<PAGE>
TEHAMA BANCORP
239 SOUTH MAIN STREET
RED BLUFF, CALIFORNIA 96080
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD TUESDAY, APRIL 25, 2000 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 25,
2000, at 7:30 P.M. for the following purposes:
1. To elect directors; and
2. 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 6,
2000, 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 24, 2000
/s/ Raymond C. Lieberenz
---------------------------
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 3, 2000
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 25, 2000.
Only shareholders of record on March 6, 2000 (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 1,713,694 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, 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.
<PAGE>
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.
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 fourteen
(14). 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 fourteen
(14) 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 6, 2000 (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 58 Director 1984 10,000 10,368 1.19
- ---------------------------- ------- -------------------------- --------------- ------------ ----------- -----------
Louis J. Bosetti 68 Director 1984 2,574 26,372 1.69
- ---------------------------- ------- -------------------------- --------------- ------------ ----------- -----------
Harry Dudley 69 Director 1989 6,569 36,800 2.53
- ---------------------------- ------- -------------------------- --------------- ------------ ----------- -----------
William P. Ellison 51 President, Chief 1995 31,242 -0- 1.81
Executive Officer
and Director
- ---------------------------- ------- -------------------------- --------------- ------------ ----------- -----------
Dr. Garry D. Fish 55 Director 1984 12,032 11,350 1.36
- ---------------------------- ------- -------------------------- --------------- ------------ ----------- -----------
Max M. Froome 49 Director 1984 2,851 -0- *
- ---------------------------- ------- -------------------------- --------------- ------------ ----------- -----------
Orville K. Jacobs 69 Director 1984 48,168 1,100 2.87
- ---------------------------- ------- -------------------------- --------------- ------------ ----------- -----------
</TABLE>
2
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Gary C. Katz 50 Director 1984 8,529 32,715 2.41
- ---------------------------- ------- -------------------------- --------------- ------------ ----------- -----------
John W. Koeberer 55 Chairman of the Board of 1984 27,136 -0- 1.58
Directors and Director
- ---------------------------- ------- -------------------------- --------------- ------------ ----------- -----------
Raymond C. Lieberenz 56 Secretary and Director 1984 2,390 12,184 *
- ---------------------------- ------- -------------------------- --------------- ------------ ----------- -----------
Leslie L. Melburg 47 Director 1998 5,356(4) -0- *
- ---------------------------- ------- -------------------------- --------------- ------------ ----------- -----------
Gary L. Napier 58 Vice Chairman of the 1984 30,627 -0- 1.79
Board of Directors
and Director
- ---------------------------- ------- -------------------------- --------------- ------------ ----------- -----------
John D. Regh 47 Director 1998 7,800(4) -0- *
- ---------------------------- ------- -------------------------- --------------- ------------ ----------- -----------
Terrance A. Rust 59 Director 1984 13,171 49,116 3.63
- ---------------------------- ------- -------------------------- --------------- ------------ ----------- -----------
All directors and
principal officers (16 221,756 180,005 22.80
persons) as a group
============================ ======= ========================== =============== ============ =========== ===========
</TABLE>
(1)The calculations in the chart are based on the total number of shares
outstanding, including 2,133 shares (368 of which became vested during 1999)
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 unexercised but
exercisable stock options as indicated in footnotes 2 and 4.
(2)The named persons exercise sole voting and investment power with respect
to shares listed in this column. Includes for each named director (except Mr.
Ellison) 1,000 shares as to which options granted pursuant to the Company's
1999 Stock Option Plan are exercisable within 60 days of the Record Date.
Includes for Mr. Ellison 3,000 shares as to which options granted under the
1999 Stock Option Plan and 17,900 shares as to which options granted under
the 1994 Stock Option Plan are exercisable within 60 days of the Record Date.
See "Stock Option Plan" herein.
(3)The named persons share voting and investment power with respect to shares
listed in this column.
(4)Also includes 4,356 shares for which options granted
pursuant to the Company's 1994 Stock Option Plan are exercisable within 60
days of the Record Date.
*Indicates less than one percent (1%).
The following is a brief account of the business experience of each nominee.
HENRY C. ARNEST III is Vice President of Sales and Marketing for the Alzeta
Corporation, and was formerly Vice President and General Manager for
Northwestern Carbon.
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 broker of antiques.
3
<PAGE>
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 Chairman and Chief Executive Officer of Katz Investments and
former President and majority owner of Phoenix Broadcasting, Inc.
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 formerly a licensed real
estate broker and appraiser, and currently teaches in the Tehama County Schools.
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.
