SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
[X] Filed by the Registrant
[ ] Filed by a Party other than the Registrant
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of Commission Only (as permitted
by rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or
Rule 14a-12
Centennial Bancorp
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement
if Other Than Registrant)
Payment of filing fee (Check the appropriate box):
[X] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1),
or 14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
[ ] $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:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
<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:
<PAGE>
CENTENNIAL BANCORP
NOTICE OF ANNUAL MEETING
AND
PROXY STATEMENT
MAY 15, 1996
<PAGE>
CENTENNIAL BANCORP
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
May 15, 1996
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 15, 1996, 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 approve the 1995 Stock Incentive Plan.
3. 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 8, 1996
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 want 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 4, 1996 Cordy H. Jensen
Secretary
- --------------------------------------------------------------------------------
YOUR VOTE IS IMPORTANT. PLEASE RETURN YOUR PROXY
SO THAT YOUR VOTE CAN BE COUNTED.
- --------------------------------------------------------------------------------
<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 15,
1996. The approximate date of mailing this Proxy Statement and the accompanying
form of proxy is April 4, 1996. The Company's 1995 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 prior to the date hereof.
The only class of outstanding stock of the Company is its Common
Stock, $2 par value. At March 8, 1996, the record date for determining
shareholders entitled to vote at the meeting, there were 4,700,847 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. Brokers are permitted to vote the shares held by them
in "street name" on routine matters without receiving specific directions from
the beneficial owners of the shares, but brokers must receive specific
directions from beneficial owners before they may vote on nonroutine matters.
Thus, brokers enter a "broker nonvote" on nonroutine matters with respect to
shares where the broker has not received direction from the beneficial owner.
These broker nonvotes, as well as votes that are withheld from directors and
abstentions, are counted in determining whether a quorum is present.
If a proxy in the accompanying form is executed and returned, the
shares represented thereby will be voted at the
<PAGE>
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 and for approval of the 1995 Stock Incentive Plan. 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 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.
PROPOSAL 1
ELECTION OF DIRECTORS
Members of the Board of Directors are elected annually. 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. 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,
which means that the five nominees receiving the most votes at the meeting will
be elected. Accordingly, a vote withheld from a particular nominee will not
affect the outcome of an uncontested election. Shareholders are not entitled to
cumulate votes for election of directors.
<PAGE>
NOMINEES FOR DIRECTOR
The following table gives certain information about each nominee for
director, as of March 8, 1996. With the exception of Mr. Giustina (who was
elected to the Board in May 1995) 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 Centennial Mortgage Co. ("Centennial Mortgage"), another subsidiary
of the Company.
Name (Age) and Principal Occupation
Position with Company (During the last 5 Years)
- --------------------- -------------------------
Brian B. Obie (54) 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 (64) 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 (56) 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 (56) 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 (46) Managing Partner of Giustina
Director Resources (owns and manages timber and
timberland); member/manager of G
Group LLC (owns and manages
residential and commercial real
estate); director of Centennial Bank
since 1991
The Board of Directors held 13 meetings during 1995. Each director,
during his tenure on the Board of Directors of the Company in 1995, attended
more than 75% of the aggregate of the total number of meetings of the Board of
Directors and of
<PAGE>
meetings held by committees of the Company's Board of Directors
on which the director served.
BOARD COMMITTEES
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 formally in 1995, but the scope and
results of the Company's audit were reviewed at the Company's regular Board
meetings.
The Compensation Committee administers the Company's stock option
plans and determines management compensation. The members of the Compensation
Committee are Messrs. Obie, Newburn, Giustina (since his election to the Board
in May 1995) and Jensen. The Compensation Committee held four meetings in 1995,
which were attended by all members of the committee during their tenure on the
committee.
In addition, Centennial Bank has an Audit and Personnel Committee of
its Board of Directors consisting of four 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 seven 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. The independent auditors have
direct access to the Company's Board of Directors, and the employees responsible
for conducting internal reviews have direct access to the Bank's Audit and
Personnel Committee to discuss the results of their examinations, the adequacy
of internal accounting controls and the integrity of financial reporting.
PRINCIPAL SHAREHOLDERS AND MANAGEMENT OWNERSHIP
The following table sets forth certain information regarding
beneficial ownership of the Company's Common Stock at February 29, 1996 by: (i)
each person who is known by the
<PAGE>
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.
<TABLE>
<CAPTION>
Amount and Nature of
Beneficial
Name of Beneficial Owners Ownership Percent of Class
- ------------------------- -------------------- ----------------
<S> <C> <C>
Brian B. Obie 134,574(1) 2.9
Robert L. Newburn 99,140(2) 2.1
Dan Giustina 34,277(3) .7
Cordy H. Jensen 114,392(4) 2.4
Richard C. Williams 191,440(5) 4.0
Ron R. Peery 154,104(6) 3.3
David M. Gazeley 71,642(7) 1.5
Trust Dept., Bank of
America Oregon 331,963(8) 7.1
FBL Investment Advisory Services, Inc. 365,664(9) 7.2
All executive officers and directors
as a group (12 persons) 1,059,235(10) 21.8
</TABLE>
(1) Includes 14,870 shares held by Mr. Obie's wife, 67,382 shares held by
Obie Media Corporation of which Mr. Obie is President and owns a
controlling interest, and 7,335 shares which could be acquired within
60 days by exercise of stock options.
(2) Includes 73,648 shares which are held jointly with Mr. Newburn's wife,
6,626 shares which are held by Mr. Newburn as custodian for minors,
and 17,881 shares which could be acquired within 60 days by exercise
of a stock option.
(3) Includes 14,525 shares which could be acquired within 60 days by
exercise of a stock option.
(4) Includes 73,648 shares which are jointly held with Mr. Jensen's wife,
321 shares which are held by Mr. Jensen as custodian for a minor, 40
shares which are held jointly in CAC Investments, a partnership of
which Mr. Jensen is the Managing Partner, 18,311 shares which are held
by Mr. Jensen as trustee for his mother, and 7,335 shares which could
be acquired within 60 days by exercise of a stock option.
(5) Includes 42,586 shares which could be acquired within 60 days by
exercise of a stock option. Also includes 63,609 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.
[footnotes continued on next page]
<PAGE>
[footnotes continued from previous page]
(6) Includes 66,616 shares which are held jointly with Mr. Peery's wife,
3,141 shares which are held jointly with Mr. Peery's mother, 10,274
shares which are held by Mr. Peery's wife, and 25,578 shares which
could be acquired within 60 days by exercise of a stock option. Also
includes 40,239 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) Includes 904 shares which are held by Mr. Gazeley's wife, 32,065 shares
which are held jointly with Mr. Gazeley's wife as trustees of the
Gazeley Family Trust, 321 shares which are held by Mr. Gazeley as
custodian for a minor, 2,936 shares which could be acquired within 60
days by exercise of a stock option, and 31,013 shares which are held of
record for Mr. Gazeley's account by B of A as trustee of the Employee
Savings Plan; B of A has sole voting power over such shares.
(8) 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.
(9) FBL Investment Advisory Services, Inc. is an investment adviser
registered under the Investment Advisers Act of 1940 whose address is
5400 University Avenue, West Des Moines, IA 50266. The shares shown as
beneficially owned represent shares underlying $3,769,000 of Centennial
Bancorp Convertible Debentures due May 1, 2004, which are held on
behalf of various investment advisory clients, none of which
individually owns more than 5%.
