<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule
14a-12
Centennial Bancorp
------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
Carol Dey Hibbs
------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[X] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1),
or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to
Exchange Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which
transaction applies:
------------------------------------------------------
(2) Aggregate number of securities to which
transaction applies:
------------------------------------------------------
(3) Per unit price or other underlying value of
transaction computed pursuant to Exchange Act
Rule 0-11:
------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------
-1-
<PAGE>
[ ] Check box if any part of the fee is offset as provided
by Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or Schedule
and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------
(2) Form, Schedule or Registration Statement no.:
------------------------------------------------------
(3) Filing Party:
------------------------------------------------------
(4) Date Filed:
------------------------------------------------------
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<PAGE>
CENTENNIAL BANCORP
NOTICE OF ANNUAL MEETING
AND
PROXY STATEMENT
MAY 17, 1995
<PAGE>
CENTENNIAL BANCORP
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
May 17, 1995
NOTICE IS HEREBY GIVEN that the annual meeting of
shareholders of Centennial Bancorp, an Oregon corporation (the
"Company"), will be held at 3 p.m. on May 17, 1995, at the Eugene
Main Branch of Centennial Bank, 675 Oak Street, Suite 200,
Eugene, Oregon, for the following purposes:
1. To consider and act upon the election of five (5)
directors of the Company.
2. To transact such other business as may properly come
before the meeting or any adjournment or adjournments
thereof.
Only shareholders of record at the close of business on
March 10, 1995 are entitled to notice of, and to vote at, the
meeting or any adjournment or adjournments thereof. Further
information regarding voting rights and the business to be
transacted at the annual meeting of shareholders is given in the
accompanying Proxy Statement.
Shareholders who find it convenient are invited to
attend the meeting personally. If you are not able to do so and
wish your shares to be voted, it is important that you complete,
sign, date and promptly return the accompanying proxy in the
enclosed postage-paid envelope.
We hope that you will be able to attend the meeting.
It is always a pleasure to meet and become better acquainted with
shareholders of the Company.
By order of the Board of Directors.
April 14, 1995 Cordy H. Jensen
Secretary
- - -----------------------------------------------------------------
YOUR VOTE IS IMPORTANT. PLEASE RETURN YOUR PROXY
SO THAT YOUR VOTE CAN BE COUNTED.
- - -----------------------------------------------------------------
-2-<PAGE>
CENTENNIAL BANCORP
675 Oak Street
Eugene, Oregon 97401
(503) 342-3970
PROXY STATEMENT
This Proxy Statement is furnished in connection with
the solicitation of proxies by the Board of Directors of
Centennial Bancorp (the "Company") to be used at the annual
meeting of the Company's shareholders to be held on May 17, 1995.
The approximate date of mailing this Proxy Statement and the
accompanying form of proxy is April 14, 1995. The Company's 1994
Annual Report to Shareholders is being mailed to shareholders of
the Company with this Proxy Statement.
PROXIES AND VOTING AT THE MEETING
Unless otherwise noted, all share and per share
information included in this Proxy Statement has been
retroactively adjusted to reflect all stock dividends and stock
splits effected by the Company.
The only class of outstanding stock of the Company is
its Common Stock, $2 par value. At March 10, 1995, the record
date for determining shareholders entitled to vote at the
meeting, there were 3,974,225 shares of Common Stock outstanding.
Each holder of record of outstanding shares of Common Stock on
the record date is entitled to one vote for each share held on
every matter submitted at the meeting.
A majority of the outstanding Common Stock must be
represented at the meeting in person or by proxy in order to
constitute a quorum for the transaction of business.
Shareholders who do not vote (either in person or by submitting a
proxy), including broker non-votes, will be considered
abstentions and will not be counted toward the quorum.
If a proxy in the accompanying form is executed and
returned, the shares represented thereby will be voted at the
meeting in accordance with the instructions given in the proxy.
If no instructions are given, the proxyholders will vote for
management's nominees for director. They will vote in their
discretion as to any other matters that may properly be brought
before the meeting. Any proxy may be revoked prior to its
-3-
<PAGE>
exercise by giving written notice of revocation to the Secretary
of the Company or by submitting to the Secretary a duly executed
proxy bearing a later date. The attendance of a shareholder at
the meeting will not revoke a proxy. Ballots and proxies will be
counted by personnel of the Company.
