SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. __)
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[X] Definitive Proxy Statement Commission Only (as permitted by
[ ] Definitive Additional Materials Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
MCB FINANCIAL CORPORATION
----------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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MCB FINANCIAL CORPORATION
1248 Fifth Avenue
San Rafael, CA 94901
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held May 16, 2001
TO THE SHAREHOLDERS OF MCB FINANCIAL CORPORATION:
NOTICE IS HEREBY GIVEN that pursuant to its Bylaws and the call of its
Board of Directors, the 2001 Annual Meeting of Shareholders (the "Meeting") of
MCB Financial Corporation ("MCB Financial") will be held at MCB Financial, 1248
Fifth Avenue, San Rafael, California 94901, on Wednesday, May 16, 2001 at 5:30
p.m., for the purpose of considering and voting on the following matters:
1. Election of Directors. To elect the following eight persons to the Board of
Directors of MCB Financial to serve until the 2002 Annual Meeting of
Shareholders and until their successors are elected and have been qualified:
John Cavallucci Patrick E. Phelan
Charles O. Hall Gary T. Ragghianti
Timothy J. Jorstad Edward P. Tarrant
Catherine H. Munson Randall J. Verrue
2. Ratification of Independent Auditor. To ratify the Board of Directors'
recommendation of independent auditor for the year ending December 31, 2001.
3. Other Business. To transact such other business as may properly come before
the Meeting and any adjournment or adjournments thereof.
Only those shareholders of record at the close of business on March 19,
2001 will be entitled to notice of and to vote at the Meeting.
It is very important that every shareholder vote. We urge you to sign and
return the enclosed proxy as soon as possible, whether or not you plan to attend
the Meeting in person. If you do attend the Meeting and wish to vote in person,
you may then withdraw your proxy. If you do not attend the Meeting, you may
revoke the proxy prior to the time it is voted by notifying the Corporate
Secretary in writing to that effect or by filing a later dated proxy.
In order to facilitate the provision of adequate accommodations, please
indicate on the proxy whether or not you expect to attend the Meeting.
DATED: April 6, 2001
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Nancy R. Boatright
---------------------------------------
Nancy R. Boatright, Corporate Secretary
PROXY STATEMENT OF
MCB FINANCIAL CORPORATION
1248 Fifth Avenue
San Rafael, CA 94901
April 6, 2001
2001 ANNUAL MEETING OF MCB FINANCIAL CORPORATION SHAREHOLDERS
Introduction
This Proxy Statement is being furnished to MCB Financial Corporation ("MCB
Financial") Shareholders in connection with the solicitation of proxies by the
MCB Financial Board of Directors for use at the 2001 Annual Meeting of
Shareholders of MCB Financial to he held on Wednesday, May 16, 2001 at 5:30 p.m.
at MCB Financial's office, 1248 Fifth Avenue, San Rafael, California 94901, and
at any adjournments thereof ("MCB Financial Meeting"). This Proxy Statement, the
attached notice and the enclosed form of proxy are first being mailed to MCB
Financial Shareholders on or about April 9, 2001.
Matters to Be Considered
At the MCB Financial Meeting, MCB Financial Shareholders will be asked to
(i) elect a board of eight directors (see "ELECTION OF DIRECTORS," herein); (ii)
ratify the Board's selection of independent auditor for the year ending December
31, 2001 (see "RATIFICATION OF SELECTION OF INDEPENDENT AUDITOR," herein); and
(iii) transact such other business as may properly come before the MCB Financial
Meeting and any and all adjournments thereof (see "OTHER MATTERS," herein).
Record Date; Voting Information
The close of business on March 19, 2001 was the record date ("Record Date")
for determining which of the MCB Financial shareholders were entitled to receive
notice of and to vote at the MCB Financial Meeting. On the Record Date, there
were 1,775,182 shares of MCB Financial Common Stock outstanding, held by 712
holders of record. Each holder of MCB Financial Common Stock will be entitled to
one vote, in person or by proxy, for each share of MCB Financial Common Stock
standing in his or her name on the books of MCB Financial as of the Record Date
on any matter submitted to the vote of the MCB Financial Shareholders at the MCB
Financial Meeting, except that, in connection with the election of directors,
the shares are entitled to be voted cumulatively.
Cumulative voting entitles an MCB Financial Shareholder to give one nominee
a number of votes equal to the number of directors to be elected multiplied by
the number of votes to which that shareholder's shares are normally entitled, or
to distribute his votes among as many candidates as the shareholder thinks fit.
However, no shareholder is entitled to cumulate votes for a nominee unless such
nominee's name has been placed in nomination prior to the vote and the
shareholder has given notice before the voting of his or her intention to vote
shares cumulatively. If any shareholder has given such notice, all shareholders
may cumulate their votes for nominees. Discretionary authority to cumulate votes
in such a manner as to elect the maximum number of the Board of Directors'
nominees is solicited in this Proxy Statement.
Voting of Proxies; Revocability
A form of proxy for the MCB Financial Meeting is enclosed. All shares of
MCB Financial Common Stock represented by properly executed proxies received by
MCB Financial will, unless revoked, be voted at the MCB Financial Meeting in
accordance with the instructions on such proxies. If no instruction is specified
with regard to a matter to be considered, the proxy will be voted in favor of
(i) electing the eight nominees of the Board for director; and (ii) ratifying
the Board of Directors' recommendation of independent auditor for the year
ending December 31, 2001.
