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
of the Securities Exchange Act of 1934
Filed by the Registrant ☒
Filed by a Party other than the Registrant
☐
Check the appropriate box:
☐
Preliminary Proxy Statement
☐
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
☒ Definitive Proxy Statement
☐
Definitive Additional Materials
☐
Soliciting Material Pursuant to § 240.14a-12
CALIFORNIA BANCORP
(Name of registrant as specified in its charter)
Not applicable
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check all boxes that apply):
☒ No fee required.
☐ Fee paid previously with preliminary materials
☐ Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11
April 8, 2025
Dear Fellow Shareholder,
On behalf of the Board of Directors and management, you are cordially invited to attend the 2025 Annual Meeting of Shareholders (the “Annual Meeting”) of California BanCorp (the “Company”). The Annual Meeting will be held at the Company’s headquarters, located at 12265 El Camino Real, Suite 210, San Diego, California, 92130, on Tuesday, May 21, 2025, at 8:30 a.m., Pacific Daylight Time.
The attached Notice of Annual Meeting and proxy statement describe the formal business to be conducted at the Annual Meeting. Members of our Board of Directors and management will be present in person at the Annual Meeting to respond to any questions that our shareholders may have.
Your vote is important.
Whether or not you plan to attend the Annual Meeting, we encourage you to cast your vote via the Internet, telephone, or by completing your proxy card and returning it by mail. Specific instructions with respect to your voting options are described in the accompanying proxy statement. If you hold your shares through an account with a brokerage firm, bank, or other nominee, please follow the instructions you receive from that entity to vote your shares.
Each proxy is revocable and will not affect your right to vote in person if you attend the Annual Meeting. If you are a shareholder of record and attend the Annual Meeting, you may simply revoke your previously submitted proxy and vote your shares at that time. If your shares are held by a broker or otherwise not registered in your name, you will need additional documentation from your record holder proving your ownership in order to vote your shares personally at the Annual Meeting.
On behalf of the Board of Directors and the officers and employees of California BanCorp, we would like to thank you and all of our shareholders for your continued support. We look forward to your participation at the Annual Meeting.
Sincerely,
David I. Rainer
Executive Chairman
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12265 El Camino Real, Suite 210
San Diego, California 92130
(844) 265-7622
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 21, 2025 - 8:30 a.m. (Pacific Daylight Time)
The 2025 Annual Meeting of Shareholders (the “Annual Meeting”) of California BanCorp (the “Company” or “Corporation”) will be held at the Company’s headquarters, located at 12265 El Camino Real, Suite 210, San Diego, CA 92130 on Tuesday, May 21, 2025, at 8:30 a.m. Pacific Daylight Time for the purpose of considering and voting upon the following matters:
ITEMS OF BUSINESS:
Proposals:
I.
Election of Directors.
To elect the following twelve (12) director nominees to the Board of Directors (“Board”) of the Company to serve until the next annual meeting of shareholders and until their successors are elected and have qualified:
| Andrew J. Armanino, Jr. | Richard Martin | ||||
| Stephen A. Cortese | Frank L. Muller | ||||
| Kevin J. Cullen | David I. Rainer | ||||
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Frank D. Di Tomaso
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Steven E. Shelton | ||||
| Rochelle G. Klein | David Volk | ||||
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Dr. Lester Machado
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Anne Williams | ||||
II. Ratification of the Appointment of Public Accounting Firm.
To ratify the appointment of RSM US LLP as the independent public accounting firm for the Company for the fiscal year ending December 31, 2025.
III. Other Business.
To transact such other business as may properly be brought before the Annual Meeting or any adjournments or postponements of the Annual Meeting.
Only shareholders of record at the close of business on
March 27, 2025,
are entitled to notice and to vote at the Annual Meeting (any and adjournments or postponements thereof).
As set forth in the enclosed proxy statement, proxies are being solicited by and on behalf of the Board. All proposals set forth above are proposals of the Company. It is expected that the Notice of Internet Availability of Proxy Materials, which includes instructions on how to access these materials online will be mailed to shareholders on or about
April 8, 2025
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Your vote is important.
Whether or not you expect to attend the Annual Meeting, we hope you will vote as soon as possible. You will be able to vote your shares over the Internet, by telephone or by completing a proxy card and returning it by mail. Please review the instructions with respect to your voting options described in the accompanying proxy statement. If you hold your shares through an account with a brokerage firm, bank, or other nominee, please follow the instructions you receive from that entity to vote your shares. Voting by Internet, telephone or mail will not prevent you from voting in person if you choose to attend the Annual Meeting.
If you would like to attend the Annual Meeting and your shares are held by a broker, bank or other nominee, you must bring to the Annual Meeting a recent brokerage statement or a letter from the nominee confirming your beneficial ownership of the shares. You must also bring a form of personal identification. In order to vote your shares at the Annual Meeting, you must obtain from the nominee a legal proxy issued in your name.
BY ORDER OF THE BOARD OF DIRECTORS
/s/Manisha K. Merchant
Manisha Merchant
Chief Legal Officer and Corporate Secretary
San Diego, California
April 8, 2025
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Important Notice Regarding the Availability of
Proxy Materials for the Shareholder Meeting To Be Held on May 21, 2025.
California BanCorp’s proxy statement, annual report
and electronic proxy card are available on the Internet at https://www.envisionreports.com/BCAL.
You are encouraged to review all of the information contained in the proxy statement before voting.
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TABLE OF CONTENTS
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Annual Meeting of Shareholders
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Information About the Annual Meeting and Voting
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Security Ownership of Certain Beneficial Owners and Management
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| Proposal No. I— Election of Directors | |||||
| Board of Directors | |||||
| Corporate Governance | |||||
| The Board's Role in Risk Oversight | |||||
| Director Compensation | |||||
| Executive Officers | |||||
| Executive Compensation | |||||
| Certain Relationships And Related Transactions, and Director Independence | |||||
| Report of the Audit and Risk Committee | |||||
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Proposal No. II—Ratification of the Appointment of RSM US LLP as the Company’s Independent Public Accounting Firm for the Fiscal Year Ending December 31, 2025
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Solicitation
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Shareholder Proposals and Nominations
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Delinquent Section 16(a) Reports
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Other Matters
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Internet Availability of Materials
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PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
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Date and Time
May 21, 2025
8:30 A.M. Pacific Daylight Time
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Record Date
March 27, 2025
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Location
California BanCorp
12265 El Camino Real, Suite 210
San Diego, California 92130
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Who Can Vote
Holders of the Company’s
Common Stock as of the Record Date
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| No. | Proposal | Board Recommendation | Page | |||||||||||||||||
| I. |
Election of the twelve (12) director nominees named in this proxy statement, to serve until the next annual meeting of shareholders and until their successors are elected and have qualified.
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FOR, each director nominee | ||||||||||||||||||
| II. |
Ratification of the selection of RSM US LLP as the Company’s independent public accounting firm for the year ending December 31, 2025.
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FOR | ||||||||||||||||||
These proposals are described in more detail elsewhere in this proxy statement. In addition to these proposals, shareholders will also consider any other matters that may properly come before the Annual Meeting or any adjournment or postponement of the Annual Meeting.
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By submitting your proxy, you authorize the persons named in this proxy statement to represent you and vote your shares at the Annual Meeting in accordance with your instructions. Those persons also may vote your shares to adjourn the Annual Meeting from time to time and will be authorized to vote your shares at any adjournments or postponements of the Annual Meeting.
The Company’s Annual Report for the year ended December 31, 2024 (the “Annual Report”), which includes the Company’s audited consolidated financial statements, accompanies this proxy statement. The Annual Report does not constitute a part of the proxy solicitation materials and is not incorporated into this proxy statement by reference.
