<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act
of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2)
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Security Bank Holding Company
-----------------------------
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No Fee Required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration No.:
3) Filing Party:
4) Date Filed:
<PAGE>
SECURITY BANK HOLDING COMPANY
NOTICE OF ANNUAL MEETING
AND
PROXY STATEMENT
Meeting Date:
-------------
April 18, 2000
12:30 p.m.
Location:
---------
Pony Village Motor Lodge
1503 Virginia Avenue
North Bend, OR 97459
<PAGE>
SECURITY BANK HOLDING COMPANY
170 S. Second St.
Coos Bay, Oregon 97420
Dear Shareholder:
You are cordially invited to attend Security Bank Holding Company's Annual
Meeting of Shareholders. The meeting will be held at the Pony Village Motor
Lodge, located at 1503 Virginia Avenue, North Bend, Oregon on Tuesday, April 18,
2000 at 12:30 p.m. Hors d'oeuvres and refreshments will be served before the
meeting.
The Notice of Annual Meeting of Shareholders, Proxy Statement and Proxy
for the Company follow. Even if you plan to attend the Annual Meeting in person,
it is important that you return the enclosed Proxy to ensure that every
shareholder's shares are voted at the meeting. Please mark, date, sign, and
return your Proxy promptly in the enclosed postage-paid return envelope.
The directors, officers, and employees of Security Bank Holding Company
look forward to seeing you at the Annual Meeting.
Sincerely,
/S/ Chuck Brummel
Chuck Brummel
Chairman of the Board and Chief Executive Officer
<PAGE>
SECURITY BANK HOLDING COMPANY
170 S. Second St.
Coos Bay, Oregon 97420
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON TUESDAY, APRIL 18, 2000
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (the "Meeting")
of Security Bank Holding Company (the "Company") will be held at the Pony
Village Motor Lodge located at 1503 Virginia Avenue, North Bend, Oregon, at
12:30 p.m., Pacific Time, April 18, 2000, for the following purposes, all of
which are more completely set forth in the accompanying Proxy Statement:
1. To vote to change the name of the Company from Security Bank Holding
Company to INDEPENDENT FINANCIAL NETWORK.
2. To elect three directors to serve a three year term, or until their
successors are duly elected and qualified; and
3. To transact such other business as may properly come before the
meeting.
Holders of record of common stock of the Company at the close of business on
February 11, 2000, are entitled to notice of, and to vote at, the Meeting or any
adjournment or adjournments thereof.
By order of the Board of Directors.
/S/ Chuck Brummel
Chuck Brummel
Chairman of the Board and Chief Executive Officer
February 25, 2000
Coos Bay, Oregon
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING. IT IS IMPORTANT THAT YOUR
SHARES BE REPRESENTED REGARDLESS OF THE NUMBER YOU OWN. EVEN IF YOU PLAN TO BE
PRESENT, YOU ARE URGED TO COMPLETE, SIGN, DATE AND PROMPTLY RETURN THE ATTACHED
PROXY USING THE ENVELOPE PROVIDED. IF YOU ATTEND THE MEETING, YOU MAY VOTE
EITHER IN PERSON OR BY YOUR PROXY. ANY PROXY GIVEN MAY BE REVOKED BY YOU IN
WRITING OR IN PERSON AT ANY TIME PRIOR TO THE EXERCISE THEREOF.
<PAGE>
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
OF SECURITY BANK HOLDING COMPANY
APRIL 18, 2000
This Proxy Statement is furnished in connection with the solicitation of proxies
by the Board of Directors to be used at the Annual Meeting of Shareholders of
Security Bank Holding Company (the "Company"), to be held at the Pony Village
Motor Lodge, 1503 Virginia Avenue, North Bend, Oregon, Tuesday, April 18, 2000,
at 12:30 Pacific Time (the "Meeting"). Hors d'oeuvres and refreshments will be
served before the meeting.
Only the holders of common stock (the "Common Stock") as shown on the Company's
records as of February 11, 2000 (the "Record Date"), are entitled to notice of,
and to vote at, the Meeting. A quorum for the purpose of transacting business
requires the presence, in person or by proxy, of the holders of a majority of
the outstanding shares. An abstention from a given matter will not affect the
presence of the shares as to determination of a quorum, nor will it affect the
election of Directors. At the close of business on the Record Date, there were
4,681,122 shares of Common Stock issued and outstanding, with each share being
entitled to one vote. In the election of directors, each share is entitled to
one vote for each director position to be filled, and shareholders may not
accumulate votes.
Proxies in the form enclosed are being solicited by the Board of Directors.
