<PAGE> 1
[WEST COAST BANCORP LOGO]
March 15, 1996
Dear Shareholder:
You are cordially invited to attend the annual meeting of shareholders of West
Coast Bancorp to be held at the Holiday Inn Crowne Plaza, located at 14811
Kruse Oaks Dr., Lake Oswego, Oregon on Friday, April 19, 1996 at 2:00 p.m.,
Pacific Daylight Time. The Crowne Plaza is located off Exit 292 (east bound)
at the intersection of Kruse Way and Bangy Road.
At the annual meeting, West Coast Bancorp shareholders will be asked to approve
the election of four directors for a term of three years.
YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE IN FAVOR OF THE
ABOVE MATTER.
A proxy card is enclosed in the front portion of the mailing envelope. Please
indicate your voting instructions and sign, date, and return the proxy card
promptly in the business reply envelope provided. Whether or not you plan to
attend the annual meeting in person, it is important that you return the
enclosed proxy card so that your shares are voted. A proxy that is returned
signed and dated but with no voting instructions will be voted in favor of
the matter(s) and, in appropriate circumstances, will enable West Coast
Bancorp's management to adjourn the meeting to continue to solicit votes to
approve these matters. The proxy may be revoked in writing by the person
giving it at any time before it is exercised by notice of such revocation to
the Secretary of West Coast Bancorp, or by submitting a proxy having a later
date, or by such person appearing at the meeting and electing to vote in person.
We value you as a shareholder in West Coast Bancorp and look forward to
reporting the results of 1995 to you. We invite your comments concerning any
of the company's affairs and hope you will contact us for any further
information you desire.
Sincerely,
Lester D. Green Victor L. Bartruff Rodney B. Tibbatts
Chairman of the Board Co-President & CEO Co-President & CEO
5335 S.W. Meadows Road, Suite 201, Lake Oswego, Oregon 97035
Tel. 503-684-0884 - Fax 503-684-0781
<PAGE> 2
WEST COAST BANCORP
5335 SW MEADOWS ROAD, SUITE 201
LAKE OSWEGO, OREGON 97035
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 19, 1996
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, April 19,
1996, 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. 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 1,
1996, 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.
March 15, 1996 BY ORDER OF THE BOARD OF DIRECTORS
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
WEST COAST BANCORP
5335 SW MEADOWS ROAD, SUITE 201
LAKE OSWEGO, OREGON 97035
(503) 624-5864
PROXY STATEMENT
This Proxy Statement and the accompanying Proxy are being sent to
shareholders on or about March 15, 1996, for use in connection with the Annual
Meeting of Shareholders of West Coast Bancorp (the "Company") to be held on
Friday, April 19, 1996. Only those shareholders of record at the close of
business on March 1, 1996, 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 4,810,759.
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, 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. Shareholders are not entitled
to cumulate their votes in the election of directors.
2
<PAGE> 4
BUSINESS OF THE MEETING
There is one matter being presented for consideration by the
shareholders at the Annual Meeting.
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. Iral Barrett, whose term would have expired in
1997, retired from the Board in late 1995 to pursue other interests. Chester
Clark, whose term expires at the 1996 Annual Meeting has advised the Board that
he would not stand for reelection and is retiring from the Board of Directors.
The Board has determined not to seek replacements for Messrs. Clark or Barrett
at this time and, accordingly, has reduced the size of the Board to twelve.
In accordance with the above, the Board of Directors has nominated
Messrs. Bartruff, Loch, Morrison and Tibbatts for election as directors for
three-year terms to expire in 1999. If either Messrs. Bartruff, Loch, Morrison
or Tibbatts 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.
3
<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
December 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 DECEMBER 31, 1995
------------------ --------------- -----------------
(1)(2)
NOMINEES FOR DIRECTOR FOR THREE YEAR TERM EXPIRING 1999
<S> <C> <C>
Victor L. Bartruff, 48 Co-President and Co-CEO of 40,091
Since 1995 the Company; President and
CEO of BN; former district
manager of U.S. National
Bank of Oregon; director of
BN, CB and VCB
William B. Loch, 62 President of Capital City 16,415
Since 1982 Companies, Inc.; director of
CB
Robert D. Morrison, 64 First Vice President, 18,494
Since 1982 Financial Consultant, Smith
Barney, Inc.; director of CB
Rodney B. Tibbatts, 56 Co-President and Co-CEO of 38,801 (3)
Since 1990 the Company; former
President and CEO of
Commercial Bancorp; director
of CB
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE NOMINEES TO BE
ELECTED AS DIRECTORS.
