DEF 14A 1 0001.txt FORM DEF 14A SCHEDULE 14A (Rule 14a-101) INFORMATION REQUIRED IN PROXY STATEMENT SCHEDULE 14A INFORMATION PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. __) 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 [X] Definitive Proxy Statement Commission Only (as permitted by [ ] Definitive Additional Materials Rule 14a-6(e)(2)) [ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12 MCB FINANCIAL CORPORATION ---------------------------------------------------------- (Name of Registrant as Specified in Its Charter) ---------------------------------------------------------- (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 transactions applies: (2) Aggregate number of securities to which transactions applies: (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): (4) Proposed maximum aggregate value of transaction: (5) Total fee paid: [ ] 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: (2) Form, Schedule or Registration Statement No.: (3) Filing party: (4) Date filed: MCB FINANCIAL CORPORATION 1248 Fifth Avenue San Rafael, CA 94901 NOTICE OF ANNUAL MEETING OF SHAREHOLDERS To Be Held May 16, 2001 TO THE SHAREHOLDERS OF MCB FINANCIAL CORPORATION: NOTICE IS HEREBY GIVEN that pursuant to its Bylaws and the call of its Board of Directors, the 2001 Annual Meeting of Shareholders (the "Meeting") of MCB Financial Corporation ("MCB Financial") will be held at MCB Financial, 1248 Fifth Avenue, San Rafael, California 94901, on Wednesday, May 16, 2001 at 5:30 p.m., for the purpose of considering and voting on the following matters: 1. Election of Directors. To elect the following eight persons to the Board of Directors of MCB Financial to serve until the 2002 Annual Meeting of Shareholders and until their successors are elected and have been qualified: John Cavallucci Patrick E. Phelan Charles O. Hall Gary T. Ragghianti Timothy J. Jorstad Edward P. Tarrant Catherine H. Munson Randall J. Verrue 2. Ratification of Independent Auditor. To ratify the Board of Directors' recommendation of independent auditor for the year ending December 31, 2001. 3. Other Business. To transact such other business as may properly come before the Meeting and any adjournment or adjournments thereof. Only those shareholders of record at the close of business on March 19, 2001 will be entitled to notice of and to vote at the Meeting. It is very important that every shareholder vote. We urge you to sign and return the enclosed proxy as soon as possible, whether or not you plan to attend the Meeting in person. If you do attend the Meeting and wish to vote in person, you may then withdraw your proxy. If you do not attend the Meeting, you may revoke the proxy prior to the time it is voted by notifying the Corporate Secretary in writing to that effect or by filing a later dated proxy. In order to facilitate the provision of adequate accommodations, please indicate on the proxy whether or not you expect to attend the Meeting. DATED: April 6, 2001 BY ORDER OF THE BOARD OF DIRECTORS /s/ Nancy R. Boatright --------------------------------------- Nancy R. Boatright, Corporate Secretary PROXY STATEMENT OF MCB FINANCIAL CORPORATION 1248 Fifth Avenue San Rafael, CA 94901 April 6, 2001 2001 ANNUAL MEETING OF MCB FINANCIAL CORPORATION SHAREHOLDERS Introduction This Proxy Statement is being furnished to MCB Financial Corporation ("MCB Financial") Shareholders in connection with the solicitation of proxies by the MCB Financial Board of Directors for use at the 2001 Annual Meeting of Shareholders of MCB Financial to he held on Wednesday, May 16, 2001 at 5:30 p.m. at MCB Financial's office, 1248 Fifth Avenue, San Rafael, California 94901, and at any adjournments thereof ("MCB Financial Meeting"). This Proxy Statement, the attached notice and the enclosed form of proxy are first being mailed to MCB Financial Shareholders on or about April 9, 2001. Matters to Be Considered At the MCB Financial Meeting, MCB Financial Shareholders will be asked to (i) elect a board of eight directors (see "ELECTION OF DIRECTORS," herein); (ii) ratify the Board's selection of independent auditor for the year ending December 31, 2001 (see "RATIFICATION OF SELECTION OF INDEPENDENT AUDITOR," herein); and (iii) transact such other business as may properly come before the MCB Financial Meeting and any and all adjournments thereof (see "OTHER MATTERS," herein). Record Date; Voting Information The close of business on March 19, 2001 was the record date ("Record Date") for determining which of the MCB Financial shareholders were entitled to receive notice of and to vote at the MCB Financial Meeting. On the Record Date, there were 1,775,182 shares of MCB Financial Common Stock outstanding, held by 712 holders of record. Each holder of MCB Financial Common Stock will be entitled to one vote, in person or by proxy, for each share of MCB Financial Common Stock standing in his or her name on the books of MCB Financial as of the Record Date on any matter submitted to the vote of the MCB Financial Shareholders at the MCB Financial Meeting, except that, in connection with the election of directors, the shares are entitled to be voted cumulatively. Cumulative voting entitles an MCB Financial Shareholder to give one nominee a number of votes equal to the number of directors to be elected multiplied by the number of votes to which that shareholder's shares are normally entitled, or to distribute his votes among as many candidates as the shareholder thinks fit. However, no shareholder is entitled to cumulate votes for a nominee unless such nominee's name has been placed in nomination prior to the vote and the shareholder has given notice before the voting of his or her intention to vote shares cumulatively. If any shareholder has given such notice, all shareholders may cumulate their votes for nominees. Discretionary authority to cumulate votes in such a manner as to elect the maximum number of the Board of Directors' nominees is solicited in this Proxy Statement. Voting of Proxies; Revocability A form of proxy for the MCB Financial Meeting is enclosed. All shares of MCB Financial Common Stock represented by properly executed proxies received by MCB Financial will, unless revoked, be voted at the MCB Financial Meeting in accordance with the instructions on such proxies. If no