<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 / /
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/ / Definitive Proxy Statement
/x/ 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)
GRAHAM & DONN
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/x/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(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:
<PAGE> 2
March 14, 1997
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 18, 1997 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, approve amendments to
Directors Stock Option Plan and whatever other business properly comes before
close of the annual meeting.
YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE IN FAVOR OF THE
ABOVE MATTERS.
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 of West Coast Bancorp and look forward to
reporting the results of 1996 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
Chairman of the Board President & CEO
<PAGE> 3
WEST COAST BANCORP
5335 SW MEADOWS ROAD, SUITE 201
LAKE OSWEGO, OREGON 97035
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 18, 1997
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 18,
1997, at 2:00 p.m. local time 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. AMENDMENTS TO DIRECTOR STOCK OPTION PLAN. To approve amendments to
the Director Stock Option Plan as more fully outlined in the
accompanying proxy statement to (i) increase the number of shares
available for grant; (ii) amend the Plan to allow the Board to grant
options at the Board's discretion; and (iii) incorporate certain
technical changes made in connection with revisions to Section 16
and tax law changes.
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 February 28,
1997, 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 14, 1997 BY ORDER OF THE BOARD OF DIRECTORS
Carolyn R. Williams, 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> 4
WEST COAST BANCORP
5335 SW MEADOWS ROAD, SUITE 201
LAKE OSWEGO, OREGON 97035
(503) 684-0884
PROXY STATEMENT
This Proxy Statement and the accompanying Proxy are being sent to
shareholders on or about March 14, 1997, for use in connection with the Annual
Meeting of Shareholders of West Coast Bancorp (the "Company") to be held on
Friday, April 18, 1997. Only those shareholders of record at the close of
business on February 28, 1997, 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 6,706,268.
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 subsidiaries, The
Commercial Bank ("CB"), The Bank of Newport ("BON"), The Bank of Vancouver
("BOV"), Valley Commercial Bank ("VCB") and West Coast Trust ("WCT"),
(collectively, the "Subsidiaries"). 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 amendments to 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. Shareholders are not entitled to cumulate their votes in
the election of directors.
RECENT DEVELOPMENTS
Reorganization of Senior Management
In 1995, West Coast Bancorp, Newport, Oregon ("WCB") was merged with and
into Commercial Bancorp, Salem, Oregon ("Commercial"), with the resulting
company operating under the name "West Coast Bancorp" located in Lake Oswego,
Oregon. It was agreed that for a period of time, the "merger of equals" would be
led by the combined management team of Victor L. Bartruff (President and Chief
Executive Officer from WCB) and Rodney B. Tibbatts (President and Chief
Executive Officer from Commercial), in the dual position of Co-President and
Co-Chief Executive Officer of the Company, each responsible for separate areas
within the Company. Management considers that with the successful implementation
of the merger of WCB and Commercial, it is time to transition the position of
President and Chief Executive Officer to one individual. In that regard,
effective February 1, 1997, Victor L. Bartruff assumed the role of President and
Chief Executive Officer of the Company. Mr. Tibbatts will continue with the
Company in the position of Executive
1
<PAGE> 5
Vice President - Corporate Development, with substantially the same
responsibilities as previously held which include overseeing mergers and
acquisitions and interfacing with the investment community.
As part of the reorganization, Mr. Bartruff has relinquished his position
as President and Chief Executive Officer of BON and Mr. Timothy P. Dowling has
been hired to fill the position of President and Chief Executive Officer of BON.
Merger of Bank Subsidiaries
On January 29, 1997, The Bank of Newport and Valley Commercial Bank
entered into an agreement under which VCB will merge with and into BON, under
the charter of BON, operating under the title of "Valley Commercial Bank".
Currently, certain activities such as accounting, management and board
reporting, regulatory reporting, asset liability management analysis and
reporting, securities portfolio management, and loan portfolio management, as
well as others, are being performed separately for each bank. This duplication
not only utilizes a significant portion of management's time, but also forces
the banks to maintain a higher staffing level than if the banks were merged and
these activities were consolidated. Additionally, the merger of the two banks
will bring greater unification to the markets served by the banks, and allow
customers the ability to conduct increased business at the branches of the other
bank.