The cost of this proxy solicitation will be borne by
the Company. The Company does not expect to pay any compensation
for the solicitation of proxies but may reimburse brokers, banks
and other nominees for their expenses in sending proxy material
to principals and obtaining their proxies. In addition to
solicitation of proxies by mail, the Company may also use its
officers and regular employees or officers and employees of
Centennial Bank to solicit proxies from shareholders, either in
person or by telephone, telegraph, or letter. Such persons will
not be specially compensated for these activities.
BUSINESS OF THE MEETING
Management knows of only one matter, which is discussed
below, to be presented at the annual meeting for shareholder
action.
ELECTION OF DIRECTORS
- - ---------------------
Members of the Board of Directors are elected annually.
With the exception of Harry Rubenstein who is retiring from
service as a director at the annual shareholder meeting, the
current members of the Board have been nominated to continue in
office until the next annual meeting of shareholders, and until
their successors have been elected and qualified. Dan Giustina
has also been nominated to serve as a director. Although the
Company knows of no reason why any of the nominees may be unable
or unwilling to serve, if any nominee becomes unable or unwilling
to serve, it is the intention of the persons named in the proxy
to vote for any substitute nominee the Board of Directors of the
Company may recommend. The Board does not have a standing
nominating committee nor does it have a formal procedure to
receive shareholder nominations, but it will consider any written
recommendations sent to the attention of the Board at the
Company's administrative offices at 675 Oak Street, P.O.
Box 1560, Eugene, Oregon 97440.
Directors are elected by a plurality of votes cast at
the meeting. Accordingly, the five nominees receiving the most
votes at the meeting will be elected. Shareholders are not
entitled to cumulate votes for election of directors.
-4-
<PAGE>
The following table shows, as to each nominee for
director, the identified information as of March 10, 1995. With
the exception of Mr. Giustina (who has not served on the
Company's Board of Directors) and Mr. Jensen (who was appointed
to the Board in February 1994), all nominees have served as
directors of the Company since the Company's organization in
1981. All of the nominees (together with other people) are also
directors of the Company's subsidiary, Centennial Bank (sometimes
referred to herein as the "Bank"). Mr. Williams is also Chairman
of the Board of both Centennial Mortgage Co. ("Centennial
Mortgage") and Harding Fletcher Co. ("Harding Fletcher"), two
other subsidiaries of the Company.
Name (Age) and Principal Occupation
Position with Company (During the last 5 Years)
- - --------------------- ------------------------
Brian B. Obie (53) President of Obie Industries, Inc.
Chairman of the Board (broadcasting, outdoor advertising,
media and real estate development);
former mayor of Eugene, Oregon
Robert L. Newburn (63) President and Chief Executive Officer
Vice-Chairman of the of Pacific Petroleum Company (retail
Board distribution of petroleum products);
Chairman of the Board of Centennial
Bank
Richard C. Williams (55) President and Chief Executive Officer
President, Chief of the Company; Chief Executive
Executive Officer and Officer and Vice Chairman of
Director Centennial Bank
Cordy H. Jensen (55) President and owner of Station
Director and Secretary Masters Inc. (restaurant and lounge);
Managing Partner of McKenzie Brewing
Co.; Managing Partner of CAC
Investments (real estate rentals);
major shareholder in Menu Book Inc.
(publishing)
Dan Giustina (45) Managing Partner of Giustina
Director Resources (ownership and management
of timber and timberland); partner in
Broadway & Oak Associates (ownership
and management of residential and
commercial real estate); director of
Centennial Bank since 1991
-5-
<PAGE>
The Board of Directors held 13 meetings during 1994.
The Board of Directors has two committees. The Audit Committee
consists of all members of the Board of Directors. It reviews
the scope of internal and external audit activities and the
results of the Company's annual audit. The Audit Committee did
not meet in 1994. The Compensation Committee administers the
Company's two stock option plans and determines management
compensation. The members of the Compensation Committee are
Messrs. Obie, Newburn, Jensen and Rubenstein. The Compensation
Committee held three meetings in 1994, which were attended by all
members of the committee, except for Mr. Newburn who attended two
of the meetings.
In addition, Centennial Bank has an Audit and Personnel
Committee of its Board of Directors consisting of five
nonemployee members of Centennial Bank's Board of Directors who
are not also members of the Company's Board of Directors. The
Audit and Personnel Committee meets periodically with management
to ensure that appropriate audits of Centennial Bank's affairs
are being conducted. The Audit and Personnel Committee also
reviews the reports of examinations of Centennial Bank conducted
by the Federal Deposit Insurance Corporation and the Oregon
Department of Consumer and Business Services. Centennial Bank
also has an Asset/Liability Committee, which has eight members,
three of whom (Messrs. Newburn, Jensen and Williams) are
directors of the Company. The Asset/Liability Committee meets
weekly.
