def14a
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO.)
Filed by the Registrant þ
Filed by a Party other than the Registrant o
Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for Use of the Commission |
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Definitive Proxy Statement
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Only (as permitted by Rule 14a-6(e)(2)) |
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Definitive Additional Materials |
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Soliciting Material Pursuant to §240.14a-12 |
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Bank of Commerce Holdings
(Name of Registrant as Specified in its Charter)
PAYMENT OF FILING FEE (Check the appropriate box):
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No fee required. |
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
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Per unit price or other
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Proposed maximum aggregate value of the transaction: |
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Fee paid previously with preliminary materials. |
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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 previously
paid. Identify the previous filing by registration
statement number, or the Form or Schedule and the date
of its filing. |
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Amount Previously Paid: |
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Form, Schedule or Registration Statement No.: |
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Date Filed: |
Bank of Commerce Holdings
Notice of 2007 Annual Meeting of Shareholders
And
Proxy Statement
April 6, 2007
Dear Shareholder:
It is my pleasure to invite you to Bank of Commerce Holdings 2007 Annual Meeting of Shareholders.
We will hold the meeting on May 15, 2007, at 5:00 p.m., in the lobby of Redding Bank of Commerce
located at 1951 Churn Creek Road, Redding, California, 96002. In addition to the formal items of
business, I will report on past performance and future prospects.
At the annual meeting you will be asked to elect directors, approve the Bank of Commerce Holdings
2008 Stock Option Plan and to ratify the appointment of independent accountants for 2006. The Board
of Directors recommends that you vote FOR the director nominees, FOR the 2008 Stock Option Plan and
FOR the ratification of independent accountants.
This mailing includes the formal notice of the Annual Meeting and the Proxy Statement. The Proxy
Statement describes the business that we will conduct at the meeting and our 2006 Form 10-K and
Annual Report provides financial results and information about Bank of Commerce Holdings &
Subsidiaries.
Please vote promptly by mail, telephone or internet regardless of whether you plan to attend the
meeting. You may later decide to vote in person at the meeting if you are a stockholder of record,
or you may revoke you proxy or voting instructions for any other reason before your shares are
voted. Your vote is important.
We look forward to seeing you at the meeting.
Sincerely,
/s/ Michael C. Mayer
Michael C. Mayer
President and
Chief Executive Officer
Bank of Commerce Holdings & Subsidiaries
This proxy statement and the accompanying form of proxy are being mailed to shareholders on or
about April 6, 2007
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BANK OF COMMERCE HOLDINGS
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS |
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Date:
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Tuesday, May 15, 2007 |
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Time:
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5:00 p.m. |
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Place:
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Redding Bank of Commerce |
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1951 Churn Creek Road |
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Redding, California 96002 |
Dear Shareholders:
At our 2007 Annual Meeting, we will ask you to:
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Elect directors each to serve for a term of one year; |
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Approve the Bank of Commerce Holdings 2008 Stock Option Plan; |
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Ratify the selection of Moss Adams, LLP as our independent public accountants for
2006; and |
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Transact any other business that may properly be presented at the Annual Meeting. |
If you were a shareholder of record as of the close of business on March 31, 2007, you
are entitled to notice of and to vote at the Annual Meeting and any adjournment thereof.
This proxy statement and the accompanying form of proxy are being mailed to shareholders
on or about April 6, 2007.
Whether or not you plan to attend, please grant a proxy to vote your shares in
one of three ways: via Telephone, fax or mail. Instructions regarding telephone
voting are included on the proxy card. If you choose to vote by mail, please
mark, sign and date the proxy card and return it in the enclosed envelope. Your
proxy may be revoked at any time before it is exercised as explained in the
proxy statement. Our transfer agents facsimile number is (415) 989-5241.
Returning your proxy will not limit your rights to attend or vote at the Annual
Meeting.
By Order of the Board of Directors,
/s/
David H. Scott
Corporate Secretary, Bank of Commerce Holdings
Redding, California
Dated: April 6, 2007
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Information about the Annual Meeting and voting |
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Information about Bank of Commerce Holdings Stock Ownership |
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Appendix A Audit Committee and Qualified Legal Committee charters |
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Appendix B Nominating Committee charter |
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Appendix C Compensation Committee charter |
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Appendix D Bank of Commerce Holdings 2008 Stock Option Plan |
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Page 2
Why did you send me this Proxy Statement?
The Board of Directors of Bank of Commerce Holdings is soliciting proxies from its stockholders to
be used at the annual meeting of stockholders on Tuesday, May 15, 2007. This Proxy Statement
summarizes the information you need to know to cast an informed vote at the Annual Meeting. You do
not need to attend the Annual Meeting to vote your shares. Instead you may simply complete, sign
and return the enclosed proxy card, or use the convenient telephone or internet voting method as
described in the proxy card.
Along with this Proxy Statement, we are also sending you our 2006 Form 10-K and Annual Report.
Who is entitled to vote?
Shareholders of record at the close of business on March 31, 2007 (the Record Date) are entitled
to notice of and to vote at the Annual Meeting. As of the close of business on the Record Date,
the Company had 8,849,542 shares of Common Stock outstanding and entitled to vote.
What constitutes a quorum?
The presence in person or by proxy of the holders of a majority of the Companys outstanding shares
of Common Stock (Common Stock) constitutes a quorum for the transaction of business at the Annual
Meeting. Abstentions and broker non-votes are each included in the determination of the number
of shares present and voting for purposes of determining the presence of a quorum. A broker
non-vote occurs when the nominee holding shares for a beneficial owner does not have
discretionary voting power with respect to that item and has not received instructions from the
beneficial owner. Abstentions will be included in the tabulations of the votes cast on proposals
presented to the shareholders and therefore will have the effect of a negative vote. Broker
non-votes will not be counted for purposes of determining the number of votes cast for a
proposal.
How many votes do I have?
Each share of Bank of Commerce Holdings Common Stock that you owned as of the record date entitles
you to one vote. The proxy card indicates the number of votes that you have.
How do I vote by proxy? Can I vote by telephone or internet?
Whether or not you plan to attend the Annual Meeting, we urge you to complete, sign and date the
enclosed proxy card and to return it promptly. You may also cast your votes by telephone or
internet as indicated on the proxy card. Returning the proxy card will not affect your right to
attend the Annual Meeting and vote. If you fill in your proxy card and send it to us in time to
vote, your proxy (as appointed on your proxy card) will vote your shares as you have directed. If
you sign the proxy card but do not make specific choices, your proxy will vote your shares as
recommended by the Board of Directors as follows:
For the election of all nominees for Director
For the Bank of Commerce Holdings 2008 Stock Option Plan
For the ratification of independent accountants
If any other matter is presented, your proxy will vote in accordance with the recommendation of the
Board of Directors, or, if no recommendation is given, in accordance with his or her best judgment.
At the time this Proxy Statement went to press, we knew of no matters that needed to be acted upon
at the Annual Meeting, other than those discussed in this Proxy Statement.
Page 3
How do I change my vote?
Only holders of record at the close of business on March 31, 2007 will be entitled to vote at the
annual meeting. Whether or not you plan to attend the Annual Meeting, you may vote your shares via
mail, telephone or internet. If you fill out and vote the proxy card, you may change your vote at
any time before the vote is conducted at the Annual Meeting. You may notify the Companys Corporate
Secretary in writing before the Annual Meeting that you have revoked your proxy. You may also
attend the Annual Meeting and vote in person.
What vote is required to approve each proposal?
Proposal 1: Elect ten directors
The ten nominees for director who receive the most votes will be elected. If you do not vote for a
particular nominee, or you indicate Withhold Authority to vote for a particular nominee on your
proxy card, your vote will not count for or against the nominee.
Proposal 2: Approve the Bank of Commerce Holdings 2008 Stock Option Plan.
A copy of the plan is included in the appendix of this document for our investors full review.
Proposal 3: Ratification of the selection of Independent Public Accountants
The affirmative vote of a majority of votes cast at the Annual Meeting on this proposal is required
to ratify the selection of independent public accountants. If you abstain from voting, it has no
effect on the outcome of this proposal.
What are the costs of soliciting these Proxies?
The expense of printing and mailing proxy materials, including the annual statement, will be borne
by the Company. In addition to the solicitation of proxies by mail, certain directors, officers
and other employees of the Company may make solicitation by personal interview, telephone or
facsimile. No additional compensation will be paid to such persons for such solicitation. The
Company will reimburse brokerage firms and others for their reasonable expenses in forwarding
solicitation materials to beneficial owners of the Companys Common Stock. We have contracted with
Mellon-Investor Services and ADP Investor Services to assist us in the distribution of materials
and tabulation of the results. This service will cost the Company approximately $38,000.00 plus out
of pocket expenses.
How do I obtain an Annual Report on Form 10-K?
The consolidated financial statements of Bank of Commerce Holdings and subsidiaries for the year
ended December 31, 2006, as part of the Companys Form 10-K and 2006 Annual Report to Shareholders
accompany this proxy statement.
Additional copies of the annual report on Form 10-K and 2006 Annual Report to Shareholders may be
obtained upon written request to Linda J. Miles, Executive Vice President & Chief Financial Officer
at the Companys administrative offices, 1951 Churn Creek Road, Redding, California 96002.
The Securities and Exchange Commission (SEC) maintains an internet site at
http://www.sec.gov that contains Bank of Commerce Holdings SEC filings. Access to the
filings are also available from Redding Bank of Commerces website under the heading Investor
Information. The website addresses are www.reddingbankofcommerce.com,
www.rosevillebankofcommerce.com or www.sutterbankofcommerce.com.
Page 4
Information about Bank of Commerce Holdings Stock Ownership
Does anyone own 5% or more of Bank of Commerce Holdings Common Stock?
Yes. Bank of Commerce Holdings is aware of three shareholders who beneficially own 5% or more of
our outstanding common stock. The Securities and Exchange Commission has defined beneficial
ownership (1) to mean more than ownership in the usual sense. For example, a person has beneficial
ownership of a share not only if he owns it in the usual sense, but also if he has the power to
vote, sells or otherwise disposes of the share. Beneficial ownership also includes that number of
shares that a person has a right to acquire within sixty (60) days. The following table shows, to
the knowledge of the Company, the only beneficial owners of more than five percent of the
Corporations shares as of the record date.
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Name and address of Beneficial Owner |
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Percent of Class* |
Robert C. Anderson |
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547,800 |
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6.19 |
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1960 Bechelli Lane
Redding, California 96002 |
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John C. Fitzpatrick |
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530,260 |
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6.00 |
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822 Northridge Drive
Redding, California 96001 |
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Harry L. Grashoff, Jr. |
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512,395 |
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5.79 |
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3162 Pinot Path
Redding, California 96001 |
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Based upon 8,849,542 shares outstanding at the record date. |
How much of Bank of Commerce Holdings Stock is owned by Directors and Executive Officers?
The following table sets forth certain information regarding beneficial ownership of the Companys
Common Stock as of March 31, 2007 by (i) each person who is known by the Company to beneficially
own more than five percent of the Companys Common Stock, (ii) each of the Companys directors and
nominees, (iii) each of the Named Executive Officers (as defined on page 8) and (iv) all directors
and executive officers of the Company as a group.
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Number of Shares of |
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Common Stock |
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Beneficially Owned |
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Percentage of |
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Name and Address of Beneficial Owner |
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Class |
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Robert C. Anderson (2) |
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547,800 |
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6.19 |
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John C. Fitzpatrick (3) |
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530,260 |
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6.00 |
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Harry L. Grashoff, Jr. (4) |
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512,395 |
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5.79 |
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Welton L. Carrel (5) |
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318,138 |
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3.60 |
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Kenneth R. Gifford, Jr. (6) |
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243,860 |
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2.76 |
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Michael C. Mayer (7) |
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178,527 |
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2.02 |
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Russell L. Duclos (8) |
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150,600 |
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1.74 |
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David H. Scott (9) |
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90,366 |
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1.03 |
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Patrick J. Moty (10) |
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67,476 |
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0.77 |
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Lyle L. Tullis (11) |
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54,904 |
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0.62 |
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Robert J. ONeil (12) |
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32,190 |
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0.37 |
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Linda J. Miles (13) |
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31,750 |
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0.36 |
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Orin Bennett (14) |
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30,200 |
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0.35 |
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Randall S. Eslick (15) |
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23,109 |
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0.27 |
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Jon Halfhide (16) |
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7,200 |
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All directors and executive officers as a group (14 persons) |
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2,818,775 |
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31.86 |
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Page 5
(1) |
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Beneficial ownership is determined in accordance with the rules of the Commission and
generally includes voting or investment power with respect to securities. Shares of Common
Stock subject to options currently exercisable or exercisable within 60 days of March 31,
2007, are deemed to be beneficially owned by the person holding such option for the purpose of
computing the percentage ownership of such person but are not treated as outstanding for the
purposes of computing the percentage ownership of any other person. Except as indicated by
footnotes and subject to community property laws, where applicable, the persons named above
have sole voting and investment power with respect to all shares of Common Stock shown as
beneficially owned by them. |
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Includes 547,800 shares held by the Anderson Family Revocable Living Trust, of which Mr.
Anderson is a co-trustee and shares voting and investment power with respect to such shares. |
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Includes 392,733 shares held by Carbonated Industries Inc., 137,527 shares owned by the J.C.
and Betty Fitzpatrick 1984 Revocable Trust. Mr. Fitzpatrick was chief executive officer of
Carbonated Industries, Inc. Mr. Fitzpatrick disclaims beneficial ownership of the shares held
by Carbonated Industries, Inc. |
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Includes 471,145 shares held by the Grashoff Family Revocable Trust of which Mr. Grashoff and
his spouse are co-trustees, 18,612 shares held separately in his spouses IRA account, 22,638
held individually in an IRA account. |
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Includes 308,538 shares held by the Carrel Family Living Trust of which Mr. Carrel is a
co-trustee with his spouse Judith, and shares voting and investment power with respect to such
shares and 9,600 shares issuable to Mr. Carrel upon the exercise of options exercisable within
60 days of March 31, 2007. |
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Includes 224,060 shares held jointly with Mr. Giffords spouse and 19,800 shares held by
Gifford Construction, Inc. |
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Includes 74,250 shares held individually, 18,600 held individually in an IRA account, and
51,927 shares in the Redding Bank of Commerce 401(k) Plan to which Mr. Mayer has voting powers
as Trustee, and 33,750 shares issuable to Mr. Mayer upon the exercise of options exercisable
within 60 days of March 31, 2007. |
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Includes 150,600 shares held by the Duclos Family Trust of whom Mr. Duclos and his
spouse are co-trustees. |
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Includes 69,241 shares held jointly with Mr. Scotts spouse, 204 shares held individually by
his spouse, 6,241 shares in 401(k) retirement plan, 14,680 shares in his spouses individual
retirement account. |
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Includes 35,300 shares jointly with Mr. Motys spouse, 3,276 individually in an IRA
account and 28,900 shares issuable to Mr. Moty upon the exercise of options exercisable within
60 days of March 31, 2007. |
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Includes 45,520 shares held jointly with Mr. Tullis spouse and 4,200 shares held separately
in his spouses name and 5,184 shares issuable to Mr. Tullis upon the exercise of options
exercisable within 60 days of March 31, 2007. |
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Includes 1,920 shares individually, 390 shares individually in an IRA account and 29,880
shares issuable to Mr. ONeil upon the exercise of options exercisable within 60 days of March
31, 2007. |
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Includes 19,750 shares held by the Miles Family Trust of whom Mrs. Miles and her spouse are
co-trustees, and 12,000 shares issuable to Ms. Miles upon the exercise of options exercisable
within 60 days of March 31, 2007. |
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Includes 2,000 shares held jointly with Mr. Bennetts spouse, 25,000 shares held by the
Bennett Family Revocable Trust and 3,200 shares issuable to Mr. Bennett upon the exercise of
options exercisable within 60 days of March 31, 2007. |
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Includes 5,109 shares held individually in an IRA account and 18,000 shares issuable to Mr.
Eslick upon the exercise of options exercisable within 60 days of March 31, 2007. |
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Includes 7,200 shares held by the Halfhide Family Trust of which Mr. Halfhide is co-trustee
with his spouse Teresa. |
Page 6
CORPORATE GOVERNANCE AND BOARD MATTERS
The Board of Directors is committed to sound and effective corporate governance principles and
practices. The Board of Directors has adopted corporate governance guidelines to provide the
framework for the governance of the company. These guidelines set forth director qualifications and
standards of independence, and mandate that at least a majority of the Board and all the members of
the Audit and the Nominating and Corporate Governance Committees meet the criteria for independence
as discussed below. Highlights of our corporate governance practices are described below.
The Company expects its employees to adhere to the highest possible standards of ethics and
business conduct with other employees, customers, stockholders and the communities it serves, and
to comply with all applicable laws, rules and regulations that govern its business. The Board of
Directors has adopted a code of ethics to promote honesty and integrity through out the Company.
The adopted charter of the Nominating and Corporate Governance Committee is included in this
document as appendix B. Interested parties may view the Code of Ethics on any of our Company
websites, www.bankofcommerceholdings.com, www.reddingbankofcommerce.com,
www.rosevillebankofcommerce.com, and www.sutterbankofcommerce.com.
Standards of Director Independence
A director will be considered independent under the standards adopted by the Companys Board of
Directors so long as all business and tax exempt organization relationships between Bank of
Commerce Holdings or its subsidiaries and either the director, any immediate family member in the
directors home, or any business or professional entity of which the director is an officer,
partner, or a 10% or greater owner are non-preferential and comply with applicable law and the
listing standards of NASDAQ. In addition, any entity of which the director is an officer or
employee or in which the director is a partner or has a 10% ownership interest, any law firm to
which the director is of counsel, or any entity of which an immediate family member is an executive
officer may make payments to, or receive payments from, Bank of Commerce Holdings or its
subsidiaries for goods and services so long as such payments last year were less than $1.5 million
or 5% of the Companys consolidated revenues for that period and such property or services were
provided or received in the ordinary course of business of each of the parties. Other than Michael
Mayer and Kenneth Gifford, Jr., all of the members of the Board of Directors are independent.
The Board of Directors
The basic responsibility of the Board is to oversee the business and affairs of the Company. Key
responsibilities of the Board and its committees include:
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Monitoring the performance of the Chief Executive Officer |
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Appropriately compensating the Chief Executive Officer and other executives |
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Creating a succession plan for the position of Chief Executive Officer |
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Approving the Companys strategic business plan |
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Establishing a high ethical tone for the Company |
Directors are expected to attend the Companys Annual Meeting of Shareholders, board meetings and
meetings of the committees on which they serve.
