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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [_]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Civic Bancorp
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(Name of Registrant as Specified In Its Charter)
Civic Bancorp
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[_] 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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(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 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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Notes:
[CIVIC BANCORP LOGO]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held on May 3, 2001
To the Shareholders of Civic BanCorp:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Civic
BanCorp will be held at 2101 Webster Street, 1st Floor, Oakland, California on
May 3, 2001 at 4:00 p.m., for the following purposes:
1. Electing directors to serve for ensuing year;
2. Ratification of the Board of Directors' selection of KPMG LLP as
independent accountants for the year 2001; and
3. Transacting such other business as may properly come before the meeting
or any adjournment thereof.
The close of business on March 6, 2001 has been fixed as the record date for
the determination of shareholders entitled to notice of and to vote at the
meeting or any adjournment thereof.
Whether or not you plan to attend the meeting, you may vote by completing,
signing and returning the enclosed proxy card promptly. Your proxy card may be
revoked at any time prior to the time it is voted.
By Order of the Board of Directors
Herbert C. Foster
President and Chief Executive
Officer
April 3, 2001
(Approximate mailing date of proxy materials)
Place and Time of Annual Meeting
2101 Webster Street, 1st Floor
Oakland, California 94612
4:00 p.m.
PROXY STATEMENT
OF
CIVIC BANCORP
2101 Webster Street
Oakland, California 94612
Annual Meeting of Shareholders
May 3, 2001
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Civic BanCorp (the "Company"), a
California corporation, for use at the Annual Meeting of Shareholders to be
held on May 3, 2001 at 4:00 p.m. at 2101 Webster Street, 1st floor, Oakland,
California, and any adjournment thereof. These proxy materials were mailed to
shareholders on or about April 3, 2001.
PURPOSE OF THE MEETING
The meeting is to be held for the purpose of:
1. Electing fifteen (15) directors (the entire Board of Directors).
2. Ratifying the selection of KPMG LLP as independent public accountants
for the year 2001.
3. Acting upon such other business as may properly come before the meeting
or any adjournment thereof.
GENERAL PROXY STATEMENT INFORMATION
Revocability of Proxies
Any shareholder giving the enclosed proxy has the right to revoke it at any
time before it is exercised by filing with the Company's Secretary, Amy
Haggerty, a written notice of revocation or by presenting, prior to closing of
the polls at the meeting, a duly executed proxy bearing a later date. A
shareholder may also revoke the proxy by attending the meeting and electing to
vote in person at the meeting.
Solicitation of Proxies
This proxy solicitation is made by the Board of Directors of the Company and
the cost of the solicitation is being borne by the Company. Solicitation is
being made by this Proxy Statement and may also be made by employees of the
Company who may communicate with shareholders or their representatives in
person, by telephone or by additional mailings in connection with proxies,
although no employee will be specifically engaged for that purpose and no
employee will receive additional compensation for these activities.
Outstanding Securities and Voting Rights
As of March 6, 2001, the Company had 5,000,578 shares of common stock, no
par value, issued and outstanding, held by approximately 1,500 shareholders.
Only those shareholders of record of the Company's common stock as of the
record date, March 6, 2001 will be entitled to notice of and to vote in person
or by proxy at the meeting or any adjournment thereof, unless a new record
date is set for an adjourned meeting.
Each share of common stock is entitled to one vote at the annual meeting,
except with respect to the election of directors. In elections for directors,
California law provides that a shareholder, or his or her proxy, may
1
cumulate votes; that is, each shareholder has a number of votes equal to the
number of shares owned, multiplied by the number of directors to be elected,
and the shareholder may cumulate such votes for a single candidate, or
distribute such votes among as many candidates as he or she deems appropriate.
However, a shareholder may cumulate votes only for a candidate or candidates
whose names have been properly placed in nomination prior to the voting, and
only if at least one shareholder has given notice at the meeting, prior to the
voting, of his or her intention to cumulate votes for the candidates in
nomination. The proxy holders are given, under the terms of the Company's
proxy, discretionary authority to cumulate votes represented by shares for
which they are named proxy.
In the election of directors, the fifteen (15) candidates receiving the
highest number of votes will be elected. Ratification of the selection of KPMG
LLP as independent public accountants requires the affirmative vote of a
majority of the issued and outstanding shares of common stock represented at
the meeting. Broker non-votes (i.e. shares held by brokers or nominees which
are represented at the meeting but with respect to which the broker or nominee
is not authorized to vote on a particular proposal), are counted as present
for determining whether a quorum is present. In determining whether a proposal
has received the requisite number of affirmative votes, abstentions will have
the effect of a negative vote and broker nonvotes will be disregarded and have
no effect on the outcome of the vote.
If the enclosed proxy is completed in the appropriate spaces, signed, dated
and returned, the proxy will be voted as you specify in the proxy. If no
specification is made, it will be voted FOR the election of directors
nominated by the Board of Directors, and FOR ratification of KPMG LLP as
independent public accountants, and will be voted on such other matters as may
come before the meeting at the discretion of the proxy holders.
The Board of Directors of the Company is not aware of any other matters to
come before the meeting, and recommends that the shareholders vote FOR the
election of the directors nominated by the Board of Directors, and FOR
ratification of KPMG LLP as independent public accountants.
Principal Shareholders
No persons are known to the Board of Directors to have beneficial ownership,
directly or indirectly, of more than 5% of the Company's issued and
outstanding shares of common stock as of March 6, 2001 other than as follows:
Amount of Percent
beneficial of
Name and address of beneficial owner ownership class
------------------------------------ ---------- -------
C. Donald Carr............................................ 1,282,107 25.6%
1001 Dry Creek Road
Napa, CA 94558
Paul R. Handlery.......................................... 387,178 7.7%
C/O Handlery Hotels
180 Geary Street
San Francisco, CA 94108
Banc Funds Company, LLC................................... 339,888 6.8%
208 South LaSalle Street, Suite 1680
Chicago, IL 60684
Dimensional Fund Advisors, Inc. .......................... 253,696 5.1%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
2
Proposals of Shareholders
Under certain circumstances, shareholders are entitled to present proposals
at shareholders' meetings, provided that the proposal is submitted in a timely
manner and in a form that complies with applicable regulations. For any such
shareholder proposal to be included in the proxy statement to be prepared for
next year's annual meeting, the shareholder must submit the proposal prior to
December 4, 2001 in a form that complies with applicable regulations.
