Registration Statement No. 33-60566
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As filed with the Securities and Exchange Commission on March 24, 1998
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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
POST EFFECTIVE AMENDMENT NO. 5 TO
FORM S-2
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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NORTHERN EMPIRE BANCSHARES
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(Exact name of registrant as specified in its charter)
California 94-2830529
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification
Number)
801 Fourth Street
Santa Rosa, California 95404
(707) 579-2265
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(Address, including zip code, and telephone number,
including area code, of registrant's
principal executive offices)
Deborah A. Meekins with copies to:
President and Chief Executive Officer
Sonoma National Bank Lyman G. Lea
801 Fourth Street Joan L. Grant
Santa Rosa, California 95404 c/o Haines, Brydon & Lea
(707) 579-2265 235 Pine Street, Suite 1300
(Name, address, including zip code, and San Francisco, California
94104
telephone number, including area code, Telephone: (415) 981-1050
of agent for service)
Approximate date of commencement of the proposed sale to the public:
N/A-Offering has commenced.
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following box. [x]
If the registrant elects to deliver its latest annual report to security
holders, or a complete and legible facsimile thereof, pursuant to Item
11(a)(1) of this Form, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number
of the earlier effective registration statement for the same offering.
[ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
<PAGE>
PROSPECTUS
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NORTHERN EMPIRE BANCSHARES
801 Fourth Street
Santa Rosa, California 95404
(707) 579-2265
67,531 Shares (1) of Common Stock, no par value
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offered pursuant to the
NORTHERN EMPIRE BANCSHARES STOCK OPTION PLAN
This prospectus covers 67,531 shares of common stock, no par value,
of Northern Empire Bancshares (the "Corporation") which have been
offered, are being offered or may from time to time be offered pursuant
to the Northern Empire Bancshares Stock Option Plan, as amended (the
"Plan"). Each option is subject to the terms, conditions and
restrictions set forth in the Plan and the option agreement between the
individual optionee and the Corporation. Options have been granted to
directors and employees of Northern Empire Bancshares and/or its
subsidiary, Sonoma National Bank of Santa Rosa, California (the "Bank").
THIS PROSPECTUS MUST BE ACCOMPANIED BY A COPY OF THE CORPORATION'S
LATEST ANNUAL REPORT ON FORM 10-KSB. THAT REPORT PROVIDES INFORMATION
REGARDING THE CORPORATION, THE COMMON STOCK AND THE MARKET FOR THE
COMMON STOCK, AND THE RESULTS OF OPERATIONS AND FINANCIAL CONDITION OF
THE CORPORATION, AND INCLUDES FINANCIAL STATEMENTS FOR THE CORPORATION.
OPTIONEES SHOULD REVIEW THAT REPORT, ALONG WITH THIS PROSPECTUS,
CAREFULLY, BEFORE DETERMINING WHETHER TO EXERCISE THEIR OPTIONS.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THIS PROSPECTUS MAY NOT BE USED IN CONNECTION WITH THE RESALE BY
OPTIONEES OF COMMON STOCK OF THE CORPORATION ACQUIRED PURSUANT TO THE
PLAN.
THE SECURITIES OFFERED HEREBY INVOLVE CERTAIN RISKS. SEE "RISK
FACTORS".
No person has been authorized to give any information or to make any
representations in connection with the offer contained in this
Prospectus which are not expressed herein, and, if given or made, such
other information or representations must not be relied upon as having
been authorized. This Prospectus does not constitute an offer of any
securities other than those to which it relates or an offer in any
jurisdiction where such offer would be unlawful. The delivery of this
Prospectus at any time does not imply that the information herein is
correct as of any time subsequent to its date.
Underwriting Proceeds to
discounts and issuer or
Price to public(2) commissions(3) other persons
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Per share $6.31 -0- $6.31
Total $426,266 -0- $426,266
(1) Options to purchase 67,531 shares are outstanding under the Plan.
The number of shares underlying outstanding options are adjusted by the
Board of Directors to reflect stock dividends declared. All numbers of
shares and option exercise prices throughout this prospectus have been
adjusted for stock dividends.
(2) Under the Plan, the exercise price of each option equals the fair
market value of the Corporation's common stock on the date the option is
granted. The exercise price for each option is specified in the Option
Agreement for such option. The actual exercise prices range from $5.74
to $7.01 per share, with $6.31 per share being the average exercise
price.
(3) This offering is being made pursuant to the Plan and is not
underwritten. However, the Corporation is bearing certain expenses in
connection with this registration, which are currently estimated to be
$5,000 per year, consisting of legal, accounting and registration fees.
(End of Footnotes)
The Date of this Prospectus is March 24, 1998.
AVAILABLE INFORMATION
The Corporation files annual, quarterly and current reports and other
information with the SEC. You may read and copy any reports, statements
or other information we file at the SEC's public reference room located
at 450 Fifth Street, N.W. Room 1024, Washington, D.C. 20549, and at the
public reference facilities in the Commission's regional offices located
at: 7 World Trade Center, 13th Floor, New York, New York 10048; and at
Northwest Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. You may request copies of these documents, upon payment
of a duplicating fee, by writing to the SEC. Please call the SEC at 1-
800-SEC-0330 for further information on the operation of the public
reference rooms. The Corporation's SEC filings are also available to
the public on the SEC Internet site (http://www.sec.gov.).
The Corporation has filed with the Commission a Registration Statement
under the Securities Act of 1933 with respect to the securities being
offered by this Prospectus. This Prospectus does not contain all the
information set forth in the Registration Statement, certain portions of
which have been omitted as permitted by the rules and regulations of the
Commission. In addition, certain documents filed by the Corporation
with the Commission have been incorporated in this Prospectus by
reference. For further information with respect to the Corporation and
the securities offered hereby, reference is made to the Registration
Statement, including the exhibits thereto.
INCORPORATION BY REFERENCE
The Corporation's Annual Report on Form 10-KSB filed pursuant to Section
13 of the Securities Exchange Act of 1934, for the fiscal year ended
December 31, 1997 is hereby incorporated by reference into this
Prospectus.
