<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
TEHAMA BANCORP
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE>
TEHAMA BANCORP
239 SOUTH MAIN STREET
RED BLUFF, CALIFORNIA 96080
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD TUESDAY, APRIL 27, 1999 AT 7:30 P.M.
TO THE SHAREHOLDERS OF TEHAMA BANCORP:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
Tehama Bancorp (the "Company") will be held at the Red Bluff Community &
Senior Center, 1500 S. Jackson Street, Red Bluff, California on Tuesday,
April 27, 1999, at 7:30 P.M. for the following purposes:
1. To elect directors;
2. To approve the Tehama Bancorp 1999 Stock Option Plan; and
3. To transact such other business as may properly come before the
Annual Meeting and any adjournment or adjournments thereof.
Section 16 of the Bylaws of the Company provides for the nomination of
directors in the following manner:
Nomination for election of members of the Board of Directors may be
made by the Board of Directors or by any stockholder of any outstanding class
of capital stock of the corporation entitled to vote for the election of
directors. Notice of intention to make any nominations shall be made in
writing and shall be delivered or mailed to the President of the corporation
not less than 21 days nor more than 60 days prior to any meeting of
stockholders called for the election of directors; provided however, that if
less than 21 days notice of the meeting is given to shareholders, such notice
of intention to nominate shall be mailed or delivered to the President of the
corporation not later than the close of business on the tenth day following
the day on which the notice of meeting was mailed; provided further, that if
notice of such meeting is sent by third-class mail as permitted by Section 6
of these Bylaws, no notice of intention to make nominations shall be
required. Such notification shall contain the following information to the
extent known to the notifying shareholder: (a) the name and address of each
proposed nominee; (b) the principal occupation of each proposed nominee; (c)
the number of shares of capital stock of the corporation owned by each
proposed nominee; (d) the name and residence address of the notifying
shareholder; and (e) the number of shares of capital stock of the corporation
owned by the notifying shareholder. Nominations not made in accordance
herewith may, in the discretion of the Chairman of the meeting, be
disregarded and upon the Chairman's instructions, the inspectors of election
can disregard all votes cast for each such nominee.
Only those shareholders of record at the close of business on March 5,
1999, will be entitled to notice of and to vote at the Annual Meeting.
You are cordially invited to attend the Annual Meeting.
DATED: Red Bluff, California By Order of the Board of Directors
March 31, 1999
Raymond C. Lieberenz
Secretary
WHETHER OR NOT YOU PLAN TO ATTEND THIS MEETING, PLEASE SIGN AND RETURN THE
ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN THE ENCLOSED POST-PAID ENVELOPE.
<PAGE>
Mailed to shareholders
on or about April 2, 1999
TEHAMA BANCORP
239 SOUTH MAIN STREET
RED BLUFF, CALIFORNIA 96080
TELEPHONE (530) 528-3000
PROXY STATEMENT
INFORMATION CONCERNING THE SOLICITATION
This Proxy Statement is being furnished to the shareholders of
Tehama Bancorp, a California corporation (the "Company"), in connection with
the solicitation of proxies by the Board of Directors for use at the Annual
Meeting of Shareholders to be held at Red Bluff Community & Senior Center,
1500 S. Jackson Street, Red Bluff, California, at 7:30 P.M. on Tuesday, April
27, 1999. Only shareholders of record on March 5, 1999 (the "Record Date"),
will be entitled to notice of and to vote at the meeting. At the close of
business on that date, the Company had outstanding and entitled to be voted
1,677,387 shares of its no par value Common Stock (the "Common Stock").
Shareholders of Common Stock are entitled to one vote for each share
held, except that for the election of directors each shareholder has
cumulative voting rights and is entitled to as many votes as shall equal the
number of shares held by such shareholder multiplied by the number of
directors to be elected. Each shareholder may cast all of his or her votes
for a single candidate or distribute such votes among any or all of the
candidates as he or she chooses. However, no shareholder shall be entitled to
cumulate votes (in other words, cast for any candidate a number of votes
greater than the number of shares of stock held by such shareholder) unless
such candidate's name has been placed in nomination prior to the voting and
the shareholder has given notice at the meeting prior to the voting of the
shareholder's intention to cumulate votes. If any shareholder has given such
notice, all shareholders may cumulate their votes for candidates in
nomination. Prior to voting, an opportunity will be given for shareholders or
their proxies at the meeting to announce their intention to cumulate their
votes. The proxy holders are given, under the terms of the proxy,
discretionary authority to cumulate votes on shares for which they hold a
proxy.
Any person giving a proxy in the form accompanying this Proxy
Statement has the power to revoke that proxy prior to its exercise. The proxy
may be revoked prior to the meeting by delivering to the Secretary of the
Company either a written instrument revoking the proxy or a duly executed
proxy bearing a later date. The proxy may also be revoked by the shareholder
by attending and voting at the meeting. The proxy will be voted as directed
by the shareholder giving the proxy and if no directions are given on the
proxy, the proxy will be voted "FOR" the nominees of the Board of Directors
and "FOR" approval of the Tehama Bancorp 1999 Stock Option Plan as described
in this Proxy Statement and, at the proxy holders' discretion, on such other
matters, if any, which may come before the meeting (including any proposal to
adjourn the meeting).
The Company will bear the entire cost of preparing, assembling,
printing and mailing proxy materials furnished by the Board of Directors to
shareholders. Copies of proxy materials will be furnished to brokerage
houses, fiduciaries and custodians to be forwarded to the beneficial owners
of the Common Stock. In addition to the solicitation of proxies by use of the
mail, some of the officers, directors and regular employees of the Company
may (without additional compensation) solicit proxies by telephone or
personal interview, the costs of which will be borne by the Company.
PRINCIPAL SHAREHOLDERS
As of the Record Date, no person known to the Company owned
beneficially or of record more than five percent (5%) of the outstanding
shares of its Common Stock.
<PAGE>
PROPOSAL NO. 1
ELECTION OF DIRECTORS OF THE COMPANY
The Bylaws of the Company provide a procedure for nomination for
election of members of the Board of Directors, which procedure is printed in
full in the Notice of Annual Meeting of Shareholders accompanying this Proxy
Statement. Nominations not made in accordance therewith may be disregarded by
the Chairman of the Meeting, and upon his instructions the inspectors of
election shall disregard all votes cast for such nominee(s).
The authorized number of directors fixed in accordance with Section
16 of the Bylaws of the Company and to be elected at the Annual Meeting is
fifteen (15). Each director will hold office until the next Annual Meeting of
Shareholders and until his or her successor is elected and qualified.
All proxies will be voted for the election of the following fifteen
(15) nominees (all of whom are incumbent directors), recommended by the Board
of Directors, unless authority to vote for the election of any directors is
withheld by the shareholder on the proxy. If any nominee should unexpectedly
decline or be unable to act as a director, the proxies may be voted for a
substitute nominee to be designated by the Board of Directors. The Board of
Directors has no reason to believe that any nominee will become unavailable
and has no present intention to nominate persons in addition to or in lieu of
those named below.
The following table sets forth information with respect to
beneficial ownership of the Common Stock of the Company by those persons
nominated by the Board of Directors for election as directors, as well as all
directors and principal officers as a group. There is no family relationship
between any of the directors and/or principal officers. The Company has only
one class of shares outstanding, Common Stock.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
SHARES BENEFICIALLY OWNED
DIRECTOR AS OF MARCH 5, 1999 (1)
NOMINEE AGE POSITIONS HELD WITH OF COMPANY
THE COMPANY OR BANK % OF
SINCE SOLE (2) SHARED (3) CLASS
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Henry C. Arnest III 57 Director 1984 9,000 17,226 1.56
- -----------------------------------------------------------------------------------------------------------------
Louis J. Bosetti 67 Director 1984 12,464 15,482 1.67
- -----------------------------------------------------------------------------------------------------------------
Harry Dudley 68 Director 1989 -0- 42,369 2.53
- -----------------------------------------------------------------------------------------------------------------
William P. Ellison 50 President, Chief 1995 23,044 -0- 1.37
Executive Officer
and Director
- -----------------------------------------------------------------------------------------------------------------
Dr. Garry D. Fish 54 Director 1984 11,032 11,350 1.33
- -----------------------------------------------------------------------------------------------------------------
Max M. Froome 48 Director 1984 3,305 3,594 0.41
- -----------------------------------------------------------------------------------------------------------------
Orville K. Jacobs 68 Director 1984 48,918 1,100 2.98
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Gary C. Katz 49 Director 1984 28,239 11,310 2.36
- -----------------------------------------------------------------------------------------------------------------
John W. Koeberer 54 Chairman of the Board 1984 26,380 -0- 1.57
and Director
- -----------------------------------------------------------------------------------------------------------------
Raymond C. Lieberenz 55 Secretary and Director 1984 6,390 12,184 1.11
- -----------------------------------------------------------------------------------------------------------------
Leslie L. Melburg 46 Director 1998 2,178 -0- 0.13
- -----------------------------------------------------------------------------------------------------------------
Gary L. Napier 57 Vice Chairman of the 1984 40,517 -0- 2.42
Board and Director
- -----------------------------------------------------------------------------------------------------------------
2
<PAGE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
SHARES BENEFICIALLY OWNED
DIRECTOR AS OF MARCH 5, 1999 (1)
NOMINEE AGE POSITIONS HELD WITH OF COMPANY
THE COMPANY OR BANK % OF
SINCE SOLE (2) SHARED (3) CLASS
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Eugene F. Penne 71 Director 1984 -0- 22,971 1.37
- -----------------------------------------------------------------------------------------------------------------
John D. Regh 46 Director 1998 2,178 2,444 0.28
- -----------------------------------------------------------------------------------------------------------------
Terrance A. Rust 58 Director 1984 12.171 49,116 3.65
- -----------------------------------------------------------------------------------------------------------------
All directors and 244,880 189,146 25.88
principal officers (19
persons) as a group
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The calculations below are based on the total number of shares
outstanding, including 4,459 shares (145 of which became vested during 1998)
held for the benefit of the principal officers pursuant to the Company's
Employee Stock Ownership Plan and related trust agreement (see "Employee
Stock Ownership Plan" herein), and includes certain stock options as
indicated in footnote 2.