Execution of the proxy will not in any way affect a shareholder's right to
attend the Meeting and vote in person, and shareholders giving proxies may
revoke them at any time before they are exercised by submitting (i) a written
revocation, or (ii) a duly executed proxy bearing a later date, to the Secretary
of the Company at 170 S. Second St., Coos Bay, Oregon 97420 prior to
commencement of the Meeting, or at the Meeting. Attendance at the Meeting will
not, of itself, revoke a previously executed proxy.
If a proxy in the enclosed form is executed and returned, the shares represented
will be voted according to your instructions at the Meeting. If no instructions
are given, the proxy will be voted FOR the election of the nominees for
directors, and in the proxyholder's discretion on any other matters that may
properly come before the shareholders at the Meeting.
This Proxy Statement is being mailed to shareholders on or about February
25, 2000. The entire cost of solicitation of proxies will be borne by the
Company, including expenses incurred by banks, brokers, and other nominees in
forwarding soliciting materials to their principals and obtaining authorization
for the execution of proxies. Proxies may also be solicited personally or by
telephone by directors, officers and other employees of the Company, but such
persons will not be specifically compensated for this service.
The date of this proxy statement is February 25, 2000.
<PAGE>
BUSINESS TO BE CONDUCTED AT THE MEETING
- ---------------------------------------
Agenda Item 1. Name Change
-----------
"Security Bank of Myrtle Point" was founded in 1919 in Myrtle Point Oregon. The
name was changed to "Security Bank of Coos County" when its first branch opened
in 1971. The name was changed to "Security Bank" in 1985 when it opened a bank
in Curry County. Security Bank Holding Company was created in 1986. The only
bank owned by the Holding Company at that time was Security Bank. The Holding
Company currently owns six banks and a mortgage company. It is no longer
appropriate to call the Company Security Bank Holding Company. It is confusing.
Security Bank does not own the Holding Company, the Holding Company owns
Security Bank. Since the Holding Company now owns more than one bank, it would
not make sense to include the names of all the banks in the name. "Security
Lincoln Pacific Family Oregon McKenzie Bank Holding Company" obviously would be
too long of a name.
Certainly Security Bank is a long established well-known historical Coos County
bank, and will continue to be an outstanding community bank. We are not changing
the name of the bank; we are changing the name of the Holding Company. The
Holding Company is not a bank. The Holding Company does not have depositors or
borrowers, it owns banks.
The Company utilized a consulting firm to assist in seeking a suitable name.
After interviews with staff, officers, directors, some shareholders, and the
market makers, the name selected by your board of directors was Independent
Financial Network, with a tag line of Experts in Community Banking. The Company
is excited to have the confusion expressed by employees, customers,
shareholders, other banks and the market place in general, finally resolved with
a name change. The Company will be asking shareholders to approve the name
change at the annual meeting. Please remember that the well-known name of
Security Bank will remain the same, but the name of the Holding Company will
change. Thanks for your support.
Agenda Item 2. Election of Directors
---------------------
The Bylaws of the Company provide for a Board of Directors consisting of
not more than 15 directors, with the exact number determined from time to time
by resolution of the Board of Directors. The Bylaws of the Company provide
further that Directors are elected to serve staggered three-year terms of
office. The Board has set the number of Directors at seven. Current Directors
are serving terms that will expire in 2000, 2001 or 2002. The Nominating
Committee of the Board of Directors is nominating Ronald L. LaFranchi, Gary L.
Waggonner and Robert L. Fullhart to serve three-year terms. All three nominees
are currently serving as members of the Board. One position is reserved for
adding a representative from the Willamette Valley, where we have established a
market presence with three companies. The open position may be filled by Board
of Director appointment to serve until the next annual shareholders meeting.
It is the intention of the persons named in the Proxy to vote FOR the election
of the nominees identified above. If any nominee is not available for election,
the Proxy will be voted by the individuals named in the Proxy for such
substitute nominee as the Nominating Committee may designate. Management has no
reason to believe any nominee will be unavailable to serve.
<PAGE>
RECOMMENDATION OF THE BOARD OF DIRECTORS
Directors are elected by a plurality of the votes cast. Shareholders are
not entitled to accumulate votes for Directors. Rather, each shareholder may
cast votes equal to the number of shares held for each of the three open
positions. The Board of Directors recommends a vote FOR the election of all
nominees above.