4
<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 DECEMBER 31, 1995
------------------ --------------- -----------------
(1)(2)
DIRECTORS WITH TERM EXPIRING IN 1997
<S> <C> <C>
Lloyd D. Ankeny, 58 Personal Investments, 39,284
Since 1995 formerly Owner, Landmar
Development Corporation;
director of BN
Phillip G. Bateman, 55 Partner, Bateman Funeral 21,009
Since 1995 Homes, Central Coast
Crematorium and Chelan
Abbey Mausoleum and
Columbarium; director of BN
Stanley M. Green, 74 Animation Director Tolco 121,985 (3)
Since 1995 Productions, Inc.; formerly (2.5%)
Animation Artist with Walt
Disney; former director of
BN
C. Douglas McGregor, 57 Chairman, Access Long 5,397
Since 1994 Distance; formerly EVP with
First Interstate Bank of
Oregon, N.A.; director of CB
</TABLE>
5
<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 DECEMBER 31, 1995
------------------ --------------- -----------------
(1)(2)
DIRECTORS WITH TERM EXPIRING IN 1998
<S> <C> <C>
Lester D. Green, 70 Property Manager of Mission 40,733 (3)
(Chairman of the Board) Properties; former chair of
Since 1982 Capitol Auto Group; director
of CB
Jack E. Long, 57 Owner/Manager, J&L 9,487
Since 1990 Nursery Co., Inc.; director of
CB
J. F. Ouderkirk, 45 Attorney, Partner of 18,534
Since 1995 Richardson, Ouderkirk and
Hollen; director of BN
Gary D. Putnam, 51 Treasurer/Chief Financial 6,974
(Vice Chairman Officer of Pump & Drilling
of the Board) Supply, Inc.; former
Since 1995 President, Pacific Drilling
Supply Inc.; former
Chairman, President and
CEO of WCB; director of BN
</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, 5,568 shares; Victor L. Bartruff,
27,265 shares; Phillip G. Bateman, 6,526 shares; Lester D. Green, 3,080
shares; Stanley M. Green, 5,568 shares; William Lock, 3,080 shares;
Jack E. Long, 3,080 shares; C. Douglas McGregor, 3,080 shares; Robert
D. Morrison, 3,080 shares; J.F. Ouderkirk, 7,641 shares; Gary D.
Putnam, 5,522 shares; Rodney B. Tibbatts, 35,662 shares.
(3) Share amounts include shares owned by the spouses of Lester D. Green
(7,597), Stanley M. Green (38,205), William B. Loch (1,109), and Rodney
B. Tibbatts (3,139), each of whom disclaims any beneficial ownership of
the shares.
6
<PAGE> 8
INFORMATION REGARDING THE BOARD OF DIRECTORS AND ITS COMMITTEES
The following sets forth information concerning the Board of Directors
and Committees of the Company during the fiscal year ended 1995.
BOARD OF DIRECTORS
The Company held eleven (11) Board meetings in 1995. 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 the Company have established an Audit and
Compliance Committee ("Audit Committee") and a Compensation Committee. When the
need arose the full Board served as the Nominating Committee.
Audit Committee. The main function of the 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 the Company's records and its
business practices, and reviews the adequacy and implementation of the internal
auditing, accounting and financial controls. The Committee held four (4)
meetings during the year. For fiscal 1995, members of the Audit Committee
consisted of Messrs. Ankeny (Chairperson), Bateman, Barrett (retired 10/31/95)
and Morrison.
Compensation Committee. The Compensation Committee met four times for
the purpose of reviewing Mr. Tibbatts' and Mr. Bartruff's salary and incentive
compensation and for reviewing and recommending to the full Board stock option
grants for executive officers. The Compensation Committee consisted of Messrs.
McGregor (Chairperson), Ankeny, Clark, Morrison and S. Green. Neither Mr.
Tibbatts nor Mr. Bartruff participated in the Board's action on their
compensation.
Executive Committee. In addition to the above Committees, the Company
has established 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
7
<PAGE> 9
to ensure the Company's strategic planning process is being followed. For the
fiscal year 1995, members of the Executive Committee consisted of Messrs. Putnam
(Chairman), Bartruff, Lester D. Green, Long, Ouderkirk and Tibbatts.