(2) The named persons exercise sole voting and investment power with respect
to shares listed in this column. Includes 2,500 shares as to which options
granted to directors and principal officers pursuant to the Company's 1994
Stock Option Plan (see "Stock Option Plan" herein) are vested within 60 days
of the Record Date.
(3) The named persons share voting and investment power with respect to
shares listed in this column.
The following is a brief account of the business experience of each nominee.
HENRY C. ARNEST III is Vice President and General Manager for Northwestern
Carbon. He was previously owner of Arnest & Sons Country Store and Vice
President & National Sales Manager for Woman's Day Magazine, a division of
CBS.
LOUIS J. BOSETTI was the Superintendent of Schools for Tehama County from
1971 until retirement in 1991, and is currently self-employed as an
educational consultant.
HARRY DUDLEY was Founder of Dudleys' Excavating, Inc., a construction company
located in Gerber, CA continuously for 45 years. He started Western Plastic,
Inc., which built the first fiberglass septic tanks in the western United
States. He was President and major stockholder of Countryside Cable, a cable
television company, in central Tehama County. He has also been involved in
the development of numerous commercial and residential real estate properties
in the area and has been a director of the Red Bluff Roundup Association for
15 years.
WILLIAM P. ELLISON became President and Chief Executive Officer of the Bank
January 1, 1996, and from 1991 until that time served the Bank as Vice
President and later Senior Vice President (Operations). Prior to joining the
staff of Tehama Bank, Mr. Ellison was employed by Bank of America for 21
years.
DR. GARRY D. FISH has been engaged in the practice of optometry in Red Bluff
since 1972.
MAX M. FROOME was self-employed as a landscape contractor from 1978 to 1992
and currently is self-employed as a real estate consultant and a broker of
antiques and environmental products.
ORVILLE K. JACOBS is retired and was a developer of real estate in Tehama
County for 14 years, during which time he was involved with commercial real
estate ventures in Red Bluff and surrounding communities. He served as member
of the Red Bluff Chamber of Commerce for 11 years, and was a founding
Director of the Tehama Local Development Corp. Mr. Jacobs is presently on the
advisory board for Celebrity City, and is owner of Antelope Service Center.
GARY C. KATZ is the President and majority owner of Phoenix Broadcasting,
Inc., which owns and operates the North State Radio Network, operator of
radio stations in northern California.
3
<PAGE>
JOHN W. KOEBERER, Chairman of the Board, is the President and co-owner of
three corporations: Urban Park Concessionaires, California Guest Services,
Inc., and The Picnic People, Inc., which operate park concessions at Lassen
Volcanic National Park, Shasta Lake and numerous facilities in the San
Francisco Bay Area. He is a member of the California Travel & Tourism
Commission and serves on the Boards of Directors of both the United States
Chamber of Commerce and the California State Chamber of Commerce. He is the
Chairman of the Lassen Park Foundation and President of The California Parks
Hospitality Association. He also serves on the Board of Directors of the San
Francisco Visitor and Convention Bureau and the California Travel Industries
Association.
RAYMOND C. LIEBERENZ, Secretary of the Board, was associate real estate
appraiser for the Tehama County Assessor from 1977 to 1987, and is a licensed
real estate broker.
LESLIE L. MELBURG is Senior Partner in charge of Design for Nichols, Melburg,
Rossetto Architects, a forty-eight person architectural firm with offices
located in Redding, Chico, Sacramento and Fort Bragg. He has won a number of
awards for design accomplishments and his projects have been published in
trade and architecture periodicals. He is a director of numerous community
organizations, including the Redding Chamber of Commerce and actively
participates in many other city and county organizations.
GARY L. NAPIER, Vice Chairman of the Board, has been owner of Buffum and
Napier Insurance Brokers since 1965. He is also the President of Torja
Corporation, a private investment company.
EUGENE F. PENNE is the Proprietor of Lariat Bowl, a Bowling Recreation Center
located in Red Bluff. He also owned and operated Orchard Lanes Bowling Center
in Chico for twenty-one years, and for sixteen years was a Shell Oil Company
Service Station Dealer in Red Bluff.
JOHN D. REGH is the President of Inland Business Machines Systems and Inland
Leasing, Inc.. Inland Business Machines was established in 1986 and is
involved in the sales, service and financing of office equipment. He also
serves on the Boards of Directors for the Chico Chamber of Commerce and Butte
Creek Country Club.
TERRANCE A. RUST is a dentist engaged in the specialty practice of oral and
maxillofacial surgery, and has maintained an office in Redding since 1970.
COMMITTEES OF THE BOARD OF DIRECTORS
The Company has an Audit Committee and an Executive Committee which
also acts as the Investment and Compensation Committee. The Audit Committee
examines and reviews both internal audit controls and regulatory audit
reports, and meets with the Company's auditors concerning audit procedures
and controls. The members of the Audit Committee are Messrs. Bosetti
(chairman), Arnest, Katz, Koeberer and Penne. The Executive Committee
oversees the routine operations of the Company by delegation from the Board
of Directors, advises and reports to the full Board regarding such matters,
investigates and advises the Board of Directors as to employee benefit
arrangements, conducts searches when the Company proposes to hire executive
personnel, reports to the Board of Directors with regard to executive
compensation, including bonus compensation, and monitors the Company's
investments. The members of the Executive Committee are Messrs. Koeberer
(chairman), Bossetti, Ellison, Fish, Katz and Napier.
The Company does not have a nominating committee, but the Executive
Committee functions as the Company's nominating committee. Shareholders may
nominate directors in accordance with the procedures set forth in Section 16
of the Company's Bylaws, which is printed in full in the Notice of Annual
Meeting of Shareholders which accompanies this Proxy Statement.
The Board of Directors met a total of twelve (12) times during 1998.
During this same period, the Audit Committee met nine (9) times and the
Executive Committee nine (9) times. All incumbent directors of the Company
attended at least seventy-five percent (75%) of the meetings of the Board of
Directors and the Committees of which they were members.
4
<PAGE>
COMPENSATION AND CERTAIN TRANSACTIONS
SUMMARY COMPENSATION TABLE
The following table provides information concerning compensation of
all executive officers of the Company who received, during any of the periods
indicated, annual salary and bonus exceeding $100,000. All compensation was
paid by the Bank for services to the Bank.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
ANNUAL COMPENSATION
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
NAME YEAR SALARY BONUS (1) OTHER ANNUAL ALL OTHER
COMPENSATION(2) COMPENSATION (3)
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
William P. Ellison 1998 $120,000 $70,000 $2,356 $12,458
1997 126,600 -0- 1,770 27,575
1996 109,500 51,500 4,272 24,315
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
W. Steven Gilman 1998 $ 81,000 $17,500 $2,231 $ 9,081
1997 80,500 -0- 1,191 4,325
1996 74,583 20,000 641 -
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Bonuses are indicated for the years upon which they are based, and are
payable March of the succeeding year.
(2) Includes payment of insurance premiums, matching contributions to the
Employee Stock Ownership Plan and use of an automobile.
(3) Includes amounts accrued pursuant to Salary Continuation Agreements.
STOCK OPTION PLAN
The Tehama Bancorp 1994 Stock Option Plan (the "1994 Plan") was
approved by the shareholders of the Bank at the 1994 Annual Meeting of
Shareholders. The Board adopted the 1994 Plan in order to attract and retain
the best available personnel for positions of substantial responsibility and
to provide additional incentive to present and future affiliates of the
Company, including officers, employees and directors. Options granted under
the 1994 Plan may only be granted to key, full-time salaried employees, key,
full-time salaried officers, and directors of the Company or any subsidiary.
As of the date of this Proxy Statement there are approximately 85 officers or
employees of the Company eligible to receive option grants. The aggregate
number of shares available for issuance pursuant to the exercise of options
granted under the Plan may not exceed 369,200 shares of the Company's common
stock. However, such number of shares as well as the number of shares and the
exercise price of outstanding options are required to be proportionately
adjusted for any increase or decrease in the number of outstanding shares of
common stock resulting from any recapitalization, merger in which the Company
is not the surviving entity, stock dividend, or the like. The 1994 Plan and
outstanding options may be terminated in the event of a sale or dissolution
or change in control of the Company, provided that (unless replacement
options are offered) all outstanding options may be exercised prior to the
effectiveness of such transactions without regard to individual vesting
provisions. Acceleration of vesting is also required in the event of tender
offers. The Plan is administered by a Stock Option Committee currently
composed of all members of the Board of Directors except Chief Executive
Officer William P. Ellison
The terms of options granted to officers and employees of the
Company are within the discretion of the Committee, subject to the
limitations that no option may have a term exceeding ten years, all options
must be granted at not less than the fair market value of the common stock as
of the date of grant, and the number of shares subject to options granted
under the Plan or any other plan of the Company held by any single optionee
may not exceed 10% of the total outstanding shares of the Company's common
stock. The 1994 Plan also provides that each current and future director of
the Company shall receive a one-time grant of an option to acquire 10,890
shares of common stock at a price equal to 100 % of the fair market value of
the common stock
5
<PAGE>
as of the date of the grant. No director may receive more than one such grant
under the 1994 Plan. Each such director option expires five years from the
date of grant, vests immediately as to 20 % of the total number of shares
subject to the grant, and vests to the extent of an additional 20% of such
number of shares on each of the first through the fourth anniversaries of the
date of grant.