Any statement contained in a document incorporated by reference herein
shall be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein, or in any amendment or
supplement hereto, modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
On request the Corporation will furnish, without charge, to each person
to whom this Prospectus is delivered, copies of any document
incorporated by reference in this Prospectus (not including exhibits,
unless such exhibits are specifically incorporated by reference into the
information that the Prospectus incorporates). Oral or written requests
for copies should be directed to Deborah A. Meekins, President and Chief
Executive Officer, Sonoma National Bank, 801 Fourth Street, Santa Rosa,
California 95404, Telephone: (707) 579-2265.
ANNUAL REPORTS TO SECURITY HOLDERS
The Corporation provides and will continue to provide its shareholders
with an annual report not later than 120 days after the close of its
fiscal year. Such report contains a consolidated balance sheet as of
the end of the fiscal year and an income statement and statement of cash
flow for such fiscal year. The annual report contains financial
information that has been examined and reported upon, with an opinion
expressed by, independent certified public accountants. The Corporation
also provides its shareholders with other periodic reports containing
unaudited financial information. The Form 10-KSB annual report of the
Corporation will be available to shareholders within 90 days after the
end of its fiscal year.
FORWARD-LOOKING STATEMENTS
This report contains "forward-looking statements" as defined in section
27A of the Securities Act of 1993, as amended, and section 21E of the
Securities Exchange Act of 1934, as amended, which includes statements
such as projections, plans and objectives and assumptions about the
future, and such forward looking statements are subject to the safe
harbor created by these sections. Many factors could cause the actual
results, amounts or events to differ materially from those the
Corporation expects to achieve or occur, such as changes in competition,
market interest rates, economic conditions and regulations. Although
the Corporation has based its plans and projections on certain
assumptions, there can be no assurances that its assumptions will be
correct, or that its plans and projections can be achieved.
PROSPECTUS SUMMARY
The following summary sets forth, in an abbreviated manner, information
selected from this Prospectus and is qualified in its entirety by the
information in the remainder of this prospectus. Optionees are urged to
read the entire Prospectus carefully before deciding to exercise a stock
option.
The Corporation
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Northern Empire Bancshares is a bank holding company headquartered in
Santa Rosa, California and parent of Sonoma National Bank (the "Bank")
of Santa Rosa, California. The Bank was organized as a national banking
association on March 27, 1984, and commenced operations on January 25,
1985. It currently has three banking offices: the main office is
located at 801 Fourth Street, in the central business district of Santa
Rosa, a branch office is located in the Oakmont area of Santa Rosa,
approximately 5 miles east of the main office, and a branch office is
located in the Windsor Safeway Supermarket, approximately 5 miles north
of the main office. The Bank engages in the general commercial banking
business. It accepts checking and savings deposits, offers money market
deposit accounts and certificates of deposit, makes secured and
unsecured commercial and other installment and term loans, real estate
loans and SBA loans and offers other customary banking services. See,
"The Corporation, Business of the Bank" in the Corporation's Annual
Report on form 10-KSB for the year ended December 31, 1997.
The Bank's primary market area and the source of most of its loan and
deposit business is Marin and Sonoma Counties, California.
The Corporation had total assets of $233,737,000 as of December 31,
1997, including net loans of $204,408,000. Total deposits at December
31, 1997 were $214,747,000 and shareholders' equity was $17,709,000.
The Corporation reported net income of $3,273,000 for the year ended
December 31, 1997, as compared to income of $2,306,000 for the year
ended December 31, 1996. See, "Management's Discussion and Analysis of
Financial Condition or Plan of Operation" in the Corporation's Annual
Report on form 10-KSB for the year ended December 31, 1997.
The Offering
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The Offering Northern Empire Bancshares Stock Option Plan
Securities Offered Pursuant
to Plan 67,531 shares of common stock, no par value
Eligible Participants Directors and employees of the Corporation
and/or any of its subsidiaries
Exercise Price The exercise price of an option is specified
in the optionee's Option Agreement. Under
the Plan, the exercise price may not be less
than the fair market value of the
Corporation's common stock on the date the
option was granted.
Exercise of Options Written notice must be given to the
Corporation stating the number of shares
with respect to which the option is being
exercised, and the date the shares should be
delivered (which must be at least 15, but
not more than 30, days from the date of the
notice).
RISK FACTORS
LACK OF DIVIDENDS. Since it commenced business, the Corporation has
paid cash dividends to its shareholders in 1995, 1994, 1993, 1992, and
1991, paid a 5% stock dividend in 1997, 1996, 1995 and 1994, and has had
one stock split in 1989. There can be no assurance that dividends will
be declared in the foreseeable future. The Corporation's ability to pay
dividends is subject to the limitations of the California General
Corporation Law. At present, the Corporation's primary source of income
is dividends from its subsidiary, the Bank and the ability of the Bank
to pay dividends to the Corporation is subject to legal limitations.
COMPETITION, ECONOMIC CONDITIONS AND GOVERNMENT REGUALTION. The
Corporation and the Bank operate in an increasingly competitive
financial and banking environment and compete with a number of other
commercial banks, savings and loan associations, money market funds,
credit unions and other financial institutions, many of which have
substantially greater financial resources. There is no assurance that
the Corporation will continue to be able to compete successfully.
The Bank is significantly affected by general economic and political
conditions, and by governmental monetary and fiscal policies.
Conditions such as inflation, recession, unemployment, interest rates,
short money supply, scarce natural resources, and other factors are
beyond the Corporation's control and may adversely affect its
profitability. These changes could negatively impact the Bank's
profitability and growth of its loan portfolio.
The Corporation is subject to extensive governmental supervision,
regulation and control, and there can be no assurance that future
legislation or government policy will not adversely affect the banking
industry or the operations of the Corporation in particular.
LACK OF TRADING MARKET. There is currently a limited trading market for
the Corporation's common stock. The number of shares traded as reported
by Hoefer & Arnet, a market maker for the Corporation, in the months of
October, November and December 1997 was 31,100, 3,900 and 50,900 shares,
respectively, equaling 2.3%, 0.3% and 3.31% of the Corporation's
outstanding common stock. It is not possible to predict the trading
volume that will occur at any time in the future.
