SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-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] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it
was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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<PAGE>
[ [ Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement no.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
CENTENNIAL BANCORP
NOTICE OF ANNUAL MEETING
AND
PROXY STATEMENT
MAY 21, 1997
<PAGE>
CENTENNIAL BANCORP
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 21, 1997
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 21, 1997, in the Wilder Room of the Eugene Hilton, 66 East 6th
Street, Eugene, Oregon, for the following purposes:
1. To consider and act upon the election of five 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 31, 1997
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 14, 1997 Cordy H. Jensen
Secretary
------------------------------------------------
YOUR VOTE IS IMPORTANT. PLEASE RETURN YOUR PROXY
SO THAT YOUR VOTE CAN BE COUNTED.
------------------------------------------------
<PAGE>
CENTENNIAL BANCORP
P.O. Box 1560
Eugene, Oregon 97440
(541) 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 21,
1997. The approximate date of mailing this Proxy Statement and the accompanying
form of proxy is April 14, 1997. The Company's 1996 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 31, 1997, the record date for determining
shareholders entitled to vote at the meeting, there were 6,553,013 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 are counted in determining whether a quorum is present,
but are not counted for or against the proposal at issue. "Abstentions" and
"withheld" votes also are counted toward the quorum requirement for the meeting,
but have the effect of a vote against the applicable proposal.
<PAGE>
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 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. The Company
expects to solicit proxies primarily by mail. The Company may also use its
officers and employees and officers and employees of Centennial Bank to solicit
proxies, either in person or by telephone 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 31, 1997. 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 (55) Chairman, President and Chief Executive Officer of
Chairman of the Board Obie Media Corporation (outdoor and transit
advertising); President and Chief Executive Officer
of Obie Industries Incorporated (real estate
development); former mayor of Eugene, Oregon
Robert L. Newburn (65) President and Chief Executive Officer of Pacific
Vice Chairman of the Petroleum Company (retail distribution of petroleum
Board products); Chairman of the Board of Centennial Bank
Richard C. Williams (57) President and Chief Executive Officer of the Company;
President, Chief Chief Executive Officer and Vice Chairman of
Executive Officer and Centennial Bank; Director of Obie Media Corporation
Director
Cordy H. Jensen (54) President and owner of Station Masters Inc.
Director and Secretary (restaurant and lounge); Managing Partner of
McKenzie Brewing Co.; Managing Partner of CAC
Investments (real estate rentals); Managing Partner
of Bev's Investment Co. (real estate holdings);
Director of Jasper's Delis
Dan Giustina (47) Managing Partner of Giustina Resources (owns and
Director manages timber and timberland); member/manager of G
Group LLC (owns and manages residential and
commercial real estate)
The Board of Directors held 16 meetings during 1996. Each director
attended more than 75% of the meetings of the Board of Directors and all
committees of the Board on which the director served.
<PAGE>
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 1996, 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 and Jensen. The Compensation
Committee held four meetings in 1996.
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.
COMPENSATION OF DIRECTORS
- -------------------------
Executive officers receive no compensation for serving as directors of
the Company. All other directors of the Company receive $1,000 per month, except
that the Chairman of the Board receives an additional $500 per quarter.
<PAGE>
The directors of the Company also serve as directors of Centennial
Bank. Executive officers receive no compensation for serving as directors of
Centennial Bank. All other directors of Centennial Bank receive $750 per month,
except that the Chairman of the Board receives an additional $500 per quarter.
Centennial Bank's Asset/Liability Committee meets weekly; nonemployee
directors who serve on that committee receive $75 for each meeting attended,
except that the Chairman of that Committee receives $100 per 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 8,471
shares of Common Stock at the fair market value on the date of grant.
In addition to these initial stock option grants, the Company's Board
of Directors adopted a stock option program in September 1996 for nonemployee
directors of the Company and its subsidiaries. The program provides for options
to purchase 1,000 shares to be granted under the 1995 Stock Incentive Plan
annually to each nonemployee director, with the grants commencing generally
during the director's second year of service. Options will be granted on the
first business day of each calendar year, will vest over a three-year period and
will have a term of 10 years. The exercise price for the options will be the
fair market value of the Company's Common Stock on the date of grant. Options
that have vested on the date a director ceases to serve as a director will
remain exercisable for one year from the date of termination. These options will
be transferrable, under specified circumstances, to members of the director's
immediate family, to family trusts and to family partnerships. When the program
was adopted, options for 14,000 shares were granted on the terms specified above
to nonemployee directors for service during 1994 and 1995. The exercise price
for those options is $11.82 per share.