INFORMATION REGARDING DIRECTORS AND NOMINEES
The following table shows as to each nominee for Director and for those
Directors whose terms have not yet expired, the identified information as of
February 11, 2000:
Year Elected
or
Appointed as Year Term
Name Age Position Director Expires
- ---- --- -------- -------- -------
Charles D. Brummel 60 Chairman/CEO 1974 2002
William A. Lansing 53 Vice Chairman/Director 1991 2001
Kenneth C. Messerle 59 Director 1992 2002
Glenn A. Thomas 58 Director 1995 2001
Ronald L. LaFranchi 47 Director 1997 2000
Gary L. Waggonner 58 Director 1999 2000
Robert L. Fullhart 68 Director 1997 2000
Information concerning the share ownership of directors can be found below
under "PRINCIPAL SHAREHOLDERS."
EXPERIENCE OF DIRECTORS
The business experience of each of the directors and executive officers for at
least the past five years has been as follows:
CHARLES D. BRUMMEL currently serves as Chairman of the Board, and serves as
Director and Chief Executive Officer of the Company. He was a director of
the Board of the Oregon Bankers Association from 1977 to 1989 and served as
its president in 1986/1987. He is Chairman of the Board of Directors of
BancSource, Inc., an OBA for-profit subsidiary. He also served as a
director of the American Bankers Association from 1986 to 1989 and
currently serves as a member of the Board of Directors of each of the six
subsidiary banks of the Company. Mr. Brummel is also President-elect of the
Western Independent Bankers Association.
WILLIAM A. LANSING is President of Menasha Corporation Forest Products
Group, in North Bend, Oregon, where he has been employed since 1970. Mr.
Lansing sits on the board of several state-wide (Oregon and Washington)
timber related associations and has been recognized for his efforts in
community and state affairs by both local and regional organizations.
KENNETH C. MESSERLE sold his share in the family business of Messerle &
Sons, Inc., a cattle and timber corporation, in Coos County. In 1996, he
was elected to the State Legislature for District 48, and re-elected in
1998. Mr. Messerle also serves on the Board of Directors of Lincoln
Security Bank.
<PAGE>
RONALD L. LAFRANCHI is the owner of Ron's Oil Co., a chain of independently
owned, name brand retail gasoline stations he started in 1976. He presently
operates several stations located throughout Oregon, as well as a propane
gas division which serves predominately retail customers.
GLENN A. THOMAS is the owner of Thomas & Son Beverage, Inc., and its
subsidiaries, Thomas & Son Trucking and Thomas & Son Transportation
Systems, in Coos Bay, Oregon. He has been the Oregon Director for the
Rocky Mountain Wholesalers Association, a director and officer of Oregon
Beer & Wine Distributors Association, and a director of National Beer
Wholesalers.
GARY L. WAGGONNER has been a Director of Pacific State Bank since 1987,
joining Security Bank Holding Company's Board in 1999. He currently serves
as Chairman of the Board of Directors of Pacific State Bank, and is a
rancher and timberland manager.
ROBERT L. FULLHART has been a Director of Pacific State Bank since 1989,
joining Security Bank Holding Company's Board in 1997 as a result of the
acquisition of Pacific State Bank. He is the owner of Fullhart Insurance
Agency, which has five offices in Oregon.
During the year ended December 31, 1999 the Board of Directors held 12 regularly
scheduled meetings. All directors attended at least 75 percent of the board
meetings and committee meetings during the year.
COMMITTEES
The Company's Board of Directors has established a Compensation Committee
comprised of William A. Lansing (Chair), Glenn A. Thomas and Gary L. Waggonner.
The Compensation Committee determines the salary of the Chief Executive Officer
and the bonuses and stock option grants to the Chief Executive Officer and other
executive officers of the Company.
The Board of Directors also has established a standing Audit Committee
consisting of Kenneth C. Messerle (Chair), Ronald L. LaFranchi and Robert L.
Fullhart. The Audit Committee is responsible for overseeing regulatory
compliance matters, and reviewing periodic examinations by state and federal
regulators of the Company and the subsidiary banks, and other external/internal
audits.
The Board of Directors appointed a Nominating Committee, consisting of Ronald L.
LaFranchi (Chair), William A. Lansing, and Glenn A. Thomas, to recommend
nominees for election of directors at the annual meeting of shareholders.
Shareholders who wish to make recommendations to the Nominating Committee for
directors to be nominated for election at the 2000 annual meeting of
shareholders may do so in writing addressed to the Secretary of the Corporation
at the address indicated above no later than November 5, 2000.
COMPENSATION
All Directors of the Company except Charles D. Brummel received $1,000 in
compensation for each meeting of the Board of Directors attended in 1999. There
is no separate compensation for participation in any of the Committees. Payment
was made in the form of Company stock, purchased by the Company from existing
stock on the market.
<PAGE>
EXECUTIVE OFFICERS
Charles D. Brummel is Chief Executive Officer of the Company. Antoinette M.