JOHN D. REGH is the President of Inland Business Machines Systems and Inland
Leasing. 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.
4
<PAGE>
The Board of Directors met a total of twelve (12) times during 1999.
During this same period, the Audit Committee met eighteen (18) times and the
Executive Committee six (6) 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.
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 1999 $125,000 $70,000 $2,718 $40,275
1998 120,000 -0- 2,356 12,458
1997 126,600 51,500 1,770 27,575
========================= =========== ================= ================ =================== =======================
W. Steven Gilman 1999 $83,680 $17,500 $736 $12,584
1998 81,000 -0- 2,231 9,081
1997 80,500 20,000 1,191 4,325
========================= =========== ================= ================ =================== =======================
Wayne N. Shaffer 1999 $87,500 $21,500 $1,740 $16,910
1998 75,000 -0- 1,769 7,809
1997 34,375 -0- -0- -0-
========================= =========== ================= ================ =================== =======================
</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 and, in
the case of Mr. Ellison, director's fees of $9,000.
STOCK OPTION PLANS
The Tehama Bancorp 1994 Stock Option Plan (the "1994 Plan") was
terminated for the purpose of granting new options on May 14, 1999, the
effective date of the 1999 Stock Option Plan (the "1999 Plan") approved by
the shareholders of the Company at the 1999 Annual Meeting of Shareholders.
Options for 89,865 shares of Common Stock of the Company remain outstanding
under the 1994 Plan.
Under the 1999 Plan, nonstatutory (sometimes also called
"non-qualified") options to purchase shares of the Company's Common Stock may be
granted to employees, directors and consultants of the Company, and incentive
options may be granted to employees. The 1999 Plan is administered by the Board
of Directors, which selects the individuals to whom options will be granted, the
type of option to be granted, the exercise
5
<PAGE>
price of each option, the number of shares covered by such option and the
other terms and conditions of each option, including the vesting schedule. By
terms of the 1999 Plan, each director of the Company was granted
automatically on May 17, 1999, a five-year nonstatutory option for 5,000
shares of Common Stock, exercisable at the price of $11.875 per share and
vesting in increments of 1,000 shares immediately and on the first through
the fourth anniversaries of the grant date.
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, and
no option may have a term exceeding ten years. All options (except for automatic
option grants to directors of the Company) terminate upon termination of
employment, but may be exercised (to the extent vested) for varying periods
after termination of employment. 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 are not transferable during
the optionee's lifetime, except to the extent otherwise permitted in the option
agreement. The exercise price of shares issued pursuant to exercise of an option
under the 1999 Plan may always be paid in cash and, in addition, may be paid, in
the discretion of the Board with (1) Company shares already owned by the
optionee, valued at their fair market value, (2) the proceeds of a resale of the
shares by an authorized securities broker or (3) the proceeds of a loan (by a
securities broker or lender approved by the Company) secured by a pledge of the
shares acquired by the exercise.
The Board has authority to delegate its administrative powers to one or
more committees of the Board. A total of 511,770 shares are reserved for
issuance under the 1999 Plan, of which 407,014 are reserved for options granted
and outstanding under the 1999 Plan as of the Record Date. As of the date of
this Proxy Statement, there are approximately 111 persons who are officers or
employees of the Company eligible to receive option grants under the 1999 Plan;
no current director is eligible to receive a further grant in addition to the
option granted in 1999. The Board may amend, suspend or terminate the 1999 Plan
at any time and for any reason.
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 shares reserved for the 1999 Plan, and outstanding options granted
under the 1999 Plan, are subject to adjustment of their number or price in the
event of a subdivision of the outstanding shares of the Company, a declaration
of a dividend payable in such shares or 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, a recapitalization, a
spinoff or a similar occurrence. 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 may provide (by way of example) 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), or 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, in all cases without the optionees' consent. Any cancellation of options
may not occur until after optionees have been notified of the merger or
reorganization and have had reasonable opportunity to exercise their exercisable
options.
6
<PAGE>
OPTION GRANTS, EXERCISES AND YEAR-END VALUES FOR 1999
The following table sets forth, with respect to the executive officers
named in the Summary Compensation Table on page 6, information concerning
options granted or exercised during 1999 and the estimated 1999 year-end value
of unexercised options held by such executive officers.
<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 5,616 $10,889 13,920/10,980 $0.00/$0.00
- ------------------------- ------------ -------------- ------------------- ---------------------- ----------------------
W. Steven Gilman -0- -0- - 6,900/3,600 $0.00/$0.00
- ------------------------- ------------ -------------- ------------------- ---------------------- ----------------------
Wayne N. Shaffer -0- -0- - 2,000/3,000 $0.00/$0.00
========================= ============ ============== =================== ====================== =====================
</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 1999, minus the exercise or
base price.