instruction is specified with regard to a matter to be considered, the proxy will be voted in favor of (i) electing the eight nominees of the Board for director; and (ii) ratifying the Board of Directors' recommendation of independent auditor for the year ending December 31, 2001. The proxy also confers discretionary authority to vote the shares represented thereby in accordance with the recommendations of the MCB Financial Board of Directors on any matter that was not known at the time this Proxy Statement was mailed which may properly be presented for action at the MCB Financial Meeting and the election of any person to any office for which a bona fide nominee is named herein if such nominee is unable to serve or for good cause will not serve. If any other business is properly presented at the MCB Financial Meeting, the proxy will be voted in accordance with the recommendation of the MCB Financial Board of Directors. Any MCB Financial Shareholder may revoke his or her proxy at any time before it is voted by filing with MCB Financial's Corporate Secretary an instrument revoking it or a duly executed proxy bearing a later date, or by attending the MCB Financial Meeting and advising the Chairman of his or her election to vote in person. A proxy may also be revoked if written notice of the death or incapacity of the MCB Financial Shareholder is received by MCB Financial before the vote pursuant to that proxy is counted. Solicitation of Proxies This solicitation of MCB Financial Shareholders is being made by the Board of Directors of MCB Financial. The expense of preparing, assembling, printing and mailing this Proxy Statement to MCB Financial Shareholders and the materials used in the solicitation of proxies for the MCB Financial Meeting will be borne by MCB Financial. MCB Financial contemplates that the proxies will be solicited principally through the use of the mail, but officers, directors and employees of MCB Financial may solicit proxies personally or by telephone or other electronic transmission without receiving special compensation therefor. In addition, MCB Financial may use the services of individuals or companies, including a proxy solicitation firm, it does not regularly employ in connection with the solicitation of proxies if deemed advisable by the MCB Financial Board of Directors. Although there are no formal agreements to do so, MCB Financial will reimburse banks, brokerage houses and, although it has made no such arrangements to date, other custodians, nominees and fiduciaries for their reasonable expenses in forwarding these proxy materials to MCB Financial Shareholders, and will reimburse such other expenses as may be incurred by any proxy solicitation firm engaged by MCB Financial. Required Vote Except as specifically noted below, each of the proposals described in this Proxy Statement requires the affirmative vote of a majority of the shares of MCB Financial's Common Stock represented and voting at the Annual Meeting of Shareholders where a quorum is present. In the election of directors, the eight directors receiving the most votes will be elected. If any proposal requires the affirmative vote of the holders of a specified percentage of MCB Financial's outstanding shares of Common Stock, abstaining and broker non-votes will have the same effect as a negative vote. Security Ownership of Certain Beneficial Owners Except as set forth below, as of the Record Date no individuals known to the Board of Directors of MCB Financial owned of record or beneficially five percent or more of the outstanding shares of common stock of MCB Financial. The following table provides certain information as of March 19, 2001, with respect to the only persons who own beneficially in excess of five percent of MCB Financial Common Stock: Amount and Nature Name and Address of of Beneficial Percent of Title of Class Beneficial Owner Ownership Class -------------- ---------------- --------- ----- Common Stock John Cavallucci 233,451(1) 13.12% 1248 Fifth Avenue San Rafael, CA 94901 Common Stock Martin Bramante 95,772 5.15% Velia Bramante P.O. Box 2126 San Rafael, CA 94901 ---------------------------- (1) See "Security Ownership of Management" table below for a description of the nature of beneficial ownership. Security Ownership of Management The following table provides certain information, as of March 19, 2001, with respect to the beneficial ownership of shares of MCB Financial Common Stock by each MCB Financial director and nominee, each executive officer(1), and by all of the directors and executive officers of MCB Financial as a group. Unless otherwise indicated, each person listed has sole investment and voting power with respect to the shares listed. Name and Amount and Nature of Percent Title of Class Address of Beneficial Owner(2) Beneficial Ownership(3) of Class -------------- --------------------------- -------------------- -------- Common Stock John Cavallucci 233,451(4) 13.12% Common Stock Charles O. Hall 50,833(5) 2.82% Common Stock Timothy J. Jorstad 74,655(6) 4.20% Common Stock Catherine H. Munson 32,289(7) 1.81% Common Stock Gary T. Ragghianti 31,116(8) 1.75% Common Stock Edward P. Tarrant 51,479(9) 2.89% Common Stock Randall J. Verrue 40,891(10) 2.30% Common Stock Stephen R. Brodie 10,937(11) * Common Stock Raymon L. Hanssen 8,446(12) * Common Stock Patrick E. Phelan 13,269(13) * Common Stock Current Directors and Executive Officers as a Group (10 persons) 547,366(14) 29.43% *Less than one percent (*) -------------------------------- (1) As used throughout this Proxy Statement, unless specified otherwise, the term "executive officer" means with respect to MCB Financial, the President and Chief Executive Officer of MCB Financial and Metro Commerce Bank ("Metro Commerce"), the Chief Financial Officer of MCB Financial and Executive Vice President/Chief Financial Officer of Metro Commerce, the Executive Vice President/Chief Credit Officer of Metro Commerce and the Executive Vice President/Chief Administrative Officer of Metro Commerce. (2) The address for all persons is c/o MCB Financial Corporation, 1248 Fifth Avenue, San Rafael, California 94901. (3) Includes all shares beneficially owned, whether directly or indirectly, individually or together with associates. Includes any shares owned, whether jointly or as community