Poole is Executive Vice President and Chief Operating Officer of the Company.
Ronald L. Farnsworth is Vice President and Chief Financial Officer of the
Company. Naseer M. Nasim is Vice President and Chief Information Officer of
the Company. Executive Officers serve at the discretion of the Board of
Directors.
The following sets forth certain information about the executive officers of the
Company, other than Chuck Brummel:
ANTOINETTE M. POOLE, age 53 serves as the Company's Executive Vice
President and Chief Operating Officer. Prior to fulfilling the
responsibilities of Chief Operating Officer of the Company, she was
Executive Vice President and Loan Administrator of Security Bank, and has
served in a number of other officer positions. She has been employed by the
Company since 1976.
RONALD L. FARNSWORTH, age 29, employed by the Company since 1996, is Vice
President and Chief Financial Officer of the Company. Farnsworth was
previously employed by KPMG Peat Marwick LLP in Portland, Oregon, from 1992
to 1996.
NASEER M. NASIM, age 36, joined the Company in July 1999, and serves as the
Company's Vice President and Chief Information Officer. Nasim has been
involved with the financial industry since 1990. His experience also
includes consultant services to fortune 500 companies, and CEO of AmeriNex,
Inc., an internet service providing company in Santa Clara, California.
Information concerning share ownership of executive officers can be found later
within this document under "PRINCIPAL SHAREHOLDERS."
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth compensation earned for the years ended December
31, 1999, 1998 and 1997 by each executive officer of the Company receiving over
$100,000 of total compensation during such year:
<TABLE>
<CAPTION>
Annual Compensation Long term
------------------- ---------
compensation awards
-------------------
Number
of Securities
Other Underlying All other
Name and Position Year Salary(1) Bonus Compensation (2) Options comp (3)
- ----------------- ---- --------- ----- ---------------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Charles D. Brummel 1999 $183,343 $ - $22,822 72,450 $71,900
Chief Executive 1998 $166,675 $48,855 $25,692 -- $76,603
Officer 1997 $130,016 $68,684 $12,887 -- $68,943
</TABLE>
(1) Includes amounts contributed by the named executive officer to the 401k
plan.
(2) Consisting of Directors fees paid from the subsidiary banks of the
Company, of which Mr. Brummel is a Director, and Company provided auto and
spousal travel.
(3) Consists of accrued earnings related to the Key Executive Deferred
Compensation Plan for the benefit of the named Executive Officer. See
"Other Benefit Plans".
INCENTIVE CASH BONUS PLAN. The Board of Directors of the Company believes
that an incentive bonus based on earnings motivates management to perform at the
highest levels. Management performance has a direct impact on the short-range
and long-range profitability and viability of the institution and an incentive
bonus promotes the retention of qualified management. Directors also believe
that compensation programs with incentive pay as a significant portion of
compensation allow base salaries to remain relatively constant, even during
highly profitable periods, thereby containing salary costs during less
profitable periods. The management incentive bonus program is at the discretion
of the Board. Specific performance levels and awards are developed by the
Compensation Committee of the Board and approved annually by the Board of
Directors. The size of the total incentive is determined by a formula based upon
the earnings of the Company.
PHANTOM STOCK DEFERRED COMPENSATION PLAN. In 1996, the Company established a
deferred compensation plan for a select group of key employees to provide for
unfunded, non-qualified deferred compensation to assist in attracting and
retaining such key employees and to encourage such employees to devote their
best efforts to the business of the Company. An eligible employee is permitted
to defer up to 20% of that employee's base salary and 100% of any cash bonus,
and is required to defer not less than 2% of base salary and 20% of any cash
bonus. Deferred compensation is credited to the participant's account in the
form of Phantom Stock Units, the number of units being determined by dividing
the amount of the compensation deferred by the base price established annually
by the Board of Directors for that Plan Year's deferrals. The base price of each
unit is the average closing price of the Company's common stock for the last ten
trading days of the preceding calendar year. Distributions to a participating
employee are made in cash only and are distributed over a period not to exceed
60 months after the earlier of the employee's death, disability, termination of
employment, change of control of the Company or the attainment of the age
specified in the Plan agreement between the employee and the Company. Upon
distribution, the deferred compensation amount is valued by multiplying the
cumulative number of Phantom Stock Units by the average of the bid and ask
prices of Company common stock on the date of distribution. Currently, Mr.
Brummel is the only participant in the plan.
