<PAGE> 1
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 the 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
VRB Bancorp
(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 is 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> 2
VRB BANCORP
110 Pine Street
Rogue River, Oregon 97537
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 14, 1999
To the Shareholders of VRB Bancorp:
Notice is hereby given that the Annual Meeting of Shareholders of
VRB Bancorp ("Bancorp") will be held at the Rogue Valley Country Club located at
2660 Hillcrest Road, Medford, Oregon, on Friday, April 14, 1999, at 1:30 PM for
the following purposes:
(1) To elect nine Directors of Bancorp.
(2) To transact such other business as may properly come
before the Annual Meeting or any adjournments thereof.
Only shareholders of record at the close of business on the record
date, February 19, 1999, are entitled to vote at the Annual Meeting or any
adjournments thereof.
Further information regarding voting rights and the business to be
transacted at the Annual Meeting is given in the accompanying Proxy Statement.
Your continued interest as a shareholder in the affairs of Bancorp, its growth
and development, is genuinely appreciated by the officers and personnel who
serve you.
March 12, 1999 BY ORDER OF THE BOARD OF DIRECTORS
Tom Anderson
Executive Vice President
Secretary
YOUR VOTE IS IMPORTANT
Whether or not you plan to attend the Annual Meeting, please sign and date your
Proxy and return it in the enclosed postage prepaid envelope. A shareholder who
completes and returns the Proxy and subsequently attends the Annual Meeting may
elect to vote in person, since a proxy may be revoked at any time before it is
voted. Retention of the Proxy is not necessary for admission to the Annual
Meeting.
<PAGE> 3
VRB BANCORP
110 Pine Street
Rogue River, Oregon 97537
PROXY STATEMENT
This Proxy Statement is being furnished in connection with the
solicitation by the Board of Directors of VRB Bancorp ("Bancorp") of proxies to
be used at the Annual Meeting of shareholders of Bancorp scheduled to be held
April 14, 1999 (the "Annual Meeting"). This Proxy Statement and the enclosed
form of proxy are being mailed to shareholders on or about March 12, 1999. The
1998 Annual Report of Bancorp to its shareholders is being mailed to
shareholders with this Proxy Statement.
The cost of this Proxy solicitation will be borne by Bancorp.
Bancorp does not expect to pay any compensation for the solicitation of proxies
but may reimburse brokers and other persons holding stock in their names, or in
the names of nominees, for their expenses in sending proxy material to
principals and obtaining their proxies. In addition to solicitation of proxies
by mail, Bancorp may also use its officers and regular employees or officers and
employees of its subsidiary, Valley of the Rogue Bank, to solicit proxies from
shareholders, either in person or by telephone, fax, or letter, without extra
compensation.
BUSINESS OF THE MEETING
The following matter will be presented for shareholder action at the
annual meeting:
ELECTION OF DIRECTORS
NOMINEES
The following persons have been nominated to serve terms expiring
with the 2000 Annual Meeting of Shareholders and until their successors have
been elected and qualified. All nine nominees are presently serving as Directors
of Bancorp.
NAME OF NOMINEE
James D. Coleman
John O. Dunkin
Michael Donovan
April Sevcik
Gary Lundberg
Robert J. DeArmond
Larry L. Parducci
William A. Haden
Tom Anderson
It is the intention of the persons named in the Proxy to vote for
the election of the nominees listed 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 Board of Directors may designate.
Management has no reason to believe any nominee will be unavailable.
APPROVAL REQUIRED AND BOARD OF DIRECTORS' RECOMMENDATIONS
Directors are elected by a plurality of votes cast. Shareholders are
not entitled to accumulate votes for Directors. The Board of Directors
recommends a vote "FOR" the election of all nominees.
<PAGE> 4
INFORMATION REGARDING NOMINEES
The following table shows as to each nominee for director, position
held with Bancorp, age, year in which he/she first became a director of Bancorp,
and principal occupation and business experience during the last five years.
