under Section 162(m) of the Internal
Revenue Code with vesting tied to an increase in Bancorp's stock price. Other
changes described above were made to clarify existing plan administration
practices.
As of March
1, 2009, Bancorp and its subsidiaries employed approximately 806 employees
eligible to participate in the Plan. Also at that date, 995,137 shares were
subject to outstanding options under the Plan, 300,151 shares had been issued
upon exercise of options granted under the Plan, and 472,817 shares had been
granted as restricted stock awards under the Plan. On March 12, 2009, the
closing price of our common stock was $1.35.
No new plan
benefits have been allocated to executive officers, directors, or any specific
individuals under the Plan at this time. For information regarding awards
granted under the Plan to executive officers named in this proxy statement,
please see "Executive Compensation" below. Executive officers as a group have
received 277,190 options to purchase common shares and 159,125 shares of
restricted stock under the Plan, while directors as a group have received
110,150 options and 56,082 shares of restricted stock. Employees other than
executive officers named in this proxy statement have received 1,017,060 options
and 257,610 restricted stock awards. No types of awards other than options and
restricted stock have been granted under the Plan to date.
Description of the Plan as
Proposed to be Amended
The complete
text of the Plan, as proposed to be amended, is included in Appendix A
immediately following Amendment No. 4 to the Plan. The following description of
the Plan summarizes its material features as proposed to be amended and is
qualified in its entirety by reference to the Plan included in Appendix A.
Purpose
. The purpose of the Plan is to
give the Company a competitive advantage in attracting, retaining and motivating
officers, employees, directors and/or consultants and to provide the Company and
its subsidiaries and affiliates with a stock plan providing incentives linked to
the profitability of the Company's businesses and increases in shareholder
value.
Eligibility and Administration
.
Individuals eligible to participate in the Plan include directors, officers,
employees, and consultants of the Company or any of its subsidiaries or
affiliates and prospective employees and consultants who have accepted offers of
employment or engagement.
The Plan is
administered by the Board of Directors directly based generally on
recommendations of the Compensation Committee (such administrator is referred to
herein as the "Committee"). If the Board elects, it may delegate its authority
to the Compensation Committee or such other committee of the Board as the Board
may from time to time designate. All or any portion of responsibilities and
powers under the Plan may, unless prohibited by applicable law or Nasdaq rule,
be further delegated to any one or more of the members of a committee, or to any
other person or persons.
Types of
Awards
. The Plan provides for both incentive
and nonqualified stock options, restricted stock and other awards of common
stock or awards that are valued in whole or in part by reference to common
stock. The following is a brief description of the types of awards that may be
granted under the Plan:
Options
. The Plan provides for
stock options of two types: incentive stock options qualified under Section 422
of the Internal Revenue Code (the "Code") and nonqualified options. Each option
will be evidenced by an option agreement approved by the Committee, which form
of agreement may differ. With respect to each option grant, the Committee will
have authority to determine, among other things, (i) the individuals to whom
options may be granted, (ii) the number of shares of common stock subject to an
option, (iii) the terms and conditions of an option, including exercise price,
vesting conditions, any vesting acceleration, and the acceptable methods of
exercise and payment of the exercise price, and (iv) whether an option will be
an incentive or nonqualified option. Incentive stock options may be
-10-
exercisable for not more than 10 years
from the date of grant and must have an option price of not less than the fair
market value of the underlying common stock on the date of grant. Under the
terms of the Plan, no individual may be granted options in any calendar year
representing the right to receive in excess of 300,000 shares. As amended, the
Plan will prohibit payment of dividends or dividend equivalents on stock
options, which is not something the Company has done historically.
Unless
otherwise determined by the Committee, if a recipient of an option terminates
services to the Company by reason of death, disability or retirement, any option
held at that time will immediately vest in full and may thereafter be exercised
until the expiration of the stated term of the option. Unless otherwise
determined by the Committee or as described with respect to termination events
following a Change in Control (as defined and described under the heading
"Change in Control Arrangements" below), options held by an option holder
terminated other than for Cause (as defined below) or by reason of death,
disability, or retirement may be exercised to the extent then exercisable for
three months from the date of termination or the balance of the stated term of
the option, whichever is shorter. Unless otherwise provided by the Committee,
options will terminate automatically if an option holder is terminated for
"cause," as defined in an agreement with the Company or, if no agreement exists,
conviction of a felony or willful and deliberate failure on the part of the
participant to perform his or her employment duties in any material respect
("Cause"). If at any time an option is exercised after the expiration of
applicable periods specified under Section 422 of the Code, the option will
thereafter be treated as a nonqualified option for all purposes.
Restricted Stock
. Restricted stock
awards are shares of common stock that may be subject to forfeiture during a
specified vesting period if conditions are not satisfied, such as continued
employment or attainment of individual or Company performance goals. From the
date of issuance of shares of restricted stock, the recipient is entitled to the
rights of a shareholder with respect to such shares, including voting and
dividend rights. The Committee may award shares of restricted stock either alone
or in addition to other awards, and restricted stock awards will be subject to
such terms, conditions, and restrictions as the Committee determines.
The
Committee may, prior to or at the time of grant of restricted stock, designate
the grant as a performance-based award. In the case of performance-based awards
to covered employees under Section 162(m) of the Code, performance goals must be
based on the attainment of specified levels of one or more of the following
measures: stock price, earnings, earnings per share, return on equity, return on
assets, asset quality, net interest margin, loan portfolio growth, efficiency
ratio, deposit portfolio growth, and liquidity, and must be set by the Committee
within the time period prescribed by Section 162(m) of the Code and related
regulations. The Plan is designed to provide the Company with the flexibility to
qualify compensation attributable to performance-based awards for deduction in
full under Section 162(m) of the Code.
Unless
otherwise determined by the Committee, upon a participant's termination by
reason of death or disability, all restrictions, including any performance
goals, applicable to any restricted stock will lapse or be deemed earned in
full, as the case may be, and such restricted stock will become fully vested and
transferable to the full extent of the original grant. Other vesting conditions
are determined by the Committee and set forth in forms of award agreements used
by the Company from time to time.
Changes
in Control
. All awards held by a participant
will vest in full and become exerciseable for the full term of an option if a
participant's employment is terminated by the Company or its successor other
than for Cause during the 24-month period following a Change in Control (as
defined in the Plan). The Plan also contains look-back provisions providing for
full vesting and exercisability for the entire stated term of an option
agreement upon a Change in Control for individuals terminated other than for
Cause after the Company executes an agreement that provides for a Change in
Control but before closing of the transaction. Finally, the Committee may
provide in an award agreement or otherwise that, during the 60-day period from
and after a Change in Control, an optionee will have the right to the cash value
of
-11-
all or any part of an option (whether or
not fully vested) based on the spread between a formula price approximating the
price per share received in the Change in Control and the exercise price.
Adjustments to Shares
. In the event of
a stock split (including a reverse stock split), a dividend or distribution paid
in common stock, or a recapitalization of or affecting common stock, the
aggregate number and kind of shares reserved for issuance under the Plan, the
maximum limitation upon the number of shares that may be issued as restricted
stock or subject to stock options to be granted to a single participant in any
fiscal year under the Plan, the number, kind, and option price per share subject
to each outstanding stock option, and the number and kind of shares subject to
other awards granted under the Plan, will automatically be adjusted
proportionately, or substituted, to reflect the effect of such stock split,
distribution paid in common stock, or recapitalization. Adjustments will be in
the discretion of the Committee in the event of any merger or consolidation,
separation (including a spin off), or other reorganization or change in capital
structure.
If any
awards granted under the Plan are forfeited or any option terminates, expires,
or lapses without being exercised, the shares subject to such awards will again
be available for issuance under the Plan.
Federal
Income Tax Consequences
. Certain awards
granted under the Plan are intended to qualify as incentive stock options for
federal income tax purposes. Under federal income tax law currently in effect,
the recipient of an option will recognize no income or gain (for regular income
tax purposes) upon either grant or exercise of an incentive stock option.
However, upon the exercise of an incentive stock option, the amount by which the
market value of the shares subject to the incentive stock option exceeds the
exercise price is included in the alternative minimum taxable income of the
optionee and may, under certain conditions, be taxed under the alternative
minimum tax. If an employee exercises an incentive stock option and does not
dispose of any of the option shares within either two years following the date
of grant or one year following the date of exercise, then any gain realized upon
subsequent disposition of the shares will be treated as capital gain. If an
employee disposes of shares acquired upon exercise of an incentive stock option
before the expiration of applicable holding periods, any amount realized will be
taxable as ordinary compensation income. The Company will not be allowed any
deduction for federal income tax purposes at either the time of the grant or the
time of exercise of an incentive stock option. Upon any disqualifying
disposition by an employee, the Company will generally be entitled to a
deduction to the extent the employee realized ordinary income.
Certain
awards under the Plan will be treated as nonqualified options for federal income
tax purposes. Under federal income tax law presently in effect, the recipient of
a nonqualified option will recognize no income until the option is exercised. At
the time of exercise of a nonqualified option, the optionee will realize
ordinary income, and the Company will generally be entitled to a deduction, in
the amount by which the market value of the shares exceeds the exercise price.
The Company is required to withhold on the income amount. Upon the sale of
shares acquired upon exercise of a nonqualified option, the excess of the amount
realized from the sale over the market value of the shares on the date of
exercise is taxable to the recipient as capital gain, and will not result in any
further deduction for the Company.
The
Committee may permit recipients of options to pay all or a portion of the
exercise price for an option using previously acquired shares of common stock.
If an option is exercised and payment is made in previously held shares, there
is no taxable gain or loss to the recipient other than any gain recognized as a
result of exercise of the option, as described above.
An employee
who receives restricted stock under the Plan will generally realize taxable
income in each year in which a portion of the shares vest based on the value of
the shares at the time of vesting, unless a Section 83(b) election is made. If a
Section 83(b) election is made, the employee will realize taxable income in the
year of initial receipt based on the value of the shares at that time. The
Company generally will be entitled to a tax deduction equal to the amount
includable as income by the employee at
-12-
the same time or times as the employee
recognizes income with respect to the shares. The Company is required to
withhold on the income amount.
Section
162(m) of the Code limits to $1,000,000 per person the amount that the Company
may deduct for compensation paid to any of its executive officers named in the
executive compensation section of the Company's proxy statement in any year
("named executive officers"). Under IRS regulations, compensation received
through the exercise of an option or through grant or vesting of restricted
stock will not be subject to the $1,000,000 limit if the option or grant and the
plan pursuant to which it is granted meet certain requirements. One requirement
is shareholder approval of a per-employee limit on the number of shares as to
which options or grants may be made. Another requirement relates to the
independence of the Board or committee of the Board considering and approving
performance goals and grants of awards. Finally, the exercise price of an option
may not be less than the fair market value of the common stock on the date of
grant. The Plan has been structured so that any options and restricted stock
awards that are subject to performance goals described in the Plan will meet the
Section 162(m) requirements.
The
Board of Directors recommends that you vote
FOR
amending
our 2002 Stock Incentive Plan as described above.
Proposal 3—Ratification of
Selection of Independent Registered Public Accountants
The Audit
Committee has selected Deloitte & Touche LLP as the Company's independent
registered public accountants for the fiscal year ending December 31, 2009.
Although the selection of independent auditors is not required to be submitted
to a vote of the shareholders by the Company's charter documents or applicable
law, the Board has decided to ask the shareholders to ratify the selection. If
the shareholders do not approve the selection of Deloitte & Touche LLP, the
Board will ask the Audit Committee to reconsider its recommendation.
Provided
that a quorum is present, the selection of Deloitte & Touche LLP as the
Company's independent auditors will be ratified if more votes are cast for the
proposal than against it at the Annual Meeting. Shares that are not represented
at the meeting, shares that abstain from voting on this proposal, and shares not
voted on this proposal by brokers or nominees will not be counted as voted for
purposes of determining whether the proposal has been approved.
The
Board of Directors recommends that you vote
FOR
ratification of the selection of Deloitte & Touche LLP as our independent
registered public accounting firm for 2009.
MATTERS RELATED TO OUR AUDITORS
Auditors for Fiscal Year Ended December
31, 2008
Deloitte
& Touche LLP, our independent registered public accountants, performed
audits of our consolidated financial statements for 2008 and our management's
assessment that the Company maintained effective internal control over financial
reporting as of December 31, 2008. A representative of Deloitte & Touche LLP
will be present at the Annual Meeting and available to respond to appropriate
questions. The representative will have the opportunity to make a statement at
the annual meeting if he or she so desires.
-13-
Fees Paid to Independent Registered
Public Accounting Firm
The
following table sets forth the aggregate fees paid to Deloitte & Touche LLP,
the member firms of Deloitte Touche Tohmatsu, and their respective affiliates
(collectively, "Deloitte & Touche"), for the years ended December 31, 2008,
and December 31, 2007:
|
|
Year Ended
December 31, 2008
|
|
Year Ended
December 31, 2007
|
|
Description
|
|
Amount Paid
|
|
Amount Paid
|
|
Audit
Fees (1)
|
$
|
678,620
|
|
|
$
|
675,500
|
|
|
Audit-Related Fees (2)
|
|
18,000
|
|
|
|
17,375
|
|
|
Tax
Fees (3)
|
|
61,341
|
|
|
|
46,263
|
|
|
All
Other Fees
|
|
0
|
|
|
|
0
|
|
|
|
(1)
|
|
Fees for audit services consist
of:
|
|
|
|
|
|
|
|
-
Audit of the Company's annual financial
statements;
-
Reviews related to obligations under the Federal
Deposit Insurance Corporation Improvement Act;
-
Reviews in connection with quarterly reports filed with
the SEC;
-
Includes approximately $140,000 in 2008 and
approximately $166,000 in 2007 for preparation of internal control
reports and related attestation services; and
-
Other SEC-related work such as consents and other
services.
|
|
|
|
|
|
(2)
|
|
Fees for audit-related services
consist of benefit plan audits.
|
|
|
|
|
|
(3)
|
|
Fees for tax services consist of
tax compliance services, including federal, state, and local tax
preparation services and advice, and tax
planning.
|
The Audit
Committee has adopted pre-approval policies and procedures for pre-approving
work to be performed by Deloitte & Touche. Under Bancorp's pre-approval
policy, the Audit Committee must pre-approve all audit and permitted non-audit
services to be performed by our independent auditors. All services performed by
Deloitte & Touche during 2008 were pre-approved by the Audit Committee.
The Audit
Committee has pre-approved the use of Deloitte & Touche for certain audit
services and specific types of services characterized as audit-related and tax
services. These categories include with respect to audit services, attestation
services, services associated with SEC registration statements, and
consultations with management relating to accounting disclosure of transactions
or events. With respect to audit-related and tax services, these categories
include due diligence and audit services relating to potential mergers and
acquisitions, benefit plan audits, internal control reviews, consultations
relating to disclosure treatment of transactions, tax preparation services, and
tax planning and advice. For each category of services, the Audit Committee has
set dollar limits on the amount of services that may be provided and has
required that management or the auditors report back to the committee from time
to time to inform members of services actually provided and costs therefor. The
Audit Committee has delegated to the chair of the Audit Committee the authority
to consider and pre-approve any management or other request for additional
services to be performed by Deloitte & Touche.
Report of Audit Committee
In discharging its responsibilities,
the Audit Committee:
-
Reviewed and held discussions with management and
Deloitte & Touche relating to the Company's financial statements, internal
control, the audit and financial reporting by Bancorp
generally;
-
Discussed and reviewed with Deloitte & Touche all matters
the firm was required to communicate to and discuss with the Audit Committee
under applicable standards, including those described in Statement on Auditing
Standards No. 61, as amended; and
-14-
-
Received from Deloitte & Touche the written
disclosures and letter required by the Public Company Accounting Oversight
Board regarding communication with the Audit Committee concerning independence
and discussed with Deloitte & Touche its independence.
Based on the
Audit Committee's review of the audited consolidated financial statements and
the various discussions with management and the independent accountants
described above, the Audit Committee recommended to the Board of Directors that
the audited consolidated financial statements be included in the Company's
Annual Report on Form 10-K for the year ended December 31, 2008.
Audit Committee Members
Duane C. McDougall (Chair), Michael
Bragg, and Dr. Nancy Wilgenbusch.
OTHER BUSINESS
The Board
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 Annual
Meeting, the proxy holders will vote shares represented by properly executed
proxies in their discretion in accordance with their judgment on such matters.
-15-
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
Stock Ownership Table
The
following table shows the amount of Bancorp common stock beneficially owned as
of December 31, 2008, by our current directors and nominees for director, the
executive officers named in the summary compensation table below, shareholders
known to us to beneficially own more than 5% of our common stock, and all
executive officers and directors of Bancorp as a group. Beneficial ownership
includes shares currently owned, shares that a person has a right to vote or
transfer, and any shares that a person has a right to acquire within 60 days.
Except as noted below, none of such shares have been pledged as collateral for
loans or other indebtedness. Except as noted below, each holder has sole voting
and investment power with respect to shares listed as owned. At December 31,
2008, Bancorp had 15,741,491 shares outstanding.
|
|
|
Number of
Shares
|
|
|
|
|
Name and
Address
|
|
Beneficially Owned
(1)(2)(3)(4)
|
|
Percent of Class
(5)
|
|
5% or Greater Owners
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Columbia Wanger Asset
|
|
837,000
|
(6)
|
|
5.33
|
%
|
|
Management, L.P.
|
|
|
|
|
|
|
|
227
W. Monroe Street
|
|
|
|
|
|
|
|
Chicago, IL 60606
|
|
|
|
|
|
|
|
|
|
Barclays Global Investors, N.A.
|
|
870,236
|
(7)
|
|
5.54
|
%
|
|
400
Howard Street
|
|
|
|
|
|
|
|
San
Francisco, CA 94105
|
|
|
|
|
|
|
|
|
|
Investment Counselors
|
|
1,053,500
|
(8)
|
|
6.71
|
%
|
|
of Maryland, LLC
|
|
|
|
|
|
|
|
803
Cathedral Street
|
|
|
|
|
|
|
|
Baltimore, MD 21201
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Officers and Directors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lloyd
D. Ankeny
|
|
142,024
|
|
|
*
|
|
|
Michael J.
Bragg
|
|
37,998
|
(9)
|
|
*
|
|
|
James
D. Bygland
|
|
57,263
|
(10)
|
|
*
|
|
|
Anders
Giltvedt
|
|
149,758
|
|
|
*
|
|
|
Duane
C. McDougall
|
|
27,077
|
|
|
*
|
|
|
Xandra
McKeown
|
|
36,810
|
|
|
*
|
|
|
Steven J. Oliva
|
|
116,220
|
|
|
*
|
|
|
J. F.
Ouderkirk
|
|
55,825
|
(11)
|
|
*
|
|
|
Hadley S. Robbins
|
|
18,110
|
|
|
*
|
|
|
Steven N.
Spence
|
|
23,184
|
(12)
|
|
*
|
|
|
Robert D. Sznewajs
|
|
423,003
|
|
|
2.64
|
%
|
|
David J.
Truitt
|
|
21,148
|
|
|
*
|
|
|
Nancy
Wilgenbusch
|
|
20,546
|
|
|
*
|
|
|
All directors and
executive officers
|
|
1,128,966
|
|
|
6.96
|
%
|
|
as a group (13
persons)
|
|
|
|
|
|
|
*Represents less than 1% of our
outstanding common stock.
|
|
(1)
|
|
Share amounts include shares
subject to stock options exercisable within 60 days after December 31,
2008, as follows: Lloyd D. Ankeny, 13,850 shares; Michael J. Bragg, 5,800
shares; James D. Bygland, 30,246 shares; Anders Giltvedt, 95,052 shares;
Duane C. McDougall, 10,850 shares; Xandra McKeown, 14,566
shares;
|
-16-
|
|
|
|
Steven J. Oliva,
10,850 shares; J. F. Ouderkirk, 26,750 shares; Hadley Robbins, 2,100
shares; Steven N. Spence, 3,450 shares; Robert D. Sznewajs, 254,373
shares; David J. Truitt, 7,850 shares; Nancy Wilgenbusch, 10,850 shares;
and by all directors and executive officers as a group, 486,587
shares.
|
|
|
|
|
|
(2)
|
|
Share amounts include
shares held under deferred compensation plans as to which participants
have shared voting and dispositive power as follows: Lloyd D. Ankeny,
1,699 shares; Michael J. Bragg, 2,710 shares; James D. Bygland, 633
shares; Duane C. McDougall, 2,478 shares; Xandra McKeown, 142 shares;
Steven J. Oliva, 6,330 shares; J. F. Ouderkirk, 3,810 shares; Hadley
Robbins, 705 shares; Steven N. Spence, 1,355 shares; David J. Truitt,
7,859 shares; and Nancy Wilgenbusch, 2,668 shares.
|
|
|
|
|
|
(3)
|
|
Share amounts include
restricted shares which, although not fully vested, possess full voting
rights, as follows: Lloyd D. Ankeny, 1,400 shares; Michael J. Bragg, 1,400
shares; James D. Bygland, 5,125 shares; Anders Giltvedt, 17,811 shares;
Duane C. McDougall, 1,400 shares; Xandra McKeown, 11,362 shares; Steven J.