The proxy also confers discretionary authority to vote the shares
represented thereby in accordance with the recommendations of the MCB Financial
Board of Directors on any matter that was not known at the time this Proxy
Statement was mailed which may properly be presented for action at the MCB
Financial Meeting and the election of any person to any office for which a bona
fide nominee is named herein if such nominee is unable to serve or for good
cause will not serve. If any other business is properly presented at the MCB
Financial Meeting, the proxy will be voted in accordance with the recommendation
of the MCB Financial Board of Directors.
Any MCB Financial Shareholder may revoke his or her proxy at any time before it
is voted by filing with MCB Financial's Corporate Secretary an instrument
revoking it or a duly executed proxy bearing a later date, or by attending the
MCB Financial Meeting and advising the Chairman of his or her election to vote
in person. A proxy may also be revoked if written notice of the death or
incapacity of the MCB Financial Shareholder is received by MCB Financial before
the vote pursuant to that proxy is counted.
Solicitation of Proxies
This solicitation of MCB Financial Shareholders is being made by the Board
of Directors of MCB Financial. The expense of preparing, assembling, printing
and mailing this Proxy Statement to MCB Financial Shareholders and the materials
used in the solicitation of proxies for the MCB Financial Meeting will be borne
by MCB Financial. MCB Financial contemplates that the proxies will be solicited
principally through the use of the mail, but officers, directors and employees
of MCB Financial may solicit proxies personally or by telephone or other
electronic transmission without receiving special compensation therefor. In
addition, MCB Financial may use the services of individuals or companies,
including a proxy solicitation firm, it does not regularly employ in connection
with the solicitation of proxies if deemed advisable by the MCB Financial Board
of Directors. Although there are no formal agreements to do so, MCB Financial
will reimburse banks, brokerage houses and, although it has made no such
arrangements to date, other custodians, nominees and fiduciaries for their
reasonable expenses in forwarding these proxy materials to MCB Financial
Shareholders, and will reimburse such other expenses as may be incurred by any
proxy solicitation firm engaged by MCB Financial.
Required Vote
Except as specifically noted below, each of the proposals described in this
Proxy Statement requires the affirmative vote of a majority of the shares of MCB
Financial's Common Stock represented and voting at the Annual Meeting of
Shareholders where a quorum is present. In the election of directors, the eight
directors receiving the most votes will be elected. If any proposal requires the
affirmative vote of the holders of a specified percentage of MCB Financial's
outstanding shares of Common Stock, abstaining and broker non-votes will have
the same effect as a negative vote.
Security Ownership of Certain Beneficial Owners
Except as set forth below, as of the Record Date no individuals known to
the Board of Directors of MCB Financial owned of record or beneficially five
percent or more of the outstanding shares of common stock of MCB Financial. The
following table provides certain information as of March 19, 2001, with respect
to the only persons who own beneficially in excess of five percent of MCB
Financial Common Stock:
Amount
and Nature
Name and Address of of Beneficial Percent of
Title of Class Beneficial Owner Ownership Class
- -------------- ---------------- --------- -----
Common Stock John Cavallucci 233,451(1) 13.12%
1248 Fifth Avenue
San Rafael, CA 94901
Common Stock Martin Bramante 95,772 5.15%
Velia Bramante
P.O. Box 2126
San Rafael, CA 94901
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(1) See "Security Ownership of Management" table below for a description of the
nature of beneficial ownership.
Security Ownership of Management
The following table provides certain information, as of March 19, 2001,
with respect to the beneficial ownership of shares of MCB Financial Common Stock
by each MCB Financial director and nominee, each executive officer(1), and by
all of the directors and executive officers of MCB Financial as a group. Unless
otherwise indicated, each person listed has sole investment and voting power
with respect to the shares listed.
Name and Amount and Nature of Percent
Title of Class Address of Beneficial Owner(2) Beneficial Ownership(3) of Class
- -------------- --------------------------- -------------------- --------
Common Stock John Cavallucci 233,451(4) 13.12%
Common Stock Charles O. Hall 50,833(5) 2.82%
Common Stock Timothy J. Jorstad 74,655(6) 4.20%
Common Stock Catherine H. Munson 32,289(7) 1.81%
Common Stock Gary T. Ragghianti 31,116(8) 1.75%
Common Stock Edward P. Tarrant 51,479(9) 2.89%
Common Stock Randall J. Verrue 40,891(10) 2.30%
Common Stock Stephen R. Brodie 10,937(11) *
Common Stock Raymon L. Hanssen 8,446(12) *
Common Stock Patrick E. Phelan 13,269(13) *
Common Stock Current Directors and Executive
Officers as a Group (10 persons) 547,366(14) 29.43%
*Less than one percent (*)
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(1) As used throughout this Proxy Statement, unless specified otherwise, the
term "executive officer" means with respect to MCB Financial, the President and
Chief Executive Officer of MCB Financial and Metro Commerce Bank ("Metro
Commerce"), the Chief Financial Officer of MCB Financial and Executive Vice
President/Chief Financial Officer of Metro Commerce, the Executive Vice
President/Chief Credit Officer of Metro Commerce and the Executive Vice
President/Chief Administrative Officer of Metro Commerce.
(2) The address for all persons is c/o MCB Financial Corporation, 1248 Fifth
Avenue, San Rafael, California 94901.
(3) Includes all shares beneficially owned, whether directly or indirectly,
individually or together with associates. Includes any shares owned, whether
jointly or as community property, with a spouse and any stock of which
beneficial ownership may be acquired within 60 days of March 19, 2001, the
Record Date, by the exercise of stock options vested pursuant to MCB Financial's
1989 Stock Option Plan, and 1999 Stock Option Plan.
(4) Includes options to acquire 4,200 shares which are exercisable within 60
days of the Record Date.