(10) Includes 163,835 shares which could be acquired within 60 days by
exercise of stock options. Also includes 263,187 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.
INFORMATION REGARDING MANAGEMENT
EXECUTIVE OFFICERS
The following information identifies the executive officers of the
Company. 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 (56) 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.
Ron R. Peery (56) Executive Vice President of the Company
since 1986; President and Southern
Region Manager of Centennial Bank since
January 1996; President and Chief
Operating Officer of Centennial Bank
from 1992 through December 1995;
Executive Vice President of Centennial
<PAGE>
Bank from 1982 to 1992; a director
of Centennial Mortgage since 1987.
Eric H. Hardin (55) 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 (56) Executive Vice President of the Company
since 1986; Executive Vice President of
Centennial Bank since 1982.
Michael J. Nysingh (43) 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 January 1995; Vice
President of Centennial Bank from 1982
through 1994; Cashier of Centennial Bank
since 1982; a director of Centennial
Mortgage since 1990; Chief Financial
Officer of Centennial Mortgage since
1988.
David M. Gazeley (46) Senior Vice President of Centennial Bank
since 1992; Northern Region Manager of
Centennial Bank since January 1996;
Manager of Pacific Corporate Center
Office of Centennial Bank from May 1994
through December 1995; Manager of
Springfield Branch of Centennial Bank
from 1986 to April 1994; Vice President
of Centennial Bank from 1986 to 1992.
Thomas P. Widmer (46) 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 through 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.
Dennis M. Carlson (50) President and Chief Executive Officer of
Centennial Mortgage since 1988;
Executive Vice President of Centennial
<PAGE>
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.
EXECUTIVE COMPENSATION
The following table sets forth certain information regarding
compensation paid by the Company during 1995, 1994 and 1993 to Mr. Williams as
the Company's Chief Executive Officer and to Mr. Peery and Mr. Gazeley as the
only other executive officers whose aggregate salary and bonus in 1995 exceeded
$100,000:
<TABLE>
<CAPTION>
Summary Compensation Table
--------------------------
Long-term
compensation
Annual compensation awards
------------------------- ------------
Number of
securities
underlying All other
Name and principal Salary(1) Bonus(2) options compensation
position Year ($) ($) (#) ($)(3)
- ------------------ ---- --------- -------- --------- ------------
<S> <C> <C> <C> <C> <C>
Richard C. Williams 1995 206,250 75,000 66,000 9,841
President and Chief 1994 187,369 60,000 -- 11,917
Executive Officer of 1993 165,650 60,000 22,000 12,834
the Company
Ron R. Peery 1995 110,000 35,000 -- 7,382
President and Southern 1994 98,250 30,000 -- 8,083
Region Manager of 1993 90,000 25,000 16,500 6,666
Centennial Bank
David M. Gazeley 1995 78,865 38,190 -- 7,595
Senior Vice President 1994 72,624 26,817 -- 7,120
and Northern Region 1993 58,000 22,336 -- 3,937
Manager
</TABLE>
(1) Includes amounts contributed by the named executive officer to the Employee
Savings Plan.
(2) Includes bonuses paid or to be paid during the subsequent year but
attributable to the year indicated.
(3) Consists of the Company's contributions to the Employee Savings Plan for
the benefit of the named executive officers.
<PAGE>
The following table sets forth information regarding the option to
purchase the Company's Common Stock that was granted during 1995:
<TABLE>
<CAPTION>
Option Grants in Fiscal 1995
----------------------------
Potential
realizable
Number of % of total value at
securities options assumed annual
underlying granted to Exercise rates of stock
options employees in or base Expiration price appreciation
granted fiscal year ($/Sh) date for option term
---------- ------------ -------- ---------- ------------------
5%($) 10%($)
----- ------
<S> <C> <C> <C> <C> <C> <C>
Richard C. Williams 66,000(1) 100% $10.57(2) 11/21/2015 $1,153,000 $3,995,000
</TABLE>
(1) The option granted to Mr. Williams becomes exercisable as to one-third
of the option shares on September 30 each year, commencing on September
30, 1996, until fully vested. Exercise of the option may be accelerated
if the Company is acquired by another corporation. The option grant is
subject to approval of the 1995 Stock Incentive Plan at this annual
meeting. The option is a nonstatutory stock option, and may be
transferred within the limits described under "Transferability" on page
20 of this Proxy Statement.
(2) The exercise price was equal to the fair market value of the underlying
Common Stock on the date of grant. The option is not currently
exercisable. Consequently, the dollar value of the benefit to Mr.
Williams will depend on the excess of the market price of the Common
Stock over the exercise price at the date of exercise, and cannot be
determined at this time. The market value of the Common Stock (i.e.,
the closing price) on March 25, 1996 was $12.25 per share.
The following table sets forth information regarding option exercises
during 1995 and option holdings at December 31, 1995 by each executive officer
named in the Summary Compensation Table:
<TABLE>
<CAPTION>
Aggregated Option Exercises in Last Fiscal Year
-----------------------------------------------
and Fiscal Year-End Option Values
---------------------------------
Shares Value of unexercised in-the-
acquired Number of unexercised money options at
on Value options at FY-End(#) FY-End($)(1)
exercise realized --------------------- ----------------------------
Name (#) ($) Exercisable Unexercisable Exercisable Unexercisable
- ------------------- --------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Richard C. Williams 23,217 $192,046 42,587 75,978 $354,798 $143,660
Ron R. Peery 11,053 91,437 25,579 7,483 193,279 34,389
David M. Gazeley 2,934 12,809 2,936 8,803 13,494 40,460
</TABLE>
(1) On December 31, 1995, the closing price of the Company's Common Stock was
$12.05. 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.
<PAGE>
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 the option 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, 1995, 214,219
shares were reserved under the 1993 Incentive Plan, including 18,274 shares
available for future grant. Options covering a total of 195,945 shares were
outstanding under the 1993 Incentive Plan at December 31, 1995, of which 104,778
shares were then exercisable.
In addition to the options outstanding under the 1993 Incentive Plan,
at December 31, 1995, options covering 47,512 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.
Shareholders are being asked to approve the 1995 Stock Incentive Plan
at this annual meeting. A total to 220,000 shares of Common Stock have been
reserved for issuance under that plan. See pages 18 to 23 for a description of
this plan. An option covering 66,000 shares has been granted under the 1995
Stock Incentive Plan, subject to shareholder approval of the plan.
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, 1995, 139,383 shares were reserved under the 1993
Directors Plan, including 37,205 shares available for future grant. Options
covering a total of 102,178 shares were outstanding under the 1993 Directors
Plan at December 31, 1995, of which 70,461 shares were then exercisable.
In addition to the options outstanding under the 1993 Directors Plan,
at December 31, 1995, options covering 55,497 shares were outstanding under the
1988 Nonemployee Directors
<PAGE>
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 (60% of employee
contributions were matched up to 6% of compensation during 1995). Income taxes
on employee contributions will be deferred under current law as permitted by
Section 401(k) of the Internal Revenue Code, which imposes 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, 1995,
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 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 Committee, receive a 10-year option to purchase up to 7,335 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
compensation 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
<PAGE>
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 1995, as the Board of Directors reviewed the Company's strategic
plans for the future, the Board determined that it would be in the best
interests of the Company to renegotiate Mr. Williams' employment contract to
extend its term. Central to the Board's interests were the long-term operation
of the Company and succession of management. The new agreement is described at
pages 15 to 16 of this Proxy Statement.