Submission of a proposal does not guarantee its inclusion in a proxy statement
or its presentation at a shareholder meeting. Shareholder proposals are
subject to regulation under Federal securities laws.
Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than ten percent of
a registered class of the Company's equity securities, to file with the
Securities and Exchange Commission initial reports of ownership and reports of
changes in ownership of common stock and other equity securities of the
Company. Officers, directors and greater than ten percent shareholders are
required by SEC 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 and written representations that no other
reports were required, during the year ended December 31, 2000 all Section
16(a) filing requirements applicable to its officers, directors and greater
than ten percent beneficial owners were complied with.
1. PROPOSAL ONE
ELECTION OF DIRECTORS
The Bylaws of the Company provide that the number of directors shall be not
less than eleven (11) nor more than twenty (20). By resolution the Board of
Directors has fixed the number of directors at fifteen (15).
Nominees to the Board of Directors
The procedure governing nominations for election to the Board of Directors
is set forth in Sections 3.19 and 3.20 of the Bylaws, which provide as
follows:
Section 3.19. NOMINATIONS FOR ELECTION OF DIRECTORS. Nominations for
election of members of the Board of Directors may be made by the Board of
Directors (or the nominating committee of the Board of Directors) or by any
holder of any outstanding class of capital stock of the corporation
entitled to vote for the election of Directors. Notice of Intention to make
any nominations (other than by the Board of Directors or its nominating
committee) must be made in writing and be delivered or mailed to the
President of the corporation by the later of the close of business: (i) 90
days prior to any meeting of shareholders at which Directors will be
elected or (ii) in case of an annual meeting of shareholders, not later
than 90 days before the anniversary of the previous year's annual meeting.
Such notification must contain the following information to the extent
known to the notifying shareholder: (a) the name and address of each
proposed nominee; (b) the principal occupation of each proposed nominee;
(c) the number of shares of capital stock of the corporation owned by each
proposed nominee; (d) the name and residence address (or business address,
if the notifying shareholder is not a natural person) of the notifying
shareholder; (e) the number of shares of capital stock of the corporation
owned by the notifying shareholder; (f) the number of shares of capital
stock of any bank, bank holding company, savings and loan association or
other depository institution owned beneficially by the nominees and by the
notifying shareholder and the identities and locations of any such
institutions; (g) whether the proposed nominee has ever been convicted of
or pleaded nolo contendere to any criminal offense involving dishonesty or
breach of trust, filed a petition in bankruptcy or been adjudged bankrupt;
and (h) a statement regarding the nominee's compliance with
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Article Three, Section 3.20 of these Bylaws. The notification shall be
signed by the nominating shareholder and by each nominee, and shall be
accompanied by a written consent to such nomination from each proposed
nominee. Nominations not made in accordance with these procedures shall be
disregarded by the Chairman of the meeting, and upon his instructions, the
inspectors of the election shall disregard all votes cast for each such
nominee. The foregoing requirements do not apply to the nomination of a
person to replace a proposed nominee who has become unable to serve as a
Director between the last day for giving notice in accordance with this
paragraph and the date of election of Directors if the procedure called for
in this paragraph was followed with respect to the nomination of the
proposed nominee. A copy of Article Three, Section 3.19 of these Bylaws
will be provided to any shareholder upon receipt of a written request
thereof, addressed to the President of the corporation.
Section 3.20. QUALIFICATIONS OF DIRECTORS. No person shall be a member of
the Board of Directors (a) who is a director, officer, employee, agent,
nominee, attorney or other representative for any other financial
institution, lender or bank holding company, or affiliate or subsidiary
thereof, engaged in business or that proposes to engage in business,
directly or through any parent company, subsidiary or affiliate, in
California or Nevada, or (b) who has, or has been or is the nominee of
anyone who has, any contract, arrangement or understanding with any other
financial institution, lender or bank holding company, or affiliate or
subsidiary thereof, engaged in business or that proposes to engage in
business, directly or through any parent company, subsidiary or affiliate,
in California or Nevada, or with any officer, director, employee, agent,
nominee, attorney or other representative thereof, pursuant to which he or
she will disclose or in any way utilize information obtained as a director
for purposes other than for the benefit of this corporation or that he or
she will, directly or indirectly, attempt to effect or encourage any action
of this corporation for the benefit of any person or entity other than this
corporation, or (c) who has not owned at least $1,000 fair market value of
the corporation's Common Stock for at least 90 days prior to the date of
his or her election as a director.
Subparagraph (c) shall not apply to an individual hired by the
corporation's Board of Directors to be President and Chief Executive
Officer of this corporation until such time as that individual has been
employed by the corporation for a period of two years.
The Board of Directors of this corporation or a committee thereof, shall
make the determination whether any person who seeks to become a director
complies with the provisions of this Section 3.20.
Each of the Board's nominees to the Board of Directors of the Company has
served as a director of the Company and its subsidiary CivicBank of Commerce
("Bank") since 1984 except Herbert C. Foster, who was appointed in March,
1993, Wayne S. Doiguchi who was appointed in May, 1998, John E. Lindstedt, who
was appointed in 1999, Gordon Gravelle and Craig Anderson who were appointed
in May, 2000, and James P. Green DDS who is being nominated for the first
time.