PRINCIPAL SHAREHOLDERS AND MANAGEMENT OWNERSHIP
The following table sets forth certain information regarding
beneficial ownership of the Company's Common Stock at March 31, 1997 by: (i)
each person who is known by the Company to own beneficially more than 5% of the
Common Stock; (ii) each director; (iii) the executive officers named in the
Summary Compensation Table below; and (iv) all executive officers and directors
as a group. Each named beneficial owner has sole voting and investment power
with respect to the shares listed unless otherwise indicated.
<PAGE>
Amount and Nature of
Beneficial
Name of Beneficial Owners Ownership Percent of Class
- ------------------------- -------------------- ----------------
Brian B. Obie 155,451(1) 2.4
Robert L. Newburn 114,492(2) 1.8
Cordy H. Jensen 204,552(3) 3.1
Dan Giustina 47,213(4) .7
Richard C. Williams 252,467(5) 3.8
Ron R. Peery 180,124(6) 2.7
Eric H. Hardin 49,348(7) .8
Gary L. Stevens 94,845(8) 1.4
David M. Gazeley 87,160(9) 1.3
Key Trust Company of
the Northwest 676,528(10) 10.2
FBL Investment Advisory
Services, Inc. 376,015(11) 5.7
All executive officers
and directors as a
group (15 persons) 1,369,497(12) 20.3
(1) Includes 17,170 shares held by Mr. Obie's wife, 77,819 shares held by
Obie Industries Incorporated of which Mr. Obie is President and owns a
controlling interest, and 8,471 shares which could be acquired within
60 days by exercise of stock options.
(2) Includes 85,880 shares which are held jointly with Mr. Newburn's wife,
220 shares which are held by Mr. Newburn's wife, and 7,640 shares which
are held by Mr. Newburn as custodian for minors.
(3) Includes 85,063 shares which are jointly held with Mr. Jensen's wife,
62,726 shares which are held by Mr. Jensen's wife as trustee for their
children's trust, 17,089 shares which are held by Mr. Jensen's wife as
trustee for their grandchildren's trust, 370 shares which are held by
Mr. Jensen as custodian for a minor, 1,136 shares which are held
jointly in CAC Investments, a partnership of which Mr. Jensen is the
Managing Partner, and 21,148 shares which are held by Mr. Jensen as
trustee for his mother.
(4) Includes 16,775 shares which could be acquired within 60 days by
exercise of a stock option.
(5) Includes 59,306 shares which could be acquired within 60 days by
exercise of a stock option. Also includes 83,183 shares which are held
of record for Mr. Williams' account by Key Trust Company of the
Northwest ("Key Trust") as trustee of Centennial Bank's Employee
Savings and Profit Sharing Plan (the "Employee Savings Plan"); Key
Trust has sole voting power over such shares.
[FOOTNOTES CONTINUED ON NEXT PAGE]
<PAGE>
[FOOTNOTES CONTINUED FROM PREVIOUS PAGE]
(6) Includes 76,363 shares which are held jointly with Mr. Peery's wife,
3,627 shares which are held jointly with Mr. Peery's mother, 11,865
shares which are held by Mr. Peery's wife, and 20,335 shares which
could be acquired within 60 days by exercise of a stock option. Also
includes 48,750 shares which are held of record for Mr. Peery's account
by Key Trust as trustee of the Employee Savings Plan; Key Trust has
sole voting power over such shares.
(7) Includes 16,947 shares which could be acquired within 60 days by
exercise of a stock option, and 32,401 shares which are held of record
for Mr. Hardin's account by Key Trust as trustee of the Employee
Savings Plan; Key Trust has sole voting power over such shares.