The Board of Directors of the Company approves the
independent auditors selected by the Company's management. Both
the independent auditors and the employees responsible for
conducting internal reviews have direct access to the Audit and
Personnel Committee and the Bank's Board of Directors to discuss
the results of their examinations, the adequacy of internal
accounting controls and the integrity of financial reporting.
During his tenure on the Board of Directors of the
Company in 1994, each incumbent director attended more than 75%
of the aggregate of the total number of meetings of the Board of
Directors and of meetings held by committees of the Company's
Board of Directors on which the director served.
OTHER BUSINESS
- - --------------
The Company's management knows of no other matters to
be brought before the meeting for a vote. However, if other
matters are presented for a vote at the meeting, the proxy
holders will vote the shares represented by properly executed
proxies according to their judgment on those matters. At the
-6-
<PAGE>
meeting, management will report on the Company's business, and
shareholders will have an opportunity to ask questions.
PRINCIPAL SHAREHOLDERS AND MANAGEMENT OWNERSHIP
The following table sets forth certain information
regarding beneficial ownership of the Company's Common Stock at
February 28, 1995 by: (i) each person who is known by the
Company to own beneficially more than 5% of the Common Stock;
(ii) each nominee for director; (iii) the executive officers
named in the Summary Compensation Table below; and (iv) all
executive officers and nominees as a group. Each named
beneficial owner has sole voting and investment power with
respect to the shares listed unless otherwise indicated.
Amount and Nature
of Beneficial
Name of Beneficial Owners Ownership Percent of Class
- - ------------------------- ----------------- ----------------
Brian B. Obie 122,022(1) 3.1%
Robert L. Newburn 85,842(2) 2.2
Dan Giustina 29,680(3) .7
Cordy H. Jensen 99,865(4) 2.5
Richard C. Williams 166,966(5) 4.2
Ron R. Peery 133,386(6) 3.3
Trust Dept., Bank of 311,036 7.8
America Oregon (7)
All executive officers and 921,142(8) 22.4
nominees as a group
(12 persons)
- - --------------------
(1) Includes 12,877 shares held by Mr. Obie's wife, 58,340
shares held by Obie Media Corporation of which Mr. Obie is
President and owns a controlling interest, and 6,352 shares
which could be acquired within 60 days by exercise of stock
options.
(2) Includes 63,765 shares which are held jointly with
Mr. Newburn's wife, 5,738 shares which are held by Mr.
Newburn as custodian for minors, and 15,485 shares which
-7-
<PAGE>
could be acquired within 60 days by exercise of a stock
option.
(3) Includes 12,578 shares which could be acquired within 60
days by exercise of a stock option.
(4) Includes 63,765 shares which are held jointly with
Mr. Jensen's wife, 854 shares which are held jointly in CAC
Investments, a partnership of which Mr. Jensen is the
Managing Partner, 15,855 shares which are held by Mr. Jensen
as trustee for his mother, and 6,352 shares which could be
acquired within 60 days by exercise of a stock option.
(5) Includes 48,666 shares which could be acquired within
60 days by exercise of a stock option. Also includes
57,429 shares which are held of record for Mr. Williams'
account by Bank of America Oregon ("B of A") as trustee of
Centennial Bank's Employee Savings and Profit Sharing Plan
(the "Employee Savings Plan"); B of A has sole voting power
over such shares.
(6) Includes 48,406 shares which are held jointly with
Mr. Peery's wife, 2,720 shares which are held jointly with
Mr. Peery's mother, 25,488 shares which could be acquired
within 60 days by exercise of a stock option, and 8,896
shares which are held by Mr. Peery's wife. Also includes
33,583 shares which are held of record for Mr. Peery's
account by B of A as trustee of the Employee Savings Plan; B
of A has sole voting power over such shares.
(7) The Trust Department of B of A is the trustee of the
Employee Savings Plan and as such is the record holder of
these shares; sole investment power over these shares is
held by the respective beneficiaries of the individual
accounts maintained under such plan. B of A's address is
1001 S.W. Fifth Avenue, Portland, Oregon 97204.
(8) Includes 143,531 shares which could be acquired within
60 days by exercise of stock options. Also includes
222,134 shares which are held of record for the accounts of
certain executive officers by B of A as trustee of the
Employee Savings Plan; B of A has sole voting power over
such shares.
