<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
/X/ Definitive Proxy Statement Only (as permitted by Rule 14a-6(e)(2))
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to
sec. 240.14a-11(c) or sec. 240.14a-12
</TABLE>
WEST COAST BANCORP
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 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 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
---------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
---------------------------------------------------------------------
(5) Total fee paid:
---------------------------------------------------------------------
/ / 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:
---------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
---------------------------------------------------------------------
(3) Filing Party:
---------------------------------------------------------------------
(4) Date Filed:
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<PAGE> 2
[LOGO]
WEST COAST BANCORP
5335 SW MEADOWS ROAD, SUITE 201
LAKE OSWEGO, OREGON 97305
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 12, 1995
To the Shareholders of West Coast Bancorp:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of West
Coast Bancorp (the "Company") will be held at the Crown Plaza Holiday Inn,
located at 14811 Kruse Oaks Drive, Lake Oswego, Oregon, on Friday, May 12,
1995, at 2:00 p.m. for the purpose of considering and voting upon the following
matters:
1. ELECTION OF DIRECTORS. To elect four (4) Directors for a term
of three years or until their successors have been elected and
qualified.
2. DIRECTOR STOCK OPTION PLAN. To adopt a Director Stock Option
Plan.
3. WHATEVER OTHER BUSINESS may properly come before the Annual
Meeting or any adjournments thereof.
Only those shareholders of record at the close of business on March
31, 1995, shall be entitled to notice of, and to vote at, the Annual Meeting or
any adjournments thereof.
Further information regarding voting rights and the business to be
transacted at the Annual Meeting is given in the accompanying Proxy Statement.
Your continued interest as a shareholder in the affairs of the Company, its
growth and development, is genuinely appreciated by the directors, officers and
personnel who serve you.
April 7, 1995 BY ORDER OF THE BOARD OF DIRECTORS
/s/ CORA A. HALLAUER
-------------------------------
Cora A. Hallauer, Secretary
YOUR VOTE IS IMPORTANT
Whether or not you plan to attend the Annual Meeting, please sign and date
your Proxy card and return it in the enclosed postage prepaid envelope.
Retention of the Proxy is not necessary for admission to the Annual
Meeting.
<PAGE> 3
[LOGO]
WEST COAST BANCORP
5335 SW MEADOWS ROAD, SUITE 201
LAKE OSWEGO, OREGON 97305
(503) 624-5864
PROXY STATEMENT
This Proxy Statement and the accompanying Proxy are being sent to
shareholders on or about April 7, 1995, for use in connection with the Annual
Meeting of Shareholders of West Coast Bancorp (the "Company") to be held on
Friday, May 12, 1995. Only those shareholders of record at the close of
business on March 31, 1995, shall be entitled to vote. The number of shares of
the Company's no par value common stock (the "Common Stock"), outstanding and
entitled to vote at the Annual Shareholders' Meeting is 4,365,171.
As you are aware, the recent merger of West Coast Bancorp Newport,
Oregon ("WCB") and Commercial Bancorp, Salem, Oregon ("Commercial") was
completed on February 28, 1995 (the "Merger"). In addition, on March 30, 1995,
the Company successfully completed the acquisition of Great Western Bank,
Dallas, Oregon ("GWB"). Accordingly, the Annual Meeting is being held in May
this year to allow all shareholders of the Company (which include former
shareholders of WCB and GWB) to participate in the Annual Meeting. In that
regard, where appropriate, certain sections of the Proxy Statement (such as
sections relating to the Board of Directors and Management of the Company)
reflect information with respect to the combined company resulting from the
Merger.
The enclosed Proxy is solicited by and on behalf of the Board of
Directors of the Company, with the cost of solicitation borne by the Company.
Solicitation may be made by directors and officers of the Company and its bank
subsidiaries, The Commercial Bank ("CB"), The Bank of Newport ("BN") and Valley
Commercial Bank ("VB") (collectively, the "Subsidiary Banks"). Solicitation
may be made by use of the mails, by telephone, facsimile and personal
interview. The Company does not expect to pay any compensation for the
solicitation of proxies, except to brokers, nominees and similar recordholders
for reasonable expenses in mailing proxy materials to beneficial owners.
If the enclosed Proxy is duly executed and received in time for the
meeting, it is the intention of the persons named in the Proxy to vote the
shares represented by the Proxy FOR the four nominees listed in this Proxy
Statement and FOR the Director Stock Option Plan, unless otherwise directed.
Any proxy given by a shareholder may be revoked before its exercise by notice
to the Company in writing, by a subsequently dated proxy, or at the Meeting
prior to the taking of the shareholder vote. The shares represented by
properly executed, unrevoked proxies will be voted in accordance with the
specifications in the Proxy. Shareholders have one vote for each share of
Common Stock held, including the election of directors. Shareholders are not
entitled to cumulate their votes in the election of directors.
1
<PAGE> 4
BUSINESS OF THE MEETING
There are two matters being presented for consideration by the
shareholders at the Annual Meeting.
PROPOSAL NO. 1 - ELECTION OF DIRECTORS
GENERAL
The Company's Restated Articles of Incorporation ("Articles") provide
that the number of directors must fall within a range of 8 and 20, the exact
number to be determined by an affirmative vote of 75% of the directors then in
office. The Articles also provide that the Board of Directors may fill
vacancies created on the Board, provided that the number of directors shall at
no time exceed 20.