(8) Includes 19,949 shares which are held jointly with Mr. Stevens' wife,
16,947 shares which could be acquired within 60 days by exercise of a
stock option, and 47,613 shares which are held of record for Mr.
Stevens' account by Key Trust as trustee of the Employee Savings Plan;
Key Trust has sole voting power over such shares.
(9) Includes 1,043 shares which are held by Mr. Gazeley's wife, 35,384
shares which are held jointly with Mr. Gazeley's wife as trustees of
the Gazeley Family Trust, 370 shares which are held by Mr. Gazeley as
custodian for a minor, 6,780 shares which could be acquired within 60
days by exercise of a stock option, and 38,498 shares which are held of
record for Mr. Gazeley's account by Key Trust as trustee of the
Employee Savings Plan; Key Trust has sole voting power over such
shares.
(10) Key Trust 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. Key Trust's address is 1211 S.W.
Fifth Avenue, Suite 300, Portland, Oregon 97204.
(11) 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, Iowa 50266. The shares shown
as beneficially owned represent shares which are held on behalf of
various investment advisory clients, none of which individually owns
more than 5% of the Company's outstanding stock.
(12) Includes 179,792 shares which could be acquired within 60 days by
exercise of stock options. Also includes 330,452 shares which are held
of record for the accounts of certain executive officers by Key Trust
as trustee of the Employee Savings Plan; Key Trust 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 Agreements," all executive officers serve at the discretion of the
Board of Directors.
Name of Individual (Age) Positions and Offices Held
- ------------------------ --------------------------
Richard C. Williams (57) 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.
<PAGE>
Name of Individual (Age) Positions and Offices Held
- ------------------------ --------------------------
Ron R. Peery (57) 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 Bank from 1982 to 1992; a director of
Centennial Mortgage since 1987.
Eric H. Hardin (56) 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 (57) Executive Vice President of the Company since 1986;
Executive Vice President of Centennial Bank since
1982.
Michael J. Nysingh (44) 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 (47) 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 May
1996; Manager of Springfield Branch of Centennial
Bank from 1986 to April 1994; Vice President of
Centennial Bank from 1986 to 1992.
Collin L. Alspach (51) Senior Vice President of Centennial Bank since
November 1996; Vice President of Centennial Bank from
April 1994 through October 1996.
<PAGE>
Name of Individual (Age) Positions and Offices Held
- ------------------------ --------------------------
Jesse Averette (51) Senior Vice President and Manager of Pacific
Corporate Center Office of Centennial Bank since June
1996.
Dennis P. Huserik (54) Senior Vice President of Centennial Bank since
November 1996.
Thomas P. Widmer (47) 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 (51) 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.
<PAGE>
EXECUTIVE COMPENSATION
- ----------------------
The following table sets forth certain information regarding
compensation paid by the Company during 1996, 1995 and 1994 to Mr. Williams as
the Company's Chief Executive Officer and the four other most highly compensated
executive officers:
<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) ($) (3) (#) ($)(4)
- ------------------ ---- --------- -------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Richard C. Williams 1996 $231,250 $100,000 -- $11,270
President and Chief 1995 206,250 75,000 76,230 9,841
Executive Officer of 1994 187,369 60,000 -- 11,917
the Company
Ron R. Peery 1996 120,000 40,000 -- 9,470
President and Southern 1995 110,000 35,000 -- 7,382
Region Manager of 1994 98,250 30,000 -- 8,083
Centennial Bank
Eric H. Hardin 1996 86,000 20,000 -- 6,633
Executive Vice 1995 80,000 18,000 -- 5,525
President of the 1994 75,750 13,000 -- 6,519
Company
Gary L. Stevens 1996 86,000 17,500 -- 7,587
Executive Vice 1995 80,000 15,000 -- 6,129
President of the 1994 75,750 13,000 -- 6,895
Company
David M. Gazeley 1996 85,030 30,530 2,750 9,364
Senior Vice President 1995 78,865 38,190 -- 7,595
and Northern Region 1994 72,624 26,817 -- 7,120
Manager of Centennial
Bank
</TABLE>
- ----------------------------------------
(1) Includes amounts contributed by the named executive officer to the
Employee Savings Plan.
