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Securities and Exchange Commission
Washington, D.C. 20549
RULE 13E-3 TRANSACTION STATEMENT
(Pursuant to Section 13(e) of the Securities Exchange Act of 1934)
[Amendment No. ______]
UNITED BANCORP
(Name of the Issuer)
UNITED BANCORP
(Name of Person(s) Filing Statement)
Common Stock, $2.50 par value, of United Bancorp
(Title of Class of Securities)
909 446 106
(CUSIP Number of Class of Securities)
David R. Ludwig
Farleigh, Wada & Witt, P.C.
600 Bank of America Financial Center
121 S.W. Morrison Street
Portland, Oregon 97204
(503) 228-6044
(Name, address, and telephone number of person authorized
to receive notices and communications on behalf of
person(s) filing statement)
This statement is filed in connection with
(check the appropriate box):
a. _____ The filing of solicitation materials or an information statement
subject to Regulation 14A [17 CFR 240.14a-1 to 240.14b-1],
Regulation 14C [17 CFR 240.14c-1 to 240.14c-101] or Rule 13e-
3(c) [Section 240.13e-(c)] under the Securities Exchange Act of
1934.
b. _____ The filing of a registration statement under the Securities Act
of 1933.
c. _____ A tender offer.
d. __x__ None of the above.
Check the following box if the soliciting material or information statement
referred to in checking box (a) are preliminary copies: _____.
Calculation of Filing Fee
Transaction valuation Amount of Filing Fee
$59,157* $11.83
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_____ Check box if any part of the fee is offset as provided by Rule 0-
11(a)(2) and identify the filing with 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.
Amount Previously Paid: $_________
Form or Registration No.: __________
Filing Party: __________
Date Filed: __________
Notes:
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* 2,191 shares of the Issuer's Common Stock, $2.50 par value, redeemed for
cash consideration of $27 per share.
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INTRODUCTION
This Rule 13E-3 Transaction Statement is being filed by United Bancorp
(the "Corporation") with respect to the class of equity securities of the
Corporation that is subject to a Rule 13e-3 transaction. The Corporation is
submitting to its stockholders a proposal to approve and adopt Articles of
Amendment to its Second Restated Articles of Incorporation providing (a) for a
reduction in the number of authorized shares of the Corporation's common stock,
$2.50 par value (the "Common Stock"), from 5,000,000 shares of Common Stock to
83,334 shares of common stock, $150 par value (the "New Common Stock"), (b) for
a 60 to one reverse stock split of the Corporation's Common Stock, and (c) for
a cash payment in the amount of $27 per share of the currently outstanding
Common Stock in lieu of the issuance of any resulting fractional shares of the
New Common Stock to stockholders who, after the reverse stock split, own less
than one share of the New Common Stock (items (a), (b), and (c) will be
considered one proposal and will be referred to herein as the "Reverse Stock
Split"). The Reverse Stock Split is upon the terms and subject to the
conditions set forth in the Corporation's Proxy Statement for the Corporation's
Special Meeting of Stockholders scheduled to be held on June 26, 1996
(including all annexes and schedules thereto, the "Proxy Statement").
The following Cross Reference Sheet shows the location in the Proxy
Statement, a copy of which is filed as Exhibit (d)(1) hereto and by this
reference expressly incorporated herein, of the information required to be
included in response to the items of this Statement. The responses to the
items of this Statement also incorporate by reference from the Proxy Statement
the information required to be included in response to such items and the
location of such information in the Proxy Statement and are qualified in their
entirety by the provisions of the Proxy Statement.
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CROSS REFERENCE SHEET SHOWING LOCATION
IN PROXY STATEMENT OF INFORMATION
REQUIRED BY ITEMS IN SCHEDULE 13E-3
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SCHEDULE 13E-3 ITEM LOCATION IN PROXY STATEMENT
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1. Issuer and Class of Security Subject
to the Transaction
Item 1(a)........................... Cover Page
Item 1(b)........................... Cover Page, "Introduction - Record
Date; Quorum; Required Vote," "The
Reverse Stock Split - Voting; Voted
Required," and "Market Prices of
Shares of Common Stock; Dividends"
Item 1(c)........................... "Market Prices of Shares of Common
Stock; Dividends"
Item 1(d)........................... "Market Prices of Shares of Common
Stock; Dividends"
Item 1(e)........................... Not applicable
Item 1(f)........................... "Market Prices of Shares of Common
Stock; Dividends" and "Security
Ownership of Certain Beneficial
Owners and Management"
2. Identity and Background
Items 2(a)-(d) and (g).............. "Directors and Executive Officers"
and "Security Ownership of Certain
Beneficial Owners and Management"
Items (e) and (f)................... Not applicable
3. Past Contacts, Transactions or
Negotiations
Item 3(a)(1)........................ Not applicable
Items 3(a)(2) and (b)............... "Special Factors - Background and
Reasons for the Reverse Stock Split"
and "Special Factors -
Recommendations of the Board of
Directors of the Corporation;
Fairness of the Reverse Stock Split"
4. Terms of the Transaction
Items 4(a)-(b)...................... "The Reverse Stock Split - Amendment
of Second Restated Articles of
Incorporation to Effect Reverse Stock
Split" and "The Reverse Stock Split -
Exchange of Shares and Payment in
Lieu of Issuance of Fractional
Shares"
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5. Plans or Proposals of the Issuer or
Affiliate
Items 5(a)-(g)...................... "Special Factors - Plans for the
Corporation after the Reverse Stock
Split" and "Special Factors - Certain
Effects of the Reverse Stock Split"
6. Source and Amounts of Funds or Other
Consideration
Item 6(a)-(c)....................... "Special Factors - Source and Amounts
of Funds for and Expenses of the
Reverse Stock Split"
Items 6(d).......................... Not applicable
7. Purpose(s), Alternatives, Reasons
and Effects
Item 7(a)........................... "Special Factors - Purposes of the
Reverse Stock Split"
Item 7(b)........................... "Special Factors - Recommendations of
the Board of Directors of the
Corporation; Fairness of the Reverse
Stock Split"
Item 7(c)........................... "Special Factors - Background and
Reasons for the Reverse Stock Split"
Item 7(d)........................... "Special Factors - Certain Effects of
the Reverse Stock Split" and "Special
Factors - Certain Federal Income Tax
Consequences"
8. Fairness of the Transaction
Item 8(a)........................... "Special Factors - Recommendations of
the Board of Directors of the
Corporation; Fairness of the Reverse
Stock Split"
Item 8(b)........................... "Special Factors - Recommendations of
the Board of Directors of the
Corporation; Fairness of the Reverse
Stock Split" and "Security Ownership
of Certain Beneficial Owners and
Management"
Item 8(c)........................... "Introduction - Record Date; Quorum;
Vote Required" and "The Reverse Stock
Split - Voting; Vote Required"
Item 8(d)........................... "Special Factors - Interest of
Certain Persons in Reverse Stock
Split; Conflicts of Interest"
Item 8(e)........................... "Special Factors - Background and
Reasons for the Reverse Stock Split"
and "Special Factors -
Recommendations of the Board of
Directors of the Corporation;
Fairness of the Reverse Stock Split"
Item 8(f)........................... Not applicable
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9. Reports, Opinions, Appraisals and
Certain Negotiations
Item 9(a)-(c)....................... "Special Factors - Lack of Reports,
Opinions, and Appraisals," "Special
Factors - Recommendations of the
Board of Directors of the
Corporation; Fairness of the Reverse
Stock Split," and "Security Ownership
of Certain Beneficial Owners and
Management"
10. Interest in Securities of the Issuer
Item 10(a)-(b)...................... "Security Ownership of Certain
Beneficial Owners and Management"
11. Contracts, Arrangements or
Understandings with Respect to the
Issuer's Securities................. "Special Factors - Interest of
Certain Persons in the Reverse Stock
Split; Conflicts of Interest"
12. Present Intention and Recommendation
of Certain Persons with Regard to
the Transaction
Item 12(a)-(b)...................... "Introduction - Record Date; Quorum;
Required Vote," "Special Factors -
Recommendations of the Board of
Directors of the Corporation;
Fairness of the Reverse Stock Split,"
and "The Reverse Stock Split -
Voting; Vote Required"
13. Other Provisions of the Transaction
Item 13(a).......................... "The Reverse Stock Split - Dissenting
Stockholders' Rights"
Items 13(b) and (c)................. Not applicable
14. Financial Information
Item 14(a).......................... "Financial Information"
Item 14(b).......................... Not applicable
15. Persons and Assets Employed,
Retained or Utilized
Items 15(a) and (b)................. "Introduction - Solicitation of
Proxies"
16. Additional Information.............. Proxy Statement in its entirety
17. Material to be Filed as Exhibits.... Separately included herewith
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Item 1. Issuer and Class of Security Subject to the Transaction.
(a) The name of the issuer is United Bancorp, an Oregon corporation, and
the address of its principal executive offices is 555 S.E. Kane Street,
Roseburg, Oregon 97470.
(b) The exact title of the class of equity securities to which this
statement relates is Common Stock, $2.50 par value. The information set forth
under the captions "Introduction - Record Date, Quorum; Required Vote," "The
Reverse Stock Split Voting; Vote Required," and "Market Prices of Shares of
Common Stock; Dividends" of the Proxy Statement is incorporated herein by
reference.
(c) The information set forth under the caption "Market Prices of Shares
of Common Stock; Dividends" of the Proxy Statement is incorporated herein by
reference.
(d) The information set forth under the caption "Market Prices of Shares
of Common Stock; Dividends" of the Proxy Statement is incorporated herein by
reference.
(e) Not applicable.
(f) The information set forth under the captions "Market Prices of Shares
of Common Stock; Dividends" and "Security Ownership of Certain Beneficial
Owners and Management" of the Proxy Statement is incorporated herein by
reference.
Item 2. Identity and Background.
(a)-(d) and (g) This Statement is filed by United Bancorp, an Oregon
corporation, a bank holding corporation, with its principal executive offices
at 555 S.E. Kane Street, Roseburg, Oregon 97470. The information set forth
under the captions "Directors and Executive Officers" and "Security Ownership
of
Certain Beneficial Owners and Management" of the Proxy Statement is
incorporated herein by reference.
(e) and (f) To the best of the Corporation's knowledge, each person
described under the captions "Directors and Executive Officers" and "Security
Ownership of Certain Beneficial Owners and Management" of the Proxy Statement
is a citizen of the United States and during the last five years no such person
has been convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors) and no such person was a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction as a result of which
he was or is subject to a judgment, decree, or final order enjoining future
violations of, or prohibiting activities subject to, federal or state
securities laws or finding any violation of such laws.
Item 3. Past Contracts, Transactions or Negotiations.
(a)(1) Not applicable.
(a)(2) and (b) The information set forth under the captions "Special
Factors - Background and Reasons for the Reverse Stock Split" and "Special
Factors - Recommendations of the Board of Directors; Fairness of the Reverse
Stock Split" of the Proxy Statement is incorporated herein by reference.
Item 4. Terms of the Transaction.
(a)-(b) The information set forth under the captions "The Reverse Stock
Split - Amendment of Second Restated Articles of Incorporation to Effect
Reverse Stock Split" and "The Reverse Stock Split - Exchange of Shares and
Payment in Lieu of Fractional Shares" of the Proxy Statement is incorporated
herein by reference.
1
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Item 5. Plans or Proposals of the Issuer or Affiliate.
(a)-(g) The information set forth under the caption "Special Factors
- - Plans for the Corporation after the Reverse Stock Split" and "Special Factors
- - Certain Effects of the Reverse Stock Split" of the Proxy Statement is
incorporated herein by reference.
Item 6. Source and Amounts of Funds or Other Consideration.
(a)-(c) The information set forth under the caption "Special Factors
- - Source and Amounts of Funds for and Expenses of the Reverse Stock Split" of
the Proxy Statement is incorporated herein by reference.
(d) Not applicable.
Item 7. Purpose(s), Alternatives, Reasons and Effects.
(a) The information set forth under the caption "Special Factors -
Purposes of the Reverse Stock Split" of the Proxy Statement is incorporated
herein by reference.
(b) The information set forth under the captions "Special Factors -
Recommendations of the Board of Directors of the Corporation; Fairness of the
Reverse Stock Split" of the Proxy Statement is incorporated herein by
reference.
(c) The information set forth under the caption "Special Factors -
Background and Reasons for the Reverse Stock Split" of the Proxy Statement is
incorporated herein by reference.
(d) The information set forth under the caption "Special Factors -
Certain Effects of the Reverse Stock Split" and "Special Factors - Certain
Federal Income Tax Consequences" of the Proxy Statement is incorporated herein
by reference.
Item 8. Fairness of the Transaction.
(a) The information set forth under the caption "Special Factors -
Recommendations of the Board of Directors of the Corporation; Fairness of the
Reverse Stock Split" of the Proxy Statement is incorporated herein by
reference.
(b) The information set forth under the captions "Special Factors -
Recommendations of the Board of Directors of the Corporation; Fairness of the
Reverse Stock Split" and "Security Ownership of Certain Beneficial Owners and
Management" of the Proxy Statement is incorporated herein by reference.
(c) The information set forth under the captions "Introduction - Record
Date; Quorum; Vote Required" and "The Reverse Stock Split - Voting; Vote
Required" of the Proxy Statement is incorporated herein by reference.
(d) The information set forth under the caption "Special Factors -
Interest of Certain Persons in Reverse Stock Split; Conflicts of Interest" of
the Proxy Statement is incorporated herein by reference.
(e) The information set forth under the captions "Special Factors -
Background and Reasons for Reverse Stock Split" and "Special Factors -
Recommendations of the Board of Directors of the Corporation; Fairness of the
Reverse Stock Split" of the Proxy Statement is incorporated herein by
reference.
(f) Not applicable.
Item 9. Reports, Opinions, Appraisals and Certain Negotiations.
(a)-(c) The information set forth under the captions "Special Factors -
Lack of Reports, Opinions, and Appraisals," "Special Effects - Recommendations
of the Board of Directors of the Corporation; Fairness of the Reverse
2
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Stock Split," and "Security Ownership of Certain Beneficial Owners and
Management" of the Proxy Statement is incorporated herein by reference.
Item 10. Interest in Securities of the Issuer.
(a)-(b) The information with respect to the ownership of and
transactions in Common Stock set forth under the caption "Security Ownership of
Certain Beneficial Owners and Management" of the Proxy Statement is
incorporated herein by reference.
Item 11. Contracts, Arrangements, or Understandings with Respect to the
Issuer's Securities.
The information set forth under the captions "Special Factors - Interest
of Certain Persons in the Reverse Stock Split; Conflicts of Interest" is
incorporated herein by reference.
Item 12. Present Intention and Recommendation of Certain Persons with Regard
to the Transaction.
(a)-(b) The information set forth under the captions "Introduction -
Record Date; Quorum; Required Vote," "Special Factors - Recommendations of the
Board of Directors of the Corporation; Fairness of the Reverse Stock Split,"
and "The Reverse Stock Split - Voting; Vote Required" of the Proxy Statement is
incorporated herein by reference.
Item 13. Other Provisions of the Transaction.
(a) The information set forth under the caption "The Reverse Stock Split
- - Dissenting Stockholders' Rights" of the Proxy Statement is incorporated
herein by reference.
(b)-(c) Not applicable.
Item 14. Financial Information.
(a) The information set forth under the caption "Financial Information"
of the Proxy Statement is incorporated herein by reference.
(b) Not applicable.
Item 15. Persons and Assets Employed, Retained or Utilized.
(a)-(b) The information set forth under the caption "Introduction -
Solicitation of Proxies" of the Proxy Statement is incorporated herein by
reference.
Item 16. Additional Information.
All of the information set forth in the Proxy Statement is incorporated
herein by reference.
Item 17. Material to be Filed as Exhibits.
(a), (b), (c), and (f) Not applicable.