-8-
<PAGE>
INFORMATION REGARDING MANAGEMENT
EXECUTIVE OFFICERS
- - ------------------
The following information identifies the executive
officers of the Company and its subsidiaries. Subject to certain
obligations of the Company described below under "Employment and
Change of Control Agreements," all executive officers serve at
the discretion of the Board of Directors.
Name of Individual (Age) Positions and Offices Held
- - ----------------------- --------------------------
Richard C. Williams (55) President, Chief Executive Officer
and a director of the Company since
1981; Vice Chairman and Chief
Executive Officer of Centennial Bank
since 1992; President of Centennial
Bank from 1977 to 1992; a director
of Centennial Bank since 1977; a
director of Centennial Mortgage
since 1987; Chairman of Harding
Fletcher since July 1993.
Ron R. Peery (55) Executive Vice President of the
Company since 1986; President and
Chief Operating Officer of
Centennial Bank since 1992;
Executive Vice President of
Centennial Bank from 1982 to 1992; a
director of Centennial Mortgage
since 1987.
Eric H. Hardin (54) Executive Vice President of the
Company and of Centennial Bank since
1989; Senior Vice President of the
Company from 1986 to 1989; Senior
Vice President of Centennial Bank
from 1982 to 1989.
Gary L. Stevens (55) Executive Vice President of the
Company since 1986; Executive Vice
President of Centennial Bank since
1982.
Michael J. Nysingh (42) Chief Financial Officer of the
Company since 1985; Acting Chief
Financial Officer of the Company
from 1982 to 1985; Senior Vice
President of Centennial Bank since
-9-
<PAGE>
January 1995; Vice President of
Centennial Bank from 1982 to 1994;
Cashier of Centennial Bank since
1982; a director of Centennial
Mortgage since 1990; Chief Financial
Officer of Centennial Mortgage since
1988.
Dennis M. Carlson (49) President and Chief Executive
Officer of Centennial Mortgage since
1988; Executive Vice President of
Centennial Mortgage from 1987 to
1988; a director of Centennial
Mortgage since 1987; Senior Vice
President of Centennial Bank since
1990; Vice President of Centennial
Bank from 1982 to 1990.
David M. Gazeley (45) Senior Vice President of Centennial
Bank since 1992; Manager of Pacific
Corporate Center Office of
Centennial Bank since May 1994;
Manager of Springfield Branch of
Centennial Bank from 1986 to April
1994; Vice President of Centennial
Bank from 1986 to 1992.
Thomas P. Widmer (45) Senior Vice President and Manager of
Eugene Main Branch of Centennial
Bank since January 1995; Vice
President and Manager of Eugene Main
Branch of Centennial Bank from 1992
to December 1994; Vice President and
Assistant Manager of Eugene Main
Branch of Centennial Bank from 1989
to 1992; Vice President and Manager
of Valley River Branch of Centennial
Bank from 1988 to 1989; Assistant
Vice President and Manager of Valley
River Branch of Centennial Bank from
1986 to 1988.
EXECUTIVE COMPENSATION
- - ----------------------
The following table sets forth certain information
regarding compensation paid by the Company during 1994, 1993 and
1992 to Mr. Williams as the Company's Chief Executive Officer and
-10-
<PAGE>
to Mr. Peery as the only other executive officer whose aggregate
salary and bonus in 1994 exceeded $100,000.
Summary Compensation Table
--------------------------
<TABLE>
<CAPTION>
Long-term
compensation
Annual compensation awards
--------------------------- ------------
Number of
securities
underlying All other
Name and principal Salary<F1> Bonus<F2> options compensation
position Year ($) ($) (#) ($)<F3>
------------------ ---- --------- -------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Richard C. Williams 1994 187,369 60,000 -- 11,917
President and Chief 1993 165,650 60,000 22,000 12,834
Executive Officer of the 1992 142,995 50,000 -- 10,702
Company
Ron R. Peery 1994 98,250 30,000 -- 8,083
President and Chief 1993 90,000 25,000 16,500 6,666
Operating Officer of 1992 86,030 29,500 -- 5,886
Centennial Bank
- - ---------------------
<FN>
<F1> Includes amounts contributed by the named executive officer to the Employee Savings Plan.