Page 7
Board Evaluation and Education
Each year, the board and each of its committees evaluate their effectiveness. The Board views
self-evaluation as an ongoing process designed to achieve high levels of Board and committee
performance. All new directors participate in an orientation program their first year as a
director.
This orientation includes presentations by Senior Management to familiarize new directors with our
strategic plans, significant financial, accounting and risk management issues, compliance programs,
conflict policies, Code of Ethics and Insider Trading Policy and other policies.
The Board requires directors to participate in continuing education programs and reimburses
directors for the expenses of such participation. All directors have successfully completed the
Directors Certification Program sponsored by the California Bankers Association.
Board Attendance and Annual Meeting Policy
Directors are expected to attend all Board meetings and meetings of committees on which they serve,
and each annual stockholders meeting. In 2006 ten nominees for director attended the Companys
annual meeting of stockholders.
The Board of Directors held 12 meetings during 2006. All directors attended at least 92% of the
aggregate number of meetings of the Board of Directors and of the committees on which such director
serves.
Certain Relationships and transactions with Directors; Compensation Committee Interlocks and
Insider Participation
Almost all of our directors and some of their respective family members and or affiliated entities
had certain relationships and/or transactions with the Company in 2006, as described below.
Family Relationships
No current directors have family members who are employed by the Company or a subsidiary.
Lending and Other Ordinary Business Transactions
During 2006, almost all of our directors as well as some of their respective family members and/or
affiliated entities, engaged in loan transactions and/or had other extensions of credit in the
ordinary course of business with our banking and mortgage subsidiaries. All of these transactions
were on substantially the same terms, including interest rates, collateral and repayment and other
terms, as those available at the time for similar transactions with unrelated parties. None of
these loans or credit transactions involves more than the normal risk of collectibility or presents
other unfavorable features.
Related Party Transaction and Approval of Related Party Transactions
Kenneth R. Gifford, Jr., is a Director, President and Chief Executive Officer of Gifford
Construction, Inc. Gifford Construction Inc. was the selected bidder to construct the Companys
Technology and Support Center (TASC) during 2006 on properties owned by the Company adjacent to
the Churn Creek Branch facility. The process for selection included invitation to qualified vendors
to submit sealed bids with the selection based upon lowest overall cost. The project is expected to
cost approximately $3.7 million upon completion. Completion time is expected to be March 1, 2007.
Page 8
Policy and Procedures on Related Person Transaction
The Company adopted its code of ethics to promote a tone at the top of highest ethical standards
within the Company. The code of ethics requires all Company personnel to make immediate disclosure
of situations that might create a conflict of interest, or the perception of a conflict of
interest, which includes transactions involving entities with which such personnel are associated.
The Board of Directors recognizes that related party transactions present a heightened risk of
conflicts of interest and/or improper valuation (or the perception thereof). Such transactions,
after full disclosure of the material terms to the Board, must be approved by the members of the
Board who are not parties to the specific transaction determine are just and reasonable to the
Company at the time of such approval, with those members of the Board (if any) who have an interest
in the transaction abstaining. Such procedures are consistent with the terms of California
corporate law but the Company does not presently have a written policy evidencing such terms.
Other than the TASC transaction identified above, no transactions required such review and approval
during 2006.
Compensation Committee Interlocks and Insider Participation
During the fiscal year 2006, Harry L. Grashoff, Jr., retired President and CEO of the Company,
participated in deliberations of the Corporations Executive Compensation Committee of the Board of
Directors concerning executive officer compensation. Mr. Grashoff retired as President and CEO of
the Company in July 1997. No other member of the Executive Compensation Committee of the Board of
Directors serves or has served as a bank officer or employee of Bank of Commerce Holdings or its
subsidiaries.
Page 9
Information about Directors and Executive Officers
Committees of the Board of Directors
The Board of Directors has established six standing committees, each of which is identified below.
Information about each committee of the Board, its members, purpose, and the number of meetings
held in 2006 follows.
The Board of Directors has a standing Audit Committee, Loan Committee, Executive Committee,
Asset/Liability Committee, Executive Compensation Committee, and Nominating and Corporate
Governance Committee. All Directors participate in the Long-Range planning of the Company. The
Executive Compensation Committee and Audit Committee also meet the standards of independence
prescribed by NASDAQ National Market and applicable SEC regulations.
|
|
|
|
|
Audit and
Qualified Legal
Compliance Committee |
|
|
|
|
|
|
|
|
|
Members:
|
|
David H. Scott, Chairman
|
|
Harry L. Grashoff, Jr. |
|
|
Russell L. Duclos
|
|
Lyle L. Tullis |
|
|
Jon Halfhide |
|
|
|
|
|
|
|
Purpose: |
|
To assist the Board of Directors in fulfilling its responsibilities to
oversee management activities related to accounting and financial
reporting policies, internal controls, auditing practices, and legal and
regulatory compliance; to review and discuss the integrity of the
Companys financial statements and the adequacy and reliability of
disclosures to stockholders; to review the qualifications and
independence of the outside accountants and the performance of internal
and outside accountants, to prepare the Committee report included in the
Companys annual proxy statement in accordance with SEC rules; to act as
the qualified legal compliance committee of the Company in accordance
with its charter; and to perform the audit committee and fiduciary audit
committee functions on behalf of the Company in accordance with federal
banking regulations. Independent directors meet in an executive session
of the Audit Committee each meeting. |
|
|
|
|
|
Number of meetings in 2006:
|
|
Five |
|
|
|
|
|
|
|
Nominating and Corporate
Governance Committee |
|
|
|
|
|
|
|
|
|
Members:
|
|
Lyle. L. Tullis, Chairman
|
|
John C. Fitzpatrick |
|
|
Harry L. Grashoff, Jr.
|
|
Welton L. Carrel |
|
|
|
|
|
Purpose: |
|
To assist the Board of Directors by identifying individuals qualified to
become Board members and to recommend to the Board nominees for director
and director nominees for each committee; to recommend to the Board the
corporate governance guidelines of the Company and to oversee an annual
review of the Boards performance; to recommend to the Board a
determination of each non-management directors independence under
applicable rules and guidelines, and to review from time to time
directors compensation and recommend any changes for approval by the
Board. |
|
|
|
|
|
Number of meetings in 2006
|
|
Three |
|
|
Page 10
|
|
|
|
|
Executive Committee |
|
|
|
|
Members:
|
|
Harry. L. Grashoff, Jr., Chairman
|
|
Michael C. Mayer |
|
|
John C. Fitzpatrick
|
|
Orin N. Bennett |
|
|
Kenneth R. Gifford, Jr. |
|
|
|
|
|
|
|
Purpose: |
|
To review all current and pending strategies for achieving financial
objectives; to review financial performance results; and to oversee the
administration and effectiveness of financial risk management policies |
|
|
|
|
|
Number of meetings in 2006:
|
|
Twelve |
|
|
|
|
|
|
|
Executive Compensation
Committee |
|
|
|
|
Members:
|
|
John C. Fitzpatrick, Chairman
|
|
Harry L. Grashoff, Jr. |
|
|
Welton L. Carrel
|
|
Jon Halfhide |
|
|
|
|
|
Purpose: |
|
To discharge the Board of Directors responsibilities relating to
compensation of the Companys executive officers; to review the
Compensation Discussion and Analysis and to recommend inclusion of such
disclosure in the Companys proxy statement; to conduct the annual chief
executive officer performance evaluation process; to evaluate and
approve compensation plans, policies, and programs of the Company
applicable to Executive Officers; and to oversee succession planning. |
|
|
|
|
|
Number of meetings in 2006
|
|
Two |
|
|
|
|
|
|
|
Loan Committee |
|
|
|
|
Members:
|
|
Kenneth R. Gifford, Jr. Chairman
|
|
Harry L. Grashoff, Jr. |
|
|
Russell L. Duclos
|
|
Michael C. Mayer |
|
|
David H. Scott |
|
|
|
|
|
|
|
Purpose: |
|
To review the quality of the Companys loan portfolio and the trends
affecting the loan portfolio; to oversee the effectiveness and
administration of loan-related policies; and to review the adequacy of
the allowance for loan and lease losses. The loan committee has the full
Bank delegated authority for approval of loans. |
|
|
|
|
|
Number of meetings in 2006
|
|
Forty two |
|
|
|
|
|
|
|
Asset Liability
Committee |
|
|
|
|
Members:
|
|
Russell L. Duclos, Chairman
|
|
Harry L. Grashoff, Jr. |
|
|
David H. Scott
|
|
Michael C. Mayer |
|
|
Linda J. Miles
|
|
Patrick J. Moty |
|
|
|
|
|
Purpose: |
|
To review the quality of the Companys investment portfolio and current
and future interest rate risks and trends; to produce and Interest Rate
View; to oversee the effectiveness and administration of investment and
interest rate risk related policies; to review and monitor exposure to
interest rate risk. |
|
|
|
|
|
Number of meetings in 2006
|
|
Five |
|
|
Page 11
Identifying and Evaluating Nominees for Director
The Nominating and Corporate Governance Committee of the Board of Directors has been delegated the
responsibility to identify, evaluate, and recommend for nomination candidates for election as new
directors. Each of the members of the Committee is an independent director as determined by the
Board under the rules of the NASDAQ global stock exchange.
The goal of the Committees nominating process is to assist the Company in attracting competent
individuals with the requisite management, financial and other expertise who will act as directors
in the best interests of the company and all its stockholders. The Committee consults with other
Board members, the Companys Chief Executive Officer, and other Company personnel in this process.
The Committee will consider an individual recommended by a stockholder for nomination as a new
director provided the stockholder making the recommendation follows the procedures for submitting a
proposed nominees name and the required information described below.
Director Qualifications and the Nomination Process
The Board has approved certain minimum standards for candidates for service as a first-time
director and the Committee has developed a process for identifying and evaluating first-time
nominees in light of these standards and other such factors as the Committee deems appropriate.
These standards, and the Committees evaluation process, apply to all first-time nominees for
directors, including those nominees recommended by stockholders. This process is based on the
Committees familiarity with the composition of the current Board, its awareness of anticipated
openings, and its assessments of desirable talents or expertise. The Committee regularly reviews
the composition of the Board in light of its understanding of the backgrounds, industry, and
professional experience, and the various communities, both geographic and demographic, represented
by the current members. It also monitors the expected service dates of Board members, any planned
retirement dates, and other anticipated events that may affect a directors continued ability to
serve. The Committee periodically reviews Board self-evaluations and information with respect to
the business and professional expertise represented by current directors in order to identify any
specific skills desirable for future Board members.
The Board has approved the following minimum qualifications for first-time nominees for director,
including nominees recommended by stockholders, for election to the Companys Board: (1) a
demonstrated breadth and depth of management and/or leadership experience, preferably in a senior
leadership role (i.e. chief executive officer, managing partner, president, chief financial
officer); (2) financial literacy or other professional or business experience relevant to an
understanding of the Company and its business; (3) a demonstrated ability to think and act
independently as well as the ability to work constructively in a group environment. The Committee
will determine, in its sole discretion, whether a nominee meets these minimum qualifications.
The Committee is responsible for managing the new director nomination process and may use a variety
of sources. The Committee then commences an inquiry to obtain sufficient information on the
background of a potential new director-nominee. Included in this inquiry is an initial review of
the candidate with respect to the following three factors: whether the individual meets the minimum
qualifications for first-time director nominees approved by the Board; whether the individual would
be considered independent under the NASDAQ rules and Companys standard of independence; and
whether the individual would meet any additional requirements imposed by law or regulation on the
members of the Audit and Executive Compensation Committees of the Board.
Following the initial review, the Committee arranges an introductory meeting with the candidate and
the Companys Chief Executive Office, Chairman of the Board of Directors, and in some cases with
additional directors, to determine the candidates interest in serving on the Board.
Page 12
The Committee, together with several members of the Board and the Chief Executive Officer then
conducts a comprehensive interview with the candidate. The individual will also be asked to provide
the information required to be disclosed in the Companys proxy statement.
Assuming a satisfactory conclusion to the process outlined above, the Committee then presents the
candidates name to the Board of Directors for election as a director.
Director Nominations by Stockholders
A stockholder who wishes to submit an individuals name for consideration by the Committee for
nomination as a director of the Company must provide (1) the stockholders name and address and the
number of shares of the Companys common stock beneficially owned by the stockholder; (2) the name
of the proposed nominee and the number of shares of the Companys common stock beneficially owned
by the nominee; (3) sufficient information about the nominees experience and qualifications for
the Committee to make a determination whether the individual would meet the minimum qualifications
for directors; and (4) such individuals written consent to serve as a director of the Company, if
elected. The Committee has the right to request, and the stockholder will be required to provide,
such additional information with respect to the stockholder nominee as the Committee may deem
appropriate or desirable to evaluate the proposed nominee in accordance with the nomination process
described above, including the information about the proposed nominee that is required to be
disclosed by the Company in its proxy statement under Regulation 14A of the Securities Exchange Act
of 1934, as amended.
Communications with the Board of Directors
The Board has established a process for stockholders and other interested parties to communicate
with Independent members of the Board or a specific committee. Parties may send a letter to Bank of
Commerce Holdings, Attention: Corporate Secretary, 1951 Churn Creek Road, Redding, California
96002.
Code of Ethics
The Board has adopted a Code of Ethics that applies to all of our directors, officers and staff
including our principal executive officer and principal financial officer. The Code of Ethics
embodies our commitment to high standards of ethical and professional conduct. All directors,
officers and staff are required to annually certify that they have read and complied with the Code
of Ethics. The Code of Ethics consists of basic standards of business practice as well as
professional and personal conduct. A copy of the Code of Ethics is available on our website;
www.bankofcommerceholdings.com.
How we compensate Directors
Annual Compensation
Non-employee directors receive a monthly cash retainer and other compensation for service as a
director in the form of a stock option grant and participation in the Directors Deferred
Compensation Plan. A Director who is an officer of the Company or of a subsidiary is not
compensated for his or her membership on the Board.
Each independent director of the Company receives a $500 monthly retainer. Independent Directors
are paid $500 for each Board of Directors meeting attended and $250 for each committee meeting
attended. Committee chairman are paid an additional $50 per meeting. The Chairman of the Board is
paid an additional $750 per month and the Chairman of the Audit Committee is paid an additional
$375 per month.
Page 13
Equity Compensation
Independent directors are also eligible to participate in the 1998 Stock Option Plan, as determined
by the Executive Compensation Committee. A non-employee director may receive a stock option at a
discounted exercise price equal to 85% of the closing price per share of the common stock as of the
day of trading at the close the date of the meeting when the option is granted.
On November 21, 2006, 16,000 shares of the Company common stock was issued and Orin Bennett and
16,000 shares of the Company common stock was issued to Jon Halfhide at an exercise price of $9.99,
which represented 85% of the fair market value on the date of the grant as determined by the most
recent activity posted on the NASDAQ. The options will vest over five years and terminate on
December 1, 2016.
Summary Director Compensation Table
The following is a summary of the compensation earned by our Directors during 2006:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and Non- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Qualified |
|
|
|
|
|
|
Fees |
|
|
|
|
|
Stock |
|
Non-Equity |
|
Deferred |
|
|
|
|
|
|
earned or |
|
Stock |
|
Option |
|
Incentive |
|
Compensation |
|
All Other |
|
|
|
|
paid in |
|
Awards |
|
Awards |
|
Compensation |
|
Earnings |
|
Compensation |
|
Total |
Director |
|
cash ($) |
|
($) |
|
($)(1) |
|
($) |
|
($) (2) |
|
($) |
|
($) |
|
Welton L. Carrel |
|
$ |
13,500 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
16,958 |
|
|
$ |
0 |
|
|
$ |
30,458 |
|
Russell L. Duclos |
|
$ |
24,200 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
16,008 |
|
|
$ |
0 |
|
|
$ |
40,208 |
|
John C. Fitzpatrick |
|
$ |
14,400 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
14,400 |
|
Kenneth R. Gifford, Jr. |
|
$ |
26,750 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
20,242 |
|
|
$ |
0 |
|
|
$ |
46,992 |
|
Harry L. Grashoff, Jr. |
|
$ |
38,750 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
34,087 |
|
|
$ |
0 |
|
|
$ |
72,837 |
|
David H. Scott |
|
$ |
27,250 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
12,358 |
|
|
$ |
0 |
|
|
$ |
39,608 |
|
Lyle L. Tullis |
|
$ |
17,150 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
6,055 |
|
|
$ |
0 |
|
|
$ |
23,205 |
|
Jon Halfhide |
|
$ |
1,000 |
|
|
$ |
0 |
|
|
$ |
81,440 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
1,000 |
|
Orin N. Bennett |
|
$ |
14,250 |
|
|
$ |
0 |
|
|
$ |
81,440 |
|
|
$ |
0 |
|
|
$ |
636 |
|
|
$ |
0 |
|
|
$ |
14,886 |
|
|
|
|
1) |
|
The value of the stock option award is the amount recognized for financial statement
reporting purposes. |
|
2) |
|
Directors deferred compensation earns interest at a rate of 10% per annum. Long term
directors have had the opportunity to defer fee income as of January 1, 1993. Item (2)
represents the interest paid on such balances. Differences in earnings are based upon the
balances in the deferred accounts. |
The form and amount of compensation paid to independent non-management directors is reviewed from
time to time by the Executive Compensation Committee. No changes were made to the compensation
package for independent non-management directors during 2006.
Directors Deferred Compensation Program
The Directors Deferred Compensation Plan, adopted by the Board of Directors effective January 1,
1993 is a non-qualified director benefit plan in which the eligible director voluntarily elects to
defer some or all of his or her current fees in exchange for the Companys promise to pay a
deferred benefit. The deferred fees are credited with interest under the plan and the accrued
liability is paid to the director at retirement. The current interest rate on the plan is ten
percent.
Page 14
As a non-qualified plan, the plan is only available to independent directors without regard to
nondiscrimination requirements of qualified plans. The account is segregated from other assets
owned by the Bank, only by way of its identification on the books of the Bank as a liability of the
Bank to the Director. The account is subject to claims of general creditors of the Bank and the
account shall be a general unsecured creditor of the Bank.
