Nixon Peabody LLP
ATTORNEYS AT LAW
Two Embarcadero Center
Suite 2700
San Francisco, CA 94111-3996
(415) 984-8200
Fax: (415) 984-8300
R. Brent Faye
Direct Dial: (415) 984-8365
E-Mail: rfaye@nixonpeabody.com
April 13, 2005
VIA EDGAR
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: North Bay Bancorp
Definitive Proxy Materials
Ladies and Gentlemen:
On behalf of our client, North Bay Bancorp (the "Company"), and
pursuant to Rule 14a-6(b) promulgated under the Securities Exchange Act of 1934,
as amended, we are transmitting via EDGAR the definitive proxy materials for the
Annual Meeting of Shareholders of the Company scheduled for May 12, 2005 (the
"Proxy Material").
No filing fee is required.
We are also transmitting as an appendix to the Proxy Material:
Appendix A - North Bay Bancorp Proxy Card
If you have any questions or need any additional information with
respect to this transmission, please contact the undersigned at (415) 984-8365.
Very truly yours,
/s/ R. Brent Faye
R. Brent Faye
of NIXON PEABODY LLP
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-12
NORTH BAY BANCORP
________________________________________________
(Name of Registrant as Specified in Its Charter)
_______________________________________________________________________
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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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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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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NOTICE OF THE SIXTH ANNUAL MEETING
OF SHAREHOLDERS OF
NORTH BAY BANCORP
TO THE SHAREHOLDERS OF NORTH BAY BANCORP:
NOTICE IS HEREBY GIVEN that the Sixth Annual Meeting of the Shareholders of
North Bay Bancorp will be held at Copia, 500 First Street, Napa, California,
94559, on Thursday, May 12, 2005, at 7:00 p.m. to consider and act on:
(1) Election of Class A Directors. The Board of Directors intends at
this time to present the following nominees for election as Class A
Directors to serve a three year term expiring at the 2008 Annual
Meeting of Shareholders:
John Anthony III Thomas N. Gavin
Thomas H. Lowenstein Stephen Spencer
Denise Suihkonen James E. Tidgewell
Nominations for election of members of the Board of Directors may be made
by the Board of Directors or by any shareholder 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 will be made in
writing and will be delivered or mailed to the President of the
corporation not less than 21 days nor more than 60 days prior to any
meeting of shareholders called for the election of directors; provided
however, that if less than 21 days' notice of the meeting is given to
shareholders, the notice of intention to nominate will be mailed or
delivered to the President of the corporation not later than the close of
business on the tenth day following the day on which the notice of
meeting was mailed; provided further, that if notice of the meeting is
sent by third class mail as permitted by Section 6 of the Company's
Bylaws, no notice of intention to make nominations will be required. The
notification will 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 of the notifying
shareholder; and (e) the number of shares of capital stock of the
corporation owned by the notifying shareholder. Nominations not made in
accordance herewith may, in the discretion of the Chairman of the
meeting, be disregarded and upon the Chairman's instructions, the
inspectors of election can disregard all votes cast for that nominee. A
copy of this paragraph will be set forth in a notice to shareholders of
any meeting at which directors are to be elected.
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(2) Ratification of the Selection of KPMG LLP. The shareholders will be
asked to ratify the Audit Committee's selection of KPMG LLP,
independent certified public accountants, as the independent
auditors of North Bay Bancorp for the year ending December 31, 2005.
Other Business. The shareholders will consider and act on any other
business as may properly be brought before the meeting.
Shareholders of record at the close of business on March 18, 2005 are entitled
to notice of, and to vote at, the Annual Meeting. Every shareholder is invited
to attend the Annual Meeting in person or by proxy. If you do not expect to be
present at the Meeting, you are requested to complete and return the
accompanying proxy form in the envelope provided. Any shareholder present at the
Annual Meeting may vote personally on all matters brought before the Meeting,
and in that event your proxy will not be used.
Dated: April 13, 2005
/s/ Wyman G. Smith
----------------------------------
Wyman G. Smith
Corporate Secretary
WHETHER OR NOT YOU PLAN TO ATTEND THIS MEETING, PLEASE SIGN AND
RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN THE
ENCLOSED POSTAGE PAID ENVELOPE
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PROXY STATEMENT
FOR THE
SIXTH ANNUAL MEETING OF SHAREHOLDERS
OF
NORTH BAY BANCORP
1190 AIRPORT ROAD, SUITE 101
NAPA, CALIFORNIA 94558
(707) 257-8585
To Be Held May 12, 2005 at 7:00 p.m.
at Copia, 500 First Street, Napa, California, 94559
-----------------------------------
-1-
TABLE OF CONTENTS
GENERAL INFORMATION FOR SHAREHOLDERS..............................................................................5
PRINCIPAL SHAREHOLDERS............................................................................................7
MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING....................................................................8
PROPOSAL No. 1. -ELECTION OF CLASS A DIRECTORS....................................................................8
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS................................................................14
Audit Committee.........................................................................................14
Compensation Committee..................................................................................16
Nominating and Governance Committee.....................................................................18
Compensation Committee Interlocks and Insider Participation in Compensation Decisions...................19
Shareholder Return on Performance Graph.................................................................20
COMMUNICATION BY SECURITY HOLDERS WITH THE BOARD OF DIRECTORS....................................................21
SECURITY OWNERSHIP OF MANAGEMENT.................................................................................22
EXECUTIVE COMPENSATION...........................................................................................28
Summary Executive Compensation Table....................................................................28
Option Grants and Exercises.............................................................................30
Options Granted in Last Fiscal Year.....................................................................31
Aggregate Option Exercises in Last Fiscal Year and Year-End Option Values...............................32
Long Term Incentive Plans - Awards in Last Fiscal Year..................................................32
Employment Agreement and Termination of Employment and Change of Control Arrangements...................33
Incentive Plan..........................................................................................35
Executive Officer Supplemental Executive Retirement Plan................................................35
Compensation of Directors...............................................................................36
OTHER INFORMATION REGARDING MANAGEMENT...........................................................................38
Management Indebtedness.................................................................................38
Certain Business Relationships..........................................................................38
Reports of Changes in Beneficial Ownership..............................................................39
PROPOSAL NO. 2 - RATIFICATION OF INDEPENDENT AUDITORS...........................................................40
Audit Fees..............................................................................................40
Audit Committee's Pre-Approval Policies and Procedures..................................................40
Required Vote and Recommendation........................................................................41
Availability of Form 10-K........................................................................................41
Shareholder Proposals............................................................................................41
OTHER MATTERS....................................................................................................41
EXHIBIT A - Audit Committee Charter..............................................................................42
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GENERAL INFORMATION FOR SHAREHOLDERS
The following information is furnished in connection with the solicitation of
the accompanying proxy by and on behalf of the Board of Directors of North Bay
Bancorp ("the Company" or "North Bay") for use at the Sixth Annual Meeting of
Shareholders to be held at Copia, 500 First Street, Napa, California, 94559, on
Thursday, May 12, 2005, at 7:00 p.m. Only shareholders of record at the close of
business on March 18, 2005, (the "Record Date") will be entitled to notice of
and to vote at the Annual Meeting. On the Record Date, the Company had
outstanding 3,698,925 shares of its Common Stock, all of which will be entitled
to vote at the Annual Meeting and any adjournments thereof. This proxy statement
will be first mailed to shareholders on or about April 13, 2005.
As many of the Company's shareholders are not expected to personally attend the
Annual Meeting, the Company solicits proxies so that each shareholder is given
an opportunity to vote. Shares represented by a duly executed proxy in the
accompanying form, received by the Board of Directors prior to the Annual
Meeting, will be voted at the Annual Meeting. A shareholder executing and
delivering the enclosed proxy may revoke the proxy at any time prior to exercise
of the authority granted by the proxy by:
o filing with the Secretary of the Company an instrument revoking it or
a duly executed proxy bearing a later date; or
o attending the meeting and voting in person.
A proxy is also revoked when written notice of the death or incapacity of the
maker of the proxy is received by the Company before the vote is counted.
If a shareholder specifies a choice with respect to any matter on the
accompanying form of proxy, the shares will be voted accordingly. If no
specification is made, the shares represented by this proxy will be voted in
favor of election of the nominees specified and in favor of the specified
proposals.
Each shareholder of record is entitled to one vote for each share held on all
matters to come before the Annual Meeting. As a result of an amendment to Bylaws
approved at the Company's 2003 Annual Meeting of Shareholders, cumulative voting
on the election of directors has been eliminated
The proxy committee is composed of two officers of the Company, Terry L.
Robinson and Wyman G. Smith, who will vote all shares of Common Stock
represented by the proxies. However, the proxy committee cannot vote the shares
of the shareholder unless the shareholder signs and returns a proxy card. Proxy
cards also confer upon the proxy committee discretionary authority to vote the
shares represented by the proxy cards on any matter that was not known at the
time this Proxy Statement was mailed, which may properly be presented for action
at the Annual Meeting including a motion to adjourn, and with respect to
procedural matters pertaining to the conduct of the Annual Meeting. The total
expense of management soliciting proxies will be borne by the Company. While
proxies are normally solicited by mail, proxies may also be directly solicited
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by officers, directors and employees of the Company. The officers, directors and
employees will not be compensated for this service beyond normal compensation to
them.
The voting of proxies will be tabulated by a representative of Registrar and
Transfer Company, which has been appointed as the Company's independent
inspector of election. The inspector of election will be present at the meeting
in order to tabulate the voting of any proxies returned and ballots cast at that
time. Except as required by law, the vote indicated on each individual proxy
card and ballot will be held confidential.
Abstentions and broker non-votes are each included in the determination of the
number of shares present and voting for the purpose of determining whether a
quorum is present, and each is tabulated separately. In determining whether a
proposal has been approved, abstentions are counted in tabulations of the votes
cast on proposals presented to shareholders and have the effect of a vote
"against" the proposals.
If you hold your shares in street name and do not provide voting instructions to
your broker, your broker cannot vote your shares on any proposal on which your
broker does not have discretionary authority to vote. This is called a broker
non-vote. Broker non-votes will not be counted in tabulations of votes cast on
proposals. Brokers may vote in their discretion on routine matters. Under Nasdaq
rules, the election of directors and the ratification of auditors are routine
matters. If you do not vote your shares held in street name, your broker has
authority to vote on your behalf.
A copy of the Annual Report of the Company for the fiscal year ended December
31, 2004, accompanies this Proxy Statement. Additional copies of the Annual
Report are available upon request to Pansy F. Smith, Assistant Corporate
Secretary of the Company.
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PRINCIPAL SHAREHOLDERS
As of March 18, 2005, the following persons were known by the Company to
beneficially own more than five percent (5%) of the outstanding Common Stock:
Relationship Number of Shares Percent of Class 1
Name and Address with Company Beneficially Owned Beneficially Owned
- ---------------------------------------------------------------------------------------------------------
Houghton Gifford, M.D. Director Emeritus 2 189,637 5.10%
3219 Vichy Avenue. of The Vintage Bank
Napa, CA 94558
<FN>
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1 In computing the percentage of outstanding Common Stock owned beneficially,
the number of shares beneficially owned has been divided by the number of
outstanding shares on the Record Date after giving effect to stock
dividends paid through March 31, 2005, and assuming options exercisable, if
any, by the named person within 60 days have been exercised.
2 Included in the total for Dr. Gifford are 189,637 shares held in the name
of the Gifford Family Trust dated April 8, 1985, of which Dr. Gifford is
trustee.
</FN>
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MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING
PROPOSAL No. 1. -ELECTION OF CLASS A DIRECTORS
It is intended to elect six (6) nominees as Class A Directors of the Company to
serve a three year term expiring at the 2008 Annual Meeting of Shareholders. All
of the nominees are present members of the Board of Directors of the Company. If
any nominee should refuse or be unable to serve, the proxies will be voted for
any person the Board of Directors may designate to replace that nominee. The
Board presently has no knowledge that any of the nominees will refuse or be
unable to serve. The nominees (up to the number of directors to be elected)
receiving the highest number of votes are elected.
As the result of a Bylaw amendment approved at the 2003 Annual Meeting of
Shareholders, the Board of Directors has been classified into three (3) classes
The term of office of the first class ("Class A") expires at the 2005 annual
meeting of shareholders, the term of the second class ("Class B") will expire at
the 2006 annual meeting of shareholders, and the term of office of the third
class ("Class C") will expire at the 2007 annual meeting of shareholders. At
subsequent annual meetings of shareholders, the number of directors to be
elected will equal the number of directors with terms expiring at that annual
meeting and the directors elected will be elected for a term of three (3) years,
subject to the power of the Board of Directors, in its discretion, to increase
or decrease the number of directors.
All nominees for Class A director are independent directors as defined by the
rules of the National Association of Securities Dealers, Inc. and are
non-management directors.