<F2> Includes bonuses paid or to be paid during the subsequent year but attributable to the year
indicated.
<F3> Consists of the Company's contributions to the Employee Savings Plan for the benefit of the named
executive officers.
</FN>
</TABLE>
No stock options were granted to Mr. Williams or
Mr. Peery during 1994. The following table sets forth
information regarding their option exercises and holdings at
December 31, 1994:
-11-
<PAGE>
Aggregated Option Exercises in Last Fiscal Year
-----------------------------------------------
and Fiscal Year-End Option Values
---------------------------------
<TABLE>
<CAPTION>
Shares Number of unexercised Value of unexercised in-the-
acquired options at FY-End(#) money options at
on Value --------------------------- FY-End($)<F1>
exercise realized ----------------------------
Name (#) ($) Exercisable Unexercisable Exercisable Unexercisable
- - -------------------- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Richard C. Williams -- -- 48,666 16,948 308,388 --
Ron R. Peery 9,570 88,623 25,488 12,711 146,361 --
- - ---------------------
<FN>
<F1> On December 31, 1994, the closing price of the Company's Common Stock was $8.41. For purposes of
the foregoing table, stock options with an exercise price less than that amount are considered to be
"in-the-money" and are considered to have a value equal to the difference between that amount and
the exercise price of the stock option multiplied by the number of shares covered by the stock
option.
</FN>
</TABLE>
INCENTIVE STOCK OPTION PLANS
- - ----------------------------
At the 1994 annual meeting of shareholders,
shareholders approved the Restated 1993 Incentive Stock Option
Plan (the "1993 Incentive Plan"). Under the 1993 Incentive Plan,
shares of common stock are reserved for issuance at their fair
market value at the date of grant. Options vest in accordance
with the vesting schedule set at the time the options are
granted. Options expire ten years after the date of grant and
are subject to earlier cancellation in the event an optionee
ceases to be an employee. At December 31, 1994, 190,575 shares
were reserved under the 1993 Incentive Plan, including 584 shares
available for future grant. Options covering a total of 189,991
shares were outstanding under the 1993 Incentive Plan at
December 31, 1994, of which 48,982 shares were then exercisable.
In addition to the options outstanding under the 1993
Incentive Plan, at December 31, 1994, options covering 79,862
shares were outstanding under the 1983 Incentive Stock Option
Plan, all of which were then exercisable. No additional grants
may be made under that plan.
-12-
<PAGE>
NONEMPLOYEE DIRECTORS STOCK OPTION PLANS
- - ----------------------------------------
At the 1994 annual meeting of shareholders, the
Company's shareholders approved the Restated 1993 Stock Option
Plan for Nonemployee Directors (the "1993 Directors Plan").
Under the 1993 Directors Plan, shares of Common Stock are
reserved for issuance to nonemployee directors of the Company and
its subsidiaries at their fair market value at the date of grant
and become exercisable to the extent of one-third of the optioned
shares per year, with credit given for prior service. Options
expire ten years after the date of grant and are subject to
earlier cancellation in the event an optionee ceases to be a
director.
At December 31, 1994, 120,697 shares were reserved
under the 1993 Directors Plan, including 51,979 shares available
for future grant. Options covering a total of 68,718 shares were
outstanding under the 1993 Directors Plan at December 31, 1994,
all of which were exercisable. In addition to the options
outstanding under the 1993 Directors Plan, at December 31, 1994,
options covering 57,188 shares were outstanding under the 1988
Nonemployee Directors Stock Option Plan, all of which were then
exercisable. No additional grants may be made under that plan.
EMPLOYEE SAVINGS AND PROFIT SHARING PLAN
- - ----------------------------------------
Centennial Bank implemented the Employee Savings Plan
in 1986. Under the Plan, eligible employees may elect to
contribute by payroll deductions 2% to 15% of their compensation,
which will be matched by Centennial Bank up to 6% of compensation
at a level determined annually by the Bank (75% of employee
contributions were matched up to 6% of compensation during 1994).
Income taxes on employee contributions will be deferred under
current law as permitted by Section 401(k) of the Internal
Revenue Code, which results in substantial restrictions governing
the withdrawal of employee contributions. Employer contributions
vest (become nonforfeitable) 20% after two years of service with
the Bank and 20% per year thereafter, up to 100%. All of the
executive officers were entitled to full vesting of employer
contributions at December 31, 1994, due to past service with
Centennial Bank.