Directors are elected for a term of three years and until their
successors have been elected and qualified. The Company's Articles require
that the terms of the directors be staggered such that approximately one-third
of the directors are elected each year. In accordance with this requirement,
and as provided in the Merger Agreement between the Company and WCB, the Board
of Directors has nominated Messrs. Lester D. Green, Long, Ouderkirk and Putnam
for election as directors for three-year terms to expire in 1998. If either
Messrs. Green, Long, Ouderkirk or Putnam should refuse or be unable to serve,
your Proxy will be voted for such person as shall be designated by the Board of
Directors to replace any such nominee. The Board of Directors presently has no
knowledge that any of the nominees will refuse or be unable to serve.
Other nominations, if any, may be made only in accordance with the
prior notice provisions contained in the Bylaws of the Company.
2
<PAGE> 5
INFORMATION WITH RESPECT TO NOMINEES AND
DIRECTORS WHOSE TERMS CONTINUE
The following tables set forth certain information with respect to the
nominees for director and for directors whose terms continue. The table
includes their ages, their principal occupations during the past five years,
and the year first elected or appointed a director of the Company. The table
also indicates the number of shares of Common Stock beneficially owned by each
individual on March 31, 1995 and the percentage of Common Stock outstanding on
that date that the individual's holdings represented. However, where
beneficial ownership was less than one percent of all outstanding shares, the
percentage is not reflected in the table.
<TABLE>
<CAPTION>
SHARES AND
PERCENTAGE OF
COMMON STOCK
PRINCIPAL OCCUPATION BENEFICIALLY
NAME, AGE AND OF DIRECTOR DURING OWNED AS OF
TENURE AS DIRECTOR LAST FIVE YEARS MARCH 31, 1995
------------------ --------------- ---------------
(1)(2)
<S> <C> <C>
NOMINEES FOR DIRECTOR FOR THREE YEAR TERM EXPIRING 1998
-------------------------------------------------------
Lester D. Green, 69 Property Manager of Mission 32,334 (3)
(Chairman of the Board) Properties; director of CB
Since 1982
Jack E. Long, 56 Owner/Manager, J&L Nursery Co., 5,198
Since 1990 Inc.; director of CB
J. F. Ouderkirk, 44 Attorney, Partner of Richardson, 13,258
Since 1995 Ouderkirk and Hollen; director of
BN
Gary D. Putnam, 50 President, Pacific Drilling Supply 2,880
(Vice Chairman of the Inc.; former Chairman, President
Board) and CEO of WCB; former Executive VP
Since 1995 Far West Federal Bank, S.B.;
director of BN
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE NOMINEES TO BE
ELECTED AS DIRECTORS.
3
<PAGE> 6
<TABLE>
<CAPTION>
SHARES AND
PERCENTAGE OF
COMMON STOCK
PRINCIPAL OCCUPATION BENEFICIALLY
NAME, AGE AND OF DIRECTOR DURING OWNED AS OF
TENURE AS DIRECTOR LAST FIVE YEARS MARCH 31, 1995
------------------ --------------- ---------------
(1)(2)
<S> <C> <C>
DIRECTORS WITH TERM EXPIRING IN 1996
-------------------------------------
Victor L. Bartruff, 47 Co-President and Co-CEO; President 31,854
Since 1995 and CEO of BN; former district
manager of U.S. National Bank of
Oregon; director of BN
Rodney B. Tibbatts, 55 Co-President and Co-CEO; former 21,734 (3)
Since 1990 Sr. VP Regional Manager, Key Bank
of Oregon; director of CB
Chester C. Clark, 74 Chairman and retired owner/operator 42,583 (3)
Since 1995 of Alsea Veneer, Inc; director of
BN
Robert D. Morrison, 63 First Vice President, Financial 13,217
Since 1982 Consultant, Smith Barney , Inc.;
director of CB
William B. Loch, 61 President of Capital City 11,424
Since 1982 Companies, Inc.; director of CB
</TABLE>
4
<PAGE> 7
<TABLE>
<CAPTION>
SHARES AND
PERCENTAGE OF
COMMON STOCK
PRINCIPAL OCCUPATION BENEFICIALLY
NAME, AGE AND OF DIRECTOR DURING OWNED AS OF
TENURE AS DIRECTOR LAST FIVE YEARS MARCH 31, 1995
------------------ --------------- ---------------
(1)(2)
<S> <C> <C>
DIRECTORS WITH TERM EXPIRING IN 1997
------------------------------------
Lloyd D. Ankeny, 57 Owner, Landmark Development 32,912
Since 1995 Corporation; director of BN
Iral D. Barrett, 61 Retired; formerly Chairman Supra 10,181
Since 1982 Products, Inc.; director of CB
Phillip G. Bateman, 54 Partner, Bateman Funeral Homes, 16,299
Since 1995 Central Coast Crematorium and
Chelan Abbey Mausoleum and
Columbarium; director of BN
Stanley M. Green, 73 Animation Director Tolco 116,360 (3)
Since 1995 Productions, Inc.; formerly (2.7%)
Animation Artist with Walt Disney;
director of BN
C. Douglas McGregor, 56 Chairman, Access Long Distance; 634
Since 1994 formerly EVP with First Interstate
Bank of Oregon, N.A.; director of
CB
- -----------------------------------
</TABLE>
(1) Shares held directly with sole voting and sole investment power,
unless otherwise indicated.