The proxy materials for the Annual Meeting, including this proxy statement and the Annual Report, will be available to our shareholders on the internet at www.envisionreports.com/BCAL, beginning on or about April 8, 2025.
Your vote is important.
Whether or not you plan to attend the Annual Meeting, we encourage you to read this proxy statement and provide us with your proxy or voting instructions as soon as possible.
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INFORMATION ABOUT THE ANNUAL MEETING AND VOTING
When and where will the Annual Meeting be held?
The Annual Meeting will be held at the Company’s headquarters, located at 12265 El Camino Real, Suite 210, San Diego, CA 92130 on May 21, 2025, at
8:30 a.m.
Pacific Daylight Time.
Why did you send me this proxy statement?
We sent you this proxy statement and the enclosed proxy card because our Board is soliciting your proxy to vote at the Annual Meeting. This proxy statement summarizes the information you need to know to cast an informed vote at the Annual Meeting. However, 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. You may also vote by telephone or by the Internet by following the instructions on the proxy card.
Who may vote?
Shareholders who were the record owners of the Company’s common stock (the “Common Stock”) at the close of business on March 27, 2025 (the “Record Date”) are entitled to vote. On the Record Date, there were
32,402,140
shares of Common Stock issued and outstanding and entitled to vote. Our Common Stock is our only outstanding class of capital stock.
What is the difference between a shareholder of record and a “street name” holder?
If your shares are registered directly in your name, you are considered the shareholder of record with respect to those shares.
If your shares are held in a stock brokerage account or by a company, trust or other nominee, then the broker, company, trust or other nominee is considered to be the shareholder of record with respect to those shares. However, you are still considered the beneficial owner of those shares and your shares are said to be held in “street name.” Street name holders generally cannot vote their shares directly and must instead instruct the broker, company, trust or other nominee generally how to vote their shares using the voting instruction form provided by it. If you hold your shares in street name and do not provide voting instructions, your broker, company, trust or other nominee has discretionary authority to vote your shares on “routine” proposals, such as on the ratification of the selection of RSM US LLP as our independent public accounting firm for the fiscal year ending December 31, 2025 (Proposal II), even in the absence of your specific voting instruction. Those shares will also be counted as present at the Annual Meeting for purposes of determining a quorum. However, in the absence of your specific instructions as to how to vote, your broker, company, trust or other nominee does not have authority to vote on “non-routine” proposals, including the election of directors (Proposal I), without receiving voting instructions from you.
What constitutes a quorum?
A quorum of shareholders is necessary to hold a valid Annual Meeting. The presence at the Annual Meeting, either in person or by proxy, of holders of a majority of the outstanding shares of Common Stock entitled to vote at the Annual Meeting will constitute a quorum for the transaction of business. Proxies marked as abstaining (including proxies containing broker non-votes) on any matter to be acted upon by shareholders will be treated as present at the Annual Meeting for purposes of determining a quorum but will not be counted as votes cast on such matters. If there is no quorum, a majority of the shares represented at the Annual Meeting may adjourn the Annual Meeting to another date.
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How many votes do I have?
Holders of Common Stock are entitled to one vote for each share of Common Stock held in his or her name on the books of the Company as of the Record Date on any matter submitted to the vote of the shareholders.
Notwithstanding the foregoing, if any shareholder in attendance at the Annual Meeting gives notice at the Annual Meeting, prior to the voting, of an intention to cumulate votes in the election of directors, then all shareholders will be entitled to cumulate votes in that election. In an election of directors held by cumulative voting, each shareholder is entitled to cast a number of votes that is equal to the number of directors to be elected (which at the Annual Meeting will be twelve (12)), multiplied by the number of shares that the shareholder is entitled to vote at the Annual Meeting. The shareholder may cast all of those votes for a single nominee or distribute them among any number or all of the nominees in such proportions as the shareholder may choose.
What vote is required to approve each proposal, and what is the effect of withholding authority to vote, broker non-votes and abstentions?
The following table sets forth the vote that is required to approve each proposal, and the effect of withholding authority to vote, broker non-votes and abstentions from voting.
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Proposal
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Vote Required
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Effect of “Withhold” Votes,
Abstentions, Broker Non-Votes
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Proposal I: Election of Directors |
The candidates receiving the highest number of votes, up to the number of directors to be elected, twelve (12), will be elected.
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Withheld votes, abstentions and broker non-votes will have no effect on the voting for the election of directors. However, shares voted “withhold” and broker non-votes will be considered present at the Annual Meeting for purposes of determining whether a quorum is present.
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| Proposal II: Ratification of the Company’s Independent Public Accounting Firm | Affirmative vote of at least a majority of the shares represented and voting at the Annual Meeting, with affirmative votes constituting at least a majority of the required quorum. |
Abstentions and broker non-votes will have no effect unless there are insufficient votes in favor of the proposal, such that the affirmative votes constitute less than a majority of the required quorum. In such case, abstentions and broker non-votes will have the same effect as a vote against the proposal.
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Voting by Telephone:
You may vote by calling the toll-free telephone number 1-800-652-VOTE(8683) and following the instructions printed on your proxy card. The deadline for voting by telephone is May 20, 2025, at 8:59 p.m., Pacific Daylight Time. If you vote by telephone, you do not need to return your proxy card.
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Voting on the Internet:
You may vote on the Internet by accessing the website address www.envisionreports.com/BCAL and following the instructions printed on your proxy card. The deadline for voting on the Internet is May 20, 2025, at 8:59 p.m., Pacific Daylight Time. If you vote on the Internet, you do not need to return your proxy card.
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Voting by Mail:
You may vote by completing, signing and returning your proxy card by mail. To vote in this manner, please mark, date and sign the enclosed proxy card and return it by mail in the accompanying postage-prepaid envelope. In order to assure that your shares will be voted, you should mail your signed proxy card in sufficient time for it to be received before the Annual Meeting. If your shares are registered in different names or you hold your shares in more than one capacity, you will receive more than one proxy card. In that case, if you choose to vote by mail and you want all of your shares voted, please complete each proxy card that you receive and return it in its own postage prepaid envelope.
Even if you plan to attend the Annual Meeting, we recommend that you submit your proxy in advance of the Annual Meeting as described above so that your vote will be counted if you later decide not to attend the Annual Meeting. Submitting your proxy by telephone, Internet or mail will not affect your right to vote at the Annual Meeting should you decide to attend the Annual Meeting. If you do attend and vote your shares at the Annual Meeting after having voted by any of the methods described above, only your last vote will be counted.
Voting by Proxy for Shares Held in Street Name:
If you are the beneficial owner of shares held in street name, you will receive instructions from your broker, bank or other nominee that you must follow in order to instruct how your shares are to be voted at the Annual Meeting.
Revoking a Proxy
You may revoke your proxy before it is voted by:
a.
submitting a new proxy with a later date, including a proxy submitted via the Internet or by telephone;
b.
providing us with written notification before the Annual Meeting that you are revoking your previously submitted proxy; addressed to the Company’s Corporate Secretary at 12265 El Camino Real, Suite 210, San Diego, CA 92130; or
c.
voting at the Annual Meeting.
However, if your shares are held in street name, you will need to contact your broker, bank or the nominee holder if you wish to change or revoke any voting instructions that you previously gave to your broker, bank or other nominee holder.
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How will the Board vote my proxy?
If you grant us your proxy to vote your shares (whether by telephone or over the Internet or by completing, signing and returning your proxy card by mail), and you do not revoke that proxy prior to the Annual Meeting, your shares will be voted as directed by you. If you do not provide any specific direction as to how your shares should be voted, your shares will be voted as follows:
a.
