 were $310,000. The Audit Committee has considered whether the
provision of these non-audit services is compatible with maintaining the
independence of Deloitte & Touche LLP.
INTERESTS OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS
Don J. Wang, the Company's Chairman of the Board and President, is a
principal shareholder and Chairman of the Board of 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 $1,140,100 and $1,098,000 for such insurance during the
years ended December 31, 2000 and 1999, respectively.
Tiong Loi Ang, a 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. The lease covering the Company's headquarters is for a term of four
years and nine months commencing February 1, 2001 at a net rent of $24,800 per
month. The lease covering the Bank's Bellaire branch is for a term of four
years and eleven months commencing January 1, 1997 at a net rent of $10,500 per
month. For these respective lease agreements, the Company paid Gaumnitz, Inc.
$400,000 and $380,000 during the years ended December 31, 2000 and 1999,
respectively.
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
2000, the Company made loans in the ordinary 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, 2000, all of such loans aggregated $6.3 million
which was approximately 11.3% 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.
-14-
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 April 10, 2001 by (i) directors and
the Named Executive Officers of the Company, (ii) each person who is known by
the Company to own beneficially 5% or more of the Common Stock and (iii) all
directors and Named Executive Officers as a group. Unless otherwise indicated,
based on information furnished by such shareholders, management believes that
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)....... 491,558 7.04%
Siah Chin Leong(3).................... 466,732 6.69%
Leslie Looi Meng(4)................... 391,640 5.61%
Shou Chiun Ting(5).................... 373,819 5.35%
DIRECTORS AND EXECUTIVE OFFICERS
Tiong Loi Ang......................... 101,286(6) 1.45%
Helen F. Chen......................... 565,419(7) 8.10%
Tommy F. Chen......................... 194,891(8) 2.79%
May P. Chu............................ 113,264(9) 1.62%
Allen L. Cournyer..................... - *
George M. Lee......................... 1,000 *
John Lee.............................. 101,718(10) 1.45%
Ruth E. Ransom........................ 900(11) *
David Tai............................. 268,573(12) 3.84%
Joyce Tee............................. 1,700(13) *
Joe Ting.............................. 72,106(14) 1.03%
Don J. Wang........................... 552,491(15) 7.89%
Directors and Named Executive
Officers as a Group (12 persons) 1,969,838 27.82%
_________________________________
* Indicates ownership that does not exceed 1.0%.
(1) The percentage of beneficially owned was calculated based on 6,979,530
shares of Common Stock 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 controlling
shareholder and President of Metro Investment Group, Inc. and has voting
and investment control of the shares.
(3) Siah 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.
(5) Mr. Shou Chiun Ting's address is 2825 Wilcrest, Suite 200, Houston, Texas
77042. Includes 169,003 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.
-15-
(6) Includes 39,143 shares held of record by Mr. Ang's spouse and 25,936 shares
held of record by Gaumnitz, Inc., of which Mr. Ang is Chairman of the Board
and has voting and investment control.
(7) Includes 491,558 shares held of record by Metro Investment Group, Inc. of
which Ms. Chen is the President and has voting and investment control.
(8) Includes 20,000 shares which may be acquired within 60 days pursuant to the
Founding Director Plan and 77,611 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.
(10) Includes 20,000 shares which may be acquired within 60 days pursuant to the
Founding Director Plan.
(11) Consists of 900 shares which may be acquired within 60 days pursuant to the
Company's 1998 Stock Incentive Plan.
(12) Includes 20,000 shares which may be acquired within 60 days pursuant to the
Founding Director Plan.
(13) Ms. Tee resigned effective December 31, 2000.
(14) Includes 2,200 shares held of record by each of Mr. Ting's three minor
children.
(15) Includes 20,000 shares which may be acquired under the Founding Director
Plan, 520,816 shares held of record by two trusts, 2,124 shares held of
record by Mr. Wang's spouse, and 9,551 shares held of record by a non-
profit corporation over which Mr. Wang has voting and investment control.
-16-
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, 2000, 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.
For the performance graph included in the Company's proxy statement for the
2000 Annual Meeting of Shareholders, the Company selected the SNL Index to
replace the Nasdaq Bank Index. Although both indices are included in the
performance graph below, the Company will use the SNL 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 STOCK MARKET (US) INDEX, THE
NASDAQ BANK INDEX, THE SNL BANK INDEX AND METROCORP BANCSHARES, INC.