(2) Share amounts include stock options which are exercisable within 60
days as follows: Lloyd D. Ankeny, 2,261 shares; Victor L. Bartruff,
21,885 shares; Phillip G. Bateman, 3,132 shares; Chester C. Clark,
3,132 shares; Stanley M. Green, 2,261 shares; Edgar B. Martin, 11,110
shares; J. F. Ouderkirk, 3,355 shares; Gary D. Putnam, 1,560 shares;
Rodney B. Tibbatts, 18,920 shares.
(3) Share amounts include shares owned by the spouses of Lester D. Green
(5,914), Stanley M. Green (37,596), William B. Loch (783), and Rodney
B. Tibbatts (2,814), each of whom disclaims any beneficial ownership
of the shares.
5
<PAGE> 8
INFORMATION REGARDING THE BOARD OF DIRECTORS AND ITS COMMITTEES
The following sets forth information concerning the Board of Directors
and Committees of Commercial and CB during the fiscal year ended 1994.
BOARD OF DIRECTORS
Commercial held eleven (11) Board meetings in 1994. Each director
attended at least 75 percent of the aggregate of (i) the total number of
meetings of the Board of Directors, and (ii) the total number of meetings held
by all committees on which he or she served.
CERTAIN COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors of Commercial have established an Audit
Committee and the Board of Directors of CB have established an Audit Committee
and Compensation Committee. When the need arose the full Board served as the
Nominating Committee.
Audit Committee. The main function of the Audit and Examination
Committee ("Audit Committee") includes reviewing the plan, scope, and audit
results of the independent auditors, as well as reviewing and approving the
services of the independent auditors. The Audit Committee reviews or causes to
be reviewed the reports of bank regulatory authorities and reports its
conclusions to the Board of Directors. The Audit Committee also reviews
procedures with respect to Commercial's books and records and its business
practices, and reviews the adequacy and implementation of the internal
auditing, accounting and financial controls. The Committee held two (2)
meetings during the year. For fiscal 1994, members of the Audit Committee
consisted of Messrs. Morrison, (Chairperson), Golden, Grove, Pauls, Weil and
Mrs. Neilsen.
Compensation Committee. The Compensation Committee met twice for the
purpose of reviewing Mr. Tibbatts' salary and incentive compensation and for
reviewing and recommending to the full Board stock option grants for executive
officers. The Compensation Committee consisted of Mrs. Peterson,
(Chairperson), Messrs. Barrett, Bragg, and Weil. Mr. Tibbatts did not
participate in the Board's action on his compensation. Commercial does not have
a standing compensation committee. Other than the Chief Executive Officer, all
other executive officers were paid salary and bonus compensation by each
respective bank. During 1994, Commercial's Board of Directors appointed an ad
hoc compensation committee.
COMPENSATION OF DIRECTORS
Except for a fee paid to the Chairman of the Board of Commercial, no
fees were paid to directors of Commercial other than as directors of CB and VB.
Each non-employee director of CB received a fee of $650 per month. Lester D.
Green, the Chairman of the Board of Commercial received $325 and Jack E. Long,
the Chairman of the Board of CB, received $325 per month for their additional
responsibilities. Messrs. Weil and Tibbatts each received $125 per month as a
director of VB. During 1994, Commercial, CB and VB's officers who also served
as directors received no additional fees. Effective October 1, 1994, these
director fees
6
<PAGE> 9
were increased to $750 per month, with the Chairman of the Board receiving
$1,000 per month, and each committee member receiving $100 per committee
meeting attended (other than special Loan and Investment Committee meetings
held immediately prior to the regular board meeting).
Taking into account the advice of an independent consultant, the Board
has revised their fees for the Company for 1995 as follows:
WCB. The Chairman of the Board and the Chairman of the Executive
Committee will each receive an annual retainer of $12,000; each committee
Chairperson and each Director will receive an annual retainer of $10,000; and
each committee member will receive a fee of $200 for each meeting attended.
In addition, the independent consultant has recommended the following
fees:
CB. The Chairman of the Board will receive an annual retainer of
$9,600; each committee Chairperson and each Director will receive an annual
retainer of $8,000; and each committee member will receive a fee of $100 for
each meeting attended.
BN. The Chairman of the Board will receive an annual retainer of
$7,600; each committee Chairperson and each Director will receive an annual
retainer of $6,300; and each committee member will receive a fee of $100 for
each meeting attended.
VB. The Chairman of the Board will receive an annual retainer of
$1,300; each committee Chairperson and each Director will receive an annual
retainer of $1,100; and each committee member will receive a fee of $50 for
each meeting attended.
COMMITTEES OF THE COMPANY
Transition Compensation Committe. In accordance with the Merger
Agreement, a Transition Compensation Committee was appointed to consider and
recommend on an advisory basis regarding matters relating to director and
senior officer compensation and benefits. In addition to proposing the form of
employment and severance agreements for certain key executives and employees,
the committee's function is to review the existing plans, arrangements and
agreements for directors and certain other employees' compensation and benefits
and to recommend for adoption by the Board of Directors (subject to shareholder
approval, if applicable), appropriate forms of director and senior officer
compensation and benefit plans. The Transition Compensation Committee members
consist of Messrs. Ankeny, Clark, McGregor and Morrison.
Executive Committee. In accordance with the Merger Agreement and the
Bylaws of the Company, the Board of Directors appointed an Executive Committee.