No compensation so deferred shall be payable to a director until the death, disability,
resignation, retirement or removal from office of such director, whereupon all such compensation,
together with interest thereon shall be provided to such director, or his beneficiary within thirty
(30) days from the date of death, disability or resignation. If the director shall designate an
optional installment payment method, in which event the first installment shall be paid after six
months of his or her normal retirement date.
Upon the death of a director, while serving in such capacity, distribution of compensation deferred
together with interest shall be made in one lump sum to his or her designated beneficiary. Upon the
death of a director who had previously retired and had elected an installment method of
distribution, all sums remaining undistributed shall be paid in one lump sum to his or her
designated beneficiary.
Deferred compensation by reason of the resignation or retirement, may at the option of the
director, be payable in approximately equal monthly installments over a period not to exceed
fifteen (15) years, provided however, that on any such installment method of distribution, interest
shall continue to be credited on the undistributed sums.
As of December 31, 2006 the Companys accrued obligations under the Directors Deferred Compensation
Plan were $2,035,219.
Directors and Officers liability insurance and Indemnification matters
The Companys bylaws provide for indemnification of the Companys directors, officers, employees
and other agents of the Company to the extent and under the circumstances permitted by the
California General Corporation Law. The Companys bylaws also provide that the Company shall have
the power to purchase and maintain insurance covering its directors, officers and employees against
any liability asserted against any of them and incurred by any of them, whether or not the Company
would have the power to indemnify them against such liability under the provisions of applicable
law or the provisions of the Companys bylaws.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers or persons controlling the Company pursuant to provisions in the
Companys bylaws, the Company understands that it is in a position of the Securities and Exchange
Commission (the SEC), that such indemnification is against public policy as expressed in the
Securities Act of 1933, and is therefore unenforceable.
Page 15
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended (the Exchange Act), requires the
Companys directors and executive officers and persons who own more than ten percent of a
registered class of the Companys equity securities to file with the SEC initial reports of
ownership and reports of changes of ownership of Common Stock and other equity securities of the
Company. To the Companys knowledge, based solely upon a review of such reports and written
representations, the Company believes that all reports required by Section 16(a) of the Exchange
Act to be filed by its executive officers and directors during the last fiscal year were filed in a
timely manner.
Page 16
Compensation Discussion and Analysis
Objectives of Executive Compensation Programs
The Companys compensation programs and policies are designed to enhance shareholder value by
aligning the financial interests of the executive officers of the Company with those of the
Companys shareholders. The compensation program has two goals: To help the Company compete with
other financial services organizations by attracting and retaining highly qualified individuals as
executive officers; and to pay executive officers based upon their contribution to the Companys
performance.
The Executive Compensation Committee meets annually to review the salaries of executive officers,
to reestablish the base salary, to propose adjustments to the incentive compensation portion and to
establish a discretionary bonus plan if all performance objectives are met. The long-term
compensation components (equity incentives and post-termination benefits) are reviewed in the
context of other compensation provided to executives; however, adjustments to long-term
compensation are not necessarily made annually.
Equity compensation and post-termination benefits are intended to provide retention incentives to
executives and are not specifically intended to reward current employment. Salary, bonus and
perquisite compensation are related to, and affected by, current performance.
The Companys philosophy for providing equity compensation in the form of stock options is based on
the principles of encouraging key employees to remain with the Company and to encourage ownership
thereby providing them with a long-term interest in the Companys overall performance. The Company
intends to retain the flexibility necessary to provide total cash compensation in line with
competitors practice, the Companys compensation philosophy and the Companys best interests,
including compensation that may not be deductible.
Commitment to Quality Governance
The Executive Compensation Committee oversees the Companys executive compensation programs. The
Committee has adopted the following procedures intended to ensure quality governance of the
Companys pay for performance.
|
|
Only independent members of the Board may serve on the
Executive Compensation Committee. |
|
|
The committee meets on a regular basis as needed throughout
the year. Generally the committee will review year-to-date
financial performance versus budget; year-to-date and multi
year performance versus competitor group performance (Uniform
Bank Performance Report); executive officer stock ownership
levels; each executive officers target total compensation for
the year; and other topics as appropriate. |
|
|
At least once a year, the committee reviews each executive
officers total compensation package, including base salary,
cash and stock incentive awards, qualified and non-qualified
retirement and deferred compensation benefit packages. |
|
|
The committee utilizes independent compensation reports to
assist in the analysis of compensation packages. |
|
|
At least once a year, the committee reviews and reassesses its
charter and recommends any proposed changes to the Board of
Directors for approval. The committee also conducts an annual
review of its own performance. |
|
|
The committee reports on its meetings to the full Board. The
independent members of the Board, after a review of the
Companys performance, approve each year the total
compensation awards for the executive officers. |
Page 17
Measuring Performance
|
|
The committee reviews the extent to which the Companys
internal goals have been achieved. In reviewing achievement of
internal goals, the committee considers the quality of the
Companys earnings. |
|
|
The committee reviews objective data concerning the Companys
financial performance, with a focus on revenue, net income,
operating earnings per share, shareholder value and total
shareholder return. |
Compensation Review
In 2006, the Compensation Committee initiated a review of the Companys compensation philosophy to
ensure that it continued to meet the overall objective of enhancement of shareholder interests. The
Compensation Committee evaluated a number of compensation practices of the Companys competitors
and analyzed the compensation and benefit practices used within the Company for executive officers.
The Compensation Committee evaluated executive officer total compensation in compared to detailed
public company information provided by Equilar®, a leading marketer for benchmarking executive
compensation and a trusted data provider to NASDAQ. Members of the Compensation Committee reviewed
data to determine appropriate benchmarks for the Companys executive officers, without
recommendations from executives or outside parties.
Compensation Philosophy
The Company seeks to attract, retain and motivate executives who can thrive in a challenging and
dynamic environment by providing compensation that is highly competitive for top management and
with substantial performance-based components. It is the Companys practice to structure cash and
equity-based incentives in a manner that rewards employees consistent with shareholder interests.
The Compensation Committee believes that it is important to retain the best possible executives in
the industry, and so, compensation opportunities for the two top executive officers assuming
strong performance are targeted at the highest quartile. Incentive opportunities for top
executives are largely tied to the performance of the Company, while incentives for other employees
include emphasis on activities associated within various business units.
Components of Executive Officer Compensation
The Companys compensation program consists of five components, namely, (i) base salary; (ii) cash
incentives; (iii) equity incentives; (iv) perquisites; and (v) post-employment pay and benefits.
These components are intended to work together to compensate the executive officer fairly for
services, reward the executive officer based upon the Companys overall performance and, depending
on the position, their own performance during the year. In assessing the executive officers total
rewards, the Compensation Committee reviews each component of an executives compensation and
consider and evaluate pay mix, the competitive market, the value of total pay, benefits and
perquisites.
Base Salary:
Base salary is generally established by an individuals performance, potential, responsibilities,
promotions, other compensation and peer group compensation levels. The Compensation Committee
considers other compensation earned as well as the terms of an employment agreement, if any, with
the executive. All of the factors described herein are considered on a subjective basis in the
aggregate, and not of the factors is accorded a specific weight.
Page 18
The base salary for the Chief Executive Officer for 2006 was determined by (i) examining the
Companys performance against its preset goals, (ii) comparing the Companys performance against
companies determined by the Compensation Committee to be competitors, (iii) evaluating the
effectiveness and performance of the Chief Executive Officer and (iv) comparing the base salary of
the Chief Executive Officer to that of other chief executive officers in similarly situated
companies. The total compensation received by the Companys Chief Executive Officer is detailed in
the Summary Compensation Table.
Cash Incentive Compensation:
The Companys Incentive Profit Sharing Plan (the Profit Sharing Plan) allow the Company to
provide cash incentives to executive officers based on the Companys overall performance, and, in
some cases, individual performance and personal goals. The Profit Sharing Plan provides that
incentives are computed after a 20% return on the prior years equity, before income taxes, less any
gain and plus any loss on investment securities sold. Cash incentives are paid quarterly as to 70%
of the incentive earned for the previous calendar quarter. The remaining 30% holdback is paid upon
verification and completion of the Companys audited annual financial statements.
The Companys President and Chief Executive Officer and the Companys Executive Vice President and
Chief Financial Officer earns a percentage of the profits as defined above, limited by absolute
dollar caps. During 2006 the dollar caps were met. All employees participate in the cash incentive
compensation. The percentage is recalculated each year based upon the approved budget.
Equity Compensation:
Under the Companys compensation philosophy, ownership of the Companys Common Stock is a
significant element of executive compensation.
Equity compensation consists of stock options. The Company maintains an equity compensation plan
which has been approved by the Companys shareholders. The number of shares granted to an employee
is based on several factors including performance and the value placed on expected future employee
performance, retention and, in some cases, internal or external pay equity.
The grant of a stock option is intended to retain and motivate key executives and to provide a
direct link with the interest of the shareholders of the Company. In general, stock option grants
are determined based on (i) prior award levels, (ii) total awards received to date by the
individual executives, (iii) the total stock award to be made and the executives percentage
participation in that award, (iv) the executives direct ownership of Company Common Stock, (v) the
number of options vested and non-vested and (vi) the options outstanding as a percentage of total
shares outstanding.
The proposal to approve the 2008 Equity Incentive Plan is intended to permit the Company to reward
employees for the strong performance of the Company in keeping with shareholder interests. As
shareholders have been rewarded over the years for their investment in the Company, the Committee
believes that grants of equity to employees will continue to enhance the Companys ability to
reward, motivate and attract high performing employees.
Perquisites:
The Compensation Committee believes that offering certain perquisites helps in the operation of the
business as well as assists the Company to recruit and retain key executives. The Company offers
health, life and disability insurance, and in some cases, automobiles and country club memberships
to our executive management.
Page 19
Post-Employment Compensation:
The Company maintains an Executive Salary Continuation Plan (SCP) and a change in control severance
provision in employment agreements, providing for certain payments following the termination of
employment for five executive officers.
Compensation Committee Report
We have reviewed and discussed the foregoing Compensation Discussion and Analysis with management.
Based on our review and discussion with management, we have recommended to the Board of Directors
that the Compensation Discussion and Analysis be included in this proxy statement and in Bancorps
Annual Report on Form 10-K for the year ended December 31, 2006.
March 9, 2007,
Respectfully submitted by the members of the Executive Compensation Committee,
John C. Fitzpatrick, Chairman of the Executive Compensation Committee
Welton L. Carrel
Harry L. Grashoff, Jr.
Jon Halfhide, CPA
Page 20
Executive Officers and Senior Management
Set forth below are the names and most recent biographies of Bank of Commerce Holdings executive
officers and senior leadership team. Only Mr. Mayer, Mrs. Miles, Mr. Moty, Mr. Eslick and Mr.
ONeil are Named Officers for purposes of the Securities Exchange Act and rules. Information
relating to other Company personnel in this proxy statement is provided solely for the information
of shareholders.
|
|
|
Name, Age and Principal Occupation |
|
Business Experience |
Michael C. Mayer, born in 1956,
President and Chief Executive Officer
|
|
President and Chief
Executive Officer and
a director of Redding
Bank of Commerce (the
Bank) and Bank of
Commerce Mortgage
since January 2001 and
Bank of Commerce
Holdings as of May
2001. From April 1997
to May 2000, he served
as Executive Vice
President and Chief
Credit Officer of the
Bank. From May 2000 to
January 2001, he
served as Executive
Vice President and
Chief Operating
Officer of the Bank.
Before joining the
Bank, Mr. Mayer was
Senior Vice President
and Senior Loan
Officer at another
California independent
financial institution. |
|
|
|
Linda J. Miles, born in 1953
Executive Vice President & Chief Financial Officer
|
|
Executive Vice
President and Chief
Financial Officer of
Bank of Commerce
Holdings, Redding Bank
of Commerce and Bank
of Commerce Mortgage
since January 1996.
From October 1989 to
December 1995, she
served as Senior Vice
President and Chief
Financial Officer of
the Bank. Before
joining the Bank, Ms.
Miles was Senior Vice
President and Chief
Financial Officer at
another California
independent financial
institution. |
|
|
|
Patrick J. Moty, born in 1957
Executive Vice President & Chief Credit Officer
|
|
Executive Vice
President and Chief
Credit Officer since
December 2005. Senior
Vice President and
Chief Credit Officer
since 2000. Senior
Vice President and
Senior Loan Officer
since 1998. Vice
President and Senior
Loan Officer since
1993. Vice President
and Loan Officer since
1988. Assistant Vice
President and Loan
Officer since 1987.
Mr. Moty joined the
company in 1985 as a
Loan Officer following
four years in lending
at a large Regional
financial institution. |
Page 21
|
|
|
Name, Age and Principal Occupation |
|
Business Experience |
Randall S. Eslick, born in 1957
Regional President Roseville Division
|
|
Regional President
Roseville Bank of
Commerce since
December 2005. Senior
Vice President and
Regional Manager of
the Roseville Bank of
Commerce since 2002.
Prior to joining the
company, Vice
President and
Commercial Loan
Officer at another
California independent
financial institution.
Joined the Company in
March 2001 as Senior
Vice President and
Commercial Loan
Officer. |
|
|
|
Caryn A. Blais, born in 1951
Senior Vice President & Chief Information Officer
|
|
Senior Vice President
and Chief Information
Officer of Redding
Bank of Commerce since
1991. Prior to joining
the Company she served
as Vice President Data
Processing at another
California independent
financial institution.
Ms. Blais has held
administrative
positions since 1986. |
|
|
|
Theodore Cumming, born in 1957
Senior Vice President & Lending Group Manager
|
|
Senior Vice President
and Lending Group
Manager of Redding
Bank of Commerce
Placer Division since
2001. Prior to joining
the company, Vice
President of
Commercial Lending for
a large Regional Bank. |
|
|
|
Samuel Jimenez, C.P.A., born in 1964
Senior Vice President & Director of Risk
Management
|
|
Senior Vice President
and Director of Risk
Management of Redding
Bank of Commerce since
September 2003.
Federal Deposit
Insurance Examiner
from 1992 2003.
Certified Public
Accountant. |
Page 22
|
|
|
Name, Age and Principal Occupation |
|
Business Experience |
Robert A. Matranga, born in 1953
Senior Vice President & Lending Group Manager
|
|
Senior Vice President
and Lending Group
Manager Redding Bank
of Commerce Churn
Creek division since
1997. Vice President
of Commercial Lending
at the time of joining
the Bank. Prior to
joining the company,
Vice President of
Commercial Lending for
another California
independent financial
institution. |
|
|
|
Robert J. ONeil, born in 1955
Senior Vice President & Regional Credit Manager
Roseville Bank of Commerce
|
|
Senior Vice President
and Regional Credit
Manager Roseville
Bank of Commerce since
2002. Vice President
of Commercial lending
at time of joining
company. 1986 2002
as a Senior executive
with another
California independent
financial institution.
1975-1986 majoring in
lending at a large
Regional financial
institution. |
|
|
|
Debra A. Sylvester, born in 1958
Senior Vice President & Chief Administrative
Officer
|
|
Senior Vice President
since 1999. Appointed
to Chief
Administrative Officer
during 2004. Has held
administrative
positions with the
Company since 1984. |
Page 23
Stock Price Performance Graph
The following graph compares the Companys cumulative total return to shareholders during the past
five years with that of the Standard & Poors 500 Composite Stock Index (the S&P) and the SNL
Securities $250-$500 million Bank Asset-Size Index (the SNL Securities Index). The stock price
performance shown on the following graph is not necessarily indicative of future performance of the
Companys Common Stock.
Bank of Commerce Holdings
Five Year Performance Graph
Stock Performance Graph (1)
|
|
|
|
|
|
SNL Securities LC ©2006
|
|
(804) 977-1600 |
(1) Assumes $100 invested on December 31, 2001, in the Companys Common Stock, the NASDAQ, the S&P
500 and the SNL Securities Index. Assumes reinvestment of dividends. Source: SNL Securities
(share prices for the Companys Common Stock was furnished to SNL Securities through the NASDAQ).
Page 24
COMPENSATION TABLES AND INFORMATION
Summary Compensation Table
The following table sets forth certain summary information concerning compensation paid to the
Companys Chief Executive Officer, Chief Financial Officer, Chief Credit Officer, Senior Vice
President and Regional President, and Senior Vice President and Regional Credit Manager (the Named
Executive Officers) on December 31, 2006, and whose aggregate salary and bonus exceeded $100,000
in fiscal 2006.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity |
|
|
|
|
|
|
Non-Qualified |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive Plan |
|
|
Option |
|
|
Deferred |
|
|
All Other |
|
|
Total |
|
Name and Principal |
|
|
Salary |
|
|
Compensation |
|
|
Awards |
|
|
Earnings |
|
|
Compensation |
|
|
Compensation |
|
Position |
|
Year |
|
|
(1) ($) |
|
|
(2) ($) |
|
|
(3) ($) |
|
|
(4) ($) |
|
|
(5) ($) |
|
|
($) |
|
|
Michael C. Mayer |
|
|
2006 |
|
|
$ |
240,000 |
|
|
$ |
120,000 |
|
|
$ |
0 |
|
|
$ |
26,231 |
|
|
$ |
68,892 |
|
|
$ |
455,123 |
|
President & Chief |
|
|
2005 |
|
|
$ |
225,000 |
|
|
$ |
100,000 |
|
|
$ |
0 |
|
|
$ |
11,243 |
|
|
$ |
65,754 |
|
|
$ |
401,997 |
|
Executive Officer |
|
|
2004 |
|
|
$ |
166,000 |
|
|
$ |
99,411 |
|
|
$ |
96,810 |
|
|
$ |
3,026 |
|
|
$ |
56,340 |
|
|
$ |
421,587 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Linda J. Miles |
|
|
2006 |
|
|
$ |
195,000 |
|
|
$ |
60,000 |
|
|
$ |
0 |
|
|
$ |
31,157 |
|
|
$ |
77,544 |
|
|
$ |
363,701 |
|
EVP & Chief |
|
|
2005 |
|
|
$ |
170,000 |
|
|
$ |
56,000 |
|
|
$ |
0 |
|
|
$ |
13,386 |
|
|
$ |
74,022 |
|
|
$ |
313,408 |
|
Financial Officer |
|
|
2004 |
|
|
$ |
130,000 |
|
|
$ |
64,748 |
|
|
$ |
55,320 |
|
|
$ |
3,610 |
|
|
$ |
63,456 |
|
|
$ |
317,134 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Patrick J. Moty |
|
|
2006 |
|
|
$ |
160,000 |
|
|
$ |
77,000 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
10,950 |
|
|
$ |
247,950 |
|
EVP & Chief |
|
|
2005 |
|
|
$ |
127,200 |
|
|
$ |
69,500 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
3,240 |
|
|
$ |
199,940 |
|
Credit Officer |
|
|
2004 |
|
|
$ |
107,280 |
|
|
$ |
40,000 |
|
|
$ |
35,958 |
|
|
$ |
0 |
|
|
$ |
3,060 |
|
|
$ |
186,298 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Randall S. Eslick |
|
|
2006 |
|
|
$ |
150,000 |
|
|
$ |
63,550 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
19,892 |
|
|
$ |
233,442 |
|
Regional President |
|
|
2005 |
|
|
$ |
128,160 |
|
|
$ |
57,500 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
12,490 |
|
|
$ |
198,150 |
|
Roseville Bank of |
|
|
2004 |
|
|
$ |
120,840 |
|
|
$ |
26,500 |
|
|
$ |
41,490 |
|
|
$ |
0 |
|
|
$ |
8,460 |
|
|
$ |
197,290 |
|
Commerce |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert J. ONeil |
|
|
2006 |
|
|
$ |
140,000 |
|
|
$ |
55,500 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
12,500 |
|
|
$ |
208,000 |
|
Senior VP |
|
|
2005 |
|
|
$ |
122,201 |
|
|
$ |
50,500 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
12,490 |
|
|
$ |
185,191 |
|
Regional Credit |
|
|
2004 |
|
|
$ |
115,252 |
|
|
$ |
22,750 |
|
|
$ |
16,596 |
|
|
$ |
0 |
|
|
$ |
8,460 |
|
|
$ |
163,058 |
|
Manager |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Base salaries include 401(K) contributions made by the executive officers of
approximately $82,000 during 2006. |
|
(2) |
|
The Companys Cash Incentive Compensation Plan (the Profit Sharing Plan) is a
cash-based incentive profit sharing program. The Profit Sharing Plan provides that
profit sharing is computed on the Companys profit after a 20% return on prior years
equity, before income taxes, less any gain on investments securities sold and plus any
losses on investment securities sold. The percentage is recalculated each year based
upon the approved budget limited by absolute dollar caps for the two top executives.