The Board of Directors may increase or decrease the number of directors in one
or more classes as may be appropriate whenever it increases or decreases the
number of directors to constitute the full Board of Directors in order to ensure
that the three classes shall be as nearly equal in number of directors as
practicable. A director will hold office until the annual meeting for the year
in which his or her term expires and until his or her successor is elected and
qualified, subject, however, to prior death, resignation, retirement,
disqualification or removal from office.
Information is provided below regarding the individual nominees and all other
directors of the Company, as well as regarding the executive officers of the
Company. Executive Officers serve on an annual basis and must be selected by the
Board of Directors annually pursuant to the Bylaws of the Company.3 The ages
stated are as of March 18, 2005. All directors are also directors of The Vintage
Bank. In January 2005, Solano Bank merged with and into The Vintage Bank.
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3 As used throughout the Proxy Statement, the term "Executive Officer" means
the President, Executive Vice President/Credit Administrator, Senior Vice
President/Chief Financial Officer, Corporate Secretary, and Senior Vice
President/Human Resources of North Bay; the President of Solano Bank, a
Division of The Vintage Bank; and the President of The Vintage Bank.
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Lauren Ackerman (Class B), 48, has been a member of the North Bay Bancorp Board
since 2004 and a member of The Vintage Bank Board since 2003. She is currently
Chairman of the Board of Copia: The American Center for Wine, Food and the Arts
founded by Robert Mondavi. Ms. Ackerman spent 18 years in business development
within the technology sector doing both consulting and founding/managing a
technology marketing corporation prior to her current involvement with the
nonprofit sector in the Napa Valley. Besides her involvement with North Bay
Bancorp and Copia, Ms. Ackerman is also a Trustee of the Blue Oak School, an
independent progressive school in Napa as well as a board member of the
Community Foundation of the Napa Valley. Ms. Ackerman is a 2003 alumni of the
Rockefeller Foundation's Global Philanthropy Workshop program based in New York.
Ms. Ackerman has a B. A. in public relations from the University of Southern
California as well as an M.B.A from Pepperdine University.
John B. Anthony III(Class A), age 53, has been a member of the North Bay Board
since 2004 and previously served as a member of the Solano Bank Board. He is CEO
of Jack Anthony Industries Inc. which owns and operates 10 car washes in
Northern California. In 2005 he is also serving as the president of the
International Car Wash Association. He has been active in Lion's International
and recently served on the Board of Directors of the Vallejo Chamber of
Commerce.
Lee-Ann Cimino, age 41, is Senior Vice President and Chief Financial Officer of
North Bay and The Vintage Bank. Ms. Cimino joined The Vintage Bank in 1987.
Prior to becoming employed by The Vintage Bank, Ms. Cimino served as Operations
Manager for Lamorinda National Bank. Ms. Cimino is past treasurer of the Napa
Valley D.A.R.E. Foundation and a member of the board of directors of Napa Valley
Safe School Foundation. Ms. Cimino holds a Professional Masters of Banking
graduate degree from the Graduate School of Banking at Louisiana State
University.
Susan C. Fonseca, age 50, is Senior Vice President, Human Resources of North
Bay. From 1990 until joining North Bay in 2002, Ms. Fonseca was employed by
Wells Fargo Bank, serving as Vice President and Human Resources Manager from
1995 to 2002 and as Personnel Officer from 1990 to 1995. From 1988-1990, she was
Employee Benefits Coordinator for Buffums Department Stores. Ms. Fonseca
graduated from Kent State University with a B.A. degree in Spanish and Latin
American Studies.
Thomas N. Gavin (Class A), age 52, is a Director of North Bay and The Vintage
Bank and was a director and Chairman of the Board of Solano Bank from 2000. Mr.
Gavin is 50% owner of Gavin & Schreiner, a general partnership, a benefit
planning company started in 1985. He is also an insurance agent for New York
Life, where he has been affiliated for over twenty-seven years. Mr. Gavin earned
his Associate of Arts degree from Solano Community College and a B.A. in
Sociology from the University of California at Davis. He completed his insurance
agent education and was awarded his CLU from American College. He also holds a
Chartered Financial Consultant degree from American College. Mr. Gavin has been
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active in professional and local civic and social organizations, including the
Benicia Rotary Club (President 1994-1995), the Benicia Chamber of Commerce
(President 1987); St. Patrick -St. Vincent High School Board of Regents
(President 1996); and the Benicia Mainstreet Program Board of Directors
(President 1988). He is also a former member of the Sutter-Solano Hospital
Foundation Board and the Board of Directors for St. Dominic's Church in Benicia,
where he has also coached basketball and softball for PAL.
David B. Gaw (Class C), age 59, is a Director of North Bay and Chairman of the
Board of Directors. He has served as a director of The Vintage Bank since 1984
and is a former director of Solano Bank. Mr. Gaw has been engaged in the
practice of law in Napa and Solano Counties for more than thirty-three years and
is one of the founding members of Gaw, Van Male, Smith, Myers & Miroglio, a
professional law corporation with offices in Napa, St. Helena, Fairfield,
Vacaville and Redlands. Mr. Gaw is certified by the California State Board of
Legal Specialization in Probate, Estate Planning, and Trust Law, and a Certified
Elder Law Attorney by the National Elder Law Foundation. Mr. Gaw has served as
President of the Napa County Bar Association. He is a member of The Queen of the
Valley Hospital Foundation Board of Trustees and is a member of Boards of
Directors of the Solano Community Foundation, and the North Bay Health Care
Group. North Bay, Solano Bank and The Vintage Bank have retained the legal
services of Mr. Gaw's law firm since their organization and North Bay and The
Vintage Bank expect to retain the firm's services in 2005.
Fred J. Hearn, Jr. (Class B), age 51, has served as a Director of North Bay
since 2000. He is also a director of The Vintage Bank and was a director of
Solano Bank from 2000. Mr. Hearn is President of Hearn Pacific Corporation, a
general contracting company headquartered in Vacaville for more than
twenty-seven years. He is also a member in Pacific Valley Development Company
and, until this year, CEO of Pacific Concrete Construction Company, Inc. Mr.
Hearn is an active member of the Vacaville Chambers of Commerce, and is a member
of the founders club of the Solano Community Foundation. He has also served on
the Notre Dame Parochial School Board as secretary and vice president. Mr. Hearn
is presently serving on the Board of Directors of the Vacaville Public Education
Foundation.
Conrad W. Hewitt (Class C), age 68, joined the Board of North Bay in November,
1999 and is a retired consultant. He is also a director of The Vintage Bank. He
is a director for Varian, Inc. and is Chairman of the Audit Committee and a
member of the Compensation and Nominating and Governance Committees. Mr. Hewitt
is a Trustee of the Kalmanovitz Charitable Foundation. Also, he is a director of
S&P Company and a director of Pabst Brewing Company. He also serves as Chairman
of the Pabst Brewing Company Audit and Compensation Committees. Additionally, he
is a director of Spectrum Organic Products, Inc. and is Chairman of the Audit
Committee and a member of the Compensation Committee. He is also an advisory
director for Private Capital Corporation. Mr. Hewitt served as Superintendent of
Banks and Commissioner, Department of Financial Institutions, State of
California from 1995 to 1998. Prior to 1995, Mr. Hewitt was the Managing
Partner, North Bay Area, of Ernst & Young and was employed by Ernst & Young for
thirty-three years until his retirement. Mr. Hewitt is a Certified Public
Accountant. Mr. Hewitt received a B.S. in Finance and Economics from the
University of Illinois and did post-graduate work at the University of Southern
California.
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Connie Klimisch (Class B), age 50, is a director of North Bay and The Vintage
Bank and served as a Director of Solano Bank from 2003. She and her husband own
and operate Klimisch's Inc. Collision Repair. She is active in the Vallejo
community. She serves on the board of the Chamber of Commerce of Vallejo and is
currently holding the position of past chair. She is also very involved in the
Rotary Club of Vallejo and has served on their board twice.
Richard S. Long (Class C), age 60, is a director of North Bay and is also a
director of The Vintage Bank. He presently serves as Chief Executive Officer of
Regulus Group, LLC. Mr. Long has over thirty years of entrepreneurial and
executive management experience. Regulus is a remittance processor for major
banks and corporations with over twenty locations in the United States. In 1998
Mr. Long sold his company, Quantum Information Corporation, to Regulus. Quantum,
which has now been merged into Regulus, is an information distribution
management company that outsources the processing, printing and distribution of
time critical financial documents. Prior to Quantum, Mr. Long spent seventeen
years in the industrial gas and equipment business. Starting in sales and moving
through management to CEO and owner of Bayox, Inc., which he sold to Union
Carbide Corporation in 1983. Mr. Long then bought out the investment group that
started Boboli and subsequently sold the United States and Canadian segments of
this business to General Foods in 1988. The international segment of this
business was sold in 1995.
Thomas H. Lowenstein (Class A), age 62, is a director of North Bay and has
served as a Director of The Vintage Bank since 1988. He is President of North
Bay Plywood, a company engaged in the manufacture and sale of building
materials. Mr. Lowenstein has been active in the affairs of St. Apollinaris
School, Product Services Incorporated (PSI) and the Justin High Foundation,
having served on the boards of St. Apollinaris School and PSI and as a Past
President of St. Apollinaris School Board.
Thomas F. Malloy (Class B), age 62, is a director and past Chairman of the Board
of North Bay and former Chairman of the Board of The Vintage Bank, where he has
served as a director since 1984. He is an insurance broker and a retired Member
of Malloy Imrie & Vasconi Insurance Services LLC with offices in Napa and St.
Helena. He is also a member of MMV Building LLC. Mr. Malloy is a member and Past
President of the Napa County Independent Insurance Agents Association and Past
President of the Napa Active 20-30 Club. Mr. Malloy received a B.S. degree in
business from Santa Clara University.
Kathi Metro, age 50, is the Executive Vice President and Credit Administrator of
North Bay and Executive Vice President and Credit Administrator of The Vintage
Bank. She was employed by The Vintage Bank from 1985 to 2000. Prior to becoming
employed by The Vintage Bank, Ms. Metro was an Assistant Vice President and
Branch Manager of Napa Valley Bank. She is currently a member of the Board of
Directors of the North Napa Rotary Club, serves as President of the Board of
Directors of the Napa Valley College Foundation, and is a member of the
California Bankers Association Real Estate Legislation Committee. Ms. Metro is
also a Director and Audit Committee Chair of SAFE BIDCO, a state assisted fund
for enterprise, business, and industrial development. Ms. Metro is a 1993
graduate of the Graduate School of Banking, Pacific Coast Banking School,
University of Washington.
-9-
John A. Nerland, age 40, is President of Solano Bank, a division of The Vintage
Bank. Prior to his employment with Solano Bank, Mr. Nerland was a Region Manager
at Civic Bank of Commerce. Mr. Nerland also held various positions with
WestAmerica Bank, including, Regional Vice President of WestAmerica's San Rafael
Region. Mr. Nerland currently sits on the boards of Sutter-Solano Hospital
Foundation, Vacaville Museum, and Solano Economic Development Corporation. He is
currently a member of the Vacaville Noon Rotary Club. Mr. Nerland received his
B.S. in Finance from Arizona State University and an M.B.A. from San Francisco
State University.
Andrew Nicks, M.D., FACR (Class A), age 61, has been a member of the Radiology
Medical Group of Napa, Inc. since 1976, and serves as its president. He received
his college degree from the University of Wisconsin, his medical degree from the
Medical College of Wisconsin (Marquette) and his Radiology residency at
Letterman Hospital in San Francisco. He was elected Chief of Staff at Queen of
the Valley Hospital and has been awarded Fellowship in the American College of
Radiology. He has served as a member of the Board of Directors of the
Partnership Health Plan of California, the Board of Directors of Napa Valley
Country Club and the Board of Trustees of Queen of the Valley Hospital. Dr.
Nicks has been a Director of The Vintage Bank since 2000 and of the North Bay
Bancorp since 2004.
Terry L. Robinson (Class C), age 57, is President and Chief Executive Officer
and a Director of North Bay. He is also a Director and Chief Executive Officer
of The Vintage Bank and was a Director of Solano Bank. He was employed by The
Vintage Bank beginning in 1988. Mr. Robinson is a past president of the Western
Independent Bankers. Prior to joining The Vintage Bank, Mr. Robinson served as
Executive Vice President and a member of the Board of Directors of American Bank
of Commerce in Boise, Idaho. Mr. Robinson is a past founding director the
Community Foundation of Napa Valley and was Co-Chair of the Napa Boys and Girls
Club capital campaign. He currently serves as a member of the Queen of the
Valley Hospital Foundation Board of Trustees. He is also an organizer and
proposed director of Idaho First Bank (Proposed). Mr. Robinson holds a B.S. in
Business and Accounting from the University of Idaho and a M.B.A. in finance
from U.C. Berkeley.