The exercise price of options under the 1994 Plan may be paid in
cash or in shares of common stock valued at fair market value on the exercise
date. Options may also be exercised (1) through a same-day sale program,
pursuant to which a designated brokerage firm is to effect an immediate sale
of the shares purchased under the option and pay over to the Company, out of
the sales proceeds available on the settlement date, sufficient funds to
cover the exercise price for the purchased shares plus applicable withholding
taxes, (2) by delivering to the Company a sufficient number of previously
acquired shares of common stock to pay the exercise price and any required
withholding, and (3) with the consent of the Stock Option Committee, by
having the Company withhold from the number of shares exercised a sufficient
number of shares to satisfy such exercise price and tax withholding. The
Committee's current policy is not to permit the exercise of stock options by
the share withholding method because of its adverse tax consequences for the
Company, but the Company's policy in such cases is to pay the brokerage
commission if the optionholder elects to exercise by means of the same-day
sale program.
Options under the 1994 Plan are not assignable or transferable other
than by will or by the laws of inheritance, and during the optionee's
lifetime, the option may be exercised only by the optionee. If an optionee
officer or director ceases to be employed by the Company or any of its
subsidiaries for any reason other than cause (as defined), disability or
death, the optionee may, within three months after the date of termination of
employment, exercise the option to the extent the optionee was entitled to
exercise it at the date of such termination; provided that the date of
exercise is in no event after the expiration of the term of the option. If an
employee's employment is terminated for cause, the option terminates on the
date of termination. In the event an optionee's employment is terminated due
to the optionee's disability or death, the optionee or the optionee's estate,
as applicable, within twelve months following the date of termination of
employment, may exercise the option to the extent the option was exercisable
at the date of such termination of employment, provided that the date of
exercise is in no event after the expiration of the term of the option.
OPTION GRANTS, EXERCISES AND YEAR-END VALUES FOR 1998
The following table sets forth, with respect to the executive
officers named in the Summary Compensation Table, information concerning
options granted or exercised during 1998 and the estimated 1998 year-end
value of unexercised options held by such executive officers. Numbers and
prices have been adjusted for the 1994 stock split and previous applicable
stock dividends.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
NUMBER OF VALUE OF
SECURITIES UNEXERCISED
UNDERLYING IN-THE-MONEY
UNEXERCISED OPTIONS
SHARES OPTIONS AT FY-END (2)
ACQUIRED AT FY-END
OPTIONS ON VALUE (EXERCISABLE/ (EXERCISABLE/
NAME GRANTED EXERCISE REALIZED (1) UNEXERCISABLE) UNEXERCISABLE)
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
William P. Ellison 5,000 6,000 $45,509 14,556/10,960 $34,532/11,580
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
W. Steven Gilman 2,500 -0- -0- 4,800/5,700 $4,475/4,025
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Market value of underlying securities on the date(s) of exercise, minus
the exercise or base price.
(2) Market value of underlying securities at year-end 1998, minus the
exercise or base price.
6
<PAGE>
The Board of Directors has voted to terminate the 1994 Plan
concurrently with the effectiveness of the Tehama Bancorp 1999 Stock Option
Plan which is being submitted for approval by the shareholders of the
Company. See "PROPOSAL NO. 2 - TEHAMA BANCORP 1999 STOCK OPTION PLAN" below
SALARY CONTINUATION AGREEMENTS
In order to provide long-term incentive to selected senior executive
officers, the Bank in 1993 entered into Executive Salary Continuation
Agreements (each an "SCA") with three former and one current senior executive
officer of the Company, Chief Executive Officer William P. Ellison. An
agreement amending the SCA with Mr. Ellison also was entered into effective
in 1998, and SCAs were entered into subsequently with other officers of the
Company, including Senior Vice President and Director of Sales and Service W.
Steven Gilman.
Benefits payable under the SCAs are intended by the Company to be
funded by single-premium life insurance policies which were purchased in
connection with entering into the SCAs and of which the Company is the owner
and beneficiary. The total amount of such premiums paid by the Bank in
connection with all SCAs entered into is $3,015,000. Notwithstanding the
existence of such policies of insurance, however, the SCAs create no rights
or interests in the property or assets of the Company, the sole obligation of
the Company under the SCAs is an unfunded and unsecured promise to pay money
in the future, and the status of any person who may assert a claim pursuant
to an SCA is that of an unsecured general creditor of the Company.
Generally, each SCA provides the named executive officer with a
specified annual money benefit (the "Annual Benefit") payable to the
executive or to his named beneficiary or surviving spouse or estate, in that
order, for a period of up to fifteen years following the executive's
retirement upon or after a specified retirement age. If the executive should
die or become disabled prior to such specified retirement age, a percentage
of the Annual Benefit (on a sliding upward scale depending upon the number of
years which elapse between execution of the SCA and the executive's early
death or disability) would be payable.
No Annual Benefit is payable if the executive's employment is
terminated for cause or the executive voluntarily terminates his employment
with the Company prior to his specified retirement age, but the full Annual
Benefit is payable if the executive's employment with the Company is
terminated by the Company without cause or in connection with a change in
control of the Company. The amount of the Annual Benefit also is subject to
reduction if in any year it exceeds the compensation expense which (with
respect to the payment of such Annual Benefit) the Company may deduct under
the Internal Revenue Code of 1986, as amended (the "Code"), or if any portion
of the Annual Benefit not waived by the executive constitutes an "excess
parachute" payment under the Code.
Subject to such contingencies, the following table sets forth
information regarding benefits payable under the SCAs which are currently in
effect between the Company and the executive officers named in the Summary
Compensation Table:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
ANNUAL YEARS REQUIRED YEAR ANNUAL RETIREMENT
NAME BENEFIT FOR FULL BENEFIT BENEFIT COMMENCES AGE
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
William P. Ellison $75,000 10 2010 62
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
W. Steven Gilman $50,000 10 2016 62
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
DIRECTOR COMPENSATION
Directors of the Company are also directors of the Bank and were
paid by the Bank $750 per meeting of its Board of Directors attended during
1998. In addition, members of each committee were paid $100 for each
committee meeting attended, Mr. Koeberer, as Chairman, was paid an additional
$500 per month, and committee chairman were paid an additional $50 per
meeting. The total amount of such fees paid by the Bank to
7
<PAGE>
all directors for all meetings attended during fiscal year 1998 was $177,250
including $6,800 paid by the Bank's subsidiary Bancorp Financial Services
("BFS") to directors of the Bank who served on the board of directors of BFS.
During 1998, director options for 50,338 shares of Company common
stock having a net value (market price less exercise price on the date of
exercise) of $354,395 were exercised.
DIRECTOR EMERITUS PROGRAM
The Bylaws of the Company and the Bank prohibit (with certain
exceptions in the case of current directors) the election as a director of
any person 70 years of age or older. The Company in tandem with this policy
has instituted a Director Emeritus Program whose purpose is to permit the
Company and the Bank to continue to utilize and benefit from the experience
and community position of retired and former directors The Program permits
the board of directors to retain for a period of up to five years the
services of any former director of the Bank or any director who retires
because of age after at least ten years of service as a director. Directors
Emeritus may be compensated annually in an amount which may not exceed ten
times the monthly fee paid to current members of the board of directors.
Directors Emeritus in return are required to represent and promote the
Company and the Bank, call on customers and prospective customers of the Bank
on a monthly basis, meet at least twice a year with the President and
Chairman of the Board, consult upon request in the director's field of
expertise, business or profession, and comply with all policies of the
Company and the Bank. Directors Emeritus do not participate in establishing
or administering Bank or Company policy and are not entitled to request or
obtain confidential information of the Bank or the Company. As of the date of
this Proxy Statement, one former director participates in the Director
Emeritus Program.
INDEBTEDNESS OF MANAGEMENT
The Company has had and expects to have in the future, banking
transactions in the ordinary course of its business with directors, principal
officers, their respective associates and members of their immediate
families. All loans and commitments to lend extended to such persons during
1998 by the Bank were made in accordance with Bank policy on substantially
the same terms, including interest rates and collateral, as those prevailing
at the time for comparable transactions with other persons and, in the
opinion of the Company and the Bank, did not involve more than the normal
risk of collectibility or present other unfavorable features.
TRANSACTIONS WITH MANAGEMENT
During 1998, the Bank placed radio advertising in the gross amount
of $6,870 with agencies employed by stations owned and operated by director
Gary Katz, and paid brokerage commissions in the total amount of $10,623 to
director Gary Napier for insurance purchased through his agency. No other
business transactions of any kind existed or were entered into between the
Company and its directors and their affiliates.