Oliva, 1,400 shares; J. F. Ouderkirk, 1,400 shares; Hadley Robbins, 10,843
shares; Steven N. Spence, 1,400 shares; Robert D. Sznewajs, 44,649 shares;
David J. Truitt, 1,400 shares; and Nancy Wilgenbusch, 1,400 shares; and by
all directors and executive officers as a group, 100,990
shares.
|
|
|
|
|
|
(4)
|
|
Share amounts include
the following shares held in accounts under Bancorp's 401(k) Plan: James
D. Bygland, 7,464 shares; Anders Giltvedt, 1 share; Xandra McKeown, 1,003
shares; Robert D. Sznewajs, 1,467 shares; and by all directors and
executive officers as a group, 9,935 shares.
|
|
|
|
|
|
(5)
|
|
Calculated in
accordance with Rule 13d-3(d)(1) of the Securities Exchange Act of
1934.
|
|
|
|
|
|
(6)
|
|
Based on information
contained in the Schedule 13G filed February 9, 2009, by Columbia Wanger
Asset Management, L.P. ("WAM"), relating to shares held by the Columbia
Acorn Trust, an entity advised by WAM.
|
|
|
|
|
|
(7)
|
|
Based on information
contained in the Schedule 13G filed February 5, 2009, by Barclays Global
Investors, N.A., and related entities. Of the amount reported, the listed
entity reports sole dispositive power with respect to 462,159 shares,
while Barclays Global Financial Advisors reports sole voting and
dispositive power with respect to 408,077 shares.
|
|
|
|
|
|
(8)
|
|
Based on information
contained in the Schedule 13G filed February 23, 2009, by Investment
Counselors of Maryland, LLC ("ICM"), relating to shares held by various
investment advisory clients of ICM.
|
|
|
|
|
|
(9)
|
|
Share amount includes
1,604 shares owned by Mr. Bragg's spouse. Mr. Bragg disclaims any
beneficial ownership of these shares.
|
|
|
|
|
|
(10)
|
|
Share amounts include
60 shares owned by Mr. Bygland's stepson. Mr. Bygland disclaims any
beneficial ownership of these shares.
|
|
|
|
|
|
(11)
|
|
Share amounts include
50 shares held by Mr. Ouderkirk's spouse as custodian for his son. Mr.
Ouderkirk disclaims any beneficial ownership of these shares.
|
|
|
|
|
|
(12)
|
|
Share amounts include
2,000 shares owned by Mr. Spence's spouse. Mr. Spence disclaims any
beneficial ownership of these shares.
|
Section 16(a) Beneficial Ownership
Reporting Compliance
Section
16(a) of the Securities Exchange Act of 1934, as amended ("Section 16(a)"),
requires that all of our executive officers and directors and all persons who
beneficially own more than 10% of our common stock ("reporting persons") file
reports with the SEC with respect to beneficial ownership of Bancorp common
stock. We have adopted procedures to assist our directors and executive officers
in complying with the Section 16(a) filing requirements.
There were
two late filings of Section 16 reports during 2008. On March 4, 2008, 693 shares
were acquired by the trustee of Bancorp's Executives' Deferred Compensation Plan
using amounts deferred by Mr. Robbins. The transaction was reported on March 31,
2008. On December 1, 2008, 1,062 shares were acquired by the trustee of
Bancorp's Directors' Deferred Compensation Plan using director fees deferred by
Mr. Truitt. On December 2, 2008, this transaction was incorrectly reported as
the acquisition of 199.566 shares. On December 9, 2008, the correct number of
shares was reported.
Except as
provided in the preceding paragraph, we believe that all executive officers and
directors made all filings required by Section 16(a) on a timely basis during
2008, based solely upon our review of the copies of filings that we received
with respect to the year ended December 31, 2008, and written representations
from reporting persons.
-17-
MANAGEMENT
Information
with respect to our executive management team, other than Mr. Sznewajs, appears
below. Information relating to Mr. Sznewajs, who is also a director, can be
found under "Proposal 1—Election of Directors." Each of the executive officers
listed below serves in the position listed at both Bancorp and the Bank.
|
James
D. Bygland, 47
|
|
Mr.
Bygland has served as Executive Vice President and Chief Information
Officer for more than five years.
|
|
|
|
|
|
Anders Giltvedt, 49
|
|
Mr.
Giltvedt has served as Executive Vice President and Chief Financial
Officer for more than five years.
|
|
|
|
|
|
Kevin
McClung, 39
|
|
Mr.
McClung has served as Controller for more than five years and is presently
a Senior Vice President.
|
|
|
|
|
|
Xandra McKeown, 51
|
|
Ms.
McKeown has served as Executive Vice President and Manager of the
Commercial Banking Group for more than five years.
|
|
|
|
|
|
Hadley S. Robbins, 52
|
|
Mr.
Robbins has served as Executive Vice President and Chief Credit Officer
since April 2007. Mr. Robbins previously served as a regional business
banking manager and in other positions at Wells Fargo & Company, from
October 2003 until joining Bancorp. Prior to that, Mr. Robbins served as
Chief Credit Officer of Bank of the Northwest and in credit management at
its successor from 2000 until October
2003.
|
-18-
EXECUTIVE COMPENSATION
Discussion and Analysis of Executive
Compensation Programs
As part of
our discussion of executive compensation in this proxy statement, we provide
summaries of and derive examples from various plans and agreements, such as
employment agreements, change in control agreements, equity incentive plans, and
supplemental executive retirement agreements, that are complicated legal
documents. For additional information regarding these legal documents, we refer
you to the complete documents as they have been incorporated into our Annual
Report on Form 10-K for the year ended December 31, 2008. Our annual report has
been filed with the SEC and is available on its website at www.sec.gov. The
Exhibit Index in our annual report directs you to where each of the exhibits
incorporated into our annual report, including all agreements with our named
executive officers, can be found. All of these documents can be obtained on the
SEC website. All summaries or examples derived from these documents that are
included in this proxy statement are qualified in their entirety by reference to
the actual legal documents.
Objectives and Basis for Compensation
. The objectives of our compensation program for named executive officers
are to attract, retain, motivate and reward highly qualified executives. For
2008, the Compensation Committee generally targeted total compensation of each
named executive at the 65
th
percentile
of the total compensation of executives holding similar positions at similarly
situated bank holding companies, as modified upward or downward by the following
factors:
-
length of time in the position,
-
scope of job responsibilities,
-
current and long term job performance and potential for
advancement,
-
competitive market conditions for individuals holding similar
positions, and
-
the annual and longer term performance of our
company.
Total executive compensation may also be
affected by decisions to pay higher levels of compensation in order to attract
superior executive talent in critical functions or to provide additional
compensation outside of the normal annual review cycle to address retention
issues.
To assist
the Compensation Committee in achieving the objectives of our compensation
programs for executive officers, the committee has on a periodic basis retained
the services of a consultant to conduct surveys and provide reports, updates and
related advice to the committee regarding compensation paid to executive
officers at similarly situated bank holding companies that hold positions
similar to those of our named executive officers. In 2006, the committee
retained the Compensation Group of Clark Consulting, Inc., ("Consultant"), to
provide such services. The Consultant provided the committee with a report
regarding executive compensation based on information derived from a banking and
financial industry compensation survey and a customized survey of a peer group
composed of the bank holding companies listed on page 21 below ("the peer
group").
The
Compensation Committee periodically compares the total annual compensation of
each named executive to the total annual compensation of executives holding
comparable positions at similarly situated bank holding companies. For the
purpose of such comparisons, the committee considers base salary, annual bonus,
and the value of stock options and restricted stock grants. The committee focuses
primarily on total annual compensation rather than the various individual
elements of compensation because total annual compensation is generally most
important to executives. Further, focusing on total annual compensation allows
us more flexibility to provide forms of compensation that are tailored to meet
-19-
our goals and the particular executive's
needs and wishes, either at the time of hire or later in the employment
relationship. The Compensation Committee does not focus on supplemental
executive retirement plans, life insurance, change in control agreements, and
other compensation elements in its comparisons because it does not believe such
comparisons are particularly meaningful, it is difficult to assign a value to
certain elements, and it is not believed to be industry practice to do
so.
According to
information provided by our Consultant, the total annual compensation of each of
our named executive officers compares to the 65
th
percentile of 2008 total annual
compensation of similarly situated executives at peer group companies as
follows: Mr. Sznewajs: -26%; Mr. Giltvedt: -27%; Ms. McKeown: -22; Mr. Robbins:
-26%; and Mr. Bygland: -48%. To calculate these percentages and the base salary
percentages discussed below, our Consultant applied increase factors to its 2006
market data of 4% for 2007 and 7% for 2008.
Based on our
review of the compensation arrangements discussed below, and our assessments of
individual and corporate performance, we believe our executive compensation
levels and the design of our executive compensation programs are effective.
Goals
. The compensation program
and its various elements are designed to reward a combination of individual,
department and/or corporate performance. How the various elements of the
compensation program are designed to reward such performance is explained more
fully below.
Elements of Compensation
. The
primary elements of our compensation program for named executive officers are
base salary, annual bonus, stock options, restricted stock, supplemental
executive retirement plans, life insurance, change in control agreements,
deferred compensation plans, and an employment contract with the President &
CEO. In addition, named executive officers are eligible to receive other
benefits that are generally available to all employees on a non-discriminatory
basis, such as participation in and matching contributions under our 401(k)
plan, vacations, and medical, dental, life, disability, and long term care
insurance.
Base
Salaries
.
Base salaries of named executive officers were last adjusted effective
January 1, 2007, to approximately the amounts shown under the subheading
"Summary Compensation Table" in this section below. The Committee
normally adjusts base
salaries of named executive officers on the first day of each calendar year. It
did not do so in 2008 or 2009 due to the Company's recent financial
performance.
Except for
the absence of base salary adjustments in 2008 and 2009, it has been the
practice of the Compensation Committee to target the base salary of each named
executive officer at or slightly below the 65th percentile base salary of
executives holding similar positions in our Consultant's report. According to
information provided by our Consultant, the 2008 base salary of our named
executive officers compares to the 65th percentile base salary in 2008 of
similarly situated executives at peer group companies as follows: Mr. Sznewajs:
-28%; Mr. Giltvedt: -23%; Ms. McKeown: -7%; Mr. Robbins: -8%; and Mr. Bygland:
-23%.
As described
in greater detail below, an increase in the base salary of a named executive
officer also results in an increase in such officer's targeted annual bonus and
benefit levels under the supplemental executive retirement and change in control
agreements applicable to him or her and may also lead to increases in the number
of stock options and restricted shares granted to such person.
Annual
Bonuses
.
In light of lower than expected corporate performance, no annual bonuses
were paid to named executive officers for 2008. Although no annual bonuses were
paid for 2008, this section provides information regarding the structure of
Bancorp's annual bonus program.
Annual
bonuses allow named executives to earn additional annual cash compensation if
performance goals and certain objective and subjective criteria are satisfied.
The bonus paid each named
-20-
executive officer is a function of the
executive's bonus opportunity, the achievement of individual, department and/or
corporate performance goals, and the Compensation Committee's
discretion.
The bonus
opportunity of each named executive is a percentage of his or her base salary
and, except in the case of our CEO, is proposed by the President and CEO and
reviewed and approved annually by the Compensation Committee. For example, an
executive with a base salary of $200,000 and a bonus opportunity of 50% has an
opportunity to earn a bonus of $100,000, subject to achievement of individual,
department and Company performance goals and to the discretion of the
Compensation Committee. The bonus paid may be more or less than the amount of
the bonus opportunity. This structure gives the Compensation Committee latitude
to weigh factors it considers important when considering executive bonuses,
including subjective factors.
The bonus
opportunity and the percentage of that opportunity that is allocated between
individual, department and corporate goals for each named executive is as
follows:
|
|
|
% of Bonus
Opportunity Allocated to
|
|
|
|
Achievement
of
|
|
|
Bonus
|
Individual and
|
Corporate
|
|
|
Opportunity*
|
Department
Goals
|
Goals
|
|
Robert
Sznewajs
|
100%
|
0%
|
100%
|
|
Anders
Giltvedt
|
60%
|
25%
|
75%
|
|
Xandra
McKeown
|
50%
|
50%
|
50%
|
|
Hadley
Robbins
|
50%
|
50%
|
50%
|
|
James
Bygland
|
30%
|
50%
|
50%
|
|
*As a percentage of base salary.
|
Our primary
long-term corporate goals are to maintain a 10% or greater year-over-year growth
in earnings per share and a 15% or greater return on average equity, tangible.
See our Form 10-K for a discussion of how the Company calculates return on
equity, tangible, from its audited financial statements. Our primary long-term
corporate goals have been approved by the Board as part of the strategic
planning process and are routinely disclosed in our periodic reports with the
SEC, the Investor Relations section of our website, and in presentations to
investors and analysts. The Company did not achieve its primary long term
corporate goals in 2008. Our year-over-year earnings per diluted share declined
to a loss of $.38 in 2008, from earnings of $1.05 in 2007 and $1.86 in 2006. Our
return on average equity, tangible was (2.88)% in 2008, down from 8.7% in 2007.
In addition
to our primary long-term corporate goals, other corporate goals considered by
management and the Compensation Committee in determining the annual bonuses of
each named executive included:
-
regulatory compliance, corporate governance, and
credit quality,
-
strategic planning and execution of the strategic
plan,
-
the competitive environment, and
-
customer and employee satisfaction survey results and
community image.
While the
Company did not achieve its growth in earnings per share and return on equity,
tangible goals, most corporate goals were achieved. Those goals that were not
achieved were primarily due to difficulties in certain parts of our loan
portfolio, including residential construction loans.
-21-
As a result
of not achieving certain corporate goals, the Committee determined that each
named executive should receive 0% for both the corporate goals part and the
individual/ department part of his/her bonus opportunity.
The
individual and department performance goals of each named executive officer
differed. Mr. Sznewajs had no individual or department goals. The individual and
department performance goals of each of our named executives were as
follows:
|
Officer
|
Performance Goal Areas
|
|
Mr.
Giltvedt
|
Financial reporting,
expansion strategies, capital management, and corporate
projects.
|
|
Ms.
McKeown
|
Origination and sale of
certain commercial loan, deposit and related products, cross-sales, and
customer satisfaction.
|
|
Mr.
Robbins
|
Credit quality, loan
losses and quality of reporting to our Board and its Loan, Investment
& Asset/Liability Committee.
|
|
Mr.
Bygland
|
Systems maintenance
(including operational accuracy) and systems development (including new
products and services).
|
The foregoing goals are general rather
than specific. All named executives also have department goals relating to
employee satisfaction.
In light of
the Committee's determination that no annual bonuses should be paid due to
Bancorp's lower than expected financial performance, achievement of individual
and department goals became irrelevant for purposes of determining annual
bonuses.
Restricted Stock and Stock
Options
. Restricted stock and stock options
provide the
Compensation Committee with important
tools to attract, retain, motivate and reward named executive officers and to
further align the interests of management with those of our shareholders.
Restricted stock and stock option awards are designed to strengthen the
mutuality of interests between Bancorp's shareholders and named executive
officers by providing a portion of annual compensation in a form that gives the
executive a proprietary interest in pursuing the long-term growth,
profitability, and financial success of Bancorp. Stock option grants provide an
additional incentive for named executive officers to build shareholder value
since recipients only receive value from the grants if the price of our stock
appreciates.
In 2008,
stock options and two types of restricted stock awards were granted to each
named executive officer. Stock options awarded in 2008 vest one-quarter annually
over a four-year period. The vesting period helps retain named executive
officers and is generally consistent with industry practice. Stock options
expire ten years from the date of grant. Stock options granted in 2008 and
earlier years were incentive stock options to the extent permitted by law. We
chose to grant incentive stock options primarily, rather than non-qualified
options, because of the additional incentive to hold the stock after exercise
and the potential tax benefits provided to employees by incentive stock options.
Two methods
were used to determine the number of stock options granted to each named
executive. The first method used individual performance, the executive's
potential, and a formula that takes into account the total number of option
shares being granted to all employees being granted stock options (as determined
by total dollars available for all such grants and our determination of the
value of each option share using the Black-Scholes method), the executive's
salary, and a multiplier based on the executive's job grade. The second method
is similar to the first method, except the total dollars available for the grant
to each named executive was determined by reference to the corporate part of the
named executive's annual bonus opportunity.
-22-
The first
type of restricted stock awarded to named executive officers vests over a four
year period, with one quarter of the award vesting each year. Cash dividends on
this type of restricted stock award are paid at the same time and in the same
amount as dividends on our common stock generally and are not subject to any
vesting condition.
The second
type of restricted stock awarded to named executive officers vests only if a
certain price per share of Bancorp stock ($23.57) is achieved for a period of 20
consecutive business days within a four-year period following the date of grant.
The vesting price is the average price of Bancorp stock for the 365-day period
prior to and including the grant date. The second type of grant included an
additional grant equal to approximately 25% of the number of restricted shares
if the Bancorp stock price target is achieved within 2 years of the date of
grant. In each case, 50% of the award vests on the last day of the 20-day
period, and 25% of the award vests on each of the first and second anniversaries
of the last day of the 20-day period. Cash dividends on the second type of
restricted stock award are reinvested in Bancorp stock, and the stock issued
upon reinvestment is also restricted. When any part of the second type of
restricted stock award vests, all shares issued upon dividend reinvestment vest
and any future dividends are paid without restrictions. The second type of grant
was specifically structured to motivate named executive officers to improve
Bancorp's financial performance.
The number
of restricted shares awarded to each named executive officer for the first type
of award was determined based upon individual performance, the executive's
potential, and a formula that takes into account the total number of restricted
shares being awarded to all recipients of restricted stock, the mid-point of the
executive's salary grade, a percentage equal to the executive's annual bonus
opportunity, and the market price of our stock. The total number of restricted
shares awarded to all recipients was arrived at by dividing total dollars
available for all such grants by the closing price of our stock on a date
shortly before the date of grant. The number of restricted shares granted to
each named executive officer for the second type of award was determined in a
similar manner, except the group of employees receiving such grant consisted of
a group of senior officers and the total number of shares being awarded was
determined by reference to a portion of the dollar amount of the corporate part
of the executive's annual bonus opportunity divided by the closing price of our
stock on a date shortly before the date of grant.
In 2008, we
increased both the number of stock options and restricted shares granted to
named executive officers and others, while keeping the overall cost of such
equity-based compensation relatively constant due to the lower value per share
associated with each type of grant. The relatively larger increase in the number
stock options was prompted by our perception that stock options will generally
provide greater value to recipients than restricted stock.
In 2008 (and
for several years prior), our board generally granted restricted stock and/or
stock options to named executive officers at meetings held on the date of our
annual shareholders meeting, a date shortly after we release first quarter
earnings. The exercise price for options has been the closing reported sales
price of our stock on that date of grant. Our practices in this regard have been
consistent.
Supplemental Executive Retirement Plans
. The Compensation Committee approved entry into supplemental executive
retirement agreements ("SERPs") with Mr. Sznewajs, Mr. Gilvedt, Ms. McKeown, and
Mr. Bygland in 2003 and with Mr. Robbins in 2007. The SERPs were implemented to
help retain key executives and remain competitive with others in our peer group.
In a report provided by our Consultant in 2003, it was reported that 14 of the
19 bank holding companies in our peer group at the time provided SERPs to one or
more executive officers. It was also reported that 8 of the 19 peer banking
holding companies provided deferred compensation plans to one or more executive
officers. Information provided by our Consultant indicated that benefits to be
provided to named executives under the SERPs would, with respect to percentage
of base salary and payout periods, be in the mid-range of benefits provided by
companies in our peer group at the time.
-23-
The SERPs
originally provided each executive with a fixed payment for 15 years after
retirement. Payments commence at age 62 for Mr. Sznewajs and age 64 for other
executives. The SERPs were amended in 2005 to tie each benefit to a percentage
of final base salary rather than provide fixed benefit awards. The SERPs were
further amended in 2008 to give each executive a one-time option, to be
exercised no later than December 31, 2008, to obtain a lump sum payment after
retirement instead of a fixed payment for 15 years. All named executives elected
to receive some or all of their SERP benefits in a lump sum payment. Each SERP
includes non-compete and non-solicitation provisions. For more detailed
discussion of the SERPs, see the discussion in this section below under the
subheading "Pension Benefits for 2008."
The SERPs
generally vest at a rate of 10% per year upon either achievement of a return on
equity, tangible of 10%, or in the discretion of the Committee. Although the
Company did not achieve a return on equity, tangible of 10% in 2008, the
Committee approved 10% SERP vesting for each named executive officer for 2008 in
order to motivate, retain and recognize the long-term nature of this element of
compensation. In early 2009, based on advice from our Consultant that vesting
requirements are relatively uncommon in SERPs, the SERPs were amended to
eliminate the requirement of a 10% per year return on equity, tangible for
vesting to occur.
Life Insurance
. In 2003, we purchased bank-owned life insurance for Mr.
Sznewajs,
Mr. Giltvedt, Ms. McKeown, and Mr.
Bygland and others to help recover the costs of projected employee benefits,
provide key executives with another element of a comprehensive and competitive
compensation package, reward those persons for past and future services, and
encourage them to continue employment with us. In 2007, we purchased a term life
insurance policy for Mr. Robbins. Life insurance benefits under the policies are
$300,000 for Mr. Sznewajs and $200,000 for each other named executive officer.
Additional life insurance coverage is provided under policies available to all
employees.
Change In
Control Agreements
. The Compensation
Committee approved entry into change in control agreements ("CIC's") for Mr.
Sznewajs, Mr. Giltvedt, Ms. McKeown, and Mr. Bygland in 2003 and Mr. Robbins in
2007. The CICs were implemented to help us retain the executives (particularly
after a change in control has been proposed) and remain competitive with others
in our peer group and in our market.
Benefits
under the CICs are payable to each named executive officer upon the occurrence
of events described in the CICs. Those events require both a change in control
(as defined in the CIC) and a termination of the employment of the named
executive officer (i.e., a double trigger). CICs provided by some other
companies provide executives with benefits solely upon the occurrence of a
change in control (i.e., a single trigger). We believe our approach is more
reasonable and reflective of our intent to compensate the executive in the event
of a termination of employment.