The main function of the Executive Committee is to establish the agenda for the
Company's Board of Directors meeting, to receive reports from the Executive
Officers regarding their activities and the implementation of the Company's
business plan, and to ensure the Company's strategic planning process is being
followed. For the fiscal year 1995, the members of the Executive Committee are
Messrs. Putnam (Chairman), Bartruff, Lester D. Green, Long, Ouderkirk and
Tibbatts.
7
<PAGE> 10
EXECUTIVE COMPENSATION
The following table sets forth a summary of certain information
concerning compensation awarded to or paid by Commercial and WCB for services
rendered in all capacities, during the last three fiscal years to the Chief
Executive Officer and the most highly compensated executive officers of
Commercial and WCB, whose total compensation during the last fiscal year
exceeded $100,000. In the case of Mr. Bartruff, amounts shown were paid by WCB
and/or BN. It should also be noted that the Company has retained an
independent consultant to review its existing employee and director
compensation plans and to recommend any appropriate changes or additions. This
review is currently in process.
<TABLE>
<CAPTION>
Long Term
Compensation
Annual Compensation -------------------
--------------------------------------- Awards Payouts
Other Annual ------- ------- All Other
Name and Salary Bonus Compensation Options LTIP Compensation
Principal Position Year (1) (2) (3) (4) Payouts (5)(6)
------------------ ---- --------- -------- ------------ ------- ------- ------------
<S> <C> <C> <C> <C> <C> <C>
Rodney B. Tibbatts 1994 $121,008 $ 60,000 8.500 0 $ 23,930
Co-President and Co-Chief 1993 117,404 30,000 7,700 0 18,973
Executive Officer 1992 101,482 15,000 6,600 0 3,410
Victor L. Bartruff 1994 $108,000 $ 50,000 1,800 0 $ 9,564
Co-President and Co-Chief 1993 100,000 40,000 14,520 0 7,965
Executive Officer; 1992 -- -- -- - --
President and Chief (7) (8)
Executive Officer of BN
Edgar B. Martin 1994 $110,201 $ 36,366 6,500 0 $ 22,675
President and Chief 1993 101,200 32,384 5,500 0 14,540
Executive Officer-CB 1992 90,800 20,160 3,300 0 166
</TABLE>
(1) In addition to salary, includes amounts contributed by executive
officer to Commercial's 401(k) Employee Savings Plan and Trust, auto
allowance, if any, and any fees paid as a director for participation
in Board and committee meetings.
(2) Includes bonuses paid or to be paid during the subsequent year but
attributable to the year indicated.
(3) Does not include amounts attributable to miscellaneous benefits
received by executive officers, including the use of company-owned
automobiles and the payment of certain club dues. In the opinion of
management, the costs to Commercial of providing such benefits to any
individual executive officer during the year ended December 31, 1994
did not exceed the lesser of $50,000 or 10% of the total of annual
salary and bonus reported for the individual.
(4) Options to acquire shares of Common Stock as adjusted for subsequent
stock dividends and stock splits.
(5) Includes premium cost of life insurance paid on behalf of Mr. Tibbatts
in the amount of $3,410 in 1994, 1993 and 1992 and $166 paid on behalf
of Mr. Martin for 1994.
(6) Includes 401(k) Plan contributions paid by Commercial on behalf of
Messrs. Tibbatts and Martin in the amounts of $20,520 and $22,509,
respectively for 1994 and $15,563 and $14,374, respectively for 1993.
(7) The number of options listed have been adjusted to reflect the
exchange ratio of .60 shares of Common Stock for each share of WCB
common stock.
(8) Includes WCB 401(k) Plan contributions paid by WCB on behalf of Mr.
Bartruff in the amount of $4,740 and $4,018 and life insurance
premiums in the amount of $4,824 and $3,947 for the years ended 1994
and 1993, respectively.
8
<PAGE> 11
STOCK OPTIONS
The following table sets forth certain information concerning
individual grants of stock options pursuant to stock option plans awarded to
the named executive officers during the year ended December 31, 1994.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential Realizable Value
at Assume Annual Rates
of Stock Price Appreciation
Individual Grants for Option Term(3)
- ---------------------------------------------------------------------------- ---------------------------
% of Total
Options
Granted
Options to Exercise Expiration
Name Granted Employees Price Date 5% 10%
---- ------- --------- -------- ---------- -- ---
<S> <C> <C> <C> <C> <C> <C>
Rodney B. Tibbatts 8,500 21.46% $15.375 11-16-04 $82,189 $189,983
(1) (2)
Victor L. Bartruff 1,800 4.55% $13.75 07-25-04 $15,565 $39,445
(4) (4) (4) (4)
Edgar B. Martin 6,500 16.41% $15.375 11-16-04 $62,850 $145,280
(1) (2)
</TABLE>
(1) The stock options are not exercisable as to any of the shares until
November 17, 1995.
(2) The option exercise price may be paid in cash or by surrender for
cancellation of shares Common Stock owned by the executive officer or
a combination of the foregoing.
(3) The potential realizable value portion of the foregoing table
illustrates values that might be realized upon exercise of the options
immediately prior to the expiration of their term based upon the
assumed compounded rates of appreciation in the value of Common Stock
as specified in the table over the term of the options. These amounts
do not take into account provisions of the options providing for
termination of the option following termination of employment or
nontransferability.
(4) The number of options listed, the exercise price and the potential
realizable value have been adjusted to reflect the exchange ratio of
.60 shares of Common Stock for each share of WCB common stock. These
options were granted under the WCB stock option plan and vest over a
period of 50 equal monthly installments.