“
FOR
” the election of each of the twelve (12) director nominees named in this proxy statement to serve until the next annual meeting of shareholders until their successors are elected and have qualified (Proposal No. I); and
b.
“
FOR
” ratification of the appointment of RSM US LLP as our independent public accounting firm for the fiscal year ending December 31, 2025 (Proposal No. II).
If any other matter should be properly presented at the Annual Meeting upon which a vote may be taken, the shares will be voted in accordance with the judgment of the holders of the proxy.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
We have determined beneficial ownership in accordance with the rules of the Securities and Exchange Commission (the “SEC”). These rules generally provide that a person is the beneficial owner of securities if such person has or shares the power to vote or direct the voting of securities, or to dispose or direct the disposition of securities, or has the right to acquire such powers within 60 days. For purposes of calculating each person’s percentage ownership, common stock issuable pursuant to options that are currently exercisable or will become exercisable or restricted share units that will vest within 60 days are included as outstanding and beneficially owned for that person or group, but are not deemed outstanding for the purposes of computing the percentage ownership of any other person. Except as disclosed in the footnotes to this table and subject to applicable community property laws, we believe that each person identified in the table has sole voting and investment power over all of the shares shown opposite such person’s name.
The following table provides information regarding the beneficial ownership based on 32,402,140 shares of our common stock issued and outstanding as of March 27, 2025, by those persons or entities known by us to beneficially own more than five percent of the outstanding shares of our common stock.
| Name and Address of Greater than 5% Shareholders | Shares Beneficially Owned |
Percent of Class
Beneficially Owned | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
John & Heidi Farkash
(1)
PO Box 576, Rancho Santa Fe, CA 92067
|
2,940,964 | 9.08 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Fourthstone LLC
(2)
575 Maryville Centre, Suite 110, St. Louis, MO 63141
|
3,010,135 | 9.29 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
AB Financial Services Opportunity Fund (c/o Alliance Bernstein L.P.)
1345 Avenue of the Americas, New York, NY 10105 | 2,525,590 | 7.79 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Endeavour Capital Advisors Inc.
(3)
410 Greenwich Avenue, Greenwich, CT 06830
|
2,454,490 | 7.58 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Castle Creek Capital Partners VI LP
(4)
11682 El Camino Real, Suite 320, San Diego, CA 92130
|
2,340,719 | 7.22 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
2025 | Annual Proxy Statement
|
12
|
|||||||
The following table provides information regarding the beneficial ownership based on 32,402,140 shares of our common stock issued and outstanding as of March 27, 2025, for:
•
each director of the Company;
•
each of our Named Executive Officers; and
•
all directors of the Company and our executive officers (including Named Executive Officers) as a group.
Unless otherwise indicated, we believe that the shareholders listed have sole voting and investment power over all of the shares shown opposite such person’s name, subject to applicable community property laws.
|
Name of Beneficial Owner
(1)
|
Shares of Common
Stock Beneficially
Owned
(2)
|
Shares
Subject to
Exercisable
Options that will
Vest Within 60 Days
(3)
|
Shares Subject to
RSUs that will Vest Within 60 Days
(3)
|
Shares Beneficially Owned |
Percent of Class
Beneficially
Owned
(3)
|
||||||||||||||||||||||||||||||
| Non-Employee Directors: | |||||||||||||||||||||||||||||||||||
|
Andrew J. Armanino, Jr.
|
212,578 | — | — | 212,578 | 0.66 | % | |||||||||||||||||||||||||||||
|
Stephen A. Cortese
|
381,639 |
(4)
|
— | — | 381,639 | 1.18 | % | ||||||||||||||||||||||||||||
|
Kevin J. Cullen
|
78,907 | — | — | 78,907 | 0.24 | % | |||||||||||||||||||||||||||||
|
Frank D. Di Tomaso
(5)
|
406,532 | — | — | 406,532 | 1.25 | % | |||||||||||||||||||||||||||||
|
Rochelle G. Klein
|
274,014 |
(6)
|
— | — | 274,014 | 0.85 | % | ||||||||||||||||||||||||||||
|
Dr. Lester Machado
|
56,861 | 7,500 | — | 64,361 | 0.20 | % | |||||||||||||||||||||||||||||
| Richard Martin | 21,669 | — | — | 21,669 | 0.07 | % | |||||||||||||||||||||||||||||
|
Frank L. Muller
|
27,537 | — | — | 27,537 | 0.08 | % | |||||||||||||||||||||||||||||
| David Volk | 2,344,153 |
(7)
|
17,500 | — | 2,361,653 | 7.28 | % | ||||||||||||||||||||||||||||
|
Anne Williams
|
60,337 | — | — | 60,337 | 0.19 | % | |||||||||||||||||||||||||||||
|
Employee Directors and Named Executive Officers:
|
|||||||||||||||||||||||||||||||||||
|
David I. Rainer
Director, Executive Chairman of the Board
|
402,667 | — | — | 402,667 | 1.24 | % | |||||||||||||||||||||||||||||
|
Steven E. Shelton
Director, Chief Executive Officer of the Company and Bank
|
80,411 | — | 540 | 80,951 | 0.25 | % | |||||||||||||||||||||||||||||
|
Thomas G. Dolan
Executive Vice President Chief Financial Officer of the Company and Chief Strategy Officer of the Bank
|
240,813 | — | — | 240,813 | 0.74 | % | |||||||||||||||||||||||||||||
|
2025 | Annual Proxy Statement
|
13
|
|||||||
|
Name of Beneficial Owner
(1)
|
Shares of Common
Stock Beneficially
Owned
(2)
|
Shares
Subject to
Exercisable
Options that will
Vest Within 60 Days
(3)
|
Shares Subject to
RSUs that will Vest Within 60 Days
(3)
|
Shares Beneficially Owned |
Percent of Class
Beneficially
Owned
(3)
|
||||||||||||||||||||||||||||||
|
Richard Hernandez
President of the Company and the Bank
|
61,184 | — | 3,365 | 64,549 | 0.20 | % | |||||||||||||||||||||||||||||
|
Thomas Sa
Former Executive Vice President and Chief Operating Officer of the Company and the Bank
(8)
|
30,812 |
| — | — | 30,812 | 0.10 | % | ||||||||||||||||||||||||||||
|
Directors and Executive Officers as a Group (21 in Number)
(9)
|
4,781,533 |
(9)
|
25,000 | 8,348 | 4,814,881 | 14.84 | % | ||||||||||||||||||||||||||||
(1) Unless otherwise stated, the address for each individual is c/o California Bank of Commerce, N.A., 12265 El Camino Real, Suite 210, San Diego, CA 92130.
(2) Except as otherwise noted, may include shares held by or with such person’s spouse and minor children; shares held by any other relative of such person who has the same home; shares held by a family trust as to which such person is a trustee with sole voting and investment power (or shared power with a spouse); or shares held in an Individual Retirement Account or pension plan as to which such person has pass-through voting rights and investment power. Does not include vested stock options.
(3) Stock options or restricted share units that are exercisable or vest within 60 days after March 27, 2025, are treated as issued and outstanding for the purpose of computing the percent of class owned by such person but not for the purpose of computing the percent of class owned by any other person.
(4) Includes 2,086 shares held by Cortese Real Property LP, a limited partnership of which Cortese Management, LLC is the general partner and 2.352% owner. Mr. Cortese is the sole member of Cortese Management, LLC and has voting rights with respect to such shares.
(5) Mr. Di Tomaso retired from his role as Executive Director effective July 18, 2024. He continues to serve as a director of the Company and Bank.