CAPITAL ADEQUACY. The Corporation and the Bank are both considered
"well-capitalized" under federal capital adequacy guidelines at this
time. As a result, the Corporation and the Bank benefit in various
ways, including a low deposit insurance premium, exemptions from some
regulatory restrictions such as the brokered deposit restrictions and
increased ability to engage in new activities. However, if the
Corporation grows more quickly than its retained earnings grow, or if it
suffers losses, so that its capital to asset ratios decline, the
Corporation and the Bank will lose these benefits unless they can raise
capital. Although the Corporation believes that it could raise capital
if necessary, there can be no assurances that it would not affect the
market for the common stock, or that the Corporation would not incur
significant costs in such a transaction.
SBA LENDING PROGRAMS. A substantial part of the Bank's loan business
consists of loans guaranteed in part under one of the Small Business
Administration's (SBA) loan programs. These programs are subject to
revisions based upon political conditions. Also, a number of other
lenders, including banks and other types of business lenders, compete
with the Bank for this business. Many other lenders are Preferred
Lenders like the Bank. There can be no assurance that the Bank will
continue to make a substantial number and amount of SBA loans, or that
such loan business will continue to be profitable. See, "Loan
Portfolio" in the Corporation's Annual Report on form 10-KSB for the
year ended December 31, 1997.
DESCRIPTION OF THE PLAN
General Plan Information
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The Northern Empire Bancshares Stock Option Plan (the "Plan") was
adopted by the Board of Directors of the Corporation on February 26,
1984, and approved by the shareholders at the 1985 annual shareholders'
meeting. Amendment No. 1 to the Plan, which increased the number of
shares for which options could be granted to 311,380 from 244,014 and
amended other restrictions and provisions in the Plan to comply with the
requirement for "incentive stock options" under the Tax Reform Act of
1986, was adopted by the Board of Directors on May 16, 1989 and approved
by the shareholders at the 1989 annual shareholders' meeting. Amendment
No. 2 to the Plan, which permits the Board of Directors to extend the
options of employees or directors upon termination of employment or
service as a directors for up to six (6) months following such
termination, was approved by the Board on October 16, 1990. The
approval of the shareholders was not required for Amendment No. 2.
The purpose of the Plan was to provide a means whereby directors and
employees of the Corporation and/or the Bank may be given an opportunity
to purchase shares of the Corporation's common stock. The Plan was
intended to advance the interests of the Corporation and the Bank by
encouraging stock ownership on the part of key employees, by enabling
the Corporation and the Bank to secure and retain the services of highly
qualified persons as directors and employees, by providing such
directors and employees with an additional incentive to make every
effort to enhance the success of the Corporation and the Bank and by
providing a means whereby directors may be compensated for significant
contributions to the success of the Corporation and the Bank.
The Plan provided for the grant of both non-qualified options and
options which are intended to qualify as "incentive stock options" as
defined in Section 422 of the Internal Revenue Code (the "Code"). See,
"Federal Tax Consequences."
Term of the Plan and Amendments
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Options could be granted under the Plan until February 26, 1994. The
Plan could have been modified, amended or terminated earlier by the vote
of the holders of a majority of the Corporation's outstanding common
shares or by the Corporation's Board of Directors. However, without the
approval of the shareholders as provided above, the Board could not have
(a) increase (other than pursuant to the adjustment provisions referred
to below) the maximum number of shares as to which options may be
granted under the Plan; (b) decrease the minimum exercise price provided
by the Plan; (c) extend the term of the Plan or the maximum term of the
options granted under it; (d) decrease, directly or indirectly (by
cancellation and substitution of options or otherwise), the exercise
price applicable to any option granted under the Plan; or (e) withdraw
the administration of the Plan from the Board or a committee of the
Board.
Administration
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The Plan is administered by the Corporation's Board of Directors. The
Board had the authority to determine the individual employees and
directors who will receive options, the number of shares to be covered
by such options and the timing of the grants, and to interpret the Plan.
In making any determination as to participants to whom options may be
granted and the number of shares to be covered by such options, the
Board took into account the duties of the respective participants, their
present and potential contributions to the success of the Corporation
and the Bank, and such other factors as the Board deemed relevant in
connection with accomplishing the purposes of the Plan.
The individual directors are elected by the shareholders of the
Corporation at each annual shareholders' meeting. At each such meeting
the directors are elected for the following year and until their
successors are elected and qualified. A director of a California
corporation may be removed by the vote of the shareholders, by the Board
if the director is declared of unsound mind by a court or convicted of a
felony or by a Superior Court action requested in a suit brought by
shareholders holding at least 10% of the outstanding stock, in the case
of fraudulent or dishonest acts or gross abuse of authority or
discretion. Also, because the Corporation is a bank holding company,
directors may be removed by the Federal Reserve Board in the event of
certain misconduct.
Eligibility
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Options could be granted under the Plan to any director and/or employee
of the Corporation or its subsidiaries. As to options granted as
"incentive stock options", the aggregate fair market value (determined
as of the date an option is granted) of the shares as to which such
options first become exercisable by an optionee) may not exceed $100,000
during any calendar year.
At February 26, 1994 when the plan terminated, approximately 70
directors and employees were eligible to receive options under the Plan,
and 23 such eligible individuals had been granted options.
Nothing in the Plan confers on any director or employee any right to
continue in the employment of the Corporation or affects the terms and
provisions of any agreement between an employee and the Corporation.
Furthermore, options granted under the Plan confer no rights as a
shareholder of the Corporation until validly exercised.
Number of Shares Available
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Subject to certain adjustment provisions described below, the Plan
provided that options may be granted to participants by the Corporation
from time to time until February 26, 1994 for an aggregate of 333,498
shares of the Corporation's common stock (as adjusted for stock
dividends and the like). Certain information regarding the common stock
is provided below under "Description of Common Stock."
At February 28, 1998, 262,467 shares of common stock had been purchased
pursuant to the exercise of options granted under the Plan, and 67,531
shares were subject to options granted under the Plan. When the Plan
expired on February 26, 1994, there were 200 shares available under the
Plan for options that had not been granted and since then 3,300 options
for shares have expired. Options may no longer be granted under the
Plan. The 5% stock dividends distributed in 1997, 1996, 1995 and 1994
resulted in 22,118 additional shares subject to option.
Term of Options and Determination of Exercise Price
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The option price to be paid upon exercise of an option may not be less
than the fair market value of the shares of the Corporation's common
stock on the date the option was granted. The fair market value of the
Corporation's common stock could be established by the Board by use of
any reasonable valuation method, taking into consideration prices at
which shares of the Corporation have recently traded, the number of
shares traded and other relevant factors as determined by the Board.