9
<PAGE> 12
The following table sets forth certain information concerning
exercises of stock options pursuant to stock option plans by the named
executive officers during the year ended December 31, 1994 and stock options
held at year end.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND YEAR END OPTION VALUES
<TABLE>
<CAPTION>
Number of Value of
Unexercised Unexercised Options at
Shares Options at Year End Year End
Acquired on Value ----------------------------- -----------------------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Rodney B. Tibbatts -- -- 18,920 8,500 $42,465 --
(1) (1) (2)
Victor L. Bartruff -- -- 18,184 12,655 $131,400 $48,775
(3) (3) (3) (3)
Edgar B. Martin -- -- 11,110 6,500 $21,720 --
(1) (1) (2)
</TABLE>
(1) The stock options identified as unexercisable all become exercisable
on November 17, 1995.
(2) On December 31, 1994, the closing price of Common Stock was $14.50.
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 this
amount and the exercise price of the stock option multiplied by the
number of shares covered by the stock option.
(3) The number of options listed and the value of unexercised options have
been adjusted to reflect the exchange ratio of .60 shares of Common
Stock for each share of WCB common stock. These options were granted
under the WCB stock option plan and vest over a period of 50 equal
monthly installments. The closing price of WCB common stock at
December 31, 1994 was $13.75 (converted by .60 for the stock
exchange).
EMPLOYMENT AND SALARY CONTINUATION AGREEMENTS
Employment Agreements. Prior to completion of the Merger and pursuant
to the Merger Agreement, Commercial entered into executive employment
agreements with Rodney B. Tibbatts and Cora A. Hallauer (Corporate Secretary),
and WCB entered into executive employment agreements with Victor L. Bartruff
and Donald A. Kalkofen (Chief Financial Officer). The employment agreements,
which were conditioned upon consummation of the Merger, have been assumed by
the Company and replaced any employment or severance agreements to which such
executives were parties.
Each executive employment agreement provides that the executive
officer will hold such office through December 31, 1996. In addition to their
base salary, the executive officers are eligible to receive bonuses and such
other benefits as may be determined by the Company.
10
<PAGE> 13
If an executive's employment is terminated prior to December 31, 1996,
without cause (as defined) or terminated by the executive for good reason (as
defined), the executive is entitled to continuing compensation through December
31, 1996. The employment agreements also provide that the executives are
entitled to receive a salary continuation payment if their employment is
terminated without cause or if employment is terminated by the executive for
good reason, following a change in control (as defined), which occurs prior to
December 31, 1996, or which results from a definitive agreement in effect at or
prior to December 31, 1996. The amount of the salary continuation payment is
based on the executive's salary at the date of termination and most recent
bonus and would be paid in a lump sum for a period of 24 months following the
triggering event for the co-chief executive officers, or for a period of 18
months for the other executives, in each case, less any period of continued
employment of such executive by the Company following such triggering event
during the applicable salary continuation period.
Salary Continuation Agreement. Prior to completion of the Merger and
pursuant to the Merger Agreement, CB and BN entered into salary continuation
agreements with certain officers. Each salary continuation agreement was
conditioned upon consummation of the Merger and replaced any salary
continuation or severance agreements previously in place. Under the salary
continuation agreements, the officers are entitled to receive a salary
continuation payment in the event their employment for good reason (as defined)
prior to or in the event the officers elect to terminate their employment for
good reason (as defined) prior to February 28, 1996, (or December 31, 1996 in
the case of one officer). In the event of a change in control (as defined) of
the Company occurring either on or before June 30, 1996, or pursuant to a
definitive agreement executed by that date, the officers would be entitled to
receive a payment in the event of termination without cause or termination by
the officer for good reason occurring prior to the anniversary date of the
change in control (or December 31, 1996 in the case of one officer). In either
such event, the salary continuation payment would be based on the officer's
current salary as of the date of termination plus a prorated amount reflecting
the officer's most recently received bonus or incentive compensation and would
be payable in a lump sum.
DEFERRED COMPENSATION PLAN
In December of 1994, CB approved a non-qualified Deferred Compensation
Plan for Edgar B. Martin which provides that at age 65, Mr. Martin will be
eligible to receive a retirement benefit of $250,000. The deferred plan was
approved by the Board to compensate Mr. Martin for the short-fall which he
would have otherwise received as a participant in CB's Defined Benefit Plan
which was terminated on December 31, 1992. It is expected the deferred plan
will be funded by an insurance contract, for which premiums will be paid on an
annual basis.
INCENTIVE COMPENSATION PLAN
The Subsidiary Banks have each adopted an Incentive Compensation Plan
("ICP"), for persons who generally are eligible to receive benefits. Under the
ICP, participants receive additional compensation based on the Company's
respective bank's level of profitability.
11
<PAGE> 14
PROFIT SHARING PLAN
The Company currently maintains the Commercial 401(k) and the WCB
401(k) profit sharing plans which were in place at the time of the Merger, each
of which are qualified for special tax treatment under Section 401(k) of the
Internal Revenue Code. Under the Commercial profit sharing plan ("Commercial
401(k)"), eligible employees (including executive officers) are permitted to
make elective contributions by salary deductions for a portion of their
compensation. The Company will match 25 percent of an employee's elective
contribution up to a contribution level of six percent of the participant's
compensation. The Company will also make a basic annual contribution of $100
per eligible employee and may also make additional profit sharing contributions
in the discretion of the Board of Directors.