(d)(1) Proxy Statement of United Bancorp for the Special Meeting of
Stockholders to be held on June 26, 1996.
(d)(2) Proxy Card.
(e) Statement of appraisal rights is incorporated by reference from
Annex B to the Proxy Statement filed as Exhibit (d)(1) hereto.
3
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SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
UNITED BANCORP
REGISTRANT
Date: May 23, 1996 By: /s/ M. John Loosley
-------------------------------------
M. John Loosley, Vice Chairman of the
Board of Directors and President
4
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EXHIBIT INDEX
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EXHIBIT DESCRIPTION PAGE
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(a), (b), (c), Not applicable.
and (f)
(d)(1) Proxy Statement of United Bancorp for the
Special Meeting of Stockholders to be
held on June 26, 1996.
(d)(2) Proxy Card.
(e) Statement of appraisal rights is incorporated
by reference from Annex B to the Proxy
Statement filed as Exhibit (d)(1) hereto.
</TABLE>
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Exhibit (d)(1)
UNITED BANCORP
555 S.E. KANE STREET
ROSEBURG, OREGON 97470
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 26, 1996
To the Stockholders of United Bancorp:
Notice is hereby given that a Special Meeting of Stockholders of United
Bancorp (the "Corporation") will be held at the offices of the Corporation,
555 S.E. Kane Street, Roseburg, Oregon 97470, on Wednesday, June 26, 1996, at
7:00 p.m., local time (the "Special Meeting"), for the following purposes:
1. To consider and vote upon a proposal to approve and adopt
Articles of Amendment to the Corporation's Second Restated Articles
of Incorporation (a) providing for a reduction of the number of
authorized shares of common stock from 5,000,000 shares of common
stock, $2.50 par value (the "Common Stock"), to 83,334 shares of
common stock, $150 par value (such new shares of common stock to
be referred to herein as the "New Common Stock"); (b) for a 60 to
one reverse stock split of the Corporation's Common Stock; and (c)
for a cash payment in the amount of $27 per share of the currently
outstanding Common Stock in lieu of the issuance of any resulting
fractional shares of the New Common Stock to stockholders who,
after the reverse stock split, own less than one share of the New
Common Stock (items (a), (b), and (c) will be considered one
proposal and will be referred to herein as the "Reverse Stock
Split"), all as described more fully in the accompanying Proxy
Statement; and
2. To transact such other business as may properly be
brought before the Special Meeting or any adjournments or
postponements thereof.
Only holders of shares of Common Stock of record at the close of business
on May 17, 1996, are entitled to notice of and to vote at the Special
Meeting. Each share of Common Stock outstanding on such date is entitled to
one vote at the Special Meeting.
If the Reverse Stock Split is approved, the stockholders of the
Corporation who dissent from the proposed Reverse Stock Split and strictly
comply with the requirements of Sections 60.551 to 60.594 of the Oregon
Business Corporation Act will have the right to receive payment in cash of the
fair value of their shares of Common Stock. See "The Reverse Stock Split -
Dissenting Stockholders' Rights" in the accompanying Proxy Statement for a
statement of the rights of dissenting stockholders and a description of the
procedures required to be followed to obtain the fair value of the shares of
Common Stock. A copy of Sections 60.551 to 60.594 of the Oregon Business
Corporation Act is attached as Annex B to the accompanying Proxy Statement.
YOUR VOTE IS IMPORTANT REGARDLESS OF THE NUMBER OF SHARES OF COMMON STOCK
YOU OWN. WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, PLEASE
COMPLETE, SIGN, DATE, AND RETURN THE ENCLOSED PROXY CARD IN THE ENCLOSED
PREPAID ENVELOPE WITHOUT DELAY. ANY SHAREHOLDER PRESENT AT THE SPECIAL MEETING
MAY VOTE PERSONALLY ON EACH MATTER BROUGHT BEFORE THE SPECIAL MEETING AND ANY
PROXY GIVEN BY A STOCKHOLDER MAY BE REVOKED AT ANY TIME BEFORE IT IS EXERCISED.
By Order of the Board of Directors,
/s/ M. John Loosley
M. John Loosley
Vice Chairman of the Board of Directors
and President
Roseburg, Oregon
June 5, 1996
PLEASE DO NOT SEND ANY CERTIFICATES FOR YOUR SHARES AT THIS TIME.
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PROXY STATEMENT
UNITED BANCORP
555 S.E. KANE STREET
ROSEBURG, OREGON 97470
-------------------------
SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 26, 1996
-------------------------
This Proxy Statement is being furnished to the stockholders of United
Bancorp, an Oregon corporation (the "Corporation"), in connection with the
solicitation of proxies by the Board of Directors of the Corporation (the
"Board of Directors") from holders of outstanding shares of the Corporation's
common stock, $2.50 par value (the "Common Stock"), for use at the special
meeting of the stockholders to be held on Wednesday, June 26, 1996, at the
Corporation's offices at 555 S.E. Kane Street, Roseburg, Oregon 97470, and any
adjournments or postponements thereof (the "Special Meeting"). This Proxy
Statement and the attached Notice of Special Meeting of Stockholders and the
Proxy Card are first being mailed to stockholders on or about June 5, 1996.
At the Special Meeting, holders of shares of Common Stock on the
applicable record date will consider and vote upon the proposal by the Board of
Directors to approve and adopt Articles of Amendment to the Corporation's
Second Restated Articles of Incorporation (the "Articles of Amendment")
providing (a) for a reduction of the number of authorized shares of Common
Stock from 5,000,000 shares to 83,334 shares, $150 par value (such new shares
of common stock referred to herein as the "New Common Stock"); (b) for a 60 to
one reverse stock split of the Corporation's Common Stock; and (c) for a cash
payment of $27 per share (the "Cash Consideration") of the currently
outstanding Common Stock in lieu of the issuance of any resulting fractional
shares of the New Common Stock to any stockholders who, after the reverse stock
split owns less than one share of the New Common Stock (the "Fractional
Stockholders")(items (a), (b), and (c) will be considered one proposal and will
be referred to herein as the "Reverse Stock Split").
Pursuant to the Oregon Business Corporation Act, the affirmative vote of
the holders of a majority of the outstanding shares of Common Stock present in
person or by proxy at the Special Meeting is required to approve the proposed
Reverse Stock Split. The officers and directors of the Corporation have
advised the Corporation that they intend to vote their shares, representing
approximately 21 percent of the outstanding shares of Common Stock, in favor of
the approval of the Reverse Stock Split.
NO PERSONS HAVE BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROXY STATEMENT IN
CONNECTION WITH THE SOLICITATION OF PROXIES MADE HEREBY, AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE CORPORATION OR ANY OTHER PERSON.
-------------------------
THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE FAIRNESS OR
MERITS OF SUCH TRANSACTION NOR UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION
CONTAINED IN THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
-------------------------
The date of this Proxy Statement is June 5, 1996.
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TABLE OF CONTENTS
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Page
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SUMMARY 1
INTRODUCTION 3
General 3
The Special Meeting 3
Record Date; Quorum; Required Vote 3
Proxies 4
Solicitation of Proxies 4
SPECIAL FACTORS 4
Purposes of the Reverse Stock Split 4
Background and Reasons for the Reverse Stock Split 5
Recommendations of the Board of Directors of the Corporation; 6
Fairness of the Reverse Stock Split
Interest of Certain Persons in the Reverse Stock Split; Conflicts 8
of Interest
Lack of Reports, Opinions, and Appraisals 8
Plans for the Corporation after the Reverse Stock Split 8
Certain Effects of the Reverse Stock Split 8
Certain Federal Income Tax Consequences 9
Source and Amounts of Funds for and Expenses of the Reverse Stock 10
Split
THE REVERSE STOCK SPLIT 11
Amendment of Second Restated Articles of Incorporation to Effect 11
Reverse Stock Split
Exchange of Shares and Payment in Lieu of Issuance of Fractional 11
Shares
Voting; Vote Required 11
Dissenting Stockholders' Rights 11
MARKET PRICES OF SHARES OF COMMON STOCK; DIVIDENDS 13
DIRECTORS AND EXECUTIVE OFFICERS 13
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 15
INDEPENDENT PUBLIC ACCOUNTANTS 17
FINANCIAL INFORMATION 17
ADDITIONAL INFORMATION 17
INDEX TO FINANCIAL INFORMATION F-1
ANNEXES:
A -- Form of Proposed Articles of Amendment to Second Restated
Articles of Incorporation
B -- Sections 60.551 to 60.594 of the Oregon Business Corporation
Act
</TABLE>
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SUMMARY
The following is a brief summary of certain information contained
elsewhere in this Proxy Statement (the "Proxy Statement"). This summary is not
intended to be a complete description of the matters covered in this Proxy
Statement and is subject to and qualified in its entirety by reference to the
more detailed information contained elsewhere in this Proxy Statement,
including the Annexes hereto and the documents incorporated by reference
herein.
THE SPECIAL MEETING
Time, Date, and Place of Special Meeting.
A special meeting of the stockholders of the Corporation will be held at
7:00 p.m., local time, on Wednesday, June 26, 1996, at the Corporation's
offices at 555 S.E. Kane Street, Roseburg, Oregon 97470 (the "Special
Meeting").
Purpose of the Special Meeting.
The purpose of the Special Meeting is to consider and vote upon a proposal
to approve and adopt the Articles of Amendment to the Corporation's Second
Restated Articles of Incorporation ("Articles of Amendment") providing (a) for
a reduction of the number of authorized shares of Common Stock from 5,000,000
shares, $2.50 par value, to 83,334 shares, $150 par value (the "New Common
Stock"); (b) for a 60 to one reverse stock split of the Corporation's Common
Stock; and (c) for a cash payment of $27 per share (the "Cash Consideration")
of the currently outstanding Common Stock in lieu of the issuance of any
resulting fractional shares of the New Common Stock to any stockholders who,
after the Reverse Stock Split, own less than one share of the New Common Stock
(the "Fractional Stockholders") (items (a), (b), and (c) will be considered one
proposal and referred to herein as the "Reverse Stock Split").
Record Date; Quorum.
The close of business on May 17, 1996 (the "Record Date") has been fixed
as the record date for the determination of those stockholders entitled to
notice of and to vote at the Special Meeting. As of the Record Date, 439,761
shares of Common Stock were outstanding and held of record by 383 holders. The
presence, in person or by proxy, of the holders of majority of the shares of
Common Stock entitled to vote at the Special Meeting is necessary to constitute
a quorum for the transaction of business at the Special Meeting.
Vote Required.
Pursuant to the Oregon Business Corporation Act, the affirmative vote of
the holders of a majority of the outstanding shares of Common Stock present in
person or by proxy at the Special Meeting will be required to approve the
Reverse Stock Split. The officers and directors of the Corporation who own
collectively approximately 21 percent of the outstanding shares of Common
Stock, have indicated that they intend to vote in favor of the approval of the
Reverse Stock Split.
SPECIAL FACTORS
Purposes of the Reverse Stock Split.
The purposes of the Reverse Stock Split are to reduce the number of
stockholders of record of the Corporation to less than 300 in order to permit
it to suspend its obligation to file reports under the Securities Exchange Act
of 1934 (the "Exchange Act"), to relieve the Corporation of the burden and
costs arising from the periodic reporting requirements of the Exchange Act, to
permit the Corporation to focus on its long range business needs of the
customers of its wholly-owned subsidiary, Douglas National Bank, to enhance the
Corporation's operating flexibility, to reduce the cost of servicing
stockholder accounts, and to afford stockholders an opportunity to receive a
fair price for their shares in an otherwise illiquid
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market without such stockholders incurring the attendant costs of sale. See
"Special Factors - Purposes of the Reverse Stock Split."
Reasons for Reverse Stock Split.
The Board of Directors determined to propose the Reverse Stock Split,
because the Board of Directors believes that neither the Corporation nor its
stockholders derive any material benefit from the Corporation's status as a
public company and that the monetary expense and burden to management of
continued compliance with the reporting requirements of the Exchange Act
significantly outweighs any material benefit that may be received by the
Corporation or its stockholders as a result of its status as a public company.
See "Special Factors - Background and Reasons for the Reverse Stock Split."
Recommendations of the Board of Directors; Fairness of the Reverse Stock
Split.
A special committee (the "Special Committee") of four members of the Board
of Directors of the Corporation who are not employees of the Corporation
unanimously determined that, and, on the basis of such determination, the Board
of Directors concluded that the terms of the Reverse Stock Split are fair to,
and in the best interest of, the stockholders. Accordingly, the Board of
Directors, on the basis of the unanimous recommendation of the Special
Committee, has unanimously approved the Reverse Stock Split and recommends a
vote FOR approval of the Reverse Stock Split. See "Special Factors -
Recommendations of the Board of Directors of the Corporation; Fairness of the
Reverse Stock Split."
Certain Effects of the Reverse Stock Split Transaction.
Upon the effectiveness of the Reverse Stock Split, the Fractional
Stockholders of the Corporation will no longer have any continuing interest as
stockholders of the Corporation and the Corporation will no longer file reports
pursuant to the Exchange Act. See "Special Factors - Certain Effects of the
Reverse Stock Split."
Lack of Reports, Opinions, and Appraisals.
The Corporation, the Board of Directors, or the Special Committee did not
receive any report, opinion, or appraisal from an outside party with respect to
the Reverse Stock Split generally or with respect to its fairness. See
"Special Factors - Lack of Reports, Opinions, and Appraisals."
Conflicts of Interest.
The Corporation's Board of Directors consists of ten directors, nine of
whom own in the aggregate 21 percent of the issued and outstanding Common Stock
of the Corporation. The Special Committee of the Board of Directors consists
of four directors, all of whom own in the aggregate 8 percent of the
Corporation's issued and outstanding Common Stock. All of the members of the
Board of Directors, including the members of the Special Committee, voted their
shares in favor of the Reverse Stock Split at the special meetings of the Board
of Directors at which the Board of Directors considered the Reverse Stock
Split. They have also indicated that they will each vote their shares in favor
of the approval of the Reverse Stock Split at the Special Meeting. They will
also continue to be directors of the Corporation upon consummation of the
Reverse Stock Split. See "Special Factors - Interest of Certain Persons in the
Reverse Stock Split; Conflicts of Interest."
THE REVERSE STOCK SPLIT
Terms of Reverse Stock Split.
The Articles of Amendment provide for a reduction of the authorized shares
of Common Stock of the Corporation from 5,000,000 shares of Common Stock, $2.50
par value, to 83,334 shares of New Common Stock, $150 par value. Immediately
upon the filing of the Articles of Amendment with the Secretary of State of the
State of Oregon, every 60 shares of the Corporation's Common Stock issued on
the date of the filing of the Articles of Amendment will be automatically
converted into one share of the Corporation's New Common Stock. The
Corporation will then acquire for cash all resulting
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fractional shares of New Common Stock at a price equal to $27 per share (the
"Cash Consideration") from stockholders who, after the Reverse Stock Split, are
the owners of less than one share of New Common Stock (the "Fractional
Stockholders"). The Corporation will pay for such fractional shares upon the
physical surrender by stockholders of their share certificates pursuant to the
transmittal instructions to be mailed by the Corporation to the stockholders
after the Special Meeting. See "The Reverse Stock Split - Amendment of Second
Restated Articles of Incorporation to Effect Reverse Stock Split" and "The
Reverse Stock Split - Exchange of Shares and Payment in Lieu of Issuance of
Fractional Shares."
Dissenting Stockholders' Rights.
Stockholders are entitled to seek payment in cash of the fair value of
their shares of Common Stock under Sections 60.551 to 60.594 of the Oregon
Business Corporation Act, subject to their satisfaction of the conditions for
dissenters' rights established by Sections 60.551 to 60.594. Sections 60.551
to 60.594 are set forth in full in Annex B hereto. See "The Reverse Stock
Split - Dissenting Stockholders' Rights."
Certain Federal Income Tax Consequences.