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 Compensation Committee maintains a philosophy that a significant
element of compensation of executive officers, specifically including Mr.
Williams, Mr. Peery and Mr. Gazeley 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. In 1995, executive officers earned cash bonuses in
specified amounts per executive, upon the achievement of specific performance
measurements by the Company each quarter. In 1995, the performance measurements
were: return on average assets; return on average equity; net interest margin;
efficiency ratio; and growth objectives for total loans, total deposits and
total assets. Cash bonuses for 1995 were paid 20% on the 15th day of April, July
and October and 40% on January 15, 1996. Further, the value of stock options
which have been granted to Mr. Williams, Mr. Peery and Mr. Gazeley and other
executive officers is ultimately dependent entirely upon the market value of the
Company's shares.
The Compensation Committee believes that the base salary compensation
provided to Mr. Williams, Mr. Peery, Mr. Gazeley 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 bonuses and stock options provide
additional, continuing incentives to executives in appropriate
<PAGE>
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
Dan Giustina
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, 1995, 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, 1990, 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 GRAPHICS
<TABLE>
<CAPTION>
PERIOD ENDING
12/31/90 12/31/91 12/31/92 12/31/93 12/30/94 12/29/95
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Nasdaq CRSP Bank 100.00 164.09 239.98 272.39 271.41 404.35
Centennial Bncp-OR 100.00 152.26 236.60 297.74 299.38 495.27
Nasdaq Total Return 100.00 160.56 186.86 214.51 209.68 296.30
</TABLE>
<PAGE>
The stock performance shown on the graph above is not necessarily
indicative of future performance. The Company will not make nor endorse any
predictions as to future stock performance.
EMPLOYMENT AGREEMENTS
The Company has an employment agreement with Mr. Williams (the
"Williams Agreement"). Centennial Bank has a deferred compensation agreement
with Mr. Peery (the "Peery Agreement").
RICHARD C. WILLIAMS
The Williams Agreement commenced on October 1, 1995 and terminates on
December 31, 2001. The Williams Agreement supersedes and replaces a five-year
agreement that would have terminated on September 30, 1996.
The Williams Agreement provides for a base salary of $225,000 for the
12 months ending September 30, 1996, increasing to a base salary of $250,000 for
the 12 months ending September 30, 1997 and for amounts approved by the
Company's Board of Directors for periods after September 30, 1997, but not less
than $250,000 for each 12-month period.
In addition to the base salary for Mr. Williams described above, the
Williams Agreement provides for a cash bonus for each calendar year if the
Company and/or Mr. Williams reach certain objectives determined by the Board of
Directors before the beginning of that year. Any cash bonus is payable 20% on
the 15th day of April, July and October and 40% on the 15th day of the following
January with the first payment due April 15, 1996. Assuming the objectives are
met, the cash bonus will be $100,000 for the year ending December 31, 1996,
$100,000 for the year ending December 31, 1997 and amounts approved by the Board
of Directors for the periods after December 31, 1997, but not less than $25,000
per calendar quarter.
The Williams Agreement also acknowledges the grant to Mr. Williams of
an option to purchase 66,000 shares of the Company's Common Stock under the 1995
Stock Incentive Plan, subject to the approval of such plan at this annual
meeting of shareholders. That option is described on page 10 of this Proxy
Statement. 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, cash
bonus and benefits
<PAGE>
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, cash bonus, and benefits through the end of the term of the Williams
Agreement, plus all deferred compensation.
The Williams Agreement provides for deferred compensation in an amount
equal to $2,100,000 (8.4 times Mr. Williams' base salary of $250,000). The
deferred compensation is fully vested unless employment is terminated by the
Company for cause or by Mr. Williams without good reason, in which case the
deferred compensation is vested 95% until October 1, 1996 on which date the
deferred compensation will become fully vested. The deferred compensation is
payable in installments beginning at the earliest to occur of the following: (1)
December 31, 2001; (2) the date of Mr. Williams' death; (3) the termination of
his employment unless terminated by reason of disability; or (4) the date of the
last payment to be made under a disability income insurance policy.
The Williams Agreement provides that for periods after September 30,
1997 or the date a new chief executive officer of the Company is hired,
whichever occurs later, Mr. Williams will be deemed to have fulfilled his
full-time service obligation if he devotes time equivalent to three-fourths of a
full-time schedule to his duties with the Company. In addition, Mr. Williams is
permitted to take a single leave of absence of up to 180 days, which may not
commence until a new chief executive officer is hired and which is expected to
be completed prior to December 31, 1998. He will receive full compensation and
benefits during such leave of absence.
For a period of three years following Mr. Williams' termination of
employment, unless such termination was by the Company without cause, or by Mr.
Williams for good reason, or as a result of any acquisition of a majority of the
stock or assets of the Company by a third party, Mr. Williams cannot, without
the consent of the Board of Directors, engage in or enter into any business or
perform services for another business that is in substantial competition with
the Company.
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 85% vested at March 31, 1996, with an
additional 5% vesting each year thereafter through March 31, 1999. The deferred
compensation is payable in
<PAGE>
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 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 (the
"1934 Act"), requires that all executive officers and directors of the Company
and all persons who beneficially own more than 10% 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
<PAGE>
ended December 31, 1995, and written representations from certain reporting
persons, the Company believes that all reporting persons made all required
Section 16 filings with respect to 1995 on a timely basis.
PROPOSAL 2
APPROVAL OF
1995 STOCK INCENTIVE PLAN
The Board of Directors has adopted, subject to shareholder approval,
the 1995 Stock Incentive Plan (the "Plan"). The Plan is intended to provide a
means by which select employees, directors and consultants may be given an
opportunity to acquire stock of the Company. The Plan authorizes the grant of
incentive stock options (options that qualify under Section 422 of the Internal
Revenue Code), nonstatutory stock options and restricted stock awards, or any
combination of the foregoing.
The following is a summary of the basic provisions of the Plan. A
complete copy of the Plan is attached as Exhibit A, and the following discussion
is qualified by reference to Exhibit A.
ADMINISTRATION
The Plan will be administered by the Compensation Committee (the
"Committee"). The Committee will determine the persons to whom awards will be
made under the Plan, when awards will be granted, the amount of the awards, and
other terms and conditions of the awards. The Committee may also waive or modify
any restriction with respect to an award. The Committee will promulgate rules
and regulations for the operation of the Plan, will interpret the Plan and
related agreements and will generally supervise the administration of the Plan.
ELIGIBILITY
Employees, directors (including nonemployee directors) and consultants
are eligible to participate in the Plan. Only employees are eligible to receive
incentive stock options.
At the date of this Proxy Statement, approximately 45 officers and 12
nonemployee directors of the Company and its subsidiaries are eligible to
participate in the Plan. Each person selected by the Committee to receive an
award under the Plan must be a person the Committee believes has made or will
make an important contribution to the Company. In determining to
<PAGE>
make awards under the Plan, the Committee may take into account the nature of
the services rendered by the individual, the person's present and potential
contribution to the success of the Company, and such other factors as the
Committee deems relevant.