The Plan also provides that no option may be granted to any participant
who owns stock possessing more than 10% of the total combined voting
power of the Corporation, unless the exercise price of such option is at
least 110% of the fair market value of the Corporation's common stock on
the date the option is granted, and no "incentive stock option" may be
granted to any such participant unless the exercise term of such option
does not exceed five years.
Each option granted under the Plan must expire not more than 10 years
from the date the option is granted.
Assignment of Option Rights
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No incentive stock option is assignable or transferable except by will
or the laws of descent and distribution. Options that are not incentive
stock options may be assigned by the optionee to a member of the
optionee's immediate family and may thereafter be exercised by such
transferee or assignee to the extent exercisable by the optionee
immediately prior to such transfer or assignment. During the lifetime
of an optionee, an option is exercisable only by him or her, except in
the case of a non-incentive stock option, which can be exercised by such
transferees as are permitted above. In the event of any attachment,
execution or similar process on an option, the Corporation will notify
the optionee and allow the optionee a reasonable time (but not to exceed
60 days) to obtain a release of the option from such process. If the
optionee does not obtain a release, the Corporation may terminate the
option.
Exercise Of Options
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Each option may be exercised upon the terms and conditions provided by
the Stock Option Agreement by which the option was granted.
Options may be exercised by written notice to the Corporation stating
the number of shares with respect to which the option is being
exercised, and the time of delivery thereof, which shall be not less
than 15 and not more than 30 days after the notice is given. At the
time specified in the notice, the Corporation shall deliver to the
optionee a certificate for such shares and the optionee shall deliver
payment in full, in cash or by certified or official bank check, for the
shares. The Corporation may delay the time of delivery as required for
it with reasonable diligence to comply with any applicable legal
requirements. If the optionee fails to accept delivery of or pay for
all or part of the number of shares for which the option is being
exercised, the right to exercise the option shall be terminated.
Termination of Employment or Service as a Director
- - --------------------------------------------------
Except as stated below with respect to termination of employment or
service as a director "for cause," in the event that an optionee's
employment or service as a director is terminated by failure to be re-
elected or otherwise, his or her option shall terminate immediately;
provided, however, that the optionee shall have the right to exercise
the option within three months from the date of such termination to the
extent he or she was entitled to exercise the same immediately prior to
termination, with certain exceptions in the case of disability or death.
The Board of Directors may extend the three month exercise period for up
to three additional months, such that an optionee may have up to six
months following termination to exercise an option.
If an employee-optionee's employment is terminated for cause, including
willful breach of duty by the employee or habitual neglect of duty, the
right to exercise any option shall immediately and automatically
terminate; provided, however, that the Board may, in its sole and
absolute discretion, prior to the expiration of thirty days after the
date of said termination, reinstate the option as set forth below.
If a director-optionee's service as a director is terminated pursuant to
Section 302 of the California General Corporation Law (with respect to
removal for cause), pursuant to Section 304 of the California General
Corporation Law (with respect to removal by shareholders' suit in case
of fraudulent or dishonest acts or gross abuse of authority or
discretion with reference to the Corporation), or if the Comptroller of
the Currency or other supervisory authority shall exercise its cease and
desist power to remove a director from office, the right to exercise any
option shall immediately and automatically terminate; provided, however,
that the Board may, in its sole and absolute discretion, prior to the
expiration of thirty days after the date of said termination, reinstate
such option as set forth below.
If the Board determines that an optionee's option is to be reinstated as
provided above, written notice of such determination shall be sent to
the optionee, at his or her last known address. Upon receipt of such
written notice, the optionee shall have the right to exercise the
option, to the extent that he or she was entitled to exercise the same
immediately prior to termination, at any time during the period from
receipt of such written notice to a day three months from the date of
termination.
Additional Terms
- - ----------------
In the event that the outstanding shares of common stock of the
Corporation are increased or decreased or changed into or exchanged for
a different number or kind of shares or other securities of the
Corporation or of another corporation, by reason of reorganization,
merger, consolidation, recapitalization, reclassification, stock split,
combination of shares, dividend payable in common stock, acquisition, or
the like, appropriate adjustment will be made by the Board in the number
and kind of shares for the purchase of which options may be granted
under the Plan. In these cases, the Board will also make appropriate
adjustment in the number and kind of shares as to which outstanding
options will be exercisable, so that any participant's proportionate
interest in the Corporation by reason of rights under any unexercised
portions of such option shall be maintained. Such adjustment in
outstanding options will be made without change in the total price
applicable to the unexercised portion of the option and with a
corresponding adjustment in the option price per share.
In the event of a dissolution or liquidation of the Corporation or a
merger, consolidation, acquisition or other reorganization in which the
Corporation is not the surviving or resulting corporation, the Board of
Directors has the power to cause the termination of every outstanding
option; provided, however, that in all events the optionee will have the
right, immediately prior to such dissolution, liquidation, merger,
consolidation, acquisition or other reorganization in which the
Corporation is not the surviving or resulting corporation, to exercise
his or her option and purchase shares subject thereto, to the extent of
any unexercised portion of the option, without regard to any installment
provision in the option agreement, provided that in all events the
option is otherwise exercisable in accordance with the terms and
conditions of the Plan.
Additional Information
- - ----------------------
For additional information about the Plan and the administrators of the
Plan, participants should contact Deborah A. Meekins, President and
Chief Executive Officer, Sonoma National Bank, 801 Fourth Street, Santa
Rosa, California, 95404, telephone: (707) 579-2265
Miscellaneous
- - -------------
The Plan is not subject to the provisions of the Employee Retirement
Income Security Act of 1974 or qualified under Section 401(a) of the
Code.
FEDERAL TAX CONSEQUENCES
The Plan provides for the grant of both non-qualified options and
options which are intended to qualify as "incentive stock options" as
defined in Section 422 of the Code. The Code provides that no income is
recognized from the grant of an incentive stock option or, as long as
certain requirements are met, from the exercise of an incentive stock
option by the optionee. If the requirements are not met, ordinary
income will be recognized at the time of exercise. On the sale of stock
acquired through the exercise of an option, long-term or short-term
capital gain will be recognized, depending upon how long the stock was
held. Under the current tax laws, capital gains are presently taxed at
rates that are slightly less than ordinary income rates. The employer
is not allowed a business expense deduction with respect to an incentive
stock option unless income is recognized by the optionee.