Stockholders who receive cash for their fractional shares as a result of
the Reverse Stock Split will recognize gain or loss based on their adjusted
basis in the shares purchased. See "Special Factors - Certain Federal Income
Tax Consequences."
INTRODUCTION
GENERAL
This Proxy Statement is being furnished to holders of the outstanding
shares of Common Stock of the Corporation in connection with the solicitation
of proxies by the Board of Directors of the Corporation (the "Board of
Directors") for use at a Special Meeting of Stockholders of the Corporation to
be held on Wednesday, June 26, 1996, at 7:00 p.m., local time, at the
Corporation's offices at 555 S.E. Kane Street, Roseburg, Oregon 97470,
including any adjournments or postponements thereof.
THE SPECIAL MEETING
At the Special Meeting, holders of shares of Common Stock will consider
and vote upon a proposal to approve and adopt Articles of Amendment to the
Corporation's Second Restated Articles of Incorporation (the "Articles of
Amendment") providing (a) for a reduction in the number of authorized shares of
Common Stock from 5,000,000 shares, $2.50 par value, to 83,334 shares, $150 par
value (the "New Common Stock"), (b) for a 60 to one reverse stock split of the
Corporation's Common Stock, and (c) for a cash payment of $27 per share (the
"Cash Consideration") of currently outstanding Common Stock in lieu of the
issuance of any resulting shares of New Common Stock to stockholders who, after
the reverse stock split, own less than one share of New Common Stock (the
"Fractional Stockholders") (items (a), (b), and (c) are considered one proposal
and will be referred to herein as the "Reverse Stock Split"). The Board of
Directors has unanimously approved the Reverse Stock Split. The Board of
Directors unanimously recommends that the stockholders vote FOR the approval of
the Reverse Stock Split.
RECORD DATE; QUORUM; REQUIRED VOTE
The close of business on May 17, 1996 (the "Record Date") has been fixed
as the record date for determining holders of shares of Common Stock entitled
to vote at the Special Meeting. Each share of Common Stock outstanding on such
date is entitled to one vote at the Special Meeting. As of the Record Date,
439,761 shares of Common Stock were outstanding and held of record by 383
holders. The presence, in person or by proxy, of the holders of a majority of
the outstanding shares of Common Stock entitled to vote at the Special Meeting
is necessary to constitute a quorum for the transaction of business at the
Special Meeting.
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Pursuant to the Oregon Business Corporation Act, the affirmative vote of
holders of a majority of the shares of Common Stock present in person or by
proxy at the Special Meeting is required to approve the Reverse Stock Split.
The officers and directors of the Corporation own collectively approximately 21
percent of the outstanding shares of Common Stock. They have indicated that
they intend to vote in favor of the approval of the Reverse Stock Split at the
Special Meeting.
PROXIES
Shares of Common Stock represented by properly executed proxies received
at or prior to the Special Meeting and which have not been revoked will be
voted in accordance with the instructions indicated thereon. If no
instructions are indicated on a properly executed proxy, such proxies will be
voted FOR the approval of the Reverse Stock Split.
A stockholder who has given a proxy may revoke such proxy at any time
prior to its exercise at the Special Meeting by (i) giving written notice of
revocation to the Secretary of the Corporation, (ii) properly submitting to the
Corporation a duly executed proxy bearing a later date, or (iii) attending the
Special Meeting and voting in person. Attendance at the Special Meeting will
not in and of itself revoke a proxy. All written notices of revocation and
other communications with respect to revocation of proxies should be addressed
as follows: United Bancorp, 555 S.E. Kane Street, Roseburg, Oregon 97470,
Attention: Pete Nilsen, Secretary.
If the Special Meeting is adjourned or postponed for any purpose, at any
subsequent reconvening of the Special Meeting, all proxies will be voted in the
same manner as such proxies would have been voted at the original convening of
the meeting (except for any proxies which have theretofore effectively been
revoked or withdrawn), notwithstanding that they may have been effectively
voted on the same or any other matter at a previous meeting.
STOCKHOLDERS SHOULD NOT SEND ANY STOCK CERTIFICATES WITH THEIR PROXY
CARDS. IF THE REVERSE STOCK SPLIT IS CONSUMMATED, THE PROCEDURE FOR THE
EXCHANGE OF CERTIFICATES REPRESENTING SHARES OF COMMON STOCK WILL BE AS SET
FORTH IN THIS PROXY STATEMENT. SEE "THE REVERSE STOCK SPLIT - EXCHANGE OF
SHARES AND PAYMENT IN LIEU OF ISSUANCE OF FRACTIONAL SHARES."
SOLICITATION OF PROXIES
The cost of solicitation of the stockholders of the Corporation will be
paid by the Corporation. Such cost will include the reimbursement of banks,
brokerage firms, nominees, fiduciaries, and custodians for the expenses of
forwarding solicitation material to beneficial owners of shares. In addition
to the solicitation of proxies by use of mail, the directors, officers, and
employees of the Corporation, may solicit proxies personally or by telephone,
telegraph, or facsimile transmission. Such directors, officers, and employees
will be not be additionally compensated for such solicitation but may be
reimbursed for out-of-pocket expenses incurred in connection therewith.
SPECIAL FACTORS
PURPOSES OF THE REVERSE STOCK SPLIT
The Board of Directors has proposed the Reverse Stock Split for the
following purposes:
1. To reduce the number of stockholders of record of the Corporation
to less than 300 in order to suspend the Corporation's obligations to file
reports under Section 15(d) of the Exchange Act.
2. To relieve the Corporation of the burden and costs arising from
and in connection with the reporting requirements of the Exchange Act and the
rules and regulations of the Securities and Exchange Commission (the "SEC")
promulgated thereunder.
3. To permit the Corporation to focus primarily upon the long range
business needs of the customers of its wholly-owned subsidiary, Douglas
National Bank (the "Bank").
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4. To enhance its operating flexibility.
5. To reduce the cost of servicing stockholder accounts.
6. To afford stockholders an opportunity to receive a fair price for
their shares in an otherwise illiquid market without such stockholders
incurring the attendant costs of sale.
BACKGROUND AND REASONS FOR REVERSE STOCK SPLIT
Background of Reverse Stock Split.
The Corporation is an Oregon corporation organized in 1971. Its principal
continuing business is the coordination of the financial resources of the
consolidated enterprise and the making of investments in and advances to its
subsidiaries to fund portions of their capital and credit requirements. The
business of the Bank is, and is expected for the foreseeable future to continue
to be, the principal source of the Corporation's revenue.
In 1983, the Corporation filed with the Securities and Exchange Commission
("SEC") a Registration Statement on Form S-18 under the Securities Act of 1933
in connection with the offer and sale of certain convertible subordinated
debentures. At that time, it became subject to the reporting requirements of
the Exchange Act and, on April 2, 1984, filed an Annual Report on Form 10-K
with the SEC for the fiscal year ended December 31, 1983, and has filed an
Annual Report on Form 10-K for each fiscal year thereafter. It has not
registered its shares of Common Stock under Section 12(g) of the Exchange Act;
Section 15(d) of the Exchange Act requires that the Corporation file reports
under the Exchange Act.
Since becoming subject to the reporting requirements of the Exchange Act,
the Board of Directors has recognized that the Corporation has developed only a
limited public market for its shares of Common Stock. It also has increasingly
recognized that the Corporation in the foreseeable future will continue to have
only a limited public market for such shares. On the other hand, it has
recognized that the Corporation is nonetheless required to incur substantial
general and administrative costs as a result of its status as a public company
under the Exchange Act and remains subject to the burden and costs arising from
and in connection with the reporting requirements of the Exchange Act. The
Board of Directors, for these reasons, has concluded that neither the
Corporation nor its stockholders derive any material benefit from the
Corporation's status as a public company and that the monetary expense and
burden to management of continued compliance with the reporting requirements
thereunder significantly outweighed any material benefit that the Corporation
or its stockholders may receive from the Corporation's status as a public
company.
On March 26, 1996, and April 23, 1996, the Board of Directors met to
consider the appropriateness and desirability of the Reverse Stock Split and to
establish a fair price for the purchase of the fractional shares of New Common
Stock. The Board of Directors unanimously approved the Reverse Stock Split at
such meetings, including the payment of the amount of $27 per share of Common
Stock in lieu of the issuance of fractional shares of the New Common to
stockholders who, after the Reverse Stock Split, own less than one New Share.
The Board of Directors directed that the Reverse Stock Split be placed on the
agenda for the consideration of the stockholders at the Special Meeting.
Reasons for going private.
Reduction of Reporting Costs.
The Corporation incurs substantial costs in result of its status as a
public company under the Exchange Act. It incurs costs, including legal,
accounting, and printing fees, to prepare Annual Reports on Form 10-K,
Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K. If the
Corporation was not a publicly held company, then it would neither be required
to incur these costs nor would it be required to incur the substantial indirect
costs as a result of, among other things, management time required for the
preparation and review of such filings, the furnishing of information to
stockholders, and the attention to stockholder matters.
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Enhancement of Operating Flexibility.
If the Corporation is no longer required to comply with the reporting
requirements of the Exchange Act, the Corporation would be able to focus
primarily upon the long range business needs of the customers of the Bank. It
would also enhance the Corporation's operating flexibility in the event of
acquisitions by enhancing its ability to leverage assets in order effect such
acquisitions by reducing potential delays, added costs, and risks of derivative
or other litigation.
Little Benefit to Stockholders in Illiquid Market.
The shares of Common Stock are not traded in any established market
and transactions occur infrequently. The Corporation's shares are not listed
on any national securities exchange or quoted in any inter-dealer quotation
system of a registered national securities association (such as NASDAQ). As a
result, the Reverse Stock Split would not only reduce the cost of servicing
stockholder accounts, but at the same time would afford the Fractional
Stockholders an opportunity to receive a fair price for their shares in an
otherwise illiquid market without such stockholders incurring any brokerage
fees.
RECOMMENDATIONS OF THE BOARD OF DIRECTORS; FAIRNESS OF THE REVERSE STOCK SPLIT
General.
The Board of Directors at its meetings on March 26, 1996, and April 23,
1996, considered the fairness of (i) the proposed 60 to one Reverse Stock Split
of the Corporation's Common Stock and (ii) the Cash Consideration equal to $27
per share of Common Stock. The Board of Directors, on the basis of the factors
discussed below and elsewhere in this Proxy Statement concluded that the
Reverse Stock Split (including the Cash Consideration), taken as a whole, is
fair to, and in the best interests of, the unaffiliated stockholders of the
Corporation.
Fairness of the Reverse Stock Split and Cash Consideration.
At a regular meeting of the Board of Directors of the Corporation on March
26, 1996, the Board of Directors preliminarily approved the Reverse Stock
Split. The Board of Directors found that the stockholders derived little
benefit from the Corporation's status as a public company, since the shares of
Common Stock are not listed on any recognized national stock exchange and
transactions in the shares of Common Stock occur infrequently. Accordingly, it
approved the Reverse Stock Split to reduce the number of stockholders of record
to less than 300 in order to suspend the Corporation's obligations to file
reports under Section 15(d) of the Exchange Act, to relieve the Corporation of
the burdens and costs associated with the reporting requirements of the
Exchange Act, to permit the Corporation to focus primarily upon the long range
business needs of the customers of the Bank, to enhance its operational
flexibility, to reduce the cost of servicing stockholder accounts, and to
afford the Fractional Stockholders an opportunity to receive a fair price for
their shares in an otherwise illiquid market without such stockholders
incurring brokerage fees.
At such meeting, the Board of Directors appointed M. John Loosley, David
A. Jackson, William C. Stiles, and Lauren D. Young, members of the Executive
Committee of the Board of Directors and neither present or former employees of
the Corporation, as members of an independent advisory committee of the Board
of Directors (the "Special Committee" or the "Committee"). The Board of
Directors appointed the Special Committee to determine the cash consideration
to be paid to the Fractional Stockholders and to review, evaluate, and make a
recommendation with respect to the fairness of the proposed Reverse Stock Split
and such cash consideration.
At a meeting on April 1, 1996, the Special Committee reviewed and
evaluated the fairness of the proposed Reverse Stock Split. The Special
Committee reiterated that the stockholders derived little benefit from the
Corporation's status as a public company under the Exchange Act, since the
shares are not listed on any recognized stock exchange and market transactions
in the stock occur infrequently. Accordingly, it believed that the Reverse
Stock Split is fair to the Fractional Stockholders for the same reasons that
the Board of Directors approved the Reverse Stock Split at the meeting on March
26, 1996. It also specifically noted that each of the Fractional Stockholders
would have dissenting stockholders' rights under the Oregon Business
Corporation Act.
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The Special Committee considered other alternatives to reduce the number
of stockholders to less than 300. The Special Committee determined that the
Reverse Stock Split is the most expeditious way of changing the Corporation's
status from a reporting company to a privately held, nonreporting company.
The Special Committee also determined the cash consideration to be paid to
the Fractional Stockholders. It concluded that the payment to each Fractional
Stockholder of the cash consideration in the amount of $27 per share of Common
Stock in lieu of the issuance of less than one share of New Common Stock is
fair to the Fractional Stockholders.
The Special Committee considered the historical and current market prices
for the shares of Common Stock. The Corporation's shares of Common Stock do
not trade on any established market. The sales and purchases of them are
infrequent. For these reasons, the Special Committee did not consider this
factor meaningful.
The Special Committee also considered net book, going concern, and
liquidation values. It noted that, on the basis of the December 31, 1995,
audited financial statements of the Corporation, no significant difference
existed between the book value per share of Common Stock and current market
price per share. As a result, the Special Committee believed that the book
value of the Corporation effectively equals the fair value of the Corporation.
The Special Committee also considered going concern and liquidation
values. They rejected these values as less certain and more difficult to
ascertain than the book or market value of the Corporation.
The Special Committee also reviewed other indicia of the value of the
Corporation's Common Stock. It noted that Black & Company, Inc., one of the
Corporation's market makers, advised it that the current market price is $22
and that The Oregonian published information with respect to the price of the
shares of Common Stock in the "less active stock" section of that newspaper.
It also reviewed the historical market prices, book values, and the purchase
prices paid by purchasers during the previous two fiscal years of the
Corporation. Finally, it noted that there have been no contracts,
negotiations, or transactions with respect to a merger, consolidation, or
acquisition; a tender offer; an election of directors; or a sale or other
transfer of a material amount of assets.
The Special Committee also considered the Corporation's business,
prospects, and business strategy and its financial condition, results of
operations, assets, and liabilities. It also considered current industry,
economic, and market conditions.
The Special Committee, in view of the circumstances and the wide variety
of factors considered in connection with the evaluation of the fairness of the
Reverse Stock Split did not find it practicable to assign relative weights to
the factors considered in reaching its determination that the Reverse Stock
Split, taken as a whole, is fair to, and in the best interest of the
stockholders of the Corporation.
The Special Committee determined on the basis of these factors that the
book value per share of Common Stock as of February 29, 1996, equal to $26.46
per share, as opposed to the market price of $22 per share, plus the additional
payment of 54 cents per share to each of the Fractional Stockholders, is fair
to the Fractional Stockholders. The Special Committee, thus, determined and
recommended that the Cash Consideration equal $27 per share.
Recommendations of the Board of Directors.
The Board of Directors unanimously concluded at its meeting on April 23,
1996, that, on the basis of the recommendations of the Special Committee and on
the basis of the factors discussed at its meeting on March 27, 1996, the
Reverse Stock Split and the Cash Consideration of $27 per share of Common Stock
to be paid to the Fractional Stockholders in lieu of the issuance to them of
fractional shares of the New Common Stock is fair to the Corporation and both
the Fractional Stockholders and the remaining stockholders of the Corporation.
For these reasons and the reasons described in "Special Factors - Purposes of
the Reverse Stock Split" and "Special Factors - Background and Reasons for the
Reverse Stock Split" above, the Board of Directors, including all of the
directors who are not employees of the Corporation, unanimously approved the
Reverse Stock Split and recommended that stockholders vote FOR the approval of
the Reverse Stock Split.