PROPOSAL NO. 2
TEHAMA BANCORP 1999 STOCK OPTION PLAN
INTRODUCTION
Shareholders are being asked to vote on a proposal to approve the
Tehama Bancorp 1999 Stock Option Plan (the "1999 Plan"), which was approved
and adopted March 18, 1999, by the Board of Directors. The following
discussion summarizes the principal features of the 1999 Plan. This
description is qualified in its entirety by reference to the full text of the
1999 Plan, a copy of which is attached to this Proxy Statement as Appendix A
and is incorporated here by reference.
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<PAGE>
SUMMARY OF 1999 PLAN
PURPOSE OF THE 1999 PLAN. The purpose of the 1999 Plan is to offer
selected employees, directors and consultants of the Company an opportunity
to acquire a proprietary interest in the success of the Company, or to
increase such interest, by purchasing shares of the Company's common stock.
The options issued under the 1999 Plan, at the discretion of the
Board or a committee appointed by the Board, may be either incentive stock
options or non-qualified stock options.
ADMINISTRATION. The Board will have authority to administer the 1999
Plan but may delegate its administrative powers to one or more committees of
the Board. With respect to the participation of employees who are subject to
Section 16 of the Securities Exchange Act (the "Exchange Act"), the 1999 Plan
may be administered by a committee composed solely of two or more members of
the Board of Directors who qualify as "nonemployee directors" as defined in
SEC Rule 16b-3 under the Exchange Act. With respect to the chief executive
officer of the Company, the 1999 Plan may be administered by a committee
composed solely of two or more members of the Board of Directors who qualify
as "outside directors" for such purpose as defined by the Internal Revenue
Service. If the committee members meet both such qualifications, then one
committee may administer the 1999 Plan.
The Board may appoint a separate committee, consisting of one or
more members of the Board who do not meet such qualifications. Such committee
may administer the 1999 Plan with respect to employees who are not officers
of the Company or members of the Board, may grant options under the 1999 Plan
to such employees and may determine the timing, number of shares and other
terms of such grants.
SHARES RESERVED. The aggregate number of shares available for
issuance pursuant to the exercise of options granted under the 1999 Plan has
been calculated in compliance with a regulation of the California
Commissioner of Corporations (the "Commissioner") which limits the total
number of shares of the Company's common stock issuable upon the exercise of
options under all stock option plans of the Company to a number equal to
thirty percent (30%) of the Company's outstanding shares. The Company's 1994
Plan will terminate effective with the qualification of the 1999 Plan by the
Commissioner, but options under the 1994 Plan are still outstanding.
The following calculations demonstrate the application of this rule
of the Commissioner to the 1994 and 1999 Plans:
<TABLE>
<S> <C>
Shares outstanding as of the Record Date (1,677,387) x 30% = 503,216
Less shares reserved for outstanding options under 1994 Plan (136,716) = 366,500
</TABLE>
The number of shares available for issuance under the 1999 Plan if no
outstanding options under the 1994 Plan are exercised before the 1999 Plan is
qualified by the Commissioner, therefore, would be 366,500. However, if all
of the options outstanding under the 1994 Plan were exercised before
qualification of the 1999 plan by the Commissioner, the new shares issued
upon exercise of such options would be added to shares outstanding and the
calculation of shares available for issuance under the 1999 Plan would be as
follows:
<TABLE>
<S> <C>
Shares outstanding if all options outstanding under 1994 Plan are exercised:
1,677,387 + 136,716 = 1,814,103
Maximum number of shares reserved under 1999 Plan:
1,814,103 x 30% = 544,230
</TABLE>
Hence, if the 1999 Plan is approved by the shareholders, the maximum number
of shares available under the 1999 Plan will be 544,230, and the minimum
number of shares available will be 366,500. Should any option granted under
the 1994 or 1999 Plans expire or become unexercisable for any reason without
having been exercised in full, the shares subject to the portion of the
option not so exercised will be available for subsequent option grants under
the 1999 Plan.
9
<PAGE>
Options under the 1999 Plan may not be granted until the 1999 Plan
is qualified by the Commissioner. This is expected to occur within the month
following the annual meeting.
ELIGIBILITY. Any individual who is a common-law employee of the
Company, any member of the Board, and any independent contractor who performs
services for the Company and who is not a member of the Board will be
eligible to participate in the 1999 Plan. As of the date of this Proxy
Statement, there are approximately 85 persons who are officers or employees
of the Company and fourteen directors who are eligible to receive option
grants under the 1999 Plan.
OPTION GRANTS TO NON-EMPLOYEE DIRECTORS. The Plan provides that each
current and future director of the Company shall receive a one-time grant of
an option to acquire 5,000 shares of common stock at a price equal to 100% of
the fair market value of the common stock as of the date of the grant. No
director may receive any other grant of options under the Plan unless the
additional grant is approved by the shareholders of the Company (not
including shares beneficially owned by any director to whom such an
additional option is proposed to be granted). Each such option (i) expires
ten years from the date of grant, (ii) vests immediately as to 20% of the
total number of shares subject to the grant and vests to the extent of an
additional 20% of such number of shares on each of the first through the
fourth anniversaries of the date of grant, and (iii) terminates only in the
event of the director's death or termination of service as a director for
cause.
TERMS OF OPTIONS. Under the 1999 Plan, the Board or the Committee
(as the case may be) selects the individuals to whom options will be granted,
the type of option to be granted, the exercise price of each option, the
number of shares covered by such option and the other terms and conditions of
each option. The eligible individuals are able to receive incentive and
non-qualified stock options; provided, however, that the aggregate fair
market value (determined at the time the incentive stock option is granted)
of the stock with respect to which incentive stock options are exercisable
for the first time by the optionee during any calendar year (under all
incentive stock option plans of the Company) may not exceed one hundred
thousand dollars ($100,000). Should it be determined that any incentive stock
option granted exceeds such maximum, such incentive stock option is
considered to be a non-qualified stock option and not to qualify for
treatment as an incentive stock option under Section 422 of the Internal
Revenue Code to the extent, but only to the extent, of such excess.
The vesting of any option granted under the 1999 Plan will be
determined by the Committee at its sole discretion, provided however, that
(i) each option agreement must provide for immediate exercisability of the
entire option in the event of a change in control of the Company, and (ii) in
the event that an optionee's service as an employee, or non-director
consultant of the Company terminates, the option will be exercisable only to
the extent it was vested as of the date of such termination, unless otherwise
specified in the option agreement.
For purposes of the above provisions, a "change in control" will
mean that either:
(i) A change occurs in the composition of the Board, as a result of
which fewer than one-half of the incumbent directors are directors who had
been directors of the Company for 24 months prior to such change, or were
elected, or nominated for election, to the Board with the affirmative votes
of at least a majority of the directors who had been directors of the Company
24 months prior to such change and who were still in office at the time of
the election or nomination; or
(ii) Any person, company or governmental or political subdivision,
agency or instrumentality is or becomes the beneficial owner, directly or
indirectly, of securities of the Company representing 50 percent or more of
the combined voting power of the Company's then outstanding securities.
The exercise price of each option granted pursuant to the 1999 Plan
ordinarily may not be less than one hundred percent (100%) of the fair market
value of the stock subject to the option on the date the option is granted;
provided, however, that the purchase price of the stock subject to an
incentive stock option may not be less than one hundred ten percent (110%)
for incentive stock options where the optionee owns stock possessing more
than ten percent (10%) of the total combined voting power of Company. For
purposes of establishing the
10
<PAGE>
exercise price and for all other valuation purposes under the 1999 Plan, the
fair market value per share of common stock on any relevant date will be such
value as determined by the Committee in reliance upon prices reported or
quoted upon any exchange or transaction reporting system on which the common
stock is listed or reported. If the common stock is not so listed or quoted,
fair market value may be determined in any manner which the Committee deems
reasonable. The fair market value of the Company's common stock on the Record
Date as reported on the OTC Bulletin Board was $12.25 per share.
SUBSTITUTE OPTIONS. If the Company at any time succeeds to the
business of another corporation through merger or consolidation, or through
the acquisition of stock or assets of such corporation, options may be
granted under the 1999 Plan in substitution of options previously granted by
such other corporation to purchase shares of its stock, which options are
outstanding at the date of the succession.
The Committee will have discretion to determine the extent to which
Substitute Options will be granted, the persons to receive Substitute
Options, the number of shares to be subject to Substitute Options, and the
terms and conditions of Substitute Options which shall, to the extent
permissible within the terms and conditions of the Plan, be equivalent to the
terms and conditions of the options surrendered in exchange for Substitute
Options. The exercise price per share of Substitute Options may be determined
without regard to the requirement that options be granted at an exercise
price per share not less than fair market value, provided, however, that the
exercise price of each Substitute Option must be an amount such that, in the
sole and absolute judgment of the Committee, the economic benefit provided by
such Substitute Option is not greater than the economic benefit represented
by the surrendered option as of the date the Substitute Option is granted.
PAYMENT FOR SHARES. The exercise price of shares issued pursuant to
exercise of a nonstatutory stock option under the 1999 Plan may be made (i)
all or in part with shares which have already been owned by the optionee or
his or her representative for more than 6 months, valued at their fair market
value on the date when the new shares are purchased, (ii) by the delivery (on
a form prescribed by the Company) of an irrevocable direction to a securities
broker approved by the Company to sell shares and to deliver all or part of
the sales proceeds to the Company in payment of all or part of the exercise
price and any withholding taxes, or (iii) by the delivery (on a form
prescribed by the Company) of an irrevocable direction to pledge shares to a
securities broker or lender approved by the Company, as security for a loan,
and to deliver all or part of the loan proceeds to the Company in payment of
all or part of the exercise price and any withholding taxes. In the
discretion of the Committee, payment of the exercise price of incentive stock
options may be accepted in any of such forms or as the Committee may
otherwise provide in the option agreement.