[Linear graph plotted from data in table below]
12/16/98 12/31/98 06/30/99 12/31/99 06/30/00 12/31/00
-------- -------- -------- -------- -------- --------
MetroCorp Bancshares, Inc. $100.00 $ 96.10 $ 78.11 $ 75.75 $ 64.22 $ 93.44
Nasdaq-Total US 100.00 109.27 134.06 203.08 198.19 122.22
Nasdaq Bank 100.00 105.03 108.20 100.97 88.76 115.29
SNL $1B-$5B Bank 100.00 102.90 102.81 94.57 85.29 107.32
-17-
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 officers and persons who
own more than 10% of a registered class of the Company's equity securities, to
file reports of ownership and reports of changes in ownership of such 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 the Company's review of the
copies of such reports furnished to it and representations from certain
reporting persons that they have complied with the relevant filing requirements,
during the year ended December 31, 2000, all Section 16(a) reporting
requirements applicable to the Company's officers, directors and greater than
10% shareholders were complied except that Ms. Tee was late in filing a Form 3,
Mr. Ting was late in filing one report covering one transaction, Mr. Wang was
late in filing two reports covering five transactions, Ms. Ransom was late in
filing one report covering one transaction and Mr. Cournyer was late filing five
reports covering eight transactions.
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, 2001. 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 PricewaterhouseCoopers 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 PricewaterhouseCoopers LLP,
PricewaterhouseCoopers 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.
-18-
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 2002 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
21, 2001. 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 and does not know of other matters to be presented for action at the
Meeting. However, if any other matter does properly come before the Meeting, or
any adjournment thereof, 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,
2000, 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
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APPENDIX A
METROCORP BANCSHARES, INC.
CHARTER OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
I. PURPOSE
The primary purpose of the Audit Committee is to provide independent and
objective oversight with respect to the Company's financial reports and other
financial information provided to shareholders and others, the Company's
internal controls and the Company's audit, accounting and financial reporting
processes generally. The Audit Committee shall report to the Board of Directors
concerning such matters.
The Audit Committee has the authority to conduct any investigation
appropriate to fulfilling its responsibilities, and it has direct access to the
independent auditors as well as anyone in the organization. The Audit Committee
has the authority to retain any special legal, accounting or other consultants
or experts it deems necessary in the performance of its duties.
II. COMPOSITION
The Audit Committee shall be comprised of three or more directors as
determined by the Board of Directors, each of whom shall be an independent
director as determined in accordance with rules of The Nasdaq Stock Market, Inc.
and free from any relationship that would interfere with the exercise of his or
her independent judgment. All members of the Audit Committee shall have a basic
understanding of finance and accounting and must be able to read and understand
fundamental financial statements. At least one member of the Audit Committee
shall have accounting or related financial management expertise.
Audit Committee members shall be appointed annually by the Board of
Directors. If the Board shall have established a Nominating Committee, the
Audit Committee members shall be appointed by the Board on recommendation of the
Nominating Committee. The members of the Audit Committee shall designate a
chairperson by majority vote of the members. The chairperson shall schedule and
preside at all meetings of the Audit Committee and shall be responsible for
preparing agendas and making regular reports to the Board of Directors.
III. MEETINGS
The Audit Committee shall meet a least four times annually, or more
frequently as circumstances dictate. The Audit Committee shall meet privately
in separate sessions at least annually with management, the Company's or
subsidiary's internal auditor and independent auditors regarding the systems of
internal control, results of audits and accuracy of financial reporting.
IV. RESPONSIBILITIES AND DUTIES
The Audit Committee shall perform the following functions, and any
additional functions that the Committee deems appropriate given the
circumstances:
1. Review the independence and performance of the independent auditors
and annually recommend to the Board of Directors the appointment of
the independent auditors to audit the Company's financial statements
or approve any discharge of auditors when circumstances warrant. The
independent auditors are accountable to the Board and the Audit
Committee.
2. Review and discuss with management and the independent auditors the
annual audited financial statements prior to issuance by the auditors
of their report thereon, filing such statements with the
A-1
Securities and Exchange Commission ("SEC") and distribution to third
parties. The review shall include:
. the Company's annual consolidated financial statements and the
notes thereto;
. the independent auditors' audit of the consolidated financial
statements and report;
. any significant changes required in the independent auditors'
examination plan;
. the matters required to be discussed in Statement of Auditing
Standards No. 61 (Communication with Audit Committees), as may be
modified, supplemented or replaced; and
. review of particularly sensitive accounting estimates, reserves
and accruals, judgmental areas, audit adjustments and other
inquiries as the Audit Committee or independent auditors deem
appropriate.
Based on such a review, the Audit Committee shall recommend to the
Board whether to include such audited financial statements in the
Company's Annual Report on Form 10-K.
3. Review with the independent auditors, the internal auditors and
management the integrity of the Company's financial reporting
processes and controls. Review and discuss significant financial risk
exposures and the steps management has taken to monitor and control
such exposure.
4. Obtain from and review with the independent auditors the annual
management letter as to the adequacy of the Company's internal control
environment and the existence of any reportable conditions or material
weaknesses. Review management's responses to the annual management
letter.