NUMBER OF SHARES COVERED BY PLAN
The Company may issue up to 220,000 shares of Common Stock under the
Plan (including 66,000 shares issuable to Mr. Williams under an option granted
under the Plan in November 1995, subject to shareholder approval of the Plan).
TERM OF PLAN; AMENDMENT OF PLAN
Subject to shareholder approval, the Plan was approved by the Board of
Directors in November 1995 and will remain in effect until all awards granted
under the Plan have been satisfied or expired. However, no awards may be granted
under the Plan after November 21, 2005. To the extent that an award lapses or
terminates, any shares of Common Stock subject to such award shall again be
available for the grant of an award under the Plan.
Generally, the Board of Directors of the Company may amend, modify or
terminate the Plan at any time subject to the requirement for shareholder
approval of certain material changes.
STOCK OPTIONS
The term of each option granted under the Plan shall be as specified
by the Committee at the date of grant, except that no incentive stock option
will have a term of more than ten years from the date of grant. No incentive
stock option will be granted to an individual who owns more than 10% of the
total combined voting power of all classes of stock of the Company unless the
exercise price is at least 110% of the fair market value of the Common Stock at
the time of the grant and the term of the option is no more than five years from
the date of grant.
The Committee will determine the exercise price for all stock options.
The exercise price for incentive stock options will be not less than the fair
market value of the underlying Common Stock on the date of grant.
The exercise price of an option or portion thereof shall be paid in
full at the time of exercise in the manner prescribed by the Committee.
<PAGE>
In the event of the death of other termination of an optionee's
employment with the Company, the Plan provides that the optionee's options may
be exercised for specified periods thereafter (one year in the case of
termination by reason of death or disability and three months in the case of
termination for any other reason), but only if and to the extent the optionee
was entitled to exercise the option at the date of such termination. The Plan
also provides that, at the time of grant or at any time thereafter, the
Committee may extend the three-month and one-year post-termination exercise
periods for any period up to the expiration date of the option and may increase
the portion of the option that is exercisable.
RESTRICTED STOCK
The Committee may grant awards of restricted Common Stock under the
Plan. The Committee will determine the persons to receive restricted stock
awards and will determine the amount and form of any payment due for the
restricted stock. The Committee also will establish a restriction period for
such awards during which the holder will have rights to receive dividends, vote
the Common Stock, and enjoy all other shareholder rights except custody of the
stock certificate and transfer rights. The restricted stock awards will be
subject to such other restrictions as the Committee may determine. Such awards
are subject to forfeiture for breach of the terms and conditions of the
restricted stock agreement entered into at the time of such award.
TRANSFERABILITY
An award will not be transferable otherwise than by will or the laws
of descent and distribution, unless the assignment or transfer: (i) is of a
nonstatutory stock option; (ii) is not made for consideration; (iii) is
consented to by the Committee; and (iv) does not cause the Plan to lose its
qualification under SEC Rule 16b-3. At the date the Plan was approved by the
Board, the following additional transfers of nonstatutory stock options could be
made without causing the Plan to lose its qualification under Rule 16b-3: (i)
transfers pursuant to qualified domestic relations orders; (ii) transfers to
members of the optionee's immediate family (i.e., children, grandchildren and
spouses); (iii) transfers to trusts for the benefit of such family members; and
(iv) transfers to partnerships whose only partners are such family members.
<PAGE>
CHANGES IN CAPITAL STRUCTURE
If any recapitalization, reclassification, stock split, combination of
shares or stock dividend causes the Company's outstanding Common Stock to
increase or decrease or to be changed into a different number or kind of
securities of the Company or any other corporation, the Committee will make
appropriate adjustments in the number and kind of shares available for awards
under the Plan and in the number and kind of shares as to which outstanding
options will be exercisable, such that the optionee's proportionate interest
before and after the event is maintained.
In the event of the dissolution of the Company, or a merger,
consolidation, plan of exchange or similar transaction affecting the Company, in
lieu of making the adjustment described immediately above, or in lieu of having
the options continue unchanged, the Committee may, in its sole discretion,
provide a 30-day period prior to such event during which optionees shall have
the right to exercise options in whole or in part without any limitation on
exercisability. Upon the expiration of any such 30-day period, all unexercised
options will immediately terminate. Notwithstanding the foregoing, if an
optionee is subject to Section 16(b) of the 1934 Act and, if the dissolution,
merger, etc. occurs less than six months after the date an option is granted,
the exercise of the option will not be accelerated, unless such acceleration is
approved by both the Committee and the optionee, if acceleration would cause the
grant or the exercise of the option to be deemed a purchase subject to Section
16(b) of the 1934 Act and the regulations promulgated thereunder.
FEDERAL TAX CONSEQUENCES
INCENTIVE STOCK OPTIONS
Certain options authorized to be granted under the Plan are intended
to qualify as "incentive stock options" for federal income tax purposes. Under
federal income tax law in effect as of the date of this Proxy Statement, an
optionee will recognize no income upon the grant or exercise of an incentive
stock option. If an employee exercises an incentive stock option and does not
dispose of any of the shares acquired within two years following the date of
grant and within one year following the date of exercise, capital gain or loss
will be realized upon the subsequent disposition of the shares. If an employee
disposes of shares acquired upon exercise of an incentive stock option before
the expiration of either the one-year or the two-year holding period specified
in the foregoing sentence (a "disqualifying disposition"), the employee will
realize ordinary income in an amount equal to the lesser of: (i) the excess of
the fair market value of the shares on the date of exercise over the exercise
<PAGE>
price; or (ii) the excess of the fair market value of the shares on the date of
disposition over the exercise price. Any additional gain realized upon the
disqualifying disposition will constitute capital gain. The Company will not be
allowed any deduction for federal income tax purposes at either the time of
grant or the time of exercise of an incentive stock option. Upon any
disqualifying disposition by an employee, the Company will be entitled to a
deduction to the extent the employee realizes ordinary income.
NONSTATUTORY STOCK OPTIONS
Certain options authorized to be granted under the Plan will be
treated as nonstatutory stock options for federal income tax purposes. Under
federal income tax law in effect as of the date of this Proxy Statement, no
income is realized by the holder of a nonstatutory stock option until the option
is exercised. At the time of exercise, the optionee will realize income, and the
Company will be entitled to a deduction, in the amount by which the fair market
value of the shares subject to the option at the time of exercise exceeds the
exercise price. The Company's deduction is conditioned upon the Company
withholding income taxes on such income. Upon the sale of shares acquired upon
exercise of a nonstatutory stock option, the employee will realize capital gain
or loss equal to the difference between the amount realized from the sale and
the fair market value of the shares on the date of exercise.
RESTRICTED STOCK
Restricted stock awarded under the Plan, which is transferable or not
subject to a substantial risk of forfeiture, will be taxable as ordinary income
equal to the excess of the fair market value of the shares received (determined
as of the date of the award) over the amount, if any, paid for the shares by the
participant. The Company will be entitled to a tax deduction in the same amount,
if the Company withholds income taxes on the participant's income.