COMPENSATION OF DIRECTORS
The Company and its Subsidiary Banks have established a program by
which a non-employee director receives an annual retainer as a member of the
Board of Directors as well as for each Committee that the Director attends as
follows:
Company. The Chairman of the Board and the Chairman of the Executive
Committee each receive an annual retainer of $12,000; each committee Chairperson
and each Director receives an annual retainer of $10,000; and each committee
member receives a fee of $200 for each meeting attended.
CB. The Chairman of the Board receives an annual retainer of $9,600;
each committee Chairperson and each Director receive an annual retainer of
$8,000; and each committee member receives a fee of $100 for each meeting
attended.
BN. The Chairman of the Board receives an annual retainer of $7,600;
each committee Chairperson and each Director receive an annual retainer of
$6,300; and each committee member receives a fee of $100 for each meeting
attended.
VB. The Chairman of the Board receives an annual retainer of $1,300;
each committee Chairperson and each Director receive an annual retainer of
$1,100; and each committee member receives a fee of $50 for each meeting
attended.
DIRECTORS' DEFERRED COMPENSATION PLAN
The Board of Directors recently adopted a Directors' Deferred
Compensation Plan ("Directors DCP") which will go into effect during the 1996
fiscal year and which is open to all non-employee directors of the Company or
its Subsidiary Banks on a completely voluntary basis.
Under the Directors' DCP, directors may elect to defer payment of a
specified portion of their directors' fees with no limitation of the amount
deferred. There are no Company paid contributions under this plan. Contributions
are transferred to a so-called "rabbi trust." A director may invest their
deferred fees in a number of investment funds similar to those offered
8
<PAGE> 10
under the 401(k) Plan, including Company stock. Distributions will be made after
a director is no longer serving as a director for any of the companies
participating in the Directors DCP or in the event of an unforeseeable financial
emergency. Directors are fully vested in their benefits under the Directors DCP
at all times.
Benefit payments from the Director DCP will be taxed as ordinary income
in the year they are received by participants. The Company will generally
receive a deduction for the deferred directors' fees at that time. ERISA's and
the Internal Revenue Code's onerous tax-qualified plan rules generally do not
apply to this plan.
9
<PAGE> 11
EXECUTIVE COMPENSATION
The following table sets forth a summary of certain information
concerning compensation awarded to or paid by the Company 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 the Company, whose
total compensation during the last fiscal year exceeded $100,000. In the case of
Mr. Bartruff and Mr. Kalkofen, amounts shown for the fiscal years 1994 and 1993
were paid by West Coast Bancorp, Newport, Oregon ("WCB") and/or BN. During the
fiscal year 1995, the Company retained an independent consultant to review its
existing employee and director compensation plans and to recommend any
appropriate changes or additions. Certain of these recommendations were adopted
by the Board and have been implemented by the Company.
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION
---------------------------------------------------------
OTHER AWARDS PAYOUTS
ANNUAL -------------------
NAME AND BONUS COMPENSATION OPTIONS LTIP ALL OTHER
PRINCIPAL POSITION YEAR SALARY (1) (2) (3) PAYOUTS COMPENSATION
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
RODNEY B. TIBBATTS, 1995 $125,004 $ 47,000 0 5,170 0 $ 21,719
CO-PRESIDENT AND CO- 1994 121,008 60,000 0 9,350 0 23,930
CHIEF EXECUTIVE 1993 117,404 30,000 0 8,470 -- 18,973
OFFICER (4)
- ----------------------------------------------------------------------------------------------------------
VICTOR L. BARTRUFF, 1995 $125,000 $ 62,500 0 5,170 0 $ 8,733
CO-PRESIDENT AND CO- 1994 108,000 50,000 0 1,980 0 9,564
CHIEF EXECUTIVE 1993 100,000 40,000 0 15,972 -- 7,965
OFFICER; PRESIDENT (5)
AND CHIEF EXECUTIVE
OFFICER OF BN
- ----------------------------------------------------------------------------------------------------------
EDGAR B. MARTIN, 1995 $114,579 $ 25,207 0 3,619 0 $ 27,590
PRESIDENT AND CHIEF 1994 110,201 36,366 0 7,150 0 22,675
EXECUTIVE OFFICER-CB 1993 101,200 32,384 0 6,050 -- 14,540
(6)
- ----------------------------------------------------------------------------------------------------------
DONALD A. KALKOFEN 1995 $ 80,000 $ 34,000 0 6,204 0 3,420
SENIOR VICE 1994 64,200 27,000 0 1,908 0 2,435
PRESIDENT/CHIEF 1993 57,000 13,000 0 7,986 0 1,890
FINANCIAL OFFICER (7)
- ----------------------------------------------------------------------------------------------------------
</TABLE>
10
<PAGE> 12
<TABLE>
LONG TERM
ANNUAL COMPENSATION COMPENSATION
---------------------------------------------------------
OTHER AWARDS PAYOUTS
ANNUAL -------------------
NAME AND BONUS COMPENSATION OPTIONS LTIP ALL OTHER
PRINCIPAL POSITION YEAR SALARY (1) (2) (3) PAYOUTS COMPENSATION
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
CORA A. HALLAUER 1995 $ 70,000 $ 34,466 0 4,136 0 $ 11,378
SENIOR VICE 1994 61,280 26,222 0 3,850 0 10,807
PRESIDENT/SECRETARY 1993 59,985 19,195 0 2,420 0 8,036
(8)
==========================================================================================================
</TABLE>
(1) Includes bonuses paid or to be paid during the subsequent year but
attributable to the year indicated.