Thomas Shelton (Class B), age 52, a 1974 graduate of Wake Forest University with
a Bachelor's Degree in Politics, Mr. Shelton began his graduate studies in
Political Science at the University of Maryland in 1975. He has served as a
director of North Bay and The Vintage Bank for the past year. He is the
President & CEO of Joseph Phelps Vineyards in St. Helena, CA. He has played an
active role in wine industry issues. He served on the Board of Directors of Napa
Valley Vintners Association from 1996-2000 and served as President of the trade
organization in 1999. As one of the founders of Free the Grapes, he has endorsed
reform of the mandatory three-tier system of wine distribution in the United
States. He has also served as a representative to the Board of Directors of the
Wine Institute, and is active with the Coalition for Free Trade. He was
appointed to the Napa County Watershed Oversight Committee and continues to
serve on the board of the Napa County Watershed Information Center.
Wyman G. Smith, age 54, is Corporate Secretary of North Bay Bancorp and The
Vintage Bank and has served as such since the organization of each entity. He
was also Corporate Secretary of Solano Bank. Mr. Smith has been engaged in the
practice of law in Napa and Solano Counties for more than twenty-nine years and
is one of the senior members of Gaw, Van Male, Smith, Myers & Miroglio, a
-10-
professional law corporation, with offices in Napa, St. Helena, Fairfield,
Vacaville and Redlands. Mr. Smith chairs the firm's business and real estate
department and is a member of the American Bar Association business and banking
law section and the State Bar of California business law section. Mr. Smith has
served as president of the Napa County Bar Association. He is a former member of
the Queen of the Valley Hospital Board of Trustees and past Chairman of the
Board of Trustees. Mr. Smith is a former Trustee and President of the Queen of
the Valley Hospital Foundation. He is a member and President of the Board of
Directors of the Napa Valley Economic Development Corporation, in the past he
served as a member of the Board of Directors of the Solano County Economic
Development Corporation, and he is a member of the Rotary Club of Napa. North
Bay Bancorp, The Vintage Bank and Solano Bank have retained the legal services
of Mr. Smith's law firm since their organization and North Bay and The Vintage
Bank expect to retain the firm's services in 2005.
Stephen Spencer (Class A), age 54, is a Director of North Bay Bancorp and The
Vintage Bank and was a founding shareholder and board member of Solano Bank. Mr.
Spencer oversees three companies. He has been President of Gateway Realty since
1981, President of Solano Property Management since 1987, and President and
Founding Principal of Premier Commercial since 1995. He has been a licensed Real
Estate Broker since 1977 and Attorney since 1979, and is a current member of the
Solano Commercial Brokers. Past President and Chair of numerous organizations,
including Professional Standards Committee of the Northern Solano Association of
Realtors, Solano Affordable Housing, Fairfield/Suisun Chamber of Commerce, etc.
Mr. Spencer received his B.A. from Drake University, and his J.D. from Western
State University.
Denise Suihkonen (Class A), age 48, is a director of North Bay and The Vintage
Bank and served as a director of Solano Bank from its inception in 2000 and as
chairperson of the board prior to the merger of Solano Bank into The Vintage
Bank. She is a CPA and a partner in Suihkonen CPAs and Consultants LLP, located
in Vacaville. She is active in the community, serving as a Housing and
Redevelopment commissioner for the city of Vacaville and on the board of the
Vacaville Ballet, Vacaville Soroptimist, Vacaville Police Activities League, and
the Vacaville Chamber of Commerce.
Glen C. Terry, age 53, is the President of The Vintage Bank. Until April 1, 2002
he was President, Chief Executive Officer, Chief Credit Officer, and a Director
of Solano Bank. Prior to the opening of Solano Bank, beginning in 1999, he
served as Senior Vice President and Solano Region Manager of The Vintage Bank.
Prior to being employed by Solano Bank, Mr. Terry was President of the Solano
Region of Sierra West Bank, President & CEO of Napa Valley Bank, and previously
held other positions at WestAmerica Bank. Mr. Terry has also worked with First
Interstate Bank and Zions First National Bank. Mr. Terry is an alumnus of
Leadership Santa Rosa and has served on the Santa Rosa Design Review Board, the
Santa Rosa Chamber of Commerce and Clinic Ole. He is a member of the Boards of
the Napa Chamber of Commerce, Junior Achievement of the Redwood Empire and Napa,
and the Western Independent Bankers Association. Additionally, he is a Board
member and Treasurer of the Community Foundation of Napa Valley and a Board
member, Trustee, and Treasurer of the Queen of the Valley Hospital Foundation.
Mr. Terry received a B.S. in Political Science from Utah State University and an
M.B.A. from the University of Utah.
-11-
James E. Tidgewell (Class A), age 59, is a Director of North Bay and former
Chairman of the Board of The Vintage Bank and has served as a Director of The
Vintage Bank since 1988. He is a certified public accountant and partner in the
accounting firm of G & J Seiberlich & Co LLP, with which he has been associated
since 1976. Mr. Tidgewell received a B.S. degree in accounting from the
University of Notre Dame in 1968 and thereafter spent approximately five years
as an accountant with Price Waterhouse & Co. Mr. Tidgewell is a member of the
American Institute of Certified Public Accountants and the California Society of
Certified Public Accountants. He is a past president of the Napa Active 20-30
Club, a member of the Napa Rotary Club, a member of the Board of Trustees of
Queen of the Valley Hospital, and an honorary member and past president of The
Queen of the Valley Hospital Foundation Board of Trustees.
During 2004, the Company's Board of Directors met eleven (11) times. All of the
Directors of the Company standing for reelection attended more than 75% of the
aggregate of (1) the total number of meetings of the Board and (2) the total
number of meetings held by all committees of the Board on which she or he
served, except for Director Stephen Spencer who attended 60.7% of such meetings.
No director of the Company holds a directorship in any other company with a
class of securities registered pursuant to Section 12 of the Securities Exchange
Act of 1934, as amended, or subject to the requirements of Section 15(d) of that
Act or any company registered as an investment company under the Investment
Company Act of 1940, except for Conrad W. Hewitt who is also a director of
Spectrum Organic Products, Inc. and of Varian, Inc. No director or executive
officer of the Company has any family relations with any other director or
executive officer of the Company.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The Company has standing Audit, Compensation, and Nominating and Governance
Committees.
Audit Committee
The Audit Committee, which, during 2004, consisted of Conrad W. Hewitt as
chairman, Thomas H. Lowenstein, James E. Tidgewell, Denise Suihkonen, and John
B. Anthony III, met eight (8) times during the fiscal year ended December 31,
2004. The functions of the Audit Committee are to engage and oversee the
Company's firm of independent public accountants who audit the books and records
of the Company for the fiscal year for which they are appointed, to approve each
professional service rendered by the accountants and to evaluate the possible
effect of that service on the independence of the Company's accountants. The
Audit Committee also reviews internal controls and reporting procedures of the
Bank's branch offices and periodically consults with the independent auditors
with regard to the adequacy of internal controls.
During 2005, the Audit Committee will consist of Conrad W. Hewitt as chairman,
Lauren Ackerman, John B. Anthony III, Thomas H. Lowenstein, and James E.
Tidgewell
-12-
Each member of the audit committee is independent as defined by current rules of
the National Association of Securities Dealers.
Financial Expert
The Board of Directors has determined that it has a financial expert serving on
the Company's audit committee. The audit committee's financial expert is
Director Conrad W. Hewitt. As mentioned above, as with all members of the audit
committee, Mr. Hewitt is independent as defined by current rules of the National
Association of Securities Dealers, Inc.
REPORT OF AUDIT COMMITTEE
- -------------------------
NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN ANY OF THE COMPANY'S
FILINGS UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES EXCHANGE ACT OF 1934,
THE FOLLOWING REPORT OF THE AUDIT COMMITTEE WILL NOT BE INCORPORATED BY
REFERENCE INTO ANY FLINGS AND WILL NOT OTHERWISE BE DEEMED FILED UNDER THOSE
ACTS.
North Bay Bancorp (March 16, 2005)
The Audit Committee of the North Bay Bancorp Board of Directors (the "Audit
Committee") oversees the Company's accounting and financial reporting process
and the audits of the Company's financial statements, as further detailed in the
Committee's Charter attached as Appendix A to this Proxy Statement. All members
of the Audit Committee are independent directors as defined in the rules of the
National Association of Securities Dealers, Inc., and are non-management
directors. In 2004 the members of the Audit Committee were Conrad Hewitt
(Chairman and financial expert), Thomas H. Lowenstein, Denise Suihkonen, John B.
Anthony III and James E. Tidgewell. In 2005 the members of the Audit Committee
are Conrad Hewitt (Chairman and financial expert), Thomas H. Lowenstein, John B.
Anthony III, James E. Tidgewell and Lauren Ackerman.
Management is responsible for the Company's internal controls and its financial
reporting process. The Company's independent accountants, KPMG LLP, are
responsible for performing an independent audit of the Company's consolidated
financial statements in accordance with generally accepted auditing standards
and to issue a report thereon. The Audit Committee monitors and oversees these
processes. The Audit Committee selects the Company's independent accountants and
approves all non-audit services provided to the Company by its independent
accountants.
In this context, the Audit Committee has met and held discussions with
management and KPMG LLP. Management has represented to the Audit Committee that
the Company's consolidated financial statements were prepared in accordance with
generally accepted accounting principles, and the Audit Committee has reviewed
and discussed the consolidated financial statements with management and KPMG
LLP. The Audit Committee discussed with KPMG LLP matters required to be
discussed by Statement on Auditing Standards No. 61 (Communication with Audit
Committees).
-13-
KPMG LLP also provided to the Audit Committee the written disclosures required
by Independent Standards Board Standard No. 1 (Independence Discussions with
Audit Committees), and the Audit Committee discussed with KPMG LLP that firm's
independence.
Based on the Audit Committee's discussion with management and KPMG LLP and the
Audit Committee's review of the representation of management and the report of
KPMG LLP to the Audit Committee, the Audit Committee recommended that the Board
of Directors include the audited consolidated financial statements in the
Company's Annual Report on Form 10-K for the year ended December 31, 2004 filed
with the Securities and Exchange Commission.
The Audit Committee has also considered whether the provision of services by
KPMG LLP not related to the audit of the financial statements referred to above
and to the reviews of interim financial statements included in the Company's
10-Qs for the quarters ended March 31, June 30 and September 30, 2004, is
compatible with maintaining KPMG LLP's independence.
Respectfully submitted by the Audit Committee,
Conrad Hewitt (Chair), John B. Anthony III, Lauren Ackerman, Thomas H.
Lowenstein, and James E. Tidgewell
Compensation Committee
The Compensation Committee which during 2004 consisted of Richard S. Long, as
chair, Andrew Nicks, M.D., Thomas N. Gavin, Thomas F. Malloy, and Stephen
Spencer met six (6) times during the fiscal year ended December 31, 2004. The
principal functions of the Compensation Committee are, subject to approval of
the Board of Directors, to establish personnel policies, set compensation for
senior officers, establish employee benefit programs and review the performance
of senior officers.
During 2005, the Compensation Committee will consist of Richard S. Long as
chair, Thomas N. Gavin, Thomas F. Malloy, and Stephen Spencer.
Each member of the compensation committee is independent as defined by current
rules of the National Association of Securities Dealers, Inc.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
- -------------------------------------------------------
North Bay Bancorp (March 16, 2005)
The Compensation Committee of the Board of Directors establishes and administers
the Company's executive compensation programs. All members of the Committee are
independent directors as defined in the rules of the National Association of
Securities Dealers, Inc. and are non-management directors. The goals of the
Company's executive compensation programs are to:
1. Align executive compensation with shareholders interests;
-14-
2. Attract, retain, and motivate a highly competent executive team;
3. Link compensation to Company and individual performance; and
4. Achieve a balance between short-term and long-term performance.
CEO Compensation: The Compensation Committee reviews and approves all components
of the CEO's compensation, including salary, incentive compensation, equity and
long-term incentive compensation, accumulated realized and unrealized stock
option gains, the dollar value to the CEO and the cost to the Company of all
perquisites and other personal benefits, the projected payout obligations under
the CEO's supplemental executive retirement plan and under potential severance
and change-in-control scenarios, and all other compensation as described in the
Executive Compensation section of this Proxy Statement. A spreadsheet setting
forth all of the above components and affixing dollar amounts under the various
payout scenarios was prepared and reviewed by the Committee. Based on this
review and a subjective evaluation of performance and purposes, the Committee
finds the CEO's compensation (and, in the case of severance and
change-in-control scenarios, the potential payouts) in the aggregate to be
reasonable and not excessive.
It should be noted that when the Committee considers any component of the CEO's
total compensation, the aggregate amounts and mix of all the components,
including accumulated (realized and unrealized) option gains are taken into
consideration in the Committee's decisions. The CEO is not present during
discussion or deliberation of his own compensation.
Other Executive Officer Compensation: The Committee reviews and approves
recommendations of the Company's CEO for all elements of executive compensation.