The Company anticipates that the merger of VCB and BON will close by March
31, 1997.
2
<PAGE> 6
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. Stanley M. Green, whose term would have expired at the
1997 Annual Meeting, advised the Board in July 1996 of his resignation from the
Board of Directors for personal reasons. Mr. Green, together with past director
Chester Clark will serve as director emeritus. The Board has determined not to
seek a replacement for Mr. Green 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.
Ankeny, Bateman, McGregor and Pomajevich for election as directors for
three-year terms to expire in the year 2000. Messrs. Ankeny, Bateman and
McGregor are presently directors of the Company standing for re-election. Mr.
Pomajevich was appointed a director of the Company as a result of the merger
with Vancouver Bancorp ("VB") and is being nominated for election by the
shareholders at this meeting. If either Messrs. Ankeny, Bateman, McGregor or
Pomajevich 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> 7
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 below
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, 1996 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, 1996
------------------ --------------- -----------------
(1)(2)
NOMINEES FOR DIRECTOR FOR THREE YEAR TERM EXPIRING 2000
<S> <C> <C>
Lloyd D. Ankeny, 59 Personal Investments, 52,132
Since 1995 formerly Owner, Landmar
Development Corporation;
director of BON
Phillip G. Bateman, 56 President, Bateman 29,120
Since 1995 Funeral Homes, Central
Coast Crematorium and
Chelan Abbey Mausoleum
and Columbarium; director
of BON
C. Douglas McGregor, 58 Chairman, Access Long 9,414
Since 1994 Distance; formerly EVP
with First Interstate
Bank of Oregon, N.A.;
director of CB
James J. Pomajevich, 54 Owner and President, 39,415(3)
Since 1996 Pomajevich Properties,
Inc.; Chairman of BOV
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE NOMINEES TO BE
ELECTED AS DIRECTORS.
4
<PAGE> 8
<TABLE>
<S> <C> <C>
DIRECTORS WITH TERM EXPIRING IN 1998
Lester D. Green, 71 Property Manager of 54,922(3)
(Chairman of the Board) Mission Properties;
Since 1982 former chair of Capitol
Auto Group
Jack E. Long, 58 Owner/Manager, J&L 14,806
Since 1990 Nursery Co., Inc.;
Chairman of CB
J. F. Ouderkirk, 46 Attorney, Partner of 26,181
Since 1995 Richardson, Ouderkirk and
Hollen; Chairman of BON;
director of WTC
Gary D. Putnam, 52 Executive Vice President, 11,627
(Vice Chairman Brentwood, Inc.; former
of the Board) Treasurer/Chief Financial
Since 1995 Officer of Pump &
Drilling Supply, Inc.;
former President, Pacific
Drilling Supply Inc.;
former Chairman,
President and CEO of WCB;
director of BON
DIRECTORS WITH TERM EXPIRING IN 1999
Victor L. Bartruff, 49 President and Chief 70,543(4)
Since 1995 Executive Officer of the (1.05%)
Company; former President
and CEO of BON; director
of BON, CB and VCB
William B. Loch, 63 President of Capital City 23,460(3)
Since 1982 Companies, Inc. and
Capital Warehouse
Company, Inc.; director
of CB
Robert D. Morrison, 65 First Vice President, 26,053
Since 1982 Financial Consultant,
Smith Barney, Inc.;
director of CB
Rodney B. Tibbatts, 57 Executive Vice 54,395(3)
since 1990 President-Corporate
Development; formerly
Co-President and Co-CEO
of the Company; past
President and CEO of
Commercial; director of
CB; director of WCT
</TABLE>
5
<PAGE> 9
(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, 2,861 shares; Victor L. Bartruff, 52,179
shares; Phillip G. Bateman, 11,017 shares; Lester D. Green, 1,925 shares;
William B. Loch, 5,775 shares; Jack E. Long, 5,775 shares; C. Douglas
McGregor, 1,925 shares; Robert D. Morrison, 5,775 shares; J.F. Ouderkirk,
12,565 shares; James J. Pomajevich 8,440 shares; Gary D. Putnam, 9,733
shares; Rodney B. Tibbatts, 50,413 shares.