<TABLE>
<CAPTION>
DIRECTOR OF PRINCIPAL OCCUPATION AND LAST FIVE
NAME AND POSITION AGE BANCORP SINCE YEARS BUSINESS EXPERIENCE
<S> <C> <C> <C>
James D. Coleman 60 1987 Mr. Coleman currently serves as Chairman of the Board of
Director Directors. Mr. Coleman was previously a director of Medford
State Bank which Bancorp acquired in 1987. He is President
and owner of Crater Lake Motors, a Ford and Mercedes
automobile dealership in Medford, Oregon.
John O. Dunkin 60 1986 Mr. Dunkin currently serves as Vice Chairman of the Board of
Director Directors. Mr. Dunkin is Chief Executive Officer of Grants
Pass Moulding, Rogue Valley Sash & Door, and
Pacific Lumber, all located in Grants Pass, Oregon.
Michael Donovan 48 1997 Mr. Donovan is Co-Owner of the Chateaulin Restaurant & Wine
Director Shoppe in Ashland, Oregon.
April Sevcik 52 1997 Ms. Sevcik is the owner and President of General Credit
Director Service Inc. in Medford, Oregon.
Gary Lundberg 60 1993 Mr. Lundberg was formerly an owner of Lundberg's Funeral Home
Director in Grants Pass, Oregon.
Robert J. DeArmond 68 1990 Mr. DeArmond formerly served (22 years) as a director of
Director Mountain States Savings Bank in Coeur d'Alene Idaho and as
Chairman of the Board of Idaho Forest Products until his
retirement in 1995. He currently serves on the Board of
Directors of North Pacific Lumber Company in Portland, Oregon.
Larry L. Parducci 54 1994 Mr. Parducci is the owner/operator of Holiday RV Park in
Director Phoenix, Oregon. Mr. Parducci also serves on the Phoenix City
Council.
William A. Haden 50 1996 Mr. Haden currently serves as President & CEO for VRB Bancorp
President and and President & CEO for Valley of the Rogue Bank.
Director
Tom Anderson 48 1996 Mr. Anderson currently serves as Executive Vice President &
Executive Vice Secretary for Executive Vice President and VRB Bancorp and
President and Executive Vice President & Chief Operating Officer for
Director Director Valley of the Rogue Bank.
</TABLE>
The Board of Directors of Bancorp has established the number of
Directors at nine, as provided in the by-laws. All of the Directors of Bancorp
also serve as Directors of Valley of the Rogue Bank.
During 1998, the sole business activity of Bancorp related to the
operation of its wholly-owned subsidiary, Valley of the Rogue Bank. Bancorp held
5 meetings of the Board of Directors during 1998. All directors nominated
attended at least 80 percent of the total number of meetings held during 1998.
<PAGE> 5
CERTAIN COMMITTEES OF THE BOARD OF DIRECTORS
Bancorp does not have a Nominating committee. When the need arises,
the full Board serves as the Nominating committee.
Bancorp does not maintain a standing Compensation committee. All
compensation paid to Directors and executive officers is paid by Bancorp's
subsidiary bank, Valley of the Rogue Bank. The Bank maintains a standing
Compensation committee which during 1998 consisted of directors John O. Dunkin,
Michael Donovan, James D. Coleman and Larry L. Parducci.
Bancorp does not maintain a standing Examination committee. Reports
of examinations, regulatory or otherwise are reviewed with the entire Board of
Directors. Bancorp's subsidiary bank, Valley of the Rogue Bank, maintains a
standing Examination committee which during 1998 consisted of directors Robert
J. DeArmond, April Sevcik, James Coleman and Gary Lundberg.
The Bank also maintains a standing Loan committee. The committee
reviews and approves extensions of credit when the borrower's total indebtedness
to the Bank is in excess of $200,000. The committee meets on an as needed basis.
All nine of Bancorp's directors serve as members of the Loan committee.
COMPENSATION OF DIRECTORS
No fees are paid to Directors of Bancorp other than as Directors of
the subsidiary bank. Each non-employee Director of Valley of the Rogue Bank
received a fee of $750.00 per month during 1998. James Coleman (Chairman of the
Board) received $800.00 per month. During 1998, Bancorp and Bank officers who
also served as Directors received no additional fees for serving on the Boards.