property, with a spouse and any stock of which beneficial ownership may be acquired within 60 days of March 19, 2001, the Record Date, by the exercise of stock options vested pursuant to MCB Financial's 1989 Stock Option Plan, and 1999 Stock Option Plan. (4) Includes options to acquire 4,200 shares which are exercisable within 60 days of the Record Date. (5) Includes options to acquire 30,504 shares which are exercisable within 60 days of the Record Date. (6) Includes 60,478 shares held by Jorstad, Inc., Money Purchase & Profit Sharing Pension Plan. Also includes options to acquire 4,200 shares which are exercisable within 60 days of the Record Date. (7) Includes 18,575 shares held by Lucas Valley Properties, Inc., Money Purchase & Profit Sharing Pension Plan. Also includes options to acquire 4,200 shares which are exercisable within 60 days of the Record Date. (8) Includes 5,786 shares held by Ragghianti & Thomas Profit Sharing Plan. Also includes options to acquire 6,291 shares which are exercisable within 60 days of the Record Date. (9) Includes 12,188 shares held by Mr. Tarrant as Custodian for his grandchildren. Also includes options to acquire 4,200 shares which are exercisable within 60 days of the Record Date. (10) Includes 7,354 shares held in Mr. Verrue's IRA trust accounts, and 1,800 shares which are held by Mr. Verrue as Trustee for his grandchild. Also includes options to acquire 4,200 shares which are exercisable within 60 days of the Record Date. (11) Includes options to acquire 9,937 shares which are exercisable within 60 days of the Record Date. (12) Represents vested options exercisable within 60 days of the Record Date. (13) Includes options to acquire 8,410 shares which are exercisable within 60 days of the Record Date. (14) Includes options held by executive officers and non-employee directors of MCB Financial which are exercisable within 60 days of the Record Date. Section 16(a) Beneficial Ownership Reporting Compliance Section 16(a) of the Securities Exchange Act of 1934 requires MCB Financial's directors and executive officers, and persons who own more than ten percent of a registered class of MCB Financial's equity securities, to file with the Securities and Exchange Commission initial reports of ownership and reports of changes in ownership of common stock and other equity securities of MCB Financial. Officers, directors and greater than ten percent shareholders are required by SEC regulation to furnish MCB Financial with copies of all Section 16(a) forms they file. To MCB Financial's knowledge, based solely on review of the copies of such reports furnished to MCB Financial and written representations that no other reports were required, during the year ended December 31, 2000, the executive officers, directors and greater than ten percent beneficial owners of MCB Financial's common stock complied with all applicable Section 16(a) filing requirements. Changes in Control Management of MCB Financial is not aware of any arrangement which may, at a subsequent date, result in a change of control of MCB Financial. Recommendations MCB Financial's Board of Directors unanimously recommends electing the eight nominees to the MCB Financial Board of Directors and ratifying the Board of Directors' recommendation of independent auditor for the year ending December 31, 2001. These proposals are discussed in greater detail in the following sections of this Proxy Statement. PROPOSAL ONE: ELECTION OF DIRECTORS MCB Financial's Bylaws provide that the number of directors shall be determined from time to time by the Board of Directors or the shareholders but may not be less than seven nor more than thirteen. The number of directors is currently fixed at seven members. MCB Financial Shareholders are being asked to elect the eight persons named below, who are the nominees of the Board of Directors for election as directors of MCB Financial, to serve until the 2002 Annual Meeting of Shareholders of MCB Financial and until their successors are elected and have been qualified. Mr. Cavallucci is being renominated to the Board but will resign from the Board when the sale of all of the remaining common shares of MCB Financial held by him and his family occurs. The sale is currently expected to be completed in July 2001. (See "Certain Relationships and Related Transactions - Repurchase of Shares Held by Cavallucci Family" below). Each of the nominees listed below has consented to be named as a nominee and to serve if elected to the MCB Financial Board of Directors. Votes will be cast pursuant to the enclosed proxy in such a way as to effect the election of said eight nominees, or as many thereof as possible under the rules of cumulative voting. In the event that any of the nominees should be unable to or for good cause will not serve as a director, it is intended that the shares represented by the proxies solicited will be voted for the election of such substitute nominee, if any, as shall be designated by the MCB Financial Board of Directors. The MCB Financial Board of Directors has no reason to believe that any nominees will become unavailable to serve if elected. It is intended that each person elected a director of MCB Financial will also be elected by the Board of MCB Financial as a director of Metro Commerce.
Metro MCB Present Position(s) Commerce Financial with MCB Financial Director Director Name Age and Metro Commerce Since Since ---- --- ------------------ ----- ----- John Cavallucci 59 Director 1991 1993 Charles O. Hall 46 Director, President and Chief Executive Officer of 1995 1999 MCB Financial and Metro Commerce Timothy J. Jorstad 49 Chairman of MCB Financial and Metro Commerce 1989 1993 Catherine H. Munson 73 Director 1989 1993 Patrick E. Phelan 37 Chief Financial Officer of MCB Financial; Executive -- -- Vice President and Chief Financial Officer of Metro Commerce Gary T. Ragghianti 57 Vice Chairman 1989 1993 Edward P. Tarrant 57 Director 1989 1993 Randall J. Verrue 57 Director 1989 1993