In a 2003
report, our Consultant advised us that 17 of the 19 bank holding companies in
our peer group provided change in control agreements to their CEOs and that 14
of the 19 bank holding companies provided CICs to other executives. The report
also revealed that benefit levels to be provided by Bancorp under its CICs were
generally in the mid-range of benefit levels provided by companies in our peer
group. Potential payments under the CICs have not influenced decisions regarding
other elements of compensation. For a more detailed discussion of the terms and
conditions of the CICs, see the discussion in this section below under the
subheading "Potential Payments Upon Termination or Change in Control."
Deferred
Compensation Plan
. We maintain an executive
officers' deferred compensation plan which permits each named executive officer
to defer all or part of his or her base salary, annual incentive bonuses, and
commissions under the plan on a tax-deferred basis. The plan provides us with an
additional opportunity to attract and retain senior officers by providing them
with a tax-advantaged investment vehicle at a very nominal cost to us. We do not
make contributions to the plan or pay or guarantee earnings to
participants.
-24-
An amount
equal to participant deferrals is placed in a "rabbi" trust that is subject to
the claims of our creditors. Plan participants have a number of investment
options, including Bancorp stock. The return on contributions enjoyed by each
participant depends on the return on the investments which the participant
selects. Participants are fully vested in their plan benefits at all times. For
more detailed discussion of the deferred compensation plan, see the discussion
in this section below under the subheading "Nonqualified Deferred Compensation
for 2008."
Employment Contract with the CEO
. We
entered into a new employment agreement with Mr. Sznewajs that became effective
on January 1, 2008 and continues for a three-year term that ends December 31,
2010. This agreement became effective immediately following the end of the term
of our previous three-year agreement with Mr. Sznewajs. The agreement is
consistent with the objectives of our compensation program to attract, retain,
motivate and reward highly qualified executives. For more detailed discussion of
the terms and conditions of the employment agreement, see the tables and related
discussion below under the subheadings "Summary Compensation Table" and
"Potential Payments Upon Termination or Change in Control."
Role
of Executive Officers.
The base salaries,
bonus payments, and number of stock options and restricted shares granted to Mr.
Giltvedt, Ms. McKeown, Mr. Robbins, and Mr. Bygland were recommended to the
Compensation Committee by our CEO and Executive Vice President of Human
Resources and approved by the committee. The recommendations were reviewed with
the Compensation Committee chair in advance of deliberations and action by the
committee as a whole. Our CEO and Executive Vice President of Human Resources
were present during the Compensation Committee's deliberations and approval
process. The base salary, bonus payment, and number of stock options and
restricted shares granted to Mr. Sznewajs were approved by the Compensation
Committee in executive session.
Compensation Recovery and Forfeiture Policies.
We maintain the following provisions regarding the recovery,
adjustment and forfeiture of compensation paid or due to named executive
officers:
Forfeiture of Equity Awards
. The 2002
Plan provides that, in the event the employment of any holder of an option is
terminated for cause, stock options of such holder, whether vested or unvested,
will terminate. Termination "for cause" is defined as either conviction for
committing a felony or willful and deliberate failure to perform job duties.
Restricted stock that has not yet vested will also be forfeited upon any "for
cause" termination. These provisions serve to protect our intellectual and human
capital and help ensure that our executives act in the best interest of our
company and its stockholders.
Forfeiture and Recoupment Benefits
.
Each SERP applicable to our named executive officers provides that the executive
will forfeit any benefits upon any termination of employment "for cause." An
explanation of what constitutes "for cause" may be found in the discussion in
this section below under the subheading "Potential Payments Upon Termination or
Change in Control." Each agreement also provides that, if the non-competition or
non-solicitation provisions of the agreement are violated, any payments made
after the date of breach must be repaid and any remaining unpaid benefits will
be forfeited.
Recoupment of Annual Bonuses and Stock Gains
. The Sarbanes-Oxley Act of 2002 provides that if a company is required
to restate its financials due to material non-compliance with reporting
requirements, the chief executive officer and chief financial officer must
reimburse the company for (1) any bonus or other incentive- or equity-based
compensation received during the 12 months following the first public release of
later-restated financials, and (2) any profits from the sale of securities
during those 12 months.
-25-
Stock
Ownership Policy Guidelines.
We
established the following policy and recommended guidelines regarding minimum
ownership of Bancorp stock by our named executive officers:
|
Position:
|
|
Number of
Shares:
|
|
Chief Executive Officer
|
|
90,000
|
|
Chief Financial
Officer
|
|
38,500
|
|
Chief Credit Officer
|
|
22,500
|
|
Business Banking
Manager
|
|
22,500
|
|
Chief Information Officer
|
|
22,500
|
Named executive officers are expected to
achieve the indicated share ownership within three to five years of becoming an
executive. Shares subject to stock options, whether vested or unvested, are
considered owned for purposes of our stock ownership policy. During 2008, all
named officers were in compliance with the policy.
Accounting and Tax Treatments.
Provisions of the Internal Revenue Code limit the deductibility of
compensation in excess of $1 million, unless the compensation is
"performance-based compensation" or qualifies under certain other exceptions.
The Compensation Committee strives to qualify executive compensation for
deductibility to the extent consistent with the best interests of our company,
but deductibility is not the sole factor used by the committee in ascertaining
appropriate levels or modes of compensation.
Bank
Holding Company Peer Group.
The
Consultant's 2006 report provided compensation-related information regarding the
bank holding companies listed below (the "peer group"):
|
2006 Peer
Group
|
|
|
|
CVB Financial Corp.,
CA
|
|
Umpqua Holdings
Corporation, OR
|
|
Central Pacific Financial
Corp., HI
|
|
PFF Bancorp, Inc.,
CA
|
|
First Community Bancorp,
CA
|
|
Western Alliance Bancorp,
NV
|
|
Frontier Financial
Corporation, WA
|
|
Columbia Banking System,
Inc., WA
|
|
Placer Sierra Bancshares,
CA
|
|
TriCo Bancshares,
CA
|
|
Vineyard National Bancorp,
CA
|
|
Beverly Hills Bancorp,
CA
|
|
Cascade Bancorp,
OR
|
|
Heritage Commerce Corp.,
CA
|
|
AmericanWest Bancorp,
WA
|
|
Columbia Bancorp,
OR
|
The
Consultant's 2006 report included information regarding base salary, bonus,
value of awarded stock options, value of restricted stock awards, and certain
other compensation derived from various sources, including the proxy statements,
of members of the peer group. The peer group used in the Consultant's 2006
report was jointly selected by the Compensation Committee, management and the
Consultant.
-26-
Summary Compensation Table
The
following table summarizes the various elements of compensation paid to or
earned by our chief executive officer, chief financial officer and other three
most highly compensated executive officers during 2006, 2007, and
2008.
|
Name and
|
Year
|
Salary
|
Bonus
|
Stock
|
Option
|
Non-Equity
|
Change in
|
All Other
|
Total
|
|
Principal
|
|
($)
|
($)
|
Awards (1)
|
Awards (2)
|
Incentive
|
Pension Value
|
Compensation (4)
|
($)
|
|
Position
|
|
|
|
($)
|
($)
|
Plan
|
and
|
($)
|
|
|
|
|
|
|
|
|
Compen-
|
Nonqualified
|
|
|
|
|
|
|
|
|
|
sation
|
Deferred
|
|
|
|
|
|
|
|
|
|
($)
|
Compensation
|
|
|
|
|
|
|
|
|
|
|
Earnings (3)
|
|
|
|
|
|
|
|
|
|
|
($)
|
|
|
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
(i)
|
(j)
|
|
Robert D.
|
|
|
|
|
|
|
|
|
|
|
Sznewajs,
|
2008
|
$360,000
|
$0
|
$608,133(5)
|
$134,089(5)
|
$0
|
$37,267
|
$13,395
|
$1,152,884
|
|
President and
|
2007
|
360,000
|
0
|
293,089
|
67,519
|
0
|
87,896
|
21,908
|
830,412
|
|
Chief
|
2006
|
340,000
|
340,000
|
212,291
|
59,248
|
0
|
375,643
|
19,364
|
1,299,851
|
|
Executive
|
|
|
|
|
|
|
|
|
|
|
Officer
|
|
|
|
|
|
|
|
|
|
|
Anders
|
|
|
|
|
|
|
|
|
|
|
Giltvedt,
|
2008
|
$200,000
|
$0
|
$104,791
|
$15,921
|
$0
|
$38,836
|
$4,254
|
$363,802
|
|
EVP/Chief
|
2007
|
200,000
|
105,000
|
85,131
|
17,761
|
0
|
37,824
|
11,139
|
456,855
|
|
Financial
|
2006
|
186,450
|
130,000
|
64,599
|
20,419
|
0
|
34,085
|
11,184
|
445,355
|
|
Officer
|
|
|
|
|
|
|
|
|
|
|
Xandra
|
|
|
|
|
|
|
|
|
|
|
McKeown,
|
2008
|
$200,000
|
$0
|
$65,679
|
$10,430
|
$0
|
$42,325
|
$2,746
|
$321,180
|
|
EVP/Business
|
2007
|
200,000
|
90,000
|
49,675
|
11,649
|
0
|
41,271
|
9,383
|
401,978
|
|
Banking
|
2006
|
169,867
|
100,000
|
33,338
|
11,793
|
0
|
59,163
|
8,737
|
374,543
|
|
Hadley S.
|
|
|
|
|
|
|
|
|
|
|
Robbins,
|
2008
|
$200,000
|
$0
|
$48,487
|
$16,404
|
$0
|
$51,796
|
$2,157
|
$318,844
|
|
EVP/Chief
|
2007
|
166,667
|
111,200(6)
|
23,904
|
11,051
|
0
|
38,012
|
4,807
|
355,641
|
|
Credit Officer
|
|
|
|
|
|
|
|
|
|
|
James D.
|
|
|
|
|
|
|
|
|
|
|
Bygland,
|
2008
|
$150,000
|
$0
|
$32,078
|
$5,560
|
$0
|
$25,389
|
$1,322
|
$214,349
|
|
EVP/Chief
|
2007
|
150,000
|
45,000
|
25,435
|
6,257
|
0
|
24,707
|
7,292
|
258,691
|
|
Information
|
2006
|
144,200
|
48,000
|
18,540
|
6,831
|
0
|
23,026
|
6,707
|
246,847
|
|
Officer
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
The dollar amounts in column (e)
reflect the compensation expense recognized for financial statement
reporting purposes in accordance with SFAS 123R with respect to restricted
stock awards under the 2002 Plan in this and prior years. Assumptions used
in calculating expense as required by SFAS 123R are described in Note 20
to our audited financial statements included in the 2008 Form 10-K, except
that the deduction relating to estimated forfeitures has been disregarded
for this purpose. Additional details regarding restricted stock awards
under the 2002 Plan are described in the tables below under the headings
"Grants of Plan-Based Awards for 2008" and "Outstanding Equity Awards at
Fiscal Year-End 2008."
|
|
|
|
|
|
(2)
|
|
The dollar amounts in column (f)
reflect the compensation expense recognized for financial statement
reporting purposes under SFAS 123R with respect to stock option grants
under the 2002 Plan in this and prior years. Assumptions used in
calculating expense as required by SFAS 123R are described in Note 20 to
our audited financial statements included in the 2008 Form 10-K, except
that the deduction relating to estimated forfeitures has been disregarded
for this purpose. Additional details regarding stock options granted under
the 2002 Plan are described in the tables below under the headings "Grants
of Plan-Based Awards for 2008" and "Outstanding Equity Awards at Fiscal
Year-End 2008."
|
|
|
|
|
|
(3)
|
|
The dollar amounts in column (h)
reflect increases in the actuarial present value of each executive's SERP
using assumptions consistent with those used in our financial statements,
as discussed in the table and related discussion under the subheading
"Pension Benefits for 2008" below.
|
|
|
|
|
|
(4)
|
|
The dollar amounts in column (i)
reflect dividends on restricted stock and 401(k) Plan matching
contributions. No matching contributions were made with respect to 2008
contributions to the 401(k) Plan. Dividends paid on restricted stock were
as follows: Mr. Sznewajs – $13,395, Mr. Giltredt – $14,254, Ms. McKeown –
$2,746, Mr. Robbins – $2,157, and Mr. Bygland –
$1,322.
|
-27-
|
|
(5)
|
|
Compensation reported in columns
(e) and (f) relating to stock and option awards reflects accelerated
expense recognition resulting from Mr. Sznewajs having reached retirement
age of 62 during the year, making him eligible for accelerated vesting of
such awards in the event he retires.
|
|
|
|
|
|
(6)
|
|
Bonus amount includes $36,200
paid as a signing bonus when Mr. Robbins joined the Company in April
2007.
|
Under Mr.
Sznewajs's employment agreement, which expires December 31, 2010, Mr. Sznewajs
is entitled to receive an annual base salary of $360,000, subject to upward
adjustment only based on reviews to occur annually. In addition to base salary,
Mr. Sznewajs's annual cash bonus opportunity is 100% of his annual base salary.
Mr. Sznewajs is also entitled to participate in our stock incentive plan, all
employee pension, welfare and insurance benefit plans or programs, and such
fringe benefits as are available to other senior executives. We have agreed to
consider annually whether to provide
Mr. Sznewajs
retiree medical benefits.
Grants of Plan-Based Awards for 2008
The
following table sets forth certain information concerning individual grants of
equity and non-equity awards to the named executive officers during the year
ended December 31, 2008. No previously issued stock options were repriced or
otherwise modified in 2008.
|
Name
|
Grant
|
Estimated Future Payouts
|
Estimated Future Payouts
|
All
Other
|
All
Other
|
Exercise or
|
Grant
Date
|
|
|
Date
|
Under
Non-Equity
|
Under Equity Incentive
Plan
|
Stock
|
Option
|
Base
Price
|
Fair
Value
|
|
|
|
Incentive Plan Awards
|
Awards
|
Awards:
|
Awards:
|
of
Option
|
of
Stock
|
|
|
|
|
|
|
|
|
|
Number
of
|
Number
of
|
Awards
(4)
|
and
Option
|
|
|
|
Thresh-
|
Target
|
Maxi-
|
Thresh-
|
Target (1)
|
Maxi-
|
Shares
of
|
Securities
|
($/Share)
|
Awards
(5)
|
|
|
|
old
|
($)
|
mum
|
old
|
(#)
|
mum
|
Stock or
|
Underlying
|
|
|
|
|
|
($)
|
|
($)
|
(#)
|
|
(#)
|
Units
(2)
|
Options
(3)
|
|
|
|
|
|
|
|
|
|
|
|
(#)
|
(#)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
(i)
|
(j)
|
(k)
|
(l)
|
|
Robert D.
|
4/22/2008
|
|
|
|
|
12,900
|
|
|
|
|
$105,264
|
|
Sznewajs
|
4/22/2008
|
|
|
|
|
|
|
12,000
|
|
|
153,000
|
|
|
4/22/2008
|
|
|
|
|
|
|
|
34,650
|
$12.75
|
76,230
|
|
Anders
|
4/22/2008
|
|
|
|
|
5,650
|
|
|
|
|
46,104
|
|
Giltvedt
|
4/22/2008
|
|
|
|
|
|
|
6,700
|
|
|
85,425
|
|
|
4/22/2008
|
|
|
|
|
|
|
|
9,350
|
$12.75
|
20,570
|
|
Xandra
|
4/22/2008
|
|
|
|
|
3,150
|
|
|
|
|
25,704
|
|
McKeown
|
4/22/2008
|
|
|
|
|
|
|
4,600
|
|
|
58,650
|
|
|
4/22/2008
|
|
|
|
|
|
|
|
5,000
|
$12.75
|
11,000
|
|
Hadley S.
|
4/22/2008
|
|
|
|
|
3,150
|
|
|
|
|
25,704
|
|
Robbins
|
4/22/2008
|
|
|
|
|
|
|
4,600
|
|
|
58,650
|
|
|
4/22/2008
|
|
|
|
|
|
|
|
5,000
|
$12.75
|
11,000
|
|
James D.
|
4/22/2008
|
|
|
|
|
1,450
|
|
|
|
|
11,832
|
|
Bygland
|
4/22/2008
|
|
|
|
|
|
|
1,850
|
|
|
23,588
|
|
|
4/22/2008
|
|
|
|
|
|
|
|
2,500
|
$12.5
|
5,500
|
|
|
(1)
|
|
Reflects awards of restricted
stock in 2008 under the 2002 Plan. Restricted shares granted in 2008 only
vest for each officer with respect to the following number of shares only
if the closing price of Bancorp stock is equal to or greater than $23.57
(the average price of Bancorp stock in the 365-day prior to and including
the grant date) for a period of 20 consecutive business days ending on or
before April 22, 2010: Mr. Sznewajs – 2,600; Mr. Giltvedt – 1,150; Ms.
McKeown – 650; Mr. Robbins – 650; and Mr. Bygland – 300. Restricted shares
granted in 2008 vest for each officer with respect to the following number
of shares only if the closing price of Bancorp stock is equal to or
greater than $23.57 for a period of 20 consecutive business days ending on
or before April 22, 2012: Mr. Sznewajs – 10,300; Mr. Giltvedt – 4,500; Ms.
McKeown – 2,500; Mr. Robbins – 2,500; and Mr. Bygland – 1,150. If either
of the foregoing price targets are achieved, 50% of such award shall vest
on the last day of the 20-day period, 25% shall vest one year after the
last day of such 20-day period, and 25% shall vest two years after the
last day of such 20-day period. These restricted stock awards are subject
to immediate vesting in the event of death, disability, or termination of
employment within 24 months of a change in control affecting Bancorp
(extended to 36 months for Mr. Sznewajs under his change in control
agreement). Restricted stock that has not vested will be forfeited by a
recipient upon retirement or any other employment termination. Dividends
on restricted shares are also restricted and reinvested in Bancorp stock.
All such shares vest when any of the restricted stock vests. Dividends are
paid on the restricted stock at the same rate applicable to all shares of
Bancorp stock and are not preferential.
|
-28-
|
|
(2)
|
|
Reflects awards of
restricted stock in 2008 under the 2002 Plan. Restricted stock awards are
subject to a four-year vesting schedule with one-quarter of each award
vesting on each of the first four anniversaries of the grant date, subject
to immediate vesting in the event of retirement, death, disability, or
termination of employment within 24 months of a change in control
affecting our company (extended to 36 months for Mr. Sznewajs under his
change in control agreement). Restricted stock that has not yet vested
will be forfeited by a recipient upon any other employment termination.
Dividends are paid on the restricted stock at the same rate applicable to
all shares of Bancorp stock and are not preferential. Dividends vest
immediately and are not restricted.
|
|
|
|
|
|
(3)
|
|
Reflects stock option
grants in 2008 under the 2002 Plan. Stock options are subject to a
four-year vesting schedule, with one-quarter of each grant vesting on each
of the first four anniversaries of the grant date, and expire 10 years
from the grant date. Options may generally be exercised for a period of
three months following termination of employment. Options vest immediately
and remain exercisable for their stated term in the event of retirement,
death, disability, or termination of employment within 24 months of a
change in control affecting our company (extended to 36 months for Mr.