<PAGE>
SEVERANCE AGREEMENT. In addition to Mr. Brummel's regular compensation, the
Company has agreed to pay him additional compensation should his employment with
the Company be terminated under certain conditions. The severance agreement is
effective only if Mr. Brummel's employment is involuntarily terminated in
connection with the merger or sale of the Company, or if he elects to terminate
his employment within one year of a merger or sale. In the event of such a
termination, the Company has agreed to pay Mr. Brummel a sum equal to twelve
times his monthly base salary in effect at the time of the merger or sale. The
base salary includes monthly gross salary but does not include bonuses or other
compensation, plus any deferred or unpaid portion of his annual bonus. If the
severance agreement had been triggered as of December 31, 1999, Mr. Brummel
would have been entitled to a payment of $183,343.
STOCK OPTION PLAN. The Company adopted a combined incentive and non-qualified
stock option plan (the "Plan") effective May 1, 1995, and approved by the
shareholders at the annual shareholders meeting on March 20, 1996. Pursuant to
the Plan, options may be granted at the discretion of the Board of Directors or
such committee as it may designate, to key employees, including employees who
are directors of the Company.
The purpose of the plan is to advance the interests of the Company and its
shareholders by enabling the Company to attract and retain the services of
people with training, experience and ability and to provide additional incentive
to key employees and directors of the Company by giving them an opportunity to
participate in the ownership of the Company.
The Plan reserves 289,800 shares of the Company's unissued common stock for
possible grants to employees. The purchase price of shares issuable upon
exercise of options is not less than 100% of the fair market value per optioned
share at the time of the grant. Each option granted under the plan is
exercisable for up to ten years following the date of grant. Options generally
become exercisable as to 20% of the shares one year after the date of grant,
with an additional 20% becoming exercisable each year thereafter.
As of December 31, 1999, options to purchase 200,025 shares, adjusted for stock
dividends and splits, were outstanding under the Plan. There were 82,950 options
granted to employees in 1999, no options exercised and 15,750 options
terminated. The following table sets forth information regarding options held by
named executive officers as of February 11, 2000:
Number Percentage
of of Total Exercise
Name Shares Options Price Expiration Date
- ---- ------ ------- ----- ---------------
Charles D. Brummel 144,900 72.4% $6.95(1) April 30, 2005 to
August 16, 2009
Antoinette M. Poole 2,625 1.3% $8.33 December 30, 2008
Ronald L. Farnsworth 5,250 2.6% $8.33 December 30, 2008
(1) Represents the weighted average exercise price of two separate option
grants.
The following table sets forth information regarding option holdings for the
year ended December 31, 1999, with respect to the Executive Officer named in the
Executive Compensation summary table:
<PAGE>
# of unexercised options Value of unexercised in-the-money
at year end (1) options at year end
--------------- -------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ------------- ----------- -------------
Charles D. Brummel 57,960 86,940 $34,776 $8,694
(1)The named Executive Officer has yet to exercise any of the options
granted to him. On December 31, 1999, the fair market value of the
Company's common stock (the fair market value) was $6.00. For purposes of
the previous table, stock options with an exercise price less than the
fair market value are considered to have a value equal to the difference
between the fair market value and the exercise price of the stock option
multiplied by the number of shares covered by the stock option.
OTHER BENEFIT PLANS. The Company sponsors a Key Executive Deferred Compensation
Plan (the ESI Plan) which is a noncontributory defined benefit plan covering a
select group of key management employees. The ESI Plan is an unfunded plan
providing supplementary retirement benefits. Benefits under the ESI Plan are
based on years of service, final average pay and covered compensation. At
December 31, 1999, the ESI Plan covered eight participants, including four
current employees, two former employees with vested rights to future benefits,
and two retirees and beneficiaries receiving benefits. In 1999, the Board of
Directors voted to include Directors fees paid to Mr. Brummel in the average pay
formula for his retirement benefits.
COMPENSATION COMMITTEE REPORT
The intention of the Compensation Committee Report is to describe in general
terms the process the Committee undertakes and the matters it considers in
determining the appropriate compensation for the Company's executive officers,
including the executive officers who are named in the enclosed Summary
Compensation Table (the "Named Executives"). The Company, acting through the
Committee, believes that the Compensation of its Named Executives and other key
personnel should reflect and support the goals and strategies that the Company
has established.
COMPENSATION PHILOSOPHY. The Compensation Committee has two principal objectives
in determining executive compensation (1) to attract, reward and retain key
executive officers and (2) to motivate executive officers to perform to the best
of their abilities and to achieve short-term and long-term corporate objectives
that will contribute to the overall goal of enhancing stockholders value.