(6) Includes 41,737 shares held in her parent trust account whereby Ms. Klein is trustee and has voting rights with respect to such shares; and 18,135 shares held in her children trust accounts whereby Ms. Klein is trustee and has voting rights with respect to such shares.
(7) Mr. Volk is a principal of Castle Creek Advisors IV LLC and Castle Creek Capital Partners VI LP, which owns 2,239 shares and 2,340,719 shares of our common stock, respectively. Mr. Volk disclaims beneficial ownership of such shares held by Castle Creek Advisors IV LLC and Castle Creek Capital Partners VI LP, except to the extent of his pecuniary interest therein.
(8) Mr. Sa resigned from his role as Chief Operating Officer of the Company and Bank effective September 20, 2024.
(9) Includes beneficial ownership of six additional executive officers totaled 101,419 shares.
|
2025 | Annual Proxy Statement
|
14
|
|||||||
|
PROPOSAL I
ELECTION OF DIRECTORS |
||
Proposal I
|
Election of Directors.
Electing each of the following twelve (12) director nominees to the Board of Directors of the Company, each to serve until the next annual meeting of shareholders and until their successors are elected and have qualified:
|
|||||
|
Andrew J. Armanino, Jr.
|
Richard Martin
|
||||
|
Stephen A. Cortese
|
Frank L. Muller
|
||||
|
Kevin J. Cullen
|
David I. Rainer
|
||||
|
Frank D. Di Tomaso
|
Steven E. Shelton
|
||||
|
Rochelle G. Klein
|
David Volk
|
||||
|
Dr. Lester Machado
|
Anne Williams
|
||||
Our Board has nominated the twelve director nominees named above for election to the Board for a term of one year ending at the next annual meeting of shareholders and until their respective successors are elected and qualified to serve. Each of the twelve nominees named above was nominated by the Board upon the recommendation of the Compensation, Nominating, and Governance Committee (“CNG Committee”). Each nominee is currently a director of the Company as well as director of the Company’s subsidiary, California Bank of Commerce, N.A. (the “Bank”), and has consented to serve as a director, if elected at the Annual Meeting. Further, except for Mr. Rainer, Mr. Shelton, Mr. Di Tomaso, and Ms. Williams, each qualifies as an independent director under the listing rules of the Nasdaq Stock Market and the related rules of the SEC. No current director has any family relationship, as defined in Item 401 of Regulation S-K, with any other director or with any of our executive officers. Except for Mr. Volk, none of our directors have any arrangement or understanding with another person under which the director was or is to be elected as a director or director nominee. None of our directors have been involved in any bankruptcy or criminal proceedings, nor have there been any judgments or injunctions brought against any of our directors during the last ten years that we consider material to the evaluation of the ability and integrity of any director.
Vote Required and Recommendation of the Board
Under California law and our Bylaws, the twelve (12) nominees receiving the highest number of votes entitled to be cast in the election of directors will be elected to serve as directors of the Company. As a result, any shares that are voted “Withhold” and broker non-votes will not be counted in determining the outcome of the election.
Unless otherwise instructed, the persons who are named as the proxy holders on the enclosed proxy card intend to vote the proxies received by them for the election of each of the twelve director nominees. If, prior to the Annual Meeting, any of the nominees becomes unable or unwilling for good cause to serve as a director, the proxy holders will vote the proxies received by them for the election of any substitute nominees selected by the Board. The Company has no reason to believe that any of the nominees will become unable or unwilling to serve. In addition, if any shareholder gives notice at the Annual Meeting, prior to voting, of his or her intention to cumulate votes in the election of directors, the proxy holders will have the discretion to allocate and cast the votes represented by each of the proxies they hold among the above named nominees for whom authority to vote has not been withheld, in such proportions as the proxy holders deem appropriate in order to elect as many of the nominees named above as is possible.
| ü |
The Board of Directors unanimously recommends that you vote "FOR" each of the twelve (12) director nominees.
|
||||
|
2025 | Annual Proxy Statement
|
15
|
|||||||
Board of Directors
The following table sets forth certain information about our director nominees, including their ages and year in which they began serving as a director of the Company (or the Bank, if prior to the holding company reorganization on May 15, 2020).
| Name | Age | Director Since | Compensation, Nominating and Governance Committee Member | Audit and Risk Committee Member | ||||||||||||||||||||||
|
Andrew J. Armanino, Jr.
|
60 | 2024 |
X
|
X
|
||||||||||||||||||||||
| Stephen A. Cortese | 64 | 2024 |
X
|
|||||||||||||||||||||||
|
Kevin J. Cullen
|
58 | 2024 |
Chair
|
X
|
||||||||||||||||||||||
|
Frank D. Di Tomaso
|
67 |
2021
|
||||||||||||||||||||||||
|
Rochelle G. Klein
|
63 | 2024 |
Chair
|
|||||||||||||||||||||||
|
Dr. Lester Machado
|
69 |
2001
|
X
|
X | ||||||||||||||||||||||
| Richard Martin | 58 | 2023 |
X
|
X | ||||||||||||||||||||||
|
Frank L. Muller
|
68 | 2024 | ||||||||||||||||||||||||
|
David I. Rainer
|
67 | 2022 | ||||||||||||||||||||||||
|
Steven E. Shelton
|
64 | 2024 | ||||||||||||||||||||||||
|
David Volk
|
47 |
2016
|
X | |||||||||||||||||||||||
|
Anne Williams
|
66 |
2023
|
||||||||||||||||||||||||
Director Nominee Highlights
|
8 of 12 Directors are Independent
|
100% Independence for CNG, Audit and Risk Committee Chair and Members
|
||||
|
Average Age of Directors – 63 years old
|
Average Director Tenure – 4 years
|
||||
Effective July 31, 2024, the former California BanCorp (“CALB”) merged with and into the Company, and the former California Bank of Commerce merged with and into Bank (the “Merger”). At the effective time of the Merger, six directors from CALB were appointed to the Board, and six directors of the Company continued their service on the Board. For those directors who joined the Board from CALB, the preceding table is inclusive of their tenure as a director of CALB.
|
2025 | Annual Proxy Statement
|
16
|
|||||||
Set forth below is information about each of the director nominees, including their principal occupation, business experience and qualifications to serve on the Board of Directors.
|
Andrew J. Armanino, Jr.
|
|||||||
|
Mr. Armanino was the Managing Partner and Chief Executive Officer of Armanino LLP, a public accounting firm, from 2005 to 2018, at which time he retired and is no longer affiliated with the firm. During his tenure, he successfully led the firm to become the 21st largest CPA and consulting firm in the United States.
He is chairman of the board for Moore Global International, an accounting and business advisory network of independent accounting firms. Mr. Armanino is also a board member of Good.Lab, an ESG software company. Additionally, he is a board member of the Armanino Foundation, a community service organization, and serves on the American Institute of CPAs council.
Mr. Armanino was a founding member of California BanCorp (Nasdaq: CALB) and California Bank of Commerce, and has been serving on the board since 2013. Following the 2024 merger with Southern California Bancorp (Nasdaq: BCAL) and Bank of Southern California, N.A. Mr. Armanino remains an active board member, leading the Strategic Planning Committee of the Company and Bank. He is one of the Company’s Board-designated “audit committee financial experts.” Mr. Armanino’s significant accounting experience provides in-depth knowledge of generally accepted accounting principles and auditing standards to the Board. With years of providing services to small and medium-sized businesses, he brings valuable insights to the Board regarding these businesses.