5. Review with management responsible for the financial statements and
the independent auditors the Company's quarterly financial results
prior to the release of earnings and/or the Company's quarterly
financial statements prior to the filing of its Form 10-Q with the SEC
or otherwise distributing such statements. Discuss any significant
changes to the Company's accounting principles and any items required
to be communicated by the independent auditors in accordance with
Statement on Auditing Standards No. 61, as may be modified,
supplemented or replaced. The chairperson may represent the entire
Audit Committee, either in person or by telephone conference call, for
purposes of this review.
6. On an annual basis, obtain from the independent auditors a formal
written statement describing all relationships between the auditors
and the Company, consistent with Independence Standards Board
Statement No. 1, as may be modified, supplemented or replaced. The
Audit Committee shall discuss such reports with the independent
auditors and recommend that the Board of Directors take appropriate
action on any disclosed relationships that may reasonably be thought
to bear on the independence of the auditors.
7. Review the independent auditors' plan of audit.
8. Approve the fees and other significant compensation to be paid to the
independent auditors.
9. Prepare and issue annually a report for inclusion in the Company's
proxy statement related to its annual meeting of shareholders as
required by the rules and regulations of the SEC.
10. Review and discuss with management and the internal auditors the
Company's internal control systems intended to ensure the reliability
of financial reporting and compliance with applicable laws
A-2
and regulations. The review shall include the organizational
structure, responsibilities, budget, plans and staffing.
11. Review significant reports prepared by the internal audit department
together with management's response and follow-up to these reports.
12. Review the appointment, performance and replacement of the senior
internal audit executive.
13. At least annually, review directors' and officers' related party
transactions and any potential significant conflicts of interest.
14. Review alleged fraudulent actions or violations of law reported by
internal compliance programs or, under the terms of the Private
Securities Litigation Reform Act of 1995, by the independent auditors
and take any necessary action.
15. At least annually, review with the Company's legal counsel, any legal
matters (including the status of pending litigation) that may have a
material impact on the Company's financial statements, compliance with
applicable laws and regulations and any material reports or inquiries
received from regulators or governmental agencies.
16. Review and reassess the adequacy of the Audit Committee Charter on an
annual basis. Include the Charter as an appendix to the proxy
statement for the Company's annual meeting of shareholders every three
years or in the next proxy statement for an annual meeting of
shareholders following any significant amendment of the Charter.
While the Audit Committee has the responsibilities and powers set forth in
this Charter, it is not the duty of the Audit Committee to plan or conduct
audits or to determine that the Company's financial statements are complete and
accurate and are in accordance with generally accepted accounting principles.
This is the responsibility of management and the independent auditors. Nor is
it the duty of the Audit Committee to conduct investigations, to resolve
disagreements, if any, between management and the independent auditors or to
assure compliance with applicable laws and regulations.
A-3
[FRONT SIDE OF PROXY]
PROXY
METROCORP BANCSHARES, INC.
2001 ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON FRIDAY, MAY 11, 2001
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The 2001 Annual Meeting of Shareholders of MetroCorp Bancshares, Inc. (the
"Company") will be held at 9600 Bellaire Boulevard, Houston, Texas 77036, on
Friday, May 11, 2001, beginning at 10:00 a.m. (local time). The undersigned
hereby acknowledges receipt of the related Notice of 2001 Annual Meeting of
Shareholders and Proxy Statement dated April 20, 2001 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 2001 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 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, 2001.
(CONTINUED, AND TO BE SIGNED ON THE OTHER SIDE)
[BACK SIDE OF PROXY]
PLEASE DATE, SIGN AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE!
ANNUAL MEETING OF SHAREHOLDERS
METROCORP BANCSHARES, INC.
MAY 11, 2001
Please Detach and Mail in the Envelope Provided
A [X] Please mark your
votes as in this example.
FOR all WITHHOLD This proxy will be voted FOR the following proposals unless otherwise
nominees listed AUTHORITY indicated.
at right (except as for all nominees
otherwise indicated*) listed at right
FOR AGAINST ABSTAIN
1. ELECTION OF [_] [_] Nominees: Tiong Loi Ang 2. RATIFICATION OF THE APPOINTMENT OF
DIRECTORS to Tommy F. Chen DELOITTE & TOUCHE LLP as the [_] [_] [_]
serve until the Joe Ting independent auditors of the books
2004 Annual Meeting of Shareholders and until and accounts of the Company for the
their successors are duly elected and qualified. year ending December 31, 2001.
*Instructions: To withhold authority to vote for any This proxy is solicited by the Board of Directors and will be
nominee, draw a line through the name of such voted in accordance with the undersigned's directions set
nominee in the list at right. 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 until the 2004
Annual Meeting of Shareholders and until their successors are
duly elected and qualified 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, 2001
Signature(s) of Shareholder(s)_______________________________________ ___________________________________Date:_____________,2001
NOTE: Please sign your name exactly as it appears on the certificate(s) representing your shares of Common Stock. 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.