Sznewajs under his change in control agreement). Options held by employees
terminated for cause terminate immediately.
|
|
|
|
|
|
(4)
|
|
The exercise price is
equal to the closing price of Bancorp stock on the grant date. The option
exercise price may be paid in cash, by surrendering vested shares owned by
the executive officer for cancellation, by canceling sufficient option
shares to pay the exercise price, in a cashless exercise through a broker,
or a combination of the foregoing.
|
|
|
|
|
|
(5)
|
|
The grant date fair
value of restricted stock subject to a performance condition and shown in
column (g) is $8.16 per share. The grant date fair value of restricted
stock shown in column (i) is based on the market price of our stock on the
date of grant, $12.75 per share. The grant date fair value of stock
options granted in 2008 was $2.20 per share, which amount was determined
using the Black-Scholes option pricing model based on the assumptions
described in Note 20 to our audited financial statements included in the
2008 10-K.
|
-29-
Outstanding Equity Awards at Fiscal
Year-End 2008
The following table sets forth
certain information concerning outstanding equity awards held by named executive
officers at December 31, 2008.
|
|
Option
Awards
|
Stock
Awards
|
|
Name
|
Number of
|
Number of
|
Equity
|
Option
|
Option
|
Number of
|
Market Value
|
Equity
|
Equity
|
|
|
Securities
|
Securities
|
Incentive
|
Exercise
|
Expiration
|
Shares or
|
of Shares or
|
Incentive
|
Incentive
|
|
|
Underlying
|
Underlying
|
Plan
|
Price
|
Date (1)
|
Units of
|
Units of
|
Plan
|
Plan Awards:
|
|
|
Unexercised
|
Unexercised
|
Awards:
|
($)
|
|
Stock That
|
Stock That
|
Awards:
|
Market or
|
|
|
Options
|
Options (1)
|
Number of
|
|
|
Have Not
|
Have Not
|
Number of
|
Payout Value
|
|
|
(#)
|
(#)
|
Securities
|
|
|
Vested (2)
|
Vested (3)
|
Unearned
|
of Unearned
|
|
|
Exercisable
|
Unexercisable
|
Underlying
|
|
|
(#)
|
($)
|
Shares,
|
Shares, Units
|
|
|
|
|
Unexercised
|
|
|
|
|
Units or
|
or Other
|
|
|
|
|
Unearned
|
|
|
|
|
Other
|
Rights That
|
|
|
|
|
Options
|
|
|
|
|
Rights That
|
Have Not
|
|
|
|
|
(#)
|
|
|
|
|
Have Not
|
Vested (3)
|
|
|
|
|
|
|
|
|
|
Vested (4)
|
($)
|
|
|
|
|
|
|
|
|
|
(#)
|
|
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
(i)
|
(j)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101,860
|
|
|
$12.27
|
1/01/2010
|
31,749
|
$209,226
|
12,900
|
$85,011
|
|
|
68,368
|
|
|
10.28
|
4/24/2011
|
|
|
|
|
|
|
44,240
|
|
|
14.67
|
5/21/2012
|
|
|
|
|
|
Robert D.
|
5,079
|
|
|
16.24
|
4/22/2013
|
|
|
|
|
|
Sznewajs
|
24,250
|
4,850
|
|
20.64
|
4/26/2015
|
|
|
|
|
|
|
10,576
|
10,574
|
|
27.50
|
4/25/2016
|
|
|
|
|
|
|
|
34,650
|
|
12.75
|
4/22/2018
|
|
|
|
|
|
|
33,550
|
|
|
$9.55
|
4/03/2010
|
12,161
|
$80,141
|
5,650
|
$37,234
|
|
|
19,752
|
|
|
10.28
|
4/24/2011
|
|
|
|
|
|
|
13,600
|
|
|
14.67
|
5/21/2012
|
|
|
|
|
|
Anders
|
10,100
|
|
|
16.24
|
4/22/2013
|
|
|
|
|
|
Giltvedt
|
8,800
|
|
|
21.32
|
4/20/2014
|
|
|
|
|
|
|
7,500
|
1,500
|
|
20.64
|
4/26/2015
|
|
|
|
|
|
|
1,750
|
1,750
|
|
27.50
|
4/25/2016
|
|
|
|
|
|
|
|
9,350
|
|
12.75
|
4/22/2018
|
|
|
|
|
|
|
4,500
|
|
|
$16.24
|
4/22/2013
|
8,212
|
$54,117
|
3,150
|
$20,759
|
|
Xandra
|
4,450
|
1,112
|
|
21.32
|
4/20/2014
|
|
|
|
|
|
McKeown
|
4,166
|
834
|
|
20.64
|
4/26/2015
|
|
|
|
|
|
|
1,450
|
1,450
|
|
27.50
|
4/25/2016
|
|
|
|
|
|
|
|
5,000
|
|
12.75
|
4/22/2018
|
|
|
|
|
|
Hadley S.
|
2,100
|
6,300
|
|
$31.92
|
3/27/2017
|
7,693
|
$50,697
|
3,150
|
$20,759
|
|
Robbins
|
|
5,000
|
|
12.75
|
4/22/2018
|
|
|
|
|
|
|
6,272
|
|
|
$9.20
|
4/27/2010
|
3,675
|
$24,218
|
1,450
|
$9,556
|
|
|
7,715
|
|
|
10.28
|
4/24/2011
|
|
|
|
|
|
|
7,000
|
|
|
14.67
|
5/21/2012
|
|
|
|
|
|
James D.
|
4,000
|
|
|
16.24
|
4/22/2013
|
|
|
|
|
|
Bygland
|
2,350
|
|
|
21.32
|
4/20/2014
|
|
|
|
|
|
|
2,083
|
417
|
|
20.64
|
4/26/2015
|
|
|
|
|
|
|
825
|
825
|
|
27.50
|
4/25/2016
|
|
|
|
|
|
|
|
2,500
|
|
12.75
|
4/22/2018
|
|
|
|
|
|
|
(1)
|
|
All stock options expire 10 years
after the grant date. Options granted in 2005 vest and become exercisable
one-half immediately, one-sixth in two years, one-sixth in three years,
and one-sixth in four years. Options granted in 2006, 2007, and 2008 vest
and become exercisable in equal installments annually over a four-year
period.
|
-30-
(2)
Unvested awards of
restricted stock vest over the next four years as follows:
|
Date of Vesting
|
|
|
2009
|
2010
|
2011
|
2012
|
|
Mr. Sznewajs
|
15,325
|
14,812
|
8,937
|
5,575
|
|
Mr. Giltvedt
|
5,624
|
5,687
|
3,700
|
2,800
|
|
Ms. McKeown
|
3,538
|
3,662
|
2,387
|
1,775
|
|
Mr. Robbins
|
2,806
|
3,456
|
2,806
|
1,775
|
|
Mr. Bygland
|
1,651
|
1,676
|
1,049
|
749
|
|
|
(3)
|
|
Based on the closing price per share of our
stock on December 31, 2008, of $6.59.
|
|
|
|
|
|
(4)
|
|
For a description of vesting terms of
incentive-based awards see footnote (1) to the preceding "Grants of Plan-Based Awards for 2008" table.
|
Option Exercises and Stock Vesting for 2008
The following table
sets forth certain information concerning exercises of stock options and vesting
of restricted stock by the named executive officers during the year ended
December 31, 2008.
|
|
Option
Awards
|
Stock
Awards
|
|
Name
|
Number of
|
Value Realized
|
Number of
|
Value Realized
|
|
|
Shares
|
on Exercise
|
Shares
|
on Vesting (1)
|
|
|
Acquired
|
($)
|
Acquired
|
($)
|
|
|
on Exercise
|
|
on Vesting
|
|
|
|
(#)
|
|
(#)
|
|
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
|
Robert D. Sznewajs
|
--
|
$--
|
12,812
|
$165,545
|
|
Anders Giltvedt
|
--
|
$--
|
3,762
|
$48,709
|
|
Xandra McKeown
|
--
|
$--
|
2,150
|
$27,496
|
|
Hadley S. Robbins
|
--
|
$--
|
1,032
|
$13,866
|
|
James D. Bygland
|
--
|
$--
|
1,100
|
$14,075
|
(1)
Based on the
closing price per share of our stock on the date of vesting.
-31-
Pension Benefits for 2008
The
following table sets forth certain information concerning Bancorp's supplemental
executive retirement agreements ("SERPs") with named executive officers as of
December 31, 2008, assuming retirement at age 62 for Mr. Sznewajs and at age 64
for all other executives.
|
Name
|
Plan
Name
|
Number of
Years
|
Present Value
of
|
Payments
During
|
|
|
|
Credited Service (1)
|
Accumulated
|
Last Fiscal Year
|
|
|
|
(#)
|
Benefit (2)
|
($)
|
|
|
|
|
($)
|
|
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
|
Robert D.
Sznewajs
|
SERP for
|
10
|
$1,247,916
|
$0
|
|
|
Robert
Sznewajs
|
|
|
|
|
Anders
Giltvedt
|
SERP for
|
8
|
$166,591
|
$0
|
|
|
Anders
Giltvedt
|
|
|
|
|
Xandra
McKeown
|
SERP for
|
8
|
$193,874
|
$0
|
|
|
Xandra
McKeown
|
|
|
|
|
Hadley S.
Robbins
|
SERP for
|
2
|
$89,808
|
$0
|
|
|
Hadley
Robbins
|
|
|
|
|
James D.
Bygland
|
SERP for
|
10
|
$109,130
|
$0
|
|
|
James
Bygland
|
|
|
|
|
|
(1)
|
|
Mr. Sznewajs' number of years of
credited service under his SERP exceeds his actual number of years of
service with the Company by one year. He is fully vested in his benefits
under his SERP.
|
|
|
|
|
|
(2)
|
|
SERPs are individual contracts
with each of our named executive officers that originally provided for
specified benefit payments over a fixed 15-year term. The SERPs were
amended in late 2008 to provide each named executive officer with an
option to receive a lump sum payment at retirement. Mr. Giltvedt elected
to receive a lump sum payment in the event of his death prior to normal
retirement age. The other executive officers each elected to receive lump
sum payments in all payment circumstances. The valuation method used to
determine the present value of accumulated benefit in column (d) above and
the increase in the present value of the benefit disclosed in column (h)
of the Summary Compensation Table is consistent with Accounting Principles
Board Opinion No. 12, as amended, and based on the actual terms of each
SERP and a discount rate of six percent as specified in the SERPs. The
same methods and assumptions were used to derive amounts included in our
financial statements.
|
We entered
into a SERP with Mr. Robbins in April 2007. We entered into SERPs with each of
our other named executive officers in August 2003, which SERPs were amended
effective July 1, 2005. Each SERP is a non-qualified, unfunded plan that is
designed to provide retirement benefits for the participant. Each SERP is
further intended to assist in assuring each participant's continued service to
our company.
The SERPs
were further amended in late 2008 to comply with section 409A of the Internal
Revenue Code and to give each named executive officer a one-time opportunity, to
be exercised on or before December 31, 2008, to elect to receive some or all
SERP payments in a lump sum payment upon reaching retirement or normal
retirement age, as the case may be. All named executive officers other than Mr.
Giltvedt elected to receive all SERP benefits in a lump sum payment. Mr.
Giltvedt has elected to receive only his pre-retirement death benefits in a lump
sum payment and will, with respect to all other benefits, receive a fixed
payment amount per year, payable monthly, for a period of 15 years, with
payments beginning on the earlier of the first day of the month after reaching
normal retirement age—or the first day of the month after actual retirement.
-32-
Benefit
amounts payable under each SERP vary based on whether (1) a participant retired
at normal retirement age or terminated employment in connection with a
termination event under his or her change in control agreement, or (2)
terminated employment due to early voluntary termination, early involuntary
termination, or disability.
All SERP
benefits are equal to, or the lump sum payment is calculated based on the value
of, a 15-year stream of monthly payments equal to 35% of the participant's final
base salary, except that, in the event a participant terminates employment in
connection with a termination event under his or her change in control
agreement, monthly payments or lump sum amounts are based on 35% of projected
base salary as of the participant's normal retirement date. In the event a
participant terminates employment as a result of an early voluntary termination,
early involuntary termination, or disability, his or her monthly payments or
lump sum amounts will be based on annual benefit levels determined in accordance
with a formula set forth in each participant's SERP that results in benefit
amounts that increase over the participant's period of continued service, but
not above the normal retirement benefit. No benefits are payable if a
participant is terminated for cause (as defined in each participant's change in
control agreement).
Each SERP
also includes non-competition and non-solicitation provisions that provide for a
loss of future benefits and forfeiture of benefits received after a breach but
before discovery if an executive competes with us in the states of Oregon or
Washington or solicits our customers or employees (i) in the case of Mr.
Sznewajs, within 36 months of any termination which triggers change in control
benefits or 24 months of any other termination; and (ii) in the case of other
named executives, within 24 months of any termination which triggers change in
control benefits or 12 months of any other termination.
Retirement,
change in control, involuntary termination, and disability benefits of each
participant are fully vested immediately. Voluntary termination benefits are
presently vested as follows: Mr. Sznewajs, 100%; Mr. Giltvedt, 80%; Ms. McKeown,
80%; Mr. Robbins, 10%; and Mr. Bygland, 100%. Benefits not currently vested will
continue to vest at a rate of 10% for each additional year of completed service.
Each SERP may be amended only by mutual agreement, except that we may amend or
terminate each SERP if laws or regulations change in a way that would result in
benefits being taxable to the executive before receipt or in material financial
penalties or other materially detrimental ramifications to our company, provided
in any case vested benefits would be preserved.
Nonqualified Deferred Compensation for
2008
The
following table sets forth certain information regarding the accounts of named
executive officers under Bancorp's executives' deferred compensation plan.
|
Name
|
Executive
|
Bancorp
|
Aggregate
|
Aggregate
|
Aggregate
|
|
|
Contributions
|
Contributions in
|
Earnings in Last
|
Withdrawals/
|
Balance
|
|
|
in Last FY
|
Last FY
|
FY
|
Distributions
|
at Last FYE (1)
|
|
|
($)
|
($)
|
($)
|
($)
|
($)
|
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
|
Robert D.
|
|
$0
|
$0
|
|
$0
|
$0
|
|
$0
|
|
Sznewajs
|
|
|
|
|
|
|
|
|
|
Anders
|
|
$0
|
$0
|
|
($33,935)
|
$0
|
|
$136,287
|
|
Giltvedt
|
|
|
|
|
|
|
|
|
|
Xandra
|
|
$0
|
$0
|
|
($4,005)
|
$0
|
|
$9,713
|
|
McKeown
|
|
|
|
|
|
|
|
|
|
Hadley S.
|
|
$69,653
|
$0
|
|
($21,563)
|
$0
|
|
$48,090
|
|
Robbins
|
|
|
|
|
|
|
|
|
|
James D.
|
|
$0
|
$0
|
|
($7,177)
|
$0
|
|
$4,273
|
|
Bygland
|
|
|
|
|
|
|
|
|
-33-
|
|
(1)
|
|
Named executive
officers have deferred amounts previously reported as compensation in the
Summary Compensation Table into the executive's deferred compensation plan
as follows: Mr. Giltvedt - $136,064; Ms. McKeown - $10,783; Mr. Robbins -
$69,653; and Mr. Bygland - $8,494.
|
Our
executive officers' deferred compensation plan permits each named executive
officer (and other senior executives) to defer all or part of his or her base
salary, annual incentive bonuses, and commissions on a tax-deferred basis. We
have not and do not make contributions to the plan or pay preferential earnings
or guaranty interest to participants in the plan.
Under the
plan, an amount equal to deferrals under the plan is placed in a "rabbi" trust
that is subject to the claims of our creditors. Participants have a number of
investment options upon which to base earnings on deferred amounts, including
our stock. The return on contributions enjoyed by each participant depends on
the return on the investments that the participant selects. The following table
shows currently available investment choices and annualized returns earned by
those choices in 2008:
|
|
Performance
|
|
Plan
Investment Choice
|
(annual return for 2008)
|
|
American Century Strategic
Allocation: Conservative
|
|
-15.98%
|
|
|
American Century Strategic
Allocation: Moderate
|
|
-26.14%
|
|
|
American Funds EuroPacific
Growth Fund
|
|
-40.71%
|
|
|
American Funds Growth Fund
of America
|
|
-39.07%
|
|
|
Baron Growth
Fund
|
|
-39.18%
|
|
|
Dodge & Cox Balanced
Fund
|
|
-33.57%
|
|
|
Federated High-Income Bond
Fund, Inc. A
|
|
-25.63%
|
|
|
Federated Kaufmann
A
|
|
-42.22%
|
|
|
Federated Max-Cap Index
Instl
|
|
-37.02%
|
|
|
Federated Stock
(1)
|
|
-31.86%
|
|
|
Federated Stock & Bond
A
|
|
-22.73%
|
|
|
Federated Total Return
Bond Instl
|
|
0.65%
|
|
|
Manager's AMG Systematic
Value Fund (1)
|
|
-41.14%
|
|
|
West Coast Bancorp
Stock
|
|
-63.01%
|
|
|
|
(1)
|
|
These investment options were only available to
participants during part of 2008. Federated Stock fund was only available
as an investment option during first quarter, 2008 and returned -10.17%
during such period. Manager's AMB Systematic Value Fund was only available
as an investment option during the second through fourth quarters, 2008
and returned -35.90% during such period.
|
Contributions and earnings may be withdrawn following termination of
employment or upon the occurrence of a financial hardship approved by the plan
administrator.
-34-
Equity Compensation Plan Information
The
following table summarizes information regarding shares of Bancorp stock that
may be issued upon exercise of options, warrants and rights under Bancorp's
existing equity compensation plans and arrangements as of December 31, 2008. All
of our plans or arrangements under which equity compensation may be awarded have
been approved by shareholders. The information includes the number of shares
covered by, and the weighted average exercise price of, outstanding options,
warrants, and other rights and the number of shares remaining available for
future grants, excluding the shares to be issued upon exercise of outstanding
options, warrants, and other rights.
|
|
|
|
C. Number
of securities
|
|
|
A. Number of
|
B. Weighted-
|
remaining available for
|
|
|
securities to be
|
average
|
future issuance under
|
|
|
issued upon
|
exercise price
|
equity compensation plans
|
|
Plan
Category
|
exercise of
|
of outstanding
|
(excluding securities
|
|
|
outstanding
|
options,
|
reflected in column A)
|
|
|
options, warrants,
|
warrants, and
|
|
|
|
and
rights
|
rights
|
|
|
|
Equity
|
|
1,407,515
|
|
$16.41
|
|
175,483
|
|
compensation
plans
|
|
|
|
|
|
|
|
approved
by
|
|
|
|
|
|
|
|
shareholders
(1)
|
|
|
|
|
|
|
|
Equity
|
|
0
|
|
N/A
|
|
0
|
|
compensation
plans
|
|
|
|
|
|
|
|
not approved
by
|
|
|
|
|
|
|
|
shareholders
|
|
|
|
|
|
|
|
Total
|
|
1,407,515
|
|
$16.41
|
|
175,483
(2)
|
|
|
(1)
|
|
Future grants may be made only
under the 2002 Plan. The number of shares shown in column C as available
for future issuance includes approximately 56,000 shares available for
restricted stock grants. This amount corrects the number of shares shown
as available in the Company's 2008 Form 10-K.
|
Potential Payments Upon Termination or
Change in Control
The
following five tables set forth certain information concerning payments and
other benefits that would have been payable to our named executive officers in
the event of a termination of employment on December 31, 2008, under various
circumstances described in the tables. The tables assume no changes in benefits
or vesting are made by our Board. None of our officers other than Mr. Sznewajs
is entitled to severance payments solely as a result of a termination of
employment. Mr. Sznewajs may be entitled to severance under the terms of his
employment agreement. All of our named executive officers have entered into a
change in control agreement (a "CIC agreement") with us that provides severance
benefits if his or her employment is terminated by us without cause or by the
executive for good reason (which includes changes in job responsibilities)
within a certain period after a change in control of our company (referred to as
a "CIC" in the following tables). We have not entered into any agreements or
plans that provide benefits to our named executive officers solely as a result
of a change in control. Except as noted in the footnotes to the tables, all
amounts are payable by Bancorp.
-35-
Robert D. Sznewajs, President and
Chief Executive Officer
|
|
Voluntary Terminations
|
Involuntary
Terminations
|
Death
|
Disability
|
|
|
|
(Other Than
Death and Disability)
|
|
|
|
|
For Good
|
For Good
|
Any Other
|
Without
|
Without
|
Any Other
|
|
|
|
|
Reason
|
Reason With
|
Voluntary
|
Cause and
|
Cause and
|
Involuntary
|
|
|
|
|
Without
CIC
|
CIC
|
Termination
|
Without
CIC
|
With CIC
|
Terminations
|
|
|
|
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
|
Cash
|
|
|
|
|
|
|
|
|
|
Severance
(1)
|
$720,000
|
$1,080,000
|
$0
|
$720,000
|
$1,080,000
|
$0
|
$0
|
$0
|
|
Restricted
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
|
|
|
|
|
|
|
Vesting
(2)
|
294,237
|
294,237
|
294,237
|
294,237
|
294,237
|
294,237
|
294,237
|
294,237
|
|
Stock
Option
|
|
|
|
|
|
|
|
|
|
Vesting
(2)
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|
SERP
Benefits
|
|
|
|
|
|
|
|
|
|
(3)
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|
Health
|
|
|
|
|
|
|
|
|
|
Benefits
(4)
|
11,636
|
17,454
|
0
|
11,636
|
17,454
|
0
|
0
|
0
|
|
Life
Insurance
|
|
|
|
|
|
|
|
|
|
Proceeds
(5)
|
0
|
0
|
0
|
0
|
0
|
0
|
900,000
|
0
|
|
Outplacement
|
|
|
|
|
|
|
|
|
|
(6)
|
0
|
10,000
|
0
|
0
|
10,000
|
0
|
0
|
0
|
|
Tax
Gross-
|
|
|
|
|
|
|
|
|
|
up (Est.)
(7)
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|
Total
|
$1,025,873
|
$1,401,691
|
$0
|
$1,025,873
|
$1,401,691
|
$0
|
$1,194,237
|
$294,237
|
|
|
(1)
|
|
Dollar amounts in columns (a) and
(d) are comprised of amounts that would be due to Mr. Sznewajs under his
employment agreement, under which, in the event he terminates his
employment with us for "good reason" or we terminate his employment
without "cause," each as described in his employment agreement and
summarized in the discussion that follows these tables, he is entitled to
receive a lump sum payment equal to the sum of:
|
|
|
|
|
|
|
|
|
|
-
Base salary for his remaining contract term (through
December 31, 2010);
-
Annualized bonus for the year termination occurs (in
this case 2008);
-
The average of the annualized bonus for the year
termination occurs (in this case 2008) and the actual bonus paid for the
year before termination occurs (in this case 2007) times the number of
years remaining on the contract after termination occurs in this case,
two); and
-
His deemed matching and profit sharing contributions
under our 401(k) plan.
|
|
|
|
|
|
|
|
|
|
All payments must be made within six
months of termination. Mr. Sznewajs has no obligation to mitigate or
offset amounts we pay him if he takes another position following
termination.
|
|
|
|
|
|
|
|
|
|
Dollar amounts in
columns (b) and (e) represent amounts that would be due to Mr. Sznewajs
under his CIC agreement, under which, if he terminates his employment for
"good reason," or if we or our successor terminate his employment other
than for "cause," "disability," or death within three years of a change in
control (or prior to a change of control but on or after the date a
transaction is announced or should have been announced under applicable
law), he is entitled to a lump sum payment equal to the sum of:
|
|
|
|
|
|
|
|
|
|
-
Three times his adjusted salary and average bonus;
and
-
Three times his deemed matching contribution under our
401(k) plan.
|
|
|
|
|
|
|
|
|
|
Cash payments due under Mr.