Non-Employee Directors also participate in a Non-Discretionary Stock Option Plan
approved by Bancorp's shareholders in 1991 and amended in 1994. The Plan
provides for granting of options to Directors on an annual basis. The number of
shares granted to the Directors is determined by dividing the total compensation
paid each Director during the year, by the most recent year end book value per
share. Grants are made in April of each year, based on the preceding year's
compensation. Directors are required to serve for one full calendar year before
becoming eligible to participate in the plan.
<PAGE> 6
STOCK PERFORMANCE GRAPH
The chart, shown below, compares the yearly percentage change in the
cumulative shareholder return on Bancorp's Common Stock during the five fiscal
years ended December 31, 1998, with (i) the Total Return Index for the Nasdaq
Stock MarketSM (U.S. Companies) as reported by the Center for Research in
Securities Prices (ii) the Total Return Index for the Nasdaq Stock MarketSM
Financial Index as reported by the Center for Research in Securities Prices, and
(iii) the SNL Bank Index for financial institutions with assets less than $500
million, as reported by SNL Securities. This comparison assumes $100.00 was
invested on December 31, 1993, in Bancorp's Common Stock, and the comparison
indices, and assumes the reinvestment of all cash dividends prior to any tax
effect, and retention of all stock dividends. Prior to November 1997, VRB
Bancorp Common Stock was not quoted on Nasdaq Stock MarketSM. Prior to its
listing on Nasdaq Stock MarketSM, trading activity was limited. For purposes of
computing return information for the periods being compared, Bancorp used price
information for trades that were reported to it prior to November 1997.
VRB BANCORP
[GRAPH]
<TABLE>
<CAPTION>
PERIOD ENDING
-------------
Index 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98
- ----- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
VRB Bancorp 100.00 132.33 145.81 194.16 350.08 288.38
NASDAQ - Total US 100.00 97.75 138.26 170.01 208.58 293.21
NASDAQ Financial Index 100.00 100.24 145.98 187.13 285.87 276.58
SNL <$500M Bank Asset-Size Index 100.00 107.55 147.13 189.37 322.82 294.76
</TABLE>
<PAGE> 7
EXECUTIVE OFFICERS
The persons listed below are the executive officers of Bancorp, and
of its subsidiary bank, Valley of the Rogue Bank.
William A. Haden, age 50. Mr. Haden has served as President and
Chief Executive Officer of VRB Bancorp and President and Chief Executive Officer
of Valley of the Rogue Bank since January 1996. He served as Senior Vice
President of Valley of the Rogue Bank between 1996 and July 1993, when he joined
the Bank. Previous to joining Valley of the Rogue Bank, Mr. Haden served as
President of Family Bank of Commerce, from 1985 until its merger into Valley of
the Rogue Bank in 1993. Mr. Haden served as Senior Vice President and Credit
Administrator for Family Bank of Commerce from 1981 until 1985. Previous to
joining Family Bank of Commerce, Mr. Haden held various lending positions with
First Interstate Bank of Oregon, now Wells Fargo Bank.
Tom Anderson, age 48. Mr. Anderson has served as Executive Vice
President and Secretary of VRB Bancorp and Executive Vice President and Chief
Operating Officer of Valley of the Rogue Bank since January 1996. He served as
Senior Vice President & Cashier of Bancorp's subsidiary bank, Valley of the
Rogue Bank from 1983 to 1996, and as Vice President & Cashier of Valley of the
Rogue Bank from 1979 to 1983. Prior to 1979, Mr. Anderson served in Cashier and
Assistant Cashier positions with Valley of the Rogue Bank. Prior to joining
Valley of the Rogue Bank in 1977, Mr. Anderson was employed with Bank of America
(1972 to 1977).
Brad Copeland, age 49. Mr. Copeland has served as Executive Vice
President & Credit Administrator of Bancorp's subsidiary Valley of the Rogue
Bank since January 1998. Mr. Copeland served as Senior Vice President & Credit
Administrator from July 1997 through January 1998. Mr. Copeland was retained by
Valley of the Rogue Bank in October 1996 to fill the anticipated vacancy created
by the retirement of the Bank's previous Senior Vice President and Credit
Administrator. Prior to joining Valley of the Rogue Bank Mr. Copeland served as
Senior Vice President and Senior Credit Officer for Bank of America Alaska (1987
to 1996). Previous to his employment with Bank of America Alaska, Mr. Copeland
served in various lending and management positions within the banking industry
(1972 to 1987).