(3) Share amounts include shares owned by the spouses of Lester D. Green
(10,899), William B. Loch (1,543), James J. Pomajevich (6,766) and Rodney
B. Tibbatts (3,982), each of whom disclaims any beneficial ownership of
the shares.
(4) Share amount includes 4,565 shares held in IRA accounts for the
benefit of Mr. Bartruff.
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 1996.
BOARD OF DIRECTORS
The Company held fourteen (14) Board meetings in 1996. 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 served.
CERTAIN COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors of the Company have established an Audit and
Compliance Committee ("Audit Committee"), a Compensation Committee and an
Executive 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 six (6) meetings
during the year. For fiscal year 1996, members of the Audit Committee consisted
of Messrs. Ankeny (Chairperson), Bateman, Loch, Morrison and Pomajevich.
6
<PAGE> 10
Compensation Committee. The Compensation Committee met seven (7) 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, Morrison, L. Green and
S. Green (retired in July 1996). Neither Mr. Tibbatts nor Mr. Bartruff
participated in the Board's action on their compensation.
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. The Committee held fifteen (15)
meetings during the year. For the fiscal year 1996, members of the Executive
Committee consisted of Messrs. Putnam (Chairman), Bartruff, L.
Green, Long, Ouderkirk and Tibbatts.
COMPENSATION OF DIRECTORS
The Company has 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. The Chairman of the Board and the
Chairman of the Executive Committee each receive an annual retainer of $15,000;
each committee Chairperson and each Director receives an annual retainer of
$12,000; Chairman of the Audit Committee receives $300 for each meeting
attended; and each committee member receives a fee of $200 for each meeting
attended.
Similar programs for directors of the Company's Subsidiaries have been
established which are commensurate with the size of the institution and its
peers banks.
DIRECTORS' DEFERRED COMPENSATION PLAN
The Board of Directors adopted a Directors' Deferred Compensation Plan
("Directors DCP") which went into effect during the 1996 fiscal year and which
is open to all non-employee directors of the Company or its Subsidiaries 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 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 are 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.
7
<PAGE> 11
DIRECTORS STOCK OPTION PLAN
In 1995, the Board adopted and the shareholders approved a Director Stock
Option Plan ("DSOP"). The DSOP authorizes the Board of Directors (or a committee
of the Board) to administer the DSOP and to grant nonqualified stock options to
directors of the Company. Pursuant to a preauthorized schedule, each
non-employee director of the Company and its Subsidiaries automatically receive
on an annual basis, an option to purchase shares of Common Stock of the Company.
The DSOP provides that the exercise price of options granted under the DSOP must
be not less than the greater of book value or market value at the time of grant.
All options granted under the DSOP will expire not more than ten years from the
date of grant. Up to 275,000 shares of the Company's Common Stock may currently
be optioned and issued under the DSOP, subject to appropriate adjustments for
any stock splits, stock dividends, or other changes in the capitalization of the
Company. At the 1997 Annual Meeting, the shareholders will be asked to approve
certain amendments to the DSOP. SEE "Proposal No. 2 - Amendments to Director
Stock Option Plan".
8
<PAGE> 12
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 year 1994 were paid by
WCB and/or BON.