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INTEREST OF CERTAIN PERSONS IN THE REVERSE STOCK SPLIT; CONFLICTS OF INTEREST
The Corporation's Board of Directors consist of ten directors, nine of
whom own in the aggregate 21 percent of the Corporation's issued and
outstanding Common Stock. The Special Committee consists of four of the
directors, all of whom own in the aggregate 8 percent of the Corporation's
Common Stock. All of the directors, including the directors serving on the
Special Committee, were present and voted at the meetings of the Board of
Directors held on March 26, 1996, and April 23, 1996. See "Special Factors -
Background and Reasons for Reverse Stock Split." All of the directors have
indicated that they will each vote their shares in favor of the approval of the
Reverse Stock Split at the Special Meeting. They will also continue to be
directors of the Corporation upon consummation of the Reverse Stock Split. The
Board of Directors was aware of these conflicts of interest and concluded that
the Reverse Stock Split is, taken as a whole, fair to the Corporation and its
stockholders.
The directors of the Corporation who are not employees of the Corporation
did not retain an unaffiliated representative to act solely on behalf of
unaffiliated security holders for the purpose of negotiating the terms of the
Reverse Stock Split or for the purpose of preparing a report with respect to
the fairness of the Reverse Stock Split.
LACK OF REPORTS, OPINIONS, AND APPRAISALS
The Corporation, the Board of Directors, and the Special Committee did not
receive any report, opinion, or appraisal from an outside party with respect to
the Reverse Stock Split, including, but not limited to, any report, opinion, or
appraisal with respect to the Cash Consideration or its fairness or the
fairness of the Reverse Stock Split to the Corporation, to any affiliate of the
Corporation, or to any stockholders who are not affiliates of the Corporation.
The Board of Directors, however, appointed the Special Committee to evaluate
the fairness of the Reverse Stock Split (including the Cash Consideration) and
to report its findings and recommendations to the Board of Directors.
PLANS FOR THE CORPORATION AFTER THE REVERSE STOCK SPLIT
Except as indicated in this Proxy Statement, the Corporation does not have
any present plans or proposals which relate to or would result in an
extraordinary corporate transaction, such as a merger, reorganization, or
liquidation, involving the Corporation or any of its subsidiaries; a sale or
transfer of a material amount of assets of the Corporation or any of its
subsidiaries; any change in the present Board of Directors or management of the
Corporation, including, but not limited to, any plan or proposal to change the
number or term of directors, to fill any existing vacancy on the Board of
Directors, or to change any material term of the employment contract of any
executive officer; or any material change in the present dividend rate or
policy or indebtedness or capitalization of the Corporation. Upon consummation
of the Reverse Stock Split, the assets, business, and operations of the
Corporation will be continued substantially as they are currently being
conducted.
CERTAIN EFFECTS OF THE REVERSE STOCK SPLIT
General Effects.
If the Reverse Stock Split is approved by the vote of a majority of the
outstanding shares of Common Stock, the number of authorized shares of Common
Stock will be decreased from 5,000,000 to 83,334. After giving effect to the
Reverse Stock Split, the Corporation will have less than 300 stockholders of
record. The Fractional Stockholders will cease to be stockholders or have any
interest in the equity or future prospects of the Corporation.
Suspension of Reporting Obligations.
The Corporation may suspend its reporting obligations under the Exchange
Act upon notification to the SEC if the Corporation has fewer than 300 record
holders of the shares. The Corporation currently intends to notify the SEC of
the suspension of the reporting obligations as promptly as possible after
filing the Articles of Amendment. Suspension of the reporting obligations
under the Exchange Act will substantially reduce the information required to be
furnished by the Corporation to its stockholders and to the SEC and would be
make certain provisions of the Exchange Act, such as the requirements of Rule
13E-3 under the Exchange Act with respect to "going private" transactions, no
longer applicable to
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the Corporation. Suspension of the reporting obligations will deprive
"affiliates" of the Corporation and persons holding "restricted securities" of
the Corporation of the ability to dispose of such securities pursuant to Rule
144 promulgated under the Securities Act of 1933, as amended.
Effect on Market for Shares.
If the Reverse Stock Split is approved, the market for the shares of New
Common Stock will remain unchanged. Although for public market for the shares
will remain limited, the market makers for the shares, Black & Company, Inc.
and Smith, Barney, Shearson, Inc. will continue to trade such shares over-the-
counter.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The receipt by each Fractional Stockholder of cash in lieu of fractional
shares of New Common Stock pursuant to the Reverse Stock Split will be a
taxable transaction for federal income tax purposes under the Internal Revenue
Code of 1986, as amended (the "Code").
Under Section 302 of the Code, a Fractional Stockholder will recognize
gain or loss upon receiving cash in lieu of fractional shares of New Common
Stock if (i) the Reverse Stock Split results in a "complete redemption" of all
of the Fractional Stockholder's shares of Common Stock, (ii) the receipt of
cash is "substantially disproportionate" with respect to the Fractional
Stockholder, or (iii) the receipt of cash is "not essentially equivalent to a
dividend" with respect to the Fractional Stockholder. These three tests are
applied by taking into account not only shares that a Fractional Stockholder
actually owns, but also shares that a Fractional Stockholder constructively
owns pursuant to Section 318 of the Code, described below.
If any one of these three tests is satisfied, the Fractional Stockholder
will recognize gain or loss equal to the difference between the amount of cash
received by the Fractional Stockholder pursuant to the Reverse Stock Split and
the tax basis in the existing shares of Common Stock held by the Fractional
Stockholder. Provided that the shares of Common Stock constitute a capital
asset in the hands of the Fractional Stockholder, this gain or loss will be
long-term capital gain or loss if the shares of Common Stock are held for more
than one year and will be short-term capital gain or loss if the shares of
Common Stock are held for one year or less.
Pursuant to the constructive ownership rules of Section 318 of the Code, a
stockholder is deemed to constructively own shares owned by certain related
individuals and entities in addition to shares actually owned by the
stockholder. For instance, an individual stockholder is considered to own
shares owned by or for his spouse and his children, grandchildren, and parents
("family attribution"). A stockholder is also considered to own a
proportionate number of shares owned by estates or certain trusts in which the
stockholder has a beneficial interest, by partnerships in which the stockholder
is a partner, and by corporations in which 50 percent or more of the value of
the stock is owned directly or indirectly by or for such stockholder.
Similarly, shares directly or indirectly owned by beneficiaries of estates of
certain trusts, by partners of partnerships and, under certain circumstances,
by stockholders of corporations may be considered owned by these entities
("entity attribution"). A stockholder is also deemed to own shares which the
stockholder has the right to acquire by exercise of an option.
The receipt of cash by a Fractional Stockholder pursuant to the Reverse
Stock Split will result in a "complete redemption" of all of the Fractional
Stockholder's shares of Common Stock, so long as the Fractional Stockholder
does not constructively own any shares of New Common Stock immediately after
the Reverse Stock Split. However, a Fractional Stockholder may qualify for
gain or loss treatment under the "complete redemption" test even though such
Fractional Stockholder constructively owns shares of New Common Stock provided
that (i) the Fractional Stockholder constructively owns shares of New Common
Stock as a result of the family attribution rules (or, in some cases, as a
result of a combination of the family and entity attribution rules), and (ii)
the Fractional Stockholder qualifies for a waiver of the family attribution
rules (such waiver being subject to several conditions, one of which is that
the Fractional Stockholder has no interest in the Corporation immediately after
the Reverse Stock Split (including as an officer, director, or employee), other
than an interest as a creditor).
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It is anticipated that most Fractional Stockholders will qualify for
capital gain or loss treatment as a result of satisfying the "complete
redemption" requirements. However, if the constructive ownership rules prevent
compliance with these requirements, a Fractional Stockholder may nevertheless
qualify for capital gain or loss treatment by satisfying either the
"substantially disproportionate" or the "not essentially equivalent to a
dividend" requirements. In general, the receipt of cash pursuant to the
Reverse Stock Split will be "substantially disproportionate" with respect to
the Fractional Stockholder if the percentage of shares of New Common Stock
constructively owned by the Fractional Stockholder immediately after the
Reverse Stock Split is less than 80 percent of the percentage of Existing
shares of Common Stock actually and constructively owned by the Fractional
Stockholder immediately before the Reverse Stock Split. Alternatively, the
receipt of cash pursuant to the Reverse Stock Split will, in general, be "not
essentially equivalent to a dividend" if the Reverse Stock Split results in a
"meaningful reduction" in the Fractional Stockholder's proportionate interest
in the Corporation.
If none of the three tests described above is satisfied, the Fractional
Stockholder will be treated as having received a taxable dividend in an amount
equal to the entire amount of cash received by the Fractional Stockholder
pursuant to the Reverse Stock Split.
The receipt of shares of New Common Stock in the Reverse Stock Split by
stockholders of the Corporation who are not Fractional Stockholders will be a
non-taxable transaction for federal income tax purposes. Consequently, a
stockholder of the Corporation receiving shares of New Common Stock will not
recognize gain or loss, or dividend income, as a result of the Reverse Stock
Split with respect to the shares of New Common Stock received. In addition,
the basis and holding period of such stockholder's shares of Common Stock will
carry over as the basis and holding period of such stockholder's shares of New
Common Stock.
Various legislative proposals have been introduced in Congress that would
educe the rate of federal income taxation of certain capital gains. Such
legislation, if enacted, might apply only to gain realized on transactions
occurring after a date specified in the legislation. It cannot be predicted
whether any such legislation ultimately will be enacted and, if enacted, what
its effective date will be.
THE FOREGOING IS ONLY A GENERAL DESCRIPTION OF CERTAIN OF THE FEDERAL
INCOME TAX CONSEQUENCES OF THE REVERSE STOCK SPLIT TO THE STOCKHOLDERS WITHOUT
REFERENCE TO THE PARTICULAR FACTS AND CIRCUMSTANCES OF ANY PARTICULAR
STOCKHOLDER. EACH STOCKHOLDER IS URGED TO CONSULT HIS OR HER OWN TAX ADVISOR
TO DETERMINE THE PARTICULAR TAX CONSEQUENCES TO SUCH STOCKHOLDER OF THE REVERSE
STOCK SPLIT (INCLUDING THE APPLICATION AND EFFECT OF STATE AND LOCAL INCOME AND
OTHER TAX LAWS).
SOURCE AND AMOUNTS OF FUNDS FOR AND EXPENSES OF THE REVERSE STOCK SPLIT
Estimated fees and expenses incurred or to be incurred by the Corporation
in connection with the Reverse Stock Split are approximately as follows:
<TABLE>
<CAPTION>
Approximate
Item Amount
- ---- -----------
<S> <C>
Payment of Cash Consideration $ 59,157.00
Legal Fees and Expenses $ 20,000.00
Accounting Fees and Expenses $ 2,500.00
Commission Filing Fees $ 11.83
Printing and Mailing Expenses $ 2,500.00
Proxy Solicitation Fees and Expenses $ 500.00
Miscellaneous Expenses $ 1,000.00
----------
Total $ 85,668.83
</TABLE>
The Corporation has paid or will be responsible for paying all of such
expenses. It will not borrow any part of such funds to pay these expenses.
10
<PAGE> 14
THE REVERSE STOCK SPLIT
AMENDMENT OF SECOND RESTATED ARTICLES OF INCORPORATION AND TO EFFECT THE
REVERSE STOCK SPLIT
Pursuant to the terms of the Articles of Amendment, if approved, the
authorized shares of Common Stock will be reduced from 5,000,000 to 83,334,
each 60 shares of the Corporation's Common Stock then issued will be
automatically converted into one new share of the Corporation's New Common
Stock, and each share of Common Stock owned by a stockholder whose share
ownership would, as a result of the Reverse Stock Split, be reduced to less
than one share of New Common Stock (a "Fractional Stockholder") will be
automatically converted into the right to receive from the Corporation, in lieu
of the issuance of fractional shares of New Common Stock, cash in the amount of
$27 for each share of Common Stock. The form of the Articles of Amendment is
attached as Annex A to this Proxy Statement. If the Reverse Stock Split is
approved by the holders of a majority of the currently issued and outstanding
Common Stock present in person or by proxy at the Special Meeting, the
Corporation expects to file the Articles of Amendment to the Second Restated
Articles of Incorporation with the Secretary of State of the State of Oregon on
June 26, 1996, immediately following the Special Meeting, or as soon as
practicable thereafter (the "Effective Date").
EXCHANGE OF SHARES AND PAYMENT IN LIEU OF ISSUANCE OF FRACTIONAL SHARES
Within 10 days after the Effective Date, the Corporation will mail to the
stockholders a notice of the filing of the Articles of Amendment (the "Notice
of Filing") and a letter of transmittal (the "Letter of Transmittal")
containing instructions with respect to the submission of shares of Common
Stock to the Corporation. Fractional Stockholders will be entitled to receive
the Cash Consideration in lieu of the issuance of fractional shares of New
Common Stock, only by transmitting their stock certificate(s) for their shares
of Common Stock to the Corporation, together with the properly executed and
completed Letter of Transmittal and such evidence of ownership of such shares
as the Corporation may require. All other stockholders will be entitled to
receive certificates for their shares of New Common Stock, also only by
transmitting their stock certificate(s) for their shares of Common Stock to the
Corporation, together with the properly executed and completed Letter of
Transmittal and such evidence of ownership of such shares as the Corporation
may require.
VOTING; VOTE REQUIRED
The proposed Reverse Stock Split must be approved by a vote of not less
than a majority of the shares of Common Stock present in person or by proxy at
the meeting. Each share of Common Stock is entitled to one vote on each matter
submitted to a vote at the Special Meeting. The Board of Directors has been
informed that the executive officers and directors of the Corporation will vote
in favor of the Articles of Amendment. The Reverse Stock Split has not been
structured so as to require the approval of a majority of the unaffiliated
stockholders. There are no contracts, arrangements, understandings, or
relationships in connection with the Reverse Stock Split between the
Corporation (including its officers or its directors) and any other person with
respect to any securities of the Corporation.
THE NOTICE OF FILING AND THE LETTER OF TRANSMITTAL WILL BE TRANSMITTED BY
THE CORPORATION TO STOCKHOLDERS AT A DATE SUBSEQUENT TO THE EFFECTIVE DATE.
STOCKHOLDERS SHOULD NOT SEND IN THEIR CERTIFICATES UNTIL THE NOTICE OF FILING
AND LETTER OF TRANSMITTAL ARE RECEIVED AND SHOULD SURRENDER THEIR CERTIFICATES
ONLY WITH SUCH LETTER OF TRANSMITTAL.
There will be no service charges payable by the remaining stockholders in
connection with the exchange of their certificates or by the Fractional
Stockholders in connection with the payment of cash in lieu of the issuance of
fractional shares of New Common Stock. These costs will be borne by the
Corporation.
DISSENTING STOCKHOLDERS' RIGHTS
Stockholders who do not vote in favor of the approval of the Reverse Stock
Split may have the right to seek payment in cash of the fair value of their
shares of Common Stock by complying with the requirements of Sections 60.551
11
<PAGE> 15
to 60.594 of the Oregon Business Corporation Act (the "OBCA"). Failure of a
stockholder to strictly adhere to the requirements of Sections 60.551 to 60.594
of the OBCA may result in the loss of such stockholder's dissenter's rights.
A stockholder who wishes to assert such stockholder's dissenter's rights
must deliver to the Corporation a written notice before the vote on the Reverse
Stock Split at the Special Meeting to be held on June 26, 1996, of the
stockholder's intent to demand payment for the stockholder's shares of Common
Stock if the Reverse Stock Split is effectuated (the "Notice of Intent to
Demand Payment"). The written Notice of Intent to Demand Payment should be
delivered to United Bancorp, 555 S.E. Kane Street, Roseburg, Oregon 97470,
Attention: Peter Nilsen, Secretary, prior to the Special Meeting. A
dissenting stockholder may not dissent as to less than all shares of Common
Stock beneficially owned by the stockholder. A dissenting stockholder also may
not vote any of such stockholder's shares of Common Stock for the Reverse Stock
Split.