(2) Includes bonuses paid or to be paid during the subsequent year but
attributable to the year indicated.
(3) Includes amounts contributed by the named executive to the Deferred
Compensation Plan.
(4) Consists of the Company's contributions to the Employee Savings Plan
for the benefit of the named executive officers.
<PAGE>
The following table sets forth information regarding options to
purchase the Company's Common Stock that were granted during 1996 to the
executive officers named in the Summary Compensation Table:
Option Grants in Fiscal 1996
----------------------------
<TABLE>
<CAPTION>
Potential
realizable
Number of % of total value at
securities options assumed annual
underlying granted to Exercise rates of stock
options employees in or base Expiration price appreciation
granted fiscal year ($/Sh) date for option term
---------- ------------ -------- ---------- ----------------------
5%($) 10%($)
------- -------
<S> <C> <C> <C> <C> <C> <C>
David M. Gazeley 2,750(1) 5% $11.36(2) 8/20/2006 $20,000 $50,000
</TABLE>
- -----------------------------
(1) The option granted to Mr. Gazeley becomes exercisable as to one-fifth
of the option shares on August 19 each year, commencing on August 19,
1997, until fully vested. Exercise of the option may be accelerated if
the Company is acquired by another corporation. The option is an
incentive stock option.
(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.
Gazeley 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 31, 1997 was $17.125 per share.
The following table sets forth information regarding option exercises
during 1996 and option holdings at December 31, 1996 by each executive officer
named in the Summary Compensation Table:
<TABLE>
<CAPTION>
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year-End Option Values
-----------------------------------------------
Shares Value of unexercised in-the-
acquired Number of unexercised money options at
on Value options at FY-End(#) FY-End($)(1)
exercise realized ---------------------------- ----------------------------
Name (#) ($) Exercisable Unexercisable Exercisable Unexercisable
- ------------------- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Richard C. Williams 26,814 $299,430 59,306 50,820 $411,652 $274,431
Ron R. Peery 17,849 149,844 20,335 -- 131,811 --
Eric H. Hardin -- -- 16,947 -- 137,204 --
Gary L. Stevens -- -- 16,947 -- 137,204 --
David M. Gazeley -- -- 6,780 9,527 43,949 52,693
</TABLE>
- ----------------------------------------
(1) On December 31, 1996, the closing price of the Company's Common Stock
was $14.55. 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>
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 provides for a base salary of $225,000
for the 12 months ended 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. As provided in the Williams Agreement, Mr. Williams was paid a bonus of
$100,000 for 1996 after meeting the specified objectives. Assuming future
objectives are met, his cash bonus for 1997 and subsequent years will be
determined by the Compensation Committee, but may not be less than $25,000 per
calendar quarter. The Williams Agreement also provides for disability income
benefits in the event Mr. Williams should become disabled.
The Williams Agreement also acknowledges the grant to Mr. Williams of
an option to purchase 76,230 shares of the Company's Common Stock. The exercise
price for Mr. Williams' nonstatutory stock option is $9.15 per share. The option
expires on November 21, 2015. It 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 may be transferred, under certain
specified circumstances, to members of Mr. Williams' immediate family, to family
trusts and to family partnerships.
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 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.
<PAGE>
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. 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 Centennial Bank 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 90% vested at March 31, 1997, 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.
<PAGE>
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 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 Williams Agreement is
described at pages 12 to 13 of this Proxy Statement. The base salary and bonus
paid to Mr. Williams for 1996 was determined by the terms of the Williams
Agreement with the Company.
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, including Mr. Williams and the
other executive officers named in the Summary Compensation Table, must 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 1996, executive
officers earned cash bonuses in specified amounts per executive, upon the
achievement of specific performance measurements by the Company each quarter. In
1996, 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 1996 were paid
20% on the 15th day of April, July and October 1996 and 40% on January 15, 1997.
<PAGE>
The Company's stock incentive plans are an important component of the
Company's compensation program for executive officers and other employees. The
plans are intended to advance the interests of the Company and its shareholders
by encouraging and enabling executive officers and other employees to acquire
and retain a proprietary interest in the Company. Through stock options grants,
the long-range interests of management and employees are aligned with those of
shareholders as the optionees accumulate (through the vesting of their stock
options) meaningful stakes in the Company. The Compensation Committee makes all
decisions concerning the granting of stock options, including the individuals to
whom options are granted and the respective exercise prices and vesting periods.