In the case of restricted shares that are not transferable and are
subject to a substantial risk of forfeiture on the date of issuance, the
participant will generally recognize ordinary income equal to the excess of the
fair market value of shares received (determined as of the date on which the
shares either become transferable or are not subject to a substantial risk of
forfeiture) over the amount, if any, paid for the shares. The Company will be
entitled to a tax deduction in the same amount, if the Company withholds income
taxes on the participant's income. A participant may elect to recognize income
when the shares are received, rather than upon the expiration of the transfer
restriction or risk of forfeiture, and, in such event, the amount of ordinary
income will be
<PAGE>
determined as of the date of issuance rather than upon expiration of the
applicable restriction. The Company's tax deduction will be determined at the
same time.
EXPENSES
The Company will pay all the costs and expenses of administering the
Plan.
FUTURE AWARDS UNDER THE PLAN
The Committee has granted one option under the Plan, subject to
shareholder approval of the Plan. That option, which was granted to Mr.
Williams, is described on page 10 of this Proxy Statement. As of the date of
this Proxy Statement, the Committee has not decided to make any other awards
under the Plan. Therefore, except for the option granted to Mr. Williams, the
number and type of awards to be granted under the Plan to any particular
individual cannot be determined at this time.
SHAREHOLDER APPROVAL
The affirmative vote of a majority of the shares of Common Stock
present in person or represented by a proxy at the annual meeting is required to
approve the Plan. In determining whether the Plan has received the requisite
number of affirmative votes, unexecuted proxies, abstentions and broker nonvotes
are deemed present at the meeting and, therefore, will have the same effect as a
vote against the proposal.
The Board of Directors recommends that the Plan be approved.
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
meeting, management will report on the Company's business, and shareholders will
have an opportunity to ask questions.
<PAGE>
INFORMATION AVAILABLE TO SHAREHOLDERS
The Company's 1995 Annual Report is being mailed to shareholders with
this Proxy Statement. Additional copies of the Annual Report and the Company's
Form 10-K 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, 1995.
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 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
1997 annual meeting of shareholders must submit the proposals for inclusion in
the Company's proxy statement not later than December 5, 1996.
April 4, 1996
<PAGE>
EXHIBIT A
CENTENNIAL BANCORP
1995 STOCK INCENTIVE PLAN
Adopted by the Board of Directors
on November 22, 1995
I. PURPOSE
The purpose of the Plan is to provide a means by which
selected Employees, Directors and Consultants may be given an opportunity to
acquire stock of the Company. The Company, by means of the Plan, seeks to retain
the services of persons who are currently Employees, Directors or Consultants,
to secure and retain the services of new Employees, Directors and Consultants,
and to provide incentives for such persons to exert maximum efforts for the
success of the Company. Accordingly, the Plan provides for granting Incentive
Stock Options, Nonstatutory Stock Options and Restricted Stock Awards, or any
combination of the foregoing, as is best suited to the circumstances of the
particular person as provided herein.
II. DEFINITIONS
The following definitions shall be applicable throughout the Plan unless
specifically modified by any paragraph:
a. "1934 ACT" means the Securities Exchange Act of 1934, as amended
and in effect from time to time, or any successor statute.
b. "AWARD" means, individually or collectively, any Option or
Restricted Stock Award.
c. "BOARD" means the Board of Directors of Centennial Bancorp.
d. "CODE" means the Internal Revenue Code of 1986, as amended and in
effect from time to time, or any successor statute. Reference in the Plan
to any section of the Code shall be deemed to include any amendments or
successor provisions to any such section.
e. "COMMITTEE" means not less than two members of the Board who are
selected by the Board as provided in Paragraph A of Article IV.
f. "COMMON STOCK" means the shares of Common Stock of the Company,
with par value of $2.00 per share.
<PAGE>
g. "COMPANY" means Centennial Bancorp and any Parent and Subsidiary of
Centennial Bancorp.
h. "CONSULTANT" means any person, including an adviser, engaged by the
Company to render services and who does not render such services as an
Employee or Director.
i. "DIRECTOR" means an individual elected to the Board by the
shareholders of the Company or by the Board under applicable corporate law
who is serving on the Board on the date the Plan is adopted by the Board or
is elected to the Board after such date.
j. "DISABILITY" means the condition of being permanently "disabled"
within the meaning of Section 22(e)(3) of the Code, namely being unable to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result
in death or which has lasted or can be expected to last for a continuous
period of not less than 12 months.
k. "EMPLOYEE" means any person (including a Director) in an employment
relationship with the Company.
l. "FAIR MARKET VALUE" means, as of any specified date:
(i) If the Common Stock is listed on any established stock
exchange, its fair market value shall be the closing sale price
of the Common Stock (or the average of the closing bid and asked
prices, if no sales were reported), as quoted on such exchange
(or the exchange with the greatest volume of trading in Common
Stock) on the business day preceding the date of such
determination, as reported in The Wall Street Journal or such
other source as the Board deems reliable; or
(ii) If the Common Stock is quoted on the National Market
System of the National Association of Securities Dealers, Inc.
Automated Quotation (Nasdaq) System, its fair market value shall
be the average of the closing bid and asked prices for the Common
Stock on the business day preceding the date of such
determination, as reported in The Wall Street Journal or such
other source as the Board deems reliable; or
(iii) In the absence of an established market for the Common
Stock, the fair market value thereof shall be determined in good
faith by the Committee.
<PAGE>
m. "HOLDER" means an Employee, Consultant or a Director who has been
granted an Award, and any assignee or transferee of such person as
permitted under the Plan.
n. "INCENTIVE STOCK OPTION" means an incentive stock option within the
meaning of Section 422 of the Code.
o. "NONSTATUTORY STOCK OPTION" means a stock option other than an
Incentive Stock Option.
p. "OPTION" means an Award described in Article VII of the Plan.
q. "OPTION AGREEMENT" means a written agreement between the Company
and a Holder with respect to an Option.
r. "PARENT" means a "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code.
s. "PLAN" means the 1995 Stock Incentive Plan of Centennial Bancorp,
as set forth herein and as may be hereafter amended from time to time.
t. "RESTRICTED STOCK AGREEMENT" means a written agreement between the
Company and a Holder with respect to a Restricted Stock Award.
u. "RESTRICTED STOCK AWARD" means an Award described in Article VIII
of the Plan.
v. "RULE 16B-3" means Rule 16b-3 promulgated by the Securities and
Exchange Commission under the 1934 Act, as such may be amended from time to
time, and any successor rule, regulation or statute fulfilling the same or
similar function.
w. "SUBSIDIARY" means a "subsidiary corporation," whether now or
hereafter existing, as defined in Section 424(f) of the Code; namely, any
corporation in which the Company directly or indirectly controls 50 percent
or more of the total combined voting power of all classes of stock having
voting power.
III. EFFECTIVE DATE AND DURATION OF THE PLAN
The Plan shall be effective as of November 22, 1995, the date of its
adoption by the Board, subject to its ratification and approval by the
shareholders of Centennial Bancorp on or before November 21, 1996. Until the
Plan has been approved by shareholders, any Awards made under the Plan shall be
conditioned upon such approval. No Awards may be granted under the Plan after
November 21, 2005. The Plan shall remain in
<PAGE>
effect until all Awards granted under the Plan have been satisfied or expired.
IV. ADMINISTRATION
A. COMPOSITION OF COMMITTEE. The Plan shall be administered by a committee
which shall be (i) appointed by the Board and (ii) constituted so as to permit
the Plan to comply with Rule 16b-3. Except as may be permitted without causing
the Plan to lose its qualification under Rule 16b-3, no member of the Committee
shall be eligible to receive an Award under the Plan and no person who has
received an Award in the preceding year shall be eligible to serve on the
Committee.