The 15 persons named below will be nominated for election as directors to
serve until the next Annual Meeting and until their successors are duly
elected and qualified. Votes by the Company's proxy holders will be cast in
such a way as to effect the election of all nominees or as many as possible
under the rules of cumulative voting. The Board presently has no knowledge
that any of the nominees will be unable or unwilling to serve. There are no
family relationships among any of the nominees for director or any of the
executive officers of the Company.
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The following list of directors provides information with respect to each
person nominated and recommended to be elected by the current Board of
Directors of the Company. Reference is made to the section "Security Ownership
of Management" for information pertaining to stock ownership of the nominees.
Director
Name Age Since Business Experience During Past Five Years
---- --- -------- -----------------------------------------------
David L. Cutter 72 1984 Former chairman of Cutter Laboratories, Inc.;
chairman of Rossmoor Medical Center, director
of CHAD Therapeutics, Inc.; member of American
Institute of Certified Public Accountants.
Edward G. Mein 71 1984 Owner of Mein Investment Co., a real estate
management, development and lending company.
Edward G. Roach 62 1984 President of ER Development, a real estate
development firm.
James C. Johnson 67 1984 Chairman of JAE Properties, Inc., a real estate
broker, property manager, developer and
syndicator.
Dale D. Reed 69 1984 Chairman and chief executive officer of Buran &
Reed, Inc., a diversified investment company;
vice chairman of the San Leandro Planning
Commission, and a past president and current
trustee of the San Leandro Scholarship
Foundation; director of Goodwill Industries of
East Bay; chairman of the San Leandro
Industrial & Technology Roundtable.
Barclay Simpson 79 1984 Chairman of Simpson Manufacturing Co., Inc., a
manufacturer of construction products; owner of
Barclay Simpson Fine Arts Gallery in Lafayette;
director of Calendar-Robinson Insurance Co.
San Francisco; former director and president of
the Bay Area Rapid Transit District (BART);
trustee of the California College of Arts and
Crafts and the University Art Museum, Berkeley.
C. Donald Carr 69 1984 Chairman of the Company since July, 1995; owner
of The Carr Company, a real estate brokerage
and development business.
Herbert C. Foster 61 1993 President and chief executive officer of the
Company and Chairman and Chief Executive
Officer of the Bank since March, 1993;
president and chief executive officer of
Pacific Bay Bank, San Pablo, CA during 1992 and
president of University National Bank & Trust
Company, Palo Alto, CA from 1983 to 1991.
John W. Glenn 72 1984 Founder, consultant, and retired CEO of John
Glenn Adjusters and Administrators, Inc.;
former director and president of San Francisco
Bay Area Rapid Transit District (BART); member
President's Council, Southeast Missouri State
University; past president of East Bay Claims
Association; past president of California
Association of Independent Insurance Adjusters.
Paul C. Kepler 57 1984 President of The Kepler Co., a private
investment firm; former chief executive officer
of LINC Capital Corporation, an equipment
leasing and real estate financing company from
1986 to 1993; owner of the Seascape Sports
Club; director of the United States Tennis
Association (USTA)--Northern California
Section.
Wayne S. Doiguchi 51 1998 President and CEO of Park Investment Company, a
venture capital company since 1993; president
of Japanese American Chamber of Commerce; Board
of Trustees, Yu-Ai-Kai, Community Senior
Service; director, Community Youth Service;
director San Jose Sports Authority.
5
Director
Name Age Since Business Experience During Past Five Years
---- --- -------- ----------------------------------------------
John E. Lindstedt 66 1999 President of the Bank from February, 1994
through January 1999; formerly with Wells
Fargo Bank, N.A., San Francisco since 1965;
executive vice president in capacity of senior
lending officer of Corporate Banking Group
from 1988 to 1994.
Gordon Gravelle 49 2000 Director of East County Bank from 1986 through
March, 2000. Owns and operates Suncrest Homes
a real estate development company; trustee of
Sutter Delta Medical Center.
Craig Andersen 50 2000 Director of East County Bank from 1998 through
February 2000. Mr. Andersen is a partner in
the law firm of Andersen, Bonnifield & Cottle
in Concord. He is also the chairman of the
Board of Corey Delta Construction and the
owner of Trans Pacific Golf, Inc.
James P. Green DDS 59 Nominee Director of East County Bank from 1986 through
March, 2000. Operates a dentistry practice in
Antioch, California.
The enclosed proxy will be voted in favor of the election of the above-named
nominees as directors, unless authority to vote for one or more directors is
withheld. If any of the nominees should be unable or decline to serve, which
is not anticipated, discretionary authority is reserved for the proxy holders
to vote for a substitute, to be designated by the present Board of Directors.
Certain Committees of the Board of Directors
The Board of Directors of the Company has an Audit Committee, composed of
John W. Glenn (Chairman), David L. Cutter, and Craig Andersen. The Audit
Committee met seven times in 2000 for the purpose of reviewing overall
operations of the Company. As part of its duties, the Audit Committee examines
the results of the financial statements and reports prepared by the Company's
independent auditors and makes recommendations thereon to the Board of
Directors.
The Board of Directors of the Company has a Strategic Options Committee
whose members in 2000 were Wayne Doiguchi (Chairman), C. Donald Carr, John
Lindstedt, Gordon Gravelle and Barclay Simpson. The Strategic Options
Committee met six times in 2000 to consider strategic alternatives available
to the Company.
The Board of Directors of the Company has a Personnel Committee whose
members in 2000 were Barclay Simpson (Chairman), David L. Cutter, James C.
Johnson, Edward Mein and Edward Roach. The Personnel Committee met four times
in 2000 to consider the hiring and compensation of officers and employees of
the Company and the Bank. The Personnel Committee acted as Stock Option
Committee under the Stock Option Plan and in this capacity granted stock
options under the Stock Option Plan to officers and other employees. The
Personnel Committee also functions as the compensation committee and as the
nominating committee in connection with the election of directors. The
Personnel Committee will consider nominees recommended by shareholders if such
recommendations are accompanied by complete biographical and financial
statements of the nominee in such form as the Personnel Committee shall
require and, for a recommendation made in connection with an annual meeting of
shareholders, the recommendation is submitted by November 30 of the preceding
year.