Salary adjustments are determined by a subjective evaluation of performance. No
executive officer of the Company is present during discussion or deliberation of
his or her own compensation.
Incentive Compensation: Approximately 20% to 40% of executive cash compensation
is contingent upon Company performance and adjusted as appropriate for
individual performance. Grants under the Company's stock option plan are
designed to further strengthen the linkage between shareholder return and
executive compensation. The Committee recommends and the independent directors
of the Company annually determines targets for revenues, earnings, return on
assets and return on equity to be used as the measurement points for decisions
regarding executive compensation. Bonuses are awarded in amounts determined in
accordance with an incentive plan recommended by the Committee and approved by
the independent directors of the Company. The incentive plan relates the amount
of bonuses paid to the performance of the Company. 22.6% of the CEO's
compensation for 2004 was a result of a bonus awarded in accordance with the
Company's performance.
Internal Pay Equity: In addition to periodically reviewing executive
compensation in light of Company and individual performance, the Compensation
Committee periodically compares all components of compensation of Company
executive officers with compensation for comparable positions in the community
banking industry for the purpose of evaluating the competitiveness of the
Company's executive compensation and determining internal pay equity within the
Company. In the process of reviewing each component of executive officer
-15-
compensation separately, and in the aggregate, the Committee considers a
spreadsheet showing internal pay equity within the Company. This spreadsheet
shows the relationship between each senior management level of compensation
within the Company (e.g., between the CEO, CFO, Executive VPs and Senior VPs).
The comparison includes all components of compensation (as previously
described), both individually and in the aggregate.
The Committee believes that the relative difference between CEO compensation and
the compensation of the Company's other senior executives has not increased
significantly over the years. The comparisons in the Company's internal pay
equity study go back three years and the percentage differences are not
significantly different today from then. Over the period reviewed, our CEO's
total annual compensation as described in the Summary Executive Compensation
Table in the Executive Compensation section of this Proxy Statement has been in
the range of 1.4 times the compensation of the next highest paid executive
officer.
Respectfully submitted by the Compensation Committee,
Richard S. Long, Chair, Thomas N. Gavin, Thomas F. Malloy and Stephen Spencer.
Nominating and Governance Committee
The Nominating and Governance Committee was established in January 2004 and
consists of David B. Gaw, as chair, Fred W. Hearn, Richard S. Long, Thomas F.
Malloy, and Connie Klimisch. The principal functions of the Nominating and
Governance Committee are to identify and review the qualifications of nominees
for director and to recommend nominees to the Company's Board of Directors,
receive and evaluate communications from shareholders to the Board of Directors,
annually review the Committee's Charter and the Company's corporate governance
guidelines, annually conduct an assessment of the Board/s performance,
periodically assess individual director performance and the performance of the
Chairman of the Board of Directors, annually report to the Board of Directors on
director development and succession planning, and develop and recommend an
education program for the directors of the Company. Each member of the
Nominating and Governance Committee is independent as defined by current rules
of the National Association of Securities Dealers, Inc.
For the 2005 annual election of directors the Nominating and Governance
Committee recommended the six (6) nominees for Class A director listed in this
Proxy Statement under PROPOSAL No. 1 - ELECTION CLASS DIRECTORS for election by
the shareholders.
The Nominating and Governance Committee has a charter, a current copy of which
is available to shareholders on the Company's web-site. The Company's web-site
is located at www.northbaybancorp.com.
The Nominating and Governance Committee will consider director candidates
recommended by securities holders if the procedures contained in the Company's
Bylaws are followed. These procedures are described in the NOTICE OF ANNUAL
MEETING included with this Proxy Statement.
-16-
The Nominating and Governance Committee Charter contains a description of the
minimum qualifications for Nominating and Governance Committee recommended
nominees. The minimum qualifications are:
o high personal and professional integrity,
o demonstrated exceptional analytical ability and judgment with an
emphasis on strategic thinking,
o ability to read and understand fundamental financial statements,
o genuine interest in serving the Company and willingness to commit
sufficient time, and
o share ownership.
The Nominating and Governance Committee conducts an annual review of the skills
and characteristics that should be reflected in the composition of the Board as
a whole. As a result of the review the Nominating and Governance Committee will
identify the desired skills and characteristics that are not presently reflected
in the composition of the Board as a whole recognizing that the skills and
characteristics of the members of the Board will change from time to time. The
Nominating and Governance Committee will take into consideration any evaluation
of the performance of the incumbent directors. The Nominating and Governance
Committee will survey the Board and management of the Company for potential
nominee recommendations and consider any shareholder-recommended nominees.
Shareholder-recommended nominees and Nominating and Governance Committee
nominees will be evaluated in the same manner including, but not limited to:
o examination of the curriculum vitae of nominees,
o interviews,
o background checks, and
o verification of references.
The Nominating and Governance Committee has authority to engage a third party to
identify, or evaluate or assist in evaluating, potential nominees.
The Nominating and Governance Committee did not engage a third party to perform
any functions in connection with identifying or evaluating the nominees listed
and identified in this Proxy Statement.
Compensation Committee Interlocks and Insider Participation in Compensation
Decisions
There were no interlocking relationships where (a) an executive officer of North
Bay or the Banks served as a member of the compensation committee of another
entity, one of whose executive officers served on the Compensation Committee of
North Bay or the Banks; (b) an executive officer served as a director of another
entity, one of whose executive officers served on the Compensation Committee of
North Bay or the Banks; or (c) an executive officer of North Bay or the Banks
served as a member of the compensation committee of another entity, one of whose
executive officers served as a director of North Bay or the Banks.
-17-
Shareholder Return on Performance Graph
The following graph compares changes in the value of $100 invested on November
14, 1999 in the Company's Common Stock, in the Nasdaq Stock Market (U.S ) Index
and in an industry index. The Company's current industry index is the SNL NASDAQ
Bank Index. Also included is a comparison to the NASDAQ BANK Index which was the
industry for used for the previous. The change in industry index was made
because, although the two indices are substantially [reason for change]
[TOTAL PERFORMANCE GRAPH GOES HERE]
Period Ending
------------------------------------------------------------------------
Index 12/31/99 12/31/00 12/31/01 12/31/02 12/31/03 12/31/04
- -------------------------------------------- ----------- ------------ ----------- ----------- ----------- -----------
North Bay Bancorp 100.00 84.73 89.79 122.94 146.66 223.48
NASDAQ Composite 100.00 60.82 48.16 33.11 49.93 54.49
NASDAQ Bank Index* 100.00 114.23 123.68 126.65 162.92 186.45
SNL NASDAQ Bank Index 100.00 115.45 125.66 129.25 166.83 191.21
<FN>
*Source: CRSP, Center for Research in Security Prices, Graduate School of Business, The University of Chicago 2005.
Used with permission. All rights reserved. crsp.com.
</FN>
-18-
COMMUNICATION BY SECURITY HOLDERS WITH THE BOARD OF DIRECTORS
The Company's Board of Directors provides a process for shareholders to send
communications to the Board of Directors. The manner in which shareholders can
communicate with the Board of Directors and the Company's process for
determining which communications will be relayed to the Board of Directors is
available to shareholders on the Company's web-site. The Company's web-site is
located at www.northbaybancorp.com.
Policy Regarding Director Attendance at Annual Meetings
- -------------------------------------------------------
The Board of Directors has adopted a policy requiring all directors to attend
annual meetings of shareholders. At the 2004 Annual Meeting of Shareholders
seven (7) of the nine (9) incumbent directors were present.
-19-
SECURITY OWNERSHIP OF MANAGEMENT
The following table provides information as of March 18, 2005, pertaining to
beneficial ownership of the Company's Common Stock by those persons nominated
for election as directors and the Named Executive Officers listed in the Summary
Executive Compensation Table, as well as with respect to all directors and
executive officers as a group. The information contained in this table has been
obtained from the Company's records or from information furnished directly by
the individuals to the Company. The numbers in the column entitled "Number of
Shares Beneficially Owned" reflect stock dividends paid through March 31, 2005.
4 The table should be read with the understanding that more than one person may
be the beneficial owner of, or possess certain attributes of beneficial
ownership with respect to, the same shares.
- ------------------------
4 Upon the payment of a stock dividend, all unexercised stock options are
automatically adjusted so that the aggregate purchase price and the
fractional proportion of outstanding stock represented by the options
remain unchanged.
-20-
Number of
Shares
Beneficially
Name Nature of Position Owned Ownership Percent5
- ---- ------------------ ------------ --------- --------
Lauren Ackerman Director of North Bay 2,855 6,7 0.07%
and The Vintage Bank
John B. Anthony III Director of North Bay 10,829 6,8 0.28%
and The Vintage Bank
Lee-Ann Cimino Senior Vice President 15,001 6,9 0.39%
and Chief Financial
Officer of North Bay and
The Vintage Bank
Susan C. Fonseca Senior Vice President, 10,606 6,10 0.27%
Human Resources of North
Bay
Thomas N. Gavin Director of North Bay 14,316 6,11 0.37%
of The Vintage Bank
David B. Gaw Chairman of the Board 39,031 12 1.00%
and Director of North
Bay and of The Vintage
Bank
Fred J. Hearn Director of North Bay 22,153 6,13 0.57%
and The Vintage Bank
Conrad W. Hewitt Director of North Bay 19,417 6,14 0.50%
and The Vintage Bank
<FN>
- ------------------------
5 In computing the percentage of outstanding Common Stock owned beneficially
by each director and executive officer, the number of shares beneficially
owned has been divided by the number of outstanding shares on the Record
Date after (i) giving effect to stock dividends paid through March 31,
2005, and (ii) assuming options exercisable by the director and executive
officer within 60 days have been exercised.
</FN>
-21-
Number of
Shares
Beneficially
Name Nature of Position Owned Ownership Percent5
- ---- ------------------ ------------ --------- --------
Connie Klimisch Director of North Bay 7,840 6,15 0.20%
and The Vintage Bank
Richard S. Long Director of North Bay 41,050 6,16 1.05%
and The Vintage Bank
Thomas H. Lowenstein Director of North Bay 50,289 6,17 1.29%
and of The Vintage Bank
Thomas F. Malloy Director of North Bay 117,830 6,18 3.03%
and The Vintage Bank
Kathi Metro Executive V.P. and 30,519 6,19 0.79%
Credit Administrator of
North Bay and The
Vintage Bank
John A. Nerland President of Solano 17,634 6,20 0.45%
Bank, a Division of The
Vintage Bank
Andrew Nicks, M.D. Director of North Bay 25,068 21 0.64%
and The Vintage Bank
Terry L. Robinson Director, President, and 162,089 22 4.17%
CEO of North Bay and CEO
and Director of The
Vintage Bank
Thomas Shelton Director of North Bay 3,905 6,23 0.10%
and The Vintage Bank
-22-
Number of
Shares
Beneficially
Name Nature of Position Owned Ownership Percent5
- ---- ------------------ ------------ --------- --------
Stephen Spencer Director of North Bay 15,188 6,24 0.39%
and The Vintage Bank
Denise Suihkonen Director of North Bay 14,324 6,25 0.37%
and The Vintage Bank
Glen C. Terry President of The Vintage 30,095 6,26 0.77%
Bank
James E. Tidgewell Director of North Bay 21,968 6,27 0.57%
and of The Vintage Bank
All Current Executive 706,430 28 17.59%
Officers and Directors as a
group (total of 22)
- ------------------------
6 Pursuant to California law, personal property held in the name of a married
person may be community property as to which either spouse has the power
and ability to manage and control in its entirety.
7 Included in the total for Ms. Ackerman are 2,855 shares as to which Ms.
Ackerman holds options exercisable as of May 18, 2005.
8 Included in the total for Mr. Anthony are 3,477 shares held in the name of
Jack Anthony Industries, Inc. 401(k) Plan, FBO John B. Anthony, III, of
which he is a trustee and as to which he has shared voting power. Also
included in the total for Mr. Anthony are 7,352 shares as to which Mr.
Anthony holds options exercisable as of May 18, 2005.
9 Included in the total for Ms. Cimino are 1,248 shares as to which Ms.
Cimino holds options exercisable as of May 18, 2005.
10 Included in the total for Ms Fonseca 1,760 shares held by her spouse in the
name of Michael J. Drinker IRA Rollover as to which Ms. Fonseca may
indirectly have shared voting power. Also included in the total for Ms.
Fonseca are 8,327 shares as to which Ms. Fonseca holds options exercisable
as of May 18, 2005;
11 Included in the total for Mr. Gavin are 1,300 shares held by NY Life
Securities as custodian FBO Patrice M. Gavin as to which he may indirectly
have shared voting power. Also included in the total for Mr. Gavin are
9,977 shares as to which Mr. Gavin holds an option exercisable as of May
18, 2005.
12 Included in the total for Mr. Gaw are 33,280 shares held in the name of the
Gaw Family Trust dated September 22, 1999, of which he is the trustee; 284
shares held as custodian for a minor under the California Uniform Transfers
to Minors Act, and 3,099 shares held for the Gaw, Van Male, Smith, Myers &
Miroglio Profit Sharing Plan of which Mr. Gaw is a trustee as to which he
has shared voting power and as to which he disclaims beneficial ownership.