Generally, the grant of an option which does not qualify as an incentive
stock option (a "non-qualified option") does not constitute ordinary
income to the optionee, unless the option has a readily ascertainable
fair market value. When a non-qualified option is exercised, the
optionee recognizes income in an amount equal to the difference between
the option price and the value of the stock at the time of exercise.
The employer is allowed a business expense deduction equal to the amount
included in the optionee's income in the employer's corresponding tax
year.
In the event of a merger or acquisition involving the Corporation or the
Bank in which the Corporation or the Bank is not the surviving
corporation, the vesting of outstanding options is accelerated under the
Plan. The acceleration of vesting may be considered a "parachute
payment" to the participant by the Corporation. If the value of a
participant's options to which the acceleration applies exceeds three
times that participant's annual base salary, as determined under the
Code, that participant will be subject to an excise tax on the amount
that is considered an "excess parachute payment."
Because of the complexities of the Internal Revenue Code, it is
recommended that an optionee obtain tax counseling from his or her tax
advisor in connection with the exercise of an option granted under the
Plan and the sale of any common stock acquired upon the exercise of an
option. In particular, an optionee who has substantial income is
advised to obtain tax counseling, since the exercise of an incentive
stock option may constitute a tax preference item for purposes of
computing the alternative minimum tax.
RESALE OF COMMON STOCK
Each option agreement contains an agreement by the optionee that he or
she will promptly notify the Corporation in writing of any sale,
transfer, or other disposition of any shares acquired upon the exercise
of an option, if the sale, transfer or other disposition occurs within
two years from the date the option was granted or within one year from
the date of exercise.
Resale of shares acquired on the exercise of a stock options must be
made in compliance with applicable Federal and state securities laws,
including the antifraud provisions and the prohibitions against trading
on inside information. Employees who are not "affiliates" of the
Corporation, as defined in the Securities and Exchange Commission's Rule
405 under the Securities Act of 1933 (the "1933 Act") and who acquire
shares of common stock through the exercise of options granted under the
Plan, may reoffer and resell such shares without further registration
and without limitation as to holding period or number of shares to be
sold.
Affiliates of the Corporation, as defined in Rule 405, are limited in
their ability to sell stock of the Corporation. Affiliates are
generally defined to be persons who, directly or indirectly, control the
management and policies of the Corporation or are controlled or under
common control with the Corporation or other affiliates. Such persons
generally include all executive officers, directors, holders of 10% or
more of the Corporation's common stock, and those persons' affiliates,
as defined by law or regulations. Affiliates may reoffer or resell
shares of the Corporation's common stock acquired by them through the
exercise of options granted under the Plan pursuant to either Rule 144
promulgated under the 1933 Act or an effective reoffer prospectus in
accordance with the rules and regulations of the 1933 Act.
There are a number of requirements applicable to resales by affiliates
under Rule 144. Sales must be conducted through a broker or market
maker and a report of sale must be filed with the Securities and
Exchange Commission ("SEC"). The number of shares that an affiliate may
sell under Rule 144, plus all other sales within the last three months,
is limited to the greater of (i) one percent of the corporation's
outstanding shares or (ii) the average weekly volume of trading in the
Corporation's stock during the four weeks immediately preceding the
sale, as reported on NASDAQ.
The alternative to Rule 144 is to register the offer with the SEC,
pursuant to a reoffer prospectus. The SEC's rules and regulations
require that the affiliate desiring to reoffer or resell such securities
be named in the reoffer prospectus and state the number of shares he or
she desires to have registered.
USE OF PROCEEDS
This offering was made for the purpose of providing incentive
compensation to directors and officers of the Corporation and the Bank.
The Corporation intends to use the proceeds from the offering, if any,
for general corporate purposes.
DESCRIPTION OF COMMON STOCK
Authorized Shares - General
- - ---------------------------
The authorized capital stock of the Corporation consists of 20,000,000
shares of common stock, no par value, and 10,000,000 shares of preferred
stock, no par value. Each share of common stock has the same rights,
preferences and privileges as every other share of common stock. The
common stock has no conversion or redemption rights or sinking funds
provisions. Subject to the preferences of any shares of preferred stock
that may be issued in the future, holders of the common stock are
entitled to participate in such dividends as may be declared by the
Board out of funds legally available therefor and, in the event of
liquidation, dissolution or winding up of the Corporation, are entitled
to share ratably in all assets remaining after the payment of
liabilities. Shares of the common stock are not subject to assessment
under the applicable law.
The transfer agent and registrar for the common stock is ChaseMellon
Shareholders Services, L.L.C., San Francisco.
Voting Rights
- - -------------
Each share of common stock is entitled to one vote on any issue
requiring a vote and holders of the common stock have the right to
cumulate votes in elections of directors, as described below.
California law provides that a shareholder of a California corporation,
or his proxy, may cumulate votes in elections for directors, that is,
each shareholder has a number of votes equal to the number of shares
owned by him, multiplied by the number of directors to be elected, and
he may cumulate such votes for a single candidate or distribute such
votes among as many candidates as he deems appropriate. However, a
shareholder may cumulate votes only for a candidate or candidates whose
names have been properly placed in nomination prior to the voting and
only if the shareholder has given notice at the meeting, prior to the
voting, of his intention to cumulate his votes. If any one shareholder
has given such notice, all shareholders may cumulate votes for
candidates in nomination.
The Corporation's Articles of Incorporation generally may be amended at
any regular or special meeting of the shareholders by the affirmative
vote of the holders of a majority of the stock of the Corporation,
unless the vote of the holders of a greater amount of stock is required
by law.
Nominations of Directors
- - ------------------------
The Corporation's Bylaws provide that nominations for directors by
shareholders may be made, provided that certain informational
requirements concerning the identities of the nominating shareholder and
the nominee are complied with in advance of the meeting. The written
nomination must include the following information: (a) the name and
address of each proposed nominee, (b) the principal occupation of each
proposed nominee, (c) the total number of voting shares that will be
voted for each proposed nominee, (d) the name and residence address of
the nominating shareholder, and (e) the number of shares of voting stock
of the corporation owned by the nominating shareholder. This provision
is intended to provide advance notice to management of any effort to
effect an election contest or a change in control of the Board of
Directors.