Mr. Armanino earned his Bachelor’s degree in Accounting from Santa Clara University.
|
||||||||
|
Stephen A. Cortese
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mr. Cortese is the Managing Partner for Cortese Investment Company, an investment firm focused on the acquisition, development, and management of commercial real estate since 1987. Additionally, Mr. Cortese is the general partner of Cortese Real Property, LP, a commercial real estate development firm with holdings in Northern California, since 2003.
Mr. Cortese was a founding member and director of California BanCorp (Nasdaq: CALB) and California Bank of Commerce, serving as Chairman of the Board since 2010 until the merger with Southern California BanCorp (Nasdaq: BCAL) and Bank of Southern California, N.A. in July 2024. He serves as the Lead Independent Director of the Company and Bank since the merger. Mr. Cortese has significant experience in real estate management, investment and construction, particularly in the greater San Francisco Bay Area, enabling him to bring valuable insights regarding these matters to the Board.
Mr. Cortese earned his Bachelor of Business Administration with an emphasis in Finance from the University of California, Berkeley and his Master of Science in Real Estate Appraisal and Investment Analysis from the University of Wisconsin, Madison.
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2025 | Annual Proxy Statement
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Kevin J. Cullen
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Mr. Cullen is the Chief Financial Officer and co-owner of Olson & Company Steel, Inc., a construction company, a position he has held since 2013. He is also a director of Steel Bar Fresno and California Steel Captive. He previously served as Chief Financial Officer of Guarantee Glass, Inc., a subcontractor, from 2008 to 2012, and as Chief Financial Officer and a co-owner of MDC Vacuum, a manufacturing company, from 1998 to 2008.
Mr. Cullen was a founding member and director of California BanCorp (Nasdaq: CALB) and California Bank of Commerce and has been serving on the board since 2007. Following the 2024 merger with Southern California Bancorp (Nasdaq: BCAL) and Bank of Southern California, N.A., Mr. Cullen remains an active board member, chairing the Compensation, Nominating and Governance Committee of the Company and Bank. He is one of the Company’s Board-designated “audit committee financial experts.” Mr. Cullen’s business experience, including as the owner of and Chief Financial Officer for construction and manufacturing companies, enables him to bring valuable insights to the Board regarding these small to medium sized businesses.
Mr. Cullen a Bachelor’s degree in Liberal Arts with an emphasis on English from University of the Pacific.
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Frank D. Di Tomaso
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Mr. Di Tomaso has spent over 30 years in banking. He was a founding member of Bank of Santa Clarita and served as its Vice Chairman (2004-2009), Chairman (2009-2021), Executive Vice President (2004-2011), and CEO (2012-2021). Prior to the founding of Bank of Santa Clarita, he held the positions of Senior Vice President and Business Development Officer at City National Bank (1997-2004) and Senior Vice President and Commercial Loan Team Leader (1996-1997). Before joining City National Bank, Mr. Di Tomaso was employed at Metrobank until it was acquired by Comerica Bank and served as the Senior Vice President and Manager of the Asset Based Loan Division of Metrobank (1990-1996).
Mr. Di Tomaso currently serves as a director of the Company and Bank and has been with the Company since 2021. Mr. Di Tomaso’s extensive experience as an executive and director of banking and financial institutions, as well as his knowledge and leadership capabilities, make him a valuable member of the Board.
Mr. Di Tomaso earned his Bachelor of Science degree in Accounting from California State University, Fresno.
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2025 | Annual Proxy Statement
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Rochelle G. Klein
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Ms. Klein served as Vice President in the Fixed Income Currency and Commodities Division at Goldman Sachs, in New York, Los Angeles and San Francisco, from 1987 to 2002. She continues to privately invest and consult and was most recently an Advisory Business Development Director for Ocean Gate Capital Management, L.P., in San Francisco and Boston, from 2006 to 2009.
Ms. Klein was a founding member and director of California BanCorp (Nasdaq: CALB) and California Bank of Commerce and has been serving on the board since 2007. Following the 2024 merger with Southern California Bancorp (Nasdaq: BCAL) and Bank of Southern California, N.A., Ms. Klein remains an active board member, chairing the Audit and Risk Committee of the Company and Bank. She is one of the Company’s Board-designated “audit committee financial experts." Ms. Klein offers the Board a profound understanding of finance, financial markets, risk management, regulatory requirements, and business development, drawn from over 35 years of experience in both investment and community banking. Her distinguished career includes serving as a senior executive at a leading global investment bank and as a founding Director of a community bank which has successfully completed two mergers.
Ms. Klein strives to give back to her community using her financial and development expertise in chairing and serving on numerous philanthropic and higher education boards and foundations.
Ms. Klein has a Bachelor of Arts degree with honors and distinction in Economics from Stanford University and a Master’s in Business Administration and a Juris Doctor degree from University of California, Los Angeles.
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Dr. Machado practiced Oral and Maxillofacial Surgery in San Diego for over 30 years from 1990-2021. Dr. Machado also served as Chairman of the Division of Maxillofacial Surgery at both Rady Children’s Hospital (2005-2020) and Scripps Mercy Hospital (2000-2021) and is a Fellow of the Royal College of Surgeons of Edinburgh. He is the owner of Lester Machado Fine Art (2018-present) and a partner in Gribardo Vineyards (2017-present), farming wine grapes in Northern California.
Dr. Machado currently serves as a Trustee of the San Diego Museum of Art and previously served as Director for the San Diego Dental Society, San Diego Dental Foundation, Coming Together Foundation, and the Climate Action Campaign.
Dr. Lester Machado is a founding director of the Company and the Bank and has been serving on the Board since 2001. Dr. Machado’s extensive operational and business experience, as well as his passion for diversity and equality, make him a valuable contributor to the Board.
He received his bachelor’s degree from the University of California, Davis; his DDS degree from University of the Pacific; and his MD degree from Hahnemann University.
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| Richard Martin | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mr. Martin is the Founder and President of R. Martin & Associates, a Certified Public Accounting firm providing business consulting, tax, and accounting services to clients in both the public and private sectors since 2003. From 1995 to 2000 and 2001 to 2003, he served as Senior Manager at PricewaterhouseCoopers, LLP. Prior to that, he worked at KPMG LLP for four years, serving as a Supervising Senior Tax Specialist (1990-1994).
Mr. Martin has been a director of the Company and the Bank since 2023.
Mr. Martin’s substantial consulting and accounting experience in both the public and private sectors lends considerable strength to the Board. He is one of the Company’s Board-designated “audit committee financial experts.”
Mr. Martin currently serves on the Board of Directors for Glendale Memorial Hospital-Dignity Health, City of Burbank Treasurer’s Oversight Committee, and the foundation board for Village Christian Schools. Mr. Martin previously served on the Board of Directors, Audit Committee, Assets and Liability Committee and Nominating Committee for Americas United Bank (2006-2018); and the Board of Directors and Audit Committees for several not-for-profit organizations, including the Burbank YMCA and Glendale Community College’s Advisory Board for the Accounting department. He is also a member of several professional organizations including the American Institute of Certified Public Accountants, the California Society of Certified Public Accountants and Latino Deal Makers.
Mr. Martin received his bachelor’s degree from California State University, Northridge, and attended Golden Gate University for a master’s degree in taxation. He is a Certified Public Accountant (active) in the State of California.
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Frank L. Muller
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Mr. Muller is the owner of M Three Ranches, LLC in Woodland, California, a farming and farming consulting business, since January 2020. He was previously the co-owner, President and Chief Financial Officer of Muller Ranch, LLC, a farming and farming consulting business, from 1979 to December 2019. Mr. Muller has served on the board of directors for Pacific Coast Producer, an agricultural canning and packaging cooperative, since 1990, including as chairman for the past 15 years. He previously served on the board of directors for the California Department of Food and Agriculture during 2018 and 2019 and, previously, the board of directors of the Federal Crop Insurance Corporation. Mr. Muller’s familiarity with the Northern Central Valley region of California and the agricultural industry bring valuable insights to our Board.