Also included in the total for Mr. Gaw are 1,698 shares as to which Mr. Gaw
holds an option exercisable as of May 18, 2005.
-23-
13 Included in the total for Mr. Hearn are 10,055 shares held in the name of
the Hearn Family Trust dated December 31, 1996 of which Mr. Hearn is a
trustee and as to which he has shared voting power; 1,254 shares held by
Diane E. Hearn as custodian for minors under the California Uniform
Transfers to Minors Act as to which Mr. Hearn may have voting power; and
867 shares held in Joint Tenancy with Alma Haslett as to which he has
shared voting power. Also included in the total for Mr. Hearn are 9,977
shares as to which Mr. Hearn holds an option exercisable as of May 18,
2005.
14 Included in the total for Mr. Hewitt are 6,322 shares held in the name of
the Conrad W. Hewitt 2001 Trust and 246 shares held as separate property by
Mr. Hewitt's wife. Mr. Hewitt disclaims beneficial ownership of the shares
held by his wife. Also included in the total for Mr. Hewitt are 12,849
shares as to which Mr. Hewitt holds an option exercisable as of May 18,
2005.
15 Included in the total for Ms. Klimisch are 1,691 shares held by NFS/FMTC
Rollover IRA FBO Dennis R. Klimisch as to which Ms. Klimisch may indirectly
have shared voting power; 672 shares registered in the name of Connie L.
Klimisch, Trustee, Dennis R. Klimisch Trustee FBO the Klimisch Family Trust
dated March 25, 2997, and 4,955 shares as to which Ms. Klimisch holds an
option exercisable as of May 18, 2005.
16 Included in the total for Mr. Long are 19,142 shares held in the Richard S.
Long and Cynthia A. Long Trust dated September 15, 1993, of which Mr. Long
is trustee; 8,159 shares held by Charles Schwab & Co. as custodian FBO
Richard S. Long IRA dated 5-10-03; 900 shares held by Charles Schwab & Co.
as custodian FBO Cynthia A. Long IRA dated 4/05/93 as to which Mr. Long may
indirectly have shared voting power; and 12,849 shares as to which Mr. Long
holds an option exercisable as of May 18, 2005.
17 Included in the total for Mr. Lowenstein are 42,382 shares held in the name
of the Lowenstein Family Trust dated October 8, 1992, of which he is a
trustee and as to which he has shared voting power; 6,208 shares held in
the name of North Bay Plywood Profit Sharing Trust, of which he is a
trustee and as to which he has shared voting power. Also included in the
total for Mr. Lowenstein are 1,698 shares as to which Mr. Lowenstein holds
an option exercisable as of May 18, 2005.
18 Included in the total for Mr. Malloy are 76,782 shares held in the name of
the Malloy Family Trust dated August 31, 1990, of which he is a trustee and
as to which he has shared voting power; and 36,090 shares held in the name
of the Malloy Imrie & Vasconi Insurance Services LLC 401(k) Profit Sharing
Plan of which he is not a trustee but as to which he may indirectly have
shared voting power. Also included in the total for Mr. Malloy are 1,698
shares as to which Mr. Malloy holds an option exercisable as of May 18,
2005.
19 Included in the total for Ms. Metro are 1,807 shares as to which Ms. Metro
holds options exercisable as of May 18, 2005.
20 Included in the total for Mr. Nerland are 81 shares held in the name of the
Nerland Trust dated October 5, 2000, of which Mr. Nerland is the trustee;
and 8,718 shares as to which Mr. Nerland holds an option exercisable as of
May 18, 2005.
21 Included in the total for Dr. Nicks are 11,819 shares held in the name of
Radiology Medial Group of Napa Pension and Profit Sharing Plan of which he
is not a trustee but as to which he may indirectly have shared voting
power; and 12,849 shares as to which Dr. Nicks holds an option exercisable
as of May 18, 2005.
22 Included in the total for Mr. Robinson are 62,347 shares held in the name
of Snake River Honey Co., Inc., of which he is a director and as to which
he has shared voting power; and 3,938 shares as to which Mr. Robinson holds
an option exercisable as of May 18, 2005.
23 Included in the total for Mr. Shelton are 2,855 shares as to which Mr.
Shelton holds an option exercisable as of May 18, 2005.
24 Included in the total for Mr. Spencer are 432 shares held in Joint Tenancy
with Christina Spencer as to which he has shared voting power; 432 shares
held in Joint Tenancy with Stephanie Spencer as to which he has shared
voting power; and 4,347 held in the name of Solano Gateway Realty, Inc.
Profit Sharing Plan of which he is a trustee and as to which he has shared
voting power. Also included in the total for Mr. Spencer are 9,977 shares
as to which Mr. Spencer holds an option exercisable as of May 18, 2005.
-24-
25 Included in the total for Ms. Suihkonen are 2,170 shares held by Edward D,
Jones & Co. as custodian FBO Andrew T. Suihkonen IRA as to which Ms.
Suihkonen may indirectly have shared voting power; and 7 shares held in
Tenancy in Common with Kristen D. Suihkonen as to which she has shared
voting power. Also included in the total for Ms. Suihkonen are 9,977 shares
as to which Ms. Suihkonen holds an option exercisable as of May 18, 2005.
26 Included in the total for Mr. Terry are 2,732 shares held by DLJ Investment
Services Group FBO Shawna Terry IRA as to which he may indirectly have
shared voting power. Also included in the total for Mr. Terry are 3,544
shares as to which Mr. Terry holds an option exercisable as of May 18,
2005.
27 Included in the total for Mr. Tidgewell are 1,698 shares as to which Mr.
Tidgewell holds an option exercisable as of May 18 2005.
28 In computing the percentage of outstanding Common Stock owned beneficially
by all Current Executive Officers and Directors as a group, it is assumed
that those options granted to any member of the group which are exercisable
within 60 days have been exercised and that therefore, the total number of
outstanding shares of the class has been increased by 132,544, the number
of shares subject to the exercisable options by all members of the group.
-25-
EXECUTIVE COMPENSATION
Summary Executive Compensation Table
The following table provides a summary of the compensation paid during each of
the Company's last three completed fiscal years for services rendered in all
capacities to Terry Robinson, the President and Chief Executive Officer of the
Company and to Lee-Ann Cimino, Susan C. Fonseca, Kathi Metro, John A. Nerland,
and Glen C. Terry, the only other executive officers of the Company whose annual
compensation exceeded $100,000 during 2004. (Mr. Robinson, Ms. Cimino, Ms.
Fonseca, Ms. Metro, Mr. Nerland, and Mr. Terry are sometimes collectively
referred to as the "Named Executive Officers").
Long Term
Annual Compensation Compensation Awards
--------------------------------------- --------------------------------
Restricted Securities All Other
Name and Principal Other Annual Stock Awards Underlying Compensation
Position Year Salary ($) Bonus ($) Compensation ($) Options (#)29 ($)
- -------- ---- ---------- --------- ------------ ------------ ------------- ------------
Terry L. Robinson 2004 211,000 100,000 -0- -0- 15,750 27,776
President and Chief 2003 204,999 52,700 -0- -0- 9,923 28,282
Executive Officer 2002 198,125 55,000 -0- -0- -0- 26,755
Lee-Ann Cimino 2004 90,583 32,000 -0- -0- 2,678 8,377
Sr. V.P. and Chief 2003 88,083 17,600 -0- -0- 2,315 8,127
Financial Officer 2002 85,167 21,000 -0- -0- -0- 7,478
Susan C. Fonseca Sr. 2004 86,583 32,000 -0- -0- 2,678 6,945
V/P. Human Resources 2003 84,083 20,600 -0- -0- -0- 7,278
2002 81,333 20,000 -0- -0- -0- 1,609
Kathi Metro 2004 125,833 48,000 -0- -0- 4,253 16,502
Executive V.P. and Credit 2003 117,399 27,300 -0- -0- 2,977 17,203
Administrator 2002 113,333 28,000 -0- -0- -0- 16,169
John A. Nerland 2004 128,000 63,000 -0- -0- 7,088 15,973
President of Solano Bank, 2003 119,166 35,600 -0- -0- -0- 11,360
Division of The Vintage 2002 81,458 24,000 -0- -0- 17,364 4,339
Bank
Glen C. Terry 2004 150,000 65,000 -0- -0- 7,560 19,373
President of 2003 145,833 39,000 -0- -0- 4,961 19,855
The Vintage Bank 2002 137,917 39,000 -0- -0- -0- 18,544
<FN>
- ------------------------
29 As adjusted for the split effective December 6, 2004 and the 5% stock
dividend payable March 31, 2005.
</FN>
-26-
The value of perquisites and other personal benefits are disclosed in other
annual compensation if they exceed, in the aggregate, the lesser of $50,000 or
10% of salary and bonus. No amounts are reported in this column for Mr.
Robinson, Ms. Cimino, Ms. Fonseca, Ms. Metro, Mr. Nerland or Mr. Terry since the
value of perquisites and other personal benefits did not exceed the reporting
threshold.
All other compensation for 2004 includes, for each Named Executive, $250, the
value of one share of preferred stock of Vintage Capital Trust, the Vintage
Bank's REIT.
All Other Compensation for each year includes contributions to The Vintage
Bank's Profit Sharing and Salary Deferral 401(k) Plan. Contributions to the
401(k) Plan for Mr. Robinson were $15,375 in 2004, $16,553 in 2003, and $15,139
in 2002. Contributions to the 401(k) Plan for Ms. Cimino were $6,794 in 2004,
$7,674 in 2003, and $7,040 in 2002. Contributions to the 401(k) Plan for Ms.
Fonseca were $6,494 in 2004, $7,147 in 2003, and $1,478 in 2002. Contributions
to the 401(k) Plan for Ms. Metro were $9,410 in 2004, $10,382 in 2003, and
$9,378 in 2002. Contributions to the 401(k) Plan for Mr. Nerland were $9,625 in
2004, $5,227 in 2003, and $-0- in 2002. Contributions to the Bank's 401(k) Plan
for Mr. Terry were $11,275 in 2004, $12,705 in 2003, $ 11,412 in 2002. Total
contributions to the 401(k) Plan for all Named Executives as a group were
$58,964 in 2004, $59,688 in 2003, and $44,447 in 2002.
All Other Compensation for 2004 includes the economic value to Terry L.
Robinson, Lee-Ann Cimino, Kathi Metro, and Glen C. Terry of split dollar life
insurance death benefits provided by The Vintage Bank and Solano Bank pursuant
to Endorsement Method Split Dollar Agreements entered into with these executive
officers on October 1, 2001. By the terms of the Endorsement Method Split Dollar
Agreements a portion of the death benefit of single premium life insurance
policies purchased on the lives of the covered executive officers, depending on
the age of the executive officer at the time of death, is paid to the executive
officers' designated beneficiaries. At all times the bank is entitled to an
amount equal to the cash value of the life insurance policies which are the
subject of the Endorsement Method Split Dollar Agreements. The economic benefit
included in All Other Compensation for the covered executive officers is as
follows: $1,861 in 2004, $1,439 in 2003, and $1,326 in 2002 for Terry L.
Robinson; $389 in 2004, $368 in 2003, and $353 in for Lee-Ann Cimino; $630 in
2004, $600 in 2003, and $570 in 2002 for Kathi Metro; and $1,406 in 2004, $690
in 2003, $690 in 2002 for Glen C. Terry. Total economic benefit included in All
Other Compensation for all covered executive officers was $4,286 in 2004, $3,097
in 2003, and $2,586 in 2002.
In 2001 The Vintage Bank and Solano Bank paid an aggregate single premium of
$2,025,000 to purchase the life insurance policies that are the subject of the
Endorsement Method Split Dollar Agreements. Management believes that the premium
investment, after consideration of the non-taxable nature of earnings on certain
insurance investments, produces a higher return than other taxable investments
made in the normal course of business. Therefore, the net cost of the split
dollar plan is believed to be nominal.
All Other Compensation for each year includes the economic benefit of group life
insurance coverage in excess of $50,000 for the Named Executive Officers. The
amounts included for Mr. Robinson were $1,290 in 2004, $1,250 in 2003, and
-27-
$1,290 in 2002. The amounts included for Ms. Cimino were $95 in 2004, $85 in
2003, and $85 in 2002. The amounts included for Ms. Fonseca were $201 in 2004,
$131 in 2003, and $131 in 2002. The amounts included for Ms. Metro were $221 in
2004, $221 in 2003, and $221 in 2002. The amounts included for Mr. Nerland were
$148 in 2004, $133 in 2003, and $89 in 2002. The amounts included for Mr. Terry
were $442 in 2004, $442 in 2003, and $442 in 2002. The amounts included for all
Named Executives as a group were $2,397 in 2004, $2,262 in 2003, and $2,258 in
2002.