Directors' Duty of Care and Liability
- - -------------------------------------
The Corporation's Articles of Incorporation eliminate the personal
liability of directors to the Corporation and its stockholders for
monetary damages to the extent permitted by California law. The
articles do not eliminate the duty of care; only liability for monetary
damage awards based upon a breach of that duty. Under the articles, a
director is not personally liable for monetary damages for an action
based on a claim that he did not meet this standard of care.
A director does remain personally liable for: (i) intentional
misconduct or culpable violation of law; (ii) acts or omissions believed
by the director to be contrary to the best interests of the Corporation
or its shareholders, or that involve the absence of good faith on the
part of the director; (iii) any transaction from which a director
derived improper personal benefit; (iv) acts or omissions that show
reckless disregard for the director's duty to the Corporation or its
shareholders where the director, in the ordinary course of performing a
director's duties, should be aware of a risk of serious injury to the
Corporation; (v) acts or omissions that constitute an unexcused pattern
of inattention that amounts to an abdication of the director's duty to
the Corporation or its shareholders; (vi) transactions between the
Corporation and a director in which a director has a material financial
interest; and (vii) liability for improper dividends or other
distributions, loans, or guarantees. The Corporation may limit a
director's liability only with regard to derivative actions, i.e.,
actions brought by shareholders on behalf of the Corporation, and not to
claims brought by outside parties or to claims by shareholders that are
not on behalf of the Corporation. The articles do not interfere with a
shareholder's ability to pursue other remedies, such as those provided
by federal securities laws, or equitable remedies, such as injunctive
relief.
Dividends
- - ---------
The dividend policy of the Corporation is subject to the discretion of
the Board of Directors and depends upon a number of factors, including
earnings, financial condition, cash needs and general business
conditions. In addition, the Board of Directors may declare dividends
only out of funds legally available therefor.
California General Corporation Law provides that a corporation may make
a distribution if its retained earnings at least equal the amount of the
proposed distribution. In the event that sufficient retained earnings
are not available for the proposed distribution, a corporation may
nevertheless make a distribution if, immediately after giving effect to
the proposed distribution, it meets both the "quantitative solvency" and
the "liquidity" tests, as set forth in the law. In general, the
quantitative solvency test requires that the sum of the assets of the
corporation equal at least 1-1/4 times its liabilities. The liquidity
test generally requires that a corporation have current assets at least
equal to current liabilities or, if the average of earnings of the
corporation before taxes on income and before interest expense for the
two preceding fiscal years was less than the average of the interest
expense of the corporation for such fiscal years, current assets must
equal at least 1-1/4 times current liabilities.
The Corporation's primary source of income is the receipt of dividends
from its subsidiary bank. The Bank's ability to pay dividends is
subject to the restrictions of the national banking laws and, under
certain circumstances, the approval of the Comptroller of the Currency.
A national bank may not pay dividends from its capital. All dividends
must be paid out of net profits then on hand, after deducting for
expenses, including losses and bad debts. A national bank is also
prohibited from declaring a dividend until its surplus fund equals the
amount of capital stock or, if the surplus fund does not equal the
amount of capital stock, until one-tenth of the bank's net profits for
the preceding half year, in the case of quarterly or semiannual
dividends, or the preceding two consecutive half-year periods, in the
case of an annual dividend, are transferred to the surplus fund each
time dividends are declared.
The approval of the Comptroller is required if the total of all
dividends declared by a bank in any calendar year will exceed the total
of its net profits of that year combined with its retained net profits
of the two preceding years, less any required transfers to surplus or a
fund for the retirement of any
preferred stock which may be outstanding. Moreover, the Comptroller may
prohibit the payment of dividends which would constitute an unsafe and
unsound banking practice.
Issuance of Additional Shares
- - -----------------------------
The Corporation has authorized capital stock consisting of 20,000,000
common shares and 10,000,000 shares of preferred stock. Such shares
have been authorized in order that the Corporation may, in the future,
raise additional capital for growth purposes or to respond to regulatory
capital requirements. While the Corporation has no present plans to do
so, such shares may be offered without the approval of the then
shareholders of the Corporation. Authorized but unissued shares are
sometimes used in connection with responses to attempts to acquire
control of a corporation. Although the Board of Directors is not aware
of and does not anticipate any attempt to acquire control of the
Corporation, authorized but unissued shares can be used to respond to
such attempts by selling shares to a party who supports existing
management or in order to increase the number of shares outstanding,
which would both increase the amount of consideration necessary to
effect a change in control of the Corporation and dilute the percentage
ownership and voting rights of an acquiror that had already acquired
some portion of the Corporation's outstanding stock.
Serial Preferred Shares
- - -----------------------
The Corporation's Articles of Incorporation authorize its Board of
Directors to fix one or more series of preferred stock and to determine
the dividend rights (including sinking fund provisions for the purchase
or redemption of such shares), conversion rights, voting rights, if any,
preferences upon liquidation, dissolution or winding up, and the number
and designation of shares constituting any such series. If and when
shares of serial preferred stock are issued, such stock may or may not
have voting or conversion rights, and the holders of such stock may have
dividend, liquidation, redemption or other rights that are senior to
those of the holders of the Corporation's Common Stock. While the
Corporation has no present plans to issue any preferred shares, such
shares may be issued in the future without obtaining the approval of the
holders of the Common Stock.
Preemptive Rights
- - -----------------
Holders of the common stock of the Corporation do not have preemptive
rights, that is, any rights to subscribe for additional shares or other
securities which the Corporation may issue in the future. Therefore,
future shares of the Corporation's common stock or other securities may
be offered to the investing public or to shareholders, at the discretion
of the Corporation's Board of Directors, and such securities may have
rights that are senior to those of the holders of Common Stock.
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
The State of California adopted legislation, effective September 27,
1987, (the "Legislation"), which amended the California General
Corporation Law to permit limitation of liability of directors and
indemnification of directors, officers and other agents to a greater
extent than permitted under prior California law. The Legislation
permits a California corporation to include a provision in its articles
of incorporation allowing the corporation to include in its bylaws, and
in agreements between the corporation and its directors, officers and
other agents, provisions expanding the scope of indemnification beyond
that specifically provided under California law.