(5) Includes options to acquire 30,504 shares which are exercisable within 60
days of the Record Date.
(6) Includes 60,478 shares held by Jorstad, Inc., Money Purchase & Profit
Sharing Pension Plan. Also includes options to acquire 4,200 shares which are
exercisable within 60 days of the Record Date.
(7) Includes 18,575 shares held by Lucas Valley Properties, Inc., Money Purchase
& Profit Sharing Pension Plan. Also includes options to acquire 4,200 shares
which are exercisable within 60 days of the Record Date.
(8) Includes 5,786 shares held by Ragghianti & Thomas Profit Sharing Plan. Also
includes options to acquire 6,291 shares which are exercisable within 60 days of
the Record Date.
(9) Includes 12,188 shares held by Mr. Tarrant as Custodian for his
grandchildren. Also includes options to acquire 4,200 shares which are
exercisable within 60 days of the Record Date.
(10) Includes 7,354 shares held in Mr. Verrue's IRA trust accounts, and 1,800
shares which are held by Mr. Verrue as Trustee for his grandchild. Also includes
options to acquire 4,200 shares which are exercisable within 60 days of the
Record Date.
(11) Includes options to acquire 9,937 shares which are exercisable within 60
days of the Record Date.
(12) Represents vested options exercisable within 60 days of the Record Date.
(13) Includes options to acquire 8,410 shares which are exercisable within 60
days of the Record Date.
(14) Includes options held by executive officers and non-employee directors of
MCB Financial which are exercisable within 60 days of the Record Date.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires MCB
Financial's directors and executive officers, and persons who own more than ten
percent of a registered class of MCB Financial's equity securities, to file with
the Securities and Exchange Commission initial reports of ownership and reports
of changes in ownership of common stock and other equity securities of MCB
Financial. Officers, directors and greater than ten percent shareholders are
required by SEC regulation to furnish MCB Financial with copies of all Section
16(a) forms they file.
To MCB Financial's knowledge, based solely on review of the copies of
such reports furnished to MCB Financial and written representations that no
other reports were required, during the year ended December 31, 2000, the
executive officers, directors and greater than ten percent beneficial owners of
MCB Financial's common stock complied with all applicable Section 16(a) filing
requirements.
Changes in Control
Management of MCB Financial is not aware of any arrangement which may,
at a subsequent date, result in a change of control of MCB Financial.
Recommendations
MCB Financial's Board of Directors unanimously recommends electing the
eight nominees to the MCB Financial Board of Directors and ratifying the Board
of Directors' recommendation of independent auditor for the year ending December
31, 2001. These proposals are discussed in greater detail in the following
sections of this Proxy Statement.
PROPOSAL ONE:
ELECTION OF DIRECTORS
MCB Financial's Bylaws provide that the number of directors shall be
determined from time to time by the Board of Directors or the shareholders but
may not be less than seven nor more than thirteen. The number of directors is
currently fixed at seven members. MCB Financial Shareholders are being asked to
elect the eight persons named below, who are the nominees of the Board of
Directors for election as directors of MCB Financial, to serve until the 2002
Annual Meeting of Shareholders of MCB Financial and until their successors are
elected and have been qualified. Mr. Cavallucci is being renominated to the
Board but will resign from the Board when the sale of all of the remaining
common shares of MCB Financial held by him and his family occurs. The sale is
currently expected to be completed in July 2001. (See "Certain Relationships and
Related Transactions - Repurchase of Shares Held by Cavallucci Family" below).
Each of the nominees listed below has consented to be named as a nominee and to
serve if elected to the MCB Financial Board of Directors. Votes will be cast
pursuant to the enclosed proxy in such a way as to effect the election of said
eight nominees, or as many thereof as possible under the rules of cumulative
voting. In the event that any of the nominees should be unable to or for good
cause will not serve as a director, it is intended that the shares represented
by the proxies solicited will be voted for the election of such substitute
nominee, if any, as shall be designated by the MCB Financial Board of Directors.
The MCB Financial Board of Directors has no reason to believe that any nominees
will become unavailable to serve if elected. It is intended that each person
elected a director of MCB Financial will also be elected by the Board of MCB
Financial as a director of Metro Commerce.
Metro MCB
Present Position(s) Commerce Financial
with MCB Financial Director Director
Name Age and Metro Commerce Since Since
---- --- ------------------ ----- -----
John Cavallucci 59 Director 1991 1993
Charles O. Hall 46 Director, President and Chief Executive Officer of 1995 1999
MCB Financial and Metro Commerce
Timothy J. Jorstad 49 Chairman of MCB Financial and Metro Commerce 1989 1993
Catherine H. Munson 73 Director 1989 1993
Patrick E. Phelan 37 Chief Financial Officer of MCB Financial; Executive -- --
Vice President and Chief Financial Officer of Metro
Commerce
Gary T. Ragghianti 57 Vice Chairman 1989 1993
Edward P. Tarrant 57 Director 1989 1993
Randall J. Verrue 57 Director 1989 1993
There are no family relationships among any of the nominees for director or any
of the executive officers of MCB Financial.
Biographical Information of Directors
The following sets forth certain biographical information, present
occupation and business experience for at least the past five years, of each of
the nominees for director.