By the terms of the Split Dollar Agreement dated November 21, 1994, The Vintage
Bank agreed to pay $23,312 of the policy's total annual premium of $24,9222 for
a period of ten years. Effective as of November 21, 2001, the Split Dollar
Agreement was amended and Mr. Robinson assumed responsibility for the full
amount of the premium. The Vintage Bank did not pay any share of the premium in
2003 or 2004 and, accordingly, no amount of the premium has been included in All
Other Compensation for 2003 or 2004. As provided by the Split Dollar Agreement
Mr. Robinson repaid all of the premiums paid by The Vintage Bank on or before
November 21, 2004.
The taxable benefit of Mr. Robinson's benefits under the Director Supplemental
Retirement Program described in the section of this proxy statement entitled
"Compensation of Directors", is included in the amount covered under All Other
Compensation in connection with Mr. Robinson's Endorsement Method Split Dollar
Agreement, discussed above.
Option Grants and Exercises
The following table sets forth information concerning individual grants of stock
options during fiscal year 2004 to each of the Named Executive Officers, as
adjusted for the 3-for-2 stock split effective December 6, 2004 and for 5% stock
dividends paid through March 31, 2005:
-28-
Options Granted in Last Fiscal Year
No. of % of Total Options Exercise or
Underlying Granted to Employees in Base Expiration Grant Date
Name Options Granted Fiscal Year Price($/Sh.) Date Value30
- ------------------------- ---------------- ------------------------- --------------- ------------------- ------------
Terry Robinson, 15,750 18% $21.83 October 31, 2014 $71,500
President and CEO
Lee-Ann Cimino, Senior 2,678 3% $21.83 October 31, 2014 $12,155
Vice President and
Chief Financial Officer
Susan C. Fonseca Senior 2,678 3% $21.83 October 31, 2014 $12,155
Vice President, Human
Resources
Kathi Metro, 4,253 5% $21.83 October 31, 2014 $19,305
Executive Vice
President and Credit
Administrator
John A. Nerland, 7,088 8% $21.83 October 31, 2014 $32,175
President of Solano
Bank, a Division of The
Vintage Bank
Glen C. Terry, 7,560 8% $21.83 October 31, 2014 $34,320
President of The
Vintage Bank
<FN>
- ------------------------
30 Present value at date of grant using the Black-Scholes model
</FN>
-29-
The following table shows exercises of stock options during fiscal year 2004
by the Named Executive Officers and the value at December 31, 2004 of
unexercised options on an aggregated basis held by each of those persons:
Aggregate Option Exercises in Last Fiscal Year and Year-End Option Values
Number of Securities Underlying Value of Unexercised
Value Unexercised In-the-Money Options
Shares Acquired Realized Options At Fiscal Year-End at Fiscal Year-End
on Exercise (#) ($) Exercisable/Unexercisable Exercisable/Unexercisable
--------------------------------------- ------------- -------------------------------- ------------------------------
Terry Robinson, 21,107 201,216 Exercisable for 3,938 Exercisable $ 21,898
President and CEO Unexercisable for 21,735 Unexercisable $172,472
Lee-Ann Cimino, Senior -0- -0- Exercisable for 2,856 Exercisable $ 34,494
Vice President and Unexercisable for 4,147 Unexercisable $ 35,990
Chief Financial Officer
Susan C. Fonseca -0- -0- Exercisable for 8,327 Exercisable $129,467
Senior Vice President, Unexercisable for 7,113 Unexercisable $ 94,997
Human Resources
Kathi Metro, -0- -0- Exercisable for 5,828 Exercisable $ 75,276
Executive Vice Unexercisable for 6,427 Unexercisable $ 57,101
President and Credit
Administrator
John A. Nerland, -0- -0- Exercisable for 8,718 Exercisable $ 98,098
President of Solano Unexercisable for 15,734 Unexercisable $161,929
Bank, a Division of
The Vintage Bank
-0- -0- Exercisable for 19,625 Exercisable $273,730
Glen C. Terry, Unexercisable for 12,998 Unexercisable $128,481
President of The
Vintage Bank
For purposes of calculating the value of unexercised stock options as of
December 31, 2004, it is assumed that the fair market value of the shares as of
December 31, 2004 was $27.39 per share, as determined by the last reported trade
on the Nasdaq National Market System in North Bay common stock on that date, as
adjusted for the 3-for-2 stock split effective December 6, 2004 and for 5% stock
dividends paid through March 31, 2005 .
Long Term Incentive Plans - Awards in Last Fiscal Year
There were no transactions in 2004 which require disclosure in a table for
long-term incentive plan awards.
-30-
Employment Agreement and Termination of Employment and Change of Control
Arrangements.
Terry L. Robinson. Effective March 1, 2004, North Bay Bancorp entered into an
Employment Agreement with Mr. Robinson as President and Chief Executive Officer
of the Company. As a result of the merger of Solano Bank into The Vintage Bank,
Mr. Robinson's agreement was amended on March 28, 2005, to provide that he will
also serve as Chief Executive Officer of The Vintage Bank. The initial term of
the Robinson Agreement continues until the third anniversary after the effective
date (March 1, 2007). Unless terminated by Mr. Robinson or the Company, at the
end of the third year, or any subsequent year, the agreement will continue on a
year to year basis. The agreement provided for an initial base salary of
$212,000, and annual adjustments as determined by the Board of Directors in its
sole discretion. During 2005, the base salary will continue to be $212,000. Mr.
Robinson is also eligible to receive additional compensation under the terms of
an incentive compensation plan adopted annually by the Board of Directors,
participation in the Company's 401(k) Plan, paid time off in accordance with the
Company's Employee Handbook, reimbursement of reasonable business expenses, and
automobile allowance of $750 per month.
If Mr. Robinson's employment is terminated by reason of his death, termination
by the Company for cause, or resignation, he will be entitled to be paid his
salary then in effect through the effective date of termination. If he is
terminated without cause, he will be entitled to six months salary.
The agreement provides that if within one year of the effective date of certain
specified corporate changes, including a merger, sale, transfer of the company's
assets or an effective change in control of the company, Mr. Robinson's
employment is terminated by the Company, without cause, or terminated by him on
account of the Company's constructive termination of his employment, he will be
entitled to be paid an amount equal to three (3) times his annual salary then in
effect plus the average of his incentive compensation for the two most recently
completed fiscal years of the Company, increased by an additional amount so that
the net amount retained by the executive, after deduction of any federal, state
and local income tax, any excise tax and FICA Medicare withholding taxes will
equal the total benefits contemplated by the agreement. This amount is payable
over a period of thirty-six (36) months following the effective date of the
termination of his employment.
The maximum amount payable under Mr. Robinson's employment agreement in
connection with any corporate change for the years 2002, 2003 and 2004 was
$642,875, $668,847, and $712,350, respectively.
Kathi Metro. Effective May 1, 2001, North Bay Bancorp entered into an Employment
Agreement with Ms. Metro as Executive Vice President and Credit Administrator of
the Company. The initial term of the Metro Agreement continues until the third
anniversary after the effective date of the agreement. Unless terminated by Ms.
Metro or the Company, at the end of the third year, or any subsequent year, the
agreement will continue on a year to year basis. The agreement provided for an
initial base salary of $107,000 and annual adjustments as determined by the
Board of Directors in its sole discretion. During 2005, the base salary will be
$130,000. Ms. Metro is also eligible to receive additional compensation under
the terms of an incentive compensation plan adopted annually by the Board of
-31-
Directors, participation in the Company's 401(k) Plan, 30 days personal time
off, reimbursement of reasonable business expenses, and automobile allowance of
$500 per month.
John A. Nerland. Effective April 15, 2002, Solano Bank entered into an
Employment Agreement with Mr. Nerland as President and Chief Executive Officer
of the Bank. As a result of the merger of Solano Bank into The Vintage Bank, Mr.
Nerland's agreement was amended on March 28, 2005, to provide that he will serve
as President of Solano Bank, a division of The Vintage Bank. The initial term of
the Nerland Agreement continues until the third anniversary after the effective
date of the agreement. Unless terminated by Mr. Nerland or The Vintage Bank, at
the end of the third year, or any subsequent year, the agreement will continue
on a year to year basis. The agreement provided for an initial base salary of
$115,000 and annual adjustments as determined by the Board of Directors in its
sole discretion. During 2005, the base salary will be $134,000. Mr. Nerland is
also eligible to receive additional compensation under the terms of an incentive
compensation plan adopted annually by the Board of Directors, participation in
the Company's 401(k) Plan, 20 days annual vacation, reimbursement of reasonable
business expenses, and automobile allowance of $500 per month.
Glen C. Terry. Effective May 1, 2001, Solano Bank entered into an Employment
Agreement with Mr. Terry as President and Chief Executive Officer of the Bank.
Mr. Terry's agreement was assigned to The Vintage Bank on April 1, 2002. As a
result of the merger of Solano Bank into The Vintage Bank, Mr. Terry's agreement
was amended on March 28, 2005, to provide that he will serve as President of The
Vintage Bank. to The initial term of the Terry Agreement continues until the
third anniversary after the effective date of the agreement. Unless terminated
by Mr. Terry or The Vintage Bank, at the end of the third year, or any
subsequent year, the agreement will continue on a year to year basis. The
agreement provides for a base salary of $130,000, which will be adjusted
annually as determined by the Board of Directors in its sole discretion. During
2005, the base salary will be $155,000. Mr. Terry is also eligible to receive
additional compensation under the terms of an incentive compensation plan
adopted annually by the Board of Directors, participation in the Company's
401(k) Plan, 20 days annual vacation, reimbursement of reasonable business
expenses, and an automobile allowance of $500 per month.
The agreement for each of Ms. Metro, Mr. Nerland, and Mr. Terry provides that if
his or her employment is terminated by reason of his or her death, termination
by the Company for cause or by his or her resignation, he or she will be
entitled to be paid his or her salary then in effect through the effective date
of termination. If he or she is terminated without cause, he or she will be
entitled to six months salary.
The agreement for each of Ms. Metro and Mr. Terry also provides that if within
one year of the effective date of certain specified corporate changes, including
a merger, sale, transfer of the company's assets or an effective change in
control of the company, his or her employment is terminated by the Company,
without cause, he or she will be entitled to be paid an amount equal to his or
her annual salary then in effect plus the average of his or her incentive
compensation for the two most recently completed fiscal years of the Company. If
the executive has completed five or more years of service at the time of
termination, he or she will be entitled to an amount equal to two times his or
her annual salary then in effect plus the average of his or her incentive
compensation for the two most recently completed fiscal years. This amount is
-32-
payable over a period of twenty-four (24) months following the effective date of
the termination of his or her employment.
The maximum amount payable under Mr. Terry's employment agreement in connection
with any corporate change for 2003 was $184,833 and $361,000 for 2004. The
maximum amount payable under Ms. Metro's current employment agreement in
connection with any corporate change for 2003 was $262,328 and $297,650 for
2004.
The agreement for each of Mr. Robinson, Ms. Metro, and Mr. Terry also provides
that in the event the compensation payable to the executive by reason of a
change in control (including without limitation, accelerated vesting of stock
options and other compensation payable outside of the agreement) constitute
excess parachute payments within the meaning of Section 280G of the Internal
Revenue Code and the executive will be subject to the excise tax imposed by
Section 4999 of the Code, then the aggregate compensation payable to the
executive will be increased by an additional amount so that the net amount
retained by the executive, after deduction of any federal, state and local
income tax, any excise tax, and FICA Medicare withholding taxes will equal the
total benefits contemplated by the agreement.
Although they do not have a written employment agreement, the Board of Directors
has set the 2005 base salaries for Senior Vice President/Chief Financial Officer
Lee-Ann Cimino and Senior Vice President/Human Resources Susan C. Fonseca at
$95,000 and $90,000, respectively.
Incentive Plan
The Board of Directors has adopted a 2005 Incentive Plan, which includes
guidelines and an accrual formula for employee incentive compensation. Under the
Plan, incentive payments are discretionary. Management-level employees have
incentive compensation "targets" calculated as a percentage of base
compensation; the percentage is applicable if a manager attains his or her
annual goals and varies depending upon a manager's title and the net income of
the Company relative to the budget. Target incentives range from 15% of base
salary for Assistant Vice Presidents to 40% of base salary for the CEO if the
Company attains its budgeted net income.
During 2005, the Company will accrue into an incentive "pool" from which
incentive payments are made. The amount accrued into the pool varies with the
Company's net income. A "fixed" contribution of $300,000 will be accrued to the
incentive pool during the year regardless of the Company's net income; this
contribution will cover incentives paid to sales personnel who are incented for
attaining business development goals. Additional accruals to the pool will be
made monthly providing the projected net income for 2005 exceeds $5 million. In
2005, the Company will accrue for total incentive payments of $1,200,000, net of
employer payroll taxes, if it attains budgeted net income of approximately
$7,300,000. Should 2005 net income exceed $7,300,000, 30% of after tax net
income in excess of $7,300,000 will be accrued to the incentive pool.