In response to the Legislation, the Board of Directors and shareholders
previously approved amendments to the Corporation's Articles of
Incorporation and the Board of Directors approved amendments to the
Corporation's Bylaws, which limit the personal liability of directors
for monetary damages for a breach of such directors' fiduciary duty of
care and allow the Corporation to expand the scope of its
indemnification of directors, officers and other agents to the fullest
extent permitted by California law. The Corporation and the Bank have
entered into Indemnification Agreements with the directors of the
Corporation and the Bank (the "Indemnification Agreements").
Indemnification Under State Statutes and Bylaws
- - -----------------------------------------------
The Corporation is subject to the California General Corporation Law,
which provides a detailed statutory framework covering indemnification
of any officer, director or other agent of a corporation who is made or
threatened to be made a party to any legal proceeding by reason of his
or her service on behalf of the corporation. Such law provides that
indemnification against expenses actually and reasonably incurred in
connection with any such proceeding shall be made to any such person who
has been successful "on the merits" in the defense of any such
proceeding, but does not require indemnification in any other
circumstance. The law provides that a corporation may indemnify any
agent of the corporation, including officers and directors, against
expenses, judgments, fines, settlements and other amounts actually and
reasonably incurred in a third party proceeding against such person by
reason of his or her services on behalf of the corporation, provided the
person acted in good faith and in a manner he or she reasonably believed
to be in the best interests of the corporation. The law further
provides that in derivative suits a corporation may indemnify such a
person against expenses incurred in such a proceeding, provided such
person acted in good faith and in a manner he or she reasonably believed
to be in the best interests of the corporation and its shareholders.
Indemnification is not available in derivative actions (i) for amounts
paid or expenses incurred in connection with a matter that is settled or
otherwise disposed of without court approval or (ii) with respect to
matters for which the agent shall have been adjudged to be liable to the
corporation unless the court shall determine that such person is
entitled to indemnification.
The law permits the advancing of expenses incurred in defending any
proceeding against a corporate agent by reason of his or her service on
behalf of the corporation upon the giving of a promise to repay any such
sums in the event it is later determined that such person is not
entitled to be indemnified. Finally, the California General Corporation
Law, as amended by the Legislation, provides that the indemnification
provided by the statute is not exclusive of other rights to which those
seeking indemnification may be entitled, by bylaw, agreement or
otherwise, to the extent additional rights are authorized in a
corporation's articles of incorporation. The law further permits a
corporation to procure insurance on behalf of its directors, officers
and agents against any liability incurred by any such individual, even
if a corporation would not otherwise have the power under applicable law
to indemnify the director, officer or agent for such expenses. The
Articles and Bylaws of the Corporation implement the applicable
statutory framework to provide for indemnification of directors,
officers and other corporate agents.
Indemnification Agreements
- - --------------------------
The Indemnification Agreements provide to the directors the maximum
indemnification allowed under applicable law and under the Corporation's
Articles of Incorporation and Bylaws. The Indemnification Agreements
provide indemnification which expands the scope of indemnification
provided by Section 317 of the California General Corporation Law (the
"Statute"). It has not yet been determined, however, to what extent the
indemnification expressly permitted by Statute may be expanded, and
therefore the validity and scope of indemnification provided by the
Indemnification Agreements may be subject to future judicial
interpretation.
The Indemnification Agreements set forth a number of procedural and
substantive matters which are not addressed or are addressed in less
detail in the Statute, including the following:
1. The Indemnification Agreements establish a standard of conduct
that the person to be indemnified must have acted "in a manner such
person did not believe to be contrary to the best interests of the
corporation."
2. The Indemnification Agreements establish the presumption that
the indemnified party has met the applicable standard of conduct
required for indemnification. In addition, an arbitrator may make the
determination that indemnification is proper in any arbitration
proceeding in which such determination is pending.
3. The Indemnification Agreements provide that litigation
expenses shall be advanced to an indemnified party at his request
provided that he undertakes to repay the amount advanced if it is
ultimately determined that he is not entitled to indemnification for
such expenses.
4. The Indemnification Agreements explicitly provide that in a
derivative suit the indemnified party will be entitled to
indemnification against amounts paid in settlement, to the fullest
extent permitted by law, where the indemnified party meets the
applicable standard of conduct. The enforceability of the provisions
in the Indemnification Agreements providing for settlement payments in
derivative suits has not been judicially interpreted by the courts and
may be subject to public policy limitations. The Board of Directors has
not sought a legal opinion as to the enforceability of these provisions
because of the lack of judicial interpretation of the Legislation to
date.
5. In the event the Corporation does not pay a requested
indemnification amount, the Indemnification Agreements allow the
indemnified party to contest this determination by petitioning a court
to make an independent determination of whether such party is entitled
to indemnification under the Indemnification Agreements. In the event
of such a contest, the burden of providing that the indemnified party
did not meet the applicable standard of conduct will be on the
Corporation. If the Corporation fails to establish that the applicable
standard of conduct has not been met, the indemnified party will be
entitled to indemnification, which will include reimbursement for
expenses incurred by the indemnified party in such contest in
establishing the right to indemnification.
6. The Indemnification Agreements explicitly provide for partial
indemnification of costs and expenses in the event that an indemnified
party is not entitled to full indemnification under the terms of the
Indemnification Agreements.
7. The Indemnification Agreements automatically incorporate
future changes in the laws which increase the protection available to
the indemnitee. Such changes will apply to the Corporation without
further shareholder approval and may further impair shareholders' rights
or subject the corporation's assets to risk of loss in the event of
large indemnification claims. Each Indemnification Agreement
constitutes a binding, legal obligation of the Corporation, and may not
be amended without the consent of the individual who is protected by
such indemnification Agreement.
8. The Indemnification Agreements explicitly provide that actions
by an indemnified party serving at the request of the Corporation as a
director, officer or agent of an employee benefit plan, corporation,
partnership, joint venture or other enterprise, owned or controlled by
the Corporation, shall be covered by the indemnification.
Insofar as indemnification for liabilities arising under the Securities
Act of 1993 (the "Act") may be permitted to directors, officers and
controlling persons of the Corporation pursuant to the foregoing
provisions, or otherwise, the Corporation has been advised that in the
opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable.