(2) 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 the Company of providing such benefits to any
individual executive officer during the year ended December 31, 1995
did not exceed the lesser of $50,000 or 10% of the total of annual
salary and bonus reported for the individual.
(3) Options to acquire shares of Common Stock as adjusted for subsequent
stock dividends and stock splits.
(4) Includes 401(k) Plan contribution in the amount of $18,309 and life
insurance premium in the amount of $3,410 paid by the Company on behalf
of Mr. Tibbatts for the year ended 1995.
(5) Includes 401(k) Plan contribution in the amount of $4,620 and life
insurance premium in the amount of $3,947 paid by the Company on behalf
of Mr. Bartruff for the year ended 1995.
(6) Includes 401(k) Plan contribution in the amount of $18,227 and life
insurance premium in the amount of $9,031 paid by the Company on behalf
of Mr. Martin for the year ended 1995.
(7) Includes 401(k) Plan contribution in the amount of $3,420 paid by the
Company on behalf of Mr. Kalkofen.
(8) Includes 401(k) Plan contribution in the amount of $936 and life
insurance premium in the amount of $10,442 paid by the Company on
behalf of Ms. Hallauer.
11
<PAGE> 13
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, 1995.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
===================================================================================================================================
POTENTIAL REALIZABLE
VALUE AT
ASSUME ANNUAL RATES
INDIVIDUAL GRANTS OF STOCK PRICE
APPRECIATION
FOR OPTION TERM(2)
- ------------------------------------------------------------------------------------------- -----------------------------------
% OF TOTAL
OPTIONS
OPTIONS GRANTED TO EXERCISE EXPIRATION
NAME GRANTED EMPLOYEES PRICE(1) DATE 5% 10%
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
RODNEY B. TIBBATTS 5,170 9% $15.91 09/28/05 $51,727 $131,085
- -----------------------------------------------------------------------------------------------------------------------------------
VICTOR L. BARTRUFF 5,170 9% $15.91 09/28/05 $51,727 $131,085
- -----------------------------------------------------------------------------------------------------------------------------------
EDGAR B. MARTIN 3,619 6% $15.91 09/28/05 $36,209 $ 91,760
- -----------------------------------------------------------------------------------------------------------------------------------
DONALD A. KALKOFEN 6,204 11% $15.91 09/28/05 $62,072 $157,302
- -----------------------------------------------------------------------------------------------------------------------------------
CORA A. HALLAUER 4,136 7% $15.91 09/28/05 $41,381 $104,868
===================================================================================================================================
</TABLE>
(1) The option exercise price may be paid in cash or by surrendering for
cancellation shares of Common Stock owned by the executive officer or a
combination of the foregoing.
(2) 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.
12
<PAGE> 14
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, 1995 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 (1)
ACQUIRED ON VALUE
------------------------------------------------------------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
RODNEY B. TIBBATTS -- -- 35,332 -- $142,575 --
- -----------------------------------------------------------------------------------------------------------------------------------
VICTOR L. BARTRUFF -- -- 31,717 7,377 $275,666 $49,047
- -----------------------------------------------------------------------------------------------------------------------------------
EDGAR B. MARTIN -- -- 22,990 -- $85,316 --
- -----------------------------------------------------------------------------------------------------------------------------------
DONALD A. KALKOFEN -- -- 11,828 4,342 $ 42,904 $27,098
- -----------------------------------------------------------------------------------------------------------------------------------
CORA A. HALLAUER -- -- 12,887 -- $40,061 --
===================================================================================================================================
</TABLE>
(1) On December 31, 1995, the closing price of Common Stock was $16.625.