The Board of Directors of the Bank has an Audit Committee and Personnel
Committee. These committees consist of the same members as indicated above for
the Company and met the same number of times. Each committee had duties at the
Bank level similar to those for committees of the Company.
The Bank also has a Directors Marketing Committee consisting of Craig
Andersen (Chairman), James P. Green DDS and Dale Reed. The Marketing Committee
was formed in April 2000 and met two times to consider marketing initiatives
appropriate to the Company.
6
In addition, the Board of Directors of the Bank has a Directors' Loan
Committee composed of Dale D. Reed (Chairman), C. Donald Carr, Herbert C.
Foster, Wayne Doiguchi, James Johnson, Paul C. Kepler John Lindstedt and
Edward G. Mein,. This committee met twenty-six times in 2000. The function of
the Directors' Loan Committee is to review certain loans and recommend
ratification, when appropriate, to the Board of Directors, and in certain
cases to review and approve or disapprove loan applications when the amount
requested is above certain thresholds or the applicant is affiliated with the
Company or the Bank. The members of the Directors' Loan Committee also serve
as the members of the Risk Management Committee. The Risk Management Committee
met twelve times in 2000 and is responsible for monitoring the Bank's
investment activities and the overall interest rate risk profile.
Neither the Company nor the Bank has a separate compensation committee or
nominating committee; the Personnel Committee of each serves these functions.
Meetings of the Board of Directors
The Board of Directors of the Bank met in 2000 in regular meetings for a
total of nine meetings. The Board of Directors of the Company held nine
regular meetings during 2000. No nominee for director, while serving as a
director of the Bank and the Company during 2000, attended fewer than 75% of
the total number of meetings of the Board and of the committees of which he
was a member.
Director Fees
In 2000 the Bank paid fees to non-employee directors for their services as
directors. The payment schedule provides for non-employee directors to be paid
a quarterly retainer of $2,500 with the Chairman to receive $3,000 per
quarter. Additionally, $3,000 per year will be paid to each director if the
Company achieves the business plan and such amounts were paid to the Directors
for 2000, 1999 and 1998. Chairmen of the Audit, Loan and Personnel Committees
were paid an additional $350 per committee meeting attended. Committee members
were paid $250 per meeting attended. Directors who were executive officers
were not paid director fees in 2000. Total director fees paid in 2000 were
$190,400.
Executive Officers
The following are the names of the principal executive officers of the
Company and the Bank and certain information concerning each of them:
Name and Age Business Experience During Past Five Years
------------ --------------------------------------------------------
Herbert C. Foster, 61 President and Chief Executive Officer of the Company and
Chairman and Chief Executive Officer of the Bank since
March, 1993; President and Chief Executive Officer of
Pacific Bay Bank, San Pablo, CA during 1992 and
President of University National Bank & Trust Company,
Palo Alto, CA from 1983 to 1991.
Steven E. Shelton, 40 Appointed President of the Bank effective March 1, 2001.
Senior Vice President and Regional Manager of the Contra
Costa Region since March 1, 1998, Mr. Shelton has been
with CivicBank of Commerce for ten years.
Gerald J. Brown, 49 Executive Vice President and Chief Financial Officer of
the Company and of the Bank since March 1995; Vice
President and Controller of the Company and the Bank
from July 1993 to March 1995, Vice President--Controller
of Comerica Bank, California from November 1986 to June
1993.
7
Security Ownership of Directors and Management
The following table sets forth the number of the Company's common shares
owned, as of March 6, 2001, by the present directors who are also among
management's nominees for reelection, by the nominee who is currently a
director, by executive officers and by the directors, nominees and executive
officers of the Company as a group:
Shares of Common Stock Beneficially Owned
Percent of
Name of Beneficial Owner Number(1) Class
------------------------ --------- ----------
Craig Andersen.................................... 220 .00%
Gerald J. Brown................................... 26,474(2) .51
C. Donald Carr.................................... 1,288,885(3) 24.93
David L. Cutter................................... 25,587(4) .49
Wayne S. Doiguchi................................. 8,009(5) .15
Herbert C. Foster................................. 181,914(6) 3.52
John W. Glenn..................................... 42,265(7) .82
Gordon Gravelle................................... 2,220 .04
James P. Green.................................... 4,000 .08
James C. Johnson.................................. 40,299(8) .78
Paul C. Kepler.................................... 41,251(9) .80
John E. Lindstedt................................. 44,630(10) .86
Edward G. Mein.................................... 104,162(11) 2.02
Dale D. Reed...................................... 68,137(12) 1.32
Edward G. Roach................................... 37,572(13) .73
Steven E. Shelton................................. 9,019(14) .17
Barclay Simpson................................... 100,096(15) 1.94
All directors, nominees and executive officers as
a group (17 persons)............................. 2,020,740 39.17%
- --------
(1) Includes all shares beneficially owned, whether directly or indirectly,
individually or together with associates. Includes any shares owned,
whether jointly or as community property with a spouse and any shares of
which beneficial ownership may be acquired within 60 days of March 6,
2001 by the exercise of stock options.
(2) Includes 5,886 shares which may be acquired within 60 days of March 6,
2001 by the exercise of stock options.
(3) Includes 1,282,107 shares held by Mr. Carr jointly with his spouse and
6,778 shares which may be acquired within 60 days of March 6, 2001 by the
exercise of stock options.
(4) Includes 6,778 shares which may be acquired within 60 days of March 6,
2001 by the exercise of stock options.
(5) Includes 7,779 shares which may be acquired within 60 days of March 6,
2001 by the exercise of stock options.
(6) Includes 81,257 shares which may be acquired within 60 days of March 6,
2001 by the exercise of stock options.