There are no family relationships among any of the nominees for director or any of the executive officers of MCB Financial. Biographical Information of Directors The following sets forth certain biographical information, present occupation and business experience for at least the past five years, of each of the nominees for director. John Cavallucci Director of Metro Commerce since November 1991; Chairman of Metro Commerce and MCB Financial from May 1996 to May 2000; Executive Officer to the President of Metro Commerce from January 1999 to December 2000; Chief Executive Officer of Metro Commerce from December 1995 to December 1998; President and Chief Executive Officer of Metro Commerce from January 1992 to December 1995; Director, President and Chief Executive Officer of MCB Financial from January 1993 to December 1998. Charles O. Hall Director of Metro Commerce since December 1995; Director of MCB Financial since January 1999; Executive Vice President and Chief Credit Officer of Metro Commerce from March 1992 to December 1995; President, Chief Operating Officer, and Chief Credit Officer of Metro Commerce from December 1995 to April 1998; President and Chief Operating Officer of Metro Commerce from April 1998 to December 1998; President and Chief Executive Officer of Metro Commerce since January 1999; President and Chief Executive Officer of MCB Financial since January 1999. Timothy J. Jorstad President and certified public accountant, Jorstad, Inc., a certified public accounting firm. Catherine H. Munson President, Lucas Valley Properties, Inc., a real estate firm; also General Partner, McInnis Park Golf Center. Patrick E. Phelan Chief Financial Officer of MCB Financial since May 1997; Executive Vice President/Chief Financial Officer of Metro Commerce since December 1998; Senior Vice President/Chief Financial Officer of Metro Commerce from May 1997 to December 1998; Vice President/Finance of Metro Commerce from December 1996 to May 1997; Assistant Vice President and Controller of Metro Commerce from April 1994 to December 1996. Prior to that, Mr. Phelan served as a certified public accountant with Deloitte & Touche LLP and Ernst & Young LLP. Gary T. Ragghianti Attorney and President, Gary T. Ragghianti, Inc., a law firm. Edward P. Tarrant Principal and Owner, Tarrant-Bell Properties, a property development and management company. Randall J. Verrue President and Chief Executive Officer, HCV Pacific Partners, a real estate company. Meetings of the Board of Directors and Committees of MCB Financial The Board of Directors of MCB Financial held eleven meetings during 2000. MCB Financial does not have a Personnel Committee or a Nominating Committee; the Board of Directors performs such functions. During 2000 all of the directors of MCB Financial attended at a minimum 75 percent of the aggregate of all meetings of the Board of Directors and of the committees of MCB Financial on which they served, except Gary T. Ragghianti, who attended 64% of the meetings. The Audit Committee acts pursuant to a written charter adopted by the Board of Directors and attached hereto as Exhibit A. The Audit Committee currently consists of Timothy J. Jorstad, Chairman, Edward P. Tarrant and Randall J. Verrue each of whom are independent as defined in Section 121 of the American Stock Exchange Company Guide. The Audit Committee is responsible for recommending the appointment of the independent auditors for the MCB Financial, reviewing the scope of the audit, examining the auditor's reports, making appropriate recommendations to the Board of Directors as a result of such review and examination and making inquiries into the effectiveness of the financial and accounting functions and internal controls of MCB Financial. The Audit Committee met eight times during 2000. All members attended each meeting. Attached as Exhibit B is a copy of the Report of the Audit Committee. The Personnel Committee currently consists of Catherine H. Munson, Chairwoman, Charles O. Hall, and Gary T. Ragghianti. The Personnel Committee held no meetings during 2000. The Personnel Committee's function is to review compensation of executive officers and make recommendations to the Board of Directors regarding compensation. Compensation of Directors Each Metro Commerce director, with the exception of Charles O. Hall, receives an annual retainer of $18,000 for his or her services. Executive Officers The following table sets forth certain information, as of March 19, 2001, with respect to the current executive officers of MCB Financial and Metro Commerce. Present Position(s) with Name Age MCB Financial and Metro Commerce ---- --- -------------------------------- Charles O. Hall 46 Director, President and Chief Executive Officer of MCB Financial and Metro Commerce Stephen R. Brodie 55 Executive Vice President and Chief Credit Officer of Metro Commerce Raymon L. Hanssen 57 Executive Vice President and Chief Administrative Officer of Metro Commerce Patrick E. Phelan 37 Chief Financial Officer of MCB Financial; Executive Vice President and Chief Financial Officer of Metro Commerce Business Experience The following sets forth the business experience, for at least the past five years, of Metro Commerce's executive officers other than Mr. Hall and Mr. Phelan, whose experience is set forth above. Stephen R. Brodie Executive Vice President/Chief Credit Officer of Metro Commerce since April 1998; Senior Vice President/Loan Administration of Metro Commerce from January 1998 to April 1998; Senior Vice President/Construction Loan Officer of Metro Commerce from June 1996 to January 1998; Senior Vice President/Loan Officer of Metro Commerce from June 1993 to June 1996. Raymon L. Hanssen Executive Vice President/Chief Administrative Officer of Metro Commerce since February 1999; Senior Vice President/Branch Manager of Metro Commerce from May 1994 to February 1999; Senior Vice President/Loan Officer of Metro Commerce from May 1991 to May 1994. EXECUTIVE COMPENSATION OF MCB FINANCIAL AND METRO COMMERCE The following table sets forth compensation information with respect to MCB Financial's and Metro Commerce's Chief Executive Officer and the four other most highly compensated executive officers of Metro Commerce who served as such at year end 2000 and whose total annual salary and bonus exceeded $100,000 ("Named Officers"). Comparative data is also provided for the two previous fiscal years, where applicable. No cash compensation was paid by MCB Financial to any Named Officer; however, each Named Officer of MCB Financial also serves as an executive of Metro Commerce and receives compensation from Metro Commerce for services rendered in his or her capacity as such. Summary Compensation Table