ELEMENTS OF EXECUTIVE COMPENSATION. The elements of the Company's compensation
of executive officers are: (1) annual cash compensation in the form of base
salary and incentive bonuses, (2) long-term incentive compensation in the form
of stock options granted under the Company's 1995 Incentive Stock Option Plan;
and (3) other compensation and employee benefits generally available to all
employees of the Company. The Committee believes that the Company's goals are
best supported by attracting and retaining well-qualified executive officers and
other personnel through competitive compensation arrangements, with emphasis on
rewards for outstanding contributions to the Company's success, with a special
emphasis on aligning the interests of executive officers and other personnel
with those of the Company's shareholders.
<PAGE>
STOCK PERFORMANCE GRAPH
The following chart compares the yearly percentage change in the cumulative
shareholder return on the Company's Common Stock during the period beginning
September 13, 1996, when the Company first issued its shares publicly, and
ending December 31, 1999, with (i) the Total Return Index for the NASDAQ Stock
Market (U.S. Companies) as reported by the Center for Research in Securities
Prices and (ii) the Total Return Index for NASDAQ Bank Stocks as reported by the
Center for Research in Securities Prices. This comparison assumes $100.00 was
invested on September 13, 1996, in the Company's Common Stock and the comparison
groups and assumes the reinvestment of all cash dividends prior to any tax
effect.
[OBJECT OMITTED]
12/31/96 12/31/97 12/31/98 12/31/99
----------------------------------------
SBHC $103.03 $151.66 $112.36 $86.79
Nasdaq $108.61 $132.11 $184.47 $342.35
Nasdaq Banks $112.50 $184.04 $162.37 $149.42
COMPLIANCE WITH SECTION 16 FILING REQUIREMENTS
Section 16 of the Securities Exchange Act of 1934, as amended, ("Section 16")
requires that all executive officers and directors of the Company and all
persons who beneficially own more than 10 percent of the Company's Common Stock
file an initial report of their ownership of the Company's securities on Form 3
and report changes in their ownership of the Company's securities on Form 4 or
Form 5. These filings must be made with the Securities and Exchange Commission
and the National Association of Securities Dealers with a copy sent to the
Company.
Based solely upon the Company's review of the copies of the filings which it
received with respect to the fiscal year ended December 31, 1999, the Company
believes that all reporting persons made all filings required by Section 16 on a
timely basis.
<PAGE>
RELATED TRANSACTIONS WITH DIRECTORS AND OFFICERS
Some of the directors and officers of the Company, and members of their
immediate families and firms and corporations with which they are associated,
have had transactions with the Company, including borrowings and investments in
time deposits. All such loans and investments have been made in the ordinary
course of business, have been made on substantially the same terms, including
interest rates paid or charged and collateral required, as those prevailing at
the time for comparable transactions with unaffiliated persons, and did not
involve more than the normal risk of collectibility or present other unfavorable
features. As of December 31, 1999, the aggregate outstanding amount of all loans
to officers and directors was approximately $10,302,000, which represented
approximately 35.9% of the Company's consolidated shareholders' equity at that
date. In addition, the Company had deposits from Directors and Officers totaling
$4,342,000 as of December 31, 1999.
No director or principal officer of the Company has a direct family relationship
with another director or executive officer of the Company.
<PAGE>
SECURITIES OWNERSHIP OF DIRECTORS, OFFICERS AND PRINCIPAL SHAREHOLDERS
The following table sets forth as of February 11, 2000, the shares of common
stock beneficially owned by all of the directors, nominees for election as
directors, and executive officers of the Company. As of that date there were
4,681,122 shares of the Company's common stock issued and outstanding. All
shares are held directly unless otherwise indicated.
Number of Percent of
Name(1) Shares Class
------- ------ -----
Charles D. Brummel (Director/Officer)(2) 123,427 (2) 2.64%
William A. Lansing (Director)(3) 21,823 (3) *
Kenneth C. Messerle (Director)(4) 8,407 (4) *
Glenn A. Thomas (Director)(5) 10,601 (5) *
Ronald L. LaFranchi (Director)(6) 804,454 (6) 17.18%
Gary L. Waggonner (Director)(7) 7,460 (7) *
Robert L. Fullhart (Director)(8) 9,637 (8) *
Antoinette M. Poole (Officer)(9) 33,230 (9) *
Ronald L. Farnsworth (Officer)(10) 4,596 (10) *
Naseer M. Nasim (Officer) -- *
All Directors and Executive Officers
as a Group (10 persons) 1,018,841(2-10) 21.76%
========= ======
* Less than 1.0%
(1) The business address of all directors and officers is 170 S. Second St.,
Coos Bay, Oregon 97420.