Sznewajs's CIC agreement must be paid the first day of the seventh month
following the date of a termination event, unless applicable regulations
permit earlier payments, in which case payment must be made within 30 days
of the date of termination.
|
-36-
|
|
(2)
|
|
All dollar amounts
represent the value of the vesting in full of shares of restricted stock
that were not vested as of December 31, 2008, calculated by multiplying
the number of shares that would vest by the closing price of our stock on
December 31, 2008, $6.59 per share (the "Year-End Price"). Mr. Sznewajs is
entitled to vesting of all restricted stock and options with respect to
various termination events described in the column headings as follows:
(i) columns (a) and (d), under the terms of his employment agreement, (ii)
columns (b) and (e), under the terms of his CIC agreement and the 2002
Plan, (iii) columns (c) and (f), under the terms of the 2002 Plan and
related award agreements that provide for full vesting upon retirement,
unless terminated for cause, and (iv) columns (g) and (h), under the terms
of both the 2002 Plan and his employment agreement. No increase in
incremental value is shown relating to the vesting of options because all
of his unvested options have an exercise price above the Year-End
Price.
|
|
|
|
|
|
|
|
|
(3)
|
|
Mr. Sznewajs is fully
vested in his SERP benefits; accordingly, he receives no incremental
benefits under his SERP upon the occurrence of any of the described
events, other than death or disability.
|
|
|
|
|
|
(4)
|
|
Dollar amounts in
columns (a) and (d) represent total COBRA payments for 12 months that we
would be obligated to pay under Mr. Sznewajs's employment agreement,
provided that our obligation to make these payments terminates if he
qualifies for group health coverage from a subsequent employer. Dollar
amounts in columns (b) and (e) represent total COBRA payments for 18
months that we would be obligated to pay under Mr. Sznewajs's CIC
agreement, except that our obligation to make these payments will not
exceed the maximum period for which COBRA coverage is provided by
law.
|
|
|
|
|
|
(5)
|
|
The dollar amount in
column (h) represents amounts that would be due to Mr. Sznewajs's heirs
under our bank-owned life insurance program ($300,000) that provides a
benefit to certain executives and our group term life insurance program
($600,000) that provides a benefit for employees generally equal to two
times salary as of the date of death, subject to a cap of $600,000. Such
amounts would be paid by insurance companies rather than by us. Figures do
not include amounts payable under an accidental death and dismemberment
policy ($600,000) that reflect a benefit available to employees generally
equal to two times salary as of the date of accidental death, but also
subject to a cap of $600,000.
|
|
|
|
|
|
(6)
|
|
Represents amounts
available for outplacement services under his CIC agreement.
|
|
|
|
|
|
(7)
|
|
If severance benefits
due to Mr. Sznewajs under his CIC agreement subject him to the federal
excise tax imposed on benefits that constitute excess parachute payments
under the Internal Revenue Code (the "Code"), he is entitled to be
reimbursed for taxes on an after-tax basis. Mr. Sznewajs's severance
benefits as of December 31, 2008, would not trigger an excise tax under
the Code, so no gross-up payment is shown in this
illustration.
|
-37-
Anders Giltvedt, Executive Vice
President and Chief Financial Officer
|
|
Voluntary
Terminations
|
Involuntary
Terminations
|
Death
|
Disability
|
|
|
|
|
|
(Other Than
Death and Disability)
|
|
|
|
|
For Good
|
For Good
|
Any Other
|
Without
|
Without
|
Any Other
|
|
|
|
|
Reason Without
|
Reason With
|
Voluntary
|
Cause
|
Cause and
|
Involuntary
|
|
|
|
|
CIC
|
CIC
|
Termination
|
and
|
With CIC
|
Terminations
|
|
|
|
|
|
|
|
Without
|
|
|
|
|
|
|
|
|
|
CIC
|
|
|
|
|
|
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
|
|
|
|
|
|
|
|
Severance
(1)
|
$0
|
$505,000
|
$0
|
$0
|
$505,000
|
$0
|
$0
|
$0
|
|
Restricted
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
|
|
|
|
|
|
|
Vesting
(2)
|
0
|
117,374
|
0
|
0
|
117,374
|
0
|
117,374
|
117,374
|
|
Stock
Option
|
|
|
|
|
|
|
|
|
|
Vesting
(2)
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|
SERP
|
|
|
|
|
|
|
|
|
|
Benefits
(3)
|
0
|
187,083
|
0
|
0
|
187,083
|
0
|
894,254
|
39,146
|
|
Health
|
|
|
|
|
|
|
|
|
|
Benefits
(4)
|
0
|
23,641
|
0
|
0
|
23,641
|
0
|
0
|
0
|
|
Life
|
|
|
|
|
|
|
|
|
|
Insurance
|
|
|
|
|
|
|
|
|
|
Proceeds
(5)
|
0
|
0
|
0
|
0
|
0
|
0
|
600,000
|
0
|
|
Outplacement
|
|
|
|
|
|
|
|
|
|
(6)
|
0
|
5,000
|
0
|
0
|
5,000
|
0
|
0
|
0
|
|
Tax
Gross-
|
|
|
|
|
|
|
|
|
|
up (Est.)
(7)
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|
Total
|
$0
|
$838,098
|
$0
|
$0
|
$838,098
|
$0
|
$1,611,628
|
$156,520
|
|
|
(1)
|
|
Dollar amounts in columns (b) and
(e) represent amounts that would be due to Mr. Giltvedt under his CIC
agreement, under which, if he terminates his employment for "good reason,"
or if we or our successor terminate his employment other than for "cause,"
"disability," or death within two years of a change in control (or prior
to a change of control but on or after the date a transaction is announced
or should have been announced under applicable law), he is entitled to a
lump sum payment equal to the sum of:
|
|
|
|
|
-
Two times his adjusted salary and average bonus;
and
-
Two times his deemed matching contribution under our
401(k) plan.
For purposes of calculating Mr. Giltvedt's severance
payment under his CIC agreement, we have used the average of bonuses paid
to him in 2007 and 2008 for services to our company in 2006 and 2007. Cash
payments due under Mr. Giltvedt 's CIC agreement must be paid within 30
days of the date of a termination event.
|
|
|
|
|
|
(2)
|
|
All dollar amounts
represent the value of the vesting in full of restricted stock that was
not vested as of December 31, 2008, calculated by multiplying the number
of shares that would vest by the Year-End Price. Mr. Giltvedt is entitled
to vesting of all restricted stock and options, (i) with respect to
termination events described in columns (b) and (e), under the terms of
his CIC agreement and the 2002 Plan and (ii) with respect to termination
events described in columns (g) and (h), under the terms of the 2002 Plan.
No increase in incremental value is shown relating to the vesting of
options because all of his unvested options have an exercise price above
the Year-End Price.
|
|
|
|
|
|
(3)
|
|
Represents the
incremental value of benefits that would become due to Mr. Giltvedt under
his SERP upon certain termination events described in the
table.
|
|
|
|
|
|
(4)
|
|
Dollar amounts in
columns (b) and (e) represent total COBRA payments for 18 months that
would be due to Mr. Giltvedt under his CIC agreement, except that our
obligation to make these payments will end at the maximum period for which
COBRA coverage is provided by
law.
|
-38-
|
|
(5)
|
|
The dollar amount in column (h)
represents amounts due to Mr. Giltvedt's heirs under our bank-owned life
insurance program ($200,000) that provides a benefit to certain executives
and our group term life insurance program ($400,000) that provides a
benefit for employees generally equal to two times salary as of the date
of death. Such amounts would be paid by insurance companies rather than by
us. Figures do not include amounts payable under an accidental death and
dismemberment policy ($400,000) that reflect a benefit available to
employees generally equal to two times salary as of the date of accidental
death.
|
|
|
|
|
|
(6)
|
|
Represents the amount available
to cover outplacement services under his CIC agreement.
|
|
|
|
|
|
(7)
|
|
If severance benefits due to Mr.
Giltvedt under his CIC agreement subject him to the federal excise tax
imposed on benefits that constitute excess parachute payments under the
Code, he is also entitled to be reimbursed for taxes on an after-tax
basis. Mr. Giltvedt's severance benefits as of December 31, 2008, would
not trigger an excise tax under the Code, so no gross-up payment is shown
in this illustration.
|
-39-
Xandra McKeown, Executive Vice
President of Commercial Banking.
|
|
Voluntary
Terminations
|
Involuntary
Terminations
|
Death
|
Disability
|
|
|
|
|
|
(Other Than
Death and Disability)
|
|
|
|
|
For Good
|
For Good
|
Any Other
|
Without
|
Without
|
Any Other
|
|
|
|
|
Reason Without
|
Reason With
|
Voluntary
|
Cause
|
Cause and
|
Involuntary
|
|
|
|
|
CIC
|
CIC
|
Termination
|
and
|
With CIC
|
Terminations
|
|
|
|
|
|
|
|
Without
|
|
|
|
|
|
|
|
|
|
CIC
|
|
|
|
|
|
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
|
Cash
|
|
|
|
|
|
|
|
|
|
Severance
(1)
|
$0
|
$490,000
|
$0
|
$0
|
$490,000
|
$0
|
$0
|
$0
|
|
Restricted
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
|
|
|
|
|
|
|
Vesting
(2)
|
0
|
74,876
|
0
|
0
|
74,876
|
0
|
74,876
|
74,876
|
|
Stock Option
|
|
|
|
|
|
|
|
|
|
Vesting
(2)
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|
SERP
|
|
|
|
|
|
|
|
|
|
Benefits
(3)
|
0
|
200,578
|
0
|
0
|
200,578
|
0
|
819,448
|
42,767
|
|
Health
|
|
|
|
|
|
|
|
|
|
Benefits
(4)
|
0
|
14,720
|
0
|
0
|
14,720
|
0
|
0
|
0
|
|
Life
|
|
|
|
|
|
|
|
|
|
Insurance
|
|
|
|
|
|
|
|
|
|
Proceeds
(5)
|
0
|
0
|
0
|
0
|
0
|
0
|
600,000
|
0
|
|
Outplacement
|
|
|
|
|
|
|
|
|
|
(6)
|
0
|
5,000
|
0
|
0
|
5,000
|
0
|
0
|
0
|
|
Tax Gross-
|
|
|
|
|
|
|
|
|
|
up (Est.)
(7)
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|
Total
|
$0
|
$785,174
|
$0
|
$0
|
$785,174
|
$0
|
$1,494,324
|
$117,643
|
|
(1)
|
|
Dollar amounts in
columns (b) and (e) represent amounts that would be due to Ms. McKeown
under her CIC agreement with us, under which, if she terminates her
employment with no for "good reason," or if we or our successor terminate
her employment other than for "cause," "disability," or death within two
years of a change in control (or prior to a change of control but on or
after the date a transaction is announced or should have been announced
under applicable law), she is entitled to a lump sum payment equal to the
sum of:
|
|
|
|
|
|
-
Two times her adjusted salary and average
bonus; and
-
Two times her deemed matching contribution
under our 401(k) plan.
For purposes of calculating Ms. McKeown's severance
payment under her CIC agreement, we have used the average of bonuses paid
to her in 2007 and 2008 for services to our company in 2006 and 2007. Cash
payments due under Ms. McKeown's CIC agreement must be paid within 30 days
of a termination event.
|
|
|
|
(2)
|
|
All dollar amounts
represent the value of the vesting in full of restricted stock and stock
options that were not vested as of December 31, 2008, calculated by
multiplying the number of shares that would vest by the Year-End Price.
Ms. McKeown is entitled to vesting of all restricted stock and options,
(i) with respect to termination events described in columns (b) and (e),
under the terms of her CIC agreement and the 2002 Plan and (ii) with
respect to termination events described in columns (g) and (h), under the
terms of the 2002 Plan. No increase in incremental value is shown relating
to the vesting of options because all of her unvested options have an
exercise price above the Year-End Price.
|
|
|
|
(3)
|
|
Represents the
incremental value of benefits that would become due to Ms. McKeown under
her SERP upon certain termination events described in the
table.
|
|
|
|
(4)
|
|
Dollar amounts in
columns (b) and (e) represent total COBRA payments for 18 months that
would be due to Ms. McKeown under her CIC agreement, except that our
obligation to make these payments will end at the maximum period for which
COBRA coverage is provided by
law.
|
-40-
|
(5)
|
|
The dollar amount in
column (h) represents amounts due to Ms. McKeown's heirs under our bank-owned life insurance program ($200,000) that provides a benefit to certain
executives and our group term life insurance program ($400,000) that
provides a benefit for employees generally equal to two times salary as of
the date of death. Such amounts would be paid by insurance companies
rather than by us. Figures do not include amounts payable under an
accidental death and dismemberment policy ($400,000) that reflect a
benefit available to employees generally equal to two times salary as of
the date of accidental death.
|
|
|
|
(6)
|
|
Represents the amount
available to cover outplacement services under her CIC
agreement.
|
|
|
|
(7)
|
|
If severance benefits
due to Ms. McKeown under her CIC agreement subject her to the federal
excise tax imposed on benefits that constitute excess parachute payments
under the Code, she is also entitled to be reimbursed for taxes on an
after-tax basis. Ms. McKeown's severance benefits as of December 31, 2008,
would not trigger an excise tax under the Code, so no gross-up payment is
shown in this illustration.
|
|
|
-41-
Hadley S. Robbins, Executive Vice
President and Chief Credit Officer
|
|
Voluntary
Terminations
|
Involuntary
Terminations
|
Death
|
Disability
|
|
|
|
|
|
(Other Than
Death and Disability)
|
|
|
|
|
For Good Reason
|
For Good
|
Any Other
|
Without
|
Without
|
Any Other
|
|
|
|
|
Without CIC
|
Reason
|
Voluntary
|
Cause
|
Cause and
|
Involuntary
|
|
|
|
|
|
With CIC
|
Termination
|
and
|
With CIC
|
Terminations
|
|
|
|
|
|
|
|
Without
|
|
|
|
|
|
|
|
|
|
CIC
|
|
|
|
|
|
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
|
Cash
|
|
|
|
|
|
|
|
|
|
Severance
(1)
|
$0
|
$475,000
|
$0
|
$0
|
$475,000
|
$0
|
$0
|
$0
|
|
Restricted
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
|
|
|
|
|
|
|
Vesting
(2)
|
0
|
71,455
|
0
|
0
|
71,455
|
0
|
71,455
|
71,455
|
|
Stock Option
|
|
|
|
|
|
|
|
|
|
Vesting
(2)
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|
SERP
|
|
|
|
|
|
|
|
|
|
Benefits
(3)
|
0
|
325,970
|
0
|
0
|
325,970
|
0
|
951,835
|
88,461
|
|
Health
|
|
|
|
|
|
|
|
|
|
Benefits
(4)
|
0
|
8,482
|
0
|
0
|
8,482
|
0
|
0
|
0
|
|
Life
|
|
|
|
|
|
|
|
|
|
Insurance
|
|
|
|
|
|
|
|
|
|
Proceeds
(5)
|
0
|
0
|
0
|
0
|
0
|
0
|
600,000
|
0
|
|
Outplacement
|
|
|
|
|
|
|
|
|
|
(6)
|
0
|
5,000
|
0
|
0
|
5,000
|
0
|
0
|
0
|
|
Tax Gross-
|
|
|
|
|
|
|
|
|
|
up (Est.)
(7)
|
0
|
382,149
|
0
|
0
|
382,149
|
0
|
0
|
0
|
|
Total
|
$0
|
$1,268,056
|
$0
|
$0
|
$1,268,056
|
$0
|
$1,623,290
|
$159,916
|
|
(1)
|
|
Dollar amounts in
columns (b) and (e) represent amounts that would be due to Mr. Robbins
under his CIC agreement with us, under which, if he terminates his
employment for "good reason," or if we or our successor terminate his
employment other than for "cause," "disability," or death within two years
of a change in control (or prior to a change of control but on or after
the date a transaction is announced or should have been announced under
applicable law), he is entitled to a lump sum payment equal to the sum
of:
|
|
|
|
|
|
-
Two times his adjusted salary and average
bonus; and
-
Two times his deemed matching contribution
under our 401(k) plan.
For purposes of
calculating Mr. Robbins's severance payment under his CIC agreement, we
have used the bonus paid to him in 2008 for services to our company in
2007 and not averaged it with any prior bonus since Mr. Robbins is a new
employee. This result may not be required legally, but we are presenting
it here to show benefits payable to Mr. Robbins had he received two annual
bonuses of an equal amount. Cash payments due under Mr. Robbins's CIC
agreement must be paid within 30 days of a termination event.
|
|
|
|
(2)
|
|
All dollar amounts
represent the value of the vesting in full of restricted stock that were
not vested as of December 31, 2008, calculated by multiplying the number
of shares that would vest by the Year-End Price. Mr. Robbins is entitled
to vesting of all restricted stock and options, (i) with respect to
termination events described in columns (b) and (e), under the terms of
his CIC agreement and the 2002 Plan, and (ii) with respect to termination
events described in columns (g) and (h), under the terms of the 2002 Plan.
No increase in incremental value is shown relating to the vesting of
options because all of his unvested options have an exercise price above
the Year-End Price.
|
|
|
|
(3)
|
|
Represents the
incremental value of benefits that would become due to Mr. Robbins under
his SERP upon certain termination events described in the
table.
|
|
|
-42-
|
(4)
|
|
Dollar amounts in
columns (b) and (e) represent total COBRA payments for 18 months that
would be due to Mr. Robbins under his CIC agreement, except that our
obligation to make these payments will end at the maximum period for which
COBRA coverage is provided by law.
|
|
|
|
(5)
|
|
The dollar amount in
column (h) represents amounts due to Mr. Robbins's heirs under our bank-owned life insurance program ($200,000) that provides a benefit to certain
executives and our group term life insurance program ($400,000) that
provides a benefit for employees generally equal to two times salary as of
the date of death. Such amounts would be paid by insurance companies
rather than by us. Figures do not include amounts payable under an
accidental death and dismemberment policy ($400,000) that reflect a
benefit available to employees generally equal to two times salary as of
the date of accidental death.
|
|
|
|
(6)
|
|
Represents the amount
available to cover outplacement services under his CIC
agreement.
|
|
|
|
(7)
|
|
If severance benefits
due to Mr. Robbins subject him to the federal excise tax imposed on
benefits that constitute excess parachute payments under the Code, he is
also entitled to be reimbursed for taxes on an after-tax basis. Amount
shown represents the estimated gross-up payment that would be due to Mr.
Robbins under the terms of his CIC agreement to cover excise taxes arising
out of severance benefits shown in the table.
|
|
|
-43-
James D. Bygland, Executive Vice
President and Chief Information Officer
|
|
Voluntary
Terminations
|
Involuntary
Terminations
|
Death
|
Disability
|
|
|
|
|
|
(Other Than
Death and Disability)
|
|
|
|
|
For Good Reason
|
For Good
|
Any Other
|
Without
|
Without
|
Any Other
|
|
|
|
|
Without CIC
|
Reason
|
Voluntary
|
Cause
|
Cause
|
Involuntary
|
|
|
|
|
|
With CIC
|
Termination
|
and
|
and
|
Terminations
|
|
|
|
|
|
|
|
Without
|
With
|
|
|
|
|
|
|
|
|
CIC
|
CIC
|
|
|
|
|
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
|
Cash
|
|
|
|
|
|
|
|
|
|
Severance
(1)
|
$
0
|
$345,000
|
$0
|
$0
|
$345,000
|
$0
|
$0
|
$0
|
|
Restricted
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
|
|
|
|
|
|
|
Vesting
(2)
|
0
|
33,774
|
0
|
0
|
33,774
|
0
|
33,774
|
33,774
|
|
Stock Option
|
|
|
|
|
|
|
|
|
|
Vesting
(2)
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|
SERP
|
|
|
|
|
|
|
|
|
|
Benefits
(3)
|
0
|
107,706
|
0
|
0
|
107,706
|
0
|
736,661
|
0
|
|
Health
|
|
|
|
|
|
|
|
|
|
Benefits
(4)
|
0
|
23,930
|
0
|
0
|
23,930
|
0
|
0
|
0
|
|
Life
|
|
|
|
|
|
|
|
|
|
Insurance
|
|
|
|
|
|
|
|
|
|
Proceeds
(5)
|
0
|
0
|
0
|
0
|
0
|
0
|
500,000
|
0
|
|
Outplacement
|
|
|
|
|
|
|
|
|
|
(6)
|
0
|
5,000
|
0
|
0
|
5,000
|
0
|
0
|
0
|
|
Tax Gross-
|
|
|
|
|
|
|
|
|
|
up (Est.)
(7))
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|
Total
|
$
0
|
$515,410
|
$0
|
$0
|
$515,410
|
$0
|
$1,270,435
|
$33,774
|
|
(1)
|
|
Dollar amounts in
columns (b) and (e) represent amounts that would be due to Mr. Bygland
under his CIC agreement with us, under which, if he terminates his
employment for "good reason," or if we or our successor terminate his
employment other than for "cause," "disability," or death within two years
of a change in control (or prior to a change of control but on or after
the date a transaction is announced or should have been announced under
applicable law), he is entitled to a lump sum payment equal to the sum
of:
|
|
|
|
|
|
-
Two times his adjusted salary and average
bonus; and
-
Two times his deemed matching contribution
under our 401(k) plan.
For purposes of calculating Mr. Bygland's severance
payment under his CIC agreement, we have used the average of bonuses paid
to him in 2007 and 2008 for services to our company in 2006 and 2007. Cash
payments due under Mr. Bygland 's CIC agreement must be paid within 30
days of a termination event.
|
|
|
|
(2)
|
|
All dollar amounts
represent the value of the vesting in full of restricted stock that were
not vested as of December 31, 2008, calculated by multiplying the number
of shares that would vest by the Year-End Price. Mr. Bygland is entitled
to vesting of all restricted stock and options, (i) with respect to
termination events described in columns (b) and (e), under the terms of
his CIC agreement and the 2002 Plan and (ii) with respect to termination
events described in columns (g) and (h), under the terms of the 2002 Plan.