ADJUSTMENTS UPON CHANGES IN SHARES. In the event of a subdivision of
the outstanding shares of the Company, a declaration of a dividend payable in
such shares, a declaration of a dividend payable in a form other than such
shares in an amount that has a material effect on the value of outstanding
shares, a combination or consolidation of the outstanding shares by
reclassification or otherwise into a lesser number of shares, a
recapitalization, a spinoff or a similar occurrence, the Committee may make
appropriate adjustments in one or more of the number of shares available for
future grants, the limit set upon the number of options which may be granted
to any single individual in one year, the number of shares covered by each
outstanding option, or the exercise price under each outstanding option.
In the event that the Company is a party to a merger or other
reorganization, outstanding options will be subject to the agreement of
merger or reorganization, which (subject to the "change in control" provision
described above) may provide, without other limitation, for the assumption of
outstanding options under the 1999 Plan by the surviving corporation or its
parent, for their continuation by the Company (if the Company is the
surviving corporation), for payment of a cash settlement per share of the
option equal to the difference between the amount to be paid for one share of
the Company under such agreement and the exercise price per share of the
option, or for the acceleration of their exercisability followed by the
cancellation of options not exercised, in all cases without the optionees'
consent. Any cancellation may not occur until after such acceleration is
effective and optionees have been notified of such acceleration and have had
reasonable opportunity to exercise their options.
11
<PAGE>
EXPIRATION, TERMINATION AND TRANSFER OF OPTIONS. Under the 1999
Plan, no incentive option may extend more than ten years (or five years, in
the case of an incentive option granted to an employee who owns more than 10
percent of the combined voting power of all classes of stock of the Company)
from the date of grant; the terms of all options, otherwise may be determined
by the Committee in its sole discretion. In the event of termination of
employment due to death or total and permanent disability, options will
expire twelve months after such termination unless the options by their terms
were scheduled to expire earlier. If the optionee's employment is terminated
for cause, the option expires 30 days after the Company gives notice of such
termination; for such purposes, "cause" is defined to include embezzlement,
fraud, dishonesty, breach of fiduciary duty, the deliberate disregard of
rules of the Company which results in loss, damage or injury to the Company,
the unauthorized disclosure of any of the secrets or confidential information
of the Company the inducement of any client or customer of the Company to
break any contract with the Company or the inducement of any principal for
whom the Company acts as agent to terminate such agency relationship, the
engagement in any conduct which constitutes unfair competition with the
Company, the removal of the optionee from office by any court or the Company
regulatory agency, or such other similar acts which the Committee in its
discretion may determine to constitute good cause for termination of
optionee's service. During an optionee's lifetime, the optionee's incentive
options may be exercised only by him or her and may not be transferred. An
optionee's nonstatutory options also will not be transferable during the
optionee's lifetime, except to the extent otherwise permitted in the option
agreement. Subject to prior permitted transfers, in the event of an
optionee's death, the optionee's option(s) will not be transferable other
than by will, by written beneficiary designation or by the laws of descent
and distribution.
TERMINATION AND AMENDMENT OF THE PLAN. The Board may amend, suspend
or terminate the 1999 Plan at any time and for any reason. An amendment of
the Plan shall be subject to the approval of the shareholders of the Company
only to the extent required by applicable laws or regulations. If not
previously terminated by the Board, the 1999 Plan will terminate ten years
from the date of its approval by the shareholders.
FEDERAL INCOME TAX CONSEQUENCES. The following discussion is only a
summary of the principal federal income tax consequences of the options and
rights to be granted under the 1999 Plan, and is based on existing federal
law (including administrative regulations and rulings) which is subject to
change, in some cases retroactively. State and local tax consequences may
differ. This discussion is also qualified by the particular circumstances of
individual optionees, which may substantially alter or modify the federal
income tax consequences discussed.
Incentive stock options and non-qualified stock options are treated
differently for federal income tax purposes. Incentive stock options are
intended to comply with the requirements of Section 422 of the Internal
Revenue Code. Non-qualified stock options need not comply with such
requirements.
An optionee is not taxed on the grant or exercise of an incentive
stock option. The difference between the exercise price and the fair market
value of the shares on the exercise date will, however, be a preference item
for the purposes of the alternative minimum tax. If an optionee holds the
shares acquired upon exercise of an incentive stock option for at least two
years following grant and at least one year following exercise, the
optionee's gain, if any, upon a subsequent disposition of such shares is
long-term capital gain. The measure of the gain is the difference between the
proceeds received on disposition and the optionee's basis in the shares
(which generally equals the exercise price). If an optionee disposes of stock
acquired pursuant to exercise of an incentive stock option before satisfying
the one- and two-year holding periods described above, the optionee will
recognize both ordinary income and capital gain the year of disposition. The
amount of ordinary income will be the lesser of (i) the amount realized on
disposition less the optionee's adjusted basis in the stock (usually the
exercise price) or (ii) the difference between the fair market value of the
stock on the exercise date and the option price. The balance of the
consideration received on such a disposition will be long-term capital gain
if the stock had been held for at least one year following exercise of the
incentive stock option. the Company will not be entitled to an income tax
deduction on the grant or exercise of an incentive stock option or on the
optionee's disposition of the shares after satisfying the holding period
requirement described above. If the holding periods are not satisfied, the
Company will be entitled to a deduction in the year the optionee disposes of
the shares, in an amount equal to the ordinary income recognized by the
optionee.
12
<PAGE>
An optionee is not taxed on the grant of a non-qualified stock
option. Upon exercise however, the optionee recognizes ordinary income equal
to the difference between the option price and the fair market value of the
shares on the date of exercise. The Company will be entitled to an income tax
deduction in the year of exercise in the amount recognized by the optionee as
ordinary income. Any gain on subsequent disposition of the shares is
long-term capital gain if the shares are held for at least one year following
exercise. The Company will not receive a deduction for this gain.
The following table sets forth the benefits, to the extent
determinable, which would have been allocated to the specified persons or
groups for fiscal year 1998 under the 1999 Plan if it had been in effect:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
NAME AND POSITION VALUE NUMBER OF
OR GROUP SHARES
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
William P. Ellison, Chief Executive Officer
Fair Market Value See note 1
W. Steven Gilman, Senior Vice President and
Director of Sales and Service
- --------------------------------------------------------------------------------------------------------------------
All Executive Officers Fair Market Value See note 1
- --------------------------------------------------------------------------------------------------------------------
All Non-Executive Directors Fair Market Value 70,000
- --------------------------------------------------------------------------------------------------------------------
All Non-Executive Employees Fair Market Value See note 1
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Options which may be granted to this person or group are at the
discretion of the Committee.
REQUIRED VOTE
The 1999 Plan is subject to approval by the Company's shareholders.
For the proposal to approve the 1999 Plan to pass, the proposal must receive
the affirmative vote of the holders of a majority of the Company's common
stock present in person or represented by proxy and entitled to vote at the
annual meeting, and by the holders of a majority of the disinterested shares
represented in person or by proxy, and voting at the meeting. For this
purpose, "disinterested shares" are shares held by persons who have not been
granted an option under the 1999 Plan. No options have been or may be granted
under the 1999 Plan until it has been approved by the shareholders and
qualified by the California Commissioner of Corporations.
The Board of Directors recommends a vote FOR this proposal.
INDEPENDENT PUBLIC ACCOUNTANTS
The accounting firm of Perry-Smith & Co. ("Perry-Smith"), certified
public accountants, serves the Company as its auditors at the direction of
the board of directors and Audit Committee of the Company. It is anticipated
that a representative of Perry-Smith will be present at the meeting with the
opportunity to make a statement if he desires to do so and will be available
to answer appropriate questions.
During 1998, the Company paid Perry-Smith $28,110 in fees for
non-audit services, including tax advice and preparation. This amount
represented approximately 34% of the total fees paid to Perry-Smith during
the period. Before each professional service provided by Perry-Smith was
rendered to the Company, such service was approved by, and its effect upon
Perry-Smith's independence was considered by, the Audit Committee.
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<PAGE>
ANNUAL REPORT
The Annual Report to Shareholders of the Company containing audited
financial statements for the fiscal year ended December 31, 1998, accompanies
this Proxy Statement.
A COPY OF THE COMPANY'S ANNUAL REPORT TO THE SECURITIES AND EXCHANGE
COMMISSION ON FORM 10-K MAY BE OBTAINED BY ANY SHAREHOLDER OF THE COMPANY,
WITHOUT CHARGE, BY WRITING TO THE SECRETARY, TEHAMA BANCORP, 239 SOUTH MAIN
STREET, RED BLUFF, CALIFORNIA 96080.
SHAREHOLDERS' PROPOSALS
Next year's Annual Meeting of Shareholders is currently scheduled to
be held on April 28, 2000. The deadline for shareholders to submit proposals
for inclusion in the Proxy Statement and form of Proxy for the 2000 Annual
Meeting of Shareholders is December 30, 1999. Management of the Company will
have discretionary authority to vote proxies obtained by it in connection
with any shareholder proposal not submitted on or before the December 30,
1999 deadline. All proposals should be submitted by Certified Mail, Return
Receipt Requested, to the Secretary, Tehama Bancorp, 239 South Main Street,
Red Bluff, California 96080.