Executive Officer Supplemental Executive Retirement Plan
Effective October 1, 2001, The Vintage Bank and Solano Bank entered into
Executive Supplemental Compensation Agreements with Terry L. Robinson, Lee-Ann
Cimino, Kathi Metro, and Glen C. Terry. By the terms of these Agreements the
covered executive officers will receive a defined cash benefit payable monthly
upon retirement upon reaching age 65 (or upon or after age 62 with a reduced
-33-
benefit), subject to the terms set forth in the executive officer's individual
agreement. Benefits under these Agreements vest over five year periods at the
rate of 20% per year after five years of service with credit for up to five
years of prior service. The defined cash benefit per year for the covered
executive officers assuming 100% vesting is as follows: Terry L. Robinson,
$120,000; Lee-Ann Cimino, $75,000; Kathi Metro, $75,000; and Glen C. Terry,
$75,000. Yearly benefits will continue until the death of the executive, subject
to forfeiture in the event of unfair competition by the executive with The
Vintage Bank prior to commencement of benefits.
Compensation of Directors
The Board of Directors of North Bay has adopted a director compensation plan.
Under the plan, Directors of North Bay each receive an annual retainer of
$20,000, which is not dependent on the number of meetings attended. In addition
the Chairman of the Board of Directors, the Chairman of the Audit Committee, and
the Chairman of the Compensation Committee are entitled to additional retainers
of $6,000, $5,000, and $3,000, respectively.
Terry L. Robinson, President, Chief Executive Officer and a Director of North
Bay is not eligible to participate in the director compensation plan.
Additionally, during 2004 each director was granted one share of the preferred
stock of Vintage Capital Trust, the Vintage Bank's REIT, valued at $250 per
share.
Director Stock Options
Each North Bay Director, other than Terry Robinson, was granted an option to
purchase 3,150 shares of North Bay common stock on November 1, 2004 at an
exercise price of $21.83 per share. All options are non-qualified stock options.
All options vest over four years at the rate of 25% per year. All options must
be exercised within ten years of the date of grant subject to the director
continuing as a director of North Bay Bancorp.
After giving effect to the stock splits effective October 1, 1997 and December
6, 2004 and stock dividends paid through March 29, 2005, the aggregate number of
shares subject to options held by non-employee directors of North Bay Bancorp
outstanding as of March 18, 2005 is 188,376.
Directors' Deferred Fee Plan
In August 1995, The Vintage Bank established a Deferred Fee Plan for the
directors of The Vintage Bank including Mr. Robinson. The Deferred Fee Plan has
been adopted by North Bay, and is now available to directors of North Bay and
The Vintage Bank. The deferral program, provides for deferral, at the election
of each director of annual director fees. The deferral program commences at the
time the director elects to participate and continues for a period which
continues until the director completes ten years of service and attains
retirement age. At the end of the deferral program or earlier in the event of
disability, the deferred compensation, including accrued interest, is paid to
the director in a lump sum or periodic payments over a specified period of time
as selected by the director upon enrollment in the Deferred Fee Plan. If the
director terminates his or her relationship with North Bay and/or The Vintage
-34-
Bank during the Deferred Fee Plan period for reasons other than death or
disability, all amounts deferred, including accrued interest, will be paid in
the manner selected by the director but accrued interest on the deferred
compensation will be calculated at an interest rate that is two-hundred basis
points lower than the rate established by North Bay's Board of Directors in
accordance with the Deferred Fee Plan.
In the event of death while a member of the Board of Directors, the director's
beneficiary will receive the amount that would have been paid to the director
had he or she remained in the program and attained his or her specified
retirement age.
In 1995 The Vintage Bank paid an aggregate single premium of $1,040,000 to
purchase life insurance policies on each director participating in the Deferred
Fee Plan to fund its liability for the death benefit. The Vintage Bank owns and
is the beneficiary of the policies and earns a rate of return on the invested
premiums which is reflected by an increase in the cash value of the policies.
The directors participating in the deferred program have no rights in the
policies. It is the current policy of the Board of Directors not to purchase
additional life insurance policies to fund the death benefit of new directors
who subsequently become eligible to participate in the Deferred Fee Plan.
Management of North Bay believes that the premium investment, after
consideration of the non-taxable nature of earnings on certain insurance
investments, produces a higher return than other taxable investments made in the
normal course of business. Therefore, the net cost of this deferred compensation
program to North Bay is believed to be nominal.
Director Supplemental Retirement Program
Effective January 1, 1999, The Vintage Bank established a Director Supplemental
Retirement Program for the directors of The Vintage Bank including Mr. Robinson
and The Vintage Bank's corporate secretary, Wyman G. Smith. Under the program
and a retirement policy adopted by The Vintage Bank's Board of Directors,
non-employee directors attaining age sixty-five are no longer eligible for
re-election to the Board of Directors. Upon attaining retirement age and
provided the participant has served on The Vintage Bank's Board of Directors or
as an officer of The Vintage Bank for not less than ten years, participants are
entitled to receive a defined benefit of $8,500 per year under the program in
annual or monthly installments commencing thirty days following their
retirement. The benefit is subject to an annual 2% cost of living increase on
each anniversary of the commencement of a participant's benefit.
In order to fund its liability under the program and minimize the impact of the
program on The Vintage Bank's earnings, in 1998 The Vintage Bank paid an
aggregate single premium of $2,462,000 to purchase life insurance policies to
fund the retirement and death benefits. The Vintage Bank owns and is the
beneficiary of the policies and earns a rate of return on the invested premiums
which is reflected by an increase to the cash value of the policies. The
directors participating in the program have no rights in the policies other than
an endorsement for a portion of the death benefit.
The program also provides that a deceased participant's named beneficiaries will
receive a death benefit. On the death of a participant, The Vintage Bank
receives a tax-free death benefit sufficient to fully recover all premiums paid
on the deceased participant's specific life insurance policy.
-35-
In February 2002, the Board of Directors of North Bay approved discontinuation
of this program for North Bay, The Vintage Bank and Solano Bank. Discontinuation
of the program does not affect the retirement and death benefits of existing
program participants.
Management believes that the premium investment, after consideration of the
non-taxable nature of earnings on certain insurance investments, produces a
higher return than other taxable investments made in the normal course of
business. Therefore, the net cost of the program to The Vintage Bank is believed
to be nominal.
OTHER INFORMATION REGARDING MANAGEMENT
Management Indebtedness
Certain provisions of the California Financial Code and federal regulations
enable state chartered banks to make loans to officers, directors and employees
up to certain specified limits. From time to time Solano Bank and The Vintage
Bank have made loans to officers, directors and employees in the ordinary course
of business. These loans were made on substantially the same terms, including
interest rates and collateral requirements, as those prevailing for comparable
transactions with other nonaffiliated persons at the time each loan was made,
subject to the limitations and other provisions in California and Federal law.
These loans do not involve more than the normal risk of collectibility or
present other unfavorable features.
Certain Business Relationships
Except as described below, there have been no transactions since January 1, 2004
nor are there any currently proposed transactions, to which the Company, or
either of the Banks, was or is to be a party, in which the amount involved
exceeds $60,000 and in which any director, executive officer, nominee as a
director, five percent (5%) shareholder or member of the immediate family of any
of the foregoing persons had, or will have, a direct or indirect material
interest. All such transactions were made in strict accordance with applicable
rules and regulations and on substantially the same terms as those available at
the time for comparable transactions with disinterested persons.
Mr. Gaw, a Director of the Company and of The Vintage Bank, and Wyman G. Smith,
Corporate Secretary of North Bay and The Vintage Bank are members and
shareholders of the law firm of Gaw, Van Male, Smith, Myers & Miroglio, a
professional law corporation which North Bay, Solano Bank and The Vintage Bank
have retained since their organization and propose to retain for specific
matters during 2004. During 2004, fees received by the firm for these services
totaled $194,939, of which $147,884 was billed to North Bay, $39,093 to Solano
Bank, and $7,962 to The Vintage Bank.
Solano Bank rents its premises at 1411 Oliver Rd. Fairfield, California from
Solano Property Management, of which Stephen Spencer, a Director of the Company,
is President. During 2004, Solano Property Management received rent payments
totaling $115,425 from the bank.
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The Company has engaged the services of Hearn Pacific Corporation for various
construction projects. Fred J. Hearn, Jr., a Director of the Company, is
President of Hearn Pacific Corporation. During 2004, the Company paid Hearn
Pacific Corporation $77,026 for these projects.
Reports of Changes in Beneficial Ownership
Based upon a review of Forms 3 and 4 and amendments thereto furnished to the
Company during the fiscal year ending December 31, 2004, Form 5 and amendments
thereto furnished to the Company with respect to the fiscal year ending December
31, 2004, and written representations from all reporting persons, all statements
required by rules promulgated by the Securities and Exchange Commission under
Section 16 of the Securities Exchange Act of 1934 were timely filed, except that
Executive Vice President Kathi Metro filed a Form 4 due on November 4, 2004 on
December 13, 2004.
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PROPOSAL NO. 2 - RATIFICATION OF INDEPENDENT AUDITORS
The Company's independent Audit Committee has selected and appointed KPMG LLP,
independent certified public accountants, to examine the financial statements of
the Company for the year ending December 31, 2005. In recognition of the
important role of the independent auditor, the Board of Directors has determined
that its selection of the independent auditor should be submitted to the
shareholders for review and ratification. The Board of Directors expects that a
representative of KPMG LLP, will be in attendance at the Annual Meeting and will
be provided the opportunity to make a statement if he or she so desires and will
be available to respond to appropriate questions of shareholders.
KPMG LLP's engagement by North Bay commenced on April 8, 2002. During the fiscal
year ended December 31, 2004, KPMG LLP provided professional services in
connection with the review of Quarterly Reports on Form 10-Q for the quarters
ended March 31, June 30, and September 30, 2004, preparation for the audit of
financial statements of North Bay for the fiscal year ended December 31, 2004,
and consultation with North Bay's management regarding year end tax planning.
Audit Fees
The following table itemizes fees billed the Company by KPMG during the fiscal
years 2004 and 2003:
- ---------------------------------------------------------------- -------------------------- --------------------------
2004 2003
---- ----
- ---------------------------------------------------------------- -------------------------- --------------------------
Audit fees: 31 $160,000 $107,830
- ---------------------------------------------------------------- -------------------------- --------------------------
Audit related fees:
- ---------------------------------------------------------------- -------------------------- --------------------------
Other accounting services 32 0 0
- ---------------------------------------------------------------- -------------------------- --------------------------
Tax fees:
- ---------------------------------------------------------------- -------------------------- --------------------------
Tax return preparation 19,780 15,000
- ---------------------------------------------------------------- -------------------------- --------------------------
Assistance with FTP examination 0 600
- ---------------------------------------------------------------- -------------------------- --------------------------
Tax consultation 33 5,000 132,680
- ---------------------------------------------------------------- -------------------------- --------------------------
All other fees: 0 0
- ---------------------------------------------------------------- -------------------------- --------------------------
<FN>
- ------------------------
31 Services include the audit of the Company's annual financial statement and
reviews of financial statements included in the Quarterly Reports on Form
10-Q or services that are normally provided by the accountants in
connection with statutory and regulatory filings for engagement.
32 Services include assurance and related services by the auditor that are
reasonable related the performance of the audit or review on the Company's
financial statements and are not reported under "Audit Fees."
33 Services include tax compliance, tax advice and tax planning. Services in
2003 and 2004 include quarterly review of estimated tax payments. Services
in 2003 also include fees of $125,000 for tax planning associated with
establishing a Real Estate Investment Trust, which was refunded in 2004.
</FN>
Audit Committee's Pre-Approval Policies and Procedures
The services performed by KPMG LLP in 2004 were pre-approved in accordance the
pre-approval policy and procedures adopted by the Audit Committee. The policy
describes that the Audit Committee approve, in advance, any audit, audit-related
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and non-audit service provided to the Company by the independent accountants.
Additionally the Committee must approve the independent accountants' audit plan
and audit services in advance. The Chairman of the Audit Committee has been
delegated the authority to approve services up to $50,000 in between meetings,
as necessary.
Required Vote and Recommendation
The affirmative vote of a majority of the shares voting at the meeting, assuming
a quorum is present, is required to ratify the appointment of KPMG LLP to audit
the financial statements of North Bay for the fiscal year ending December 31,
2005. An abstention or failure to vote shares represented and entitled to vote
at the meeting will be treated as a negative vote. The Board of Directors
recommends that shareholders vote FOR this proposal.
AVAILABILITY OF FORM 10-K
A copy of the Company's 2004 Annual Report on Form 10-K, including financial
statements and financial statement schedules required to be filed with the
Securities Exchange Commission pursuant to Section 13 of the Securities Exchange
Act of 1934, will be furnished without charge to any shareholder upon written
request. A copy may be requested by writing Pansy F. Smith, Assistant Corporate
Secretary, North Bay Bancorp, P.O. Box 2200, Napa, California 94558.