This income item includes bonus amounts in the year earned rather than in the year paid. |
|
(3) |
|
The value of the stock option award is the amount recognized for financial
statement reporting purposes. No options were granted during 2005 and 2006. |
|
(4) |
|
The Company makes contributions to segregated accounts for the benefit of Salary
Continuation Plan beneficiaries. Such accounts earn annual interest at 10%. |
|
(5) |
|
Other Compensation consists of perquisites and contributions to the Salary
Continuation Plan. Perquisite expenses represent an automobile for business use or car
allowance, and membership expenses in connection with the use of a private club for
business purposes, particularly for the purpose of entertaining the Banks customers.
The officers may have derived some personal benefit from the use of such automobiles and
membership. |
Page 25
The Company, after reasonable inquiry, believes that the value of any personal benefit
not directly related to job performance which is derived from the personal use of such
automobile and membership does not exceed $10,000 per year in the aggregate for any single
executive officer. Perquisite amounts were (a) $8,700 for Mike Mayer in each year, (b)
$6,720 for Linda Miles in each year, (c) $3,400, $3,240 and $2,060 for Patrick Moty in
2006,2005 and 2004, respectively, (d) $12,500 for Randall Eslick in each of 2006,2005 and
2004, and $12,500 for Robert ONeill in each of 2006 and 2005, and $8,460 in 2004. The
balance represents contributions made in each year in connection with the Salary Continuation
Plan.
GRANTS OF PLAN-BASED AWARDS TABLE
The following table summarizes the options granted during fiscal 2006 to the individuals identified
below.
Option Grants for 2006
No options were granted to the Named Executive Officers during 2006.
OPTION EXERCISES IN 2006
The following tables set forth the number of shares of Bank of Commerce Holdings Common Stock
acquired by each of the named Executive Officers during fiscal year 2006, if any, the net value
realized upon exercise:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options Vested during |
|
|
Options Exercised |
|
|
Value Realized |
|
Name |
|
2006 |
|
|
during 2006 |
|
|
($) (1) (2) |
|
|
Michael C. Mayer |
|
|
1,500 |
|
|
|
0 |
|
|
$ |
0 |
|
Linda J. Miles |
|
|
1,200 |
|
|
|
0 |
|
|
$ |
0 |
|
Patrick J. Moty |
|
|
360 |
|
|
|
4,700 |
|
|
$ |
41,172 |
|
Randall S. Eslick |
|
|
450 |
|
|
|
0 |
|
|
$ |
0 |
|
Robert J. ONeil |
|
|
5,616 |
|
|
|
0 |
|
|
$ |
0 |
|
|
|
|
(1) |
|
Based on the fair market value of the Companys Common Stock at December 31, 2006 of $11.99
per share less the applicable exercise price per share. The fair market value of the
Companys Common Stock at December 31, 2006 was determined based on the last reported sale of
the Companys Common Stock in 2006 as reported on the NASDAQ National Market. |
|
(2) |
|
The realized value represents the market value at exercise less the exercise price. |
Page 26
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Incentive |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan Awards: |
|
|
|
|
|
|
|
|
|
Number of |
|
|
Number of |
|
|
Number of |
|
|
|
|
|
|
|
|
|
Securities |
|
|
Securities |
|
|
Securities |
|
|
|
|
|
|
|
|
|
Underlying |
|
|
Underlying |
|
|
Underlying |
|
|
|
|
|
|
|
|
|
Unexercised |
|
|
Unexercised |
|
|
Unexercised |
|
|
Option |
|
|
|
|
|
|
Options (#) |
|
|
Options (#) |
|
|
Unearned Options |
|
|
Exercise |
|
|
Option |
|
Name |
|
Exercisable |
|
|
Un-exercisable |
|
|
(#) |
|
|
Price ($) |
|
|
Expiration Date |
|
|
Michael C. Mayer |
|
|
15,750 |
|
|
|
0 |
|
|
|
0 |
|
|
$ |
5.42 |
|
|
|
06/01/2011 |
|
Michael C. Mayer |
|
|
4,500 |
|
|
|
3,000 |
|
|
|
0 |
|
|
$ |
6.75 |
|
|
|
01/01/2013 |
|
Michael C. Mayer |
|
|
10,500 |
|
|
|
0 |
|
|
|
0 |
|
|
$ |
10.60 |
|
|
|
06/15/2014 |
|
Linda J. Miles |
|
|
15,000 |
|
|
|
0 |
|
|
|
0 |
|
|
$ |
6.67 |
|
|
|
08/21/2011 |
|
Linda J. Miles |
|
|
3,600 |
|
|
|
2,400 |
|
|
|
0 |
|
|
$ |
6.75 |
|
|
|
01/01/2013 |
|
Linda J. Miles |
|
|
6,000 |
|
|
|
0 |
|
|
|
0 |
|
|
$ |
10.60 |
|
|
|
06/15/2014 |
|
Patrick J. Moty |
|
|
12,700 |
|
|
|
0 |
|
|
|
0 |
|
|
$ |
3.23 |
|
|
|
05/01/2008 |
|
Patrick J. Moty |
|
|
10,800 |
|
|
|
0 |
|
|
|
0 |
|
|
$ |
6.67 |
|
|
|
08/21/2011 |
|
Patrick J. Moty |
|
|
1,440 |
|
|
|
360 |
|
|
|
0 |
|
|
$ |
7.30 |
|
|
|
07/16/2012 |
|
Patrick J. Moty |
|
|
3,900 |
|
|
|
0 |
|
|
|
0 |
|
|
$ |
10.60 |
|
|
|
06/15/2014 |
|
Randy Eslick |
|
|
13,500 |
|
|
|
0 |
|
|
|
0 |
|
|
$ |
5.42 |
|
|
|
06/01/2011 |
|
Randy Eslick |
|
|
1,800 |
|
|
|
450 |
|
|
|
0 |
|
|
$ |
7.30 |
|
|
|
07/16/2012 |
|
Randy Eslick |
|
|
4,500 |
|
|
|
0 |
|
|
|
0 |
|
|
$ |
10.60 |
|
|
|
06/15/2014 |
|
Robert J. ONeill |
|
|
22,464 |
|
|
|
5,616 |
|
|
|
0 |
|
|
$ |
7.30 |
|
|
|
07/16/2012 |
|
Robert J. ONeil |
|
|
1,800 |
|
|
|
0 |
|
|
|
0 |
|
|
$ |
10.60 |
|
|
|
06/15/2014 |
|
Page 27
Employment contracts, change in control agreements and termination of employment
Effective April 2001 and amended December 31, 2006, Bank of Commerce Holdings and Redding Bank of
Commerce entered into a four-year employment agreement with its President and Chief Executive
Officer, Michael C. Mayer. The agreement provides for, among other things, (a) a base salary of
$240,000 per year, which the Executive Compensation Committee of the Board of Directors can and
does adjust annually at its discretion; (b) profit sharing $120,000, which the Executive
Compensation Committee of the Board of Directors can adjust annually at its discretion; (c) five
weeks annual vacation; (d) an automobile of predetermined value, including expenses; (e)
supplemental retirement benefits (see Salary Continuation Plan below); (f) Country Club
membership dues; (g) health and life insurance benefits that are now or may hereinafter be in
effect for all other full time employees; and (h) reimbursement for ordinary and necessary expenses
incurred by Mr. Mayer in connection with his employment.
Upon Mr. Mayers termination for cause, Mr. Mayer will be entitled to six months total
compensation package. Upon termination at the sole and absolute discretion of the Board of
Directors, Mr. Mayer will be entitled to one year of Mr. Mayers then total compensation package.
In the event of a change in control, Mr. Mayer will be entitled to the then full compensation
package for a period of twenty-four months. The executive is required to give ninety (90) days
prior notice in writing to the Employer in the event the Executive resigns or voluntarily
terminates employment, or takes an early retirement.
Effective April 2001 and amended December 31, 2006, Bank of Commerce Holdings and Redding Bank of
Commerce also entered into a four-year employment agreement with its Executive Vice President and
Chief Financial Officer, Linda J. Miles. The agreement provides for, among other things, (a) a base
salary of $195,000 per year, which the Executive Compensation Committee of the Board of Directors
can and does adjust annually at its discretion; (b) profit sharing of $60,000 per year, which the
Executive Compensation Committee of the Board of Directors can adjust annually at its discretion;
(c) five weeks annual vacation; (d) an automobile of predetermined value, including expenses; (e)
supplemental retirement benefits (see Salary Continuation Plan below); (f) Country Club
membership dues; (g) health and life insurance benefits that are now or may hereinafter be in
effect for all other full time employees; and (h) reimbursement for ordinary and necessary expenses
incurred by Ms. Miles in connection with her employment.
Upon Ms. Miles termination for cause, Ms. Miles will be entitled to six months of total
compensation package. Upon termination at the sole and absolute discretion of the Board of
Directors, Ms. Miles will be entitled to one year of Ms. Miles then total compensation package. In
the event of a change in control, Ms. Miles will be entitled to the then full compensation package
for a period of twenty-four months.
The executive is required to give ninety (90) days prior notice in writing to the Employer in the
event the Executive resigns or voluntarily terminates employment, or takes an early retirement.
Effective December 2005, Bank of Commerce Holdings and Redding Bank of Commerce entered into a
change of control agreement with four Executive officers; Patrick J. Moty, Randall S. Eslick, Caryn
A. Blais and Robert J. ONeil. Each of the agreements is identical. The terms of the agreements
provide upon a change in control and in the event of an early termination or diminution in salary
or job duties, the Bank shall pay to the executive benefits equal to one years salary at the
salary rate being paid to the executive at the time of the change in control together with an
amount equal to one years profit sharing payment based upon the average profit sharing received by
the executive for the past three years. The executive shall also receive, at the Banks expense, a
continuation of health benefits for a period of one year.
Page 28
In event that the executive is terminated by the bank not in the event of an early termination and
not as a termination for cause, the Bank shall pay to the executive benefits equal to six months
salary at the salary rate being paid to the executive at the time of termination, together with an
amount equal to one-half years profit sharing payment based upon the average profit sharing
received by the executive for the past three years. The executive shall also receive, at the Banks
expense, a continuation of health benefits for a period of six months.
Salary Continuation Plan
In April 2001, and amended December 31, 2006, the Board of Directors approved the implementation of
the Executive Salary Continuation Plan (SCP), which is a non-qualified executive benefit plan in
which the Company agrees to pay the executive additional benefits in the future in return for
continued satisfactory performance by the executive.
The payments are fixed by contract and do not depend on years of credited service. The Company
makes contributions to segregated accounts for the benefit of the Salary Continuation Plan
beneficiaries. Such accounts earn annual interest at 10%.
Benefits under the salary continuation plan include income generally payable commencing upon a
designated retirement date for the employees life, disability, or termination of employment, and a
death benefit for the participants designated beneficiaries.
Key-man life insurance policies were purchased as an investment to offset the Companys contractual
obligation to pay pre-retirement death benefits and to recover the Companys cost of providing
benefits. The executive is the insured under the policy, while the Company is the owner and
beneficiary. The insured executive has no claim on the insurance policy, its cash value or the
proceeds thereof.
A termination resulting from a reason other than cause or change of control will be deemed an early
retirement. In the event of an early retirement, the vested balance will be paid as a lump sum or
over a period of five years. In the event of a change in control, the payment terms are fixed (see
discussion below), and would be paid in addition to amounts owned under the executives employment
agreement. In the event of a termination for cause, no payments will be made to the terminated
executive.
The following table illustrates the approximate annual retirement income that may become payable to
a named executive officer assuming benefits commence at age 61. Mr. Mayer and Mrs. Miles benefits
are payable over life. Mr. Moty, Mr. Eslick and Mrs. Blais benefits are payable over a period of
ten years.
Salary Continuation Plan Benefits Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of |
|
|
Present Value |
|
|
Payments |
|
|
Annual |
|
|
Vested Balance |
|
|
|
Years Credited |
|
|
of Accumulated |
|
|
During Last |
|
|
Retirement |
|
|
at Last Fiscal |
|
Name |
|
Service (#) |
|
|
Benefit ($) |
|
|
Fiscal Year ($) |
|
|
Benefit |
|
|
Year ($) |
|
|
Michael C. Mayer |
|
|
6 |
|
|
$ |
275,609 |
|
|
$ |
0 |
|
|
$ |
150,000 |
|
|
$ |
309,376 |
|
Linda J. Miles |
|
|
6 |
|
|
$ |
328,817 |
|
|
$ |
0 |
|
|
$ |
125,000 |
|
|
$ |
367,376 |
|
Patrick J. Moty |
|
|
1 |
|
|
$ |
7,550 |
|
|
$ |
0 |
|
|
$ |
35,000 |
|
|
$ |
7,550 |
|
Randall S. Eslick |
|
|
1 |
|
|
$ |
7,392 |
|
|
$ |
0 |
|
|
$ |
35,000 |
|
|
$ |
7,392 |
|
Caryn A. Blais |
|
|
1 |
|
|
$ |
14,959 |
|
|
$ |
0 |
|
|
$ |
35,000 |
|
|
$ |
14,959 |
|
Page 29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Registrant |
|
|
Aggregate |
|
|
Aggregate |
|
|
Aggregate |
|
|
|
|
|
|
Contributions in |
|
|
Earnings in Last |
|
|
Withdrawals/ |
|
|
Balance at Last |
|
|
Vested Balance |
|
|
|
Last Fiscal Year |
|
|
Fiscal Year |
|
|
Distributions |
|
|
Fiscal Year |
|
|
at Last Fiscal |
|
Name |
|
($) |
|
|
($) |
|
|
($) |
|
|
($) |
|
|
Year ($) |
|
|
Michael C. Mayer |
|
$ |
60,192 |
|
|
$ |
26,231 |
|
|
$ |
0 |
|
|
$ |
309,376 |
|
|
$ |
309,376 |
|
Linda J. Miles |
|
$ |
70,824 |
|
|
$ |
31,157 |
|
|
$ |
0 |
|
|
$ |
367,376 |
|
|
$ |
367,376 |
|
Patrick J. Moty |
|
$ |
7,550 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
7,550 |
|
|
$ |
7,550 |
|
Randall S. Eslick |
|
$ |
7,392 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
7,392 |
|
|
$ |
7,392 |
|
Caryn A. Blais |
|
$ |
14,959 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
14,959 |
|
|
$ |
14,959 |
|
The retirement benefit is derived from accruals to a benefit account during the participants
employment. At the end of the executives period of service, the aggregate amount accrued should
equal the then present value of the benefits expected to be paid to the executive.
The participant is entitled to all vested benefits in the case of termination without cause;
however, if a participant voluntarily resigns prior to reaching normal retirement age, his or her
retirement benefits are reduced by accrual amounts not yet funded. Upon a change of control, the
participant is entitled to the full retirement benefit.
Potential Payments upon termination or change in control
The following table sets out the amounts that would have been payable to the named executive
officers at December 31, 2006 (a) upon a change of control, and (b) as a result of termination
other than termination arising from a change of control, assuming in each case that the payments
were made as a lump sum.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER THAN |
|
|
|
|
|
|
|
|
|
|
|
TERMINATION |
|
|
CONTROL |
|
|
|
CHANGE OF |
|
|
CONTROL |
|
|
CHANGE OF |
|
|
Salary |
|
|
|
Payments under |
|
|
Salary |
|
|
Payments under |
|
|
Continuation |
|
|
|
employment |
|
|
Continuation |
|
|
employment |
|
|
Plan |
|
|
|
agreements |
|
|
Plan Payments |
|
|
agreements |
|
|
Payments |
|
Name |
|
($)(1) |
|
|
($)(2) |
|
|
($)(3) |
|
|
($) (4) |
|
|
Michael C. Mayer |
|
$ |
910,246 |
|
|
$ |
1,365,399 |
|
|
$ |
227,562 |
|
|
$ |
0 |
|
Linda J. Miles |
|
$ |
727,402 |
|
|
$ |
1,091,103 |
|
|
$ |
181,851 |
|
|
$ |
0 |
|
Patrick J. Moty |
|
$ |
0 |
|
|
$ |
39,310 |
|
|
$ |
0 |
|
|
$ |
0 |
|
Randall S. Eslick |
|
$ |
0 |
|
|
$ |
39,680 |
|
|
$ |
0 |
|
|
$ |
0 |
|
Caryn A. Blais |
|
$ |
0 |
|
|
$ |
45,430 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
|
|
(1) |
|
At a change of control, severance pay is equal to two years of total compensation
package as of the date of the Executives termination. |
|
(2) |
|
Termination other than change of control the Executive will be paid six months total
compensation package as of the date of the termination. |
|
(3) |
|
SCP payments are limited under IRS Section 280-G to three times the average total
compensation package. |
|
(4) |
|
Under termination for cause, the Bank shall not pay any benefit under the SCP
agreement. |
With respect to early retirement, disability, or termination without cause (other than arising from
a change in control) under the employment agreements, the amounts to be paid over time would be any
accrued salary, sick and vacation benefits at the time of termination.