OTHER MATTERS
The Board of Directors knows of no other matters which will be
brought before the meeting but if such matters are properly presented to the
meeting, proxies solicited hereby will be voted in accordance with the
judgment of the persons holding such proxies. All shares represented by duly
executed proxies will be voted at the meeting in accordance with the terms of
such proxies.
Red Bluff, California TEHAMA BANCORP
March 31, 1999
William Jenkins
Vice President and Chief Financial Officer
14
<PAGE>
APPENDIX A
TEHAMA BANCORP 1999 STOCK OPTION PLAN
1. PURPOSE
The purpose of the Plan is to offer selected employees, directors and
consultants an opportunity to acquire a proprietary interest in the success
of the Company, or to increase such interest, by purchasing Shares of the
Company's Common Stock. The Plan provides both for the grant of Nonstatutory
Options as well as ISOs intended to qualify under section 422 of the Code.
2. DEFINITIONS
(a) "Board of Directors" shall mean the Board of Directors of the
Company, as constituted from time to time.
(b) "Change in Control" shall mean the occurrence of either of the
following events:
(i) A change in the composition of the Board of Directors, as a
result of which fewer than one-half of the incumbent directors are
directors who either:
(A) Had been directors of the Company 24 months prior to such
change; or
(B) Were elected, or nominated for election, to the Board of
Directors with the affirmative votes of at least a majority of the
directors who had been directors of the Company 24 months prior to
such change and who were still in office at the time of the
election or nomination; or
(ii) Any "person" (as such term is used in sections 13(d) and 14(d)
of the Exchange Act) who by the acquisition or aggregation of
securities is or becomes the beneficial owner, directly or
indirectly, of securities of the Company representing 50 percent or
more of the combined voting power of the Company's then outstanding
securities. For purposes of this Paragraph (ii), the term "person"
shall not include an employee benefit plan maintained by the
Company.
(c) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(d) "Committee" shall mean a committee of the Board of Directors, as
described in Section 3(a), or in the absence of such a committee,
the Board of Directors.
(e) "Company" shall mean Tehama Bancorp, a California corporation.
(f) "Employee" shall mean:
(i) Any individual who is a common-law employee of the Company or
of a Subsidiary; or
(ii) A member of the Board of Directors; or
(iii) An independent contractor who performs services for the
Company or a Subsidiary and who is not a member of the Board of
Directors.
Service as an independent contractor or member of the Board of
Directors shall be considered employment for all purposes of the
Plan, except as provided in Section 4(a).
(g) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
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<PAGE>
(h) "Exercise Price" shall mean the amount for which one Share may be
purchased upon exercise of an Option, as specified by the
Committee in the applicable Stock Option Agreement.
(i) "Fair Market Value" shall mean the market price of Stock,
determined by the Committee as follows:
(i) If Stock was traded over-the-counter on the date in question
but was not traded on the NASDAQ system or the NASDAQ National
Market System, then the Fair Market Value shall be equal to the
mean between the last reported representative bid and asked prices
quoted for such date by the principal automated inter-dealer
quotation system on which Stock is quoted;
(ii) If Stock was traded over-the-counter on the date in question
and was traded on the NASDAQ system or the NASDAQ National Market
System, then the Fair Market Value shall be equal to the
last-transaction price quoted for such date by the NASDAQ system or
the NASDAQ National Market System;
(iii) If Stock was traded on a stock exchange on the date in
question, then the Fair Market Value shall be equal to the closing
price reported by the applicable composite-transactions report for
such date; and
(iv) If none of the foregoing provisions is applicable, then the
Fair Market Value shall be determined by the Committee in good
faith on such basis as it deems appropriate.
In all cases, the determination of Fair Market Value by the Committee
shall be conclusive and binding on all persons.
(j) "ISO" shall mean an employee incentive stock option described in
Section 422(b) of the Code.
(k) "Nonstatutory Option" shall mean a stock option not described in
Sections 422(b) or 423(b) of the Code.
(l) "Option" shall mean an ISO or Nonstatutory Option granted under the
Plan and entitling the holder to purchase Shares.
(m) "Optionee" shall mean an individual who holds an Option.
(n) "Plan" shall mean this Tehama Bancorp 1999 Stock Option Plan, as it
may be amended from time to time.
(o) "Service" shall mean service as an Employee.
(p) "Share" shall mean one share of Stock, as adjusted in accordance
with Section 8 (if applicable).
(q) "Stock" shall mean the Common Stock of the Company.
(r) "Stock Option Agreement" shall mean the agreement between the
Company and an Optionee which contains the terms, conditions and
restrictions pertaining to his or her Option.
(s) "Subsidiary" shall mean any corporation, if the Company and/or one
or more other Subsidiaries own not less than 50 percent of the total
combined voting power of all classes of outstanding stock of such
corporation. A corporation that attains the status of a Subsidiary on a
date after the adoption of the Plan shall be considered a Subsidiary
commencing as of such date.
2
<PAGE>
(t) "Substitute Option" shall mean an option described in Section 6(j).
(u) "Total and Permanent Disability" shall mean that the Optionee is
unable to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment which can be
expected to result in death or which has lasted, or can be expected to
last, for a continuous period of not less than one year.
3. ADMINISTRATION
(a) COMMITTEE MEMBERSHIP. The Board of Directors shall have the authority
to administer the Plan but may delegate its administrative powers under the
Plan, in whole or in part, to one or more committees of the Board of
Directors. With respect to the participation of Employees who are subject
to Section 16 of the Exchange Act, the Plan may be administered by a
committee composed solely of two or more members of the Board of Directors
who qualify as "nonemployee directors" as defined in Securities and
Exchange Commission Rule 16b-3 under the Exchange Act. With respect to the
participation of Employees who may be considered "covered employees" under
Section 162(m) of the Code, the Plan may be administered by a committee
composed solely of two or more members of the Board of Directors who
qualify as "outside directors" as defined by the Internal Revenue Service
for plans intended to qualify for an exemption under Section 162(m)(4)(C)
of the Code. If the committee members meet both such qualifications, then
one committee may administer the Plan both with respect to Employees who
are subject to Section 16 of the Exchange Act or who are considered to be
"covered employees" under Section 162(m) of the Code.
The Board of Directors may appoint a separate committee, consisting of
one or more members of the Board of Directors who do not meet such
qualifications. Such committee may administer the Plan with respect to
Employees who are not officers of the Company or members of the Board of
Directors, may grant Options under the Plan to such Employees and may
determine the timing, number of Shares and other terms of such grants.
(b) COMMITTEE PROCEDURES. The Board of Directors shall designate one
of the members of any Committee appointed under paragraph (a) as
chairman. Any such Committee may hold meetings at such times and places
as it shall determine. The acts of a majority of the Committee members
present at meetings at which a quorum exists, or acts reduced to or
approved in writing by all Committee members, shall be valid acts of the
Committee.
(c) COMMITTEE RESPONSIBILITIES. Subject to the provisions of the Plan,
any such Committee shall have full authority and discretion to take the
following actions:
(i) To interpret the Plan and to apply its provisions;
(ii) To adopt, amend or rescind rules, procedures and forms
relating to the Plan;
(iii) To authorize any person to execute, on behalf of the Company,
any instrument required to carry out the purposes of the Plan;
(iv) To determine when Options are to be granted under the Plan;
(v) To select the Optionees;
(vi) To determine the number of Shares to be made subject to each
Option;
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(vii) To prescribe the terms and conditions of each Option,
including (without limitation) the Exercise Price, to determine
whether such Option is to be classified as an ISO or as a
Nonstatutory Option, and to specify the provisions of the Stock
Option Agreement relating to such Option;
(viii) To amend any outstanding Stock Option Agreement, subject to
applicable legal restrictions and to the consent of the Optionee
who entered into such agreement;
(ix) To prescribe the consideration for the grant of each Option
under the Plan and to determine the sufficiency of such
consideration; and
(x) To take any other actions deemed necessary or advisable for
the administration of the Plan
All decisions, interpretations and other actions of the Committee shall be
final and binding on all Optionees, and all persons deriving their rights from
an Optionee. No member of the Committee shall be liable for any action that he
or she has taken or has failed to take in good faith with respect to the Plan or
any Option.
4. ELIGIBILITY
(a) GENERAL RULES. Only Employees shall be eligible for designation as
Optionees by the Committee. In addition, only Employees who are
common-law employees of the Company or a Subsidiary shall be eligible
for the grant of ISOs.
(b) TEN-PERCENT STOCKHOLDERS. An Employee who owns more than 10
percent of the total combined voting power of all classes of outstanding
stock of the Company or any of its Subsidiaries shall not be eligible
for the grant of an ISO unless:
(i) The Exercise Price is at least 110 percent of the Fair Market
Value of a Share on the date of grant; and
(ii) Such ISO by its terms is not exercisable after the expiration
of five years from the date of grant.
(c) ATTRIBUTION RULES. For purposes of Subsection (b) above, in
determining stock ownership, an Employee shall be deemed to own the
stock owned, directly or indirectly, by or for such Employee's brothers,
sisters, spouse, ancestors and lineal descendants. Stock owned,
directly or indirectly, by or for a corporation, partnership, estate or
trust shall be deemed to be owned proportionately by or for its
stockholders, partners or beneficiaries. Stock with respect to which
such Employee holds an option shall not be counted.