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 Presidents W. Steven Gilman and Wayne N. Shaffer.
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
7
<PAGE>
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 on page 6:
<TABLE>
<CAPTION>
============================ ===================== ====================== ========================= ================
ANNUAL YEARS REQUIRED YEAR ANNUAL RETIREMENT
NAME BENEFIT FOR FULL BENEFIT BENEFIT COMMENCES AGE
============================ ===================== ====================== ========================= ================
<S> <S> <S> <S> <S>
William P. Ellison $75,000 10 2010 62
- ---------------------------- --------------------- ---------------------- ------------------------- ----------------
W. Steven Gilman $50,000 10 2016 62
- ---------------------------- --------------------- ---------------------- ------------------------- ----------------
Wayne S. Shaffer $50,000(1) 11 see note 1 62
============================ ===================== ====================== ========================= ================
</TABLE>
(1)If Mr. Shaffer's employment continues through November 3, 2008. The minimum
benefit is $31,786, which is increased to $37,380 and $43,439 if Mr. Shaffer's
service extends through November 3, 2006 and 2007, respectively.
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 1999. In
addition, members of each committee were paid $100 for each committee meeting
attended, Mr. Koeberer, as Chairman, was paid an additional $450 per month, and
committee chairman were paid an additional $50 per meeting. The total amount of
such fees paid by the Bank to all directors for all meetings attended during
fiscal year 1999 was $200,300 including $7,500 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 1999, director options for 51,608 shares of Company common stock
having a net value (market price less exercise price on the date of exercise) of
$220,727 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.
8
<PAGE>
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 1999 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 1999, the Bank placed radio advertising in the gross amount of
$2,924 with agencies employed by stations owned and operated by director Gary
Katz, and paid brokerage commissions in the total amount of $14,369 to director
Gary Napier for insurance purchased through his agency. In addition, lease
payments in the gross amount of $10,425 were paid to director Harry Dudley to
rent the Bank's relocated head office branch in Red Bluff. No other business
transactions of any kind existed or were entered into between the Company and
its directors and their affiliates.
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 or she desires to do so and will be
available to answer appropriate questions.
During 1999, the Company paid Perry-Smith $11,130 in fees for non-audit
services, including tax advice and preparation. This amount represented
approximately 17% 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.
SHAREHOLDERS' PROPOSALS
Next year's Annual Meeting of Shareholders is currently scheduled to be
held on April 23, 2001. The deadline for shareholders to submit proposals for
inclusion in the Proxy Statement and form of Proxy for the 2001 Annual Meeting
of Shareholders is December 27, 2000. 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 27, 2000 deadline.
All proposals should be submitted by Certified Mail, Return Receipt Requested,
to the Secretary, Tehama Bancorp, P.O. Box 890, 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.
9
<PAGE>
ANNUAL REPORT
The Annual Report to Shareholders of the Company containing audited
financial statements for the fiscal year ended December 31, 1999, accompanies
this Proxy Statement.
Red Bluff, California
March 24, 2000 TEHAMA BANCORP
/s/ Randall A. Shell
-------------------------
Randall A. Shell
Senior Vice President and
Chief Financial Officer
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, P.O. BOX 890, 239
SOUTH MAIN STREET, RED BLUFF, CALIFORNIA 96080.
10
<PAGE>
PROXY
-----
TEHAMA BANCORP
Solicited by the Board of Directors
for the Annual Meeting of Shareholders,
April 25, 2000
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 24, 2000, 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 25,
2000, 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:
1. To elect as Directors the nominees set forth below.
/ / FOR all nominees listed below (except as marked to the
contrary below).
/ / WITHHOLD AUTHORITY to vote for all nominees listed below.
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 Max M. Froome Leslie L. Melburg
Louis J. Bosetti Orville K. Jacobs Gary L. Napier
Harry Dudley Gary C. Katz William P. Ellison
John W. Koeberer John D. Regh Dr. Garry D. Fish
Raymond C. Lieberenz Terrance A. Rust
2. 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 OF DIRECTORS. 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 OF DIRECTORS.
<PAGE>
SHAREHOLDER(S) NO. OF COMMON SHARES
______________________________ _______________________
______________________________ _______________________
Date: _______________, 2000 Please date and sign 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.
I/we do / / or do not / / expect to attend
this meeting.
THIS PROXY IS SOLICITED BY, AND ON BEHALF OF, THE BOARD OF DIRECTORS AND MAY BE
REVOKED PRIOR TO ITS EXERCISE.