COMPENSATION OF DIRECTORS
- - -------------------------
Executive officers receive no compensation for serving
as directors of the Company or Centennial Bank. All other
-13-
<PAGE>
directors receive $500 per month, except that the Chairs of the
respective Boards receive $650 per month. Centennial Bank's
Asset/Liability Committee meets weekly; nonemployee directors who
serve on that committee receive $50 for each meeting attended.
Each nonemployee director of the Company or any of its
subsidiaries who is first elected to such position after December
1993 may, in the discretion of the Compensation Committee,
receive a 10-year option to purchase up to 6,352 shares of Common
Stock at the fair market value on the date of grant.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
- - --------------------------------------------------------------
All of the Company's executives also hold positions
with Centennial Bank and receive all of their compensation from
the Bank. The Bank has entered into intercompany agreements with
the Company and Centennial Mortgage for reimbursement for certain
compensation expenses to executive officers. Although compensa-
tion is paid by Centennial Bank, the Compensation Committee of
the Company establishes the compensation to be paid to the
Company's executive officers.
The Company and its subsidiaries are engaged in a
highly competitive industry. In order to succeed, the Company
must be able to attract and maintain qualified executives. To
achieve this objective, the Compensation Committee has structured
executive compensation systems which include both a fixed base
component and a contingent component tied to operating
performance that the Committee believes enables the Company to
attract and retain key executives.
In setting base compensation, the Compensation
Committee considers the overall performance of each executive
with respect to the duties and responsibilities assigned him.
Further, periodic surveys are taken of compensation levels and
benefit programs offered by other community banks and bank
holding companies which provide the Committee with information on
which to evaluate salary and compensation programs.
The Committee maintains a philosophy that a significant
element of compensation of executive officers, specifically
including Mr. Williams and Mr. Peery, shall be directly and
materially linked to both operating and stock price performance.
The benefit plans provided to the executive officers are designed
to accomplish that goal. In particular, bonus compensation is
available only to the extent that the Company meets or exceeds
budgeted net income. Further, the value of stock options which
have been granted to Mr. Williams and Mr. Peery and other
executive officers is ultimately dependent entirely upon the
market value of the Company's shares.
-14-<PAGE>
The Compensation Committee believes that the base
salary compensation provided to Mr. Williams, Mr. Peery and the
other executive officers of the Company is appropriate and
reasonable in light of such executives' duties, performance and
responsibilities and that the contingent forms of compensation
provided through the bonus plan and stock options provide
additional, continuing incentives to executives in appropriate
circumstances and are consistent with the benefits derived by
shareholders of the Company.
This report is submitted by the members of the
Compensation Committee of Centennial Bancorp:
Compensation Committee
Brian B. Obie
Robert L. Newburn
Cordy H. Jensen
Harry Rubenstein
STOCK PERFORMANCE GRAPH
The graph below compares the yearly percentage change
in the cumulative shareholder return on the Company's Common
Stock during the five years ended December 31, 1994, with the
(i) All Nasdaq U.S. Stocks Index as reported by the Center for
Research in Security Prices and (ii) Nasdaq Bank Index as
reported by the Center for Research in Security Prices. This
comparison assumes $100 was invested on December 31, 1989, in the
Company's Common Stock and the comparison groups and assumes the
reinvestment of all cash dividends prior to any tax effect and
retention of all shares issued pursuant to stock dividends and
stock splits.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PERIOD ENDING
12/31/89 12/31/90 12/31/91 12/31/92 12/31/93 12/31/94
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Nasdaq Bank Index 100.00 73.23 120.17 174.87 199.29 198.69
CentennialBncp-OR 100.00 94.10 143.28 222.61 280.17 281.71
All Nasdaq US Stocks 100.00 84.92 136.28 158.58 180.93 176.92
</TABLE>
-15-
<PAGE>
EMPLOYMENT AND CHANGE OF CONTROL AGREEMENTS
- - -------------------------------------------
The Company has an employment agreement with
Mr. Williams (the "Williams Agreement") that provides additional
benefits in the event of a change of control. Centennial Bank
has a deferred compensation agreement with Mr. Peery (the "Peery
Agreement").
Richard C. Williams
The Williams Agreement is a five-year agreement that
terminates on September 30, 1996. It provides for a base salary
of $190,000 for the year ending August 31, 1995, increasing
$15,000 to a base salary of $205,000 in the final year of the
agreement. Mr. Williams is also eligible to participate in
incentive compensation plans available to other executive
officers and for deferred compensation as described below. The
Williams Agreement also provides for disability income benefits
in the event Mr. Williams should become disabled.