Felice Belfiore, age 29. Ms. Belfiore has served as Senior Vice
President and Chief Financial Officer of Bancorp and its subsidiary Valley of
the Rogue Bank since January 1998. She served as Vice President and Chief
Financial Officer from June 1997 until January 1998. Previous to joining
Bancorp, Ms. Belfiore, a certified public accountant, was employed with Moss
Adams LLP where she specialized in community bank auditing.
Kathy Peckham, age 40. Ms. Peckham has served as Senior Vice
President and Corporate Sales Manager of Bancorp's subsidiary, Valley of the
Rogue Bank, since January 1999. She served as Vice President and Corporate Sales
Manager from November 1996 to December 1998. Ms. Peckham joined Valley of the
Rogue Bank in September 1995, as a Commercial Lender and Business Development
Officer. Previous to joining Valley of the Rogue Bank in 1995, Ms. Peckham
served with U. S. Bank from 1977 to 1995 under various lending and management
capacities.
The officers are appointed by the Board of Bancorp and the Bank to
serve at the discretion of the Board.
EXECUTIVE COMPENSATION
The following table sets forth all cash compensation paid or to be
paid by Bancorp or any subsidiary, as well as certain other compensation paid or
accrued, during the years ended December 31, 1998, 1997 and 1996, to William A.
Haden, Bancorp's President & Chief Executive Officer and Valley of the Rogue
Bank's President and Chief Executive Officer, Tom Anderson, Bancorp's Executive
Vice President and Secretary and Valley of the Rogue Bank's Executive Vice
President & Chief Operating Officer, and Brad Copeland, Valley of the Rogue
Bank's Executive Vice President & Credit Administrator, for services rendered in
all capacities. No other Director or executive officer of Bancorp received
salary and bonuses during the year ended December 31, 1998 in excess of
$100,000.
<PAGE> 8
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
YEAR SALARY (1) BONUS (2) OTHER ANNUAL ALL OTHER
NAME AND PRINCIPAL POSITION COMPENSATION COMPENSATION
- --------------------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
William A. Haden 1998 $105,000 $80,370 $17,050 (4)
President and Chief 1997 $ 90,000 $80,000 $16,905 (4)
Executive Officer 1996 $ 90,000 $67,500 (3) $16,050 (4)
Tom Anderson 1998 $105,000 $80,370 $16,511 (5)
Executive Vice President 1997 $ 90,000 $80,000 $16,493 (5)
& Chief Operating Officer 1996 $ 90,000 $67,500 (3) $15,111 (5)
Brad Copeland 1998 $ 85,000 $65,075 $ 8,500 (6)
Executive Vice President 1997 $ 80,000 $37,500 -
& Credit Administrator 1996 $ 14,598 - (3) -
</TABLE>
- ---------------
(1) Salary includes amounts contributed by the identified executive officer
to Bancorp's subsidiary bank's 401(k) Employee Profit Sharing Plan .
(2) Includes bonuses paid or to be paid during the subsequent year but
attributable to the year indicated.
(3) Perquisites and other personal benefits, if any, did not exceed the
lesser of $50,000 or 10 percent of total annual salary and bonus for the
named executive officer for any of the periods indicated.
(4) Includes life insurance premiums of $1,050 for $350,000 face amount
insurance above company group insurance and the balance is the company's
contribution to match employee's salary deferral under Bancorp's
subsidiary bank's 401(k) Profit Sharing Plan.
(5) Includes life insurance premiums for $511 for $350,000 face amount
insurance above company group coverage and the balance is the company's
contribution to match employee's salary deferral under Bancorp's
subsidiary bank's 401(k) Profit Sharing Plan.
(6) Includes the company's contribution to match employee's salary deferred
under Bancorp's subsidiary bank's 401(k) Profit Sharing Plan.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The non-employee members of the Board of Directors and the
Compensation committee of Valley of the Rogue Bank are responsible for
establishing and administering the company's executive compensation program.