John Cavallucci Director of Metro Commerce since November 1991; Chairman
of Metro Commerce and MCB Financial from May 1996 to May
2000; Executive Officer to the President of Metro
Commerce from January 1999 to December 2000; Chief
Executive Officer of Metro Commerce from December 1995
to December 1998; President and Chief Executive Officer
of Metro Commerce from January 1992 to December 1995;
Director, President and Chief Executive Officer of MCB
Financial from January 1993 to December 1998.
Charles O. Hall Director of Metro Commerce since December 1995; Director
of MCB Financial since January 1999; Executive Vice
President and Chief Credit Officer of Metro Commerce
from March 1992 to December 1995; President, Chief
Operating Officer, and Chief Credit Officer of Metro
Commerce from December 1995 to April 1998; President and
Chief Operating Officer of Metro Commerce from April
1998 to December 1998; President and Chief Executive
Officer of Metro Commerce since January 1999; President
and Chief Executive Officer of MCB Financial since
January 1999.
Timothy J. Jorstad President and certified public accountant, Jorstad,
Inc., a certified public accounting firm.
Catherine H. Munson President, Lucas Valley Properties, Inc., a real estate
firm; also General Partner, McInnis Park Golf Center.
Patrick E. Phelan Chief Financial Officer of MCB Financial since May 1997;
Executive Vice President/Chief Financial Officer of
Metro Commerce since December 1998; Senior Vice
President/Chief Financial Officer of Metro Commerce from
May 1997 to December 1998; Vice President/Finance of
Metro Commerce from December 1996 to May 1997; Assistant
Vice President and Controller of Metro Commerce from
April 1994 to December 1996. Prior to that, Mr. Phelan
served as a certified public accountant with Deloitte &
Touche LLP and Ernst & Young LLP.
Gary T. Ragghianti Attorney and President, Gary T. Ragghianti, Inc., a law
firm.
Edward P. Tarrant Principal and Owner, Tarrant-Bell Properties, a property
development and management company.
Randall J. Verrue President and Chief Executive Officer, HCV Pacific
Partners, a real estate company.
Meetings of the Board of Directors and Committees of MCB Financial
The Board of Directors of MCB Financial held eleven meetings during
2000. MCB Financial does not have a Personnel Committee or a Nominating
Committee; the Board of Directors performs such functions. During 2000 all of
the directors of MCB Financial attended at a minimum 75 percent of the aggregate
of all meetings of the Board of Directors and of the committees of MCB Financial
on which they served, except Gary T. Ragghianti, who attended 64% of the
meetings.
The Audit Committee acts pursuant to a written charter adopted by the
Board of Directors and attached hereto as Exhibit A. The Audit Committee
currently consists of Timothy J. Jorstad, Chairman, Edward P. Tarrant and
Randall J. Verrue each of whom are independent as defined in Section 121 of the
American Stock Exchange Company Guide. The Audit Committee is responsible for
recommending the appointment of the independent auditors for the MCB Financial,
reviewing the scope of the audit, examining the auditor's reports, making
appropriate recommendations to the Board of Directors as a result of such review
and examination and making inquiries into the effectiveness of the financial and
accounting functions and internal controls of MCB Financial. The Audit Committee
met eight times during 2000. All members attended each meeting. Attached as
Exhibit B is a copy of the Report of the Audit Committee.
The Personnel Committee currently consists of Catherine H. Munson,
Chairwoman, Charles O. Hall, and Gary T. Ragghianti. The Personnel Committee
held no meetings during 2000. The Personnel Committee's function is to review
compensation of executive officers and make recommendations to the Board of
Directors regarding compensation.
Compensation of Directors
Each Metro Commerce director, with the exception of Charles O. Hall,
receives an annual retainer of $18,000 for his or her services.
Executive Officers
The following table sets forth certain information, as of March 19,
2001, with respect to the current executive officers of MCB Financial and Metro
Commerce.
Present Position(s) with
Name Age MCB Financial and Metro Commerce
- ---- --- --------------------------------
Charles O. Hall 46 Director, President and Chief Executive
Officer of MCB Financial and Metro
Commerce
Stephen R. Brodie 55 Executive Vice President and Chief Credit
Officer of Metro Commerce
Raymon L. Hanssen 57 Executive Vice President and Chief
Administrative Officer of Metro Commerce
Patrick E. Phelan 37 Chief Financial Officer of MCB Financial;
Executive Vice President and Chief
Financial Officer of Metro Commerce
Business Experience
The following sets forth the business experience, for at least the past
five years, of Metro Commerce's executive officers other than Mr. Hall and Mr.
Phelan, whose experience is set forth above.
Stephen R. Brodie Executive Vice President/Chief Credit
Officer of Metro Commerce since April
1998; Senior Vice President/Loan
Administration of Metro Commerce from
January 1998 to April 1998; Senior Vice
President/Construction Loan Officer of
Metro Commerce from June 1996 to January
1998; Senior Vice President/Loan Officer
of Metro Commerce from June 1993 to June
1996.
Raymon L. Hanssen Executive Vice President/Chief
Administrative Officer of Metro Commerce
since February 1999; Senior Vice
President/Branch Manager of Metro Commerce
from May 1994 to February 1999; Senior
Vice President/Loan Officer of Metro
Commerce from May 1991 to May 1994.
EXECUTIVE COMPENSATION OF MCB FINANCIAL AND METRO COMMERCE
The following table sets forth compensation information with respect to
MCB Financial's and Metro Commerce's Chief Executive Officer and the four other
most highly compensated executive officers of Metro Commerce who served as such
at year end 2000 and whose total annual salary and bonus exceeded $100,000
("Named Officers"). Comparative data is also provided for the two previous
fiscal years, where applicable. No cash compensation was paid by MCB Financial
to any Named Officer; however, each Named Officer of MCB Financial also serves
as an executive of Metro Commerce and receives compensation from Metro Commerce
for services rendered in his or her capacity as such.