No increase in incremental value is shown relating to the vesting of
options because all of his unvested options have an exercise price above
the Year-End Price.
|
|
|
|
(3)
|
|
Mr. Bygland is fully
vested in his SERP benefits; accordingly, he receives no incremental
benefits under his SERP upon the occurrence of any of the described
events, other than death.
|
|
|
|
(4)
|
|
Dollar amounts in
columns (b) and (e) represent total COBRA payments for 18 months that
would be due to Mr. Bygland under his CIC agreement, except that our
obligation to make these payments will end at the maximum period for which
COBRA coverage is provided by law.
|
|
|
-44-
|
(5)
|
|
The dollar amount in
column (h) represents amounts due to Mr. Bygland's heirs under our bank-owned life insurance program ($200,000) that provides a benefit to certain
executives and our group term life insurance program ($300,000) that
provides a benefit for employees generally equal to two times salary as of
the date of death. Such amounts would be paid by insurance companies
rather than by us. Figures do not include amounts payable under an
accidental death and dismemberment policy ($300,000) that reflect a
benefit available to employees generally equal to two times salary as of
the date of accidental death.
|
|
|
|
(6)
|
|
Represents the amount
available to cover outplacement services under his CIC
agreement.
|
|
|
|
(7)
|
|
If severance benefits
due to Mr. Bygland subject him to the federal excise tax imposed on
benefits that constitute excess parachute payments under the Code, he is
also entitled to be reimbursed for taxes on an after-tax basis. Mr.
Bygland's severance benefits as of December 31, 2008, would not trigger an
excise tax under the Code, so no gross-up payment is shown in this
illustration.
|
The
discussion below should be read in conjunction with the preceding tables
illustrating payments that would be paid to our named executive officers in the
event of a hypothetical termination on December 31, 2008. Significant provisions
of our agreements with our named executive officers are discussed below,
including definitions relating to employment termination that determine whether
our executives will be entitled to severance benefits. Because our CIC
agreements with our named executive officers require termination of employment
in addition to a change in control, no executive will be entitled to severance
payments due to a change in control alone.
Agreement Terms Affecting Payments Due Upon A Termination of Employment
Following a Change in Control.
We have
entered into CIC agreements with each of our named executive officers effective
as of January 1, 2004, as amended, except in the case of Mr. Robbins whose
agreement was entered into effective March 5, 2007. Each CIC agreement has a
one-year term but provides for automatic extension for an additional year on
each anniversary of the agreement, unless on or prior to September 30 of each
year either we or the executive gives written notice terminating the agreement.
If a "change in control" occurs, each agreement provides for an automatic
extension of its term—to three years for Mr. Sznewajs and two years for each
other executive.
Each of our
executives is entitled to severance benefits if he or she terminates his or her
employment for "good reason," or if we terminate his or her employment other
than for "cause," "disability," or death within a given period following a
change in control – three years for Mr. Sznewajs and two years for all other
executives. Severance benefits will also be payable if an executive is
terminated other than for cause, disability or death prior to a change of
control and such termination occurs on or after the date a transaction is
announced or should have been announced under applicable securities or other
laws. "Good reason" and "cause" in each CIC agreement are defined in
substantially the same manner in which those terms are defined in Mr. Sznewajs's
employment agreement, as described under the subheading "Agreement Terms
Affecting Payments Due to Mr. Sznewajs Following Employment Termination" below.
A "change in control" will be deemed
to occur if:
-
a person acquires 30 percent or more of our
outstanding common stock, other than from us or in certain exempt
transactions;
-
directors in office at the time of each CIC
agreement, including individuals elected as directors thereafter based on a
nomination by our Board, cease for any reason to constitute a majority of the
Board;
-45-
-
we complete a
merger, reorganization, or consolidation or sale of all or substantially all
of our assets, unless (A) our shareholders prior to such transaction continue
to own 50 percent or more of the common stock and 50 percent or more of the
voting power of outstanding securities of the resulting entity, (B) no person
has acquired 30 percent or more of our common stock or the combined voting
power of its outstanding securities, and (C) a majority of our Board continues
in office; or
-
shareholders
approve a liquidation.
In the event
an executive's severance benefits under his or her CIC agreement are triggered,
he or she will be entitled to severance benefits, including payments, as
illustrated in the preceding table for each of our executives.
If any
payments under a CIC agreement are determined to be subject to the federal
excise tax imposed on benefits that constitute excess parachute payments under
the Internal Revenue Code, the executive will be entitled to reimbursement for
such taxes on an after-tax basis, again as illustrated in the preceding tables.
Under certain circumstances, we may also be unable to deduct the resulting
compensation expense for federal income tax purposes.
Under each
CIC agreement, the executive has agreed that he or she will assist us in
evaluating any proposal for a change in control and not resign his or her
position until the contemplated transaction is completed or abandoned. In
addition, for a period after the change in control, if we want the executive to
continue employment in a position or under circumstances that qualify as "good
reason," the executive will be obligated to do so, provided such continued
employment is for not longer than 90 days, in a reasonably comparable position,
and occurs at the then current place of employment or at such other location as
is agreeable to the executive. The executive will be entitled to severance
benefits upon commencement of a continued employment period.
Agreement Terms Affecting Payments Due to Mr. Sznewajs Following
Employment Termination.
We have entered
into an employment agreement with Mr. Sznewajs that was effective beginning
January 1, 2008, and continues for a three-year term, expiring on December 31,
2010. Mr. Sznewajs' employment agreement provides for severance benefits under
certain circumstances as described in footnotes one and two to his table of
benefits above. Whether or not Mr. Sznewajs receives benefits depends on the
nature of the termination of his employment agreement.
Mr. Sznewajs
will receive severance benefits unless he quits or is terminated for "cause." We
may terminate Mr. Sznewajs for cause only if (x) two-thirds of the members of
the Board determine that cause exists based on substantial evidence, (y) Mr.
Sznewajs is given reasonable notice of the board meeting called to make that
determination, and (z) Mr. Sznewajs and his legal counsel are given an
opportunity to address the board meeting. We may terminate Mr. Sznewajs for
"cause" if:
-
He engages in
dishonest or fraudulent conduct involving the Company;
-
He materially breaches the confidentiality
provisions of his agreement;
-
He is convicted on any felony charge or on a
misdemeanor reflecting upon honesty;
-
His acts or failures to act materially injure the
Company's reputation, business affairs, or financial condition if injury could
have been reasonably avoided by Mr. Sznewajs; or
-
He fails or refusals to substantially perform his
duties and does not cure such failure or refusal within a reasonable period
following written notice.
-46-
Mr. Sznewajs will also be entitled to
severance benefits if he terminates his employment for what is called "good
reason" under his agreement. He may terminate his employment for "good reason"
if:
-
His salary is
reduced or any compensation or benefit plan benefiting Mr. Sznewajs is reduced
or eliminated in a manner that does not apply generally to all similarly
situated employees;
-
His responsibilities or duties are
diminished;
-
He is relocated to a location more than 35 miles
from our Lake Oswego office; or
-
We materially breach Mr. Sznewajs's employment
agreement and fail to cure the breach within a reasonable period following
written notice by Mr. Sznewajs.
Report of the Compensation Committee
The
Compensation & Personnel Committee ("Compensation Committee") discharges the
responsibilities assigned to it by the Board of Directors with respect to
compensation and personnel matters, including those relating to Bancorp's
executive officers.
In discharging its responsibilities,
the Compensation Committee:
-
Reviewed and
discussed with management the Compensation Discussion and Analysis included in
this proxy statement; and
-
Based on the review and discussions, the
Compensation Committee recommended to the Board of Directors that the
Compensation Discussion and Analysis be included in the proxy statement and
furnished in the Company's annual report on Form 10-K for the year ended
December 31, 2008, through its incorporation by reference from the proxy
statement.
Compensation Committee Members
David Truitt (Chair), Lloyd D.
Ankeny, Michael J. Bragg, Duane McDougall, Steven J. Oliva
-47-
TRANSACTIONS WITH RELATED PERSONS
Various of
our directors and officers, members of their immediate families, and firms in
which they have or had an interest, were customers of and had transactions with
our subsidiaries during 2008 in the ordinary course of business. Similar
transactions may be expected to take place in the ordinary course of business in
the future. All outstanding loans and commitments included in such transactions
were made on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable transactions with
other persons and did not, in the opinion of management, involve more than the
normal risk of collectability or present other unfavorable features. These
transactions are not required to be disclosed under applicable SEC requirements
for disclosure of transactions with related persons.
Bancorp has
adopted written policies and procedures for the review, approval and
ratification of transactions with related persons. Related persons include our
directors and named executive officers. The policies require that all
transactions with related persons that are required to be publicly disclosed
under Item 404 of Regulation S-K of the Securities and Exchange Commission
("SEC") be either approved or ratified by a designated Board committee.
The policies
require that all material facts of all transactions that require approval be
reviewed and either approved or disapproved:
-
Loan
Committee Approval
. With respect to
loans and other extensions of credit, by the Loan Committee, with any members
of the committee who are not independent abstaining from discussion and
voting;
-
Governance Committee Approval.
With respect to other transactions by
the Governance Committee; and
In
determining whether to approve or ratify a transaction, the appropriate Board
committee will take into account, among other factors determined to be
appropriate, whether the transaction is on terms no less favorable than terms
generally available to an unaffiliated third-person under the same or similar
circumstances and the extent of the related person's interest in the
transaction. If advance approval of a transaction is not feasible, the
transaction is considered and, if determined to be appropriate, ratified by the
committee as soon as practical after its occurrence.
No director
may participate in any discussion or approval of a transaction for which he or
she is involved, except that the director is required to provide all material
information concerning the transaction to the committee. If a transaction will
be ongoing, the appropriate committee responsible for approval of the
transaction may establish guidelines for our management to follow in its ongoing
dealings with the related person. The policy does not require pre-approval or
ratification of any transaction with another entity in which the related
person's only relationship is as an employee (other than an executive officer)
of the entity.
We will
provide a complete written copy of the policy upon written request addressed to
the Corporate Secretary at 5335 Meadows Road, Suite 201, Lake Oswego, Oregon
97035.
INFORMATION CONCERNING DIRECTOR
NOMINATIONS
Director
Qualifications.
Qualifications required of
individuals for consideration as a board member will vary according to the
particular areas of expertise being sought as a complement to our existing board
composition at the time. Minimum qualifications do, however, include experience
at a high level in business, government, or education, demonstrated leadership
abilities, generalized or specific knowledge or other skills or qualities of
particular value to the Board in fulfilling its responsibilities, and
outstanding personal attributes such as unquestioned integrity, sound business
-48-
judgment, and significant business,
community or political contacts. In addition, a board candidate must have time
and willingness to commit to being a productive and active member of the Board
and committees of the Board on which he or she will serve. Our bylaws provide
that persons who have reached the age of 72 may not stand for election. Finally,
because persons nominated to stand for election as one of our directors will
usually also be nominated to serve as a director of the Bank, such persons must
be acceptable to our banking regulators. In general, we seek a board that
includes a diversity of perspectives and a broad range of experiences and
includes individuals that possess the background, skills, expertise, and
commitment necessary to make a significant contribution to our company.
The
Governance Committee will evaluate potential nominees by reviewing their
qualifications, considering references as appropriate, conducting interviews as
needed, and considering such other information as may be deemed relevant,
including the needs of the Board at the time. The Governance Committee is
authorized by its charter to retain a third-party search firm to assist it in
identifying director candidates, but it has not done so recently.
Director
Nominees.
We receive suggestions for
potential director nominees from a variety of sources including Board members,
management representatives, advisors, and shareholders. The Governance Committee
will consider nominees recommended by security holders. Nominees for election at
the 2009 annual meeting of shareholders are all currently directors.
Shareholder Nominee Suggestion.
It is
the policy of the Governance Committee to consider shareholder recommendations
concerning nominees for director. Shareholders wishing to suggest a candidate
for nomination as a director by the Governance Committee should write to us at
our corporate offices to the attention of the Chair of the Governance &
Nominating Committee, care of the Corporate Secretary, and shall include:
-
A statement
that the writer is a shareholder and is proposing a candidate for
consideration as a director nominee;
-
Name and contact information for the
candidate;
-
A statement of the candidate's experience in
business, government, or education and his educational
background;
-
Information regarding the candidate's
qualifications, relationships with our customers, suppliers or competitors,
and any relationship or understanding between the proposing shareholder and
the candidate; and
-
A statement that the candidate is willing to be
considered and serve if nominated and elected.
Shareholders wishing to recommend a
candidate for nomination should submit a recommendation not later than 120 days
prior to the first anniversary of the date our proxy statement was released to
shareholders in connection with the previous year's annual meeting.
Shareholder-recommended candidates will be evaluated using the same criteria
used to evaluate all potential candidates for director, except that current
directors whose performance as a director has been satisfactory or better will
normally be favored over new candidates.
In addition,
our bylaws permit shareholders to directly nominate directors for consideration
at an annual meeting of shareholders. In order to submit a nominee for
consideration at an annual meeting of shareholders, a shareholder must comply
with the notice provisions contained in our bylaws. Under our bylaws, a
shareholder entitled to vote for the election of directors may nominate at a
meeting persons for election as director only if written notice of such
shareholder's intent to make a nomination is given to our Secretary, either by
personal delivery or certified mail, not later than 60 days before the date of
the annual meeting (provided that, if the date of a meeting is not publicly
announced more than 90 days in advance, such notice must be given within 15 days
after the first public disclosure of the annual meeting date).
-49-
INFORMATION CONCERNING SHAREHOLDER
PROPOSALS
Shareholder
proposals intended to be presented at the 2010 Annual Meeting of Shareholders
must be received by our Secretary before November 17, 2009, for inclusion in the
2010 Proxy Statement and form of proxy. In addition, if we receive notice of a
shareholder proposal after January 31, 2010, the persons named as proxies in
such proxy statement and form of proxy will have discretionary authority to vote
on such shareholder proposal.
Our bylaws
provide that no business may be brought before an annual meeting except by or at
the direction of the Board, as specified in our notice of the meeting, or by any
shareholder of record who delivers notice to our Secretary not less than 60 days
in advance of such meeting (unless the date of the meeting has not been publicly
announced by us more than 90 days prior to the meeting, in which case the
shareholder's notice must be given within 15 days after we publicly announce the
meeting date). To be effective, the shareholder's notice must include certain
information about the matter proposed to be considered at the meeting and the
shareholder providing the notice, as specified further in the bylaws. If the
chair of an annual meeting determines that these advance notice procedures have
not been complied with, he or she may declare that the business was not properly
brought before the meeting and will not be considered.
HOUSEHOLDING MATTERS
We are
delivering a single Notice of Internet Access, and if requested, a single copy
of our annual report and proxy statement to persons with the same last name
residing in a single household or whom we reasonably believe are members of the
same family, unless we have been notified that such persons prefer to receive
individual copies of those documents. This practice is referred to as
"householding."
If you
reside at an address that received only one copy of our Notice of Internet
Access or, if requested, our annual report and proxy statement as a result of
householding, we will deliver additional copies upon oral or written request to
West Coast Bancorp, 5335 Meadows Road, Suite 201, Lake Oswego, Oregon 97035,
Attn: Corporate Secretary, or by phone at (503) 684-0884.
If you
object to householding and wish to receive separate copies of documents in the
future, you may contact either:
1. Broadridge ("Broadridge") if your shares are held in an
account at a brokerage firm or bank, at 1-800-542-1061. Please have your proxy
card in hand in order to access your account and follow the automated
instructions. You can also contact Broadridge in writing by writing to
Broadridge, Householding Department, 51 Mercedes Way, Edgewood, NY 11717.
2. Wells Fargo Shareholder Services ("Wells"), our stock
transfer agent, if your shares are directly registered with them, at
1-877-602-7615. Please have your proxy card in hand in order to access your
account. The Company's code for use of Wells' automated system is 210.
If you received multiple copies of your
Notice of Internet Access or other documents at a single address and would like
to request delivery of a single copy in the future, please contact us or our
transfer agent as described above.
-50-
ANNUAL REPORT TO SHAREHOLDERS
Any
shareholder may obtain without charge a copy of our Annual Report on Form 10-K
filed with the Securities and Exchange Commission for the year ended December
31, 2008 including financial statements.
Written requests for the Form 10-K should be addressed to Richard R.
Rasmussen, Corporate Secretary of West Coast Bancorp, at 5335 Meadows Road,
Suite 201, Lake Oswego, Oregon 97035.
VOTING VIA THE INTERNET OR BY
TELEPHONE
You may vote
via the Internet at
www.proxyvote.com
or may vote telephonically by calling 1-800-690-6903. In
either case, have either your Notice of Internet Availability of Proxy Materials
or your proxy card in hand and follow the instructions. Votes submitted via the
Internet or by telephone must be received by 8:59 pm (PT) on April 27, 2009
(April 24, 2009 for participants in West Coast Bancorp's 401(k) Plan), to be
counted.
The
telephone and Internet voting procedures are designed to authenticate
shareholders' identities, to allow shareholders to give their voting
instructions and to confirm that shareholders' instructions have been recorded
properly. Shareholders voting via the Internet should understand that there may
be costs associated with electronic access, such as usage charges from Internet
access providers and telephone companies, that must be borne by the shareholder.
|
March 17, 2009
|
BY ORDER OF THE BOARD OF
DIRECTORS
|
|
|
|
|
|
|
|
|
Richard R.
Rasmussen
|
|
|
Executive Vice
President
|
|
|
General Counsel and Secretary
|
-51-
Appendix A
AMENDMENT NO. 4 TO
WEST COAST
BANCORP
2002 STOCK INCENTIVE
PLAN
This AMENDMENT NO. 4 (the
“Amendment”) to the WEST COAST
BANCORP 2002
STOCK INCENTIVE PLAN (the “Plan”) is adopted effective March 10, 2009, by the
Board of Directors of West Coast Bancorp, an Oregon corporation (the "Company"),
subject to approval by the Company’s shareholders at the Company's 2009 annual
meeting of shareholders.
1. Pursuant to the provisions of
Section 10 of the Plan, the Plan is amended as follows:
(a) Section 1(t) is amended to
provide as follows:
“Performance
Goals” means the performance goals established by the Committee in connection
with the grant of Restricted Stock. In the case of Qualified Performance-Based
Awards, (i) such goals shall be based on the attainment of specified levels of
one or more of the following measures: stock price, earnings, earnings per
share, return on equity, return on assets, asset quality, net interest margin,
loan portfolio growth, efficiency ratio, deposit portfolio growth, and
liquidity, and (ii) such Performance Goals shall be set by the Committee within
the time period prescribed by Section 162(m) of the Code and related
regulations.”
(b) Section 2 is amended by adding
the following after Section 2(g):
“Notwithstanding the foregoing, except in connection with a
corporate transaction involving the Company (including, without limitation, any
stock dividend, stock split, extraordinary cash dividend, recapitalization,
reorganization, merger, consolidation, split-up, spin-off, combination, or
exchange of shares), the terms of outstanding Stock Options and stock
appreciation rights and outstanding Stock Options or stock appreciation rights
may not be amended to reduce the exercise price of the Stock Options or stock
appreciations rights and outstanding Stock Options or stock appreciations rights
may not be cancelled in exchange for cash or Awards with an exercise price that
is less than the exercise price of the cancelled Stock Options or stock
appreciation rights.”
(c)
Section 3 is amended by replacing the
first two sentences with the Following three sentences:
"The maximum number of shares of Common Stock that may be
delivered to participants and their beneficiaries under the Plan shall be
2,140,000. No more than 488,000 shares may be issued as Restricted Stock or be
based upon the Common Stock pursuant to Section 8 of the
A-1
Plan. The
maximum aggregate number of shares of Common Stock that may be issued pursuant
to Incentive Stock Options is 1,800,000."
(d) Section 5(o) is amended to
provide as follows:
“(o) Dividends and Dividend Equivalents
. Dividends and dividend equivalents may not be paid or
accrued on Stock Options.”
2. Except as amended hereby, all the
terms and conditions of the Plan will remain in full force and effect.
A-2
WEST
COAST BANCORP
2002 STOCK INCENTIVE PLAN
(As adopted by the Board of Directors March 10, 2009,
subject to
shareholder approval)
SECTION 1. Purpose; Definitions
The purpose
of the Plan is to give the Company a competitive advantage in attracting,
retaining and motivating officers, employees, directors and/or consultants and
to provide the Company and its Subsidiaries and Affiliates with a stock plan
providing incentives for future performance of services directly linked to the
profitability of the Company's businesses and increases in Company shareholder
value.
For purposes of the Plan, the
following terms are defined as set forth below:
(a)
"Affiliate"
means a corporation or other
entity controlled by, controlling or under common control with the Company.
(b) "Award"
means a Stock Option, Restricted Stock, or other stock-based
award.
(c) "Board"
means the Board of Directors of the Company.
(d)
"Cause"
means, unless otherwise provided by
the Committee, (1) "Cause" as defined in any Individual Agreement to which the
participant is a party, or (2) if there is no such Individual Agreement or if it
does not define Cause: (A) conviction of the participant for committing a felony
under federal law or the law of the state in which such action occurred, (B)
willful and deliberate failure on the part of the participant to perform his or
her employment duties in any material respect, or (C) prior to a Change in
Control, such other events as shall be determined by the Committee.
(e)
"Change in Control"
and
"Change in Control Price"
have the meanings set forth in Sections 9(b) and (c), respectively.
(f)
"Code"
means the Internal Revenue Code of
1986, as amended from time to time, and any successor thereto.
(g)
"Commission"
means the Securities and
Exchange Commission or any successor agency.
(h) "Committee"
means the Committee referred to in Section 2.
(i) "Common
Stock"
means common stock, no par value per
share, of the Company.
(j) "Company"
means West Coast Bancorp, an Oregon corporation.