(7) Includes 30,986 shares held by Mr. Glenn jointly with his spouse, 4,501
shares held in trust, John W. Glenn, Trustee, and 6,778 shares which may
be acquired within 60 days of March 6, 2001 by the exercise of stock
options.
(8) Includes 33,521 shares held by Mr. Johnson jointly with his spouse and
6,778 shares which may be acquired within 60 days of March 6, 2001 by the
exercise of stock options.
(9) Includes 6,778 shares which may be acquired within 60 days of March 6,
2001 by the exercise of stock options.
8
(10) Includes 4,630 shares which may be acquired within 60 days of March 6,
2001 by the exercise of stock options
(11) Includes 6,778 shares which may be acquired within 60 days of March 6,
2001 by the exercise of stock options.
(12) Includes 6,778 shares which may be acquired within 60 days of March 6,
2001 by the exercise of stock options.
(13) Includes 6,778 shares which may be acquired within 60 days of March 6,
2001 by the exercise of stock options.
(14) Includes 8,083 shares which may be acquired within 60 days of March 6,
2001 by the exercise of stock options.
(15) Includes 93,318 shares held by Mr. Simpson jointly with his spouse and
6,778 shares which may be acquired within 60 days of March 6, 2001 by the
exercise of stock options.
Change in Control
The Board of Directors is not aware of any arrangements, including the
pledge by any person of shares of the Company, the operation of which may at a
subsequent date result in a change in control of the Company.
Executive Compensation
The following table sets forth the compensation of the named executive
officers for each of the Company's last three fiscal years whose total annual
cash compensation exceeded $100,000.
Summary Compensation Table
Annual Compensation Long Term
----------------------- Compensation All Other
Name and Principal Position Year Salary Bonus(1) Options Compensation(2)
- --------------------------- ---- ----------- ----------- ------------ ---------------
Herbert C. Foster..................... 2000 $190,000.00 $142,200.00 None $212,723.00
President and Chief Executive Officer 1999 190,000.00 105,444.00 None 304,260.00
of the Company and Chairman and Chief 1998 190,000.00 130,700.00 None 125,526.52
Executive Officer of the Bank
Steven E. Shelton..................... 2000 135,000.00 101,571.00 5,250 shs. 24,335.00
President of the Bank 1999 110,000.00 66,296.00 5,595 shs. 14,054.00
1998 100,000.00 34,159.00 6,063 shs. 11,656.00
Gerald J. Brown....................... 2000 110,000.00 31,633.00 7,875 shs. 20,600.00
Executive Vice President and 1999 100,000.00 21,140.00 7,179 shs. 10,020.00
Chief Financial Officer of the 1998 90,000.00 18,000.00 None 8,980.00
Company and the Bank
- --------
(1) Represents cash bonus in year earned.
(2) Represents Company contributions to the Profit Sharing Retirement Plan,
Company matching contributions under the 401(k) Plan, imputed value of
life insurance premiums paid by the Company, contributions to their
respective Non-Qualified Deferred Compensation Plan for Messrs. Shelton
and Brown of $10,000 each, and for Mr. Foster, the expense associated with
a salary continuation plan of $189,726 in 2000 and $101,200 in 1999 and
1998 and the gain on stock options of $180,198 in 1999. Pursuant to a
deferred compensation agreement dated December 1, 1996 between Mr. Foster
and the Bank, Mr. Foster is entitled to salary continuation benefits of
$100,000 per year for 15 years commencing at retirement or if there is a
change in control as defined within the agreement. Messrs. Foster and
Shelton receive automobile allowances in connection with the performance
of their duties.
9
The Company pays the cost of premiums on life insurance policies insuring
all employees, including executive officers, in amounts approximating two
times their annual salaries. The policies are payable to the officers'
designated beneficiaries. A portion of the premium paid by the Bank is imputed
as income for tax purposes for the executive officers. Such amounts are
included in the compensation table above.
Incentive Reserve/Bonus Plan
The Bank has an Incentive Reserve/Bonus Plan for its vice presidents and
higher-ranking officers (19 persons as of December 31, 2000), including
Messrs. Foster, Shelton and Brown. The Bank paid bonuses of $390,086 under
this plan for 2000.
The following table summarizes all stock options granted executive officers
in 2000.
Option Grants in Last Fiscal Year
Potential Realizable
Value at Assumed
Annual Rates
of Stock Price
Appreciation for
Individual Grants Option Term
---------------------------------------------- --------------------
% of Total
Options Granted Exercise or
Options to Employees in Base Price Expiration
Name Granted Fiscal Year ($/Sh) Date 5% ($) 10% ($)
- ---- ------- --------------- ----------- ---------- --------- ----------
Steven E. Shelton....... 5,250 3.9% $13.10 2010 43,000 110,000
Gerald J. Brown......... 7,875 5.8% $13.10 2010 65,000 164,000
The following table summarizes the number of exercisable and unexercisable
options held by the named officers at December 31, 2000.
Aggregated Options/Exercises in Last Fiscal Year
and Fiscal Year End Options Values
Value of
Number of unexercised
unexercised in-the-money
options at options at
12-31-00 12-31-00
Shares acquired Value realized Exercisable/ Exercisable/
Name on exercise (#) ($) unexercisable unexercisable
- ---- --------------- -------------- ------------- ----------------
Herbert C. Foster....... None None 75,576/14,512 $715,467/$72,464
Steven E. Shelton....... None None 4,123/14,700 9,177/ 43,611
Gerald J. Brown......... 3,000 $20,964 4,014/42,143 24,939/ 42,143
Profit Sharing Retirement Plan
The Board of Directors of the Bank has adopted a Profit Sharing Retirement
Plan ("PSRP") available to all employees. The PSRP is intended to provide a
tax-deferred compensation and savings vehicle to its participants, and has
been ruled by the Internal Revenue Service to comply with requirements for the
deductibility of contributions for tax purposes. The PSRP provides for three
types of contributions: voluntary contributions by employees; partial matching
contributions on a percentage basis determined by the Bank (set at 50% for
2000); and profit-sharing contributions by the Bank at the discretion of its
Board of Directors based on earnings of the Bank. The Board did allocate a
profit sharing contribution of 4.00% of net income to the PSRP for 2000.