Annual Long Term Compensation Other Compensation ------------ Annual Awards All Other Name and Salary Bonus Compensation Options Compensation(1) Principal Position at December 31, 2000 Year ($) ($) ($) (#) ($) ----------------- ---- --- --- --- --- --- John Cavallucci 2000 77,000 46,752 8,794 Executive Officer to the 1999 70,000 34,594 10,500 3,856 President 1998 142,000 47,900 2,863 Charles O. Hall 2000 170,000 93,505 9,263 President/ 1999 153,360 69,188 10,500 7,901 Chief Executive Officer 1998 142,000 47,900 7,271 Stephen R. Brodie 2000 102,450 20,500 5,000 1,782 Executive Vice President/ 1999 96,342 16,000 1,900 Chief Credit Officer 1998 89,934 14,000 5,250 1,700 Raymon L. Hanssen 2000 101,824 20,350 7,500 8,092 Executive Vice President/ 1999 97,635 21,020 4,715 Chief Administrative Officer 1998 89,435 12,768 2,400 Patrick E. Phelan 2000 99,385 21,200 10,000 5,500 Executive Vice President/ 1999 91,081 16,500 4,100 Chief Financial Officer 1998 N/A N/A N/A
Employment Agreements, Termination of Employment and Change-in-Control Arrangements Mr. Hall Mr. Hall's current employment agreement commenced on January 1, 2001. Mr. Hall is entitled to receive payment of (i) an initial base salary in the amount of $176,800, payable not less often than monthly, increased annually by the percentage increase in the CPI for the San Francisco Bay Area as well as at the discretion of the Board of Directors, and (ii) an annual bonus equal to one and one-half percent of Metro Commerce's pre-tax income if Metro Commerce's return on beginning equity equals or exceeds 10 percent during the fiscal year. Mr. Hall has been provided with an automobile, Metro Commerce's standard health insurance coverage provided to all Metro Commerce employees, vacation leave and a tennis club membership. Mr. Hall also participates in Metro Commerce's Deferred Compensation Plan For Executives into which Mr. Hall may elect to defer a portion of his current compensation and Metro Commerce agrees to contribute up to 50 percent of the amount of his deferral. Mr. Hall vests 50 percent in Metro Commerce contributions after completing all of his contractual deferrals and vests the remaining 50 percent upon reaching retirement age. ------------------------ (1) Includes automobile compensation and matching contributions to the Executive Deferred Compensation Plan. In the event Mr. Hall's employment is terminated for any reason other than death, disability, voluntary retirement or cause he will be entitled to receive a severance payment in an amount equal to his then base salary for 36 months in one lump sum. If Mr. Hall's employment is terminated for reasons of death, voluntary retirement or cause he will not be entitled to any severance payment. If termination occurs as a result of a medical disability, he will be entitled to receive severance payment in an amount equal to 25% of his then annual base salary. Mr. Phelan Effective May 15, 2000, MCB Financial and Metro Commerce entered into a severance agreement with Patrick E. Phelan. In the event Mr. Phelan's employment is terminated for any reason other than death, disability, voluntary retirement or cause he will be entitled to receive a severance benefit equal to eighteen (18) months of pay and an added benefit of two (2) weeks of pay for each full year of service, provided that the total benefit payable to Mr. Phelan shall not exceed two years of pay. "Pay" for purposes of this severance agreement means the total annual compensation paid to Mr. Phelan, including base wages and average bonuses paid to Mr. Phelan in the three most recent years. If Mr. Phelan's employment is terminated for reasons of death, voluntary retirement or cause he will not be entitled to any severance payment. If termination occurs as a result of a medical disability, he will be entitled to receive severance payment in an amount equal to 25% of his then annual base salary. The following table sets forth information on the issuance of stock options to the Named Officers during the year ended December 31, 2000. Stock Option Grants in Last Fiscal Year Number of Percent of Securities Total Options Underlying Granted to Options Employees Exercise Expiration Name Granted During 2000 Price Date ---- ------- ----------- ----- ---- Stephen R. Brodie 5,000 11.77% $ 8.50 07/27/2010 Raymon L. Hanssen 7,500 17.65% $ 8.50 07/27/2010 Patrick E. Phelan 10,000 23.53% $11.00 01/27/2010 The following table sets forth the stock options exercised in 2000 and the 2000 fiscal year end value of unexercised stock options held by the Named Officers. The market value of MCB Financial's Common Stock as of December 31, 2000 was $10.31 per share. Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values Value of Number of Unexercised Unexercised In-the-Money Options Options Number of at 2000 at 2000 Shares Year-End (#) Year-End ($) Acquired Value Exercisable/ Exercisable/ Name On Exercise Realized(1) Unexercisable Unexercisable ---- ----------- ---------- ------------- ------------- John Cavallucci -- -- 50,505 / 6,300 304,367 / 16,953 Charles O. Hall 10,000 $54,892 40,504 / 6,300 253,522 / 16,953 Stephen R. Brodie -- -- 9,937 / 6,100 32,985 / 9,891 Raymon L. Hanssen -- -- 8,446 / 6,000 45,814 / 10,860 Patrick E. Phelan 4,630 $25,898 6,410 / 9,102 21,483 / 5,368 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Certain of the directors and executive officers of MCB Financial and Metro Commerce, the companies or organization with which they are affiliated, and members of their immediate families are customers of, and had banking transactions with Metro Commerce in the ordinary course of Metro Commerce's business during 2000, and Metro Commerce expects to have banking transactions with such persons in the future. All loans and commitments to lend to such persons were made on substantially the same terms, including interest rates, repayment terms and collateral, as those prevailing at the time for comparable transactions with other persons of similar creditworthiness and, in the opinion of management of Metro Commerce, did not involve more than a normal risk of collectibility or present other unfavorable features. All of such loans are current as to both principal and interest. As of March 31, 2001, extensions