(k) "Covered
Employee"
means a participant designated
prior to the grant of Restricted Stock by the Committee who is
or may be a "covered employee" within the meaning of Section 162(m)(3) of the
Code in the year in which the Company is expected to be entitled to a federal
income tax deduction with respect to the Award.
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(l)
"Disability"
means, unless otherwise provided
by the Committee, (1) "Disability" as defined in any Individual Agreement to
which the participant is a party, or (2) if there is no such Individual
Agreement or it does not define "Disability," permanent and total disability as
determined under the Company's Long-Term Disability Plan applicable to the
participant.
(m)
"Eligible Individuals"
mean directors,
officers, employees and consultants of the Company or any of its Subsidiaries or
Affiliates, and prospective employees and consultants who have accepted offers
of employment or consultancy from the Company or its Subsidiaries or Affiliates,
who are or will be responsible for or contribute to the management, growth or
profitability of the business of the Company, or its Subsidiaries or
Affiliates.
(n)
"Exchange Act"
means the Securities Exchange
Act of 1934, as amended from time to time, and any successor thereto.
(o) "Fair
Market Value"
means, except as otherwise
provided by the Committee, as of any given date, the closing reported sales
price on such date (or, if there are no reported sales on such date, on the last
date prior to such date on which there were sales) of the Common Stock on the
New York Stock Exchange Composite Tape or, if not listed on such exchange, on
any other national securities exchange on which the Common Stock is listed or on
NASDAQ. If there is no regular public trading market for such Common Stock, the
Fair Market Value of the Common Stock shall be determined by the Committee in
good faith.
(p)
"Incentive Stock Option"
means any Stock
Option designated as, and qualified as, an "incentive stock option" within the
meaning of Section 422 of the Code.
(q)
“Individual Agreement”
means an employment,
consulting or similar agreement between a participant and the Company or one of
its Subsidiaries or Affiliates, and, after a Change in Control, a change in
control or salary continuation agreement between a participant and the Company
or one of its Subsidiaries or Affiliates. If a participant is party to both an
employment agreement and a change in control or salary continuation agreement,
the employment agreement shall be the relevant "Individual Agreement" prior to a
Change in Control, and, the change in control or salary continuation agreement
shall be the relevant "Individual Agreement" after a Change in
Control.
(r)
"NonQualified Stock Option"
means any Stock
Option that is not an Incentive Stock Option.
(s)
"Qualified Performance-Based Award"
means an
Award of Restricted Stock designated as such by the Committee at the time of
grant, based upon a determination that (i) the recipient is or may be a "covered
employee" within the meaning of Section 162(m)(3) of the Code in the year in
which the Company would expect to be able to claim a tax deduction with respect
to such Restricted Stock, and (ii) the Committee wishes such Award to qualify
for the Section 162(m) Exemption.
(t)
"Performance Goals"
means the performance
goals established by the Committee in connection with the grant of Restricted
Stock. In the case of Qualified Performance-Based
Awards, (i) such goals shall be based on the attainment of specified levels of
one or more of the following measures: stock price, earnings, earnings per
share, return on equity, return on assets, asset quality, net interest margin,
loan portfolio growth, efficiency ratio, deposit portfolio growth, and
liquidity, and (ii) such Performance Goals shall be set by the
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Committee within the time period
prescribed by Section 162(m) of the Code and related regulations.
(u)
"Plan"
means the West Coast Bancorp 2002
Stock Incentive Plan, as set forth herein and as hereinafter amended from time
to time.
(v) "Restricted
Stock"
means an Award granted under Section
6.
(w)
"Restricted Stock Agreement”
has the meaning
set forth in Section 6(c)(vi) of the Plan.
(x)
"Retirement"
means, except as otherwise
provided by the Committee, retirement from active employment with the Company, a
Subsidiary or Affiliate at or after the attainment of age 55 and with five years
or more of employment service with the Company, a Subsidiary or
Affiliate.
(y) "Rule
16b-3"
means Rule 16b-3, as promulgated by
the Commission under Section 16(b) of the Exchange Act, as amended from time to
time.
(z)
"Section 162(m) Exemption"
means the
exemption from the limitation on deductibility imposed by Section 162(m) of the
Code that is set forth in Section 162(m)(4)(C) of the Code.
(aa) "Stock Option"
means an Award granted under Section 5.
(bb)
"Subsidiary"
means any corporation,
partnership, joint venture or other entity during any period in which at least a
50 percent voting or profits interest is owned, directly or indirectly, by the
Company or any successor to the Company.
(cc)
"Termination of Employment"
means the
termination of the participant's employment with, or performance of services
for, the Company and any of its Subsidiaries or Affiliates. A participant
employed by, or performing services for, a Subsidiary or an Affiliate shall also
be deemed to incur a Termination of Employment if the Subsidiary or Affiliate
ceases to be such a Subsidiary or an Affiliate, as the case may be, and the
participant does not immediately thereafter become an employee of, or
service-provider for, the Company or another Subsidiary or Affiliate. Temporary
absences from employment because of illness, vacation or leave of absence and
transfers among the Company and its Subsidiaries and Affiliates shall not be
considered Terminations of Employment.
In addition,
certain other terms used herein have definitions given to them in the first
place in which they are used.
SECTION 2.
Administration
The Plan
shall be administered by the Board directly, or if the Board elects, by the
Compensation and Personnel Committee or such other committee of the Board as the
Board may from time to time designate, which committee shall be composed of not
less than two directors, and shall be appointed by and serve at the pleasure of
the Board. Notwithstanding the foregoing or any other provision of the Plan to
the contrary, all Performance Goals will be established and administered and all
Qualified Performance-Board Awards will be granted to any "covered employee"
within the meaning of Section 162(m)(3) of the Code, only by either (a) the
Board as a
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whole in a proceeding in which all members
of the Board who are or may be "covered employees" recuse themselves from
consideration and approval of such goals or Awards, or (b) a duly authorized
committee consisting of two or more "outside directors" as that term is defined
in Section 162(m) of the Code. All references in the Plan to the "Committee"
refer to the Board as a whole, unless a separate committee has been designated
or authorized consistent with the foregoing.
The
Committee shall have plenary authority to grant Awards pursuant to the terms of
the Plan to Eligible Individuals.
Among other
things, the Committee shall have the authority, subject to the terms of the
Plan:
(a) To
select the Eligible Individuals to whom Awards may from time to time be
granted;
(b) To
determine whether and to what extent Incentive Stock Options, NonQualified Stock
Options and Restricted Stock or any combination thereof are to be granted
hereunder;
(c) To
determine the number of shares of Common Stock to be covered by each Award
granted hereunder;
(d) To
determine the terms and conditions of any Award granted hereunder (including,
but not limited to, the option price (subject to Section 5(a)), any vesting
condition, restriction or limitation (which may be related to the performance of
the participant, the Company or any Subsidiary or Affiliate) and any vesting
acceleration or forfeiture waiver regarding any Award and the shares of Common
Stock relating thereto, based on such factors as the Committee shall
determine;
(e) To
modify, amend or adjust the terms and conditions of any Award (subject to
Sections 5(a) and 5(b)), at any time or from time to time, including but not
limited to Performance Goals; provided, however, that the Committee may not
adjust upwards the amount payable with respect to any Qualified
Performance-Based Award;
(f) To
determine to what extent and under what circumstances Common Stock and other
amounts payable with respect to an Award shall be deferred; and
(g) To
determine under what circumstances an Award may be settled in cash or Common
Stock under Section 5(d).
The
Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall
from time to time deem advisable, to interpret the terms and provisions of the
Plan and any Award issued under the Plan (and any agreement relating thereto)
and to otherwise supervise the administration of the Plan.
The
Committee may act only by a majority of its members then in office, except that
the Committee may, except to the extent prohibited by applicable law or the
applicable rules of a stock exchange, allocate all or any portion of its
responsibilities and powers to any one or more of its members and may delegate
all or any part of its responsibilities and powers to any person or persons
selected by it. Any such allocation or delegation may be revoked by the
Committee at any time.
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Any
determination made by the Committee or pursuant to delegated authority pursuant
to the provisions of the Plan with respect to any Award shall be made in the
sole discretion of the Committee or such delegate at the time of the grant of
the Award or, unless in contravention of any express term of the Plan, at any
time thereafter. All decisions made by the Committee or any appropriately
delegated officer pursuant to the provisions of the Plan shall be final and
binding on all persons, including the Company and Plan participants.
Any
authority granted to the Committee may also be exercised by the full Board,
except to the extent that the grant or exercise of such authority would cause
any Award or transaction to become subject to (or lose an exemption under) the
short-swing profit recovery provisions of Section 16 of the Exchange Act or
cause an Award designated as a Qualified Performance-Based Award not to qualify
for, or to cease to qualify for, the Section 162(m) Exemption. To the extent
that any permitted action taken by the Board conflicts with action taken by the
Committee, the Board action shall control.
Notwithstanding the foregoing, except in connection with a corporate
transaction involving the Company (including, without limitation, any stock
dividend, stock split, extraordinary cash dividend, recapitalization,
reorganization, merger, consolidation, split-up, spin-off, combination, or
exchange of shares), the terms of outstanding Stock Options and stock
appreciation rights may not be amended to reduce the exercise price of the Stock
Options or stock appreciation rights and outstanding Stock Options or stock
appreciation rights may not be cancelled in exchange for cash, Stock Options,
stock appreciation rights or other Awards with an exercise price that is less
than the exercise price of the cancelled Stock Options or stock appreciation
rights.
SECTION 3. Common Stock
Subject to Plan
The maximum
number of shares of Common Stock that may be delivered to participants and their
beneficiaries under the Plan shall be 2,140,000. No more than 488,000 shares may
be issued as Restricted Stock or be based upon the Common Stock pursuant to
Section 8 of the Plan. The maximum aggregate number of shares of Common Stock
that may be issued pursuant to Incentive Stock Options is 1,800,000. No
participant may be granted Stock Options covering in excess of 300,000 shares of
Common Stock in any fiscal year of the Company. Shares subject to an Award under
the Plan may be authorized and unissued shares. No further awards will be
granted under the Company's 1999 Stock Option Plan, 2000 Restricted Stock Plan
and Amended and Restated 1995 Director Stock Option Plan.
If any Award
is forfeited, or if any Stock Option terminates, expires or lapses without being
exercised, the shares of Common Stock subject to such Awards shall again be
available for distribution in connection with Awards under the Plan.
In the event
of a stock split (including a reverse stock split), a dividend or distribution
paid in Common Stock, or a recapitalization of or affecting Common Stock, the
aggregate number and kind of shares reserved for issuance under the Plan, the
maximum limitation upon the number of shares that may be issued as Restricted
Stock or subject to Stock Options to be granted to a single participant in any
fiscal year under the Plan, the number, kind, and option price per share subject
to each outstanding Stock Option, and the number and kind of shares subject to
other Awards granted under the Plan, will automatically be adjusted
proportionately, or substituted, to reflect the effect of such stock split,
distribution paid in Common Stock, or recapitalization.
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In the event
of any merger or consolidation, separation (including a spin off), a
reorganization (whether or not such reorganization comes within the definition
of such term in Section 368 of the Code), any partial or complete liquidation,
or any other change in corporate capitalization not specifically addressed
above, the Committee or Board may make such adjustments or substitution in the
aggregate number and kind of shares reserved for issuance under the Plan, the
maximum limitation upon the number of shares that may be issued as Restricted
Stock or subject to Stock Options to be granted to a single participant under
the Plan, in the number, kind, and option price per share subject to outstanding
Stock Options, in the number and kind of shares subject to other outstanding
Awards under the Plan and/or such other equitable adjustments or substitutions
as it may determine to be appropriate in its sole discretion.
Notwithstanding the foregoing, the number of shares subject to any Award
shall always be a whole number which shall be obtained by rounding all
calculations up to the nearest whole share.
SECTION 4.
Eligibility
Awards may be granted under the Plan
to Eligible Individuals.
SECTION 5. Stock
Options
Stock
Options may be granted alone or in addition to other Awards granted under the
Plan and may be of two types: Incentive Stock Options and NonQualified Stock
Options. Any Stock Option granted under the Plan shall be in such form as the
Committee may from time to time approve.
The
Committee shall have the authority to grant any optionee Incentive Stock
Options, NonQualified Stock Options or both types of Stock Options;
provided, however,
that grants hereunder are subject to the aggregate limit on grants to
individual participants set forth in Section 3. Incentive Stock Options may be
granted only to employees of the Company and its subsidiaries or parent
corporation (within the meaning of Section 424(f) of the Code). To the extent
that any Stock Option is not designated as an Incentive Stock Option or even if
so designated does not qualify as an Incentive Stock Option on or subsequent to
its grant date, it shall constitute a NonQualified Stock Option.
Stock
Options shall be evidenced by option agreements, the terms and provisions of
which may differ. An option agreement shall indicate on its face whether it is
intended to be an agreement for an Incentive Stock Option or a NonQualified
Stock Option. The grant of a Stock Option shall occur on the date the Committee
by resolution selects an Eligible Individual to receive a grant of a Stock
Option, determines the number of shares of Common Stock to be subject to such
Stock Option to be granted to such Eligible Individual and specifies the terms
and provisions of the Stock Option. The Company shall notify an Eligible
Individual of any grant of a Stock Option, and a written option agreement or
agreements shall be duly executed and delivered by the Company to the
participant. Such agreement or agreements shall become effective upon execution
by the Company and the participant.
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Stock
Options granted under the Plan shall be subject to the following terms and
conditions and shall contain such additional terms and conditions as the
Committee shall deem desirable:
(a)
Option Price
. The option
price per share of Common Stock purchasable under a Stock Option shall be
determined by the Committee and set forth in the option agreement, and shall not
be less than the Fair Market Value of the Common Stock subject to the Stock
Option on the date of grant.
(b)
Option Term
. The term of each Stock Option
shall be fixed by the Committee, but no Stock Option shall be exercisable more
than 10 years after the date the Stock Option is granted.
(c)
Exercisability
. Except as otherwise provided
herein, Stock Options shall be exercisable at such time or times and subject to
such terms and conditions as shall be determined by the Committee. If the
Committee provides that any Stock Option is exercisable only in installments,
the Committee may at any time waive such installment exercise provisions, in
whole or in part, based on such factors as the Committee may determine. In
addition, the Committee may at any time accelerate the exercisability of any
Stock Option.
(d)
Method of Exercise
. Subject to the provisions
of this Section 5, Stock Options may be exercised, in whole or in part, at any
time during the option term by giving written notice of exercise to the Company
specifying the number of shares of Common Stock subject to the Stock Option to
be purchased.
Such notice
shall be accompanied by payment in full of the purchase price by certified or
bank check or such other instrument as the Company may accept. If approved by
the Committee, payment, in full or in part, may also be made in the form of
unrestricted Common Stock (by delivery of such shares or by attestation) already
owned by the optionee of the same class as the Common Stock subject to the Stock
Option (based on the Fair Market Value of the Common Stock on the date the Stock
Option is exercised);
provided, however,
that, in the case of an Incentive
Stock Option, the right to make a payment in the form of already owned shares of
Common Stock of the same class as the Common Stock subject to the Stock Option
may be authorized only at the time the Stock Option is granted.
If approved
by the Committee, payment in full or in part may also be made by delivering a
properly executed exercise notice to the Company, together with a copy of
irrevocable instructions to a broker to deliver promptly to the Company the
amount of sale or loan proceeds necessary to pay the purchase price, and, if
requested, by the amount of any federal, state, local or foreign withholding
taxes. To facilitate the foregoing, the Company may enter into agreements for
coordinated procedures with one or more brokerage firms.
In addition,
if approved by the Committee, payment in full or in part may also be made by
instructing the Company to withhold a number of such shares having a Fair Market
Value on the date of exercise equal to the aggregate exercise price of such
Stock Option. The Committee may also provide for Company loans to be made for
purposes of the exercise of Stock Options.
No shares of
Common Stock shall be issued until full payment therefor has been made. Except
as otherwise provided in Section 5(o) below, an optionee shall have all of the
rights of a shareholder of the Company holding the class or series of Common
Stock that is subject to such Stock Option (including, if applicable, the right
to vote the shares and the right to receive
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dividends), when the optionee has given
written notice of exercise, has paid in full for such shares and, if requested,
has given the representation described in Section 12(a).
(e)
Nontransferability of Stock Options
. No Stock
Option shall be transferable by the optionee other than (i) by will or by the
laws of descent and distribution; or (ii) in the case of a NonQualified Stock
Option, as otherwise expressly permitted by the Committee including, if so
permitted, pursuant to a transfer to such optionee's immediate family (as
defined by the Committee), whether directly or indirectly or by means of a trust
or partnership or otherwise. All Stock Options shall be exercisable, subject to
the terms of this Plan, only by the optionee, the guardian or legal
representative of the optionee, or any person to whom such option is transferred
pursuant to this paragraph, it being understood that the term "holder" and
"optionee" include such guardian, legal representative and other
transferee.
(f)
Termination by Reason of Death
. Unless
otherwise determined by the Committee, if an optionee incurs a Termination of
Employment by reason of death, any Stock Option held by such optionee shall
immediately vest in full and may thereafter be exercised until the expiration of
the stated term of such Stock Option. In the event of Termination of Employment by reason of death, if an
Incentive Stock Option is exercised after the expiration of the post-termination
exercise periods that apply for purposes of Section 422 of the Code, such Stock
Option will thereafter be treated as a NonQualified Stock Option.
(g)
Termination by Reason of Disability
. Unless
otherwise determined by the Committee, if an optionee incurs a Termination of
Employment by reason of Disability, any Stock Option held by such optionee shall
immediately vest in full and may thereafter be exercised until the expiration of
the stated term of such Stock Option. In the event of Termination of Employment
by reason of Disability, if an Incentive Stock Option is exercised after the
expiration of the exercise periods that apply for purposes of Section 422 of the
Code, such Stock Option will thereafter be treated as a NonQualified Stock
Option.
(h)
Termination by Reason of Retirement
. Unless
otherwise determined by the Committee, if an optionee incurs a Termination of
Employment by reason of Retirement, any Stock Option held by such optionee shall
immediately vest in full and may thereafter be exercised until the expiration of
the stated term of such Stock Option. In the event of Termination of Employment
by reason of Retirement, if an Incentive Stock Option is exercised after the
expiration of the post-termination exercise periods that apply for purposes of
Section 422 of the Code, such Stock Option will thereafter be treated as a
NonQualified Stock Option.
(i)
Termination by the Company for Cause
. Unless
otherwise determined by the Committee, if an optionee incurs a Termination of
Employment for Cause, all Stock Options held by such optionee, whether vested or
unvested, shall thereupon terminate.
(j) Other
Termination
. Unless otherwise determined by the Committee, if an optionee
incurs a Termination of Employment for any reason other than death, Disability,
or Retirement, or for Cause, and except as set forth in Section 5(i) above, any
Stock Option held by such optionee, to the extent it was then exercisable at the
time of termination, or on such accelerated basis as the Committee may
determine, may be exercised for the lesser of three months from the date of such
Termination of Employment or the balance of such Stock Option's stated term;
provided, however,
that if the optionee dies within such three-month
period, any unexercised Stock Option held by such optionee shall,
notwithstanding the expiration of such three-month period, continue to be
exercisable to the extent to which it was exercisable at the time of death for a
period of 12 months from the date of such death or until the expiration of
the
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stated term of such Stock Option,
whichever period is the shorter. If an Incentive Stock Option is exercised after
the expiration of the post-termination exercise periods that apply for purposes
of Section 422 of the Code, such Stock Option will thereafter be treated as a
NonQualified Stock Option.
(k)
Additional Rules for Incentive Stock Options.
Notwithstanding anything
contained herein to the contrary, no Stock Option which is intended to qualify
as an Incentive Stock Option may be granted to any Eligible Employee who at the
time of such grant owns stock possessing more than 10 percent of the total
combined voting power of all classes of stock of the Company or of any
Subsidiary, unless at the time such Stock Option is granted the option price is
at least 110 percent of the Fair Market Value of a share of Common Stock and
such Stock Option by its terms is not exercisable after the expiration of five
years from the date such Stock Option is granted. In addition, the aggregate
Fair Market Value of the Common Stock (determined at the time a Stock Option for
the Common Stock is granted) for which Incentive Stock Options are exercisable
for the first time by an optionee during any calendar year, under all of the
incentive stock option plans of the Company and of any Subsidiary, may not
exceed $100,000. To the extent a Stock Option that by its terms was intended to
be an Incentive Stock Option exceeds this $100,000 limit, the portion of the
Stock Option in excess of such limit shall be treated as a NonQualified Stock
Option.
(l)
Cashing Out of Stock Option
. On receipt of written notice of exercise, the
Committee may elect to cash out all or part of the portion of the shares of
Common Stock for which a Stock Option is being exercised by paying the optionee
an amount, in cash or Common Stock, equal to the excess of the Fair Market Value
of the Common Stock over the option price times the number of shares of Common
Stock for which the Option is being exercised on the effective date of such
cash-out.
(m)
Certain Terminations Prior to a Change in Control
. Unless otherwise
determined by the Committee, notwithstanding any other provision of this Plan to
the contrary, in the event an optionee incurs a Termination of Employment by the
Company other than for Cause at any time after the Company executes an agreement
that provides for a transaction that if consummated would constitute a Change in
Control, but before the actual occurrence of such Change in Control, and,
thereafter, such Change in Control actually occurs, then, upon such Change in
Control, any Stock Option held by such optionee prior to such Termination of
Employment shall immediately vest in full and may thereafter be exercised by the
optionee until expiration of the stated term of such Stock Option. If an
Incentive Stock Option is exercised after the expiration of the post-termination
exercise periods that apply for purposes of Section 422 of the Code, such Stock
Option will thereafter be treated as a NonQualified Stock Option.
(n)
Change in Control Cash-Out.