Summary Compensation Table
Annual Long Term
Compensation Other Compensation
------------ Annual Awards All Other
Name and Salary Bonus Compensation Options Compensation(1)
Principal Position at
December 31, 2000 Year ($) ($) ($) (#) ($)
- ----------------- ---- --- --- --- --- ---
John Cavallucci 2000 77,000 46,752 8,794
Executive Officer to the 1999 70,000 34,594 10,500 3,856
President 1998 142,000 47,900 2,863
Charles O. Hall 2000 170,000 93,505 9,263
President/ 1999 153,360 69,188 10,500 7,901
Chief Executive Officer 1998 142,000 47,900 7,271
Stephen R. Brodie 2000 102,450 20,500 5,000 1,782
Executive Vice President/ 1999 96,342 16,000 1,900
Chief Credit Officer 1998 89,934 14,000 5,250 1,700
Raymon L. Hanssen 2000 101,824 20,350 7,500 8,092
Executive Vice President/ 1999 97,635 21,020 4,715
Chief Administrative Officer 1998 89,435 12,768 2,400
Patrick E. Phelan 2000 99,385 21,200 10,000 5,500
Executive Vice President/ 1999 91,081 16,500 4,100
Chief Financial Officer 1998 N/A N/A N/A
Employment Agreements, Termination of Employment and Change-in-Control
Arrangements
Mr. Hall
Mr. Hall's current employment agreement commenced on January 1, 2001.
Mr. Hall is entitled to receive payment of (i) an initial base salary in the
amount of $176,800, payable not less often than monthly, increased annually by
the percentage increase in the CPI for the San Francisco Bay Area as well as at
the discretion of the Board of Directors, and (ii) an annual bonus equal to one
and one-half percent of Metro Commerce's pre-tax income if Metro Commerce's
return on beginning equity equals or exceeds 10 percent during the fiscal year.
Mr. Hall has been provided with an automobile, Metro Commerce's standard health
insurance coverage provided to all Metro Commerce employees, vacation leave and
a tennis club membership. Mr. Hall also participates in Metro Commerce's
Deferred Compensation Plan For Executives into which Mr. Hall may elect to defer
a portion of his current compensation and Metro Commerce agrees to contribute up
to 50 percent of the amount of his deferral. Mr. Hall vests 50 percent in Metro
Commerce contributions after completing all of his contractual deferrals and
vests the remaining 50 percent upon reaching retirement age.
- ------------------------
(1) Includes automobile compensation and matching contributions to the Executive
Deferred Compensation Plan.
In the event Mr. Hall's employment is terminated for any reason other
than death, disability, voluntary retirement or cause he will be entitled to
receive a severance payment in an amount equal to his then base salary for 36
months in one lump sum. If Mr. Hall's employment is terminated for reasons of
death, voluntary retirement or cause he will not be entitled to any severance
payment. If termination occurs as a result of a medical disability, he will be
entitled to receive severance payment in an amount equal to 25% of his then
annual base salary.
Mr. Phelan
Effective May 15, 2000, MCB Financial and Metro Commerce entered into a
severance agreement with Patrick E. Phelan. In the event Mr. Phelan's employment
is terminated for any reason other than death, disability, voluntary retirement
or cause he will be entitled to receive a severance benefit equal to eighteen
(18) months of pay and an added benefit of two (2) weeks of pay for each full
year of service, provided that the total benefit payable to Mr. Phelan shall not
exceed two years of pay. "Pay" for purposes of this severance agreement means
the total annual compensation paid to Mr. Phelan, including base wages and
average bonuses paid to Mr. Phelan in the three most recent years. If Mr.
Phelan's employment is terminated for reasons of death, voluntary retirement or
cause he will not be entitled to any severance payment. If termination occurs as
a result of a medical disability, he will be entitled to receive severance
payment in an amount equal to 25% of his then annual base salary.
The following table sets forth information on the issuance of stock options
to the Named Officers during the year ended December 31, 2000.
Stock Option Grants in Last Fiscal Year
Number of Percent of
Securities Total Options
Underlying Granted to
Options Employees Exercise Expiration
Name Granted During 2000 Price Date
---- ------- ----------- ----- ----
Stephen R. Brodie 5,000 11.77% $ 8.50 07/27/2010
Raymon L. Hanssen 7,500 17.65% $ 8.50 07/27/2010
Patrick E. Phelan 10,000 23.53% $11.00 01/27/2010
The following table sets forth the stock options exercised in 2000 and the 2000
fiscal year end value of unexercised stock options held by the Named Officers.
The market value of MCB Financial's Common Stock as of December 31, 2000 was
$10.31 per share.