of credit to MCB Financial directors, executive officers and beneficial owners of more than five percent of MCB Financial Common Stock, and their affiliates, as a group, was approximately $3,692,879. The maximum aggregate amount of credit extended to directors and executive officers of MCB Financial or Metro Commerce at any one time during 2000 was approximately $5,869,547. Repurchase of Shares Held by Cavallucci Family MCB Financial has entered into a stock purchase agreement with John Cavallucci and his family to purchase the remaining 229,251 shares of MCB Financial's common stock owned by them at a price of $12.00 per share. The sale will include any additional shares which the Cavallucci family acquires upon exercise of vested options prior to the closing of the sale of the 229,251 shares currently held. The Board believes that the transaction is appropriate and in the best interests of MCB Financial and its shareholders to allow Mr. Cavallucci to effect an orderly disposition of his holdings as he transitions out of his positions with MCB Financial. MCB Financial expects to fund the purchase from its operating income. As part of the agreement, Mr. Cavallucci will resign from the Board upon closing of the sale. ---------------------------- (1) Value Realized is the difference between the closing price per share on the date of exercise and the option price per share, multiplied by the number of shares acquired upon exercise of the option. PROPOSAL TWO: RATIFICATION OF SELECTION OF INDEPENDENT AUDITOR The Board of Directors of MCB Financial recommends that shareholders ratify its appointment of Deloitte & Touche LLP to audit the financial statements of MCB Financial for the year ending December 31, 2001. Deloitte & Touche LLP has served as MCB Financial's independent auditor since 1991. The Board of Directors retains the power to appoint a different independent public accounting firm should the shareholders not vote to ratify Deloitte & Touche LLP or should the Board determine subsequent to the ratification that selection of another firm would be in the best interests of MCB Financial and its shareholders. Audit Fees The aggregate fees billed by Deloitte & Touche LLP for professional services rendered for the audit for MCB Financial's annual financial statements for the year 2000 and the reviews of the financial statements included in MCB Financial's Forms 10-QSB in 2000 were $65,000. Financial Information Systems Design and Implementation Fees Deloitte & Touche LLP rendered no professional services for financial information systems design and implementation for the year 2000. All Other Fees The aggregate fees billed for services rendered by Deloitte & Touche other than for the services described above, including tax consulting and other non-audit services, for the year 2000 were $17,000. The Audit Committee considered whether the provision of the services other than the audit services is compatible with maintaining Deloitte & Touche's independence. An auditor representative from Deloitte & Touche LLP for the current year and for 2000 will be present at the MCB Financial Meeting. The representative will have an opportunity to make a statement if he or she desires to do so and will be available to respond to appropriate questions of shareholders. SHAREHOLDER PROPOSALS MCB Financial's 2002 Annual Meeting of Shareholders is currently scheduled for May 15, 2002. To be included in MCB Financial's 2002 Proxy Statement, proposals of shareholders intended to be presented at the 2002 Annual Meeting must be received by MCB Financial no later than December 6, 2001. OTHER MATTERS Management does not know of any matters to be presented at the MCB Financial Meeting other than those set forth above. However, if other matters come before the MCB Financial Meeting, it is the intention of the persons named in the accompanying proxy to vote said proxy in accordance with the recommendation of the MCB Financial Board of Directors on such matters. Discretionary authority to do so is included in the proxy. By Order of the Board of Directors, /s/ Nancy R. Boatright -------------------------------- Nancy R. Boatright Date: April 6, 2001 Corporate Secretary EXHIBIT A MCB Financial Corporation Audit Committee Charter PURPOSE The purpose of the Audit Committee of the Board of Directors of MCB Financial Corporation is to oversee and monitor the Company's financial reporting process and systems of internal controls regarding finance and accounting on behalf of the Board of Directors. RESPONSIBILITIES OF AUDIT COMMITTEE The Board of Directors recognizes that the Company's management is responsible for preparing the Company's financial statements and that independent auditors are responsible for auditing those financial statements. In fulfilling these responsibilities, management and the independent auditors are ultimately accountable to the Audit Committee and the Board of Directors. Nothing in this Charter should be construed to imply that the Audit Committee is required to provide or does provide any assurance or certification as to the Company's financial statements or as to its compliance with laws, rules or regulations. In order to fulfill its oversight responsibility, the Audit Committee must be capable of conducting free and open discussions with management, internal and independent auditors, employees and others regarding the quality of the financial statements and the system of internal controls. The specific duties of the Audit Committee shall be as follows: Independent Auditors 1. Select and evaluate independent auditors, review their performance and recommend to the Board of Directors the appointment or replacement of independent auditors; and, to review and recommend to the Board of Directors fee arrangements in connection with such appointments. 