COMPENSATION PHILOSOPHY AND OBJECTIVES
The philosophy underlying the development and administration of
Bancorp's compensation plan is the alignment of the interests of executive
management with those of the shareholders. Key elements of this philosophy are:
o Set base compensation at a level to attract and retain
competent executives.
o Establish incentive compensation plans which deliver bonuses
based on the financial performance of the company.
o Provide significant equity based incentives for executives
to ensure they are motivated over the long term to respond
to the company's business challenges and opportunities, as
owners rather than just employees.
The objective in determining base salaries for executives is to set
levels that are competitive and commensurate with the level of responsibility
assumed. Bancorp's incentive based Bonus Plan is the vehicle by which executives
can earn additional compensation depending on the financial performance of the
company.
<PAGE> 9
Bancorp's long term incentive program consists of the 1991
Non-Qualified Stock Option Plan, which was amended in 1994. Grants are made at
the discretion of the Board of Directors and awarded to individual executives,
thereby providing additional incentive for executives to increase shareholder
value. Executives receive value from these options when Bancorp's stock
appreciates over the long term.
COMPENSATION COMMITTEE MEMBERS
John O. Dunkin
James D. Coleman
Larry L. Parducci
Michael Donovan
DESCRIPTION OF COMPENSATION PLANS AND AGREEMENTS
INCENTIVE-BASED BONUS PLAN
Bancorp's Incentive-Based Bonus Plan for executive officers provides
for establishment of a pool of funds equal to 11.25 percent of net profits in
excess of a 1.0 percent return on average assets. The pool is then divided
between the executive officers on a pro-rata basis, based on base salary
compensation paid during the preceding year.
For the year ending December 31, 1998 profits generated by Bancorp
amounted to $4,927,000. These earnings equaled a return on average assets of
1.60 and a return on average shareholder equity of 14.58 percent. Based on the
performance of the Company and the incentive based Bonus Plan in place for 1998,
a bonus pool of $242,440 was established for payment of bonuses to executive
officers. Considering their respective performances, the Board awarded incentive
bonus payments to Mr. Haden and Mr. Anderson in the amounts of $80,370 each. Mr.
Copeland was awarded a bonus payment of $65,075. Ms. Belfiore was awarded
$16,625. Ms. Belfiore's participation in the plan is being phased in over a
three-year period. She will participate on a 100% basis in 2001. In 1998, Ms.
Peckham participated in Valley of the Rogue Bank's employee bonus plan. However,
she will begin participation in the executive officer bonus program in 1999.
EMPLOYMENT AND CHANGE OF CONTROL AGREEMENTS
VRB Bancorp and it's subsidiary Valley of the Rogue Bank have
entered into special agreements with certain executive officers. These
agreements are intended to help insure that the executive remains in the employ
of the Bank.
The Bank entered into an agreement with President and Chief
Executive Officer, William Haden, effective January 10, 1996, to provide at its
expense a term life insurance policy on Mr. Haden's life in the amount of
$350,000, through the year 2002 and at $150,000 thereafter. The ownership and
right to name the beneficiary under the policy is reserved to Mr. Haden. The
agreement with Mr. Haden additionally provides for a "Change in Control" payment
equal to his base salary plus any cash bonuses or other compensation paid to or
for his benefit, during the fiscal year preceding the "Change in Control".
Further, if Mr. Haden leaves the Bank following a "Change in Control", the Bank
will, at it's expense, provide COBRA benefits to Mr. Haden for no longer than
eighteen (18) months following a "Change in Control", provided he is eligible
for such benefits.
The Bank entered into an agreement with Executive Vice President Tom
Anderson, on April 10, 1992, to provide at its expense a term life insurance
policy on Mr. Anderson's life in the amount of $350,000, through the year 2002,
and at $150,000 thereafter. The ownership and right to name the beneficiary
under said policy is reserved to Mr. Anderson. The April 10, 1992 agreement with
Mr. Anderson additionally provides for a "Change in Control" payment equal to
his base salary plus any cash bonuses or other compensation paid to or for his
benefit, during the fiscal year preceding the "Change in Control". Further, if
Mr. Anderson leaves the bank following a "Change in Control", the Bank will, at
it's expense, provide COBRA benefits to Mr. Anderson for no longer than 18
months following a "Change in Control", provided he is eligible for such
benefits.