Mr. Muller has been serving as a member of the board of California BanCorp (Nasdaq: CALB) and California Bank of Commerce since 2020. Following the 2024 merger with Southern California Bancorp (Nasdaq: BCAL) and Bank of Southern California, N.A., he remains an active board member.
He is an active community volunteer with the Yolo County 4-H and Yolo Arts.
Mr. Muller has a Bachelor of Science in Agriculture and Managerial Economics from U.C. Davis.
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2025 | Annual Proxy Statement
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Mr. Rainer is the Chairman of the Board and Executive Chairman for California BanCorp (Nasdaq: BCAL) and California Bank of Commerce, N.A. Prior to the merger with California BanCorp (Nasdaq: CALB) and California Bank of Commerce, Mr. Rainer served as the Chairman and Chief Executive Officer of Southern California Bancorp and Bank of Southern California, N.A since September 2022. He previously served as the Executive Chairman from November 2020 and the Executive Chairman, President, and Chief Executive Officer from July 2021 to April 2022.
A proven leader in growing community banks, Mr. Rainer served as a Founder, Chairman and Chief Executive Officer of CU Bancorp (Nasdaq: CUNB) and its wholly owned subsidiary California United Bank (2005-2017). Prior to that, he spent three years as Executive Vice President of Commercial Banking for the Western US at US Bank (NYSE: USB) (2001-2004).
Mr. Rainer served two three-year terms on the Board of Directors of the Federal Reserve Bank of San Francisco, Los Angeles Branch (2011-2016). He is a member of the Price Board of Councilors at the USC Price School of Public Policy and former Director of InBank (2019-2020). He was recognized as an Ernst & Young Regional Entrepreneur of the Year winner in 2008.
Involved in the community, Mr. Rainer previously served on the board of directors for the Boys and Girls Club of the West Valley, Inner City Arts, Junior Achievement, and the LA Urban League.
Mr. Rainer received his bachelor’s degree from California State University, Northridge, and his Master of Business Administration from the University of Southern California.
Mr. Rainer’s extensive experience as an executive managing banks and bank holding companies and his proficiency in corporate strategy make him a valuable member of the Board.
Board of Directors
Corporate Governance Principles and Board Matters
Our Board believes that sound governance policies and practices provide an important framework to assist it in fulfilling its duties to our shareholders. Our Board has adopted a number of policies and practices under which it has operated with concepts based on the suggestions of various authorities in corporate governance and the requirements under applicable Nasdaq rules. Our Board members believe these policies and practices are essential to the performance of the Board’s oversight responsibilities and the maintenance of our integrity in the marketplace. The policies and practices include, among others, the following:
Principles of Business Conduct and Ethics Policy
. We have adopted a Principles of Business Conduct and Ethics Policy (“Code of Conduct”) applicable to our directors, officers and employees. Our Code of Conduct provides fundamental ethical principles to which these individuals are expected to adhere. Our Code of Conduct operates as a tool to help our directors, officers, and employees understand and adhere to the high ethical standards required for employment by, or association with us. Our Code of Conduct constitutes our “code of ethics” within the meaning of Section 406 of the Sarbanes-Oxley Act and is our “code of conduct” for purposes of satisfying Nasdaq’s listing standards.
Our Code of Conduct is available on our website at https://ir.californiabankofcommerce.com/governance/governance-documents. We will disclose any amendment to the Code of Conduct and any waivers of the requirements of our Code of Conduct that may be granted to our executive officers, including our principal executive officer, principal financial officer, principal accounting officer or persons performing similar functions on our website.
Related Party Transaction Policy
. Our Board has adopted a Related Party Transaction Policy, which provides that subject to certain limited exceptions, we will not enter into or consummate a related party transaction unless our CNG Committee determines it to be fair to the Company and on the same basis as would apply if the transaction did not involve a related party. A “related party transaction” is a transaction between the Company or any of its subsidiaries and any executive officer, director or owner of more than 5% of the outstanding shares of our common stock or persons related to them. Our Related Party Transaction Policy is described in more detail below under “Certain Relationship And Related Transactions, and Director Independence — Policies and Procedures for Approval of Related Person Transactions.”
Board Leadership Structure.
Our Board does not have a policy regarding the separation of the roles of the Chairman of the Board and Chief Executive Officer positions because our Board believes it is in the best interests of the Company to have the flexibility to select the persons holding those positions based on the business and governance needs and the membership of our Board. Our Board decided to separate the positions of Chairman and Chief Executive Officer because our Board believes that doing so provides the appropriate leadership structure for us at this time, particularly since the separation of those two positions enables our Chief Executive Officer to focus on running the Bank’s daily operations and executing the Board’s strategic plan, while the Executive Chair primarily focuses on governance, strategy and high-level oversight.
Since the office of Chairman is not held by an independent director, we have appointed Stephen Cortese, an independent director, to serve as Lead Director to ensure strong independent board oversight. Our Lead Director (i) presides at all meetings of the Board at which the Chairman is not present, including executive sessions of the independent directors; (ii) has the authority to call meetings
of the independent directors; (iii) serves as a liaison between the Chairman and the independent directors; (iv) ensures that matters of concern or interest of the independent directors are appropriately scheduled for discussion at Board meetings; (v) has the authority to retain outside advisors and consultants who report directly to the Board on Board-wide issues; (vi) serves as a liaison for consultation and direct communication with shareholders, as appropriate; and (vii) performs such other duties, and exercises such powers, from time to time as prescribed by our Board.
Director Independence
. Our Board has adopted corporate governance guidelines and principles requiring, among other things, that a majority of the Board be composed of directors meeting the independence requirements established by Nasdaq’s listing standards and applicable SEC rules. These guidelines and our Board’s determination regarding director independence are described below under “Certain Relationships And Related Transactions, and Director Independence — Director Independence.”
Stock Ownership Guidelines.
The Company’s Corporate Governance Policy sets forth the Board’s stock ownership guidelines. Under the policy and time periods stated therein, our Executive Chair and Chief Executive Officer are expected to own Company common stock having a value equal to at least three times base salary and the other executive officers are expected to own Company common stock having a value equal to at least one times base salary. Non-employee directors are expected to own Company common stock having a value equal to at least two times their annual cash retainer. New executive officers will be expected to meet the applicable threshold within three years of their appointment, and new non-employee directors will be expected to meet the threshold within five years of their election or appointment.
Clawback Policy
. Our Board has adopted a Clawback Policy. Under that policy, if any of our executive officers or employees receive incentive compensation as a result of our achievement of financial results measured on the basis of consolidated financial statements that are required to be restated, we generally will be obligated to recoup from those executive officers or employees, the amount by which the incentive compensation they had received based on those consolidated financial statements or the satisfaction of those metrics exceeds the incentive compensation they would have received had such incentive compensation been determined on the basis of the restated consolidated financial statements or revised metric results (“excess compensation”). The policy provides for the recoupment of excessive compensation paid to or received by any executive officer or employee during the three years immediately preceding the accounting restatement. The policy further provides that we may seek recovery of any gain realized on the vesting, exercise, settlement, sale, transfer or other disposition of any equity-based awards.
The Clawback Policy is intended to comply with Section 10D of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), Rule 10-D-1 of the Exchange Act, Nasdaq Listing Rule 5608 and other regulations, rules and guidance of the SEC. The description of the Clawback Policy above is qualified in its entirety by the text of the Clawback Policy, which can be found as Exhibit 97.1 to our Annual Report on Form 10-K for the year ended December 31, 2024.