2. Ensure the auditor's independence by: (i) ensuring that the auditors annually submit to the Audit Committee a formal written statement delineating all relationships between the auditors and the Company; (ii) actively engaging in a dialogue with the auditors with respect to any disclosed relationships or services that may impact their objectivity and independence, including the matters required by Independence Standards Board Standard No. 1 Independence Discussions with Audit Committees (as it may be as may be modified or supplemented); (iii) reviewing and discussing with the Board of Directors any relationships between the auditors and the Company, or any other relationship, that may adversely affect independence; and, reviewing and approving any significant management consulting engagements proposed to be undertaken by such auditors on behalf of the Company; and (iv) recommending that the Board of Directors take appropriate action in response to the auditors' report to satisfy itself of their independence. 3. Annually require the auditors to confirm in writing their understanding of the fact that they are ultimately accountable to the Board of Directors of the Company and its Audit Committee. 4. Annually review the auditors' proposed audit plan and approach, as well as staffing and timing of the audit and related matters. 5. Obtain from management, review and approve, a description of issues and responses whenever a second opinion is proposed by management to be sought from another outside accountant. Financial Statements 6. Conduct a post-audit, pre-issuance review of the Company's annual financial statements, the auditor's opinion thereon, and any significant difficulties or disagreements with management encountered during the course of the audit. 7. Discuss the annual financial statements with the appropriate officers and/or employees of the Company and with the independent auditors, and discuss with the auditors the matters required to be discussed by relevant auditing standards, including the quality, and not just the acceptability, of the accounting principles and underlying estimates used in the statements. 8. If the Committee finds the annual financial statements acceptable, to recommend to the Board of Directors that they be included in the Company's annual report on Form 10-K/10-KSB. 9. Prepare a report to the shareholders of the Company in each proxy statement, as required by the rules of the Securities and Exchange Commission ("Commission"). 10. Review with the Company's financial management and the independent auditors the quarterly earnings releases and the schedule of unrecorded adjustments to the Company's financial statements and the reasons underlying the Company's assessment of the immateriality of such adjustments. 11. With regard to quarterly reports to the Commission on Form 10-Q/10-QSB, the Chairman of the Committee and/or any member or members of the Committee whom he or she designates, shall review with management and the independent auditor the financial statements to be included in such filing prior to filing with the Commission. 12. Review prior to publication or filing and approve such other Company financial information, including appropriate regulatory filings and releases that include financial information, as the Committee deems desirable. Internal Accounting and Control Functions 13. Review the adequacy of the Company's system of internal accounting and financial control. 14. Annually review the quality of internal accounting and financial control, the auditor's report or opinion thereon and any recommendations the auditor may have for improving or changing the Company's internal controls, as well as management's letter in response thereto and any other matters required to be discussed under Statement of Auditing Standards No. 61 (as it may be modified or supplemented). 15. Review the Company's major financial risk exposures and the steps management has taken and proposes to take to monitor and control such exposures. 16. Review proposed future internal audit plans. General 17. Annually review this Audit Committee Charter, and any provisions of the Company's by-laws which refer to the Audit Committee, and to propose to the Board of Directors necessary or appropriate revisions; 18. At least annually, the Committee shall hold separate, private meetings without other members of management present, with the Company's Chief Financial Officer and the Company's independent auditor; and, each such person shall have free and direct access to the Committee and any of its members. 19. Prior to the beginning of each fiscal year, the Chairman shall draft a proposed schedule of the Committee's activities for the coming year, and the times at which such activities shall occur, including preliminary agendas for each proposed meeting of the Committee, which shall be submitted to the Committee for its review and approval, with such changes as the Committee shall determine to be appropriate. Reporting Responsibilities 20. Periodically report its activities, concerns, conclusions and recommendations to the Board of Directors. AUTHORITY 21. The Audit Committee and each of its members may communicate directly and/or privately with the Company's directors, officers, employees, consultants, agents, internal auditors, independent auditors, attorneys-in-fact, counsel (including inside and outside counsel) and advisors, and any and all third parties in the performance of the Committee's functions. 22. The Committee may cause an investigation to be made into any matter within the scope of its responsibilities under this Charter as the Committee deems necessary, or as otherwise requested by the Board or Directors. The Committee may require Company personnel to assist in any such investigation, and may engage independent resources to assist in such investigations as it deems necessary. COMMITTEE MEMBERSHIP 23. The membership of the Audit Committee shall consist of three or more directors each of whom shall: (i) have been appointed by the Board of Directors. (ii) be free of any relationship to the Company which, in the opinion of the Board of Directors, may interfere with the exercise of independence from management and the Company; (iii) be or shall become (within a reasonable period of time after his or her appointment to the Committee) "financially literate," as such qualification is interpreted by the Board of Directors in its discretion; and (iv) otherwise meet the requirements of independence as set forth in the rules of the American Stock Exchange or any other market on or through which the Company's securities may be traded (the "relevant listing authority"), as such rules may be amended from time to time. In addition, at least one member of the Audit Committee shall have accounting or related financial management expertise, as determined by the Board of Directors in its discretion. 