(2) Charles D. Brummel's holdings include 3,176 shares held jointly with his
spouse in his spouse's trust and 65,291 shares in the ESOP (1,225 of which
are allocated to Mr. Brummel's spouse). This amount excludes the 1999 ESOP
allocation as amount of shares allocated in 1999 is not yet known. Also
includes 57,960 shares covered by stock options exercisable in 60 days.
(3) William A. Lansing holds 21,823 shares jointly with his spouse.
(4) Kenneth C. Messerle's holdings include 8,327 shares held jointly with his
spouse and 80 shares held jointly with his grandchildren.
(5) Glenn A. Thomas holds 10,339 shares jointly with his spouse and 262 shares
held jointly with his grandchildren.
(6) Includes 13,141 shares held in a custodial capacity for the benefit of
minor children.
(7) Gary L. Waggonner holds 6,070 shares jointly with his spouse.
(8) Robert L. Fullhart holds 9,637 shares jointly with his spouse.
(9) Antoinette M. Poole includes 250 shares held directly and 27,661 shares in
the ESOP. This amount excludes the 1999 ESOP allocation as amount of
shares allocated in 1999 is not yet known. Also includes 525 shares
covered by stock options exercisable in 60 days.
(10) Ronald L. Farnsworth holds 3,546 shares in the ESOP (1,070 of which are
allocated to Mr. Farnsworth's spouse). This amount excludes the 1999 ESOP
allocation as amount of shares allocated in 1999 is not yet known. Also
includes 1,050 shares covered by stock options exercisable in 60 days.
<PAGE>
As of February 11, 2000, the only other person than those named above known to
own more than 5% of the Company's Common Stock is the ESOP, which owned 942,593
shares, or 20.14% of the total shares outstanding. Trustees of the ESOP are
appointed by the Board of Directors and currently consists of Jim Donnelly,
Partner of Moss Adams, North Bend, Oregon, Tim Salisbury, Chief Financial
Officer of Bay Area Hospital, and Marcia Hart, Vice President and Director of
Human Resources for the Company.
Agenda Item 3. Other Matters
-------------
The Board of Directors is not aware of any matters to be presented for action at
the Meeting other than those set forth in the Notice of Annual Meeting. However,
if any other matters properly come before the Meeting or any adjournment
thereof, the person or persons voting the proxies will vote them in accordance
with their best judgment.
VOTING AT THE MEETING
- ---------------------
Each copy of this Proxy Statement sent to the Company's shareholders is
accompanied by a proxy solicited by the Board of Directors of the Company for
use at the 2000 Annual Meeting of Shareholders and any adjournments thereof.
Only holders of record of Company common stock at the close of business on
February 11, 2000 are entitled to notice of, and to vote at, the Meeting. At the
Meeting, the Company's shareholders will vote on the name change of the Company,
the election of Directors and on such other matters as may properly come before
the Meeting. Shares represented by properly executed proxies will be voted at
the Meeting in accordance with the instructions on the proxy. If no instructions
are given, the shares represented thereby will be voted in favor of the name
change and in favor of persons nominated by the Board of Directors to serve as
Directors, and in the discretion of the proxy holders on such other matters that
may be considered at the Meeting.
A proxy may be revoked prior to its exercise at the Meeting by presentation of a
proxy bearing a later date, by filing an instrument of revocation (personally or
by mail) with the Secretary of the Company prior to the meeting, or by oral
request if the shareholder is present at the meeting. Attendance at the meeting
will not, of itself, revoke a proxy.
SHAREHOLDERS ARE REQUESTED TO COMPLETE, DATE, AND SIGN THE ACCOMPANYING PROXY
AND RETURN IT PROMPTLY TO THE COMPANY IN THE ENCLOSED, POSTAGE-PAID ENVELOPE,
EVEN IF THEY ARE PLANNING TO ATTEND THE COMPANY'S MEETING.
The authorized capital stock of the Company consists of ten million (10,000,000)
shares of Common Stock and five million (5,000,000) shares of Voting Preferred
Stock, and five million (5,000,000) shares of Non-voting Preferred Stock. As of
February 11, 2000, the Record Date, there were 4,681,122 shares of Common Stock
issued and outstanding and entitled to vote at the Meeting. As of the Record
Date, there were no shares of Preferred Stock outstanding.