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.
EMPLOYMENT AND SALARY CONTINUATION AGREEMENTS
Employment Agreements. In 1995 in connection with the merger ("Merger")
whereby WCB was merged with and into Commercial Bancorp ("Commercial") and
Commercial changed its name to "West Coast Bancorp," 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.
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
13
<PAGE> 15
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 Agreements. In conjunction with the Merger, 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 were entitled to
receive a salary continuation payment in the event their employment was
terminated for good reason (as defined) prior to or in the event the officers
elected to terminate their employment for good reason (as defined) prior to
February 28, 1996, (or December 31, 1996 in the case of one officer). With the
exception of one officer, these termination provisions under the Salary
Continuation Agreements expired on February 28, 1996. However, the change in
control provision in the Salary Continuation Agreements remains in effect and
provides that 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 PLANS
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.
Effective January 1, 1996, the Company adopted an Executives' Deferred
Compensation Plan ("Executive DCP") which is open only to individuals designated
by the Board of Directors of the Company or its Subsidiary Banks.
14
<PAGE> 16
Participants may elect to defer payment of a specified portion of their
salary and/or bonus. The amount of participants' annual deferral contributions
is unlimited. In addition, the employers will contribute the amount, if any,
that the executives cannot receive under the 401(k) Plan because of their
participation in the Executive DCP. Employer contributions will be subject to
the same vesting schedule as under the 401(k) Plan. Contributions are
transferred to a so-called "rabbi trust." Distributions will be made in
accordance with individual elections by participants. Participants are fully
vested in their benefits under the Executive DCP at all times.
Benefits under the Executive DCP will be taxed to participants as they
receive them after termination of employment. The Company will receive a
deduction for its contributions generally at that time. ERISA's and Internal
Revenue Code's onerous tax-qualified plan rules generally do not apply to this
plan.
BONUS COMPENSATION PLAN
The Company and its Subsidiary Banks have each adopted a Bonus
Compensation Plan for persons who generally are eligible to receive benefits.
Under the Bonus Compensation Plan, participants receive additional compensation
based on the Company's and the respective bank's level of profitability and
individual goals.
401(k) PLAN
During 1995, Commercial and WCB each maintained a 401(k) profit sharing
plan. Effective January 1, 1996, the Company merged the two plans and adopted a
combined 401(k) Plan ("401(k) Plan") which is qualified for special tax
treatment under Section 401(k) of the Internal Revenue Code, to provide for a
single retirement plan to cover all employees of the Company, including all of
its present and future subsidiaries.
The 401(k) Plan allows for pre-tax employee contributions up to IRS
maximum limits with a Company match of 50% of the first 6% of employee
contribution. The Company may also make an additional discretionary contribution
to qualifying employees. Employee elective contributions are 100% vested at all
times. Matching and discretionary contributions have a five year vesting
schedule beginning in the second year at 40% and 20% each year thereafter.
As a result of the tax qualification of the 401(k) Plan, employees are
not subject to federal or state income taxation on the employee elective
contributions, employer contributions or earnings thereon until those amounts
are distributed from the 401(k) Plan, although the Company continues to receive
a compensation expense deduction for compensation paid.
15
<PAGE> 17
REPORT ON EXECUTIVE COMPENSATION
The following is a report of the non-employee members of the
Compensation Committee of the Board of Directors (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 1995. 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:
* 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. An incentive bonus 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 in 1995
under the Stock Option Plan have a term of 10 years and vest immediately.
Executives receive value from these grants if strategic goals are achieved and
the Company's Common Stock appreciates over the long-term.
Company Performance and Compensation. During 1995, the Company met or
exceeded it's strategic, operating and financial goals of asset quality,
earnings per share, and operating income. Considering these accomplishments,
which were not specifically weighted, the Board
16
<PAGE> 18
awarded the Company's Co-Presidents and Co-CEO's, Victor L. Bartruff and Rodney
B. Tibbatts, incentive bonus payments. In addition, the Board increased their
base salaries by 20%. This increase positions their base salaries somewhat below
the midpoint paid executives in a competitive group of banking companies.
As an incentive for future performance and because the Company's
performance ratios as of September 30, 1995 compared very favorable with
publicly traded western U.S. banks, the Board granted Mr. Bartruff and Mr.