Employee contributions are fully vested at all times. Employees become
vested in profit-sharing contributions and Bank matching contributions at a
rate of 20% per year beginning two years after employment.
10
Contributions are paid to a trustee who receives and pays funds, safeguards
and values trust assets, invests trust funds and carries out the directions of
the Administrative Committee. The trustee under the PSRP is Wells Fargo Bank.
The Administrative Committee consists of members appointed by the Board of
Directors and acts as administrator of the PSRP. The committee may retain an
investment manager or other advisors as it considers necessary to discharge
its duties.
The trustees and the Administrative Committee are subject to fiduciary
duties imposed on them by the Employee Retirement Income Security Act of 1974
(ERISA) and the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA).
Participants may begin receiving benefits under the PSRP upon reaching age 59-
1/2, or earlier upon a showing of hardship. A participant may elect to receive
benefits in a lump sum, in installments, as an annuity providing for
guaranteed income for a period certain or in any combination of the foregoing
methods. Company contributions credited in 2000 to the PSRP for the benefit of
the named executive officers are included in the summary compensation table
under the column entitled "All Other Compensation."
Transactions with Directors and Officers
The Bank has had in the ordinary course of business, and expects to have in
the future, banking transactions with certain of its directors, officers,
shareholders, and their associates, including transactions with corporations
of which such persons are directors, officers or controlling shareholders. In
the opinion of management, such transactions involving loans have been and
will be entered into with such persons in accordance with applicable laws and
(1) in the ordinary course of business (2) on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with other persons, and (3) on terms not involving
more than the normal risk or collectability or presenting other unfavorable
features. For additional reference see Note 10 to the Consolidated Financial
Statements for the year ended December 31, 2000 attached to and a part of
Civic BanCorp Form 10-K for fiscal year ended December 31, 2000, and included
in the Company's Annual Report to Shareholders.
Compensation Committee Report
The Compensation Committee in accordance with applicable requirements has
provided the following report.
REPORT ON EXECUTIVE COMPENSATION
BY THE PERSONNEL COMMITTEE OF THE BOARD OF DIRECTORS
The Company's executive compensation is recommended by the Personnel
Committee and approved by the Board of Directors. The Committee usually meets
a minimum of three times per year. Salaries are reviewed and determined at the
Committee meeting in January. Any increases are approved by the Board of
Directors and are effective March 1. Incentive bonus awards are also reviewed
and determined at the same meeting. Stock options are generally awarded in
January. Compensation for a newly-hired executive may be established by the
Committee at a special meeting.
The compensation policy of the Company is designed to attract and retain
highly qualified personnel and to provide meaningful incentives for measurable
performance. The components of executive compensation include base salary, an
incentive bonus plan, non-plan bonuses, profit sharing contributions and stock
options.
The Company's general compensation strategy for executive officers including
the Chief Executive Officer is to pay annual and long term compensation which
is competitive with other executives compensation of peer group companies,
adjusted for the Company's financial condition and performance relative to
that peer group. In determining compensation levels, the Company obtains
salary survey information regarding executive salary levels for comparable
companies through many sources, including banking industry associates,
published surveys and independent compensation consultants.
11
The Company has an annual incentive bonus plan for executives and certain
officers the size of which is based on achieving certain financial performance
goals, primarily the return on assets, which are established by the Personnel
Committee and approved by the Board of Directors as part of the annual
budgeting process. Other criteria used to determine incentive awards include
asset quality and earnings results. The Board also considers professional
experience and past and potential future contributions to the Company. Each
executive's percentage of an incentive bonus pool is at the discretion of the
CEO and is payable subject to satisfactory performance and contingent on
approval of the Board of Directors after the calendar year is complete. The
maximum amount any participant can earn from the incentive bonus plan is equal
to or less than 100% of the participant's base salary.
Incentive plan bonuses were paid in 1998, 1999 and 2000, based upon the
Company's return on assets for those years. The size of the bonus pool is
directly tied to the Company's return on assets capping at a 1.70 ROA.
The total cash compensation including cash bonuses paid to the Company's
executive officers for 1998, 1999 and 2000 ranked just above average for the
total cash compensation paid to executive officers for banks in our asset size
in California.
Executive officers are permitted to participate in other Company and Bank
employee benefit plans including the Profit Sharing Retirement Plan.
Long term incentive awards consisting of stock options are considered to be
a substantial portion of the compensation package of the executive officers
and provide additional incentive to increase shareholder value. In 2000 and
1999, stock options were awarded to Messrs. Shelton and Brown and to Mr.
Shelton in 1998.
Barclay Simpson, Chairman
David L. Cutter
James C. Johnson
Edward G. Mein
Edward G. Roach
Personnel Committee Interlocks and Insider Participation
No member of the Personnel Committee is a former or current officer or
employee of the Company or its subsidiaries and no director of the Company has
any relationship or transaction which would be disclosable under SEC rules.
12
Performance Graph
The following graph compares the stock performance of the Company to the
performance of the Nasdaq Bank Stock Index and the Nasdaq U.S. Markets index
over the past five year period.