With respect to early retirement, disability, or termination without cause (other than arising from
a change in control) under the SCP, the amounts to be paid over time would be the vested balance in
the salary continuation plan. As of December 31, 2006, the vested balance for Michael C. Mayer was
$309,376; Linda J. Miles $367,376; Patrick J. Moty $7,550; Randall S. Eslick $7,392 and Caryn A.
Blais $14,959.
Page 30
REPORT OF THE AUDIT AND QUALIFIED LEGAL COMPLIANCE COMMITTEE
The Audit Committee is responsible for the appointment, compensation, and oversight of the work of
the Companys independent accountants. The Committee pre-approves on an annual basis services that
are of a recurring nature. The Committee must pre-approve any scope changes resulting in fee
increase.
In accordance with its written charter adopted by the Board of Directors (Board), a copy of which
is included as an appendix to this proxy statement, the Audit Committee of the Board ( Audit
Committee) assists the board in fulfilling its responsibility for oversight of the quality and
integrity of the accounting, auditing, and reporting practices of the Company and other such duties
as directed by the board. The membership of the Audit Committee consists of at least three
directors who are generally knowledgeable in financial and auditing matters, including at least one
member with accounting or related financial management expertise. Each member of the Audit
Committee is free of any relationship that, in the opinion of the board, would interfere with his
or her individual exercise of independent judgment, and meets the director independence
requirements for serving on Audit Committees as set forth in the corporate governance standards of
the NASDAQ National Market.
During 2006, the Audit and Qualified Legal Compliance Committee met five times. An executive
session excluding management preceded each of the meetings. The Chairman of the Audit Committee
reviewed the financial information contained in each of the quarterly press announcements and SEC
Form 10-Q and 10-K filings with the Chief Executive Officer, Chief Financial Officer and
independent accountants before public release. In addition the committee actively participated in
the control documentation work being performed by the Sarbanes-Oxley 404 Committee (SOX 404).
The Company considers all outside auditing consultants to be independent accountants. In
discharging its oversight responsibility with respect to the Audit process, the Committee obtained
from the independent accountants a formal written statement describing all relationships between
the accountants and the Company that might bear on the accountants independence consistent with
Independence Standards Board Standard No. 1, Independence Discussions with Audit Committees,
discussed with the accountants any relationships that may impact their objectivity and independence
and satisfied itself as to the auditors independence. The Audit Committee also discussed with
management and the independent accountants the quality and adequacy of the Companys internal
controls and the outsourced audit functions, responsibilities, budget and staffing. The Audit
Committee reviewed with the independent accountants their audit plans, audit scope and
identification of audit risks.
The Audit Committee discussed and reviewed with the independent accountants all communications
required by auditing standards generally accepted in the United States of America, including those
described in Statement on Auditing Standards No. 61, as amended, Communication with Audit
Committees, (SAS 61) and discussed and reviewed the results of the independent auditors audit
of the financial statements. The SAS 61 communications referred to above includes matters such as
significant adjustments, management judgments and accounting estimates, significant new accounting
policies, and disagreements with management. SAS 61 was amended in the year 2000, by Statement on
Auditing Standards No. 90, Audit Committee Communications, to require discussion of the independent
auditors judgments about quality, not just the acceptability of the companys accounting
principles. SAS 61 was also amended by Statement on Auditing Standards No. 89, Audit Adjustments,
to require the auditor to inform the audit committee about any uncorrected misstatements pertaining
to the current period whose effects management believes are immaterial to the financial statements
taken as a whole.
The Audit Committee also discussed the results of all internal audit examinations.
Page 31
The Audit Committee reviewed the audited financial statements of the company as of and for the year
ended December 31, 2006, with management and the independent accountants. Management has the
responsibility for the preparation of the Companys financial statements and the overall reporting
process, for maintaining adequate internal control over financial reporting for the Company, and
for assessing the effectiveness of the Companys internal control over financial reporting. The
independent accountants are responsible for performing independent audits of the Companys
consolidated financial statements. These audits serve as a basis for the accountants opinions
included in the annual report to stockholders addressing whether the financial statements fairly
present the Companys financial position, results of operations, and cash flows in conformity with
generally accepted accounting principles in the United States. The Committees responsibility is to
monitor and oversee these processes.
Based on the above-mentioned review and discussions with management and the independent
accountants, the Audit Committee recommended to the Board that Bank of Commerce Holdings audited
financial statements be included in its annual Report on Form 10-K for the year ended December 31,
2006, for filing with the Securities and Exchange Commission.
Principal Accounting Firm fees
Audit Fees
The aggregate fees billed by Moss Adams LLP., for professional services rendered for the audit of
the Companys annual financial statements for the fiscal years ended December 31, 2006 and 2005 and
for the reviews of the financial statements included in the Companys Quarterly Reports on Form
10-Q for those fiscal years were $126,152 and $132,454 respectively.
Audit-Related Fees
Moss Adams LLP., did not render any professional services for information technology services
relating to financial information systems design and implementation for the fiscal years ended
December 31, 2006 and December 31, 2005.
Tax Fees
Moss Adams LLP., did not render any professional services for tax compliance, tax advice, or tax
planning during 2006 or 2005.
All Other Fees
The aggregate fees billed by Moss Adams LLP. for services rendered to the Company, other that the
services described under Audit Fees and Audit-Related Fees and tax fees amount to $0 and $0 for
the fiscal years December 31, 2006 and 2005, respectively.
In discharging its oversight responsibility with respect to the audit process, the Audit Committee
of the Board of Directors obtained from the independent accountants a formal written statement
describing all relationships between the accountants and the Company that might bear on the
accountants independence consistent with Independence Standards Board Standard No.1, Independence
Discussions with Audit Committees, discussed with the accountants any relationships that may
impact their objectivity and independence and satisfied itself as to the accountants independence.
The Committee also discussed with management and the independent accountants the quality and
adequacy of Bank of Commerce Holdings internal controls and the outsourced audit functions,
responsibilities, budgeting and staffing. The Committee reviewed with the independent accountants
their audit plans, audit scope and identification of audit risks.
Page 32
Pre-approval Policies and Procedures
Under the audit committees pre-approval policies and procedures, the audit committee is required
to pre-approve the audit and non-audit services performed the Companys independent registered
public accounting firm. The audit committee may pre-approve a list of services that may be provided
by the independent registered public accounting firm without obtaining specific pre-approval from
the audit committee.
This list of services includes: audit services, audit-related services, tax services and all other
services. The audit committee sets pre-approved fee levels for each of these listed services. Any
type of service that is not included on the list of pre-approved services must be specifically
approved by the audit committee. Any proposed service that will fall outside of the pre-approved
fee levels will also require specific pre-approval by the audit committee.
All above fees paid to Moss Adams, LLP during 2006 were pre-approved by the audit committee.
Respectfully submitted by the members of the Audit and Qualified Legal Compliance Committee,
David H. Scott, CPA & Chairman of the Audit and QLCC Committee
Harry L. Grashoff, Jr.
Russell L. Duclos
Lyle L. Tullis
Jon Halfhide, CPA
Page 33
Discussion of proposals recommended by the Board of Directors
Proposal 1
Election of Directors
The Board of Directors has nominated ten persons for election at the Annual Meeting. If you elect
them, they will hold office until the election of their successors at the Annual Meeting in 2008,
or until they resign.
We know of no reason why any nominee may be unable to serve as a director. If any nominee is unable
to serve, your proxy may vote for another nominee proposed by the Board of Directors. If for any
reason these nominees prove unable or unwilling to stand for election, the Board will nominate
alternatives. The Board of Directors has no reason to believe that its nominees would prove unable
to serve if elected.
The Board of Directors recommends a vote FOR the election of each of the ten nominees for director.
Brief summaries of the background and business experience of each of the nominees other than Mr.
Mayer, who was profiled earlier in this document:
Welton L. Carrel, born in 1937, has served as a director of the Company since January 1982. Mr.
Carrel is retired. From 1961 to 1989, he was President of Western Business Equipment d.b.a.
Carrels Office Machines. Mr. Carrel is a member of the Executive Compensation Committee,
Nominating and Corporate Governance and Long-Range Planning Committee of the Board of Directors.
Russell L. Duclos, born in 1939, has served as a director of the Company since July 1997. From July
1997 through December 2000, Mr. Duclos served as President and Chief Executive Officer of the Bank
and from January 2001 through April 2001 as President and Chief Executive Officer of the Company.
Mr. Duclos is Chairman of the Asset Liability Management Committee (ALCO), and presently serves on
the Loan Committee, Audit and Long-Range Planning Committee of the Board of Directors.
John C. Fitzpatrick, born in 1935, has been a director of the Company since January 1982. Mr.
Fitzpatrick has been Chief Executive Officer of Carbonated Industries since 1986. From 1986 to
2001, Mr. Fitzpatrick served as President and Chief Executive Officer of Pepsi Cola Bottling
Company of Northern California. From 1962 to 1985, Mr. Fitzpatrick was President and Chief
Executive Officer of McColls Dairy Milk and Ice Cream. Mr. Fitzpatrick also serves as Secretary
of John Fitzpatrick & Sons, Inc., a company engaged in the real estate investment business. Mr.
Fitzpatrick serves as Chairman of the Executive Compensation Committee and is a member of the
Executive, Nominating and Corporate Governance and Long-Range Planning Committee of the Board of
Directors.
Kenneth R. Gifford, Jr., born in 1945, has served as a director of the Company since January 1998.
Mr. Gifford has been a director, President and Chief Executive Officer of Gifford Construction,
Inc. since 1972. Mr. Gifford serves as Chairman of the Loan Committee and is a member of the
Executive Committee, Audit, and Long-Range Planning Committees of the Board of Directors. During
2006 Mr. Gifford was named as Vice Chairman of the Company.
Harry L. Grashoff, Jr., born in 1935, and has served as a director of the Company since January
1982. Mr. Grashoff is currently retired. From 1982 to July 1997, Mr. Grashoff was President and
Chief Executive Officer of the Company.
Page 34
Beginning March 1, 2005 Mr. Grashoff was appointed to Chairman of the Board. Mr. Grashoff serves as
Chairman of the Board, Chairman of the Executive Committee and he is a member of the Long-Range
Planning, Executive Compensation committee, Nominating and Corporate Governance, Loan, Audit and
ALCO committees of the Board of Directors.
David H. Scott, CPA, born in 1944, has been a director of the Company since April 1997. He is a
partner of D. H. Scott & Company, LLP, a public accounting firm, a position he has held since 1986.
Mr. Scott serves as Chairman of the Audit and Qualified Legal Compliance Committee and is a member
of the ALCO, Loan and Long-Range Planning committees of the Board of Directors. The Board of
Directors has determined that Mr. Scott meets the criteria to serve as financial expert on the
Audit Committee. Mr. Scott also serves as the Secretary of the Company.
Lyle L. Tullis, born in 1950, has been a director of the Company since May 2003. Since 1976, he has
served as president of Tullis Inc. a general engineering construction company. His company
specializes in public works projects that include grading and paving. Mr. Tullis is the past
District Chairman of the Eureka and Shasta Districts of the Associated General Contractors of
California. Mr. Tullis serves as Chairman of the Nominating and Corporate Governance and is a
member of the Audit and Long-Range Planning Committees of the Board of Directors.
Jon Halfhide, CPA, born in 1957, has been a director of Redding Bank of Commerce since July
2005. Since 2000, he has served as president of Catholic Healthcare West North State Service Area
(CHW) and St. Elizabeth Community Hospital. He has over twenty years management experience with
CHW and has served in the capacity of Controller and Chief Financial Officer. Mr. Halfhide is a
certified public accountant. Mr. Halfhide meets the criteria to serve as financial expert on the
Audit Committee. Mr. Halfhide serves on the Audit and Long-Range Planning Committees of the Board
of Directors.
Orin N. Bennett, born in 1948, has been a director of Redding Bank of Commerce since September
2005. Mr. Bennett is a registered Civil Engineer in California and Nevada. He owns MHM Engineers
and Surveyors providing engineering services to cities, counties and special districts primarily in
Northern California. He is also a partner in BD Properties, a real estate investment company. Mr.
Bennett was previously employed by the respected international engineering firm of CH2M Hill prior
to forming his own business. Mr. Bennett serves on the Executive and Long-Range planning committees
of the Board of Directors.
None of the directors were selected pursuant to arrangements or understandings other than with the
directors and shareholders of the Company acting within their capacity as such. There are no
family relationships between any of the directors, and none of the directors serve as a director of
any other company which has a class of securities registered under, or subject to periodic
reporting requirements of, the Securities Exchange Act of 1934, as amended, or any company
registered as an investment company under the Investment Company Act of 1940.
Page 35
Proposal 2
Approve the Bank of Commerce Holdings 2008 Stock Option Plan
At the meeting, the shareholders will be requested to approve the 2007 Stock Option Plan (the
Option Plan). The Board recommends approval of the Option Plan to allow the Company to continue
to attract and retain the best available employees and executives and provide an incentive for
persons serving in those capacities to use their best efforts on the Companys behalf. A copy of
the Option Plan is included in this proxy statement.
Description of the Plan
Any person engaged by the Company or its subsidiaries as an employee (including an officer or
employee serving as a director) is eligible to participate in the Option Plan.
An aggregate of 620,000 shares of common stock have been reserved for issuance under the Option
Plan.
The exercise price and vesting schedule for all options granted under the Option Plan will be set
by the Board (or a committee appointed to act as administrator of the Option Plan) in its
discretion, but in all events the exercise price shall be 100% of the fair market value of the
stock at the date of the option grant, and vesting will not be less than 20% of the entire grant in
any year.
Vesting is dependent upon the Optionees continued employment with the Company. Options granted
will become fully exercisable following any change in control of the Company if the acquirer does
not assume the option obligations. Options are not transferable except upon the death of the
option holder, or as the Board may otherwise permit.
At the date of exercise, the option holder may pay the full option price in cash or in shares of
common stock previously acquired by the option holder valued at fair market value. The use of
previously acquired shares to pay the option price enables the option holder to avoid the need to
fund the entire purchase with cash. Upon exercise of an option, the number of shares subject to the
option and the number of shares available under the Option Plan for future option grants are
reduced by the number of shares with respect to which the option is exercised.
The Option Plan will be in effect until options have been granted and exercised with respect to all
shares available for the Option Plan. However, no option can be granted under the Option Plan more
than ten years after the Option Plan has been approved by the Companys shareholders. The Board
may terminate the Option Plan at any time, except with respect to options already outstanding.
Tax Consequences
The federal income tax consequences of options are complex and subject to change. The following
discussion is only a summary of the general rules applicable to the Option Plan.
Options granted under the Option Plan are intended to be incentive stock options (ISOs). An ISO
holder generally will not recognize any taxable income at the time he or she is granted the ISO, or
upon its exercise (unless the shares are resold within one year of exercise (a disqualifying
disposition)). In the event of a disqualifying disposition, the option holder will recognize
ordinary income for federal tax purposes measured by the excess of the then fair market value of
the shares over the exercise price. The income realized by the option holder will be subject to
income and other employee withholding taxes.
If there is no disqualifying disposition, the difference between the sale price and the option
holders basis in the shares will be treated as a capital gain or loss.
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Approval of the Option Plan requires more votes in favor of adoption of the plan than those against
adoption.
The Board of Directors recommends a vote FOR the approval of the Bank of Commerce Holdings 2008
Stock Option Plan.
The Board of Directors recommends a vote FOR the ratification of Moss Adams, LLP as the
Companys independent accountants for the year ended December 31, 2006.
The Audit Committee has selected Moss Adams, LLP as the independent registered public accounting
firm to audit the books of the Company and its subsidiaries for the year ending December 31, 2006,
to report on the consolidated statement of financial position and related statement of earnings of
the Company and its subsidiaries, and to perform other appropriate accounting services as may be
required by the Board of Directors. The Board recommends that the stockholders vote in favor of
ratifying the selection of Moss Adams, LLC for the purposes set forth above. If the stockholders do
not ratify the selection of Moss Adams, LLP, the Audit Committee will consider a change in
accountants for the next year.
Moss Adams, LLC has advised the Company that thy are independent accountants with respect to the
Company, within the meaning of standards established by the American Institute of Certified Public
Accountants, the Public Company Accounting Oversight Board, the Independence Standards Board and
federal securities laws administered by the SEC. The Company does not expect that representatives
of Moss Adams LLP will be present at the Annual Meeting and accordingly shall not be available to
answer questions or make a statement.
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Other Business
Requirements, including deadlines for submissions or proposals, nomination of Directors and other
Shareholder business
Under the Rules of the SEC, if a shareholder wants to include a proposal in the Companys Proxy
Statement and form of proxy for presentation at the Companys 2008 Annual Meeting of Shareholders,
the proposal must be received by the Company at its principal administrative office located at 1951
Churn Creek Road, Redding, California by November 20, 2007.
Under the Companys bylaws, as permitted by the SEC, certain procedures are provided which a
shareholder must follow to nominate persons for election as directors or to introduce an item of
business at an annual meeting of shareholders.
Nomination of directors must be made by notification in writing delivered or mailed to the
President of the Company at the Companys principal administrative office not less than 30 days or
more than 60 days prior to any meeting of shareholders called for election of directors. The
Companys annual meeting of shareholders is generally held on the third Tuesday of May. If the
Companys 2008 Annual Meeting of Shareholders is held on schedule, the Company must receive notice
of any nomination no earlier than March 20, 2008, and no later than April 20, 2008. The Chairman of
the meeting may refuse to acknowledge the nomination of any person not made in compliance with the
foregoing procedures.