Insider Trading Policies and Procedures
. We maintain a Policy Governing Insider Trading and Tipping governing the purchase, sale, and other dispositions of Company securities that are applicable to all directors, executive officers and employees.
We believe that the Policy Governing Insider Trading and Tipping and the Code of Conduct are reasonably designed to promote compliance with insider trading laws, rules and regulations and the listing standards of the Nasdaq Stock Market.
The Company is not covered by the Policy Governing Insider Trading and Tipping, but the Company aims to comply with laws applicable to a transaction of our securities, including laws regarding insider trading. A copy of
the Policy Governing Insider Trading and Tipping can be found as Exhibit 19.1 to our Annual Report on Form 10-K for the year ended December 31, 2024.
Anti-Hedging Policy
. Our Anti-Hedging Policy prohibits our directors and executive officers from hedging the economic interest in Company securities that they own and from engaging in short sales or speculative transactions with respect to our stock. Our Policy Governing Insider Trading and Tipping allows a covered person to seek approval from our Chief Legal Officer to pledge shares of California BanCorp stock for a specific loan. As of the date of this proxy statement, to the best of the Company’s knowledge, none of our directors or executive officers have outstanding pledges with respect to any Company stock.
The Board’s Role in Risk Oversight
The Board’s responsibilities in overseeing our management and business include oversight of our key risk and management processes and controls. Management, in turn, is responsible for the day-to-day management of risk and implementation of appropriate risk management controls and procedures.
New products and services, third-party risk management and cybersecurity are critical sources of operational risk that financial institutions are expected to address in the current environment. The Board and its sub-committees (including through various management committees) oversee our consolidated enterprise risk management program that monitors the adequacy of policies, procedures, tolerance levels, risk measurement systems, monitoring processes, management information systems and internal controls.
Although risk oversight permeates many elements of the work of the full Board and its committees, the Audit and Risk Committee (“ARC Committee”) is responsible for overseeing any other significant risk management processes. The ARC Committee oversees these risk management processes, periodically reporting its findings and making policy and other recommendations to the full Board.
Regular meetings of the Company’s Board of Directors were held twice a quarter during 2024, with additional, special meetings held as needed. During 2024, the Company’s Board of Directors held a total of twenty two (22) meetings. Separate sessions of independent directors were held regularly or when determined by the independent directors to be necessary. Each director attended at least 75% of the full Board meetings and the meetings of the Board committees on which they served during their term of office as a director in 2024. We encourage our directors to attend our Annual Meeting of Shareholders. Eight out of our nine then-current directors attended our 2024 Annual Meeting of Shareholders.
Committees of our Board of Directors
Our Board has two standing committees: an Audit and Risk Committee, and a Compensation, Nominating and Governance Committee. The Board has adopted a written charter for each of those committees, and copies of those charters are available on our website at https://ir.californiabankofcommerce.com/governance/governance-documents. In addition, from time to time, our Board may establish special committees to address specific issues when necessary.
The Audit and Risk Committee.
Our Board has established a standing ARC Committee, the current members of which are Rochelle G. Klein, its Chair; Andrew J. Armanino, Jr.; Kevin J. Cullen; Dr. Lester Machado; and Richard Martin. Our Board also has determined that Ms. Klein, and Messrs.
Armanino, Cullen, and Martin meet the definition of “audit committee financial expert” adopted by the SEC and satisfy the financial sophistication requirements of applicable rules of the Nasdaq Stock Market.
The ARC Committee’s responsibilities include:
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Overseeing our financial reporting, including reviewing and discussing accounting and reporting issues, results of independent audits, the integrity of our consolidated financial statements, and our systems of internal controls;
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Overseeing our internal audit process, including determining the scope and scheduling of audit activities; approving the scope of audit plans; and determining the independence, qualifications and performance of our independent auditors and internal audit function;
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Monitoring the open communication among the independent auditor, management, the internal audit function, and the Board;
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Overseeing our significant risk management activities, including information security and cybersecurity;
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Reviewing and assessing the adequacy of its formal written charter on an annual basis; and
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Overseeing such other matters that the Board may delegate to the committee.
The ARC Committee met twelve (12) times during 2024.
The Compensation, Nominating and Governance Committee.
Our Board has established a standing CNG Committee, the current members of which are Kevin J. Cullen, its Chair; Andrew J. Armanino, Jr.; Stephen A. Cortese; Dr. Lester Machado; Richard Martin; and David Volk.
The CNG Committee’s responsibilities include:
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Reviewing and approving the compensation plans, policies and programs for our Executive Chairman, Chief Executive Officer and other executive officers;
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Developing, reviewing and making recommendations to the Board with respect to the adoption or revision of cash and equity incentive plans, approving individual grants or awards thereunder, and reporting to the Board regarding the terms of such individual grants or awards;
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Retaining, overseeing, and terminating outside counsel or other experts or consultants, as it deems appropriate, and approving the fees and other retention terms for such person(s);
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Reviewing and discussing with our management the narrative discussion and tables regarding executive officer and director compensation to be included in our annual proxy statement, in accordance with applicable laws, rules and regulations;
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Producing and approving an annual report on executive compensation for inclusion in our annual proxy statement, in accordance with applicable laws, rules and regulations;
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Making recommendations to our Board regarding the type and amount of compensation paid or awarded to members of our Board;
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Developing and recommending policies to our Board regarding the director nomination process;
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Identifying and recommending to the Board candidates for election as directors;
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Recommending to the Board specific selection qualifications and criteria for Board membership;
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Evaluating the independence of our directors and recommending to the Board our directors’ committee assignments;
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Developing and recommending, for the Board’s approval, corporate governance principles and policies;
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Reviewing and assessing the adequacy of our Code of Conduct, interpreting non-audit related portions of the Code of Conduct, and making final decisions concerning disciplinary actions relating to those portions of the Code of Conduct;
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Reviewing and making recommendations to our Board concerning our management succession plans;
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Reporting to the Board its annual review of the performance of the Board and its committees, as applicable;
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Annually reviewing and assessing the adequacy of its formal written charter;
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Delegating all or any portions of its duties and responsibilities to a subcommittee of the CNG Committee as it deems necessary or appropriate; and
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Overseeing any other matters that our Board specifically delegates to the CNG Committee.
The CNG Committee met thirteen (13) times during 2024.
Selection and Nomination of Candidates for Election to the Board of Directors
Our Board has delegated to the CNG Committee the responsibility for developing the specific qualifications and criteria for prospective director candidates as it deems necessary or advisable. The CNG Committee is also charged with recommending to our Board specific candidates for election as directors. The CNG Committee considers nominees recommended by directors, officers, employees, shareholders and others using the same criteria to evaluate all candidates. In identifying prospective director candidates, the CNG Committee may consider all facts and circumstances, including among other things, the specific experience, qualifications, attributes and skills of the prospective director candidate, his or her independence, and our particular needs and the needs of our Board. The CNG Committee is authorized to engage consultants or third-party search firms to assist in identifying and evaluating potential nominees at our expense.