CIVIC BANCORP
TOTAL RETURN PERFORMANCE
[PERFORMANCE GRAPH APPEARS HERE]
12/31/95 12/31/96 12/31/97 12/31/98 12/31/99 12/31/00
-------- -------- -------- -------- -------- --------
Civic BanCorp 100.0 136.7 273.7 193.0 229.1 248.8
Nasdaq US Markets 100.0 123.0 150.7 212.5 394.9 237.6
Nasdaq Bank Stocks 100.0 132.0 221.1 219.6 326.1 241.1
13
2. PROPOSAL TWO:
RATIFICATION OF SELECTION OF INDEPENDENT
PUBLIC ACCOUNTANTS
At the 2001 Annual Meeting of Shareholders the following resolution will be
subject to ratification by a simple majority vote of shares represented at the
meeting and entitled to vote:
RESOLVED, that the selection of KPMG LLP as the independent certified
public accountants of Civic BanCorp and its subsidiary, CivicBank of
Commerce, for the fiscal year ending December 31, 2001 is hereby ratified.
If ratification is not achieved, the selection of an independent certified
public accountant will be reconsidered and made by the Board of Directors.
Even if selection is ratified, the Board of Directors reserves the right and,
in its discretion, may direct the appointment of any other independent
certified public accounting firm at any time if the Board decides that such a
change would be in the best interests of the Company and its shareholders.
Representatives of KPMG LLP will attend the meeting and will be available to
respond to appropriate questions. KPMG LLP will have an opportunity to make a
statement if they so desire.
KPMG LLP has served as the Company's independent certified public
accountants since 1994. The Company engaged KPMG LLP as its independent public
accountants by letter dated June 14, 1994 between KPMG LLP and the Audit
Committee of the Board of Directors. The Company has had no disagreements with
its accountants with respect to accounting principles or practices of
financial statement disclosure.
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The audit committee operates under a written charter, which specifies among
other things, the scope of its responsibilities and how those responsibilities
are to be performed. A copy of this charter is included in this Proxy
Statement as Appendix A. Members of the Audit Committee are "independent" as
defined by the Nasdaq Stock Market, the listing standard applicable to the
Company.
The Audit Committee reviews the Company's financial reporting process on
behalf of the Board of Directors. Management has the primary responsibility
for the financial statements and the reporting process. The Company's
independent auditors, KPMG LLP, are responsible for expressing an opinion on
the conformity of the Company's audited financial statements to accounting
principles generally accepted in the United States.
In this context, the Audit Committee has reviewed and discussed with
management and the independent auditors the audited financial statements. The
Audit Committee has also discussed with the independent auditors the matters
required to be discussed by Statement on Auditing Standards No. 61, as amended
("Communication with Audit Committees"), and Statement on Auditing Standards
No. 1 ("Independence Discussions with Audit Committee"). Further the Committee
has considered whether the provisioning non-audit service is compatible with
maintaining the independence of KPMG LLP.
In reliance on the aforementioned reviews and discussions, the Audit
Committee has recommended to the Board of Directors that the audited financial
statements be included in the Company's Annual Report on SEC Form 10-K for the
fiscal year ended December 31, 2000, for filing with the SEC.
John W. Glenn, Chairman
Craig Andersen
David L. Cutter
14
AUDIT FEES
Professional fees billed by KPMG LLP for services related to the audit of
the Company's 2000 annual financial statements and the reviews of the
quarterly financial statements included in the Company's Form 10-Q's for the
year 2000 totaled $124,200.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
The Company did not engage KPMG LLP to provide financial information systems
design and implementation services to the Company during the year 2000.
ALL OTHER FEES
Other fees billed by KPMG LLP in the year 2000 for non-audit services
included fees for internal audit services of $105,000, merger related
assurance and tax services of $21,300 and Federal and State income tax return
preparation services of $19,650.
The Board of Directors recommends a vote FOR approval of Proposal Two.
3. OTHER BUSINESS
If any other matters come before the meeting, not referred to in this Proxy
Statement, including matters incident to the conduct of the meeting, the proxy
holders will vote the shares represented by proxies in accordance with their
best judgment. Management is not aware of any other business to come before
the meeting and, as of the date of the preparation of this Proxy Statement, no
shareholder has submitted to management any proposal to be acted upon at the
meeting.
Additional Information and Documents Incorporated by Reference.
The Report of the Personnel Committee, the Report of the Audit Committee,
the Performance Graph, the Audit Committee Charter contained in Appendix A to
this Proxy statement and the statement of independence of the Audit Committee
members referred to in the Report of the Audit Committee are not to be
considered as incorporated by reference into any other filings which the
Company makes with the Securities and Exchange Commission under the Securities
Act of 1933, as amended, or the Securities Exchange Act of, 1934 as amended.
These portions of this proxy statement are not a part of any of those filings
unless otherwise stated in those filings.
The Company has sent to each shareholder entitled to vote at the annual
meeting its 2000 Form 10-K as filed with the Securities and Exchange
Commission containing financial statements, including the report of its
independent public accountants.
15
Appendix A
CIVICBANK OF COMMERCE
AUDIT COMMITTEE CHARTER
I. Audit Committee Purpose
- ---------------------------
The Audit Committee is appointed by the Board of Directors to assist the
Board in fulfilling its oversight responsibilities. The Audit
Committee's primary duties and responsibilities are to:
. Monitor the integrity of the Company's financial reporting process and
systems of internal controls regarding finance, accounting, and legal
compliance.
. Monitor the independence and performance of the Company's independent
auditors and internal auditing department.
. Provide an avenue of communication among the independent auditors,
management, the internal auditing department, and the Board of
Directors.
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 ability to retain, at the Company's expense,
special legal, accounting, or other consultants or experts it deems
necessary in the performance of its duties.
II. Audit Committee Composition and Meetings
- --------------------------------------------
Audit Committee members shall meet the requirements of the NASD Exchange.
The Audit Committee shall be comprised of three or more directors as
determined by the Board, each of whom shall be independent nonexecutive
directors, free from any relationship that would interfere with the
exercise of his or her independent judgment. All members of the
Committee shall have a basic understanding of finance and accounting and
be able to read and understand fundamental financial statements, and at
least one member of the Committee shall have accounting or related
financial management expertise.