If the Chairman of the meeting acknowledges the nomination of a person not made in compliance with
the foregoing procedures, the persons named as proxies in the proxy materials relating to that
meeting will use their discretion in voting the proxies when the nomination is made at the meeting.
Notice of any business item proposed to be brought before an annual meeting by a shareholder must
be received by the Secretary of the Company not less than 70 days or more than 90 days before the
annual meeting. If the Companys 2008 Annual Meeting of Shareholders is held on schedule, the
Company must receive notice of any proposed business item no earlier than February 20, 2008, and no
later than March 10, 2008.
If the Company does not receive timely notice, the Companys bylaws preclude consideration of the
business item at the annual meeting. The Companys bylaws also provide that notices regarding
nomination of directors must contain certain information about the director nominee.
With respect to notice of a proposed item of business, the bylaws provide that the notice must
include a brief description of the business desired to be brought before the meeting, the reasons
for conducting such business at the meeting and certain information regarding the shareholder
giving the notice. Shareholders may obtain a copy of the Companys bylaws by sending a written
request to the Secretary of the Company at the Companys principal executive offices.
Shareholders may contact an individual director, the Board of Directors as a group, or a specified
committee or group, at the Companys headquarters address. Each communication should specify the
applicable addressee or addressees to be contacted as well as the general topic of the
communication. The Company will initially receive and process communications before forwarding them
to the addressee.
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The Company generally will not forward to the directors a shareholder communication that it
determines to be primarily commercial in nature or relates to an improper or irrelevant topic, or
that requests general information about the Company. The Company knows of no other business that
will be presented at the Annual Meeting. If any other business is properly brought before the
Annual Meeting, it is intended that proxies in the enclosed form will be voted in accordance with
the judgment of the persons voting the proxies. Whether or not you intend to be present at the
Annual Meeting, we request you to return your signed proxy promptly.
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By Order of the Board of Directors,
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/s/ David H. Scott
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David H. Scott, Corporate Secretary |
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Redding, California
April 6, 2007
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Appendix A
Bank of Commerce Holdings
Audit Committee and Qualified Legal Compliance Committee Charter
Purpose
The Audit Committee is appointed by the Board of Directors to assist in monitoring the (1)
integrity of the financial statements of the Company, (2) the independent accountants
qualifications and independence, (3) the performance of the Companys internal audit function and
independent accountants, and (4) the compliance by the Company with legal and regulatory
requirements.
The Audit Committee shall prepare the report required by the rules of the Securities and Exchange
Commission to be included in the Companys annual proxy statement.
Role and Independence
The membership of the committee shall consist of at least three directors who are generally
knowledgeable in financial and auditing matters, including at least one member with accounting or
related financial management expertise construed to be a financial expert. By definition, the audit
committee financial expert is an individual who is determined by the board of directors to possess
all of the following attributes:
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An understanding of financial statements and generally accepted accounting
principles (GAAP) |
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An ability to assess the general application of such principles in
connection with the accounting for estimates, accruals and reserves |
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Experience preparing, auditing, analyzing, or evaluating financial
statements that present a breadth and level of complexity of accounting
issues generally comparable to what can be expected to be raised by the
Companys financial statements, or experience actively supervising one or
more persons engaged in such activities |
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An understanding of internal controls and procedures for financial reporting |
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An understanding of audit committee functions |
The final rule for audit committee financial experts indicates that the attributes may be acquired by:
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Education and experience as a principal financial officer, principal
accounting officer, controller, public accountant, or auditor, or
experience in one or more positions that involve the performance of similar
functions |
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Experience actively supervising a principal financial officer, controller,
public accountant, auditor, or person performing similar functions, or
experience overseeing or assessing the performance of companies or public
accountants with respect to the preparation, auditing, or evaluation of
financial statements. |
The members of the Audit Committee shall meet the independence and experience requirements of the
NASDAQ National Market stock exchange, Section 10A(m)(3) of the Securities and Exchange Commission
Act of 1934 and the rules and regulations of the commission. Each member shall be free of any
relationship that, in the opinion of the board, would interfere with his or her individual exercise
of independent judgment, and shall meet the director independence requirements for serving as set
forth in the corporate governance standards of the NASDAQ.
The committee is expected to maintain free and open communication (including private executive
sessions at each meeting) with the independent accountants, the internal accountants and the
management of the Company. The Audit Committee shall have the authority, to the extent it deems
necessary or appropriate, to retain independent legal, accounting or other advisors.
Page 40
The Company shall provide for appropriate funding, as determined by the Audit Committee, for
payment of compensation to the independent auditor for the purpose of rendering or issuing an audit
report and to any advisors employed by the Audit Committee.
The Board of Directors shall appoint the audit committee financial expert as chairperson. In
addition to the professional requirements, this person plays a pivotal role in Audit Committee
effectiveness. He or she will be responsible for the leadership of the committee, including
preparing the agenda, presiding over meetings, making committee assignments, and reporting to the
Board of Directors. The chairperson will also maintain regular liaison with the President, Director
of Risk Management, Chief Financial Officer, and the lead Independent Audit Partner.
Responsibilities
The Audit Committees primary responsibilities include:
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The Audit Committee shall have the sole authority to appoint or
replace the independent auditor (subject, if available, to
shareholder ratification.) In doing so, the committee will request
from the auditor a written affirmation that the auditor is in fact
independent, discuss with the auditor any relationships that may
impact the auditors independence, and recommend to the board any
actions necessary to oversee the auditors independence. |
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Overseeing the independent auditor relationship by discussing with
the auditor the nature and rigor of the audit process, receiving
and reviewing audit reports, and providing the auditor full access
to the committee (and the board) to report on any and all
appropriate matters. |
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The Audit Committee shall be directly responsible for the
compensation and oversight of the work of the independent auditor
(including resolution of disagreements between management and the
independent auditor regarding financial reporting) for the purpose
of preparing or issuing an audit report or related work. The
independent auditor shall report directly to the Audit Committee. |
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The Audit Committee shall pre-approve all auditing services and
permitted non-audit services (including the fees and terms) to be
performed for the Company by its independent auditor, |
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The Audit Committee shall oversee managements annual assessment
of, and report on, the companys internal control over financial
reporting. |
The Audit Committee shall make regular reports to the Board of Directors. The Audit Committee shall
review and reassess the adequacy of this Charter annually and recommend any proposed changes to the
Board of Directors for approval. The Audit Committee shall annually review the Committees own
performance.
The Audit Committee shall:
Financial Statement and disclosure matters
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Review and discuss with management and the independent auditor the annual audited financial
statements, including disclosures made in managements discussion and analysis, and approve
the filing of such documents with the SEC. Recommend the acceptance of the annual audited
financial statements as the annual Directors examination. |
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Review and discuss with management and the independent auditor the Companys quarterly
financial statements prior to the filing of its Form 10-Q, including the results of the
independent auditors review of the quarterly financial statements. |
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Discuss with management and the independent auditor significant financial reporting issues
and judgments made in connection with the preparation of the Companys financial statements,
including any significant changes in the Companys selection or application of financial
principles, any major issues as to the adequacy of the Companys internal controls and any
special steps adopted in light of material control deficiencies. |
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Discuss with management the Companys earnings press releases, including the use of pro
forma or adjusted non-GAAP information, as well as financial information and earnings
guidance provided to analysts and rating agencies. Such discussion may be done generally
(consisting of discussing the types of information to be disclosed and the types of
presentations to be made.) |
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Discuss with management and the independent auditor the effect of regulatory and accounting
initiatives as well as off-balance sheet structures on the Companys financial statements. |
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Discuss with management the Companys major financial risk exposures and the steps
management has taken to monitor and control such exposures, including the Companys risk
assessment and risk management policies. |
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Discuss with the Independent auditor the matters required to be discussed by Statement on
Auditing Standards No. 61 relating to the conduct of the audit, including any difficulties
encountered in the course of the audit work, any restrictions on the scope of activities or
access to requested information, and any significant disagreements with management. |
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Review disclosures made to the Audit Committee by the Companys CEO and CFO during the
certification process for the Form 10-K and Form 10-Q about any significant deficiencies in
the design or operation of internal controls or material weaknesses therein and any fraud
involving management or other employees who have a significant role in the Companys
internal controls. |
Oversight of the Companys Relationship with the Independent Auditor
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Review and evaluate the lead partner of the independent audit team. |
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Obtain and review a report from the independent auditor, at least annually regarding (a) the
independent auditors internal quality-control procedures, (b) any material issues raised by
the most recent internal quality-control review, or peer review of the firm, or by any
inquiry or investigation by governmental or professional authorities within the preceding
five years respecting one or more independent audits carried out by the firm, (c) any steps
taken to deal with any such issues, and (d) all relationships between the independent
auditor and the Company. The Audit Committee shall present its conclusions with respect to
the independent auditor to the Board of Directors. |
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Ensure the rotation of the audit partners as required by law. Consider whether, in order to
assure continuing auditor independence, it is appropriate to adopt a policy of rotating the
independent auditing firm on a regular basis. |
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The Audit Committee recommends prohibiting the auditor from acting as a director, officer,
or employee of the Company, or performing any decision-making, supervisory, or ongoing
monitoring function for the Company for a cooling off period of one year from the date of
engagement. |
Oversight of the Companys Internal Audit Function
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Review the appointment and replacement of the Director of Risk Management. |
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Review the significant reports to management prepared by the internal auditing department
and managements response. |
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Discuss with the independent auditor and management the internal audit responsibilities,
budget and staffing and any recommended changes in the planned scope of the internal audit. |
Compliance Oversight Responsibilities
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Obtain reports from management, the Director of Risk Management and the independent auditor
that the Company and its affiliated entities are in conformity with applicable legal
requirements and the Companys Code of Ethics and Conflict of Interest. |
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Review reports and disclosures of insider and affiliated party transactions. Advise the
Board of Directors with respect to the Companys policies and procedures regarding
compliance with applicable laws and regulations with the Companys Code of Ethics and
Conflict of Interest. |
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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 submission by employees of concerns regarding questionable
accounting or auditing matters. |
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Discuss with management and the independent auditor any correspondence with regulators or
governmental agencies and any published reports which raise material issues regarding the
Companys financial statements or accounting policies. |
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Discuss with the Companys counsel legal matters that may have a material impact on the
financial statements or the Companys compliance policies. |
It is the policy of the Board of Directors that a system of internal controls be maintained
sufficient to provide reasonable assurance that assets are safeguarded, transactions are properly
authorized and recorded, and reasonable, detailed records are maintained which accurately reflect
the financial activities.
To monitor the effectiveness of the system of internal controls, the Board of Directors established
an audit and review policy as follows:
Audit and Review Certified Public Accounting Firm
It is the policy of the Board of Directors to engage a qualified certified public accounting firm
to conduct a full audit of financial statements at least once annually. This will constitute the
annual Director examination. Credit quality reviews, Compliance reviews and Operational reviews
are regularly scheduled to support the audit and may be performed by parties other than the
certified public accounting firm selected to conduct the financial statement audit.
Audit and Review In House
The Board of Directors recognizes that it is not necessary and may not be economically feasible for
the Bank to employ a full time internal auditor until the bank achieves a certain size and
complexity. However, the Board of Directors may elect to have an outside auditor perform audits of
operational and compliance policies and procedures and an outside auditor to perform an independent
loan review for credit quality, compliance, documentation and appropriate grading.
Although outside consultants, these accountants will be considered our In-house accountants. The
Board of Directors will outline the scope of the audits on an annual basis, and will communicate
the scope directly with the independent accountants.
The Audit Committee may consult with and have the Companys Certified Public Accountants review the
scope and work papers of the in-house accountants, and make a recommendation to the Board of
Directors as to the need to employ a full time internal auditor.
Examination and Review Regulatory Agencies
It is the policy of the Board of Directors that results from examinations and audits conducted by
Regulatory Agencies such as the Department of Financial Institutions, Federal Reserve Board and the
FDIC are fully disclosed to the Board of Directors. Further, it is Board policy that at least three
representatives from the Board of Directors will be included in the exit review conducted by
regulatory personnel with the management of the Company.
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Limitation of Audit Committees Role
While the Audit Committee has the responsibilities and powers set forth in this charter, it is
reinforced that such duties include the oversight, scheduling and review of such work and it is not
the duty of the Audit Committee to conduct audits or to determine whether the Companys financial
statements and disclosures are complete and accurate and are in accordance with generally accepted
accounting principles and applicable rules and regulations. These are the responsibilities of
management and the independent auditor.
QUALIFIED LEGAL COMPLIANCE COMMITTEE
Purpose and Adoption
The purpose of the Qualified Legal Compliance Committee (the Committee) of the Board of Directors
(the Board) of Bank of Commerce Holdings (the Company) is to: (i) receive, review and take
appropriate action with respect to any report made or referred to the Committee by an attorney of
evidence of a material violation of applicable U.S. federal or state securities law, material
breach of a fiduciary duty under U.S. federal or state law or a similar material violation by the
Company or by any officer, director, employee, or agent of the Company, (ii) otherwise fulfill the
responsibilities of a qualified legal compliance committee pursuant to Section 307 of the Sarbanes
Oxley Act of 2002 and the rules promulgated there under and (iii) perform such other duties as may
be assigned to it, from time to time, by the Board.
The scope of the Committees responsibilities and its structure, process and membership
requirements are set forth in this charter (the Charter), which has been adopted and approved by
the Board and may be amended by the Board from time to time in compliance with applicable laws,
rules and regulations.
Membership
The Companys Audit Committee shall serve as the QLCC.
Procedures
The Committee shall adopt written procedures for the confidential receipt, retention and
consideration of any oral or written reports received by the Committee. The Committee shall have
the authority to establish other rules and operating procedures in order to fulfill its obligations
under this Charter and under applicable law, rules and regulations. The Chairman of the Committee
shall call a meeting of the Committee whenever circumstances warrant.
Authority and Responsibilities
The Committee shall have the following authority and responsibilities in respect of reports of
evidence of a material violation:
a. The Committee shall inform the Companys SEC Attorney and Chief Executive Officer of any report
of evidence of a material violation.
b. The Committee shall determine whether an investigation is necessary regarding any such report.
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c. If the Committee has determined that an investigation is necessary, the Committee shall: (i)
notify the Board of Directors, (ii) initiate an investigation to be conducted either by the
Companys SEC Attorney or by an outside attorney retained by the Committee and (iii) retain such
additional expert personnel as the Committee deems necessary.
d. At the conclusion of an investigation, the Committee shall: (i) recommend, by majority vote,
that the Company implement an appropriate response and (ii) inform the Companys SEC Attorney, the
Chief Executive Officer and the Board of the results of the investigation and the appropriate
remedial measures that it recommends to be adopted.
2. The Committee has the authority and responsibility to act, by majority vote, to take all other
appropriate action, including the authority to notify the Securities and Exchange Commission in the
event that the Company fails in any material respect to implement an appropriate response that the
Committee has recommended to the Company.
3. The Committee shall report to the Board on a regular basis regarding the matters that it
oversees.
QUALIFIED LEGAL COMPLIANCE COMMITTEE PROCEDURES
Any attorney of Bank of Commerce Holdings (the Company) may submit a report (a Report) of
evidence of a material violation of applicable U.S. federal or state securities law, material
breach of a fiduciary duty under U.S. federal or state law or a similar material violation by the
Company or by any officer, director, employee or agent of the Company to the Qualified Legal
Compliance Committee (the Committee).
In order to facilitate the Committees confidential receipt, retention, and consideration of
Reports, the Committee has established the following procedures:
1. The Committee shall send a written acknowledgement of receipt of each oral or written Report to
the sender. The Committee shall maintain confidentiality in its activities to the maximum extent
possible consistent with performing a full and fair investigation.
2. The Committee shall take appropriate measures so that, to the maximum extent possible, the
Companys legal privileges are protected in connection with the Committees activities, consistent
with the Committees obligations. The Committee shall maintain all documents received or reviewed
by it in accordance with the Companys document retention policy.
3. The Committee shall notify the Companys Chief Executive Officer and SEC Attorney promptly upon
receipt of a Report.
4. The Chair of the Committee shall convene a meeting of the full Committee as often as deemed
necessary or desirable and, in any case, promptly upon receipt of a Report.
5. The Committee shall keep minutes of each of its meetings.
6. The Committee shall review each Report and determine whether an investigation is necessary or
desirable in connection with the matters addressed in such Report.
7. The Committee may consult with appropriate officers of the Company, or retain outside attorneys
or experts in connection with its determination as to whether to commence an investigation in
connection with a Report. The Committee may rely on the advice of counsel as to whether further
investigation is required.
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If the Company does not have a chief legal officer at the time of any report, the Committee may
consult with, and rely on the advice of, the Companys SEC Attorney.
8. If the Committee has determined that further investigation is necessary or desirable in
connection with a Report, the Committee shall: (i) notify the Companys Board of Directors, (ii)
initiate an investigation, (iii) determine who shall conduct such investigation, and (iv) retain
such outside attorneys and expert personnel as the Committee deems necessary.
9. The Committee shall have the authority to enter into engagement letters, as appropriate, with
outside attorneys and experts retained by it.
10. At the conclusion of an investigation, the Committee shall: (i) recommend, by majority vote,
that the Company implement an appropriate response, if any, and (ii) inform the Chief Executive
Officer, the Companys SEC Attorney and the Board of Directors of the results of the investigation
and the appropriate remedial measures, if any, that it recommends to be adopted.
11. The Committee shall take appropriate action to determine whether the Company has implemented an
appropriate response to a Report, as recommended by the Committee, and, if not, shall determine
what, if any, additional action should be taken.
12. The Committee shall retain a log of all Reports, tracking their receipt, investigation and
resolution and shall periodically report on these matters to the Board of Directors.
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Appendix B
Bank of Commerce Holdings
Nominating and Corporate Governance Committee Charter
Committee mission statement
The Committee acts on behalf of the RBC Board of Directors in the best interests of the Corporation
and its shareholders with regard to the identification of individuals qualified to become Board
members, selecting or recommending to the Board that the Board select the director nominees,
including for the next annual meeting of shareholders, and providing guidance on board and
corporate governance issues including recommending to the Board corporate governance guidelines
applicable to the Corporation.
Organization
Members of the Committee are appointed by and serve at the pleasure of the Board of Directors. The
members of the Nominating and Corporate Governance Committee shall be independent directors as
determined in accordance with the laws, rules and regulations of the NASDAQ stock exchange and
shall also comply with and satisfy all other applicable laws, rules, regulations and requirements.