Tibbatts stock options for 5,170 shares each. These awards provide incentive for
Mr. Bartruff and Mr. Tibbatts to continue to build shareholder value over the
long-term. In making these awards, the Board did not consider prior grants of
stock options.
EXECUTIVE COMPENSATION COMMITTEE
Lloyd D. Ankeny Robert D. Morrison
Stanley M. Green C. Douglas McGregor
17
<PAGE> 19
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, 1995, 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, 1990, in the Company's Common Stock
and the comparison groups and assumes the reinvestment of all cash dividends
prior to any tax effect, and retention of all stock dividends.
<TABLE>
<CAPTION>
Measurement Period West Coast NASDAQ U.S. NASDAQ Bank
(Fiscal Year Covered) Bancorp Market Stocks
<S> <C> <C> <C>
12/31/90 1.000 1.000 1.000
12/31/91 1.225 1.606 1.246
12/31/92 2.156 1.869 1.814
12/31/93 2.211 2.145 2.068
12/31/94 2.233 2.097 2.061
12/31/95 2.805 2.963 3.070
</TABLE>
18
<PAGE> 20
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 December 31, 1995, beneficially owned more than five percent of it's
outstanding Common Stock.
<TABLE>
<CAPTION>
SHARES AND PERCENTAGE
RELATIONSHIP OF COMMON STOCK
NAME, ADDRESS AND AGE WITH THE COMPANY BENEFICIALLY OWNED*
- --------------------- ---------------- -------------------
<S> <C> <C>
Edgar B. Martin (56) President and CEO of CB 26,723
301 Church Street N.E. since 1991; employed by
P.O. Box 1012 CB in various capacities
Salem, OR 93708 since 1973
Donald A. Kalkofen (32) SVP and CFO of the 12,903
5335 SW Meadows Road Company since 1995;
Suite 201 SVP and Treasurer of
Lake Oswego, OR 97305 WCB and SVP and CFO
of BN from 1993
Cora A. Hallauer (56) SVP and Secretary of 14,035
301 Church Street N.E. the Company and SVP
P.O. Box 1012 Operations and Secretary
Salem, OR 93708 of CB since 1990; VP &
Systems Operations
Officer of CB from 1985
All directors and executive 482,495 (1)(2)
officers as a group (16 persons) 9.69%
</TABLE>
* Unless otherwise noted, all shares owned represent less than one
percent.
(1) Includes 166,862 shares which could be acquired within 60 days through
the exercise of stock options by directors and executive officers as a
group.
(2) Includes 51,626 shares beneficially held by Chester Clark whose term as
a director will terminate at the 1996 Annual Meeting due to his
retirement from the Board.
19
<PAGE> 21
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 1995 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, 1995, 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.
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, The Bank of Newport, and
Valley Commercial Bank, for the year ended December 31, 1995. 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.
20
<PAGE> 22
INFORMATION CONCERNING SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the 1997 Annual
Shareholders' Meeting must be received by the Secretary of the Company prior to
December 1, 1996, for inclusion in the 1997 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, 1995,
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.
March 15, 1996 BY ORDER OF THE BOARD OF DIRECTORS
Cora A. Hallauer, Secretary
21
<PAGE> 23
WEST COAST BANCORP
PROXY
PLEASE SIGN AND RETURN IMMEDIATELY
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 1, 1996, at the Annual Meeting of
Shareholders to be held on April 19, 1996, or any adjournment of such Meeting.
1. ELECTION OF DIRECTORS
A. I vote FOR all nominees listed below (except as marked to the
contrary below) / /
B. I WITHHOLD AUTHORITY to vote for any individual nominee whose
name I have struck a line through in the list below / /
Victor L. Bartruff - William B. Loch
Robert D. Morrison - Rodney B. Tibbatts
2. WHATEVER OTHER BUSINESS may properly be brought before the Meeting or
any adjournment thereof.
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.
Management knows of no other matters that may properly be, or which are
likely to be, brought before the Meeting. However, if any other matters are
properly presented at the Meeting, this Proxy will be voted in accordance with
the recommendations of management.
The Board of Directors recommends a vote "FOR" the listed directors.
____________________, 1996
__________________________________
__________________________________
WHEN SIGNING AS ATTORNEY, EXECUTOR,
ADMINISTRATOR, TRUSTEE OR GUARDIAN,
PLEASE GIVE FULL TITLE. IF MORE
THAN ONE TRUSTEE, ALL SHOULD SIGN.
ALL JOINT OWNERS MUST SIGN.