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option
Values
Value of
Number of Unexercised
Unexercised In-the-Money
Options Options
Number of at 2000 at 2000
Shares Year-End (#) Year-End ($)
Acquired Value Exercisable/ Exercisable/
Name On Exercise Realized(1) Unexercisable Unexercisable
- ---- ----------- ---------- ------------- -------------
John Cavallucci -- -- 50,505 / 6,300 304,367 / 16,953
Charles O. Hall 10,000 $54,892 40,504 / 6,300 253,522 / 16,953
Stephen R. Brodie -- -- 9,937 / 6,100 32,985 / 9,891
Raymon L. Hanssen -- -- 8,446 / 6,000 45,814 / 10,860
Patrick E. Phelan 4,630 $25,898 6,410 / 9,102 21,483 / 5,368
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Certain of the directors and executive officers of MCB Financial and Metro
Commerce, the companies or organization with which they are affiliated, and
members of their immediate families are customers of, and had banking
transactions with Metro Commerce in the ordinary course of Metro Commerce's
business during 2000, and Metro Commerce expects to have banking transactions
with such persons in the future. All loans and commitments to lend to such
persons were made on substantially the same terms, including interest rates,
repayment terms and collateral, as those prevailing at the time for comparable
transactions with other persons of similar creditworthiness and, in the opinion
of management of Metro Commerce, did not involve more than a normal risk of
collectibility or present other unfavorable features. All of such loans are
current as to both principal and interest. As of March 31, 2001, extensions of
credit to MCB Financial directors, executive officers and beneficial owners of
more than five percent of MCB Financial Common Stock, and their affiliates, as a
group, was approximately $3,692,879. The maximum aggregate amount of credit
extended to directors and executive officers of MCB Financial or Metro Commerce
at any one time during 2000 was approximately $5,869,547.
Repurchase of Shares Held by Cavallucci Family
MCB Financial has entered into a stock purchase agreement with John
Cavallucci and his family to purchase the remaining 229,251 shares of MCB
Financial's common stock owned by them at a price of $12.00 per share. The sale
will include any additional shares which the Cavallucci family acquires upon
exercise of vested options prior to the closing of the sale of the 229,251
shares currently held. The Board believes that the transaction is appropriate
and in the best interests of MCB Financial and its shareholders to allow Mr.
Cavallucci to effect an orderly disposition of his holdings as he transitions
out of his positions with MCB Financial. MCB Financial expects to fund the
purchase from its operating income. As part of the agreement, Mr. Cavallucci
will resign from the Board upon closing of the sale.
- ----------------------------
(1) Value Realized is the difference between the closing price per share on the
date of exercise and the option price per share, multiplied by the number of
shares acquired upon exercise of the option.
PROPOSAL TWO:
RATIFICATION OF SELECTION OF INDEPENDENT AUDITOR
The Board of Directors of MCB Financial recommends that shareholders ratify
its appointment of Deloitte & Touche LLP to audit the financial statements of
MCB Financial for the year ending December 31, 2001. Deloitte & Touche LLP has
served as MCB Financial's independent auditor since 1991.
The Board of Directors retains the power to appoint a different independent
public accounting firm should the shareholders not vote to ratify Deloitte &
Touche LLP or should the Board determine subsequent to the ratification that
selection of another firm would be in the best interests of MCB Financial and
its shareholders.
Audit Fees
The aggregate fees billed by Deloitte & Touche LLP for professional
services rendered for the audit for MCB Financial's annual financial statements
for the year 2000 and the reviews of the financial statements included in MCB
Financial's Forms 10-QSB in 2000 were $65,000.
Financial Information Systems Design and Implementation Fees
Deloitte & Touche LLP rendered no professional services for financial
information systems design and implementation for the year 2000.
All Other Fees
The aggregate fees billed for services rendered by Deloitte & Touche other
than for the services described above, including tax consulting and other
non-audit services, for the year 2000 were $17,000.
The Audit Committee considered whether the provision of the services other
than the audit services is compatible with maintaining Deloitte & Touche's
independence.
An auditor representative from Deloitte & Touche LLP for the current year
and for 2000 will be present at the MCB Financial Meeting. The representative
will have an opportunity to make a statement if he or she desires to do so and
will be available to respond to appropriate questions of shareholders.
SHAREHOLDER PROPOSALS
MCB Financial's 2002 Annual Meeting of Shareholders is currently scheduled
for May 15, 2002. To be included in MCB Financial's 2002 Proxy Statement,
proposals of shareholders intended to be presented at the 2002 Annual Meeting
must be received by MCB Financial no later than December 6, 2001.
OTHER MATTERS
Management does not know of any matters to be presented at the MCB
Financial Meeting other than those set forth above. However, if other matters
come before the MCB Financial Meeting, it is the intention of the persons named
in the accompanying proxy to vote said proxy in accordance with the
recommendation of the MCB Financial Board of Directors on such matters.
Discretionary authority to do so is included in the proxy.
By Order of the Board of Directors,
/s/ Nancy R. Boatright
--------------------------------
Nancy R. Boatright
Date: April 6, 2001 Corporate Secretary
EXHIBIT A
MCB Financial Corporation
Audit Committee Charter
PURPOSE
The purpose of the Audit Committee of the Board of Directors of MCB
Financial Corporation is to oversee and monitor the Company's financial
reporting process and systems of internal controls regarding finance and
accounting on behalf of the Board of Directors.
RESPONSIBILITIES OF AUDIT COMMITTEE
The Board of Directors recognizes that the Company's management is
responsible for preparing the Company's financial statements and that
independent auditors are responsible for auditing those financial statements. In
fulfilling these responsibilities, management and the independent auditors are
ultimately accountable to the Audit Committee and the Board of Directors.
Nothing in this Charter should be construed to imply that the Audit
Committee is required to provide or does provide any assurance or certification
as to the Company's financial statements or as to its compliance with laws,
rules or regulations. In order to fulfill its oversight responsibility, the
Audit Committee must be capable of conducting free and open discussions with
management, internal and independent auditors, employees and others regarding
the quality of the financial statements and the system of internal controls.