The Chairman of the Nominating and Corporate Governance Committee shall be elected annually by the
Board of Directors.
The Committee shall conduct and review with the Board of Directors annually an evaluation of the
committees performance with respect to the requirements of this Nominating and Corporate
Governance Charter.
The Committee shall have sole authority to employ professional advisers in fulfilling its duties.
Advisers include, but are not limited to, search professionals, compensation consultants, and
attorneys. The Committee shall have sole authority to approve fees, establish retention terms, and
terminate such advisers.
Purpose
The purpose of the Nominating and Corporate Governance Committee is to 1) identify individuals
qualified to serve on the Board of Directors and to recommend that the Board of Directors select
director nominees to be considered at the Companys next annual meeting of shareholders or to be
appointed by the Board of Directors to fill an existing or newly created vacancy on the Board of
Directors, 2) identify members of the Board of Directors to serve on each board committee and to
serve as chairman thereof and recommend each such member and chairman to the Board of Directors, 3)
develop and revise as appropriate Corporate Governance Guidelines applicable to the Company and
recommend such guidelines to the Board of Directors, 4) oversee managements annual assessment of,
and report on, the companys internal control over financial reporting, 5) oversee the evaluation
by the Board of Directors of itself and its committees, 6) identify individuals to serve as
executive officers of the Company and recommend such individuals to the Board of Directors and 6)
review with the Chief Executive Officer matters of management succession.
Meetings
The Nominating and Corporate Governance Committee shall meet as often as it deems necessary or
appropriate to carry out its responsibilities, no less than annually, and may, in its sole
discretion, form and delegate authority to subcommittees (comprised only of Nominating and
Corporate Governance Committee members) in furtherance of such responsibilities. Meetings of the
Nominating and Corporate Governance Committee shall be called by the Chairman of the Nominating and
Corporate Governance Committee or the Chairman of the Board.
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All such meetings shall be held pursuant to the by-laws of the Company with regard to notice and
waiver thereof, and written minutes of each such meeting shall be duly filed in the Companys
records.
Powers and Responsibilities
The Nominating and Corporate Governance Committee shall:
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Actively seek to identify individuals qualified to serve on the Board of Directors and to
recommend that the Board of Directors select director nominees to be considered for election
at the Companys next annual meeting of shareholders or to be appointed by the Board of
Directors to fill an existing or newly created vacancy on the Board of Directors in accordance
with Board membership criteria set forth in the Companys corporate governance guidelines. The
Committee shall also consider written proposals for director nominees received from
shareholders in accordance with the Companys corporate governance guidelines and by-laws. |
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The Committee shall develop specific criteria to define what minimum qualifications are
required to serve on the Board of Directors. |
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Identify qualified members of the Board of Directors to serve on each board committee and to
serve as chairman thereof and recommend each such member and chairman to the Board of
Directors. In addition, the Nominating and Corporate Governance Committee may designate a
member of such committee to attend the meetings of any other Board committee ex-officio with
the concurrence of the chairman of such other committee. |
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Develop corporate governance guidelines applicable to the Company and recommend such
guidelines or revisions of such guidelines to the Board of Directors. All guidelines shall be
reviewed at least annually. |
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Review at least annually, the nominating and corporate governance charter and executive
compensation charter of the Board of Directors and, when necessary or appropriate, recommend
changes in such charters to the Board of Directors. |
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Conduct the annual peer review of the Board of Directors, itself, and its committees.
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Review with the Chief Executive Officer matters relating to management succession. |
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Identify individuals to serve as executive or corporate officers of the Company and recommend
such individuals to the Board of Directors. |
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Monitor the development of best practices regarding corporate governance and take a
leadership role in shaping the corporate governance of the Company. |
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Appendix C
Bank of Commerce Holdings
Compensation Committee Charter
General
The Compensation Committee (the Committee) shall be appointed by the Board of Directors (the
Board) of Bank of Commerce Holdings. (the Company). The primary function of the Committee is to
discharge the responsibilities of the Board relating to compensation of the Companys Executive
Officers (i.e. CEO, COO and CFO) and directors who are not employees of the Company, and, in
connection with the Companys benefits plans (e.g., stock option and bonus plans). The Committee
shall have all authority necessary to fulfill the duties and responsibilities assigned to the
Committee in this Charter or otherwise assigned to it by the Board.
Composition and Delegation
The Committee shall be composed of at least three members. Each member of the Committee shall be a
member of the Board and shall (i) meet the independence requirements established by the Board and
applicable laws, regulations and listing requirements, (ii) be a non-employee director within the
meaning of Rule 16b-3 under the Securities Exchange Act of 1934, and (iii) be an outside director
within the meaning of Section 162(m) of the Internal Revenue Code. The members of the Committee
shall be appointed annually by the Board or as necessary to fill vacancies in the interim. The
Board shall designate one of the Committee members as Chairperson. The Board may remove any member
from the Committee at any time with or without cause. The Committee, when appropriate, may form and
delegate authority to subcommittees and, to the extent permitted by applicable law, regulations and
listing standards, may delegate authority to one or more designated members of the Committee, the
Board or Company officers.
The Committee shall have the sole authority to engage or terminate any outside consultant that is
retained to assist the Committee in the evaluation of Executive Officers and directors
compensation, including the sole authority to approve fees and other retention terms. As the
Committee deems appropriate, it may also retain independent counsel and other professionals to
assist the Committee without seeking Board approval with respect to the selection, fees or
retention terms for any such advisers.
Duties and Responsibilities
Compensation Philosophy and Goal
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Develop the Companys executive compensation philosophy and establish and annually
review and approve policies regarding executive compensation programs and practices. |
CEO and Executive Officer Compensation
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Review, solicit input from the entire Board and approve corporate goals and objectives
relevant to the Chief Executive Officers compensation and, at a meeting at which the
Chief Executive Officer is not present, evaluate the Chief Executive Officers performance
in light of those goals and objectives and determine the Chief Executive Officers
compensation based on this evaluation. In determining the long-term incentive component of
Chief Executive Officer compensation; the Committee will consider the Companys
performance and relative shareholder return, the value of similar incentive awards to
chief executive officers at comparable companies, the awards given to the Chief Executive
Officer in past years and any other factors that the Committee deems relevant. |
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Review the Chief Executive Officers recommendations, if any, and determine annual
compensation for the Companys other Executives and Officers. |
Page 49
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Establish and administer annual and long-term incentive compensation plans for
Executive Officers. |
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Recommend to the Board for its approval and, when appropriate, submission to the
Companys shareholders, incentive compensation plans and equity-based plans. |
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Recommend to the Board for its approval changes to Executive Officer compensation
policies and programs. |
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Review and approve all Executive Officer employment, compensation and retirement
arrangements. |
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Determine procedures for Board review of, and for communicating such review to, the
Chief Executive Officer and other senior management. |
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The Compensation Committee will present compensation recommendations to the Board of
Directors and the Board of Directors will vote to either accept or reject compensation
recommendations. |
Board Compensation
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Periodically review director compensation practices in relation to comparable companies. |
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Recommend to Board, as appropriate, revisions to director compensation practices. |
General Compensation and Benefits Matters
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Consult periodically with the Chief Executive Officer and the regarding compensation
and benefit matters deemed appropriate by them or the members of the Committee. |
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Provide oversight regarding the Companys retirement, welfare and other benefit plans,
policies and arrangements on an as-needed basis. |
Tax-Qualified & Nonqualified Benefit Plans
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Recommend to the Board for Board action (i) all Internal Revenue Service tax-qualified
retirement plans and all plan amendments that are non-administrative in nature and (ii)
all nonqualified benefit plans and all plan amendments that are non-administrative in
nature. |
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Approve and recommend to the Board for its action: the designation of the trustee and
the execution of trust agreements for any such plan of plans; the termination, merger or
consolidation of any such plan or plans; and the extension of plan participation to
employees of affiliates or subsidiaries. |
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Periodically review plan administration, participation and regulatory compliance of
nonqualified plans. |
Reports
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Prepare the report on executive compensation required by the rules of the Securities
and Exchange Commission to be included in the Companys annual proxy statement. |
Meetings
In accordance with the applicable provisions of the Companys Bylaws, as amended from time to time,
the Committee shall meet at such times and places, as the members deem advisable, and shall make
such recommendations to the Board as the Committee considers appropriate. When appropriate, the
Committee may meet in separate executive session with management, employees, general counsel,
internal audit and the independent auditor to discuss matters that the Committee or the other
groups believe warrant Committee attention. At each meeting of the Committee, an executive session
of only the Committee members shall be held.
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Appendix D
Bank of Commerce Holdings
2008 Stock Option Plan
1. Purposes of the Plan. The purposes of this Stock Option Plan are:
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(a) |
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to attract and retain the best available personnel for positions of substantial
responsibility; |
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(b) |
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to provide additional incentive to Employees; and |
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(c) |
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to promote the success of the Companys business. |
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Options granted under the Plan shall be Incentive Stock Options. |
2. Definitions. As used herein, the following definitions shall apply:
(a) Administrator means the Board or any of its Committees as shall be administering
the Plan, in accordance with Section 4 of the Plan.
(b) Applicable Laws means the legal requirements relating to the administration of
stock option plans under state corporate and securities laws and the Code.
(c) Board means the Board of Directors of the Company.
(d) Code means the Internal Revenue Code of 1986, as amended.
(e) Committee means a Committee appointed by the Board in accordance with Section 4
of the Plan.
(f) Common Stock means the Common Stock of the Company.
(g) Company means Bank of Commerce Holdings, a California corporation.
(h) Continuous Status means that the employment with the Company, any Parent, or
Subsidiary, is not interrupted or terminated. Continuous Status as an Employee shall not be
considered interrupted by transfers between locations of the Company or between the Company, its
Parent, any Subsidiary, or any successor. Continuous Status as an Employee shall not be considered
interrupted by any leave of absence approved by the Company. A leave of absence approved by the
Company shall include sick leave, military leave, or any other personal leave approved by an
authorized representative of the Company. No such leave may exceed ninety (90) days, unless
reemployment upon expiration of such leave is guaranteed by statute or contract. If reemployment
upon expiration of a leave of absence approved by the Company is not so guaranteed, on the
ninety-first (91st) day of such leave any Option held by the Optionee shall expire.
(i) Director means a member of the Board.
(j) Disability means total and permanent disability as defined in Section 22(e)(3)
of the Code.
(k) Employee means any person, including Officers and Directors, employed by the
Company or any Parent or Subsidiary of the Company. Neither service as a Director nor payment of a
directors fee by the Company shall be sufficient to constitute employment by the Company.
Page 51
(l) Exchange Act means the Securities Exchange Act of 1934, as amended.
(m) Fair Market Value means, as of any date, the value of Common Stock determined as
follows:
(i) If the Common Stock is listed on any established stock exchange or a national market
system, including without limitation the NASDAQ National Market or The NASDAQ Small Cap Market of
The NASDAQ Stock Market, its Fair Market Value shall be the closing sales price for such stock (or
the closing bid, if no sales were reported) as quoted on such exchange or system for the last
market trading day prior to the time of determination, as reported in The Wall Street Journal or
such other source as the Administrator deems reliable;
(ii) If the Common Stock is regularly quoted by a recognized securities dealer but selling
prices are not reported, the Fair Market Value of a Share of Common Stock shall be the mean between
the high bid and low asked prices for the Common Stock on the last market trading day prior to the
day of determination, as reported in The Wall Street Journal or such other source as the
Administrator deems reliable;
(iii) In the absence of an established market for the Common Stock, the Fair Market Value
shall be determined in good faith by the Administrator in accordance with applicable law.
(n) Incentive Stock Option means an Option intended to qualify as an incentive stock
option within the meaning of Section 422 of the Code and the regulations promulgated thereunder.
(o) Officer means a person who is an officer of the Company within the meaning of
Section 16 of the Exchange Act and the rules and regulations promulgated thereunder.
(p) Option means a stock option granted pursuant to the Plan.
(q) Option Agreement means a written agreement between the Company and an Optionee
evidencing the terms and conditions of an individual Option grant. The Option Agreement is subject
to the terms and conditions of the Plan.
(r) Option Exchange Program means a program whereby outstanding options are
surrendered in exchange for options with a lower exercise price.
(s) Optioned Stock means the Common Stock subject to an Option.
(t) Optionee means an Employee who holds an outstanding Option.
(u) Parent means a parent corporation, whether now or hereafter existing, as
defined in Section 424(e) of the Code.
(v) Plan means this Bank of Commerce Holdings 2008 Stock Option Plan, adopted as of
, 2007.
(w) Rule 16b-3 means Rule 16b-3 of the Exchange Act or any successor to Rule 16b-3,
as in effect when discretion is being exercised with respect to the Plan.
(x) Section 16(b) means Section 16(b) of the Securities Exchange Act of 1934, as
amended.
Page 52
(y) Share means a share of the Common Stock, as adjusted in accordance with Section
12 of the Plan.
(z) Subsidiary means a subsidiary corporation, whether now or hereafter existing,
as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of Section 12 of the Plan, the
maximum aggregate number of shares which may be optioned and sold under the Plan is Six Hundred
Twenty Thousand (620,000) Shares of Common Stock. All of the shares which may be optioned will be
Incentive Stock Options. Except as otherwise provided herein, the Shares may be authorized, but
unissued, or reacquired Common Stock.
If an Option expires or becomes unexercisable without having been exercised in full, or is
surrendered pursuant to an Option Exchange Program, the unpurchased Shares which were subject
thereto shall become available for future grant or sale under the Plan (unless the Plan has
terminated); provided, however, that Shares that have actually been issued under the Plan upon
exercise of an Option shall not be returned to the Plan and shall not become available for future
distribution under the Plan. For purposes of the preceding sentence, voting rights shall not be
considered a benefit of Share ownership.
4. Administration of the Plan
(a) Procedure.
(i) Multiple Administrative Bodies. If permitted by Rule 16b-3, the Plan may be
administered by different bodies with respect to Directors, Officers who are not Directors, and
Employees who are neither Directors nor Officers.
(ii) Administration with Respect to Employees who are Directors and Officers Subject to
Section 16(b). With respect to Option grants made to Employees who are also Officers or
Directors subject to Section 16(b) of the Exchange Act, the Plan shall be administered by (A) the
Board, if the Board may administer the Plan in a manner complying with the rules under Rule 16b-3
relating to the disinterested administration of employee benefit plans under which Section 16(b)
exempt discretionary grants and awards of equity securities are to be made, or (B) a committee
designated by the Board to administer the Plan, which committee shall be constituted to comply with
the rules under Rule 16b-3 relating to the disinterested administration of employee benefit plans
under which Section 16(b) exempt discretionary grants and awards of equity securities are to be
made. Once appointed, such Committee shall continue to serve in its designated capacity until
otherwise directed by the Board. From time to time the Board may increase the size of the
Committee and appoint additional members, remove members (with or without cause) and substitute new
members, fill vacancies (however caused), and remove all members of the Committee and thereafter
directly administer the Plan, all to the extent permitted by the rules under Rule 16b-3 relating to
the disinterested administration of employee benefit plans under which Section 16(b) exempt
discretionary grants and awards of equity securities are to be made.
(iii) Administration with Respect to Other Persons. With respect to Option grants
made to Employees who are neither Directors nor Officers of the Company, the Plan shall be
administered by (A) the Board or (B) a committee designated by the Board, which committee shall be
constituted to satisfy Applicable Laws. Once appointed, such Committee shall serve in its
designated capacity until otherwise directed by the Board.
Page 53
The Board may increase the size of the Committee and appoint additional members, remove members
(with or without cause) and substitute new members, fill vacancies (however caused), and remove all
members of the Committee and thereafter directly administer the Plan, all to the extent permitted
by Applicable Laws.
(b) Powers of the Administrator. Subject to the provisions of the Plan, and in the
case of a Committee, subject to the specific duties delegated by the Board to such Committee, the
Administrator shall have the authority, in its discretion:
(i) to determine the Fair Market Value of the Common Stock, in accordance with Section 2(n) of
the Plan;
(ii) to select the Employees to whom Options may be granted;
(iii) to determine whether and to what extent Options are granted to Employees, hereunder;
(iv) to determine the number of Shares of Common Stock to be covered by each Option granted to
Employees, hereunder;
(v) to approve forms of agreement for use under the Plan;
(vi) to determine the terms and conditions, not inconsistent with the terms of the Plan, of
any award granted to Employees hereunder. Such terms and conditions include, but are not limited
to, the exercise price, the time or times when Options may be exercised (which may be based on
performance criteria), any vesting acceleration or waiver of forfeiture restrictions, and any
restriction or limitation regarding any Option or the Shares of Common Stock relating thereto,
based in each case on such factors as the Administrator, in its sole discretion, shall determine
but in no event including a vesting term longer than five years and at a rate of not less than
twenty percent (20%) per year;
(vii) to reduce the exercise price of any Option granted to Employees to the then current Fair
Market Value if the Fair Market Value of the Common Stock covered by such Option shall have
declined since the date the Option was granted;
(viii) to construe and interpret the terms of the Plan and awards granted pursuant to the
Plan;
(ix) to prescribe, amend and rescind rules and regulations relating to the Plan, including
rules and regulations relating to sub-plans established for the purpose of qualifying for preferred
tax treatment under foreign tax laws;
(x) to modify or amend each Option (subject to Section 15(c) of the Plan), including the
discretionary authority to extend the post-termination exercisability period of Options longer than
is otherwise provided for in the Plan;
(xi) to authorize any person to execute on behalf of the Company any instrument required to
effect the grant of an Option previously granted by the Administrator;
(xii) to institute an Option Exchange Program;
(xiii) to determine the terms and restrictions applicable to Options granted to Employees; and
(xiv) to make all other determinations deemed necessary or advisable for administering the
Plan.
Page 54
(c) Effect of Administrators Decision. The Administrators decisions, determinations
and interpretations shall be final and binding on all Options and any holders of Options.
5. Eligibility. Incentive Stock Options may be granted only to Employees. If otherwise
eligible, an Employee who has been granted an Option may be granted additional Options.
6. Limitations.
(a) Each Option shall be designated in the written Option Agreement as an Incentive Stock
Option. Notwithstanding any provision of the Plan or the Option Agreement, to the extent that the
aggregate Fair Market Value of the Shares with respect to which Incentive Stock Options would be
exercisable for the first time by the Optionee during any calendar year (under all plans of the
Company and any Parent or Subsidiary) exceeds $100,000, the number of such Options so exercisable
shall be reduced to a number within an aggregate fair market value of $100,000. For purposes of
this Section 6(a), Incentive Stock Options shall be taken into account in the order in which they
were granted. The Fair Market Value of the Shares shall be determined as of the time the Option
with respect to such Shares is granted.