<PAGE> 10
STOCK OPTION PLANS
Bancorp has two non-qualified stock option plans which were approved
by the shareholders during 1991 and amended in 1994. The plans reserved an
aggregate of 754,515 shares of Bancorp's unissued common stock for possible
grants to employees and non-employee directors. The purchase price of the
optioned shares is equal to not less than the book value of a share of stock as
of the end of the most recently completed fiscal year. Options granted are
exercisable for ten years from the date of grant, with shares fully vested after
six months for directors and up to a ten year period for employees.
The purposes of these plans are to advance the interests of VRB
Bancorp and its shareholders by enabling the company to attract and retain the
services of people with training, experience and ability to serve as outside
directors and employees, and to provide additional incentive to key employees
and directors of the Company by giving them an opportunity to participate in the
ownership and growth of Bancorp.
During 1998, 18,200 options were granted to employees for the
purchase of Bancorp shares under the 1991 Non-Qualified Stock Option Plan for
Employees. Grants to executive officers totaled 5.7% of the total grants awarded
to employees during 1998. Ms. Peckham was awarded a grant totaling 1,040 shares.
16,853 options were awarded to directors in April 1998, as
authorized by the 1991 Non-Discretionary Stock Option Plan for Non-Employee
Directors.
The following charts reflect (i) options granted to the named
executive officer during the last fiscal year and (ii) options exercised in the
last fiscal year and the value of options exercised and unexercised at December
31, 1998.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
NUMBER OF % OF TOTAL VALUE AT ASSUMED
SECURITIES OPTIONS MARKET ANNUAL RATES OF
UNDERLYING GRANTED TO EXERCISE OR PRICE ON STOCK PRICE
OPTIONS EMPLOYEES IN BASE PRICE DATE OF EXPIRATION APPRECIATION
NAME GRANTED(1) FISCAL YEAR ($/SHARE)(2) GRANT DATE OVER OPTION TERM(2)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
5% 10%
-------------------
Kathy Peckham 1,040 5.7% $10.82 $10.82 2008 $3,109 $6,870
</TABLE>
(1) Adjusted to reflect subsequent stock dividends and splits.
(2) The potential realizable value portion of the foregoing table illustrates
values that might be realized upon exercise of the options immediately
prior to the expiration of their term based upon the assumed compounded
rates of appreciation in the value of the company's common stock as
specified in the table over the term of the options. These amounts do not
take into account provisions of the options providing for termination of
the option following termination of employment or non-transferability.
<PAGE> 11
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END STOCK OPTION VALUES
<TABLE>
<CAPTION>
Number of Unexercised
Securities Underlying Value of Unexercised In-the
Shares Options at FY End Money Options at FY End (1)
Acquired on Value --------------------------- ---------------------------
Name Exercise (#) (2) Realized Exercisable Unexercisable Exercisable Unexercisable
- ------------------ ------------ --------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
William A. Haden None None 16,108 64,430 $ 16,104 $ 64,416
Tom Anderson 1,948 $12,939 8,264 24,960 $ 5,800 None
Felice Belfiore None None 2,080 18,720 None $ 61,250
Brad Copeland None None 4,160 27,040 None $ 58,750
Kathy Peckham None None None 7,280 None $ 33,250
- ---------------
</TABLE>
(1) On December 31, 1998, the market price of Bancorp's Common Stock was $7.75
per share. For purposes of the foregoing table, stock options with an
exercise price less than that amount are considered to be "in-the-money"
and are considered to have a value equal to the difference between this
amount and the exercise price of the stock option multiplied by the number
of shares covered by the stock option.
(2) Adjusted to reflect subsequent stock dividends and splits.
SECURITY OWNERSHIP OF MANAGEMENT AND OTHERS
The following table sets forth the shares of Common Stock of Bancorp
beneficially owned as of February 19, 1999 by each Director, each named
executive officer, and the Directors and executive officers as a group. As of
that date, Bancorp is not aware of any person who owns more than 5 percent of
its shares, except as set forth below.