In the event of termination of employment by the
Company for "cause" or by Mr. Williams without "good reason," as
such terms are defined in the Williams Agreement, Mr. Williams is
entitled to the payment of base salary, incentive compensation
and benefits only through his termination date, plus vested
deferred compensation. In the event of termination of employment
by the Company without cause or by Mr. Williams for good reason,
Mr. Williams is entitled to the payment of his base salary and
benefits through the end of the term of the Williams Agreement,
as well as his incentive compensation through the date of
termination, plus all deferred compensation.
The Williams Agreement provides for deferred
compensation in an amount equal to 8.4 times Mr. Williams' base
salary. The deferred compensation is immediately fully vested
unless employment is terminated by the Company for cause or by
Mr. Williams without good reason, in which case the deferred
compensation was vested 90% at July 31, 1994, with an additional
5% vesting each year thereafter through July 31, 1996. The
deferred compensation is payable in installments beginning at the
date of Mr. Williams' death if he dies before age 60, or at the
later of age 60 or the termination of his employment.
In the event of the acquisition of more than 50% of the
Company's outstanding Common Stock or the acquisition of all or
substantially all of the Company's operating assets,
Mr. Williams is entitled to extend his employment under the
Williams Agreement for a period of five years from the date of
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such transaction. Mr. Williams' base salary will increase at the
rate of 8% per year during any such extension.
Ron R. Peery
Centennial Bank entered into the Peery Agreement in
1989. It provides for deferred compensation in the amount of
$350,000, subject to vesting based upon Mr. Peery's length of
continued employment by Centennial Bank. His employment may be
terminated by Centennial Bank or Mr. Peery at any time for any
reason. The deferred compensation was 80% vested at March 31,
1995, with an additional 5% vesting each year thereafter through
March 31, 1999. The deferred compensation is payable in
installments beginning at the date of Mr. Peery's death if he
dies before age 60, or at the later of age 60 or the termination
of his employment. Mr. Peery also is eligible for group benefits
provided to other employees or executive officers.
CERTAIN TRANSACTIONS
Certain of the directors and executive officers of the
Company and its subsidiaries, members of their immediate
families, and certain companies with which such individuals are
associated are customers of and have banking transactions with
Centennial Bank in the ordinary course of business. Centennial
Bank expects to have such banking transactions in the future.
All credit transactions with these parties in excess of $25,000
must be approved by Centennial Bank's Asset/Liability Committee
and ratified by its Board of Directors. All outstanding loans
and commitments to loan to those parties were made in compliance
with applicable laws and on substantially the same terms
(including interest rates and collateral) as those prevailing for
Centennial Bank at the time for comparable transactions with
other persons and, in the opinion of management, did not involve
more than the normal risk of collectibility or present other
unfavorable features. Loans to directors and executive officers
of the Company and of Centennial Bank must comply with federal
and state laws, which generally prohibit any preferential terms
or rates.
Broadway & Oak Associates, of which Mr. Giustina is a
partner, purchased property from Centennial Bank in September
1994 for $1,425,000. Prior to the sale, the property was
appraised by Duncan, Morgan & Brown of Eugene, Oregon at slightly
less than $1,425,000. Centennial Bank purchased the land and
building in 1989 for $1,100,000. The property was used as the
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Bank's temporary Head Office during the period of construction of
its current facilities.
COMPLIANCE WITH SECTION 16 FILING REQUIREMENTS
Section 16 of the Securities Exchange Act of 1934, as
amended ("Section 16"), requires that all executive officers and
directors of the Company and all persons who beneficially own
more than 10 percent of the Company's Common Stock file an
initial report of their ownership of the Company's securities on
Form 3 and report changes in their ownership of the Company's
securities on Form 4 or Form 5. These filings must be made with
the Securities and Exchange Commission and the National
Association of Securities Dealers with a copy sent to the
Company.
Based solely upon the Company's review of the copies of
the filings that it received with respect to the fiscal year
ended December 31, 1994, and written representations from certain
reporting persons, the Company believes that all reporting
persons made all required Section 16 filings with respect to 1994
on a timely basis, except Mr. Rubenstein who reported a gift
late.