B. AUTHORITY OF THE COMMITTEE. Subject to the provisions of the Plan, the
Committee shall have sole authority, in its discretion, to determine: (i) which
Employees, Directors and Consultants shall receive Awards; (ii) the time or
times when Awards shall be granted; (iii) the type or types of Awards to be
granted; and (iv) the number of shares of Common Stock which may be issued under
each Award. In making such determinations, the Committee may take into account
the nature of the services rendered by the respective individuals, their present
and potential contribution to the success of the Company, and such other factors
as the Committee in its discretion shall deem relevant. The Committee shall also
have such additional powers as are delegated to it by the Plan. Subject to the
express provisions of the Plan, the Committee is authorized to construe the Plan
and the respective agreements executed hereunder, to prescribe such rules and
regulations relating to the Plan as it may deem advisable to carry out the Plan,
and to determine the terms, restrictions and provisions of each Award, including
such terms, restrictions and provisions as shall be requisite in the judgment of
the Committee to cause designated Options to qualify as Incentive Stock Options,
and to make all other determinations necessary or advisable for administering
the Plan. The Committee may correct any defect or supply any omission or
reconcile any inconsistency in any agreement relating to an Award in the manner
and to the extent it shall deem expedient to carry the Award into effect. The
determinations of the Committee on the matters referred to in this Article IV
shall be conclusive.
C. LIABILITY OF COMMITTEE MEMBERS. No member of the Committee shall be
liable for any action or determination made in good faith with respect to the
Plan or any Award.
D. COSTS OF PLAN. The costs and expenses of administering the Plan shall be
borne by the Company.
V. ELIGIBILITY
Employees, Directors and Consultants are eligible to receive Options and
Restricted Stock Awards; provided, however, only Employees are eligible to
receive Incentive Stock Options.
<PAGE>
Members of the Committee shall be eligible to receive Awards only to the extent
provided in Paragraph A of Article IV. Any Award may be granted on more than one
occasion to the same person, and may include an Incentive Stock Option, a
Nonstatutory Stock Option, a Restricted Stock Award, or any combination thereof.
VI. SHARES SUBJECT TO THE PLAN
A. AGGREGATE NUMBER OF SHARES. Subject to Article IX, the aggregate number
of shares of Common Stock that may be issued under the Plan shall not exceed
200,000 shares. Shares shall be deemed to have been issued under the Plan only
(i) to the extent actually issued and delivered pursuant to an Award, or (ii) to
the extent an Award is settled in cash. To the extent that an Award lapses or
the rights of its Holder terminate, any shares of Common Stock subject to such
Award shall again be available for the grant of an Award under the Plan.
B. STOCK OFFERED. The stock to be offered pursuant to the grant of any
Award may be authorized but unissued Common Stock or Common Stock previously
issued and outstanding and reacquired by the Company.
VII. OPTIONS
A. OPTION PERIOD. The term of each Option shall be as specified by the
Committee at the date of grant, except that no Incentive Stock Option shall be
exercisable after the expiration of ten years from the date of grant of such
Incentive Stock Option.
B. LIMITATIONS ON EXERCISE OF OPTION. An Option shall be exercisable in
whole or in such installments and at such times as determined by the Committee.
C. SPECIAL LIMITATIONS ON INCENTIVE STOCK OPTIONS. To the extent that the
aggregate Fair Market Value (determined at the time the respective Incentive
Stock Option is granted) of Common Stock with respect to which Incentive Stock
Options granted are exercisable for the first time by an individual during any
calendar year under all incentive stock option plans of the Company exceeds
$100,000, such Incentive Stock Options shall be treated as options which do not
constitute Incentive Stock Options. The Committee shall determine, in accordance
with applicable provisions of the Code, Treasury Regulations and other
administrative pronouncements, which of a Holder's Options will not constitute
Incentive Stock Options because of such limitation and shall notify the Holder
of such determination as soon as practicable after such determination. No
Incentive Stock Option shall be granted to an individual if, at the time the
Option is granted, such individual owns stock possessing more than 10 percent of
the total combined voting power of all classes of stock of the Company, unless
(i) at the time such Option is granted the exercise price is at least 110
percent of the Fair
<PAGE>
Market Value of the Common Stock subject to the Option and (ii) such Option by
its terms is not exercisable after the expiration of five years from the date of
grant.
D. SEPARATE STOCK CERTIFICATES. Separate stock certificates shall be issued
by the Company for those shares acquired pursuant to the exercise of an
Incentive Stock Option and for those shares acquired pursuant to the exercise of
a Nonstatutory Stock Option.
E. OPTION AGREEMENT. Each Option shall be evidenced by an Option Agreement
in such form and containing such provisions not inconsistent with the provisions
of the Plan as the Committee from time to time shall approve, including, without
limitation, provisions to qualify an Incentive Stock Option under Section 422 of
the Code. An Option Agreement may provide for the payment of the exercise price,
in whole or in part, by the delivery of a number of shares of Common Stock (plus
cash if necessary) having a Fair Market Value (as of the exercise date of the
Option) equal to such exercise price. Moreover, an Option Agreement may provide
for a "cashless exercise" of the Option by establishing procedures whereby the
Holder, by a properly executed written notice, directs: (i) an immediate market
sale or margin loan respecting all or a part of the shares of Common Stock to
which the Holder is entitled upon exercise of the Option; (ii) the delivery of
the shares of Common Stock from the Company directly to a brokerage firm; and
(iii) the delivery of the exercise price from sale or margin loan proceeds from
the brokerage firm directly to the Company. Such Option Agreement may also
include, without limitation, provisions relating to: (a) vesting of Options; (b)
tax matters (including provisions covering any applicable employee wage
withholding requirements); and (c) any other matters not inconsistent with the
terms and provisions of this Plan that the Committee shall in its sole
discretion determine. The terms and conditions of the respective Option
Agreements need not be identical.
F. EXERCISE PRICE AND PAYMENT. The price at which a share of Common Stock
may be purchased upon exercise of an Option shall be determined by the
Committee, but such exercise price (i) shall not be less than the Fair Market
Value of a share of Common Stock on the date such Option is granted if the
Option is an Incentive Stock Option and (ii) shall be subject to adjustment as
provided in Article IX. An Option or portion thereof may be exercised by
delivery of an irrevocable notice of exercise to the Company. The exercise price
of an Option or portion thereof shall be paid in full in the manner prescribed
by the Committee.
G. TERMINATION OF EMPLOYMENT OR SERVICE.
1. In the event the employment or service of a Holder of an Option by
the Company terminates for any reason other than because of Disability or
death, such Option may be exercised at any time prior to the expiration
date of the
<PAGE>
Option or the expiration of three months after the date of such
termination, whichever is the shorter period, but only if and to the
extent the Holder was entitled to exercise the Option at the date of
such termination.
2. In the event the employment or service of a Holder of an Option by
the Company terminates because of Disability, such Option may be exercised
at any time prior to the expiration date of the Option or the expiration of
one year after the date of such termination, whichever is the shorter
period, but only if and to the extent the Holder was entitled to exercise
the Option at the date of such termination.