<TABLE>
<CAPTION>
COMMON STOCK PERCENT
NAME OF BENEFICIAL OWNER BENEFICIALLY OWNED OF CLASS
------------------------ ------------------ --------
<S> <C> <C>
James D. Coleman 117,629 (1) 1.4%
John O. Dunkin 49,310 (2) *
Michael Donovan 2,506 (3) *
April Sevcik 5,139 *
Gary A. Lundberg 19,215 (4) *
Robert J. DeArmond 123,519 (5) 1.4%
Larry L. Parducci 29,256 (6) *
Tom Anderson 90,727 (7) 1.0%
Felice Belfiore 2,080 (8) *
William Haden 31,859 (9) *
Brad Copeland 6,116 (10) *
Kathy Peckham 1,591 (11) *
ALL DIRECTORS AND EXECUTIVE OFFICERS 478,947 5.5%
All Directors, Executive Officers
and Employees 785,265 9.0%
</TABLE>
- ---------------
* Less than 1.0%.
<PAGE> 12
(1) Includes 10,859 shares which could be acquired within 60 days by
exercise of stock options and 65,980 shares held jointly with Mr.
Coleman's spouse.
(2) Includes 23,130 shares which could be acquired within 60 days by
exercise of stock options, and 25,180 shares held under JCLS limited
partnership of which Mr. Dunkin is general partner.
(3) Includes 2,246 shares which could be acquired within 60 days by exercise
of stock options.
(4) Includes 2,450 shares which could be acquired within 60 days by exercise
of stock options and 16,765 shares held jointly with Mr. Lundberg's
spouse.
(5) Includes 5,210 shares which could be acquired within 60 days by exercise
of stock options
(6) Includes 5,210 shares which could be acquired within 60 days by exercise
of stock options, 20,924 shares held jointly with Mr. Parducci's spouse.
(7) Includes 8,264 shares which could be acquired within 60 days by exercise
of stock options, 8,954 shares held jointly with Mr. Anderson's spouse,
and 73,509 shares held by Valley of the Rogue Bank 401(k) Profit Sharing
Plan, in a segregated self-directed account for the benefit of Mr.
Anderson.
(8) Includes 2,080 shares which could be acquired within 60 days by exercise
of stock options.
(9) Includes 16,108 shares which could be acquired within 60 days by
exercise of stock options and 15,751 shares held in the Valley of the
Rogue Bank 401(k) Profit Sharing Plan, in a segregated self-directed
account for the benefit of Mr. Haden.
(10) Includes 4,160 shares which could be acquired within 60 days by exercise
of stock options, 1,124 shares held in the Valley of the Rogue Bank
401(k) Profit Sharing Plan, in a segregated self-directed account for
the benefit of Mr. Copeland and 832 shares held jointly with Mr.
Copeland's spouse.
(11) Includes 1,300 shares held in the Valley of the Rogue Bank 401(k) Profit
Sharing Plan in a segregated self-directed account for the benefit of
Ms. Peckham and 291 shares held jointly with Ms. Peckham's spouse.
TRANSACTIONS WITH MANAGEMENT
Various Directors and executive officers are customers of and have
had banking transactions with Bancorp's subsidiary, Valley of the Rogue Bank, in
the ordinary course of business, and the Bank expects to have such transactions
in the future. All loans and commitments to loan included in such transactions
were made in compliance with applicable laws, on substantially the same terms
(including interest rate and collateral) as those prevailing at the time for
comparable transactions with other persons and, in the opinion of management of
the Bank, do not involve more than the normal risk of collectibility or present
any other unfavorable features. The amount of loans outstanding to directors,
executive officers, and companies with which they are associated was $1,946,548
at December 31, 1998.
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 with a copy sent to the Company.
Based solely upon the Company's review of the copies of the filings
that it received with respect to the fiscal year ended December 31, 1998, the
Company believes that, other than as stated above, all reporting persons made
all required Section 16 filings with respect to such fiscal year on a timely
basis.
<PAGE> 13
OTHER BUSINESS
At the Meeting, management will report on Bancorp's business and
shareholders will have the opportunity to ask questions.
The Board of Directors knows of no other matters to be brought
before the shareholders at the Annual Meeting. In the event other matters are
presented for a vote at the Meeting, the proxy holders will vote shares
represented by properly executed proxies at their discretion in accordance with
their judgment on such matters.