If the stockholders approve the Reverse Stock Split, the Corporation must
then give, within ten days after the approval of the Reverse Stock Split, a
written dissenters' notice (the "Dissenters' Notice") to each stockholder who
delivered to the Corporation a Notice of Intent to Demand Payment in accordance
with the OBCA. The Dissenters' Notice must: (a) state where the payment
demand will be sent and where and when certificates of shares will be
deposited; (b) inform holders of uncertificated shares to what extent transfer
of the shares will be restricted after the payment demand is received; (c)
supply a form for demanding payment that (i) includes the date of the first
announcement of the terms of the proposed corporate action to news media or to
stockholders and (ii) that requires that the person asserting dissenters'
rights certify whether or not the person acquired beneficial ownership of the
shares before that date; (d) set a date by which the Corporation must receive
the payment demand (which date may not be fewer than 30 and no more than 60
days after the date the Dissenters' Notice is delivered); and (e) be
accompanied by a copy of Sections 60.551 to 60.594 of the OBCA.
A stockholder sent a Dissenters' Notice must (a) demand payment, (b)
certify whether the stockholder acquired beneficial ownership of the shares
before the date required to be set forth in the Dissenters' Notice, and (c)
deposit the stockholder's certificates in accordance with the terms of the
Dissenters' Notice. A stockholder who does not demand payment or deposit the
stockholder's certificates where required, each by the date set forth in the
Dissenters' Notice, is not entitled to payment for the stockholder's shares
under Section 60.551 to 60.594 of the OBCA.
As soon as the proposed corporate action is taken or upon receipt of a
payment demand in accordance with the OBCA, the Corporation must pay each
dissenter the amount the Corporation estimates to be the fair value of the
stockholder's shares, plus accrued interest. The payment must be accompanied
by (a) the Corporation's balance sheet as of the end of the fiscal year, ending
not more than 16 months before the date of payment, income statement for that
year, and the latest available interim financial statements, if any; (b) a
statement of the Corporation's estimate of the fair value of the shares; (c) an
explanation of how the interest was calculated; (d) a statement of the
dissenter's rights to demand payment if the dissenter is not satisfied with
such payment; and (e) a copy of Sections 60.551 to 60.594 of the OBCA.
A dissenter may notify the Corporation in writing of the dissenter's own
estimate of the fair value of the dissenter's shares and amount of interest
due, and demand payment of the dissenter's estimate, if the dissenter believes
that the amount paid is less than the fair market value of the dissenter's
shares or believes that the interest due is incorrectly calculated, if the
Corporation fails to make payment within 60 days after the date set for
demanding payment, or if the Corporation, having failed to take the proposed
action, does not return the deposited certificates or release the transfer
restrictions imposed on uncertificated shares within 60 days after the date set
for demanding payment. A dissenter waives the right to demand payment, unless
the dissenter notifies the Corporation of the dissenter's demand in writing
within 30 days after the Corporation made or offered payment for the
dissenter's shares.
If a demand for payment remains unsettled, the Corporation must commence a
proceeding within 60 days after receiving the payment demand and petition the
court to determine the fair value of the shares and accrued interest. If the
Corporation does not commence the proceeding within the 60 day period, it shall
pay each dissenter whose demand remains unsettled the amount demanded.
A vote AGAINST approval of the Reverse Stock Split does not constitute the
written objection required to be filed by a dissenting stockholder. However,
failure by a stockholder to vote AGAINST approval of the Reverse Stock Split
will not constitute a waiver of rights under Sections 60.551 to 60.594 of the
OBCA provided that a written notice has been
12
<PAGE> 16
properly delivered to the Corporation and such stockholder has not voted any of
such stockholder's shares FOR the approval of the Reverse Stock Split.
The foregoing does not purport to be a complete statement of the
provisions of Section 60.551 to 60.594 of the OBCA and is qualified in its
entirety by reference to such sections, which are reproduced in full as Annex B
to this Proxy Statement.
THE PROVISIONS OF SECTION 60.551 TO 60.594 OF THE OBCA ARE COMPLEX AND
TECHNICAL IN NATURE. STOCKHOLDERS DESIRING TO EXERCISE DISSENTERS' RIGHTS MAY
WISH TO CONSULT COUNSEL, SINCE THE FAILURE TO COMPLY STRICTLY WITH THESE
PROVISIONS WILL RESULT IN THE LOSS OF THEIR DISSENTERS' RIGHTS.
MARKET PRICES FOR SHARES OF COMMON STOCK; DIVIDENDS
MARKET FOR COMMON STOCK
The Corporation has only a limited public trading market for its Common
Stock. The Common Stock is traded over-the-counter primarily by Black &
Company, Inc. located in Portland, Oregon, and Smith, Barney, Shearson, Inc.,
located in Roseburg, Oregon. The number of beneficial stockholders of common
stock at December 31, 1995, and 1994 was 383 and 393, respectively. The stock
traded at $19 and $18 per share as of December 31, 1995, and 1994,
respectively.
DIVIDENDS
The Corporation paid a cash dividend of 40 cents per share in 1994 and a
cash dividend of 42 cents per share in 1995. In December 1995, the Corporation
declared a dividend of 44 cents per share, payable on March 31, 1996, for
stockholders of record as of February 29, 1996.
The Bank is statutorily permitted to pay dividends to the Corporation
subject to certain limitations based on earnings and capital. The Corporation
obtained funds from the Bank in order to pay its dividends. At December 31,
1995, the amount of dividends the Bank could declare without approval was
$2,300,000.
DIRECTORS AND EXECUTIVE OFFICERS
The following sets forth information as to each director and executive
officer of the Corporation as of April 30, 1996:
Linda A. Ganim.
Ms. Ganim, age 28, has served as Treasurer since May 1992. Ms. Ganim is a
Certified Public Accountant with banking experience with North Valley Bank
between 1984 and 1986 and with Bank of America between 1987 to 1988, and served
as an accountant at Gordon, Odom and Davis, CPA Inc. from 1989 to 1992. Ms.
Ganim is the Controller of the Bank and Treasurer of the Corporation and its
subsidiaries.
David A. Jackson.
Mr. Jackson, age 59, has been Chairperson of the Corporation's and Bank's
Board of Directors since 1987, and has been a director of the Corporation and
Bank since 1975. Mr. Jackson's principal occupation has been cattle ranching
as president and majority shareholder of Jackson Ranch, Inc., a family-owned
ranching corporation. Mr. Jackson is a member of the Executive, Loan,
Investment and Funds Management, and Sales and Service Committees. He is also
a Trustee of the Corporation's Profit Sharing Plan and Trust.
13
<PAGE> 17
Gary L. Kjensrud.
Mr. Kjensrud, age 53, has been a director of the Corporation since 1982
and director of the Bank since 1981. Mr. Kjensrud has been an officer of the
Bank and Executive Vice President of the Corporation since August 1980, and has
been President and Chief Executive Officer of the Bank since April 1981. Mr.
Kjensrud is a member of the Operations, Loan, Investment and Funds Management,
and Sales and Service Committees. He is President and Director of Douglas
National Bank Insurance Agency, Inc., and serves on its Suitability Review
Committee.
M. John Loosley.
Mr. Loosley, age 68, has been a director of the Corporation and the Bank
since 1973. He has been a Vice Chairperson and President of the Corporation
since March 1986. Mr. Loosley was the principal stockholder and President of
Roseburg Paving Company until 1991, when he transferred control to his
children. He, his wife, and his two children are the sole shareholders of
Beaver State, Inc., a paving company. Mr. Loosley is Chairperson of the
Executive Committee, a member of the Loan, and Investment and Funds Management
Committees, and Chairperson of the Corporation's Profit Sharing Plan and Trust.
Pete Martini.
Mr. Martini, age 52, has been a director of the Corporation since March
23, 1993. Mr. Martini has been the President of Elk River Enterprises, Inc.,
dba American Laminators, since before 1987. American Laminators is engaged in
laminating structured timbers. Mr. Martini is Chairperson of the Corporation's
Audit Committee, and a member of the Insurance and Sales and Service
Committees. He is a Director of Douglas National Bank Insurance Agency.
Clint Newell.
Mr. Newell, age 35, has been a director of the Corporation since 1996. He
is the dealer principal of Clint Newell Motors, Inc. since 1989. He is a
member of the Audit and Sales and Service Committees.
Peter H. Nilsen.
Mr. Nilsen, age 48, has been Executive Secretary of the Corporation since
1986. Mr. Nilsen, a 1972 graduate of the University of Oregon Law School, has
practiced law with the Roseburg law firm of Walton, Nilsen & Johnson, P.C.,
since that time. Mr. Nilsen is also the Executive Secretary of Douglas
National Bank Insurance Agency, Inc.
Brian R. Pargeter.
Mr. Pargeter, age 53, has been a Director of the Corporation since
November 28, 1995. He also serves as a Director of the Bank. Since 1967, Mr.
Pargeter has been with Umpqua Insurance Agency, serving as President and
majority shareholder. Mr. Pargeter is Chairperson of the Insurance Committee,
and a member of the Operations and Audit Committees.
Lance C. Short.
Mr. Short, age 51, has been a director of the Corporation and the Bank
since 1986. He owns Short Building Co., a residential housing company, and has
been in that business since 1971. Mr. Short is a Chairperson of the Operations
Committee and a member of the Loan and of the Investment and Funds Management
Committees, and a director of Douglas National Bank Insurance Agency.
14
<PAGE> 18
William C. Stiles.
Mr. Stiles, age 65, has been a director of the Corporation and the Bank
since December 1979 and Vice President of the Corporation since March 1986.
Mr. Stiles is a professional engineer and the majority owner and president of
Bill Stiles and Associates, a real estate brokerage firm in Roseburg, Oregon.
Mr. Stiles is Chairperson of the Loan and of the Investment and Funds
Management Committees, and a member of the Executive Committee. He is a
Chairperson of the Douglas National Bank Insurance Agency's Suitability Review
Committee, and he is a Trustee of the Profit Sharing Plan and Trust.
Rickar D. Watkins.
Rickar D. Watkins, age 50, has been Director of the Corporation and the
Bank since March of 1989. Mr. Watkins is President and owner of Rick's Medical
Supply since 1978. Mr. Watkins is Chairperson of the Sales and Service
Committee and a member of the Loan, Investment and Funds Management, and
Insurance Committees.
Lauren D. Young.
Mr. Young, age 62, has been a director of the Corporation and the Bank
since 1986. He has owned and operated Lauren Young Tire Center (Les Schwab)
since 1969. He is a member of the Executive, Sales and Service, and Audit
Committees, and is a Trustee of the Profit Sharing Plan and Trust.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of April 30, 1996,
with respect to beneficial ownership of the Corporation's Common Stock by each
person who is known by the Corporation to own beneficially more than five
percent of the Common Stock, each of the Corporation's directors, each
executive officer, and all directors and executive officers as a group. Each
named beneficial owner has sole voting and investment power with respect to the
shares listed, unless otherwise indicated.
15
<PAGE> 19
<TABLE>
<CAPTION>
Amount of Percent
Name of Beneficial Owner Address Ownership of Class
- ------------------------ ------- --------- --------
<S> <C> <C> <C>
Employee Stock Ownership Plan P.O. Box 1007 71,076 16.16%
and Trust (M. John Loosley, Roseburg, OR 97470
Lance C. Short, Lauren D.
Young, David A. Jackson, and
William C. Stiles Trustees)
Gary L. Kjensrud P.O. Box 308 44,013* 10.01%*
Winchester, OR 97495
David A. Jackson P.O. Box 606 22,813 5.19%
Winchester, OR 97495
M. John Loosley 245 Carriage Lane 8,279 1.88%
Roseburg, OR 97470
Lance C. Short P.O. Box 846 7,186 1.63%
Winchester, OR 97495
William C. Stiles P.O. Box 1488 2,350 .53%
Roseburg, OR 97470
Lauren D. Young 820 Old Garden Valley 1,438 .33%
Road
Roseburg, OR 97470
Rickar D. Watkins 1425 N.E. Hillview 2,025 .46%
Roseburg, OR 97470
Pete Martini P.O. Box 297 2,232 .51%
Drain, OR 97435
Brian R. Pargeter 771 Lower Garden 2,569 .58%
Valley Road
Roseburg, OR 97470
Clint Newell 1481 N.E. Stephens 0 0.00%
Roseburg, OR 97470
Linda A. Ganim 315 Strawberry 0 0.00%
Mountain Road
Roseburg, OR 97470
Peter H. Nilsen 435 S.E. Kane Street 0 0.00%
P.O. Box 1265
Roseburg, OR 97470
All directors and executive 92,905* 21.13%*
officers as a group (12
persons)
</TABLE>
* Does not include 10,260 shares of Common Stock allocated to Mr.
Kjensrud's account under the Employee Stock Ownership.
16
<PAGE> 20
TRANSACTIONS IN SHARES OF COMMON STOCK
The Employee Stock Option Plan purchased 1,100 shares of Common Stock on
March 23, 1996, for $23 per share and 243 shares on April 30, 1996, at $22 per
share from unaffiliated stockholders. The Corporation, the Employee Stock
Ownership Plan, the directors, and the executive officers did not effect any
other transactions in the Corporation's shares of Common Stock during the past
sixty days.
INDEPENDENT PUBLIC ACCOUNTANTS
The consolidated financial statements and schedules included in the
Corporation's Annual Report on Form 10-K for the fiscal year ended December 31,
1995, incorporated by reference in this Proxy Statement, have been audited by
Coopers & Lybrand, LLP, independent public accountants, as stated in their
reports with respect thereto. It is not expected that representatives of
Coopers & Lybrand, LLP, the accountants for the fiscal year ended December 31,
1995, or of Knight, Vale & Gregory, Inc., P.S., the accountants for the current
fiscal year, will be present at the Special Meeting.
FINANCIAL INFORMATION
The Corporation hereby incorporates by reference the Consolidated Balance
Sheets as of December 31, 1995, and 1994, the Consolidated Statements of Income
for the years ended December 31, 1995, 1994, and 1993, the Consolidated
Statements of Cash Flows for the years ended December 31, 1995, 1994, and 1993,
the Statements of Stockholders' Equity for the years ended December 31, 1995,
1994, and 1993, the Notes to Consolidated Financial Statements, and the Report
of Independent Certified Public Accountants related to the Consolidated
Financial Statements and Notes Thereto dated January 23, 1996, contained in the
1995 Annual Report to Stockholders mailed to the stockholders on or about April
1, 1996. The Corporation also incorporates by reference the financial
information contained in Management's Discussion and Analysis of Financial
Condition and Results of Operations contained in Part II, Item 7 of the Annual
Report on Form 10-K for the fiscal years ended December 31, 1995 (the "1995
10-K"), and the financial information contained in Part I, Item 1, of the
Corporation's Quarterly Report on Form 10-Q for the quarter ended March 31,
1996 (the "March 1996 10-Q"), and Management's Discussion and Analysis of
Financial Condition and Results of Operations contained in Part 1, Item 2, of
the March 1996 10-Q, which financial information is attached to this Proxy
Statement.
ADDITIONAL INFORMATION
The Corporation is subject to the informational requirements of the
Exchange Act and in accordance therewith files reports and other information
with the SEC. Such reports and other information can be inspected and copied
at the public reference facilities of the SEC at Room 1024, 450 Fifth Street,
N.W., Judiciary Plaza, Washington, D.C. 20549 and at the regional offices of
the SEC located at 7 World Trade Center, 13th Floor, Suite 1300, New York, New
York 10048 and Suite 1400, Citicorp Center, 14th Floor, 500 West Madison
Street, Chicago, Illinois 60661. Copies of such materials can also be obtained
at prescribed rates by writing to the Public Reference Section of the SEC at
450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549.