Employee elective contributions in the Commercial 401(k) is 100
percent vested at all times. Matching contributions under the plan vest on a
schedule of 40 percent after two years and 20 percent per year after each of
the next three years, becoming fully vested in five years.
Under WCB's profit sharing plan ("WCB 401(k)"), WCB matches 50 percent
of an employee's contribution into the plan, up to a maximum of 6 percent of
the employee's annual salary. In addition, the WCB provides for employer
annual discretionary contributions to the plan. Employee elective
contributions in the WCB 401(k) is 100 percent vested at all times. Employer
contributions have a seven year vesting schedule, beginning in the third year
and vesting 20% each year thereafter.
As a result of the tax qualification of the 401(k) plans, employees
are not subject to federal income taxation on either employee elective
contributions or any employer contributions until those amounts are distributed
from the plan, although the Company continues to receive a compensation expense
deduction for compensation paid. However, such contributions are subject to
restrictions on withdrawal. Employees may select from several investment
vehicles for their elective contributions.
In accordance with the terms of the Merger Agreement, the Company
will, within 12 months of the Merger, adopt a profit sharing plan which will
incorporate all employees under one plan.
REPORT ON EXECUTIVE COMPENSATION
The following is a report of the non-employee members of the Board of
Directors and the Administration and Personnel Committee of CB (the
"Committee") who are responsible for establishing and administering the
Company's Executive Compensation Program. The following report (and members
thereof) is specific to matters relating to compensation during the fiscal year
1994. Although members who comprise the Committee may change, the Company
intends to utilize the same philosophy and objectives in the coming years as
has previously been used to determine compensation for its executive officers.
Compensation Philosophy and Objectives. The philosophy underlying the
development and administration of the Company's annual and long-term
compensation plans is the alignment of the interests of executive
management with those of the shareholders. Key elements of this
philosophy are:
12
<PAGE> 15
* Establish compensation plans which deliver pay commensurate
with the Company's performance, as measured by operating,
financial and strategic objectives,
* Provide significant equity-based incentives for executives to
ensure that they are motivated over the long-term to respond
to the Company's business challenges and opportunities as
owners rather than just as employees,
* Reward of executives if shareholders receive an above-average
return on their investment over the long-term.
The objective for computing executive base salaries is to structure
salaries that are competitive within the marketplace. The Incentive Bonus
Agreement or Incentive Compensation Plan, if any, is the vehicle by which
executives can earn additional compensation depending on individual and Company
performance relative to certain annual objectives. The Company objectives are
a combination of operating, financial and strategic goals (such as loan and
deposit levels, asset quality, earnings per share, operating income, etc.) that
are considered to be critical to the Company's fundamental goal - building
shareholder value.
The Company's long-term incentive program consists of the 1991
Combined Incentive and Non-Qualified Stock Option Plan. Annual grants are
considered at the then value of the Company's Common Stock, thereby providing
an additional incentive for executives to build shareholder value. Options
granted under the Stock Option Plans have a term of 10 years and vest over a
one-year period. Executives receive value from these Plans if strategic goals
are achieved and the Company's Common Stock appreciates over the long-term.
Company Performance and Compensation. During 1994, the Company met or
exceeded it's strategic, operating and financial goals of loan and deposit
growth, asset quality, earnings per share, and operating income. Operating
income was above the original target for the year by 1.0%. Considering these
accomplishments, which were not specifically weighted, the Board awarded the
Company's CEO, Rodney B. Tibbatts, an incentive bonus of $60,000.00, the
maximum award available to him under his Incentive Bonus Agreement. In
addition, the Committee awarded Mr. Martin $36,366 under the ICP. The Board
increased Mr. Tibbatts base salary by approximately 8.69%. Similarly, Mr.
Martin received a base salary increase of 4.6% which positioned him near the
median for a competitor group of banking companies.
As an incentive for future performance and because the Company's
return on assets was at the 86th percentile as of June 30, 1994 when compared
to its peer group of financial institutions in the 12th Federal Reserve
District, the Board granted Mr. Tibbatts and Mr. Martin stock options for
8,500 and 6,500 shares, respectively. These awards provide incentive for Mr.
Tibbatts and Mr. Martin to continue to build shareholder value over the long
term. In making these awards, the Board did not consider prior grants of stock
options.
13
<PAGE> 16
<TABLE>
<CAPTION>
1994 1994
COMMERCIAL ADMINISTRATION & PERSONNEL
BOARD OF DIRECTORS COMMITTEE, COMMERCIAL BANK
<S> <C>
Lester D. Green, Chairman Jack E. Long, Chairman
Iral D. Barrett C. Douglas McGregor
Thomas C. Golden Robert D. Morrison
William B. Loch Christine Neilsen
Jack E. Long Anna M. Peterson
Robert D. Morrison
J. H. Pauls
Anna M. Peterson
C. Douglas McGregor
Michael J. Bragg
Christine H. Neilsen
David C. Grove
Forrest A. Weil
</TABLE>
PROPOSAL NO. 2 - ADOPTION OF DIRECTOR STOCK OPTION PLAN
The Board believes that a stock option plan for directors is desirable
to help attract and retain the best available persons to serve as directors of
the Company. Accordingly, a Director Stock Option Plan (the "Plan") was
adopted by the Board of Directors on March 28, 1995, subject to shareholder
approval. The Plan authorizes the Board or a committee of the Board to grant
stock options to directors of the Company or its subsidiaries. Grants under
the Plan, which will be made on May 12, 1995 to non-employee directors only,
have been determined pursuant to a pre-approved schedule, as more fully
discussed below, and as set forth in the attached Appendix A.