Audit Committee members shall be appointed by the Board on recommendation
of the Personnel Committee. If an audit committee Chair is not
designated or present, the members of the Committee may designate a Chair
by majority vote of the Committee membership.
The Committee shall meet at least four times annually, or more frequently
as circumstances dictate. The Audit Committee Chair shall prepare and/or
approve an agenda in advance of each meeting. The Committee should meet
privately in executive session at least annually with management,
including the management liaison for internal audit, the independent
auditors, and as a committee to discuss any matters that the Committee or
each of these groups believe should be discussed. In addition, the
Committee, its Chair, or a Committee or Committee member designated by
the Chair should communicate with management and the independent auditors
quarterly to review the Company's financial statements and significant
findings based upon the auditors limited review procedures.
III. Audit Committee Responsibilities and Duties
- ------------------------------------------------
Review Procedures
-----------------
1. Review and reassess the adequacy of the Charter at least annually.
Submit the charter to the Board of Directors for approval and have
the document published at least every three years in accordance with
SEC regulations.
2. Review the Company's annual audited financial statements prior to
filing or distribution. Review should include discussion with
management and independent auditors of significant issues regarding
accounting principles, practices, and judgments.
3. In consultation with the management, the independent auditors, and
the internal auditors, consider the integrity of the Company's
financial reporting processes and controls. Discuss significant
financial risk exposures and the steps management has taken to
monitor, control, and report such exposures. Review significant
findings prepared by the independent auditors and the internal
auditing department together with management's response.
4. Review with financial management 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
filing or distribution. Discuss any significant changes to the
Company's accounting principles and any items required to be
communicated by the independent auditors in accordance with SAS 61
(see item 9). The Chair of the Committee, or in his absence, another
Audit Committee member may represent the entire Audit Committee for
purposes for this review.
Independent Auditors
--------------------
5. The independent auditors are ultimately accountable to the Audit
Committee and the Board of Directors. The Audit Committee shall
review the independence and performance of the auditors and annually
recommend to the Board of Directors the appointment of the
independent
auditors or approve any discharge of auditors when circumstances
warrant.
6. Approve the fees and other significant compensation to be paid to the
independent auditors.
7. On an annual basis, the Committee should review and discuss with the
independent auditors all significant relationships they have with the
Company that could impair the auditors' independence.
8. Review the independent auditors audit plan - discuss scope, staffing,
locations, reliance upon management, and internal audit and general
audit approach.
9. Prior to releasing the year-end earnings, discuss the results of the
audit with the independent auditors. Discuss certain matters required
to be communicated to audit committees in accordance with AICPA SAS
61.
10. Consider the independent auditors' judgments about the quality and
appropriateness of the Company's accounting principles as applied in
its financial reporting.
Internal Audit Department and Legal Compliance
----------------------------------------------
11. Review the budget, plan, changes in plan, activities, organizational
structure, and qualifications of the internal audit department, as
needed.
12. Review the appointment, performance, and replacement of the senior
internal audit executive.
13. Review significant reports prepared by the internal audit department
together with management's response and follow-up to these reports.
14. On at least an annual basis, review with the Company's counsel, any
legal matters that could have a significant impact on the
organization's financial statements, the Company's compliance with
applicable laws and regulations, and inquiries received from
regulators or governmental agencies.
Other Audit Committee Responsibilities
--------------------------------------
15. Annually prepare a report to shareholders as required by the
Securities and Exchange Commission. The report should be included in
the Company's annual proxy statement.
16. Perform any other activities consistent with this Charter, the
Company's by-laws, and governing law, as the Committee or the Board
deems necessary or appropriate.
17. Maintain minutes of meetings and periodically report to the Board of
Directors on significant results of the foregoing activities.
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Civic BanCorp
Proxy for the Annual Meeting of Shareholders to Be Held
The undersigned hereby appoints Wayne Doiguchi, Edward G. Roach and C.
Donald Carr, and each of them, Proxies, with the full power of substitution to
vote all of the stock of the undersigned at the Annual Meeting of Shareholders
of Civic BanCorp to be held on May 3rd, 2001 at 4:00 p.m. at 2101 Webster
Street, 1st floor, Oakland, California, and at any adjournment thereof, in the
manner indicated and in their discretion on any other business which may
properly come before said meeting, all in accordance with and as more fully
described in the Notice and accompanying Proxy Statement for said meeting,
receipt of which is hereby acknowledged. The share represented by this Proxy
shall be voted as specified below.
(Continued, and to be marked, dated and signed, on the reverse side)
1. ELECTION OF DIRECTORS:
FOR the WITHHOLD I plan to
election as authority (as to attend the
Directors of all all nominees 2. Ratification of selection of KPMG, LLP as FOR AGAINST ABSTAIN meeting
nominees. listed independent accountants for 2001. [_] [_] [_] [_]
[_] [_]
Instruction: To withhold authority to vote for any individual nominee(s),
strike a line through that nominee's name in the list below:
Craig Andersen, C. Donald Carr, David L. Cutter, Wayne S. Doiguchi,
Herbert C. Foster, John W. Glenn, Gordon Gravelle, James P. Green DDS,
James C. Johnson, John E. Lindstedt, Paul C. Kepler, Edward G. Mein, 3. OTHER MATTERS. In their discretion, upon
Dale D. Reed, Edward G. Roach and Barclay Simpson. such matters as may properly come before the
meeting; at this time the Board of Directors
is not aware of any other matters that will
be presented. If no direction is given, this
Proxy will be voted for the election of
nominees set forth above, and for the
ratification of the selection of KPMG, LLP.
PLEASE DATE AND RETURN IN
THE ENCLOSED ENVELOPE.
Signature(s)_________________________________________________________________________________________ Date_____________________
Please sign exactly as your name appears above. When signing as a custodian for a minor, executor, administrator, attorney, trustee
or guardian please give your full title as such.
- ------------------------------------------------------------------------------------------------------------------------------------
. FOLD AND DETACH HERE .