3. In the event of the death of a Holder of an Option while employed
by or providing service to the Company, such Option may be exercised at any
time prior to the expiration date of the Option or the expiration of one
year after the date of such death, whichever is the shorter period, but
only if and to the extent the Holder was entitled to exercise the Option on
the date of death. An Incentive Stock Option may be exercised only by the
person or persons to whom such Holder's rights under the Option shall pass
by the Holder's will or by the laws of descent and distribution of the
state or country of domicile at the time of death.
4. The Committee, at the time of grant or at any time thereafter, may
extend the three-month and one-year post-termination exercise periods any
length of time not later than the original expiration date of the Option,
and may increase the portion of the Option that is exercisable, subject to
such terms and conditions as the Committee may determine.
5. To the extent that the Option of any deceased Holder or of any
Holder whose employment or service terminates is not exercised within the
applicable period, all further rights to purchase Common Stock pursuant to
such Option shall cease and terminate.
H. RIGHTS AS A SHAREHOLDER. The Holder of an Option under the Plan shall
have no rights as a shareholder with respect to the Common Stock subject to such
Option until the date of issue to the Holder of a stock certificate for such
shares. Except as otherwise expressly provided in the Plan, no adjustment shall
be made for dividends or other rights for which the record date occurs prior to
the date such stock certificate is issued.
I. OPTIONS IN SUBSTITUTION FOR STOCK OPTIONS GRANTED BY OTHER CORPORATIONS.
Options may be granted under the Plan from time to time in substitution for
stock options held by individuals employed by corporations who become Employees
as a result of a merger or consolidation of the employing corporation with the
Company, or the acquisition by the Company of the assets
<PAGE>
of the employing corporation, or the acquisition by the Company of stock of the
employing corporation with the result that such employing corporation becomes a
Subsidiary.
J. RESTRICTION ON SALE. Unless otherwise permitted by the Committee, if an
officer subject to Section 16 of the 1934 Act or a Director exercises an Option
within six months of the grant of the Option to such person, the shares acquired
upon exercise of the Option may not be sold until six months after the date of
grant of the Option; provided, however, that, with respect to Options granted
subject to shareholder approval of the Plan, the six-month period shall commence
upon such shareholder approval.
VIII. RESTRICTED STOCK AWARDS
A. RESTRICTION PERIOD. At the time a Restricted Stock Award is granted, the
Committee shall establish a period of time (the "Restriction Period") applicable
to such Award. Each Restricted Stock Award may have a different Restriction
Period, in the discretion of the Committee. The Restriction Period applicable to
a particular Restricted Stock Award shall not be changed except as permitted by
Paragraph B of this Article VIII or by Article IX.
B. OTHER TERMS AND CONDITIONS. Common Stock awarded pursuant to a
Restricted Stock Award shall be represented by a stock certificate registered in
the name of the Holder of such Restricted Stock Award. The Holder shall have the
right to receive dividends during the Restriction Period, to vote Common Stock
subject thereto and to enjoy all other shareholder rights, except that: (i) the
Holder shall not be entitled to delivery of the stock certificate until the
Restriction Period shall have expired; (ii) the Company shall retain custody of
the stock certificate during the Restriction Period; (iii) the Holder may not
sell, transfer, pledge, exchange, hypothecate or otherwise dispose of the stock
during the Restriction Period; and (iv) a breach of the terms and conditions
established by the Committee pursuant to the Restricted Stock Agreement shall
cause a forfeiture of the Restricted Stock Award. Stock dividends issued with
respect to Common Stock awarded pursuant to a Restricted Stock Award shall be
treated as additional Common Stock covered by the Restricted Stock Award. At the
time of such Award, the Committee may, in its sole discretion, prescribe
additional terms, conditions or restrictions relating to Restricted Stock
Awards, including, but not limited to, rules pertaining to the termination of
employment or service (by retirement, Disability, death or otherwise) of a
Holder prior to expiration of the Restriction Period. Such additional terms,
conditions or restrictions shall be set forth in a Restricted Stock Agreement
entered into in conjunction with the Award. Such Restricted Stock Agreement may
also include, without limitation, provisions relating to: (i) vesting of Awards;
(ii) tax matters (including provisions (x) covering any applicable employee wage
withholding
<PAGE>
requirements and (y) prohibiting an election by the Holder under Section 83(b)
of the Code); and (iii) any other matters not inconsistent with the terms and
provisions of this Plan that the Committee shall in its sole discretion
determine. Unless otherwise permitted by the Committee, if an officer subject to
Section 16 of the 1934 Act or a Director receives a Restricted Stock Award,
shares issued pursuant to such Award may not be sold until six months after the
date of the Award.
C. PURCHASE PRICE AND PAYMENT. The Committee shall determine the amount and
form of any payment for Common Stock received pursuant to a Restricted Stock
Award, provided that, in the absence of such a determination, a Holder shall not
be required to make any payment for Common Stock received pursuant to a
Restricted Stock Award, except to the extent otherwise required by law.
D. RESTRICTED STOCK AGREEMENT. At the time any Award is granted under this
Article VIII, the Company and the Holder shall enter into a Restricted Stock
Agreement setting forth each of the matters contemplated hereby and such other
matters as the Committee may determine to be appropriate. The terms and
provisions of the respective Restricted Stock Agreements need not be identical.
IX. CHANGES IN CAPITAL STRUCTURE
A. If the outstanding Common Stock is hereafter increased or decreased or
changed into or exchanged for a different number or kind of shares or other
securities of the Company or of another corporation by reason of any
reorganization, merger, consolidation, plan of exchange, recapitalization,
reclassification, stock split-up, combination of shares or dividend payable in
shares, appropriate adjustment shall be made by the Committee in the number and
kind of shares available for Awards. In addition, the Committee shall make
appropriate adjustment in the number and kind of shares as to which outstanding
Options, or portions thereof then unexercised, shall be exercisable, so that the
Holder's proportionate interest before and after the occurrence of the event is
maintained. Notwithstanding the foregoing, the Committee shall have no
obligation to effect any adjustment that would or might result in the issuance
of fractional shares, and any fractional shares resulting from any adjustment
may be disregarded or provided for in any manner determined by the Committee.
Any such adjustments made by the Committee shall be conclusive. Any adjustment
provided for in this Paragraph A of Article IX shall be subject to any required
shareholder action. In the event of dissolution of the Company or a merger,
consolidation, plan of exchange or similar transaction affecting the Company, in
lieu of providing for Options as provided above in this Paragraph A of Article
IX or in lieu of having the Options continue unchanged, the Committee may, in
its sole discretion, provide a 30-day period prior to such event during which
Holders shall have the right to
<PAGE>
exercise Options in whole or in part without any limitation on exercisability
and upon the expiration of such 30-day period all unexercised Options shall
immediately terminate. Notwithstanding the foregoing, if the Holder of an Option
is subject to Section 16(b) of the 1934 Act and if such event occurs less than
six months after the date the Option is granted, the exercise of the Option
shall not be accelerated, unless such acceleration is approved by both the
Committee and the Holder, if such acceleration would cause the grant or the
exercise of the Option to be deemed a purchase subject to Section 16(b) of the
1934 Act and the regulations promulgated thereunder.
B. The existence of the Plan and the Awards granted hereunder shall not
affect in any way the right or power of the Board or the shareholders of the
Company to make or authorize any adjustment, recapitalization, reorganization or
other change in the Company's capital structure or its business, any merger or
consolidation of the Company, any issue of debt or equity securities senior to
or affecting Common Stock or the rights thereof, the dissolution or liquidation
of the Company, or any sale, lease, exchange or other disposition of all or any
part of its assets or business or any other corporate act or proceeding.