SHAREHOLDER PROPOSALS
The 2006 Annual Meeting of Shareholders will be held on May 11, 2006. December
14, 2005, is the date by which shareholder proposals intended to be presented at
the 2006 Annual Meeting must be received by management of the Company at its
principal executive office for inclusion in the Company's 2006 proxy statement
and form of proxy relating to that meeting. Additionally, with respect to any
proposal by shareholders not submitted for inclusion in the Bank's Proxy
Statement, if notice of the proposal is not received by February 27, 2006, the
notice will be considered untimely, and the Company's proxy holders will have
discretionary authority to vote on the proposal.
OTHER MATTERS
The Board of Directors is not aware of any other matters to come before the
Annual Meeting. If any other matter not mentioned in this Proxy Statement is
brought before the Annual Meeting, the persons named in the enclosed form of
proxy will have discretionary authority to vote all proxies with respect thereto
and in accordance with their judgment.
Dated: April 13, 2005, at Napa, California For the Board of Directors
/s/ Wyman G. Smith
--------------------------
Wyman G. Smith
Corporate Secretary
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EXHIBIT A
[NORTH BAY BANCORP LOGO]
AUDIT COMMITTEE CHARTER
October 2, 2004
I. COMMITTEE PURPOSE
The primary purpose of the Audit Committee (the "Committee") of the
Board of Directors of North Bay Bancorp (the "Company") is to oversee
the Company's accounting and financial reporting processes and the
audits of the Company's financial statements.
II. COMMITTEE STATEMENT OF POLICY
The Audit Committee shall provide assistance to the Directors in
fulfilling their responsibility to the shareholders, potential
shareholders, regulators and investment community relating to corporate
accounting, reporting practices of the Company and the quality and
integrity of financial reports of the Company. Thus, the Audit
Committee has the responsibility to maintain free and open
communication among the Directors, the independent auditors, the
regulators, the internal auditors and the financial management of the
Company and its subsidiaries.
III. COMMITTEE COMPOSITION AND MEETINGS
The Committee shall have a minimum of three (3) members, each of whom
shall be a member of the Board of Directors and meet the qualification
and independence requirements of the Nasdaq Stock Market, Inc. and
applicable law. Members of the Committee shall be appointed by and
serve at the discretion of the Board of Directors, which shall also
appoint the Committee's Chairman.
The Committee shall meet regularly as necessary to fulfill its
responsibilities. Special meetings may be called by the Chairman of the
Committee or the Chairman of the Board. The Committee may also take
action by unanimous written consent of its members. The Committee may
delegate any of its responsibilities to a subcommittee comprised solely
of a member or members of the Committee. At any meeting of the
Committee or a subcommittee of the Committee, the presence of one-half
of its members then in office shall constitute a quorum for the
transaction of business; and the act of a majority of the members
present at a meeting at which a quorum is present shall be the act of
the Committee or subcommittee.
The Committee may request that any other director, officer or employee
of the Company or any of the consultants or advisors attend a Committee
meeting or meet with any member of the Committee or its advisors. The
Committee shall have the authority to retain and terminate, at the
Company's expense, legal counsel, accountants or other consultants or
-40-
advisors, as the Committee determines necessary to carry out its
duties. The Committee may meet with any person in executive session,
and shall meet in executive sessions as directed below.
The Company shall provide appropriate funding, as determined by the
Committee, in its capacity as a committee of the Board of Directors,
for payment of (a) compensation to any registered public accounting
firm engaged for the purpose of preparing or issuing an audit report or
performing other audit, review or attest services to the Company, (b)
compensation to any advisors employed by the Committee as permitted by
this Charter, and (c) ordinary administrative expenses of the Committee
that are necessary or appropriate in carrying out its duties.
IV. COMMITTEE RESPONSIBILITIES
In carrying out its responsibilities, the Audit Committee believes its
policies and procedures should remain flexible. Flexibility is needed
to best react to changing conditions and to ensure to the directors,
shareholders and regulators that the corporate accounting and reporting
practices of the Company are in accordance with all requirements and
are of the highest quality.
A. Independent Accountants
The Committee shall:
1. Be directly responsible for the appointment, compensation, retention
and oversight of the work of any registered public accounting firm
engaged (including resolution of disagreements between management and
the auditor regarding financial reporting) for the purpose of preparing
or issuing an audit report or performing other audit, review or attest
services for the Company, and each such registered public accounting
firm shall report directly to the Committee, all as and to the extent
required under applicable rules of the Nasdaq Stock Exchange Market,
Inc. or SEC rules;
2. Approve in advance any audit, audit-related and non-audit services
to be provided to the Company by the independent accounts;
3. Approve in advance the independent accountants' audit plan and audit
services;
4. Review and confirm the independent accountants' independence from
the Company, by (a) obtaining from the independent accountants a formal
written statement delineating all relationships between the independent
accountants and the Company, consistent with Independence Standards
Board Standard 1, (b) discussing with the independent accountants any
disclosed relationships or services that might impact the independent
accountants' objectivity and independence and (c) reviewing at least
annually fees paid to the independent accountants for audit and
non-audit services;
5. Evaluate regularly the independent accountants' performance;
6. Receive from the independent accountants timely reports on (a) all
critical accounting policies and practices to be used, (b) all
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alternative treatments of financial information within generally
accepted accounting principals that have been discussed with the
Company's management, ramifications of the use of such alternative
disclosures and treatments, and the treatment preferred by the
independent accounts and (c) other material written communications
between the independent accountants and the Company's management, such
as any management letter or schedule of unadjusted differences;
7. Review regularly with the independent accountants the quality of the
Company's accounting and reporting principles and practices, internal
controls and any significant issues and risk areas of the Company;
8. Review regularly with the independent accountants significant
accounting developments and pronouncements; and
9. Meet regularly in executive session with a representative of the
Company's independent auditing firm.
B. Internal and Compliance Audit
The Committee shall:
1. Review the internal audit, credit administration and credit review
functions of the Company and its subsidiaries, including the
independence and authority of its reporting obligations, the proposed
audit plans for the coming year and the coordination of such plans with
the independent auditors. The internal audit and compliance review
functions shall report directly to the Audit Committee. For operational
purposes, on a daily basis these functions shall report to the CEO or
his/her designated officer. Review on a regular basis, the audit and
compliance matrix regarding progress with the plans;
2. Review significant issues raised in the internal audit program, and
any matters involving fraud, illegal acts or significant deficiencies
in internal controls;
3. Meet regularly in executive session with the Company's internal
audit, compliance and credit review firms.
4. Review and concur with Management's appointment, termination or
replacement of the internal audit, compliance review, credit
administration and credit review outsourcing firms. The Audit Committee
has the authorized responsibility to appoint, terminate or replace
these firms and personnel;
5. Review reports received from regulators concerning legal and
regulatory matters that may have a material effect on the financial
statements and related Company compliance policies, and;
6. Receive from Management, the internal audit and credit
administration review firms and the independent auditors' significant
risks or exposures and assess the steps Management has taken to
minimize such risks to the Company and its subsidiaries.
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C. Financial Reporting
The Committee shall:
1. Review with management and the independent accountants significant
financial reporting issues, among other items recent professional and
regulatory pronouncements, revenue recognition, significant reserves,
off-balance sheet items, judgment items and risks;
2. Approve all related-party transactions (as defined by rules of the
Nasdaq Stock Market, Inc.) between the Company or any of its
subsidiaries and any Company directors or nominee for director, Company
executive officer, beneficial owner of more than five percent (5%) of
the Company's outstanding securities or members of the immediate family
of any of the foregoing persons;
3. Review the quarterly financial statements with financial management
and the independent auditors prior to the filing of the Form 10-Q (or
prior to the press release of results) to determine that the
independent auditors do not take exception to the disclosure and
content of the financial statements, and discuss any other matter
required to be communicated to the Committee by the auditors. The Chair
of the Committee may act on behalf of the Committee for the purpose of
this review;
4. Review in advance with the Company's management and independent
accountants the quarterly press release reporting the Company's
financial results;
5. Review with the Company's management and independent accountants the
audited financial statements to be included in the Company's Annual
Reports on Form 10-K (or the Annual Report to Shareholders if
distributed prior to the filing of the Form 10-K), including the
selection, application and disclosure of critical accounting policies
and other significant issues and items, and the matters required to be
discussed by Statement of Auditing Standards No. 61, Communications
with Audit Committee.
D. Other Responsibilities
The Committee shall:
1. Establish procedures for the receipt, retention and treatment of
complaints received by the Company regarding accounting, internal
accounting controls or auditing matters, and the confidential,
anonymous submissions by employees regarding questionable accounting or
auditing matters;
2. Review with the Company's General Counsel legal matters that could
have a significant impact on the Company's financial statements or
results of operations;
3. Approve in advance the engagement of any independent accountants
other than the Company's principal independent accountants;
4. Review at least annually the adequacy of this Charter and recommend
to the Board of Directors any proposed changes to this Charter;
-43-
5. Prepare the report of the Committee required to be included in the
Company's annual proxy statement;
6. Review the policies and procedures in effect for considering
officers' expenses and perquisites for the Company and its
subsidiaries;
7. The Committee should conduct a self-assessment of its performances
in the interest of continuous improvement. This self-assessment should
occur at least every two (2) years.
8. Perform other responsibilities as directed by the Board of Directors
V. FREQUENCY OF MEETINGS
The Audit Committee should meet as a minimum quarterly.
VI. COMMITTEE EDUCATION AND ORIENTATION
Whenever possible, members of the Committee are expected to attend
association conferences, meetings and classes for continuing education
and exposure to the financial institution business and environment in
which the Company operates.
VII. AUDIT COMMITTEE PLAN
The Committee should develop an annual Audit Committee Plan which is
responsive to the primary Audit Committee responsibilities for the
review and approval of the Plan by the full Board.
-44-
Appendix A
X PLEASE MARK VOTES REVOCABLE PROXY
AS IN THIS EXAMPLE
This proxy is solicited on behalf of the Board of Directors and may be
revoked prior to the meeting.
NORTH BAY BANCORP
The undersigned hereby appoints Terry L. Robinson and Wyman G. Smith, as
Proxies, each with full power of substitution, and hereby authorizes them to
represent and to vote all the shares of common stock of North Bay Bancorp held
of record by the undersigned on March 18, 2005, at the annual meeting of
shareholders to be held on May 12, 2005 or any adjournment thereof. The
undersigned hereby further confers upon the Proxies, and each of them, or there
substitute or substitutes, discretionary authority to vote in respect to all
other matters which may properly come before the meeting or any adjournment
thereof.
The undersigned acknowledges receipt of (a) the Notice of Annual Meeting and
accompanying Proxy Statement and (b) an Annual Report of the Company for the
fiscal year ended December 31, 2004, and hereby expressly revokes any and all
proxies heretofore given or executed by the undersigned with respect to the
shares of stock represented by this Proxy, and by filing this Proxy with the
Secretary of the Company, gives notice of revocation.
Please be sure to sign and date this Proxy in the box below. Date _______________________________________________
_______________________________________________ _____________________________________________________
Stockholder sign above Co-holder (if any) sign above
1. ELECTION OF CLASS A DIRECTORS TO SERVE A THREE YEAR TERM EXPIRING AT THE
2008 ANNUAL MEETING OF SHAREHOLDERS.
NOMINEES
John B. Anthony III; Thomas N. Gavin; Thomas H. Lowenstein; Stephen Spencer,
Denise Suihkonen; and James A. Tidgewell
For : ____ Withhold:___ For All Except ____
INSTRUCTION: To withhold authority to vote for any individual nominee, mark "For
All Except" and write that nominee's name in the space provided below:
- ---------------------------------------------------------------------
2. PROPOSAL TO RATIFY THE APPOINTMENT OF KPMG LLP AS THE INDEPENDENT PUBLIC
ACCOUNTANTS OF THE COMPANY.
For ____ Against ____ Abstain ____
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE LISTED PROPOSALS.
This Proxy, when properly executed, will be voted in the manner directed on this
proxy card by the undersigned shareholder. If no direction is made, this Proxy
will be voted for all of the nominees named on this Proxy Card and their
assigned classes and for Proposal No. 2.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Detach above card, sign, date and mail in postage paid envelope provided.
North Bay Bancorp
1190 Airport Road, Suite 101
Napa, California 94558
Please sign exactly as your name appears hereon. If shares are held jointly by
two or more persons, whether as a community property, joint tenancy or
otherwise, both or all of the persons should sign. If shares are held by a
corporation, this Proxy should be signed in full corporate name by the President
or other authorized officer. If shares are held by a partnership, this Proxy
should be signed in partnership name by an authorized person. Executor,
administrators or other fiduciaries who execute this Proxy for a shareholder of
record should give their full title.
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
Has your address changed?
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