These decisions are made on a subjective basis and generally do not bear a
specific relationship to any particular measure of the Company's performance.
Mr. Gazeley is the only executive officer named in the Summary Compensation
Table who was granted a stock option in 1996. However, all of the named
executive officers own stock options. The value of these stock options is
entirely dependent on the market value of the Company's shares. See the stock
option tables included in "Executive Compensation."
The Company maintains a 401(k) retirement savings plan applicable to
all eligible employees, including executive officers. Under the plan, the
Company typically matches a portion of employee contributions (during 1996, 60%
of employee contributions were matched up to a maximum of 6% of compensation).
All employer contributions made on behalf of executive officers were fully
vested at December 31, 1996 on the basis of the officers' past service with
Centennial Bank. The Company also has a deferred compensation plan, which also
is applicable to all eligible employees, including executive officers. Although
the Company may match a portion of the compensation deferred by employees, no
Company contributions were made under this plan for 1996.
The Compensation Committee believes that the base salary compensation
provided to the executive officers of the Company, including those named in the
Summary Compensation Table, 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 circumstances and
are consistent with the benefits derived by shareholders of the Company.
<PAGE>
This report is submitted by the members of the Company's Compensation
Committee:
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, 1996, with (i) the All Nasdaq U.S. Stocks Index, as
reported by the Center for Research in Security Prices; and (ii) the Nasdaq Bank
Index, as reported by the Center for Research in Security Prices. This
comparison assumes $100 was invested on December 31, 1991, in the Company's
Common Stock and in 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.
Period Ending
-----------------------------------------------------------
Index 12/31/91 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96
- -------------------------------------------------------------------------------
Centennial Bancorp 100.00 155.40 195.54 196.63 325.27 453.68
NASDAQ - Total US 100.00 116.38 133.59 130.59 184.67 227.16
NASDAQ - Banks 100.00 145.55 165.99 165.38 246.32 325.60
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.
<PAGE>
CERTAIN TRANSACTIONS
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
- -----------------------------------------------------------
The members of the Compensation Committee are Messrs. Obie, Newburn,
Jensen and Giustina. None of them is or has been an officer or employee of the
Company or any of its subsidiaries.
Mr. Williams, the Company's President and Chief Executive Officer,
serves as a director and is on the Compensation Committee of Obie Media
Corporation. Mr. Obie, the Company's Chairman of the Board and a member of the
Company's Compensation Committee, is the Chairman of the Board and an executive
officer of Obie Media Corporation.
Certain directors (including each member of the Compensation
Committee) 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.
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
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, 1996, and
written representations from certain reporting persons, the Company believes
that all reporting persons made all required Section 16 filings with respect to
1996 on a timely basis, except that Robert L. Newburn reported a stock purchase
and the exercise of options on separate Forms 4 late; Ron R. Peery reported one
stock sale on Form 4 late; Gary L. Stevens reported six stock sales on two Forms
4 late; and Dennis Huserik reported one stock purchase on Form 4 late.
<PAGE>
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.
INFORMATION AVAILABLE TO SHAREHOLDERS
THE COMPANY'S 1996 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, 1996.
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. 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 1997. 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.
<PAGE>
PROPOSALS OF SHAREHOLDERS
Shareholders wishing to present proposals for action at the Company's
1998 annual meeting of shareholders must submit the proposals for inclusion in
the Company's proxy statement not later than December 15, 1997.
April 14, 1997
<PAGE>
CENTENNIAL BANCORP
Eugene Hilton, Wilder Room
66 East 6th, Eugene, Oregon 97401
Annual Meeting of Shareholders, May 21, 1997
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 21, 1997, and any adjournment or
adjournments thereof, with respect to the following:
(Continued, and to be marked, dated and signed on the other side)
<PAGE>
- -------------------------------------------------------------------------------
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: TO 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. 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.
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
-------------------------------
NOTE: Please sign as name appears hereon. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee or guardian, please give
full title as such.