Any shareholder may submit, for consideration and nomination by the CNG Committee, any candidate or candidates for election to the Board at any annual meeting of our shareholders by following the notice procedures and providing the information as required our bylaws. To nominate a candidate for election as a director at an annual meeting of shareholders, our bylaws require a shareholder to provide us with written notice no earlier 120 days and no later than 90 days before the date such annual meeting is to be held. If the current year’s annual meeting is called for a date that is not within 30 days of the anniversary of the previous year’s annual meeting, the notice must be received not later than 10 calendar days following the day on which public announcement of the date of the annual meeting is first made. Our bylaws require that the nominating shareholder’s notice include information regarding the nominating shareholder, including the name and address of the nominating shareholder and the classes and number of shares of our capital stock held and beneficially owned by such nominating shareholder. In addition, the notice must include information regarding the candidate for election as director, including the full name, age and date of birth of each candidate; the business and residence address and telephone numbers of each candidate; the education background and business/occupational experience of each candidate including a list of positions held for at least the preceding five years; the class and number of shares of our capital stock beneficially owned by the candidate; and a signed representation by the candidate that the candidate will timely provide any other information that we reasonably request for the purpose of preparing our disclosures regarding to the solicitation of proxies for the election of directors. If we request, any candidate proposed by a shareholder must complete a director questionnaire that we provide. In addition, if the nominating shareholder intends that the candidate or candidates be included on our universal proxy card under SEC Rule 14a-19, the shareholder must undertake to comply with Rule 14a-19 and the SEC’s other proxy rules and confirm that they have so complied at least 10 days prior to the shareholder meeting, and provide the candidate’s or candidates’ consent(s) to be named in our proxy materials. The name of each candidate for director must be placed in nomination at the annual meeting by a shareholder present in
person and the candidate must be present in person at the meeting for the election of directors. Shareholders are advised to carefully review our bylaws, which contain a description of the information required to be submitted, as well as the advance notice and other requirements that apply to nominations by a shareholder of candidates for election to the Board.
Director Compensation
The CNG Committee evaluates director compensation and recommends to the Board compensation for non-employee directors, and the Board approves the directors’ compensation for each fiscal year. The Company reimburses its directors for reasonable travel, food, accommodation and other business-related expenses incurred in relation to their service on the Board and committees.
The elements of the current compensation program for non-employee directors of the Company and the Bank, which the Board approved effective August 8, 2024, are set forth in the table below, alongside the elements of the program in effect prior to that date. The CNG Committee recommended the current program to the Board after evaluating director compensation paid by other banks comparable in size to the Company following the Merger, which almost doubled the Company’s total assets from less than $2 billion to over $4 billion at December 31, 2024.
Schedule of Current Director Fees
(1) The previous annual retainer was paid in monthly cash compensation of $4,000, totaling $48,000 annually. In addition to cash compensation, each of the non-employee directors was granted a number of restricted shares having a fair market value at grant equal to $36,000 (or pro-rata share of fees, as applicable) with all such shares to be vested on January 3, 2025.
(2) The current annual retainer is payable one-half in cash and one half in equity awards. All other additional compensation elements are payable in cash. Cash compensation is payable in equal monthly installments. Each of the non-employee directors was granted a number of restricted shares having a fair market value at grant equal to $55,000 (or pro-rata shares of fees, as applicable) with all such shares vesting on May 30, 2025.
(3) Equity awards are payable in the form of RSUs that generally fully vest on the one-year anniversary of the grant date, subject to acceleration upon change in control, termination of service due to death or disability or other qualifying termination of service. Equity awards are granted annually, following the Company’s annual meeting.
(4) The Lead Director received an additional monthly cash fee of $2,000, and the Chair of a Board Committee or a Committee of the Board of Directors of the Bank received an additional Chair Fee of $2,000 per month.
The following table sets forth the compensation to each of our directors for services during 2024
o
ther than
Mr. Rainer, our Executive Chairman, and Mr. Shelton, our Chief Executive Officer, who received no additional compensation for their service as a director.
(1)
Restricted shares were granted to non-employee directors for their service provided during 2024 and assumed in connection with the Merger for the New Directors (as defined in FN 2 below). The dollar value of restricted stock units represents the aggregate grant date fair value of awards granted during the applicable fiscal year as computed in accordance with FASB ASC Topic 718, disregarding for this purpose the estimate of forfeitures related to service-based vesting conditions. Stock granted to Retired Directors (as defined in FN 2 below) accelerated in full pursuant to the Merger.
(2)
On July 31, 2024, at the effective time of the Merger, Messrs. Armanino, Cortese, Cullen, and Muller and Ms. Klein were appointed as directors of the Company and Bank (“New Directors”) and Ms. Wolman, and Messrs. Golds, and Varjavand retired as directors of the Company and the Bank (“Retired Directors”).
(3)
Other compensation represents amounts paid to Mr. Di Tomaso pursuant to his employment with the Bank.
(4)
Mr. Farkash resigned from his role as director of the Company and Bank on January 16, 2024.
(5)
Mr. Volk’s Board fees are paid directly to Castle Creek Advisors IV LLC. Mr. Volk’s restricted shares were issued to Castle Creek Advisors IV LLC at vesting.
(6)
Other compensation includes the taxable fringe benefit of bank owned life insurance (“BOLI”) purchased by the Bank with directors as the insured party, whereby the benefit to each director is 100% of the death benefit in excess of the investment in BOLI.
The following table presents: (a) the number of stock awards granted to each non-employee director during 2024 (all of which were in the form of restricted stock units (“RSUs”), the grant date fair values of which are reflected in the table above); (b) the aggregate number of outstanding unvested RSUs held by each non-employee director as of December 31, 2024; and (c) the aggregate number of outstanding options (both vested and unvested) held by each non-employee director at December 31, 2024. The RSUs granted on February 1, 2024 to the non-employee directors vested in full on January 4, 2025.
(1)
On July 31, 2024, at the effective time of the Merger, Messrs. Armanino, Cortese, Cullen, and Muller and Ms. Klein were appointed as directors of the Company and Bank and Ms. Wolman, and Messrs. Golds, and Varjavand retired as directors of the Company and the Bank (“Retired Directors”). Stock granted to the Retired Directors accelerated in full pursuant to the Merger.
(2)
Mr. Farkash resigned from his role as director of the Company and Bank on January 16, 2024.
(3)
Options outstanding are fully vested and exercisable.
Compensation Committee Interlocks and Insider Participation
In 2024, the CNG Committee consisted entirely of five independent directors: Dr. Machado (Chairman), Mr. Golds, Mr. Varjavand, Mr. Volk, and Ms. Wolman. Following the Merger, Dr. Machado and Mr. Volk remained on the CNG Committee, and four additional independent directors were included Mr. Cullen (Chairman), Mr. Armanino, Mr. Cortese, and Mr. Martin. No member of the CNG Committee is a current, or during 2024 was a former, executive officer or employee of the Company or any of its subsidiaries. During 2024, no member of the CNG Committee had a relationship that must be described under the SEC rules relating to disclosure of related person transactions. In 2024, none of our executive officers served on the board of directors or compensation committee of any entity that had one or more of its executive officers serving on our Board or its CNG Committee.
Communications with the Board
Shareholders interested in communicating with members of the Board may do so by writing to the Corporate Secretary at 12265 El Camino Real, Suite 210, San Diego, California, 92130. The Corporate Secretary will review and forward to the appropriate members of the Board copies of all such correspondence that, in the opinion of the Corporate Secretary, deals with the functions of the Board or its committees or that she otherwise determines requires their attention. Concerns relating to accounting, internal controls or auditing matters will be brought promptly to the attention of the Chair of the ARC Committee and will be handled in accordance with procedures established by that committee.
Executive Officers
The Board periodically evaluates the persons who are designated as executive officers of the Company. The Company’s current executive officers are listed below:
The biographies of each of our current executive officers, other than Mr. Rainer and Mr. Shelton, are set forth below. No executive officer has any family relationship, as defined in Item 401 of Regulation S-K, with any other executive officer or any of our current directors. There are no arrangements or understandings between any of the officers and any other person pursuant to which he or she was selected as an officer. Mr. Rainer and Mr. Shelton’s biography can be found under Proposal I - Election of Directors.
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