This Proxy Statement includes information required by the SEC to be
disclosed pursuant to Rule 13e-3 under the Exchange Act, which governs so-
called "going private" transactions by certain issuers or their affiliates. In
accordance with that rule, the Corporation has filed with the SEC, under the
Exchange Act, a Schedule 13E-3 with respect to the Reverse Stock Split. This
Proxy Statement does not contain all of the information set forth in the
Schedule 13E-3, parts of which are omitted in accordance with the regulations
of the SEC. The Schedule 13E-3, and any amendments thereto, including exhibits
filed as a part thereof, will be available for inspection and copying at the
offices of the SEC as set forth above.
By Order of the Board of Directors
_____________________________________
M. John Loosley, Vice Chairman of the
Board of Directors and President
17
<PAGE> 21
INDEX TO FINANCIAL INFORMATION
Description Page
- ----------- ----
[S] [C]
Management's Discussion and Analysis of Financial Condition and F-2
Results of Operations (Item 7 of Part II of the 1995 10-K)
Unaudited Financial Statements (Item 1 of Part I of the March 1996
10-Q)
Consolidated Balance Sheets at March 31, 1996, and December F-6
31, 1995
Consolidated Statements of Income for the three months ended F-8
March 31, 1996, and March 31, 1995
Consolidated Statements of Changes in Cash Flows for the three F-9
months ended March 31, 1996, and March 31, 1995
Computation of Earnings Per Share for the three months ended F-11
March 31, 1996, and March 31, 1995
Notes to Consolidated Financial Statements, March 31, 1996 F-12
Management's Discussion and Analysis of Financial Condition and F-13
Results of Operations (Item 2 of Part I of the March 1996 10-Q)
F-1
<PAGE> 22
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
- --------------------------------------------------------------------------
OPERATION
- ---------
RESULTS OF OPERATIONS
- ---------------------
1995 COMPARED TO 1994
- ---------------------
The Company had improved financial results in 1995 with net income up 95
percent from 1994. The increase in net income resulted in a return on average
assets of 1.19% and a return on average equity of 10.95%, up from .59% and
5.94% respectively in comparison to 1994. Various factors influenced the
increase in net income. Net interest income was up 5 percent or $187,000,
noninterest income was up 14 percent or $105,000, and noninterest expense was
down 13 percent or $558,000 in comparison to 1994.
The Company repositioned the Investment portfolio in 1994, taking a $366,000
realized loss. This repositioning increased yields on investments for 1995
dramatically. The average yield on taxable securities in 1994 was 5.89
percent, while the average yield in 1995 was 7.02 percent. Although the yield
on the securities increased, total securities decreased by 21 percent or
$12,338,000 in 1995. The Company sold about $10,000,000 in securities to
decrease the volatility in the portfolio. The Company reduced exposure in the
portfolio if rates were to rise substantially. The Company used the proceeds
from the sale of securities and maturities throughout the year to pay off short
term debt and purchase seasoned real estate loans yielding an average interest
rate of 8 percent. Hence, net loans increased over 1994 by $6,217,000 and
interest income on loans increased from $3,242,000 in 1994 to $3,982,000 in
1995. The repositioning of the balance sheet resulted in an increase of
interest income of $594,000 in 1995. The Company also recognized a provision
for loan losses of $80,000 in 1995, compared with no provision in 1994. The
allowance for loan losses was $476,000 at December 31, 1995, which represented
1.19 percent of gross loans, compared with $483,000 or 1.43 percent in 1994.
The loan portfolio continues to be of strong credit quality which reflects the
Company's conservative policies. Nonperforming loans were $178,604 at year
end compared with $168,000 in 1994. The Company had net charge off loans of
$87,000 in 1995 compared to $5,000 in 1994.
Total debt was reduced by nearly $5,000,000 by year end with the proceeds from
the sale of securities. However, interest expense on these Notes Payable
increased by $246,000 over 1994. This was due in part, to an increased cost of
funds during 1995, whereby the average cost went from 5.56 percent in 1994 to
6.65 percent in 1995, and as a result of an increase in the average balance of
short term borrowings and long term debt for 1995. Total deposits, including
Fed Funds Purchased and Repurchase Agreements fell 9 percent or $7,400,000
during 1995. Bank customers transferred money out of savings and other
interest bearing accounts into Time Certificates, which showed an increase of
$2,001,000. Time Certificates represent higher cost of funds for the Company
which resulted in an increase of interest expense of $100,000 over 1994. The
Company feels the reason for the decline in deposits is largely the result of
customers moving money into annuities and mutual funds where they can earn
higher returns. Net interest income, which is the difference between interest
income and interest expense was up 5 percent as a result of the preceding
transactions.
In December 1995, the Company took advantage of the amnesty period offered by
FASB 115 to reclassify investment securities from the Held to Maturity (HTM)
portfolio into the Available for Sale (AFS) portfolio with no penalties. The
Company moved its entire Investment Portfolio to Available For Sale. At
December 31, 1994 the Investment portfolio was comprised of 46 percent Held to
Maturity securities and 54 percent Available For Sale securities. By moving
all of the securities into the Available For Sale Portfolio, the Company can
better manage liquidity concerns, volatility and net interest margin risks.
The Company has greater exposure to potential reductions in Stockholders Equity
if there is a large unrealized loss in the investment portfolio. However, the
Company feels that with the ability to manage the Investment portfolio, the
potential exposure will be minimized. The fair value of the Company's
Available for Sale securities exceeded its cost by $291,000 at December 31,
1995 creating an unrealized gain, compared with 1994 which showed an unrealized
loss of $1,276,000. Total Stockholders Equity increased by $1,969,000, mainly
due to earnings and the change in unrealized gains/losses in the Investment
Portfolio.
Noninterest income which represents service charges on deposits and other fees
collected, increased by $105,000, due in part, to increased awareness of
service charges waived and restructuring of deposit product types. Noninterest
expense decreased by $558,000 in 1995 due to the following. The largest
variance was due to realized gains in the Investment
F-2
<PAGE> 23
Portfolio of $118,000 in 1995, whereas in 1994 there were realized losses of
$336,000. FDIC assessments decreased substantially from 1994. The FDIC
lowered the insurance premium for the Company to the minimum required by any
bank. The Company will see the full effect of this change in 1996 when they
will only pay $2,000 a year compared with the $156,000 paid in 1994. The
amount paid in 1995 was $78,000 which represented a $78,000 decrease in
expense. The remainder of noninterest expenses did not change substantially
over 1994.
The Company predicts a prosperous year for 1996, and expects the economy and
the interest rate cycle to remain fairly calm.
1994 COMPARED TO 1993
- ---------------------
The Company had a 42.8 percent decrease in net income from $1,027,000 in 1993
to $587,000 in 1994. This decrease resulted primarily from the sale of certain
of the Company's investment securities at a loss and the purchase and
installation of a systems upgrade for the Company. Total assets increased from
$97,729,000 in 1993 to $103,857,000 in 1994, a 6.3 percent increase. Total
loans increased by approximately 16.3 percent from $29,052,000 in 1993 to
$33,775,000 in 1994. The increase in loans was due, in part, to the repurchase
from the Oregon Retirement System ("OPERF") of certain seasoned commercial real
estate loans the Bank originally sold to the OPERF. The increase in loans was
also due, in part, to the growth of commercial/agriculture loans. These loans
grew 17.6 percent from $17,211,000 in 1993 to $20,237,000 in 1994. The
allowance for loan losses equaled $483,000 at December 31, 1994 which
represented 1.43 percent of gross loans. At December 31, 1993, the allowance
totaled $488,000 and represented 1.6 percent of gross loans. The Company had
net charge off loans of $5,000 in 1994 compared to $39,000 in 1993. Non
performing loans were $168,000 at December 31, 1994, compared with $3,000
December 31, 1993. The loan portfolio continues to be of strong credit quality
which reflects the Company's conservative policy.
The Company's investment in securities decreased slightly from $60,761,000 in
1993 to $59,007,000 in 1994. The Company continues to increase investments in
state and political subdivisions (e.g., municipal bonds) from $6,266,000 in
1993 to $7,942,000 in 1994 in order to take advantage of the higher returns due
to their tax exempt status. As a result, tax exempt income increased from
$105,000 in 1993 to $332,000 in 1994. Interest income on taxable securities
decreased slightly from $3,054,000 in 1993 to $3,013,000 in 1994. Net interest
income was up $746,000 from $3,908,000 in 1993 to $4,654,000 in 1994, an
increase of 19.1 percent, boosted in large part by the Federal Reserve Board's
action to raise the prime interest rate five times in 1994. On the other hand,
interest expense on deposits decreased by $215,000 from $1,443,000 in 1993 to
$1,228,000 in 1994, a 14.9 percent reduction, while deposits decreased 3.6
percent from $70,930,000 in 1993 to $68,386,000 in 1994. With the increase in
interest rates, many customers moved their deposit accounts to higher yielding
investments such as treasury bills, annuities, and mutual funds. The bank's
subsidiary, Douglas National Bank Insurance Agency, benefited from the
disintermediation of the deposit accounts as the Bank's customers used such
subsidiary's brokerage services to move their accounts. During the fourth
quarter of 1994, the Company sold a portion of its Available For Sale
securities at a $366,000 loss. The Company originally purchased these
securities when the yields offered were low. It has now replaced them by
purchasing new securities with higher yields. The repositioning of a portion of
the securities portfolio, while resulting in a loss in 1994, in the view of
management, will improve the Company's earnings for 1995 and beyond.
At December 31, 1994, the Company had investment securities with average
maturities of approximately three years. The fair value of the Company's
current portfolio of Available for Sale securities is lower than cost by
$1,276,000, compared to an excess of market cost of $436,000 in 1993. The
fair value of its current portfolio of Held to Maturity securities is also
lower than cost by $1,354,000, compared to an excess of market over cost of
$106,000 in 1993. As a result, Stockholders Equity was decreased by $788,000:
$1,276,000 excess of cost over fair value, less $488,000 deferred income
benefit.
The Company purchased in 1994 computer equipment to support the FIserve
Comprehensive Banking System, a new system upgrade. The purchase of this
equipment is reflected in the increase of Bank Premises from $2,608,000 in
1993 to $2,941,000 in 1994. The systems upgrade includes computers, networking
equipment, etc. and in management's view, will result in increased efficiency
and customer service. Salaries and benefits for employees also increased
from $1,590,000 in 1993 to $2,150,000 in 1994 due to the change in estimate of
retirement benefits and due to the overtime and training costs in connection
with the installation and purchase of the new computer system. Cash flows
for the purchase of premises, furniture, and equipment was up from $108,000 in
1993 to $622,000 in 1994, also due to the installation and purchase of
F-3
<PAGE> 24
the systems upgrade. The total noninterest expenses were up 18 percent in 1994
for a total of $4,600,000, representing an annualized ratio of noninterest
expense to total revenue of 62.1 percent in 1994 compared to 59.8 percent in
1993.
1993 COMPARED TO 1992
- ---------------------
Total assets increased slightly from $97,085,000 in 1992 to $97,729,000 in
1993. Loans, on the other hand, increased by approximately 20 percent from
$24,028,000 in 1992 to $29,052,000 in 1993. The amount of the loans increased
as a result of the Company's commitment to increase its loan-to-deposit ratio
in order to improve the return on its assets. Consumer loans almost doubled
from $4,440,000 in 1992 to $7,264,000 in 1993 and commercial/agricultural
loans jumped up 20 percent from $14,352,000 in 1992 to $17,211,000 in 1993. The
Company reduced the allowance for loan loss by $537,000 to satisfy the
requirements of the Comptroller of Currency, which allowance now represents 1.6
percent of the Company's gross loans. At December 31, 1992, the allowance for
loan loss represented 4.4 percent of the Company's gross loans. The Company
recognized as income the $537,000 reduction in the allowance for loan loss in
1993 as a negative provision for a loan loss. The Company had net charge off
loans of $39,000 in 1993 as compared to net recoveries of $64,000 in 1992.
Non-accrual loans at December 31, 1993, totaled only $3,000 compared with 1992
in which they totaled $315,000.
The Company's investments in securities increased slightly from $59,535,000 in
1992 to $60,761,000 in 1993. The Company substantially increased investments
in obligations of state and political subdivisions (municipal bonds) from
$1,891,000 in 1992 to $6,266,000 in 1993. Interest income on taxable
securities decreased by $802,000 from $3,856,000 in 1992 to $3,054,000 in 1993,
which represents a 20 percent decrease. This decrease is attributable to the
low interest rate environment, resulting in the early paying off of mortgage
backed products and the repricing of other securities at lower rates. The
Company offset a part of interest income by reducing the cost of deposits.
Interest expense on deposits decreased by $444,000 in 1993, while deposits were
up by less than one percent from $70,087,000 in 1992 to $70,930,000 in 1993.
At December 31, 1993, the Company had investment securities with average
maturities of approximately two years. The Company adopted SFAS 115 at
December 31, 1993, which separates these securities into three categories:
Held-to-Maturity, Available-for-Sale, and Trading Account. At December 31,
1993, the Company had $31,540,000 of the portfolio classified as
"Held-to-Maturity" and $28,785,000 classified as "Available-for-Sale", for
liquidity and asset liability management purposes. The Available-for-Sale
securities are shown at fair value. Stockholders' Equity increased by
$269,000: $437,000 excess of fair value over cost, less $168,000 of deferred
income taxes.
The Company also adopted SFAS 109 "Accounting for Income Taxes" as of January
1, 1993. Under this liability method, deferred tax liabilities and assets
are for differences between the tax basis of assets and liabilities and their
financial reporting amounts at currently enacted tax rates. The Company also
changed its estimate of prior years taxes which increased income in 1993 by
$166,000.
Cash flows from operating activities show the amortization of securities'
discounts and premiums as a net amortization expense rather than a net
accretion into income as occurred in 1992. This is because in 1992, the
Company held large balances of zero coupon discount bonds which accrue income.
These bonds were paid in early 1993.
The Company had an 11 percent decrease in net income from $1,156,000 in 1992
to $1,027,000 in 1993 due to the items described above. The Company also
incurred certain unanticipated expenses in 1993 which affected net income,
including losses resulting from a robbery and the incurrence of additional
professional fees in connection with certain nonrecurring matters.
LIQUIDITY
- ---------
Liquidity represents the ability of the Company to insure that adequate funds
are available to meet customer's borrowing needs and fluctuations in deposits.
The most significant volatility, resulting in the need for cash outlays, is in
the purchased funds and time deposits. The Company matches the proceeds
from purchased funds with investments, largely term federal funds, of
approximately the same maturity. Time deposits have varying maturities and are
of varying amounts. The Company can control, to some
F-4
<PAGE> 25
extent, the balance of these time deposits by adjusting the rate offered on
these funds. Core deposits represent demand, interest-bearing transactions and
savings deposits. As of December 31, 1995 and 1994, core deposits were
$50,688,000 and $56,966,000 respectively. Core deposits have no stated
maturity, but in total are less volatile than purchased funds and time
deposits.
The Company has the ability to purchase federal funds from other financial
institutions to meet liquidity needs. Investments and interest bearing
deposits with banks with a carrying value of $14,418,000 will mature or payoff
within the next year to meet additional cash requirements and, if necessary,
investment securities which are classified as Available For Sale, can be sold
prior to maturity to meet any unexpected cash demands. The Company can also
control, to some extent, the cash outlays made for new loans to customers.
The Company does, however, have $8,181,000 of commitments to lend under lines
of credit and standby letters of credit which must be met if required. The
Company does not anticipate all such commitments will be exercised, but would
meet these cash demands through the available sources previously discussed.
