Sierra Bancorp - Additional Proxy Soliciting Materials - Non-Management (definitive) (DFAN14A)
May 06 2008 - 4:51PM
Edgar (US Regulatory)
UNITED STATES
SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C.
20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION
REQUIRED IN PROXY STATEMENT
SCHEDULE 14A
INFORMATION
Proxy Statement
Pursuant to Section14(a) of the
Securities Exchange Act of
1934
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Filed by the Registrant
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Filed by a
Party other than the Registrant
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Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for Use of the
Commission Only
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Definitive Proxy Statement
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(as permitted by Rule 14a-6(e)(2))
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Definitive Additional Materials
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Soliciting Material Pursuant to Rule 14a-12
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SIERRA BANCORP
(Name of Registrant as Specified In
Its Charter)
PATRICIA L.
CHILDRESS AND CAROL A. BATES
(Name of Person(s) Filing Proxy
Statement, if Other than the Registrant)
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Payment of Filing Fee (Check the
appropriate box):
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No fee required.
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Fee computed on table below per
Exchange Act Rules14a-6(i)(1) and 0-11.
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(1
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Title of each class of securities to which
transaction applies:
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(2
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Aggregate number of securities to which
transaction applies:
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(3
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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):
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Proposed maximum aggregate value of
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(5
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Total fee paid:
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Fee paid previously with preliminary
materials:
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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.
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(1
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Amount Previously Paid:
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Form, Schedule or Registration Statement
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Filing Party:
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(4
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Date Filed:
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Patricia L. Childress
c/o The Altman Group, Inc
1200 Wall Street West, 3
rd
Floor
Lyndhurst, NJ 07071
Dear Fellow Shareholder,
You may have recently
received a letter from Sierra Bank's Chairman Morris Tharp asking you to
support the current board's nominees. As support for his position he
reiterates the financial successes of the Bank of Sierra while implying that I
am seeking election to the board simply because my brother, a former Director,
held stock in the bank.
I am not seeking to become a
director because I have inherited my brother's stock.
I have been a
substantial shareholder for many years.
I have become
increasingly alarmed by the level of financial rewards the directors have
allocated to themselves and an apparent sense of entitlement that supports these
rewards. To even question these rewards appears to be an affront to
the existing group. I strongly disagree with both the awards and their sense of
entitlement.
Mr. Tharp continues to
ignore the real issues in this proxy contest and instead tells you that when the
team is winning don't concern yourself with the actions of the players. Your
board is shielding its actions behind the bank's success, and taking far too
much credit for the success. The senior officers and employees are the biggest
factor in the bank's success - NOT the Directors.
The non-officer directors
are now paid $15,700 per year in cash just for being directors, plus $900 for
attending board meetings (usually 12 each year), plus $500 for attending
committee meetings, plus stock options from the 2007 stock incentive plan, and
lastly, two lucrative retirement plans. Please review the chart below. It
details the recent compensation issues that I challenge.
The 2006 and 2007 BOD
compensation included:
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2006
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2007
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Albert
Berra (orthodontist)
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$76,173
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$116,422
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Greg Childress (farmer)
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$34,122
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--------
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Robert Fields
(investor)
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$91,769
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$100,409
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Vincent Jurkovich (President,
Porterville Concrete Pipe)
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$117,629
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$127,276
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Morris Tharp
(President/Owner, E.M Tharp Inc)
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$84,672
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$132,618
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Robert Tienken (retired realtor/farmer)
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$98,487
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$128,302
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Gordon Woods (Owner,
Gordon T. Woods Construction
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$110,514
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$122,294
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Lynda Searcy
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------
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---------
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-
1998: 50,000 option shares
@$9.00
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2001: 50,000 option shares
@$6.43
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2002: retirement/life
insurance plan with potential payments of $250,000 or $25,000 per year per
director for 10 years.
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2006: retirement/life
insurance plan with potential payments of $250,000 or $25,000 per year per
director for 10 years.
-
2007: stock incentive plan
for 1,500,000 shares (a 24% dilution factor) with 2,500 options to be granted
annually to each director over 10 years administered by the boards'
compensation committee and not requiring vesting.
To Summarize: 100,000
options previously granted, retirement benefits that could total $50,000 per
year for 10 years, and another 200,000 options planned to be allocated for the
directors plus their annual compensation.
Is it starting to become
clear why they might oppose me for the board?
How many shareholders get a compensation
package like this from a part time job?
Furthermore, I am not merely
a "relative of a former director" as Mr. Tharp stated. My sister and I are the
largest shareholders in Sierra Bancorp with over 12.7% of the outstanding
shares. We own more than twice as many shares when compared to any of the
current directors. Mr. Tharp goes on to state that "our directors have always
had a substantial financial stake in the Company, which has aligned our
interests with those of the shareholders."
In fact, stock ownership is
listed as a desired qualification of a potential director in Sierra Bancorp's
2007 proxy statement. "Each director should have a meaningful financial stake
in the Company so as to assure that every director's interests are aligned with
those of the shareholders."
Isn't 12.7% of the
outstanding shares meaningful?
Mr. Tharp also states that
the board looks for directors that enhance the board's geographic representation
to include our other market areas in addition to Porterville. This additional
geographic representation has recently become more important due to the prospect
of competition from de novo banks in two of those market areas. One of these
banks (Suncrest) is to be headquartered in Visalia where I have lived since
1984. All of the current directors reside in Porterville, and they were fully
aware of these planned banks before they appointed Ms. Scearcy (a Porterville
resident) Director in December 2007.
The board's letter refers to
its "award[ing] board seats", and the qualifications this group wants "in making
our selections".
Aren't Directors elected, not appointed?
What
further evidence do we need that this group feels our Bank belongs to them?
Are
they entitled to the generous compensation packages they have awarded
themselves at shareholder expense?
The fact that the board
members are not direct employees of the bank does not make them independent.
The lucrative compensation and rewards described above negates true independence
as commonly accepted. Once again, Institutional Shareholder Services - a world
renowned proxy advisory service - gives a negative rating to Sierra Bancorp's
governance structure because
this board has not effectively changed in 30
years
. The audit committee needs more financial expertise by corporate
(and ISS) standards. A tax CPA does not meet the SEC definition of "financial
expert" as is currently recommended for audit committees. A nominating
committee must be comprised of strong, independent board members −people
like me who would not be just figure head members of the board or paper tigers.
We need board members that are receptive to adding qualified new members to the
board even if that means some of the current members have to step down.
This board has insulated
itself from shareholder actions by creating a staggered class of
directors so they can pool their combined interests to oppose anyone who does
not agree with them. ISS gives a negative rating for staggered boards and the
majority of corporate America is transitioning to a system where the entire
board stands for election each year.
An annually elected board is more
accountable to its shareholders.
I realize many of you have
long time friendships involved in this proxy contest. However, business is
business and your hard earned investment in the Bank is very important.
Please assist me in helping to rein in some of the excesses and to improve
accountability to shareholders by voting to elect me to the board.
Please vote in favor of my
nomination to the board on the
WHITE
proxy card today. If you
have any questions or need assistance with the voting of your shares, please
call The Altman Group toll free at: (866)387-0017.
Thank you for you time.
Best regards,
Trish
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