(b) Neither the Plan nor any Option shall confer upon an Optionee any right with respect to
continuing the Optionees employment or consulting relationship with the Company, nor shall they
interfere in any way with the Optionees right or the Companys right to terminate such employment
or consulting relationship at any time, with or without cause.
(c) The granting of an Option shall impose no obligation on the Optionee to exercise such
Option.
7. Term of Plan. Subject to Section 19 of the Plan, the Plan shall become effective upon
the earlier to occur of its adoption by the Board or its approval by the shareholders of the
Company as described in Section 19 of the Plan. It shall continue in effect for a term of ten (10)
years unless terminated earlier under Section 15 of the Plan.
8. Term of Option. The term of each Option shall be stated in the Option Agreement. The
term of each Option shall be ten (10) years from the date of grant or such shorter term as may be
provided in the Option Agreement. Moreover, in the case of an Option granted to an Optionee who,
at the time the Option is granted, owns stock representing more than ten percent (10%) of the
voting power of all classes of stock of the Company or any Parent or Subsidiary, the term of the
Option shall be five (5) years from the date of grant or such shorter term as may be provided in
the Option Agreement.
9. Option Exercise Price and Consideration.
(a) Exercise Price. The per share exercise price for the Shares to be issued pursuant
to exercise of an Option shall be determined by the Administrator, subject to the following:
(i) In the case of an Option granted to an Employee who, at the time the Incentive Stock
Option is granted, owns stock representing more than ten percent (10%) of the voting power of all
classes of stock of the Company or any Parent or Subsidiary, the per Share exercise price shall be
no less than 110% of the Fair Market Value per Share on the date of grant; and
(ii) In the case of an Option granted to any Employee other than an Employee described in
paragraph (A) immediately above, the per Share exercise price shall be no less than 100% of the
Fair Market Value per Share on the date of grant.
Page 55
(b) Waiting Period and Exercise Dates. At the time an Option is granted, the
Administrator shall fix the period within which the Option may be exercised and shall determine any
conditions which must be satisfied before the Option may be exercised. In so doing, the
Administrator may specify that an Option may not be exercised until the completion of a service
period.
(c) Form of Consideration. The Administrator shall determine the acceptable form of
consideration for exercising an Option, including the method of payment as may be permitted under
Sections 408 and 409 of the California General Corporation Law. Such consideration may consist
entirely of:
(i) cash;
(ii) check;
(iii) promissory note;
(iv) other Shares which (A) in the case of Shares acquired upon exercise of an Option, have
been owned by the Optionee for more than six (6) months on the date of surrender, and (B) have a
Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as
to which said Option shall be exercised;
(v) delivery of a properly executed exercise notice together with such other documentation as
the Administrator and the broker, if applicable, shall require to effect an exercise of the Option
and delivery to the Company of the sale or loan proceeds required to pay the exercise price;
(vi) a reduction in the amount of any Company liability to the Optionee, including any
liability attributable to the Optionees participation in any Company-sponsored deferred
compensation program or arrangement;
(vii) any combination of the foregoing methods of payment; or
(viii) such other consideration and method of payment for the issuance of Shares to the extent
permitted by Applicable Laws.
10. Exercise of Option.
(a) Procedure for Exercise; Rights as a Shareholder. Any Option granted hereunder
shall be exercisable according to the terms of the Plan and at such times and under such conditions
as determined by the Administrator and set forth in the Option Agreement. An Option may not be
exercised for a fraction of a Share. An Option shall be deemed exercised when the Company
receives: (i) written notice of exercise (in accordance with the Option Agreement) from the person
entitled to exercise the Option, and (ii) full payment for the Shares with respect to which the
Option is exercised. Full payment may consist of any consideration and method of payment
authorized by the Administrator and permitted by the Option Agreement and the Plan. Shares issued
upon exercise of an Option shall be issued in the name of the Optionee or, if requested by the
Optionee, in the name of the Optionee and his or her spouse. Until the stock certificate
evidencing such Shares is issued (as evidenced by the appropriate entry on the books of the Company
or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or
any other rights as a shareholder shall exist with respect to the Optioned Stock, notwithstanding
the exercise of the Option. The Shares issued upon exercise of an Option shall comply with Section
260.140.1 of Title 10 of the California Code of Regulations. The Company shall issue (or cause to
be issued) such stock certificate promptly after the Option is exercised. No adjustment will be
made for a dividend or other right for which the record date is prior to the date the stock
certificate is issued, except as provided in Section 12 of the Plan.
Page 56
Exercising an Option in any manner shall decrease the number of Shares thereafter available,
both for purposes of the Plan and for sale under the Option, by the number of Shares as to which
the Option is exercised.
(b) Termination of Status as Employee. Upon termination of an Optionees Continuous
Status as an Employee, other than as provided for in Section 10(c) and 10(d), the Optionee may
exercise his or her Option, but only within such period of time as is specified in the Option
Agreement, and only to the extent that the Optionee was entitled to exercise it at the date of
termination (but in no event later than the expiration of the term of such Option as set forth in
the Option Agreement). In the absence of a specified time in the Option Agreement, the Option
shall remain exercisable for thirty (30) days following the Optionees termination unless otherwise
determined by the Administrator. If, on the date of termination, the Optionee is not entitled to
exercise the Optionees entire Option, the Shares covered by the unexercisable portion of the
Option shall revert to the Plan. If, after termination, the Optionee does not exercise his or her
Option within the time specified by the Administrator, the Option shall terminate, and the Shares
covered by such Option shall revert to the Plan and become available for reissuance.
(c) Disability of Optionee. In the event an Optionee terminates his or her Continuous
Status as a result of the Optionees Disability, the Optionee may exercise his or her Option at any
time within six (6) months from the date of such Disability (but in no event later than the
expiration of the term of such Option as set forth in the Option Agreement), but only to the extent
that the Optionee was entitled to exercise it at the date of such termination. If, at the date of
termination, the Optionee is not entitled to exercise his or her entire Option, the Shares covered
by the unexercisable portion of the Option shall revert to the Plan. If, after termination, the
Optionee does not exercise his or her Option within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.
(d) Death of Optionee. In the event that an Optionees Continuous Status terminates
due to the death of the Optionee, the Option may be exercised at any time within six (6) months
following the date of death (but in no event later than the expiration of the term of such Option
as set forth in the Option Agreement), by the Optionees estate or by a person who acquired the
right to exercise the option by bequest or inheritance, but only to the extent that the Optionee
was entitled to exercise the Option at the date of death. If, at the time of death, the Optionee
was not entitled to exercise his or her entire Option, the Shares covered by the unexercisable
portion of the Option shall immediately revert to the Plan. If, after death, the Optionees estate
or a person who acquired the right to exercise the Option by bequest or inheritance does not
exercise the Option within the time specified herein, the Option shall terminate, and the Shares
covered by such Option shall revert to the Plan.
(e) Buyout Provisions. The Administrator may at any time offer to buy out, for a
payment in cash or Shares, an Option previously granted based on such terms and conditions as the
Administrator shall establish and communicate to the Optionee at the time that such offer is made.
(f) Rule 16b-3. Options granted to individuals subject to Section 16 of the Exchange
Act (Insiders) must comply with the applicable provisions of Rule 16b-3 and shall contain such
additional conditions or restrictions as may be required thereunder to qualify for the maximum
exemption from Section 16 of the Exchange Act with respect to Plan transactions.
11. Non-Transferability of Options. An Option may not be sold, pledged, assigned,
hypothecated, transferred, or disposed of in any manner other than by will or by the laws of
descent or distribution and may be exercised, during the lifetime of the Optionee, only by the
Optionee.
Page 57
12. Adjustments upon Changes in Capitalization, Dissolution, Merger, or Asset Sale.
(a) Changes in Capitalization. Subject to any required action by the shareholders of
the Company, the number of Shares of Common Stock covered by each outstanding Option, and the
number of Shares of Common Stock which have been authorized for issuance under the Plan but as to
which no Options have yet been granted or which have been returned to the Plan upon cancellation or
expiration of an Option, as well as the price per Share of Common Stock covered by each such
outstanding Option, shall be proportionately adjusted for any increase or decrease in the number of
issued Shares of Common Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or decrease in the
number of issued Shares of Common Stock effected without receipt of consideration by the Company;
provided, however, that conversion of any convertible securities of the Company shall not be deemed
to have been effected without receipt of consideration. Such adjustment shall be made by the
Board, whose determination in that respect shall be final, binding and conclusive. Except as
expressly provided herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no adjustment by reason
thereof shall be made with respect to, the number or price of Shares of Common Stock subject to an
Option.
(b) Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of the Company, the Administrator shall notify each Optionee as soon as practicable
prior to the effective date of such proposed transaction, but in no case shall the Administrator
notify each Optionee less than ten (10) days before the proposed transaction. The Optionee shall
have the right to exercise his or her Option until ten (10) days prior to such transaction as to
all of the Optioned Stock covered thereby, including Shares as to which the Option would not
otherwise be exercisable. In addition, the Administrator may provide that any Company repurchase
option applicable to any Shares purchased upon exercise of an Option shall lapse as to all such
Shares, provided the proposed dissolution or liquidation takes place at the time and in the manner
contemplated. To the extent it has not been previously exercised, an Option will terminate
immediately prior to the consummation of such proposed action.
(c) Merger or Asset Sale. In the event of a merger of the Company with or into
another corporation, or the sale of substantially all of the assets of the Company, each
outstanding Option shall be assumed or an equivalent option or right substituted by the successor
corporation or a Parent or Subsidiary of the successor corporation. In the event that the
successor corporation refuses to assume or substitute for the Option, the Optionee shall have the
right to exercise the Option as to all of the Optioned Stock, including Shares as to which it would
not otherwise be exercisable due to non-vesting. If an Option is exercisable in lieu of assumption
or substitution in the event of a merger or sale of assets, the Administrator shall notify the
Optionee that the Option shall be fully exercisable for a period of fifteen (15) days from the date
of such notice, and the Option shall terminate upon the expiration of such period. For the
purposes of this paragraph, the Option shall be considered assumed if, following the merger or sale
of assets, the Option or right confers the right to purchase or receive, for each Share of Optioned
Stock subject to the Option immediately prior to the merger or sale of assets, the consideration
(whether stock, cash, or other securities or property) received in the merger or sale of assets by
holders of Common Stock for each Share held on the effective date of the transaction (and if
holders were offered a choice of consideration, the type of consideration chosen by the holders of
a majority of the outstanding Shares); provided, however, that if such consideration received in
the merger or sale of assets was not solely common stock of the successor corporation or its
Parent, the Administrator may, with the consent of the successor corporation, provide for the
consideration to be received upon the exercise of the Option, for each Share of Optioned Stock
subject to the Option, to be solely common stock of the successor corporation or its Parent equal
in Fair Market Value to the per Share consideration received by holders of Common Stock in the
merger or sale of assets.
Page 58
13. Date of Grant. The date of grant of an Option shall be, for all purposes, the date on
which the Administrator makes the determination granting such Option, or such other later date as
is determined by the Administrator. Notice of the determination shall be provided to each Optionee
within a reasonable time after the date of such grant.
14. Withholding Taxes. In accordance with any applicable administrative guidelines it
establishes, the Administrator may allow a purchaser to pay the amount of taxes required by law to
be withheld as a result of a lapse of restrictions in connection with Shares purchased pursuant to
an Option, by withholding from any payment of Common Stock due as a result of such purchase or
lapse of restrictions, or by permitting the purchaser to deliver to the Company, Shares having a
Fair Market Value, as determined by the Administrator, equal to the amount of such required
withholding taxes.
15. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time amend, alter, suspend or
terminate the Plan.
(b) Shareholder Approval. The Company shall obtain shareholder approval of any Plan
amendment to the extent necessary and desirable to comply with Rule 16b-3 or with Section 422 of
the Code (or any successor rule or statute or other applicable law, rule or regulation, including
the requirements of any exchange or quotation system on which the Common Stock is listed or
quoted). Such shareholder approval, if required, shall be obtained in such a manner and to such a
degree as is required by the applicable law, rule or regulation.
(c) Effect of Amendment or Termination. No amendment, alteration, suspension or
termination of the Plan shall impair the rights of any Optionee, unless mutually agreed otherwise
between the Optionee and the Administrator, which agreement must be in writing and signed by the
Optionee and the Company.
16. |
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Conditions upon Issuance of Shares. |
(a) Legal Compliance. Shares shall not be issued pursuant to the exercise of an
Option unless the exercise of such Option and the issuance and delivery of such Shares shall comply
with all relevant provisions of law, including, without limitation, the Securities Act of 1933, as
amended, the Exchange Act, the rules and regulations promulgated thereunder, Applicable Laws, and
the requirements of any stock exchange or quotation system upon which the Shares may then be listed
or quoted, and shall be further subject to the approval of counsel for the Company with respect to
such compliance.
(b) Investment Representations. As a condition to the exercise of an Option, the
Company may require the person exercising such Option to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and without any present
intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a
representation is required.
(c) Financial Statements. Optionees shall be entitled to receive annual
financial
statements in accordance with Section 260.140.46 of Title 10 of the California Code of
Regulations.
Page 59
17. Liability of the Company.
(a) Inability to Obtain Authority. The inability of the Company to obtain authority
from any regulatory body having jurisdiction, which authority is deemed by the Companys counsel to
be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of
any liability in respect of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.
(b) Grants Exceeding Allotted Shares. If the Optioned Stock covered by an Option
exceeds, as of the date of grant, the number of Shares which may be issued under the Plan without
additional shareholder approval, such Option shall be void with respect to such excess Optioned
Stock, unless shareholder approval of an amendment sufficiently increasing the number of Shares
subject to the Plan is timely obtained in accordance with Section 15(b) of the Plan.
18. Reservation of Shares. The Company, during the term of this Plan, will at all times
reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements
of the Plan.
19. Shareholder Approval. Continuance of the Plan shall be subject to approval by the
shareholders of the Company within twelve (12) months before or after the date the Plan is adopted.
Such shareholder approval shall be obtained in the manner and to the degree required under
applicable federal and state law.
20. Internal Revenue Code. Notwithstanding anything to the contrary in this Plan, the Plan
contemplates the issuance of both Incentive Stock Options and Non-statutory Stock Options. The
provisions of Code Section 422 and the Treasury Regulations thereunder, as may be amended from time
to time, are incorporated into this document by reference. With respect to any Option issued under
this Plan that is designated as Incentive Stock Option or that is issued under the Incentive Stock
Option Agreement, it is intended that such Option qualify as an Incentive Stock Option, and no
provision of this plan that would cause such Option to fail to qualify as an Incentive Stock Option
shall apply. Any such provision shall be deemed modified to the minimum extent necessary to cause
such Option to qualify as an Incentive Stock Option after use of the above-mentioned incorporation
by reference.
Page 60
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Name
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Bank of Commerce Holdings |
Address 2
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2007 Annual Meeting of Shareholders |
City State ZIP
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Tuesday, May 15, 2007 at 5:00 p.m. |
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Lobby of the Redding Bank of Commerce |
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1951 Churn Creek Road |
# of shares:
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Redding, California 96002 |
Annual Meeting Proxy Card
This proxy when properly executed will be voted in the manner, directed by the undersigned
shareholder. If no direction is made, this proxy will be voted for all nominees listed under Item 1
and in favor of Item 2.
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Please mark this box with an X if you plan to attend the annual meeting |
The Board of Directors recommends a vote FOR Items 1, 2 and 3 below.
Proposal 1
The Board of Directors recommends a vote FOR the election of the following director nominees.
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FOR |
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WITHHOLD |
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Welton L. Carrel
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(01 |
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o
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o |
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Russell L. Duclos
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(02 |
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o
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o |
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John C. Fitzpatrick
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(03 |
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o
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o |
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Kenneth R. Gifford, Jr.
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(04 |
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o
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o |
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Harry L. Grashoff, Jr.
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(05 |
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o
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o |
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Michael C. Mayer
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(06 |
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o
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o |
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David H. Scott
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(07 |
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o
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o |
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Lyle L. Tullis
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(08 |
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o
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o |
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Jon Halfhide
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(09 |
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o
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o |
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Orin N. Bennett
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(10 |
) |
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o
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o |
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Proposal 2
The Board of Directors recommends a vote FOR the approval of the Bank of Commerce Holdings
2008 Stock Option Plan.
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For |
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Against |
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Abstain |
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o
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o
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o |
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Proposal 3
The Board of Directors recommends a vote FOR the ratification of the appointment of Moss
Adams, LLC as the Companys independent registered public accounting firm for 2006
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For |
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Against |
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Abstain |
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o
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o
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o |
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This proxy is solicited on behalf of the Board of Directors.
You, the undersigned stockholder, appoint each Harry L. Grashoff, Jr. and Michael C. Mayer,
your attorney and proxy, with full power of substitution, on your behalf and with all powers you
would possess if personally present, to vote all shares of Bank of Commerce Holdings Common Stock
that you would be entitled to vote at the Annual Meeting of Shareholders to be held at 1951 Churn
Creek Road, Redding, California on Tuesday, May 15, 2007 at 5:00 p.m.
The shares represented by this proxy will be voted as instructed by you and in the discretion of
the proxies on other matters. If not otherwise specified, shares will be voted in accordance with
the recommendations of the Board of Directors.
PROXY VOTING INSTRUCTIONS
Please sign on the reverse side and return promptly in the enclosed envelope or vote by
telephone.
TELEPHONE VOTING INSTRUCTIONS
TO VOTE BY PHONE: Call toll-free 1-800-840-1208 on touch-tone telephone 24-hours a day 7 days
a week.
There is NO CHARGE to you for this call. Have your proxy card in hand.
You will be asked to enter a Control Number, which is located in the box in the lower right hand
corner of this form.
Option 1: To vote as the Board of Directors recommends on ALL proposals.
Proposal 1 To vote FOR ALL Nominees, Press 1; to WITHHOLD FOR ALL nominees, press 9,
to WITHHOLD FOR AN INDIVIDUAL nominee, press 0 and listen to the instructions.
When asked, please confirm by pressing 1.
The instructions are the same for all remaining proposals.
NOTE: If you vote by telephone or internet, THERE IS NO NEED TO MAIL BACK your Proxy Card.