C. Except as hereinbefore expressly provided, the issuance by the Company
of shares of stock of any class or securities convertible into shares of stock
of any class, for cash, property, labor or services, upon direct sale, upon the
exercise of rights or warrants to subscribe therefor, or upon conversion of
shares or obligations of the Company convertible into such shares or other
securities, and in any case whether or not for fair value, shall not affect, and
no adjustment by reason thereof shall be made with respect to, the number of
shares of Common Stock subject to Awards previously granted or the exercise
price per share, if applicable.
X. AMENDMENT AND TERMINATION OF THE PLAN
The Board in its discretion may terminate the Plan at any time with respect
to any shares for which Awards have not previously been granted. The Board shall
have the right to alter or amend the Plan or any part thereof from time to time;
provided, that no change in any Award previously granted may be made which would
impair the rights of the Holder without the consent of the Holder; provided
further, that the Board may not, without approval of the shareholders, amend the
Plan:
(a) to increase the maximum number of shares which may be issued on
grant or exercise of an Award, except as provided in Article IX;
(b) to change the price at which an Award may be granted or exercised;
<PAGE>
(c) to change the class of individuals eligible to receive Awards;
(d) to extend the maximum period during which Awards may be granted
under the Plan; or
(e) to decrease any authority granted to the Committee hereunder if
such change would cause the Plan to lose its qualification under Rule
16b-3.
XI. MISCELLANEOUS
A. NO RIGHT TO AN AWARD. Neither the adoption of the Plan by the Company
nor any action of the Board or the Committee shall be deemed to give an
Employee, a Consultant or a Director any right to be granted an Award or any of
the rights hereunder except as may be evidenced by an Award or by an Option
Agreement or Restricted Stock Agreement duly executed on behalf of the Company,
and then only to the extent and on the terms and conditions expressly set forth
therein.
B. NO EMPLOYMENT RIGHTS CONFERRED. Nothing in the Plan shall (i) confer
upon any Employee any right with respect to continuation of employment with the
Company or (ii) interfere in any way with the right of the Company to terminate
the Employee's employment (or service as a Director, in accordance with
applicable corporate law, or service as a Consultant) at any time for any
reason, with or without cause.
C. OTHER LAWS; WITHHOLDING. The Company shall not be obligated to issue any
Common Stock pursuant to any Award granted under the Plan at any time when the
shares covered by such Award have not been registered under the Securities Act
of 1933, as amended, and such other state and federal laws, rules or regulations
as the Company or the Committee deems applicable and, in the opinion of legal
counsel for the Company, there is no exemption from the registration
requirements of such laws, rules or regulations available for the issuance and
sale of such shares. No fractional shares of Common Stock shall be delivered,
nor shall any cash in lieu of fractional shares be paid. The Company shall have
the right to deduct in connection with all Awards any taxes required by law to
be withheld and to require any payments required to enable it to satisfy its
withholding obligations.
D. NO RESTRICTION ON CORPORATE ACTION. Nothing contained in the Plan shall
be construed to prevent the Company from taking any corporate action which is
deemed by the Company to be appropriate or in its best interest, whether or not
such action would have an adverse effect on the Plan or any Award granted under
the Plan. No Employee, Consultant, Director, beneficiary or other person shall
have any claim against the Company as a result of any such action.
<PAGE>
E. RESTRICTIONS ON TRANSFER. An Award shall not be transferable otherwise
than by will or the laws of descent and distribution; provided, however, that,
with the consent of the Committee, Nonstatutory Stock Options may be assigned or
transferred, if such assignment or transfer does not cause the Plan to lose its
qualification under Rule 16b-3. (At the date the Plan was approved by the Board,
the following additional transfers of Nonstatutory Stock Options could be made
without causing the Plan to lose its qualification under Rule 16b-3: (i)
transfers pursuant to qualified domestic relations orders; (ii) transfers to
members of the Optionee's immediate family (i.e., children, grandchildren and
spouses); (iii) transfers to trusts for the benefit of such family members; and
(iv) transfers to partnerships whose only partners are such family members.) No
consideration may be paid for the transfer of any Nonstatutory Stock Option,
and, after any permitted transfer, the Nonstatutory Stock Option shall continue
to be subject to the same terms and conditions as were applicable to it
immediately prior to its transfer. Before permitting any transfer, the Committee
may require the transferee to agree in writing to be so bound. Unless otherwise
permitted by the Committee, an officer subject to Section 16 of the 1934 Act or
a Director may not transfer a Nonstatutory Stock Option within six months of the
date of grant; provided, however, that, with respect to Nonstatutory Stock
Options made subject to shareholder approval of the Plan, the six-month period
shall commence upon such shareholder approval. Incentive Stock Options may be
exercisable during the lifetime of the optionee only by the optionee, or by the
optionee's guardian or legal representative.
F. RULE 16B-3. It is intended that the Plan and, except as otherwise
determined by the Committee, any grant of an Award made to a person subject to
Section 16 of the 1934 Act meet all of the requirements of Rule 16b-3, as
modified or amended from time to time. If any provision of the Plan or any such
Award would disqualify the Plan or such Award under, or would otherwise not
comply with, Rule 16b-3, such provision or Award shall be construed or deemed
amended to conform to Rule 16b-3, except as the Committee shall otherwise
determine with respect to any particular Award.
G. GOVERNING LAW. To the extent that federal laws (such as the Code and the
federal securities laws) do not otherwise control, the Plan shall be construed
in accordance with the laws of the state of Oregon.
H. HEADINGS. Headings contained in the Plan are for reference purposes and
shall not affect the meaning or interpretation of the Plan.
/s/Cordy H. Jensen
---------------------------------
Cordy H. Jensen, Secretary
<PAGE>
APPENDIX A
P CENTENNIAL BANCORP
675 Oak Street, Eugene, Oregon 97401
R
Annual Meeting of Shareholders, May 15, 1996
O
PROXY - SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
X
Y 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 15, 1996, 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
Please mark your
votes as indicated
in this example |X|
1. ELECTION OF DIRECTORS
NOMINEES: Brian B. Obie, Robert L. Newburn, Dan
Giustina, Cordy H. Jensen and Richard C.
Williams
INSTRUCTIONS: WITHHOLD AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH THE
NOMINEE'S NAME IN THE LIST ABOVE.
| | For all nominees listed (except as marked below to the
contrary).
| | WITHHOLD AUTHORITY to vote for all nominees listed
2. APPROVAL OF THE 1995 STOCK INCENTIVE PLAN
| | FOR | | AGAINST | | ABSTAIN
3. 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.
<PAGE>
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, "FOR"
APPROVAL OF THE 1995 STOCK INCENTIVE PLAN AND IN THE PROXIES' DISCRETION AS TO
SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING.
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.
Signature(s) -------------------------- Signature(s)---------------------------
Date-----------------------------------
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
ANNUAL MEETING OF SHAREHOLDERS
Centennial Bancorp
675 Oak Street - 2nd Floor
Eugene, OR 97401
May 15, 1996
3:00 P.M.
<PAGE>