INFORMATION AVAILABLE TO SHAREHOLDERS
The Company's 1994 Annual Report is being mailed to
shareholders with this Proxy Statement. Additional copies of the
Annual Report and the Company's Form 10-KSB filed with the
Securities and Exchange Commission may be obtained without charge
from Michael J. Nysingh, Chief Financial Officer, Centennial
Bancorp, 675 Oak Street, P.O. Box 1560, Eugene, Oregon 97440.
The Company welcomes the views of its shareholders on
its activities and performance. Shareholders who cannot attend
the annual meeting personally may use the enclosed proxy card to
ask questions or make comments.
AUDITORS
Coopers & Lybrand LLP, independent auditors, were
selected by the Board of Directors to conduct an audit of the
Company's financial statements for the year ended December 31,
1994.
Representatives of Coopers & Lybrand LLP will be at the
annual meeting and will have an opportunity to make a statement
if they desire to do so and answer any appropriate questions
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concerning their report. However, management has been advised
that the representatives of Coopers & Lybrand LLP do not plan to
make a statement.
The Company will appoint at a later date independent
auditors to audit the Company's financial statements for the 1995
fiscal year. The Board of Directors will review the scope of any
such audit and other assignments given to the auditors to assess
whether such assignments would affect their independence.
PROPOSALS OF SHAREHOLDERS
Shareholders wishing to present proposals for action at
the Company's 1996 annual meeting of shareholders must submit the
proposals for inclusion in the Company's proxy statement not
later than December 19, 1995.
April 14, 1995
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APPENDIX A
PROXY
CENTENNIAL BANCORP
675 OAK STREET
EUGENE, OREGON 97401
ANNUAL MEETING OF SHAREHOLDERS
MAY 17, 1995
PROXY - SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of Centennial Bancorp hereby
appoints Brian B. Obie and Richard C. Williams, and each of them,
as proxies with full power of substitution, and authorizes them
to represent and to vote on behalf of the undersigned shareholder
all shares of the common stock of Centennial Bancorp that the
undersigned is entitled to vote at the annual meeting of
shareholders of Centennial Bancorp to be held on May 17, 1995,
and any adjournment or adjournments thereof, with respect to the
following:
(Continued, and to be marked, dated and signed on the other side)
FOLD AND DETACH HERE
CENTENNIAL BANCORP
ANNUAL MEETING OF SHAREHOLDERS
CENTENNIAL BANCORP
675 Oak Street- 2nd Floor
Eugene, OR 97401
May 17, 1995
3:00 P.M.
<PAGE>
1. ELECTION OF DIRECTORS:
NOMINEES: Brian B. Obie, Robert L. Newburn, Richard C. Williams,
Cordy H. Jensen and Dan Giustina
INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, STRIKE A LINE THROUGH THE NOMINEE'S NAME
IN THE LIST BELOW:
FOR the election of WITHHOLD
all five nominees AUTHORITY
listed (except as to vote for all
marked below to the nominees listed
contrary)
[ ] [ ]
2. DISCRETIONARY MATTERS
The proxies are authorized
to vote in their discretion
upon any other matters
properly coming before the
meeting or any adjournment
or adjournments thereof.
THIS PROXY WHEN PROPERLY EXECUTED
WILL BE VOTED IN ACCORDANCE WITH
THE SPECIFIC INSTRUCTIONS OF THE
UNDERSIGNED SHAREHOLDER. IF NO
DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR THE ELECTION OF THE
NOMINEES LISTED FOR DIRECTOR AND IN
THE PROXIES' DISCRETION AS TO SUCH
OTHER MATTERS AS MAY PROPERLY COME
BEFORE THE MEETING.
Dated:______________________, 1995
-----------------------------------
-----------------------------------
Signature(s) of Shareholder(s)
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Please sign exactly as your name
appears. When shares are held
jointly, both should sign. When
signing as attorney, executor,
administrator, trustee or guardian,
please give full title as such. If
a corporation, please sign in full
corporate name by president or
other authorized officer. If a
partnership, please sign in
partnership name by authorized
person.
"PLEASE MARK INSIDE BLUE BOXES SO
THAT DATA PROCESSING EQUIPMENT
WILL RECORD YOUR VOTES"
FOLD AND DETACH HERE
CENTENNIAL BANCORP
ANNUAL MEETING OF SHAREHOLDERS
CENTENNIAL BANCORP
675 Oak Street- 2nd Floor
Eugene, OR 97401
May 17, 1995
3:00 P.M.
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