A majority of the outstanding shares of Common Stock must be represented at the
Meeting, in person or by proxy, to constitute a quorum for the transaction of
business. An abstention from a given matter will not affect the presence of the
shares as to determination of a quorum, nor will it affect the name change or
<PAGE>
election of Directors. Directors are elected by a plurality of the votes;
Directors receiving the most votes will be elected. Each such share is entitled
to one vote. Shareholders do not have the right to accumulate votes for
directors. As of the Record Date, there were 700 shareholders of record, not
including those holding shares in "street name". As of the Record Date,
officers, directors, and principal shareholders of the Company, together with
their affiliates, had beneficial ownership of 959,306 shares (excluding shares
covered under option that are exercisable within 60 days), of which all are
entitled to vote. The shares held by officers, directors and principal
shareholders, which are entitled to be voted at the Meeting constitute 20.49% of
the total shares outstanding and entitled to be voted at the Meeting.
INDEPENDENT AUDITORS
- --------------------
The Board of Directors designated KPMG Peat Marwick LLP, independent certified
public accountants, as auditors for the Company for the year ended December 31,
1999. The audit services performed by such firm during 1999 included an
examination of annual financial statements and audit related accounting matters.
It is expected that KPMG Peat Marwick LLP will continue to serve as the
Company's independent public accountants for 2000. It is anticipated that
representatives of KPMG Peat Marwick LLP will not be present at the Meeting.
ANNUAL REPORTS AND FINANCIAL STATEMENTS
- ---------------------------------------
A copy of the Company's Annual Report to Shareholders for the year ended
December 31, 1999 accompanies this Proxy Statement. Additional copies of the
Company's Annual Report to shareholders may be obtained by written request to
the Secretary of the Company at the address indicated at the beginning of this
document. Such Annual Report is not part of the proxy solicitation materials.
The Company, upon written request to the Secretary of the Company by any person
whose proxy is being solicited, will provide at no charge a copy of the
Company's 1999 annual report on Form 10-K, without exhibits, filed with the
Securities and Exchange Commission.
<PAGE>
SHAREHOLDER PROPOSALS
- ---------------------
Any shareholder who wishes to submit a proposal for consideration at the
Company's next annual meeting must be the beneficial owner of at least $1,000 in
market value of common stock, and have held the stock for at least one year, and
must submit the proposal no later than November 5, 2000. A shareholder
submitting a proposal for consideration must provide the Company with his or her
name, address and the number of shares held of record or beneficially, the dates
upon which such shares were acquired and documentary evidence of such ownership.
The shareholder, or a representative of the shareholder, must present the
proposal for action at the meeting. At the shareholder's request, the Company
will include with the proposal in the proxy statement mailed to shareholders in
connection with the meeting, a statement of the shareholder in support of the
proposal, which together with the proposal does not exceed 500 words. The Proxy
Statement shall include the name, address and number of shares held of record or
beneficially by the shareholder making the proposal. The Company may, under
certain circumstances, omit from the proxy statement proposals and supporting
statements.
DATED: February 25, 2000
By order of the Board of Directors,
/S/ Chuck Brummel
Chuck Brummel
Chairman of the Board
Chief Executive Officer
NOTE: Your vote is important. Please send in your Proxy immediately,
using the enclosed postage paid envelope.
<PAGE>
REVOCABLE PROXY
SECURITY BANK HOLDING COMPANY
ANNUAL MEETING OF SHAREHOLDERS
April 18,2000
PROXY SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints Linda Goodwin and Rene Collins and each of them,
proxies with power of substitution to vote on behalf of the undersigned all
shares of common stock of Security Bank Holding Company (the "Company") at the
Annual Meeting to be held on April 18, 2000, and any adjournments thereof, with
all powers the undersigned would possess if personally present, with respect to
the following:
1. Name Change. [ ] FOR the name change [ ] AGAINST the
to Independent Financial name change.
Network.
2. Election of directors. [ ] FOR all nominees [ ] WITHHOLD
listed below (except AUTHORITY
as marked to the to vote
contrary below) for all
nominees
listed below.
INSTRUCTION: To withhold authority to vote for any individual, strike a line
through the nominee's name below.
Nominees for three-year terms to expire 2003:
---------------------------------------------
Ronald L. LaFranchi *** Gary L. Waggonner *** Robert L. Fullhart
3. Other Matters. At the discretion of the proxy holder, on such other
business as may properly come before the meeting and any adjournments
thereof.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS SPECIFIED ABOVE, BUT IF NO
SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR THE NAME CHANGE AND FOR THE
ELECTION OF ALL NOMINEES. Proxies may vote in their discretion as to other
matters which may come before the meeting.
Number of Shares Held:______________ ______________________________________
Dated: , 2000
------------------ ______________________________________
Please date and sign exactly as your
name appears on your stock
certificate(s) (which should be the
same as the name on the address label
on the envelope in which this proxy
was sent to you), including
designation as executor, trustee,
etc., if applicable. A corporation
must sign its name by the president or
other authorized officer. All
co-owners must sign.