The Company has implemented a funds management program. These measures are
designed to achieve a minimum level of primary and secondary resources based
upon analysis of the volatility of the deposits and loan demands as well as
asset and liability mixes, yields and maturities.
CAPITAL RESOURCES
- -----------------
Capital resources to the Company represent the sources of liquidity previously
discussed. These sources of liquidity can be obtained at various costs. The
cost of these funds can change as market interest rates change. Capital
resources are needed to meet investing and lending demands of the Company.
The rates at which these funds can be invested (generally in Treasury and
Agency securities or Collateralized Mortgage Obligations) or loaned to
customers also vary as market interest rates change.
Interest rate fluctuations can have a significant impact on the interest
income and interest expense of the Company. The Company has relatively little
control over the rates it can earn on most assets and the rates it must pay on
most liabilities.
Within this environment, management's goal is to assure liquidity to meet the
needs of customers while maximizing the contribution of net interest income
to the Company's operating results without assuming undue risk.
The intent of management is to limit swings in net interest income resulting
from changes in interest rates. An asset or liability is described as rate
sensitive when either it can be repriced (the rate changed) or it matures,
whichever comes first. The difference between the amount of rate sensitive
assets and the amount of rate sensitive liabilities is referred to as the
interest rate sensitivity "gap". If as many assets as liabilities can be
repriced within a specific time interval, the Company is said to be matched.
In general, such a position will result in less volatile swings in net
interest income. It is management's goal to minimize swings in net interest
income due to interest rate fluctuation.
F-5
<PAGE> 26
UNITED BANCORP AND SUBSIDIARIES
Consolidated Balance Sheets
(In Thousands of Dollars)
<TABLE>
<CAPTION>
March 31, 1996 December 31, 1995
-------------- -----------------
(Unaudited) (Audited)
<S> <C> <C>
ASSETS
- ------
Cash and cash equivalents:
Cash and due from banks $ 3,981 $ 3,899
Interest bearing deposits with bank 0 0
------ ------
Total cash and cash equivalents 3,981 3,899
Securities:
Held-to-Maturity: 0 0
Available-for-Sale 51,503 46,669
------ ------
Total Securities 51,503 46,669
Loans 39,314 39,985
Less allowance for loan losses (507) (476)
------ ------
Net loans 38,807 39,509
Bank premises, furniture and equipment 2,718 2,769
Accrued interest receivable and other assets 1,064 1,013
Deferred tax assets 0 0
------ ------
Total Assets 98,073 93,859
====== ======
LIABILITIES:
- -----------
Deposits:
Demand 11,437 10,947
Interest bearing 25,474 27,057
Savings 11,857 12,684
Time Certificates:
Certificates of $100m or Larger 679 874
Certificates less than $100m 13,218 12,547
------ ------
Total Deposits 62,665 64,109
Federal funds purchased and securities sold
under agreements to repurchase 12,427 10,947
Bank Line of Credit 2,060 2,646
Notes Payable 8,695 4,103
Debt of Employee Stock Ownership Plan 211 233
Other liabilities 722 658
Deferred Tax Liability 2 182
------ ------
Total Liabilities 86,782 82,398
F-6
<PAGE> 27
UNITED BANCORP AND SUBSIDIARIES
Consolidated Balance Sheets
(In Thousands of Dollars)
(Continued)
</TABLE>
<TABLE>
<CAPTION>
March 31, 1996 December 31, 1995
-------------- -----------------
(Unaudited) (Audited)
<S> <C> <C>
STOCKHOLDER'S EQUITY:
Common stock $2.50 par value, 5,000,000
shares authorized; 438,761 and 440,441
issued and outstanding at March 31,
1996, and December 31, 1995,
respectively 1,101 1,101
Additional paid-in capital 3,514 3,515
Retained Earnings 6,998 5,889
Deferred compensation under Employee
Stock Ownership Plan (211) (233)
Net unrealized gains (losses) on
securities Available-for-Sale, net of
$182 and $112 of income tax liability,
respectively (111) 179
------ ------
Total stockholders' equity 11,291 11,461
Total Liabilities and Stockholders'
Equity $98,073 $93,859
====== ======
See notes to condensed consolidated financial statements.
</TABLE>
F-7
<PAGE> 28
UNITED BANCORP AND SUBSIDIARIES
Consolidated Statements of Income
(In Thousands of Dollars)
<TABLE>
<CAPTION>
Three Months Ended
March 31, 1996 March 31, 1995
-------------- --------------
(Unaudited) (Unaudited)
<S> <C> <C>
Interest Income
Loans $1,049 $ 926
Federal funds sold and interest bearing
deposits with bank 3 34
Securities
Taxable 617 869
Exempt from Federal Income Taxes 125 95
----- -----
Total Interest Income 1,794 1,924
Interest Expense
Deposits 343 303
Federal funds purchased and securities sold
under agreements to repurchase 173 152
Notes Payable 82 194
----- -----
Total Interest Expense 598 649
Net Interest Income 1,196 1,275
Provision for loan losses 30 0
----- -----
Net Interest Income after provision for
loan losses 1,166 1,275
Non-Interest Income
Service charges on deposit accounts 117 122
Other service charges, commissions and fees 50 44
Other Income 3 5
----- -----
Total Non-Interest Income 170 171
Non-Interest Expense
Salaries and employee benefits 527 554
Net Occupancy and Equipment 140 159
Losses (Gains) on sale of securities (30) (58)
Other 280 365
----- -----
Total Non-Interest Expense 917 1,020
----- -----
Income Before Income Taxes 419 426
Provision for Income Taxes 128 136
----- -----
NET INCOME 291 290
===== =====
See notes to condensed consolidated financial statements.
</TABLE>
F-8
<PAGE> 29
UNITED BANCORP AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(In Thousands of Dollars)
<TABLE>
<CAPTION>
Three Months Ended
March 31, 1996 March 31, 1995
-------------- --------------
(Unaudited) (Unaudited)
<S> <C> <C>
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS
Cash flows from operating activities:
Net Income 515 290
Reconciliation of net income to net cash
provided by operating activities:
Loss on disposal of furniture and
equipment 0 0
Depreciation and Amortization 74 76
Provision (Credit) for Loan Losses 30 0
Provision (Credit) for Deferred Income
Taxes 0 0
Compensation paid in stock 0 0
Stock dividend received on FHLB stock (25) (19)
Amortization of securities' discounts
and premiums 8 (19)
Net realized (Gains) losses on sale of
Available for Sale (30) (59)
Decrease (Increase) in accrued interest
receivable and other assets (51) 94
Increase (Decrease) in other liabilities 64 115
----- ------
Net cash provided by operating
activities 361 478
Cash flows from investing activities:
Securities:
Available-for-Sale:
Maturities 3,779 614
Purchase (9,338) 0
Proceeds from sales of securities 300 10,627
Held-to-Maturity:
Maturities 0 134
Purchase 0 (81)
Net (Increase) decrease in loans 672 (681)
Purchase of furniture and equipment (23) (23)
------ ------
Net cash provided by (used in)
investing activities (4,610) 10,590
</TABLE>
F-9
<PAGE> 30
UNITED BANCORP AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(In Thousands of Dollars)
(Continued)
<TABLE>
<CAPTION>
Three Months Ended
March 31, 1996 March 31, 1995
-------------- --------------
(Unaudited) (Unaudited)
<S> <C> <C>
Cash flows from financing activities:
Net increase (Decrease) in demand deposits,
interest bearing transaction, & savings
accounts (1,920) (4,798)
Proceeds from sales of certificates of
deposit greater (less) than payments for
maturing time deposits 476 1,714
Proceeds from issuance of ESOP Debt 25 68
Stock purchase for ESOP (25) (68)
Net increase (Decrease) in federal funds
purchased and securities sold under
repurchase agreements (1,960) (9,531)
Net borrowings from bank line of credit (586) 0
Net advances from FHLB of Seattle 4,739 5,000
Repayment of debt (147) (147)
Retirement of Stock (37) 0
Proceeds from issuance of stock 38 35
Cash dividends paid (193) (185)
----- -----
Net cash provided by (used in)
financing activities (4,331) (7,912)
Net increase (Decrease) in cash and cash
equivalents 82 3,156
Cash and cash equivalents at beginning
of the year 3,899 7,068
----- -----
Cash and cash equivalents at the end of
the period $3,981 $10,224
===== ======
NON CASH INVESTING AND FINANCING ACTIVITIES:
Change in unrealized gains (losses) on
securities available-for-sale, net
deferred income tax (290) (405)
CASH PAID DURING THE YEAR FOR:
Interest 448 485
Income Taxes 37 0
See notes to condensed consolidated financial statements.
</TABLE>
F-10
<PAGE> 31
UNITED BANCORP AND SUBSIDIARIES
Computation of earnings per share
(In Thousands of Dollars, except per share data)
<TABLE>
<CAPTION>
Three Months Ended March 31,
----------------------------
1995 1994
----------- -----------
(Unaudited) (Unaudited)
<S> <C> <C>
Primary:
Average shares outstanding 439,427 439,806
Net Income $291 $290
Per share amount $0.66 $0.66
======= =======
</TABLE>
F-11
<PAGE> 32
UNITED BANCORP AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
March 31, 1996
Note A ---- BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and
Article 10 - 01 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for
a fair presentation have been included. Operating results for the three month
period ended March 31, 1996 are not necessarily indicative of the results that
may be expected for the year ended December 31, 1996. For further information,
refer to the consolidated financial statements and footnotes thereto included
in the Company's annual report on Form 10-K for the year ended December 31,
1995.
F-12
<PAGE> 33
UNITED BANCORP AND SUBSIDIARIES
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATION
Total assets at March 31, 1996 equaled $98,073 million, representing an
increase from December 31, 1995 of $4,214 million or 4.5%. This was due
primarily to the Company's increase in short term borrowings to purchase
investment securities. Investment securities increased to $51,503 in March 31,
1996 compared to $46,669 in December 31, 1995. Interest income from
investments decreased however by $222,000 when compared to the three month
period ending March 31, 1995. This is a result of the average book yield on
the investment portfolio decreasing from 7.28 percent at March 31, 1995
compared to 6.54 percent at March 31, 1996, and the increase in investment
securities from 1995. The reduction of interest income from investment
securities has been offset somewhat by the shifting of the investment portfolio
to tax exempt securities, which had an increase of $30,000, or a tax equivalent
income equal to $40,000. The Company had a U.S. Agency called by the issuer
which resulted in a gain of $30,000.
Gross loans decreased from December 31, 1995 by $671,000 to $39,314 million
which represents a 1.7% decrease. The average balance of loans increased by
$4.9 million, from $35,288 million for the period ended March 31, 1995,
compared to $40,219 million for the period ended March 31, 1996. The average
yield on loans decreased from 10.49% in 1995 to 10.25% in 1996. This
combination accounts for the increase in loan interest income of $123,000 for
the three month period ending March 31, 1996, compared to the same period
ending March 31, 1995. At December 31, 1995, the loan loss reserve was $76,000
which represented 1.19% of outstanding gross loans. The Company recognized a
provision for loan losses during the first quarter of 1996 for $30,000 and had
net recoveries of loans of $1,000 which brought the loan loss reserve to
$507,000 at March 31, 1996 which represents 1.29% of outstanding gross loans.
The Company will continue to increase its loan loss reserve in the second
quarter of 1996 in order to reflect the Company's historical rate of loan
losses.
Demand and Interest Bearing Deposits decreased $1.1 million to $36.9 million at
March 31, 1996, (a 2.9% decrease), while Savings Deposits decreased $827,000 to
$11.9 million at March 31, 1996, (a 6.5% decrease). The Company continues to
see deposits running off into stocks, bonds, mutual funds or other investments
which provide higher returns to customers. Part of the run off went into Time
Certificates of Deposit which increased from $13,421 million at December 31,
1995 to $13,897 million at March 31, 1996. Other borrowings for the first
three months of 1996 increased by $6.0 million to $23.1 million. The
contributing factors for this increase are Federal Funds Purchased and
Securities Sold under Agreements to Repurchase, and Bank Line of Credit
increased $1.4 million, and notes payable increased $4.6 million for the period
ending March 31, 1996. The increase in Notes Payable was used to purchase
certain investment securities.
Total interest income fell $130,000 for the three months ended March 31, 1996
compared to the three months ended March 31, 1995. This was due in part to
interest yields on taxable securities decreasing from 6.55% in 1995 to 6.5% in
1996 and a reduction in the amount of earnings from federal funds sold.
Interest expense on deposits and other funding liabilities decreased $51,000 to
$598,000 for the three months ended March 31, 1996, compared to the three
months ended March 31, 1995. Net interest income decreased $109,000, from
$1,275 million for the three months ended March 31, 1995, compared to $1,166
million for the three months ended March 31, 1996.
Non interest expense decreased $103,000 to $917,000 at March 31, 1996 compared
to $1,020 million at March 31, 1995. Salaries decreased $27,000 as a result of
staff reductions, unfilled positions and a reduction in hours worked. In 1995
the Company invested in major building repairs which accounts for the $19,000
reduction of occupancy expense for the period ending March 31, 1996. Other
expenses decreased by $85,000 due primarily by reductions in FDIC and
Comptroller's assessments, accounting fees and credit services fees. These
expenses were offset by a gain on the call of certain investment securities of
$30,000 compared to a gain of $58,000 for the same period during 1995. Total
net income for the three months of 1996 increased over the same period of 1995
by $1,000 or three-tenths of one percent to a total of $291,000.
F-13
<PAGE> 34
ANNEX A
ARTICLES OF AMENDMENT
OF
UNITED BANCORP
Pursuant to the provisions of ORS 60.431, the undersigned corporation
executes the following Articles of Amendment to its Second Restated Articles of
Incorporation filed January 25, 1994:
1. The name of the corporation prior to amendment is: United
Bancorp.
2. State the article number(s) and set forth the article(s) as it is
amended to read. Indicate the date each amendment was adopted.
The following amendment to Article III, Paragraph A, of the Second
Restated Articles of Incorporation was adopted on June 26, 1996:
The aggregate number of shares which the corporation shall
have authority to issue is 1,083,334, which shall be divided into
classes as follows:
Title of Class Par Value Number of Shares
-------------- --------- ----------------
Preferred Stock no par value 1,000,000
Common Stock $150 per share 83,334
Upon the filing of these Articles of Amendment with the
Oregon Secretary of State, each 60 shares of the issued and
outstanding $2.50 par value common stock of the corporation
shall be reverse split into one (1) share of $150.00 par
value common stock of the corporation. Each record holder of
shares of $2.50 par value common stock whose aggregate number
of shares held of record is less than 60 shares shall be deemed
by the corporation to hold a fractional share of common stock
therefor $150 par value. All such fractional shares are hereby
cancelled immediately. The holder of such fractional shares
shall be entitled to cash payment in an amount equal to $27 per
share (pre-reverse split) upon proper surrender of the holder's
certificate or certificates.
3. Check the appropriate statement:
_____ Shareholder action was not required to adopt the amendment(s).
__x__ Shareholder action was required to adopt the amendment(s).
The shareholder vote was as follows:
<TABLE>
<CAPTION>
Number of Number of
Shares Votes Entitled Number of Number Votes
Class of Shares Outstanding to be Cast Votes Cast For Cast Against
- --------------- ----------- -------------- -------------- ------------
<S> <C> <C> <C> <C>
Common _________ _________ ________ ________
</TABLE>
4. Other provisions, if applicable: None.
Execution:
M. John Loosley President
- -------------------------------------------------------------------------------
Signature Printed Name Title
Person to contact about this filing:
David R. Ludwig (503) 228-6044
- -------------------------------------------------------------------------------
Name Daytime Phone Number
<PAGE>
ANNEX B
SECTIONS 60.551 TO 60.594 OF THE
OREGON BUSINESS CORPORATION ACT
(Right to Dissent and Obtain Payment for Shares)
60.551 Definitions for 60.551 to 60.594. As used in ORS 60.551 to
60.594:
(1) "Beneficial shareholder" means the person who is a beneficial owner
of shares held in a voting trust or by a nominee as the record shareholder.