PROXIES AND VOTING AT THE ANNUAL MEETING
A majority of the outstanding Common Stock must be represented at
the Annual Meeting in person or by proxy in order to constitute a quorum for the
transaction of business. Only shareholders of record of Bancorp's Common Stock
as of the close of business on February 19, 1999, the record date for the Annual
Meeting, will be entitled to vote. As of that date, there were 8,699,387 shares
outstanding and entitled to vote. Each share of Common Stock is entitled to one
vote.
If a proxy in the accompanying form is signed and returned, the
shares represented will be voted at the Annual Meeting. Proxies will be voted in
accordance with the instructions thereon, but if no directions are given,
proxies will be voted FOR the election of the nominees identified in this Proxy
Statement.
Any proxy given pursuant to this solicitation may be revoked by the
shareholder at any time before it is exercised by affirmatively electing to vote
in person at the Annual Meeting or by filing with Bancorp at the address shown
above either an instrument of revocation or a duly executed proxy bearing a
later date. However, a shareholder who attends the Annual Meeting need not
revoke his or her proxy and vote in person unless he or she wishes to do so.
Shareholders who do not vote in person or who have not submitted a
proxy, including broker non-votes, will be considered abstentions and may not be
counted toward a quorum or in favor of any proposition. Proxies will be counted
by representatives of Valley of the Rogue Bank as the transfer agent for VRB
Bancorp.
INFORMATION AVAILABLE TO SHAREHOLDERS
VRB Bancorp's Annual Report is being mailed to shareholders with
this Proxy Statement. Additional copies of Bancorp's Annual Report and Form 10K,
which is expected to be filed with the Securities and Exchange Commission prior
to April 1, 1999, may be obtained without charge by writing to Felice Belfiore,
Senior Vice President and Chief Financial Officer of VRB Bancorp, at P.O. Box
1046, Rogue River, Oregon 97537.
AUDITORS
Moss Adams LLP, independent Certified Public Accountants, audited
the consolidated financial statements of Bancorp for the year ended December 31,
1998. The Board of Directors of Bancorp has not selected auditors for the
current year. Representatives of Moss Adams are expected to be present at the
shareholder's annual meeting, will be given the opportunity to make a statement,
and will be available to respond to any appropriate questions.
However, management has been advised that representatives of Moss Adams LLP do
not plan to make a statement.
PROPOSALS OF SHAREHOLDERS
Proposals of shareholders intended to be presented at the 2000
Annual Shareholder's Meeting must be received by the Secretary of Bancorp prior
to November 1, 1999 for inclusion in the 2000 Proxy Statement and form of proxy.
<PAGE> 14
Annual Meeting VRB BANCORP
of Shareholders 110 Pine Street
April 14, 1999 Rogue River, OR 97537
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of VRB Bancorp (the "Corporation")
hereby constitutes and appoints William A. Haden and James D. Coleman and each
of them with power of substitution, attorneys and proxies to vote all of the
shares of common stock of the Corporation held of record by the undersigned
shareholder on February 19, 1999, at the Annual Meeting of Shareholders to be
held on April 14, 1999, at 1:30 P.M., and at any adjournments, as follows:
<TABLE>
<S> <C> <C>
1. ELECTION OF DIRECTORS. [ ] FOR all nominees listed below. [ ] WITHHOLD AUTHORITY to vote
for all nominees listed below
[ ] FOR all nominees listed
below except those nominee
names that have been
individually crossed out.
</TABLE>
NOMINEES ARE: James D. Coleman, William Haden, John O. Dunkin, Tom Anderson,
Michael Donovan, Gary Lundberg, April Sevcik, Robert DeArmond
and Larry Parducci.
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 ELECTION OF ALL
NOMINEES.
2. 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
proxies may vote in their discretion as to other matters which may come before
the meeting.
The undersigned shareholder hereby acknowledges receipt of VRB Bancorp's
1998 Annual Report, and VRB Bancorp's Proxy Statement dated March 12, 1999.
Dated: __________________, 1999
- ---------------------------------- ----------------------------------------
(Signature(s) of Shareholder(s)) (Signature(s) of Shareholder(s))
Please sign exactly as your name
appears. When shares are held by
joint tenants, both should sign.
When signing as an attorney,
executor, administrator, trustee
or guardian, please give full
title.