24. The Board of Directors reserves all authority permitted under the rules of the Commission and the relevant listing authority in connection with any matter referred to in this Charter, including but not limited to the determination of independence of Audit Committee members. MEETINGS 25. The Audit Committee shall meet as often as necessary to fulfill its functions as determined by the Committee, but no less than four times annually. Date Adopted: May 25, 2000 EXHIBIT B MCB FINANCIAL CORPORATION AUDIT COMMITTEE REPORT The Audit Committee of the Board of Directors of MCB Financial Corporation (the "Company") has reviewed the Company's audited financial statements for the fiscal year ended December 31, 2000. In conjunction with its review, the Audit Committee has met with the management of the Company to discuss the audited financial statements. In addition, the Audit Committee has discussed with the Company's independent auditors, Deloitte & Touche LLP (Deloitte & Touche), the matters required pursuant to SAS 61 and has received the written disclosures and the letter from Deloitte & Touche required by Independence Standards Board Standard No. 1. The Audit Committee considered that Deloitte & Touche rendered non-audit services to the Company during the fiscal year ended December 31, 2000, and whether the provision of non-audit services by Deloitte & Touche is compatible with maintaining Deloitte & Touche's independence. The Audit Committee determined that Deloitte & Touche's provision of non-audit services is compatible with Deloitte & Touche's independence. Based on this review and discussion, the Audit Committee recommended to the Company's Board of Directors that the audited financial statements be included in the Company's Annual Report on Form 10-KSB for the fiscal year ended December 31, 2000 for filing with the Securities and Exchange Commission. This report has been approved by all of the members of the Audit Committee. Timothy J. Jorstad Edward P. Tarrant Randall J. Verrue Members of the Audit Committee March 22, 2001 APPENDIX A PROXY MCB FINANCIAL CORPORATION PROXY PROXY FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MAY 16, 2001 THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS The undersigned hereby appoints Messrs. Timothy J. Jorstad, Edward P. Tarrant and Randall J. Verrue, and each of them, the attorneys, agents and proxies of the undersigned, with full powers of substitution to each, to attend and act as proxy or proxies of the undersigned at the 2001 Annual Meeting of Shareholders of MCB Financial Corporation to be held at MCB Financial Corporation, 1248 Fifth Avenue, San Rafael, California 94901, on Wednesday, May 16, 2001, at 5:30 p.m. or any adjournment thereof, and to vote as specified herein the number of shares which the undersigned, if personally present, would be entitled to vote. 1. Election of Directors. To elect the eight persons named below to the Board of Directors to serve until the 2002 Annual Meeting of Shareholders and until their successors are elected and have been qualified. Nominees: John Cavallucci, Charles O. Hall, Timothy J. Jorstad, Catherine H. Munson, Patrick E. Phelan, Gary T. Ragghianti, Edward P. Tarrant and Randall J. Verrue. FOR all nominees (except as indicated to the contrary below). A vote FOR will result in votes being cast to effect the election of the eight nominees or as many thereof as possible under the rules of cumulative voting. WITHHOLD AUTHORITY to vote for all nominees. (INSTRUCTION: To withhold authority for any individual nominee, write that nominee's name in the space below.) 2. Ratification of Independent Auditor. To ratify the selection of Deloitte & Touche LLP by the Board of Directors to serve as MCB Financial Corporation's independent auditor for the year ending December 31, 2001. FOR AGAINST ABSTAIN 3. Other Business. To transact such other business as may properly come before the 2001 Annual Meeting of Shareholders and any adjournments thereof. This proxy will be voted as directed by the Shareholder or, if no instructions are given by the Shareholder, the proxy holders will vote "FOR" each of the foregoing proposals and as recommended by the Board of Directors of MCB Financial on all other matters as may properly come before the meeting. Important -- Please Sign on Other Side [REVERSE SIDE] Please Sign and Date Below. The Board of Directors recommends a vote "FOR" the election of directors and the ratification of the independent auditor. The proxy confers authority to vote and shall be voted in accordance with such recommendations unless a contrary instruction is indicated, in which case the shares represented by the proxy will be voted in accordance with such instruction. If no instruction is specified with respect to a matter, the shares represented by the proxy will be voted in accordance with the recommendations of the Board of Directors. If any director nominee is unable to serve or for good cause will not serve, this proxy confers authority to and shall be voted for a substitute nominee designated by the Board of Directors. This proxy confers authority to cumulate votes for the election of directors. If any other business is presented at the meeting, this proxy confers authority to and shall be voted in accordance with the recommendations of the Board of Directors. --------------------------- (Number of Shares) --------------------------- (Please print your name) --------------------------- (Signature of Shareholder) Dated __________________,2001 MAILING LABEL SPACE --------------------------- (Please print your name) --------------------------- (Signature of Shareholder) Dated __________________,2001 (Please date this Proxy and sign your name as it appears on your stock certificates. Executors, administrators, trustees, etc., should give their full titles. All joint owners should sign.) Please indicate if you are planning to attend the Meeting. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND MAY BE REVOKED PRIOR TO ITS EXERCISE BY FILING, WITH THE CORPORATE SECRETARY OF MCB FINANCIAL CORPORATION, A DULY EXECUTED PROXY BEARING A LATER DATE OR AN INSTRUMENT REVOKING THIS PROXY, OR BY ATTENDING THE MEETING AND ELECTING TO VOTE IN PERSON.