Director stock option plans have been in place in numerous companies
(including bank holding companies) for years. Given the time and effort
directors need to invest to be effective in today's regulatory environment (not
even considering the potential personal liability risks involved), the Board
believes that an economic incentive tied to the long-term performance of the
Company is appropriate. In view of the practical limitations on a community
banking organization's ability to pay substantial directors fees, the Board
feels this is a fair means of incenting and rewarding directors for their
performance and the success of the Company and its subsidiaries. Your Board
believes that it is important that directors approach their role from the same
perspective as the owners of the Company, i.e., the shareholders. The Board
feels that the concept of relating a significant portion of director
compensation to the Company's long-term performance is in the best interest of
the Company and its shareholders.
14
<PAGE> 17
The following briefly summarizes certain key features of the Plan, a
copy of which is available for inspection at the Company upon request.
GENERAL
The Plan authorizes the Board of Directors (or a committee of the
Board) to administer the Plan and to grant nonqualified stock options to
directors of the Company. Pursuant to the Schedule (see Appendix A), each
non-employee director of the Company and its Subsidiary Banks will
automatically receive, beginning on May 12, 1995, and annually thereafter, an
option to purchase shares of Common Stock of the Company. The Plan provides
that the exercise price of options granted under the Plan must be not less than
the greater of book value or market value at the time of grant. All options
granted under the Plan will expire not more than ten years from the date of
grant. Up to 200,000 shares of the Company's Common Stock may be optioned and
issued under the Plan, subject to appropriate adjustments for any stock splits,
stock dividends, or other changes in the capitalization of the Company.
TERMINATION/AMENDMENT OF PLAN
The Board of Directors has the authority to terminate the Plan at any
time. The Plan may subsequently be amended by the Board of Directors without
shareholder approval, except that no such amendment may increase the number of
shares of Common Stock that may be issued pursuant to the Plan.
FEDERAL TAX TREATMENT
While no taxable income is recognized upon the grant of a nonqualified
stock option, recipients may generally recognize ordinary income equal to the
fair market value of the shares on the exercise date over the exercise price.
That income would be a deductible compensation expense for the Company.
IN ORDER FOR THE PLAN TO BE ADOPTED, THE PROPOSAL MUST BE APPROVED BY
SHAREHOLDERS OWNING AT LEAST A MAJORITY OF THE OUTSTANDING SHARES OF THE
COMPANY'S COMMON STOCK. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE
"FOR" THE PROPOSED PLAN.
15
<PAGE> 18
STOCK PERFORMANCE GRAPH
The following chart compares the yearly percentage change in the
cumulative shareholder return on the Company's Common Stock during the five
fiscal years ended December 31, 1994, with (i) the Total Return Index for the
NASDAQ Stock Market (U.S. Companies) as reported by the Center for Research in
Securities Prices and (ii) the Total Return Index for NASDAQ Bank Stocks as
reported by the Center for Research in Securities Prices. This comparison
assumes $100.00 was invested on December 31, 1989, in the Company's Common
Stock and the comparison groups and assumes the reinvestment of all cash
dividends prior to any tax effect, and retention of all stock dividends. Prior
to March, 1990, the Company's stock was not quoted on NASDAQ and was traded
locally in the over-the-counter market. For purposes of computing return
information for that period, an average of quarterly high and low prices has
been used.
<TABLE>
<CAPTION>
Source 12/31/89 12/31/90 12/31/91 12/31/92 12/31/93 12/31/94
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
West Coast Bancorp 100 91.3 113.1 202.8 211.0 214.1
- --------------------------------------------------------------------------------------------
NASDAQ U.S. Market 100 84.9 136.3 158.6 180.9 176.9
- --------------------------------------------------------------------------------------------
NASDAQ Bank Stocks 100 73.2 120.2 174.9 199.3 198.7
- --------------------------------------------------------------------------------------------
</TABLE>
16
<PAGE> 19
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table provides information concerning the non-director
executive officers named in the compensation table and all executive officers
and directors of the Company as a group. The Company is not aware of any
person who at March 31, 1995 beneficially owned more than five percent of it's
outstanding Common Stock.
<TABLE>
<CAPTION>
NAME, ADDRESS AND AMOUNT AND NATURE PERCENT OF CLASS
RELATIONSHIP WITH OF BENEFICIAL BENEFICIALLY
THE COMPANY OWNERSHIP OWNED
----------- --------- -----
<S> <C> <C>
Edgar B. Martin 14,461 *
President and CEO of CB
301 Church Street N.E.
P. O. Box 1012
Salem, OR 93708
375,400 (1) 8.6%
All directors and executive officers as
a group (17 persons)
</TABLE>
* Represents less than one percent
(1) Includes 76,097 shares which could be acquired within 60 days through
the exercise of stock options by directors and executive officers as a
group.
17
<PAGE> 20
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
The following table sets forth information with respect to the
executive officers who are not directors or nominees for director of the
Company. All executive officers are elected annually by the Board of Directors
and serve at the discretion of the Board of Directors.