LEGAL MATTERS
Certain legal matters in connection with the shares of common stock
offered pursuant to the Plan have been passed upon for the Corporation
by Haines, Brydon & Lea, A Law Corporation, 235 Pine Street, Suite 1300,
San Francisco, California 94104.
EXPERTS
The consolidated financial statements for the fiscal year ended December
31, 1997 and 1996, included in this registration statement, have been
included herein in reliance on Coopers & Lybrand L.L.P., independent
accountants, given on the authority of such firm as experts in
accounting and auditing.
PART II
Item 14. Other Expenses of Issuance and Distribution.
- - -------- --------------------------------------------
The SEC filing fee for filing this Registration Statement was
approximately $600. Legal fees incurred in connection with this
offering are estimated to be $4,000, accounting fees are estimated to be
$1,000 and no transfer agent fees are expected.
Item 15. Indemnification of Directors and Officers.
- - -------- ------------------------------------------
The statutory and other arrangements for indemnification of directors of
the Registrant are described in full in the prospectus under the heading
"Indemnification for Securities Act Liabilities." Indemnification of
officers and other controlling persons may be made under the provisions
of the Registrant's Articles, Bylaws and Indemnification Agreements or
pursuant to California law.
Article SEVEN of the Registrant's Articles of Incorporation provides
that the Registrant is authorized to indemnify its directors, officers,
employees and other agents as follows:
SEVEN: INDEMNIFICATION OF AGENTS
-------------------------
The corporation is authorized to provide indemnification of agents
(as defined in Section 317 of the Corporations Code) through bylaw
provisions, agreements with the agents, vote of shareholders or
disinterested directors, or otherwise, in excess of the indemnification
otherwise permitted by Section 317 of the Corporations Code, subject
only to the applicable limits on such excess indemnification set forth
in Section 204 of the Corporations Code with respect to breach of duty
to the Corporation and its shareholders.
Article VI of the Registrant's Bylaws provides for indemnification of
directors, officers, employees and other "agents" of the corporation as
follows:
ARTICLE VI
Indemnification
---------------
Section 1. Extent of Indemnification. The Corporation shall
have the power to indemnify agents (as defined in Section 317 of the
California Corporations Code), including directors, officers and
employees, in accordance with the provisions of Section 317 or as
otherwise permitted under the Corporation's Articles of Incorporation.
Section 2. Expense Advancement. Expenses incurred in
defending any proceeding may be advanced by the Corporation prior to the
final disposition of such proceeding upon receipt of an undertaking by
or on behalf of the agent to repay such amount unless it shall be
determined ultimately that the agent is entitled to be identified.
Section 3. Insurance The Corporation may purchase and
maintain insurance on behalf of any agent of the Corporation against any
liability asserted against or incurred by the agent in such capacity or
arising out of the agent's status as such whether or not the Corporation
would have the power to indemnify the agent against such liability under
the provisions of Section 317 of the California Corporations Code.
The provisions of the California General Corporation Law relating to
indemnification of directors, officers, employees and other agents of a
corporation, as presently in effect, are set forth in Sections 204 and
317, copies of which are included in this Registration Statement as
Exhibits 99 and 99.1.
Item 16. Exhibits.
- - -------- ---------
4 Stock Option Plan, including amendments to date, and forms of
Stock Option Agreements (incorporated by reference from
Exhibit 10.1 of the Registrant's Registration Statement of
Form S-2, SEC File No. 33-51906, on September 11, 1992)
5 Opinion of Haines, Brydon & Lea, a law corporation (previously
filed)
23.1 Consent of Haines, Brydon & Lea, a law corporation (previously
filed)
23.2 Consent of Coopers & Lybrand L.L.P.
24 Power of Attorney (previously filed)
24.1 Supplemental Power of Attorney (previously filed)
24.2 Supplemental Power of Attorney (previously filed)
99 Sections 204 and 317 of the California General Corporation
Law, with respect to indemnification (previously filed)
99.1 Amended section 317 of the California General Corporation Law,
with respect to indemnification (previously filed)
Item 17. Undertakings.
- - -------- -------------
The undersigned Registrant hereby undertakes (1) to file, during
any period in which it offers or sells securities, a post-effective
amendment to this Registration Statement to (i) include any prospectus
required by section 10 (a) (3) of the Securities Act of 1933; (ii)
reflect in the prospectus any facts or events which, individually or
together, represent a fundamental change in the information in the
registration statement; and (iii) include any additional or changed
material information on the plan of distribution (2) for determining
liability under the Securities Act of 1933, to treat each post-effective
amendment as a new registration statement of the securities offered, and
the offering of the securities at that time to be the initial bona fide
offering; and (3) file a post- effective amendment to remove from
registration any of the securities that remain unsold at the end of this
offering.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the
Registrant in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of
such issue.
Item 18. Financial Statements and Schedules.
- - -------- -----------------------------------
Not Applicable.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on form S-2 and has duly caused
this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of San Francisco,
State of California, on March , 1997.
NORTHERN EMPIRE BANCSHARES
*
By___________________________________
James B. Keegan, Jr.
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacity and on the dates indicated:
* Date
- - ---------------------------------
Dennis R. Hunter
Chairman of the Board of Directors
* Date
- - ---------------------------------
James B. Keegan, Jr.
President/Director
* Date
- - ---------------------------------
Patrick R. Gallaher,
Chief Accounting Officer/Director
* Date
- - --------------------------------
Robert V. Pauley,
Secretary and Treasurer/Director
* Date
- - --------------------------------
William P. Gallaher,
Director
* Date
- - --------------------------------
Clement C. Carinalli
Director
* Date
- - --------------------------------
William E. Geary,
Director
_____________________________________
* By Joan L. Grant, Attorney-in-Fact
Power of Attorney filed
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration
statement on Form S-2 (File No. 33-60566) of our report dated February
2, 1998, on our audits of the consolidated financial statements of
Northern Empire Bancshares which is included in its Annual Report on
Form 10-KSB for the years ended December 31, 1997 and 1996. We also
Consent to the reference to our firm under the caption "Experts."
Coopers & Lybrand L.L.P.
San Francisco, California
March 20, 1998