(d) OUTSTANDING STOCK. For purposes of Subsection (b) above,
"outstanding stock" shall include all stock actually issued and
outstanding immediately after the grant. "Outstanding stock" shall not
include shares authorized for issuance under outstanding options held by
the Employee or by any other person.
5. STOCK SUBJECT TO PLAN.
(a) BASIC LIMITATION. Shares offered under the Plan shall be authorized
but unissued Shares. The shares of stock subject to options authorized to
be granted under the Plan shall consist of 544,230 shares of the Company's
no par value common stock (the "Shares"), or the number and kind of shares
of stock or other securities which shall be substituted for such Shares or
to which such Shares shall be adjusted as provided in Section 6 hereof,
provided that, such number shall be adjusted downward to the extent
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necessary to conform to the requirements of Section 260.140.45 of the Rules
of the California Commissioner of Corporations, so that at no time shall
the total number of shares issuable upon exercise of all outstanding
options and the total number of shares provided for under any stock bonus
or similar plan of the Company exceed the applicable percentage as
calculated in accordance with the conditions and exclusions of such Rule.
The Shares subject to the Plan shall be set aside initially out of the
authorized but unissued shares of Common Stock of Bancorp not reserved for
any other purpose; thereto shall be added shares of Common Stock delivered
by an optionee in payment of any portion of the exercise price of an option
or taxes due in connection with such exercise. The Company, during the term
of the Plan, shall at all times reserve and keep available sufficient
Shares to satisfy the requirements of the Plan.
(b) ADDITIONAL SHARES. In the event that any outstanding option
granted under this Plan, including Substitute Options, or under the
Tehama Bancorp 1994 Stock Option Plan, for any reason expires or is
canceled or otherwise terminated, the Shares allocable to the
unexercised portion of such option shall become available for the
purposes of this Plan.
6. TERMS AND CONDITIONS OF OPTIONS.
(a) STOCK OPTION AGREEMENT. Each grant of an Option under the Plan
shall be evidenced by a Stock Option Agreement executed by the Optionee
and the Company. Such Option shall be subject to all applicable terms
and conditions of the Plan and may be subject to any other terms and
conditions which are not inconsistent with the Plan and which the
Committee deems appropriate for inclusion in a Stock Option Agreement.
The provisions of the various Stock Option Agreements entered into under
the Plan need not be identical.
(b) NUMBER OF SHARES. Each Stock Option Agreement shall specify the
number of Shares that are subject to the Option and shall provide for
the adjustment of such number in accordance with Section 8. Options
granted to any Optionee in a single calendar year shall in no event
cover more than twenty-five thousand (25,000) Shares, subject to
adjustment in accordance with Section 8. The Stock Option Agreement
shall also specify whether the Option is an ISO or a Nonstatutory Option.
(c) EXERCISE PRICE. Each Stock Option Agreement shall specify the
Exercise Price. The Exercise Price of an Option shall not be less than
100 percent of the Fair Market Value of a Share on the date of grant,
except as otherwise provided in Section 4(b) with respect to ISOs and
Section 6(i) with respect to Substitute Options. The Exercise Price
shall be payable in a form described in Section 7.
(d) WITHHOLDING TAXES. As a condition to the exercise of an Option, the
Optionee shall make such arrangements as the Committee may require for the
satisfaction of any federal, state, local or foreign withholding tax
obligations that arise in connection with such exercise. The Optionee
shall also make such arrangements as the Committee may require for the
satisfaction of any federal, state, local or foreign withholding tax
obligations that may arise in connection with the disposition of Shares
acquired by exercising an Option. The Committee may permit the Optionee to
satisfy all or part of his or her tax obligations related to the Option by
having the Company withhold a portion of any Shares that otherwise would be
issued to him or her or by surrendering any Shares that previously were
acquired by him or her. Such Shares shall be valued at their Fair Market
Value on the date when taxes otherwise would be withheld in cash. The
payment of taxes by assigning Shares to the Company, if permitted by the
Committee, shall be subject to such restrictions as the Committee may
impose.
(e) EXERCISABILITY. Each Stock Option Agreement shall specify the date
when all or any installment of the Option is to become exercisable. The
vesting of any Option shall be determined by the Committee at its sole
discretion; provided however, that:
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(i) Each Stock Option Agreement shall provide for immediate
exercisability of the entire Option in the event of a Change in
Control.
(ii) In the event that an Optionee's Service terminates, the
Option shall be exercisable only to the extent the Option was
vested as of the date of such termination, unless otherwise
specified in the Optionee's Stock Option Agreement.
(f) TERM. Each Stock Option Agreement shall specify the term of the
Option. The term of an ISO shall not exceed 10 years from the date of
grant, except as otherwise provided in Section 4(b). Subject to the
preceding sentence, the Committee at its sole discretion shall determine
when an Option is to expire. In the event that the Optionee's Service
terminates:
(i) As a result of such Optionee's death or Total and Permanent
Disability, the term of the Option shall expire twelve months (or
such other period specified in the Optionee's Stock Option
Agreement) after such death or Total and Permanent Disability but
not later than the original expiration date specified in the Stock
Option Agreement.
(ii) As a result of termination by the Company for cause, the term of
the Option shall expire thirty days after the Company's notice or
advice of such termination is dispatched to Employee, but not later
than the original expiration date specified in the Stock Option
Agreement. For purposes of this Paragraph (ii), "cause" shall mean an
act of embezzlement, fraud, dishonesty, breach of fiduciary duty to
the Company, or the deliberate disregard of rules of the Company which
results in loss, damage or injury to the Company, the unauthorized
disclosure of any of the secrets or confidential information of the
Company, the inducement of any client or customer of the Company to
break any contract with the Company, or the inducement of any
principal for whom the Company acts as agent to terminate such agency
relationship, the engagement of any conduct which constitutes unfair
competition with the Company, the removal of Optionee from office by
any court or bank regulatory agency, or such other similar acts which
the Committee in its discretion determine to constitute good cause for
termination of Optionee's Service. As used in this Paragraph (ii),
Company includes Subsidiaries of the Company.
(iii) As a result of termination for any reason other than Total
and Permanent Disability, death or cause, the term of the Option
shall expire three months (or such other period specified in the
Optionee's Stock Option Agreement) after such termination, but not
later than the original expiration date specified in the Stock
Option Agreement.
(g) TRANSFERABILITY. During an Optionee's lifetime, such Optionee's
ISO(s) shall be exercisable only by him or her and shall not be
transferable. An Optionee's Nonstatutory Options shall also not be
transferable during the Optionee's lifetime, except to the extent otherwise
permitted in the Optionee's Stock Option Agreement. Subject to prior
permitted transfers, in the event of an Optionee's death, such Optionee's
Option(s) shall not be transferable other than by will, by written
beneficiary designation or by the laws of descent and distribution.
(h) NO RIGHTS AS A STOCKHOLDER. An Optionee, or a transferee of an
Optionee, shall have no rights as a stockholder with respect to any
Shares covered by his or her Option until the date of the issuance of a
stock certificate for such Shares. No adjustments shall be made, except
as provided in Section 8.
(i) MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS. Within the
limitations of the Plan, the Committee may modify, extend or renew
outstanding Options or may accept the cancellation of outstanding
Options (to the extent not previously exercised) in return for the grant
of new Options at the same or a different price. The foregoing
notwithstanding, no modification of an Option shall, without
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the consent of the Optionee, impair such Optionee's rights or increase
his or her obligations under such Option.
(j) SUBSTITUTE OPTIONS. If the Company at any time should succeed to the
business of another corporation through merger or consolidation, or through
the acquisition of stock or assets of such corporation, Options may be
granted under the Plan in substitution of options previously granted by
such corporation to purchase shares of its stock which options are
outstanding at the date of the succession "Surrendered Options". The
Committee shall have discretion to determine the extent to which such
Substitute Options shall be granted, the persons to receive such Substitute
Options, the number of Shares to be subject to such Substitute Options, and
the terms and conditions of such Substitute Options which shall, to the
extent permissible within the terms and conditions of the Plan, be
equivalent to the terms and conditions of the Surrendered Options. The
Exercise Price may be determined without regard to Section 6(c); provided
however, that the Exercise Price of each Substitute Option shall be an
amount such that, in the sole and absolute judgment of the Committee (and
if the Substitute Options are to be ISOs, in compliance with Section 424(a)
of the Code), the economic benefit provided by such Substitute Option is
not greater than the economic benefit represented by the Surrendered Option
as of the date of the succession.
(k) Notwithstanding anything to the contrary in other provisions of the
Plan, each non-employee director of the Company shall be eligible to be
granted options under the Plan only in accordance with this subarticle.
Options granted to such directors (i) shall be Nonstatutory Stock Options;
(ii) shall be exercisable immediately as to 20% of the Shares subject to
the option and as to the remainder of the Shares in four additional
installments of 20% of the shares on each of the first four anniversary
dates after the date of grant; (iii) shall expire ten (10) years from the
date of grant; (iv) shall be granted to all non-employee directors as of
the effective date of the granting of a permit by the California
Commissioner of Corporations authorizing the granting of options pursuant
to the Plan (and to each person first afterwards becoming a non-employee
director, as of the date such person becomes a member of the Board of
Directors) in the amount of 5,000 shares at a price equal to 100% of the
fair market value of the Shares at the time of grant, or such number or
kind of shares of stock or other securities which shall be substituted for
such number of Shares or to which such number of Shares shall be adjusted
as provided in Article 6 of the Plan; (v) shall terminate only in the event
of the directors' death or termination of service as a director for cause,
and (vi) shall be otherwise subject to all terms of the Plan not
inconsistent with this subarticle. No director shall be entitled to
receive more than one grant of options pursuant to this subarticle, except
with the approval of the shareholders of the Company (not including shares
beneficially owned by any director to whom such an additional option shall
be granted), which approval may be given at any time prior to or (provided
that the option shall not be exercisable before such approval is given)
within one year following the date of such grant.