<TABLE>
<CAPTION>
Age as of
Name March 31 1995 Position
---- ------------- --------
<S> <C> <C>
Edgar B. Martin 55 President of CB; employed since 1973
Cora A. Hallauer 55 Senior Vice President and Secretary;
employed since 1972
Donald A. Kalkofen 31 Senior Vice President and Chief
Financial Officer; employed since 1992
</TABLE>
TRANSACTIONS WITH MANAGEMENT
Various of the directors and officers of the Company, members of their
immediate families, and firms in which they had an interest were customers of
and had transactions with the Subsidiary Banks during 1994 in the ordinary
course of business. Similar transactions may be expected to take place in the
ordinary course of business in the future. All outstanding loans and
commitments included in such transactions were made on substantially the same
terms, including interest rates and collateral, as those prevailing at the time
for comparable transactions with other persons and did not, in the opinion of
management, involve more than the normal risk of collectibility nor present
other unfavorable features.
COMPLIANCE WITH SECTION 16(A) FILING REQUIREMENTS
Section 16(a) of the Securities Exchange Act of 1934, as amended,
("Section 16(a)") requires that all executive officers and directors of the
Company and all persons who beneficially own more than 10 percent of the
Company's Common Stock file reports with the Securities and Exchange Commission
with respect to beneficial ownership of the Company's Securities. The Company
has adopted procedures to assist its directors and executive officers in
complying with the Section 16(a) filings.
Based solely upon the Company's review of the copies of the filings
which it received with respect to the fiscal year ended December 31, 1994, or
written representations from certain reporting persons, the Company believes
that all reporting persons made all filings required by Section 16(a) on a
timely basis.
18
<PAGE> 21
AUDITORS
Arthur Andersen, LLP, independent Certified Public Accountants,
performed the audit of the consolidated financial statements for the Company
and its wholly owned subsidiaries, The Commercial Bank and Valley Commercial
Bank, for the year ended December 31, 1994. Representatives of Arthur
Andersen, LLP will be present at the Annual Meeting, and will have the
opportunity to make a statement if they so desire. They also will be available
to respond to appropriate questions.
OTHER BUSINESS
The Board of Directors knows of no other matters to be brought before
the shareholders at the Annual Meeting. In the event other matters are
presented for a vote at the Meeting, the proxy holders will vote shares
represented by properly executed proxies in their discretion in accordance with
their judgment on such matters.
At the Meeting, management will report on the Company's business and
shareholders will have the opportunity to ask questions.
INFORMATION CONCERNING SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the 1996 Annual
Shareholders' Meeting must be received by the Secretary of Bancorp prior to
December 1, 1995, for inclusion in the 1996 Proxy Statement and form of proxy.
ANNUAL REPORT TO SHAREHOLDERS
ANY SHAREHOLDER MAY OBTAIN WITHOUT CHARGE A COPY OF THE COMPANY'S
ANNUAL REPORT ON FORM 10-K FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
UNDER THE SECURITIES EXCHANGE ACT OF 1934 FOR THE YEAR ENDED DECEMBER 31, 1994,
INCLUDING FINANCIAL STATEMENTS. Written requests for the Form 10-K should be
addressed to Cora A. Hallauer, Secretary to the Board of Directors of West
Coast Bancorp, at P.O. Box 428; Salem, Oregon 97308-0428.
April 7, 1995 BY ORDER OF THE BOARD OF DIRECTORS
/s/ CORA A. HALLAUER
-----------------------------------
Cora A. Hallauer, Secretary
19
<PAGE> 22
PROXY PROXY
WEST COAST BANCORP
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Rodney B. Tibbatts and Victor L.
Bartruff, and each of them (with full power to act alone) as Proxies, with full
power of substitution, and hereby authorizes them to represent and to vote, as
designated below, all the shares of common stock of West Coast Bancorp, held of
record by the undersigned on March 31, 1995, at the Annual Meeting of
Shareholders to be held on May 12, 1995 or any adjournment of such Meeting.
THIS PROXY CONFERS AUTHORITY TO VOTE "FOR" AND WILL BE VOTED "FOR" THE
PROPOSITIONS LISTED UNLESS AUTHORITY IS WITHHELD OR A VOTE AGAINST OR AN
ABSTENTION IS SPECIFIED, IN WHICH CASE THIS PROXY WILL BE VOTED IN ACCORDANCE
WITH THE SPECIFICATION SO MADE.
PLEASE SIGN AND RETURN IMMEDIATELY
(Continued and to be signed on reverse side.)
WEST COAST BANCORP
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. /X/
[ ]
<TABLE>
<CAPTION>
<S> <C> <C>
1. ELECTION OF DIRECTORS. For all 3. WHATEVER OTHER BUSINESS may properly be
Nominees: Lester D. Green, For Withheld Except nominees crossed out brought before the Meeting or any
Jack E. Long, J.F. Ouderkirk, / / / / / / adjournment thereof.
Gary D. Putman
Management knows of no other matters that
may properly be, or which are likely to be,
2. DIRECTOR STOCK OPTION PLAN. For Against Abstain brought before the Meeting. However, if any
Approval of a Director Stock / / / / / / other matters are properly presented at the
Option Plan. Meeting, this Proxy will be voted in
accordance with the recommendations of
management.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE LISTED PROPOSITIONS.
Dated: ____________________________, 1995
_________________________________________
_________________________________________
WHEN SIGNING AS ATTORNEY, EXECUTOR, ADMIN-
ISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE
FULL TITLE. IF MORE THAN ONE TRUSTEE, ALL
SHOULD SIGN. ALL JOINT OWNERS MUST SIGN.
</TABLE>