The specific duties of the Audit Committee shall be as follows:
Independent Auditors
1. Select and evaluate independent auditors, review their performance
and recommend to the Board of Directors the appointment or
replacement of independent auditors; and, to review and recommend
to the Board of Directors fee arrangements in connection with such
appointments.
2. Ensure the auditor's independence by:
(i) ensuring that the auditors annually submit to the Audit
Committee a formal written statement delineating all
relationships between the auditors and the Company;
(ii) actively engaging in a dialogue with the auditors with
respect to any disclosed relationships or services that
may impact their objectivity and independence, including
the matters required by Independence Standards Board
Standard No. 1 Independence Discussions with Audit
Committees (as it may be as may be modified or
supplemented);
(iii) reviewing and discussing with the Board of Directors any
relationships between the auditors and the Company, or
any other relationship, that may adversely affect
independence; and, reviewing and approving any
significant management consulting engagements proposed
to be undertaken by such auditors on behalf of the
Company; and
(iv) recommending that the Board of Directors take
appropriate action in response to the auditors' report
to satisfy itself of their independence.
3. Annually require the auditors to confirm in writing their
understanding of the fact that they are ultimately accountable to
the Board of Directors of the Company and its Audit Committee.
4. Annually review the auditors' proposed audit plan and approach, as
well as staffing and timing of the audit and related matters.
5. Obtain from management, review and approve, a description of
issues and responses whenever a second opinion is proposed by
management to be sought from another outside accountant.
Financial Statements
6. Conduct a post-audit, pre-issuance review of the Company's annual
financial statements, the auditor's opinion thereon, and any
significant difficulties or disagreements with management
encountered during the course of the audit.
7. Discuss the annual financial statements with the appropriate
officers and/or employees of the Company and with the independent
auditors, and discuss with the auditors the matters required to be
discussed by relevant auditing standards, including the quality,
and not just the acceptability, of the accounting principles and
underlying estimates used in the statements.
8. If the Committee finds the annual financial statements acceptable,
to recommend to the Board of Directors that they be included in
the Company's annual report on Form 10-K/10-KSB.
9. Prepare a report to the shareholders of the Company in each proxy
statement, as required by the rules of the Securities and Exchange
Commission ("Commission").
10. Review with the Company's financial management and the independent
auditors the quarterly earnings releases and the schedule of
unrecorded adjustments to the Company's financial statements and
the reasons underlying the Company's assessment of the
immateriality of such adjustments.
11. With regard to quarterly reports to the Commission on Form
10-Q/10-QSB, the Chairman of the Committee and/or any member or
members of the Committee whom he or she designates, shall review
with management and the independent auditor the financial
statements to be included in such filing prior to filing with the
Commission.
12. Review prior to publication or filing and approve such other
Company financial information, including appropriate regulatory
filings and releases that include financial information, as the
Committee deems desirable.
Internal Accounting and Control Functions
13. Review the adequacy of the Company's system of internal accounting
and financial control.
14. Annually review the quality of internal accounting and financial
control, the auditor's report or opinion thereon and any
recommendations the auditor may have for improving or changing the
Company's internal controls, as well as management's letter in
response thereto and any other matters required to be discussed
under Statement of Auditing Standards No. 61 (as it may be
modified or supplemented).
15. Review the Company's major financial risk exposures and the steps
management has taken and proposes to take to monitor and control
such exposures.
16. Review proposed future internal audit plans.
General
17. Annually review this Audit Committee Charter, and any provisions
of the Company's by-laws which refer to the Audit Committee, and
to propose to the Board of Directors necessary or appropriate
revisions;
18. At least annually, the Committee shall hold separate, private
meetings without other members of management present, with the
Company's Chief Financial Officer and the Company's independent
auditor; and, each such person shall have free and direct access
to the Committee and any of its members.
19. Prior to the beginning of each fiscal year, the Chairman shall
draft a proposed schedule of the Committee's activities for the
coming year, and the times at which such activities shall occur,
including preliminary agendas for each proposed meeting of the
Committee, which shall be submitted to the Committee for its
review and approval, with such changes as the Committee shall
determine to be appropriate.
Reporting Responsibilities
20. Periodically report its activities, concerns, conclusions and
recommendations to the Board of Directors.
AUTHORITY
21. The Audit Committee and each of its members may communicate
directly and/or privately with the Company's directors, officers,
employees, consultants, agents, internal auditors, independent
auditors, attorneys-in-fact, counsel (including inside and outside
counsel) and advisors, and any and all third parties in the
performance of the Committee's functions.
22. The Committee may cause an investigation to be made into any
matter within the scope of its responsibilities under this Charter
as the Committee deems necessary, or as otherwise requested by the
Board or Directors. The Committee may require Company personnel to
assist in any such investigation, and may engage independent
resources to assist in such investigations as it deems necessary.
COMMITTEE MEMBERSHIP
23. The membership of the Audit Committee shall consist of three or
more directors each of whom shall:
(i) have been appointed by the Board of Directors.
(ii) be free of any relationship to the Company which, in the
opinion of the Board of Directors, may interfere with
the exercise of independence from management and the
Company;
(iii) be or shall become (within a reasonable period of time
after his or her appointment to the Committee)
"financially literate," as such qualification is
interpreted by the Board of Directors in its discretion;
and
(iv) otherwise meet the requirements of independence as set
forth in the rules of the American Stock Exchange or any
other market on or through which the Company's
securities may be traded (the "relevant listing
authority"), as such rules may be amended from time to
time. In addition, at least one member of the Audit
Committee shall have accounting or related financial
management expertise, as determined by the Board of
Directors in its discretion.