(2) "Corporation" means the issuer of the shares held by a dissenter
before the corporate action, or the surviving or acquiring corporation by
merger or share exchange of that issuer.
(3) "Dissenter" means a shareholder who is entitled to dissent from
corporate action under ORS 60.554 and who exercises that right when and in the
manner required by ORS 60.561 to 60.587.
(4) "Fair value," with respect to a dissenter's shares, means the value
of the shares immediately before the effectuation of the corporate action to
which the dissenter objects, excluding any appreciation or depreciation in
anticipation of the corporate action unless exclusion would be inequitable.
(5) "Interest" means interest from the effective date of the corporate
action until the date of payment, at the average rate currently paid by the
corporation on its principal bank loans or, if none, at a rate that is fair and
equitable under all the circumstances.
(6) "Record shareholder" means the person in whose name shares are
registered in the records of a corporation or the beneficial owner of shares to
the extent of the rights granted by a nominee certificate on file with a
corporation.
(7) "Shareholder" means the record shareholder or the beneficial
shareholder.
60.554 Right to dissent. (1) Subject to subsection (2) of this section,
a shareholder is entitled to dissent from, and obtain payment of the fair value
of the shareholder's shares in the event of, any of the following corporate
acts:
(a) Consummation of a plan of merger to which the corporation is a party
if a shareholder approval is required for the merger by ORS 60.487 or the
articles of incorporation and the shareholder is entitled to vote on the merger
or if the corporation is a subsidiary that is merged with its parent under ORS
60.491;
(b) Consummation of a plan of share exchange to which the corporation is
a party as the corporation whose shares will be acquired, if the shareholder is
entitled to vote on the plan;
(c) Consummation of a sale or exchange of all or substantially all of the
property of the corporation other than in the usual and regular course of
business, if the shareholder is entitled to vote on the sale or exchange,
including a sale in dissolution, but not including a sale pursuant to court
order or a sale for cash pursuant to court order or a sale for cash pursuant to
a plan by which all or substantially all of the net proceeds of the sale will
be distributed to the shareholders within one year after the date of sale;
(d) An amendment of the articles of incorporation that materially and
adversely affects rights in respect of a dissenter's shares because it:
(A) Alters or abolishes a preemptive right of the holder of the shares to
acquire shares or other securities; or
(B) Reduces the number of shares owned by the shareholder to a fraction
of a share if the fractional share so created is to be acquired for cash under
ORS 60.141; or
(e) Any corporate action taken pursuant to a shareholder vote to the
extent the articles of incorporation, bylaws or a resolution of the board of
directors provides that voting or nonvoting shareholders are entitled to
dissent and obtain payment for their shares.
(2) A shareholder entitled to dissent and obtain payment for the
shareholder's shares under ORS 60.551 to 60.594 may not challenge the corporate
action creating the shareholder's entitlement unless the action is unlawful or
fraudulent with respect to the shareholder or the corporation.
(3) Dissenters' rights shall not apply to the holders of shares of any
class or series if the shares of the class or series were registered on a
national securities exchange or quoted on the National Association of
Securities Dealers, Inc. Automated Quotation System as a National Market System
issue on the record date for the meeting of shareholders at which the corporate
action described in subsection (1) of this section is to be approved or on the
date a copy or summary of the plan or merger is mailed to shareholders under
ORS 60.491, unless the articles of incorporation otherwise provide.
60.557 Dissent by nominees and beneficial owners. (1) A record
shareholder may assert dissenters' rights as to fewer than all the shares
registered in the shareholder's name only if the shareholder dissents with
respect to all shares beneficially owned by any one person and notifies the
corporation in writing of the name and address of each person on whose behalf
the shareholder asserts dissenters' rights. The rights of a partial dissenter
under this subsection are determined as if the shares regarding which the
shareholder dissents and the shareholder's other shares were registered in the
names of different shareholders.
(2) A beneficial shareholder may assert dissenters' rights as to shares
held on the beneficial shareholder's behalf only if:
(a) The beneficial shareholder submits to the corporation the record
shareholder's written consent to the dissent not later than the time the
beneficial shareholder asserts dissenters' rights; and
(b) The beneficial shareholder does so with respect to all shares of
which such shareholder is the beneficial shareholder or over which such
shareholder has power to direct the vote.
(Procedure for Exercise of Rights)
60.561 Notice of dissenters' rights. (1) If proposed corporate action
creating dissenters' rights under ORS 60.554 is submitted to a vote at a
shareholder's meeting, the meeting notice must state that shareholders are or
may be entitled to assert dissenters' rights under ORS 60.551 to 60.594 and be
accompanied by a copy of ORS 60.551 to 60.594.
(2) If corporate action creating dissenters' rights under ORS 60.554 is
taken without a vote of shareholders, the corporation shall notify in writing
all shareholders entitled to assert dissenters' rights that the action was
taken and send the shareholders entitled to dissenters' rights the dissenters'
notice described in ORS 60.567.
60.564 Notice of intent to demand payment. (1) If proposed corporate
action creating dissenters' rights under ORS 60.554 is submitted to a vote at a
shareholders' meeting, a shareholder who wishes to assert dissenters' right
shall deliver to the corporation before the vote is taken written notice of the
shareholder's intent to demand payment for the shareholder's shares if the
proposed action is effectuated and shall not vote such shares in favor of the
proposed action.
(2) A shareholder who does not satisfy the requirements of subsection (1)
of this section is not entitled to payment for the shareholders' shares under
this chapter.
60.567 Dissenters' notice. (1) If proposed corporate action creating
dissenters' rights under ORS 60.554 is authorized at a shareholders' meeting,
the corporation shall deliver a written dissenters' notice to all shareholders
who satisfied the requirements of ORS 60.564.
(2) The dissenters' notice shall be sent no later than 10 days after the
corporate action was taken, and shall:
(a) State where the payment demand shall be sent and where and when
certificated shares shall be deposited;
(b) Inform holders of uncertificated shares to what extent transfer of
the shares will be restricted after the payment demand is received;
(c) Supply a form for demanding payment that includes the date of the
first announcement of the terms of the proposed corporate action to news media
or to shareholders and requires that the person asserting dissenters' rights
certify whether or not the person acquired beneficial ownership of the shares
before that date;
(d) Set a date by which the corporation must receive the payment demand.
This date may not be fewer than 30 nor more than 60 days after the date the
subsection (1) of this section notice is delivered; and
(e) Be accompanied by a copy of ORS 60.551 to 60.594.
60.571 Duty to demand payment. (1) A shareholder sent a dissenters'
notice described in ORS 60.567 must demand payment, certify whether the
shareholder acquired beneficial ownership of the shares before the date
required to be set forth in the dissenters' notice pursuant to ORS
60.567(2)(c), and deposit the shareholder's certificates in accordance with the
terms of the notice.
(2) The shareholder who demands payment and deposits the shareholder's
shares under subsection (1) of this section retains all other rights of a
shareholder until these rights are canceled or modified by the taking of the
proposed corporate action.
(3) A shareholder who does not demand payment or deposit the
shareholder's share certificates where required, each by the date set in the
dissenters' notice, is not entitled to payment for the shareholder's shares
under this chapter.
60.574 Share restrictions. (1) The corporation may restrict the
transfer of uncertificated shares from the date the demand for their payment is
received until the proposed corporate action is taken or the restrictions
released under ORS 60.581.
(2) The person for whom dissenters' rights are asserted as to
uncertificated shares retains all other rights of a shareholder until these
rights are canceled or modified by the taking of the proposed corporate action.
60.577 Payment. (1) Except as provided in ORS 60.584, as soon as the
proposed corporate action is taken, or upon receipt of a payment demand, the
corporation shall pay each dissenter who complied with ORS 60.571, the amount
the corporation estimates to be the fair value of the shareholder's shares,
plus accrued interest.
(2) The payment must be accompanied by:
(a) The corporation's balance sheet as of the end of a fiscal year ending
not more than 16 months before the date of payment, an income statement for
that year and the latest available interim financial statements, if any;
(b) A statement of the corporation's estimate of the fair value of the
shares;
(c) An explanation of how the interest was calculated;
(d) A statement of the dissenter's right to demand payment under ORS
60.587; and
(e) A copy of ORS 60.551 to 60.594.
60.581 Failure to take action. (1) If the corporation does not take the
proposed action within 60 days after the date set for demanding payment and
depositing share certificates, the corporation shall return the deposited
certificates and release the transfer restrictions imposed on uncertificated
shares.
(2) If after returning deposited certificates and releasing transfer
restrictions, the corporation takes the proposed action, it must send a new
dissenters' notice under ORS 60.567 and repeat the payment demand procedure.
60.584 After-acquired shares. (1) A corporation may elect to withhold
payment required by ORS 60.577 from a dissenter unless the dissenter was the
beneficial owner of the shares before the date set forth in the dissenters'
notice as the date of the first announcement to news media or to shareholders
of the terms of the proposed corporate action.
(2) To the extent the corporation elects to withhold payment under
subsection (1) of this section, after taking the proposed corporate action, it
shall estimate the fair value of the shares plus accrued interest and shall pay
this amount to each dissenter who agrees to accept it in full satisfaction of
such demand. The corporation shall send with its offer a statement of its
estimate of the fair value of the shares an explanation of how the interest was
calculated and a statement of the dissenter's right to demand payment under ORS
60.587.
60.587 Procedure if shareholder dissatisfied with payment or offer. (1)
A dissenter may notify the corporation in writing of the dissenter's own
estimate of the fair value of the dissenter's shares and amount of interest
due, and demand payment of the dissenter's estimate, less any payment under ORS
60.577 or reject the corporation's offer under ORS 60.584 and demand payment of
the dissenter's estimate of the fair value of the dissenter's shares and
interest due, if:
(a) The dissenter believes that the amount paid under ORS 60.577 or
offered under ORS 60.584 is less than the fair market value of the dissenter's
shares or that the interest due is incorrectly calculated;
(b) The corporation fails to make payment under ORS 60.577 within 60 days
after the date set for demanding payment; or
(c) The corporation, having failed to take the proposed action, does not
return the deposited certificates or release the transfer restrictions imposed
on uncertificated shares within 60 days after the date set for demanding
payment.
(2) A dissenter waives the right to demand payment under this section
unless the dissenter notifies the corporation of the dissenter's demand in
writing under subsection (1) of this section within 30 days after the
corporation made or offered payment for the dissenter's shares.
(Judicial Appraisal of Shares)
60.591 Court action. (1) If a demand for payment under ORS 60.587
remains unsettled, the corporation shall commence a proceeding within 60 days
after receiving the payment demand under ORS 60.587 and petition the court
under subsection (2) of this section to determine the fair value of the shares
and accrued interest. If the corporation does not commence the proceeding
within the 60-day period, it shall pay each dissenter whose demand remains
unsettled the amount demanded.
(2) The corporation shall commence the proceeding in the circuit court of
the county where a corporation's principal office is located, or if the
principal office is not in this state, where the corporation's registered
office is located. If the corporation is a foreign corporation, without a
registered office in this state, it shall commence the proceeding in the county
in this state where the registered office of the domestic corporation merged
with or whose shares were acquired by the foreign corporation was located.
(3) The corporation shall make all dissenters, whether or not residents
of this state, whose demands remain unsettled parties to the proceeding as in
an action against their shares. All parties must be served with a copy of the
petition. Nonresidents may be served by registered or certified mail or by
publication as provided by law.
(4) The jurisdiction of the circuit court in which the proceeding is
commenced under subsection (2) of this section is plenary and exclusive. The
court may appoint one or more persons as appraisers to receive evidence and
recommend decision on the question of fair value. The appraisers have the
powers described in the court order appointing them, or in any amendment to the
order. The dissenters are entitled to the same discovery rights as parties in
other civil proceedings.
(5) Each dissenter made a party to the proceeding is entitled to judgment
for:
(a) The amount, if any, by which the court finds the fair value of the
dissenter's shares, plus interest, exceeds the amount paid by the corporation;
or
(b) The faire value, plus accrued interest, of the dissenter's after-
acquired shares for which the corporation elected to withhold payment under ORS
60.584.
60.594 Court costs and counsel fees. (1) The court in an appraisal
proceeding commenced under ORS 60.591 shall determine all costs of the
proceeding, including the reasonable compensation and expenses of appraisers
appointed by the court. The court shall assess the costs against the
corporation, except that the court may assess costs against all or some of the
dissenters, in amounts the court finds equitable, to the extent the court finds
the dissenters acted arbitrarily, vexatiously, or not in good faith in
demanding payment under ORS 60.587.
(2) The court may also assess the fees and expenses of counsel and
experts of the respective parties in amounts the court finds equitable:
(a) Against the corporation and in favor of any or all dissenters if the
court finds the corporation did not substantially comply with the requirements
of ORS 60.561 to 60.587; or
(b) Against either the corporation or a dissenter, in favor of any other
party, if the court finds that the party against whom the fees and expenses are
assessed acted arbitrarily, vexatiously or not in good faith with respect to
the rights provided by this chapter.
(3) If the court finds that the services of counsel for any dissenter
were of substantial benefit to other dissenters similarly situated, and that
the fees for those services should not be assessed against the corporation, the
court may award to counsel reasonable fees to be paid out of the amount awarded
the dissenters who were benefitted.
<PAGE>
Exhibit (d)(2)
UNITED BANCORP
555 S.E. KANE STREET
ROSEBURG, OREGON 97470
PROXY SOLICITED FOR SPECIAL MEETING OF STOCKHOLDERS, JUNE 26, 1996
The undersigned hereby appoints Roland Johnson and Ronald G. Guerra, and each
of them, the proxy and attorney-in-fact for the undersigned, with full power of
substitution in each, to vote on behalf of the undersigned at the Special
Meeting of Stockholders of UNITED BANCORP to be held at 555 S.E. Kane Street,
Roseburg, Oregon 97470, on Wednesday, June 26, 1996, at 7:00 p.m., local time,
and at any adjournment or postponement of such meeting, all shares of Common
Stock, $2.50 par value, of UNITED BANCORP standing in the name of the
undersigned or which the undersigned may be entitled to vote on the matters
described herein.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF UNITED BANCORP
PLEASE MARK, SIGN, AND DATE THIS PROXY CARD ON THE REVERSE SIDE AND RETURN IT
PROMPTLY USING THE ENCLOSED ENVELOPE.
THIS PROXY MAY BE REVOKED BY A PROXY EXECUTED AT A LATER DATE OR OTHERWISE, AS
SET FORTH IN THE UNITED BANCORP PROXY STATEMENT WHICH ACCOMPANIED THIS CARD.
THE PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS SPECIFIED BELOW BY THE
UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED
FOR THE PROPOSAL TO APPROVE AND ADOPT THE ARTICLES OF AMENDMENT (AS DESCRIBED
IN UNITED BANCORP'S PROXY STATEMENT DATED JUNE 5, 1996).
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO APPROVE AND ADOPT
THE ARTICLES OF AMENDMENT (AS DESCRIBED IN UNITED BANCORP'S PROXY STATEMENT
DATED JUNE 5, 1996).
1. THE PROPOSAL TO APPROVE AND ADOPT THE ARTICLES OF AMENDMENT (as the same is
described in United Bancorp's Proxy Statement dated June 5, 1996.
FOR [__] AGAINST [__] ABSTAIN [__]
2. In their discretion, the parties are authorized to vote upon such other
business as may properly come before the meeting or any adjournment or
postponement thereof.
SIGNATURE(S) _____________________________________ DATED ________________, 1996
Please sign exactly as name appears on this card. Joint owners should each
sign. If signing as attorney, executor, administrator, trustee, or guardian,
please indicate the capacity in which signing. If a corporation, please sign
full corporate name and sign authorized officer's name and title. If a
partnership, please sign in partnership name and sign authorized person's name
and title.