If the Committee shall determine at the time of
grant of an Option or thereafter, then, notwithstanding any other provision of
the Plan, during the 60-day period from and after a Change in Control (the
"Exercise Period"), an optionee shall have the right, whether or not the Stock
Option is fully exercisable and in lieu of the payment of the option price for
the shares of Common Stock being purchased under the Stock Option and by giving
notice to the Company, to elect (within the Exercise Period) to surrender all or
part of the Stock Option to the Company and to receive cash, within 30 days of
such election, in an amount equal to the amount by which the Change in Control
Price per share of Common Stock on the date of such election shall exceed the
exercise price per share of Common Stock under the Stock Option (the "Spread")
multiplied by the number of shares of Common Stock granted under the Stock
Option as to which the right granted under this Section 5(n) shall have been
exercised.
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(o)
Dividends and Dividend Equivalents
. Dividends
and dividend equivalents may not be paid or accrued on Stock Options.
SECTION 6. Restricted
Stock
(a)
Administration
. Shares of Restricted Stock may be awarded either alone or in
addition to other Awards granted under the Plan. The Committee shall determine
the Eligible Individuals to whom and the time or times at which grants of
Restricted Stock will be awarded, the number of shares to be awarded to any
Eligible Individual, the conditions for vesting, the time or times within which
such Awards may be subject to forfeiture and any other terms and conditions of
the Awards, in addition to those contained in Section 6(c).
(b)
Awards and Certificates
. Shares of Restricted Stock shall be evidenced in
such manner as the Committee may deem appropriate, including book-entry
registration or issuance of one or more stock certificates. Any certificate
issued in respect of shares of Restricted Stock shall be registered in the name
of such participant and shall bear an appropriate legend referring to the terms,
conditions, and restrictions applicable to such Award, substantially in the
following form:
"The
transferability of this certificate and the shares of stock represented hereby
are subject to the terms and conditions (including forfeiture) of the West Coast
Bancorp 2002 Stock Incentive Plan and a Restricted Stock Agreement. Copies of
such Plan and Agreement are on file at the offices of West Coast Bancorp, 5335
Meadows Road, Suite 201, Lake Oswego, Oregon 97035."
The Committee may require that the
certificates evidencing such shares be held in custody by the Company until the
restrictions thereon shall have lapsed and that, as a condition of any Award of
Restricted Stock, the participant shall have delivered a stock power, endorsed
in blank, relating to the Common Stock covered by such Award.
(c) Terms
and Conditions
. Shares of Restricted Stock shall be subject to the following
terms and conditions:
(i) The Committee may, prior to or at the time of grant,
designate an Award of Restricted Stock as a Qualified Performance-Based Award,
in which event it shall condition the grant or vesting, as applicable, of such
Restricted Stock upon the attainment of Performance Goals. If the Committee does
not designate an Award of Restricted Stock as a Qualified Performance-Based
Award, it may also condition the grant or vesting thereof upon the attainment of
Performance Goals. Regardless of whether an Award of Restricted Stock is a
Qualified Performance-Based Award, the Committee may also condition the grant or
vesting thereof upon the continued service of the participant. The conditions
for grant or vesting and the other provisions of Restricted Stock Awards
(including without limitation any applicable Performance Goals) need not be the
same with respect to each recipient. The Committee may at any time, in its sole
discretion, accelerate or waive, in whole or in part, any of the foregoing
restrictions (other than, in the case of Restricted Stock which is a Qualified
Performance-Based Award, satisfaction of the applicable Performance Goals,
unless the participant's employment is terminated by reason of death or
Disability). No more than 113,322 shares of Common Stock may be subject to
Qualified Performance-Based Awards granted to any participant during the term of
the Plan.
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(ii) Subject to the provisions of the Plan and the Restricted
Stock Agreement referred to in Section 6(c)(vi), during the period, if any, set
by the Committee, commencing with the date of such Award for which such
participant's continued service is required (the "Restriction Period"), and
until the later of (i) the expiration of the Restriction Period and (ii) the
date the applicable Performance Goals (if any) are satisfied, the participant
shall not be permitted to sell, assign, transfer, pledge or otherwise encumber
shares of Restricted Stock;
provided
that the foregoing shall not prevent
a participant from pledging Restricted Stock as security for a loan, the sole
purpose of which is to provide funds to pay the option price for Stock
Options.
(iii) Except as provided in this paragraph (iii) and Sections
6(c)(i) and 6(c)(ii) and the Restricted Stock Agreement, the participant shall
have, with respect to the shares of Restricted Stock, all of the rights of a
stockholder of the Company holding the class or series of Common Stock that is
the subject of the Restricted Stock, including, if applicable, the right to vote
the shares and the right to receive any dividends. If so determined by the
Committee in the applicable Restricted Stock Agreement and subject to Section
12(e) of the Plan, (A) cash dividends on the class or series of Common Stock
that is the subject of the Restricted Stock Award shall be automatically
deferred and reinvested in additional Restricted Stock, and shall, as determined
by the Committee, either be (i) held subject to the vesting of the underlying
Restricted Stock, or held subject to meeting Performance Goals applicable only
to dividends, or (ii) distributed in full or in part without regard to the
vested status of the underlying Restricted Stock and (B) dividends payable in
Common Stock shall be paid in the form of Restricted Stock of the same class as
the Common Stock with which such dividend was paid, and shall, as determined by
the Committee, be either (i) held subject to the vesting of the underlying
Restricted Stock, or held subject to meeting Performance Goals applicable only
to dividends, or (ii) distributed in full or in part without regard to the
vested status of the underlying Restricted Stock.
(iv) Except to the extent otherwise provided in the applicable
Restricted Stock Agreement or Section 6(c)(i), 6(c)(ii), 6(c)(v), 6(d) or
9(a)(ii), upon a participant's Termination of Employment for any reason during
the Restriction Period or before the applicable Performance Goals are satisfied,
all shares still subject to restriction shall be forfeited by the participant;
provided
,
however
, that the Committee shall have the discretion to
waive, in whole or in part, any or all remaining restrictions (other than, in
the case of Restricted Stock which is a Qualified Performance-Based Award,
satisfaction of the applicable Performance Goals, unless the participant's
employment is terminated by reason of death or Disability) with respect to any
or all of such participant's shares of Restricted Stock.
(v) If and when any applicable Performance Goals are satisfied
and the Restriction Period expires without a prior forfeiture of the Restricted
Stock, unlegended certificates for such shares shall be delivered to the
participant upon surrender of the legended certificates.
(vi) Each Award shall be confirmed by, and be subject to, the
terms of a Restricted Stock Agreement.
(d)
Termination of Employment due to Death or Disability
. Unless otherwise
determined by the Committee, upon a participant's Termination of Employment by
reason of death or Disability, the restrictions, including any Performance
Goals, and deferral limitations
A-13
applicable to any Restricted Stock shall
lapse (with respect to Performance Goals, be deemed earned in full), and such
Restricted Stock shall become free of all restrictions and become fully vested
and transferable to the full extent of the original grant.
SECTION 7. [Intentionally
Left Blank]
SECTION 8. Other Stock-Based
Awards
Other Awards
of Common Stock and other Awards that are valued in whole or in part by
reference to, or are otherwise based upon, Common Stock, including (without
limitation) dividend equivalents and convertible debentures, may be granted
either alone or in conjunction with other Awards granted under the
Plan.
SECTION 9. Change in Control
Provisions
(a)
Impact of Event
. Notwithstanding any other provision of this Plan to the
contrary, in the event a recipient of an Award incurs a Termination of
Employment by the Company or a successor other than for Cause during the
24-month period following a Change in Control:
(i) Any Stock Options held by an optionee which are not then
exercisable and vested, shall become fully exercisable and vested to the full
extent of the original grant, and all Stock Options shall be exercisable until
expiration of the stated term of such Stock Options.
(ii) The restrictions, including any Performance Goals, and
deferral limitations applicable to any Restricted Stock shall lapse (with
respect to Performance Goals, be deemed earned in full), and such Restricted
Stock shall become free of all restrictions and become fully vested and
transferable to the full extent of the original grant.
(iii) The Committee may also make additional adjustments
and/or settlements of outstanding Awards as it deems appropriate and consistent
with the Plan's purposes.
(b)
Definition of Change in Control
. For purposes of the Plan, a "Change in
Control" shall mean the happening of any of the following events:
(i) The acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 30 percent or more of either (1) the then outstanding shares of
common stock of the Company (the "Outstanding Company Common Stock") or (2) the
combined voting power of the then outstanding voting securities of the Company
entitled to vote generally in the election of directors (the "Outstanding
Company Voting Securities"); provided, however, that for purposes of this
subsection (i), the following acquisitions shall not constitute a Change of
Control: (1) any acquisition directly from the Company, (2) any acquisition by
the Company, (3) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation controlled by the
Company or (4) any acquisition by any corporation pursuant to a transaction
which complies with clauses (1), (2) and (3) of subsection (iii) of this Section
9(b); or
A-14
(ii) Individuals who, as of the effective date of the Plan,
constitute the Board (the "Incumbent Board") cease for any reason to constitute
at least a majority of the Board; provided, however, that any individual
becoming a director subsequent to the effective date of the Plan whose election,
or nomination for election by the Company's shareholders, was approved by a vote
of at least a majority of the directors then comprising the Incumbent Board
shall be considered as though such individual were a member of the Incumbent
Board, but excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or threatened election
contest with respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person other
than the Board; or
(iii) Consummation of a reorganization, merger or
consolidation or sale or other disposition of all or substantially all of the
assets of the Company (a "Business Combination"), in each case, unless,
following such Business Combination, (1) all or substantially all of the
individuals and entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company Voting Securities
immediately prior to such Business Combination beneficially own, directly or
indirectly, more than 50 percent of, respectively, the then outstanding shares
of common stock and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors, as the case
may be, of the corporation resulting from such Business Combination (including,
without limitation, a corporation which as a result of such transaction owns the
Company or all or substantially all of the Company's assets either directly or
through one or more subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Business Combination of the Outstanding
Company Common Stock and Outstanding Company Voting Securities, as the case may
be, (2) no Person (excluding any corporation resulting from such Business
Combination or any employee benefit plan (or related trust) of the Company or
such corporation resulting from such Business Combination) beneficially owns,
directly or indirectly, 30 percent or more of, respectively, the then
outstanding shares of common stock of the corporation resulting from such
Business Combination or the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such ownership existed
prior to the Business Combination, and (3) at least a majority of the members of
the board of directors of the corporation resulting from such Business
Combination were members of the Incumbent Board at the time of the execution of
the initial agreement, or of the action of the Board, providing for such
Business Combination; or
(iv) The approval by the shareholders of the Company of a
complete liquidation or dissolution of the Company.
(c)
Change in Control Price
. For purposes of the Plan, "Change in Control Price"
means the higher of (i) the highest reported sales price, regular way, of a
share of Common Stock in any transaction reported on the New York Stock Exchange
Composite Tape or other national exchange on which such shares are listed or on
NASDAQ during the 60-day period prior to and including the date of a Change in
Control or (ii) if the Change in Control is the result of a tender or exchange
offer or a Business Combination, the highest price per share of Common Stock
paid in such tender or exchange offer or Business Combination;
provided,
however,
that in the case of Incentive Stock Options, the Change in Control
Price shall be in all cases the Fair Market Value of the Common Stock on the
date such Incentive Stock Option is exercised. To the extent that the
consideration paid in any such transaction described above consists all or in
part of securities or other noncash consideration, the value of such securities
or other noncash consideration shall be determined in the sole discretion of the
Board.
A-15
SECTION 10. Term, Amendment
and Termination
The Plan
will terminate on the tenth anniversary of the effective date of the Plan. Under
the Plan, Awards outstanding as of such date shall not be affected or impaired
by the termination of the Plan.
The Board
may amend, alter, or discontinue the Plan, but no amendment, alteration or
discontinuation shall be made which would materially and adversely impair the
rights of an optionee under a Stock Option or a recipient of a Restricted Stock
Award or other stock-based Award theretofore granted without the optionee's or
recipient's consent, except such an amendment made to comply with applicable
law, stock exchange rules or accounting rules. In addition, no such amendment
shall be made without the approval of the Company's stockholders to the extent
such approval is required by applicable law or stock exchange rules.
The
Committee may amend the terms of any Stock Option or other Award theretofore
granted, prospectively or retroactively, but no such amendment shall materially
and adversely impair the rights of any holder without the holder's consent,
except such an amendment made to cause the Plan or Award to comply with
applicable law, stock exchange rules or accounting rules.
Subject to
the above provisions, the Board shall have authority to amend the Plan to take
into account changes in law and tax and accounting rules as well as other
developments, and to grant Awards which qualify for beneficial treatment under
such rules without stockholder approval.
SECTION 11. Unfunded Status
of Plan
It is
presently intended that the Plan constitute an "unfunded" plan for incentive and
deferred compensation. The Committee may authorize the creation of trusts or
other arrangements to meet the obligations created under the Plan to deliver
Common Stock or make payments;
provided, however,
that unless the
Committee otherwise determines, the existence of such trusts or other
arrangements is consistent with the "unfunded" status of the Plan.
SECTION 12. General
Provisions
(a) The
Committee may require each person purchasing or receiving shares pursuant to an
Award to represent to and agree with the Company in writing that such person is
acquiring the shares without a view to the distribution thereof. The
certificates for such shares may include any legend which the Committee deems
appropriate to reflect any restrictions on transfer.
Notwithstanding any other provision of the Plan or agreements made
pursuant thereto, the Company shall not be required to issue or deliver any
certificate or certificates for shares of Common Stock under the Plan prior to
fulfillment of all of the following conditions:
(i) Listing or approval for listing upon notice of issuance,
of such shares on the New York Stock Exchange, Inc., or such other securities
exchange as may at the time be the principal market for the Common
Stock;
A-16
(ii) Any registration or other qualification of such shares of
the Company under any state or federal law or regulation, or the maintaining in
effect of any such registration or other qualification which the Committee
shall, in its absolute discretion upon the advice of counsel, deem necessary or
advisable; and
(iii) Obtaining any other consent, approval, or permit from
any state or federal governmental agency which the Committee shall, in its
absolute discretion after receiving the advice of counsel, determine to be
necessary or advisable.
(b) Nothing
contained in the Plan shall prevent the Company or any Subsidiary or Affiliate
from adopting other or additional compensation arrangements for its
employees.
(c) The Plan
shall not constitute a contract of employment, and adoption of the Plan shall
not confer upon any employee any right to continued employment, nor shall it
interfere in any way with the right of the Company or any Subsidiary or
Affiliate to terminate the employment of any employee at any time.
(d) No later
than the date as of which an amount first becomes includible in the gross income
of the participant for federal income tax purposes with respect to any Award
under the Plan, the participant shall pay to the Company, or make arrangements
satisfactory to the Company regarding the payment of, any federal, state, local
or foreign taxes of any kind required by law to be withheld with respect to such
amount. Unless otherwise determined by the Company, withholding obligations may
be settled with Common Stock, including Common Stock that is part of the Award
that gives rise to the withholding requirement. The obligations of the Company
under the Plan shall be conditional on such payment or arrangements, and the
Company and its Affiliates shall, to the extent permitted by law, have the right
to deduct any such taxes from any payment otherwise due to the participant. The
Committee may establish such procedures as it deems appropriate, including
making irrevocable elections, for the settlement of withholding obligations with
Common Stock.
(e)
Reinvestment of dividends in additional Restricted Stock at the time of any
dividend payment shall only be permissible if sufficient shares of Common Stock
are available under Section 3 for such reinvestment (taking into account then
outstanding Stock Options and other Awards).
(f) The
Committee shall establish such procedures as it deems appropriate for a
participant to designate a beneficiary to whom any amounts payable in the event
of the participant's death are to be paid or by whom any rights of the
participant, after the participant's death, may be exercised.
(g) In the
case of a grant of an Award to any employee of a Subsidiary of the Company, the
Company may, if the Committee so directs, issue or transfer the shares of Common
Stock, if any, covered by the Award to the Subsidiary, for such lawful
consideration as the Committee may specify, upon the condition or understanding
that the Subsidiary will transfer the shares of Common Stock to the employee in
accordance with the terms of the Award specified by the Committee pursuant to
the provisions of the Plan. All shares of Common Stock underlying Awards that
are forfeited or canceled should revert to the Company.
(h) The Plan
and all Awards made and actions taken thereunder shall be governed by and
construed in accordance with the laws of the State of Oregon, without reference
to principles of conflict of laws.
A-17
(i) Except
as otherwise provided in Section 5(e) by the Committee, Awards under the Plan
are not transferable except by will or by laws of descent and
distribution.
SECTION 13. Effective Date
of Plan
The Plan
shall be effective as of the date it is adopted by the Board, subject to
approval of the Plan by the affirmative vote of a majority of the votes cast
with respect to the plan at a meeting of stockholders.
A-18
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5335 MEADOWS ROAD
SUITE 201
LAKE
OSWEGO, OR 97035
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VOTE BY INTERNET -
www.proxyvote.com
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Use the Internet to transmit your voting
instructions and for electronic delivery of information up until 11:59
P.M. Eastern Time on April 27, 2009 (April 24, 2009 for participants in
West Coast Bancorp's 401(k) Plan). Have your proxy card in hand when you
access the web site and follow the instructions to obtain your records and
to create an electronic voting instruction form.
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VOTE BY PHONE -
1-800-690-6903
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Use any touch-tone telephone to transmit
your voting instructions up until 11:59 P.M. Eastern Time on April 27,
2009 (April 24, 2009 for participants in West Coast Bancorp's 401(k)
Plan). Have your proxy card in hand when you call and then follow the
instructions.
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VOTE BY MAIL
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Mark, sign and date your proxy card and
return it in the postage-paid envelope we have provided or return it to
Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717 so it
is received prior to the Annual Meeting on April 28, 2009.
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ELECTRONIC DELIVERY OF FUTURE PROXY
MATERIALS
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If you would like to reduce the costs
incurred by our company in mailing proxy materials, you can consent to
receiving all future proxy statements, proxy cards and annual reports
electronically via e-mail or the Internet. To sign up for electronic
delivery, please follow the instructions above to vote using the Internet
and, when prompted, indicate that you agree to receive or access proxy
materials electronically in future years.
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TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK
AS FOLLOWS:
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WTCOB1
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KEEP THIS PORTION FOR YOUR RECORDS
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DETACH AND RETURN THIS
PORTION ONLY
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THIS PROXY CARD IS VALID ONLY WHEN
SIGNED AND DATED.
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WEST COAST
BANCORP
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The Board of
Directors recommends a vote “FOR” the listed directors and
proposals.
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Vote on Directors
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1.
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ELECTION
OF DIRECTORS
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Nominees:
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01)
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Lloyd D. Ankeny
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05)
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Steven N.
Spence
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02)
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Michael J. Bragg
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06)
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Robert D. Sznewajs
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03)
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Duane C. McDougall
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07)
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David J. Truitt
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04)
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Steven J. Oliva
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08)
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Nancy A. Wilgenbusch,
Ph.D.
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For
All
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Withhold
All
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For
All
Except
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To withhold authority to
vote for any individual nominee(s), mark “For All Except” and write the
number(s) of the nominee(s) on the line below.
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o
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o
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o
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Vote on Proposals
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For
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Against
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Abstain
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2.
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APPROVE AMENDMENTS TO THE
WEST COAST BANCORP 2002 STOCK INCENTIVE PLAN.
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o
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o
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o
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3.
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RATIFICATION
OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS THE COMPANY’S
INDEPENDENT PUBLIC ACCOUNTANTS FOR THE YEAR ENDING DECEMBER 31,
2009.
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o
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o
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o
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Management knows of no other matters that are likely to be brought before
the meeting. However, if any other matters are properly presented at the
meeting, this Proxy will be voted in accordance with the recommendations
of management.
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The undersigned acknowledges receipt of the 2009 Notice of Annual Meeting
and accompanying Proxy Statement and revokes all prior proxies for said
meeting.
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WHEN SIGNING AS
ATTORNEY, EXECUTOR, OFFICER, TRUSTEE, GUARDIAN, OR OTHER CAPACITY, PLEASE
GIVE FULL TITLE. IF MORE THAN ONE TRUSTEE, ALL SHOULD SIGN. ALL JOINT
OWNERS MUST SIGN.
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Signature [PLEASE SIGN WITHIN BOX]
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Date
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Signature (Joint Owners)
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Date
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Meeting
Location:
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Kruse Oaks
I
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5300 Meadows
Road
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Lake Oswego,
OR 97035
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Rooms:
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Conference
Center (The Oaks Meadows)
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Location:
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Main
Floor
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Time:
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2:00 P.M.,
Pacific Time
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Important Notice Regarding the Availability of Proxy
Materials for the Annual Meeting:
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The
Notice and Proxy Statement and Annual Report are available at
www.proxyvote.com.
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WEST COAST BANCORP
PROXY
PLEASE SIGN AND RETURN
IMMEDIATELY
This Proxy Is Solicited on
Behalf of the Board of Directors
The
undersigned hereby appoints Robert D. Sznewajs and Richard R. Rasmussen as
Proxies, each with the power to act alone and with full power of substitution,
and hereby authorizes them to represent and to vote all the shares of common
stock of West Coast Bancorp (the “Company”) which the undersigned may be
entitled to vote at the Annual Meeting of Shareholders to be held on April 28,
2009, or at any adjournment of the meeting.
THIS
PROXY CONFERS AUTHORITY TO VOTE “FOR” AND WILL BE VOTED “FOR” THE PROPOSALS
LISTED UNLESS AUTHORITY IS WITHHELD OR A VOTE AGAINST OR ABSTENTION IS
SPECIFIED, IN WHICH CASE THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE
SPECIFICATIONS SO MADE.
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