24. The Board of Directors reserves all authority permitted under the
rules of the Commission and the relevant listing authority in
connection with any matter referred to in this Charter, including
but not limited to the determination of independence of Audit
Committee members.
MEETINGS
25. The Audit Committee shall meet as often as necessary to fulfill
its functions as determined by the Committee, but no less than
four times annually.
Date Adopted: May 25, 2000
EXHIBIT B
MCB FINANCIAL CORPORATION
AUDIT COMMITTEE REPORT
The Audit Committee of the Board of Directors of MCB Financial Corporation
(the "Company") has reviewed the Company's audited financial statements for the
fiscal year ended December 31, 2000. In conjunction with its review, the Audit
Committee has met with the management of the Company to discuss the audited
financial statements. In addition, the Audit Committee has discussed with the
Company's independent auditors, Deloitte & Touche LLP (Deloitte & Touche), the
matters required pursuant to SAS 61 and has received the written disclosures and
the letter from Deloitte & Touche required by Independence Standards Board
Standard No. 1. The Audit Committee considered that Deloitte & Touche rendered
non-audit services to the Company during the fiscal year ended December 31,
2000, and whether the provision of non-audit services by Deloitte & Touche is
compatible with maintaining Deloitte & Touche's independence. The Audit
Committee determined that Deloitte & Touche's provision of non-audit services is
compatible with Deloitte & Touche's independence.
Based on this review and discussion, the Audit Committee recommended to the
Company's Board of Directors that the audited financial statements be included
in the Company's Annual Report on Form 10-KSB for the fiscal year ended December
31, 2000 for filing with the Securities and Exchange Commission.
This report has been approved by all of the members of the Audit Committee.
Timothy J. Jorstad
Edward P. Tarrant
Randall J. Verrue
Members of the Audit Committee
March 22, 2001
APPENDIX A
PROXY MCB FINANCIAL CORPORATION PROXY
PROXY FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 16, 2001
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Messrs. Timothy J. Jorstad, Edward P.
Tarrant and Randall J. Verrue, and each of them, the attorneys, agents and
proxies of the undersigned, with full powers of substitution to each, to attend
and act as proxy or proxies of the undersigned at the 2001 Annual Meeting of
Shareholders of MCB Financial Corporation to be held at MCB Financial
Corporation, 1248 Fifth Avenue, San Rafael, California 94901, on Wednesday, May
16, 2001, at 5:30 p.m. or any adjournment thereof, and to vote as specified
herein the number of shares which the undersigned, if personally present, would
be entitled to vote.
1. Election of Directors. To elect the eight persons named below to the Board
of Directors to serve until the 2002 Annual Meeting of Shareholders and
until their successors are elected and have been qualified.
Nominees: John Cavallucci, Charles O. Hall, Timothy J. Jorstad, Catherine
H. Munson, Patrick E. Phelan, Gary T. Ragghianti, Edward P. Tarrant and
Randall J. Verrue.
FOR all nominees (except as indicated to the contrary below). A vote FOR
will result in votes being cast to effect the election of the eight
nominees or as many thereof as possible under the rules of cumulative
voting. WITHHOLD AUTHORITY to vote for all nominees. (INSTRUCTION: To
withhold authority for any individual nominee, write that nominee's name in
the space below.)
2. Ratification of Independent Auditor. To ratify the selection of Deloitte &
Touche LLP by the Board of Directors to serve as MCB Financial
Corporation's independent auditor for the year ending December 31, 2001.
FOR AGAINST ABSTAIN
3. Other Business. To transact such other business as may properly come before
the 2001 Annual Meeting of Shareholders and any adjournments thereof.
This proxy will be voted as directed by the Shareholder or, if no instructions
are given by the Shareholder, the proxy holders will vote "FOR" each of the
foregoing proposals and as recommended by the Board of Directors of MCB
Financial on all other matters as may properly come before the meeting.
Important -- Please Sign on Other Side
[REVERSE SIDE]
Please Sign and Date Below.
The Board of Directors recommends a vote "FOR" the election of directors
and the ratification of the independent auditor. The proxy confers authority to
vote and shall be voted in accordance with such recommendations unless a
contrary instruction is indicated, in which case the shares represented by the
proxy will be voted in accordance with such instruction. If no instruction is
specified with respect to a matter, the shares represented by the proxy will be
voted in accordance with the recommendations of the Board of Directors. If any
director nominee is unable to serve or for good cause will not serve, this proxy
confers authority to and shall be voted for a substitute nominee designated by
the Board of Directors. This proxy confers authority to cumulate votes for the
election of directors. If any other business is presented at the meeting, this
proxy confers authority to and shall be voted in accordance with the
recommendations of the Board of Directors.
---------------------------
(Number of Shares)
---------------------------
(Please print your name)
---------------------------
(Signature of Shareholder)
Dated __________________,2001
MAILING LABEL SPACE ---------------------------
(Please print your name)
---------------------------
(Signature of Shareholder)
Dated __________________,2001
(Please date this Proxy and sign your
name as it appears on your stock
certificates. Executors, administrators,
trustees, etc., should give their full
titles. All joint owners should sign.)
Please indicate if you are planning to
attend the Meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND MAY BE REVOKED
PRIOR TO ITS EXERCISE BY FILING, WITH THE CORPORATE SECRETARY OF MCB FINANCIAL
CORPORATION, A DULY EXECUTED PROXY BEARING A LATER DATE OR AN INSTRUMENT
REVOKING THIS PROXY, OR BY ATTENDING THE MEETING AND ELECTING TO VOTE IN PERSON.