7 PAYMENT FOR SHARES.
(a) GENERAL RULE. The entire Exercise Price of Shares issued under the
Plan shall be payable in lawful money of the United States of America at
the time when such Shares are purchased, except as follows:
(i) ISOS. In the case of an ISO granted under the Plan, payment
shall be made only pursuant to the express provisions of the
applicable Stock Option Agreement. However, the Committee (at its
sole discretion) may specify in the Stock Option Agreement that
payment may be made pursuant to Subsections (b), (c) or (d) below.
(ii) NONSTATUTORY OPTIONS. In the case of a Nonstatutory Option
granted under the Plan, the Committee (at its sole discretion) may
accept payment pursuant to Subsections (b), (c), or (d) below.
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(b) SURRENDER OF STOCK. To the extent that this Subsection (b) is
applicable, payment may be made all or in part with Shares which have
already been owned by the Optionee or his or her representative for more
than 6 months and which are surrendered to the Company in good form for
transfer. Such Shares shall be valued at their Fair Market Value on the
date when the new Shares are purchased under the Plan.
(c) EXERCISE/SALE. To the extent that this Subsection (c) is
applicable, payment may be made by the delivery (on a form prescribed by
the Company) of an irrevocable direction to a securities broker approved
by the Company to sell Shares and to deliver all or part of the sales
proceeds to the Company in payment of all or part of the Exercise Price
and any withholding taxes.
(d) EXERCISE/PLEDGE. To the extent that this Subsection (d) is
applicable, payment may be made by the delivery (on a form prescribed by
the Company) of an irrevocable direction to pledge Shares to a
securities broker or lender approved by the Company, as security for a
loan, and to deliver all or part of the loan proceeds to the Company in
payment of all or part of the Exercise Price and any withholding taxes.
8 ADJUSTMENT OF SHARES.
(a) GENERAL. In the event of a subdivision of the outstanding Stock, a
declaration of a dividend payable in Shares, a declaration of a dividend
payable in a form other than Shares in an amount that has a material
effect on the value of Shares, a combination or consolidation of the
outstanding Stock (by reclassification or otherwise) into a lesser
number of Shares, a recapitalization, a spin-off or a similar
occurrence, the Committee shall make appropriate adjustments in one or
more of:
(i) The number of Shares available under Section 5 for future
grants;
(ii) The limit set forth in Section 6(b);
(iii) The number of Shares covered by each outstanding Option; or
(iv) The Exercise Price under each outstanding Option.
(b) REORGANIZATIONS. In the event that the Company is a party to a merger
or other reorganization, outstanding Options shall be subject to the
agreement of merger or reorganization. Subject to the provisions of
Section 6(e)(i), such agreement may provide, without limitation, for the
assumption of outstanding Options by the surviving corporation or its
parent, for their continuation by the Company (if the Company is a
surviving corporation), for payment of a cash settlement equal to the
difference between the amount to be paid for one Share under such agreement
and the Exercise Price, or for the acceleration of their exercisability
followed by the cancellation of Options not exercised, in all cases without
the Optionees' consent. Any cancellation shall not occur until after such
acceleration is effective and Optionees have been notified of such
acceleration and have had reasonable opportunity to exercise their Options.
(c) RESERVATION OF RIGHTS. Except as provided in this Section 8, an
Optionee or Offeree shall have no rights by reason of any subdivision or
consolidation of shares of stock of any class, the payment of any dividend
or any other increase or decrease in the number of shares of stock of any
class. Any issue by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall not affect,
and no adjustment by reason thereof shall be made with respect to, the
number or Exercise Price of Shares subject to an Option. The grant of an
Option pursuant to the Plan shall not affect in any way the right or power
of the Company to make adjustments, reclassifications, reorganizations or
changes of its capital or business structure, to merge or consolidate or to
dissolve,
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liquidate, sell or transfer all or any part of its business or assets.
9 SECURITIES LAWS
Shares shall not be issued under the Plan unless the issuance and delivery
of such Shares complies with (or is exempt from) all applicable requirements of
law, including (without limitation) the Securities Act of 1933, as amended, the
rules and regulations promulgated thereunder, state securities laws and
regulations, and the regulations of any stock exchange on which the Company's
securities may then be listed.
10. NO RETENTION
Neither the Plan nor any Option shall be deemed to give any individual a
right to remain an employee or consultant of the Company or a Subsidiary. The
Company and its Subsidiaries reserve the right to terminate the service of any
employee or consultant at any time, with or without cause, subject to applicable
laws and a written employment agreement (if any).
11. DURATION AND AMENDMENTS.
(a) TERM OF THE PLAN. The Plan, as set forth herein, shall become
effective as of the date the Plan is approved by the shareholders of
the Company in the manner required by applicable law or regulation (the
"Effective Date". The Plan, if not extended, shall terminate
automatically ten years after the Effective Date, except that any ISOs
granted under the Plan must be granted by March 18, 2009, ten years
after the Plan was adopted by the Board of Directors. It may be
terminated on any earlier date pursuant to Subsection (b) below.
(b) RIGHT TO AMEND OR TERMINATE THE PLAN. The Board of Directors may
amend, suspend or terminate the Plan at any time and for any reason. An
amendment of the Plan shall be subject to the approval of the Company's
shareholders only to the extent required by applicable laws or regulations.
(c) EFFECT OF AMENDMENT OR TERMINATION. No Shares shall be issued or
sold under the Plan after the termination thereof, except upon exercise
of an Option granted prior to such termination. The termination of the
Plan, or any amendment thereof, shall not affect any Share previously
issued or any Option previously granted under the Plan.
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TEHAMA BANCORP PROXY
Solicited by the Board of Directors for the
Annual Meeting of Shareholders
April 27, 1999
The undersigned holder of Common Stock acknowledges receipt of a copy of the
Notice of Annual Meeting of Shareholders of Tehama Bancorp and the
accompanying Proxy Statement dated March 31, 1999, and revoking any Proxy
heretofore given, hereby constitutes and appoints Harry Dudley and Louis J.
Bossetti and each of them, with full power of substitution, as attorneys and
proxies to appear and vote all of the shares of Common Stock of Tehama
Bancorp, a California corporation, standing in the name of the undersigned
which the undersigned could vote if personally present and acting at the
Annual Meeting of Shareholders of Tehama Bancorp, to be held at the Red Bluff
Community & Senior Center, 1500 S. Jackson Street, Red Bluff, California on
Tuesday, April 27, 1999, at 7:30 p.m. or at any adjournments thereof, upon
the following items as set forth in the Notice of Meeting and Proxy Statement
and to vote according to their discretion on all matters which may be
properly presented for action at the meeting or any adjournments thereof. The
above-named proxy holders are hereby granted discretionary authority to
cumulate votes represented by the shares covered by this Proxy in the
election of directors.
UNLESS OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED "FOR" THE FOLLOWING ITEMS:
ITEM 1. TO ELECT AS DIRECTORS THE NOMINEES SET FORTH BELOW.
/ / FOR all nominees / / WITHHOLD AUTHORITY to vote for ALL nominees
INSTRUCTION: To withhold authority to vote for any INDIVIDUAL nominee, strike a
line through the nominee's name in the list below:
Henry C. Arnest III Louis J. Bosetti Harry Dudley
Max M. Froome Orville K. Jacobs John W. Koeberer
Leslie L. Melburg Gary L. Napier Eugene F. Penne
William P. Ellison Gary D. Fish
Gary C. Katz Raymond C. Lieberenz
John D. Regh Terrance A. Rust
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ITEM 2. TO APPROVE THE TEHAMA BANCORP 1999 STOCK OPTION PLAN
/ / Yes / / No / / Withhold Item
3. In their discretion, to transact such other business as may properly come
before the meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF DIRECTORS
NOMINATED BY THE BOARD AND "FOR" APPROVAL OF THE TEHAMA BANCORP 1999 STOCK
OPTION PLAN. THE PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED.
IF NO DIRECTION IS MADE, IT WILL BE VOTED "FOR" THE ELECTION OF DIRECTORS
NOMINATED BY THE BOARD AND "FOR" APPROVAL OF THE TEHAMA BANCORP 1999 STOCK
OPTION PLAN.
I/we do / / or do not / / expect to attend this meeting.
-------------------------------------------
(Number of Common Shares)
-------------------------------------------
(Shareholder Signature)
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(Shareholder Signature)
Dated:_______________________________, 1999
Please sign and date exactly as your name(s) appears. When signing as
attorney, executor, administrator, trustee, or guardian, please give full
title. If more than one trustee, all should sign. All joint owners should
sign. WHETHER OR NOT YOU PLAN TO ATTEND THIS MEETING, PLEASE SIGN AND RETURN
THIS PROXY AS PROMPTLY AS POSSIBLE IN THE ENCLOSED POST-PAID ENVELOPE.
THIS PROXY IS SOLICITED BY, AND ON BEHALF OF, THE BOARD OF
DIRECTORS AND MAY BE REVOKED PRIOR TO ITS EXERCISE.