<TABLE>
<CAPTION>
==============================================================================================================
NAME AND YEAR LONG TERM ALL OTHER
PRINCIPAL POSITION ANNUAL COMPENSATION COMPENSATION COMPENSATION
---------------------------------------------------------
OTHER AWARDS PAYOUTS
ANNUAL
SALARY BONUS COMPENSATION
(1) (2)
------------------
OPTIONS LTIP
(3) PAYOUTS
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Victor L. Bartruff, * 1996 $150,000 $60,000 0 6,250 $10,262
Co-President and Co- 1995 125,000 62,500 0 5,170 0 8,733
Chief Executive Officer; 1994 108,000 50,000 0 1,980 0 9,564
President and Chief (4)
Executive Officer of
BON
Rodney B. Tibbatts, * 1996 $150,000 $37,500 0 6,250 0 $ 7,994
Co-President and Co- 1995 125,004 47,000 0 5,170 0 21,719
Chief Executive Officer 1994 121,008 60,000 0 9,350 0 23,930
(5)
Edgar B. Martin, 1996 $118,200 $39,900 0 4,125 $23,164
President and Chief 1995 114,579 25,207 0 3,619 0 27,590
Executive Officer-CB 1994 110,201 36,366 0 7,150 0 22,675
(6)
Donald A. Kalkofen 1996 $100,200 $40,080 0 5,000 0 $ 4,026
Senior Vice 1995 80,000 34,000 0 6,204 0 3,420
President/Chief 1994 64,200 27,000 0 1,908 0 2,435
Financial Officer (7)
Cora A. Hallauer * 1996 $75,000 $30,000 0 0 0 $ 3,150
Senior Vice 1995 70,000 34,466 0 4,136 0 11,378
President/Secretary 1994 61,280 26,222 0 3,850 0 10,807
(8)
==============================================================================================================
</TABLE>
* The positions listed are as of December 31, 1996. Effective February 1, 1997,
Mr. Bartruff assumed the role of President and Chief Executive Officer of the
Company and Mr. Tibbatts assumed the position of Executive Vice President -
Corporate Development, with substantially the same responsibilities as
previously held. In addition, Mr. Bartruff relinquished his position as
President and Chief Executive Officer of BON. Mr. Timothy P. Dowling was hired
to fill the position of President of BON. Effective January 31, 1997, Ms.
Hallauer retired from her positions with the Company and CB.
(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, 1996 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.
9
<PAGE> 13
(4) Includes 401(k) Plan contribution in the amount of $4,503 and life
insurance premium in the amount of $5,759 paid by the Company on behalf of
Mr. Bartruff for the year ended 1996.
(5) Includes 401(k) Plan contribution in the amount of $4,500 and life
insurance premium in the amount of $2,224 paid by the Company on behalf of
Mr. Tibbatts for the year ended 1996.
(6) Includes 401(k) Plan contribution in the amount of $3,480 and life
insurance premium in the amount of $15,484 paid by the Company on behalf
of Mr. Martin for the year ended 1996.
(7) Includes 401(k) Plan contribution in the amount of $4,026 paid by the
Company on behalf of Mr. Kalkofen.
(8) Includes 401(k) Plan contribution in the amount of $3,150 paid by the
Company on behalf of Ms. Hallauer.
STOCK OPTIONS
Option Grants. 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, 1996.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
=================================================================================
POTENTIAL REALIZABLE
VALUE AT
INDIVIDUAL GRANTS ASSUME ANNUAL RATES
OF STOCK PRICE
APPRECIATION
FOR OPTION TERM(2)
- ---------------------------------------------------------------------------------
% OF
TOTAL
OPTIONS OPTIONS EXERCISE EXPIRATION
NAME GRANTED GRANTED PRICE(1) DATE 5% 10%
TO
EMPLOYEES
- ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Victor L. Bartruff 6,250 8% $14.60 05/30/06 $57,387 $145,429
Rodney B. Tibbatts 6,250 8% $14.60 05/30/06 $57,387 $145,429
Edgar B. Martin 4,125 5% $14.60 05/30/06 $37,875 $ 95,983
Donald A. Kalkofen 5,000 6% $14.60 05/30/06 $45,907 $116,243
=================================================================================
</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.
10
<PAGE> 14
Option Exercises. 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, 1996 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 VALUE
NAME ON REALIZED
EXERCISE
------------------------------------------------------------
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Victor L. Bartruff 0 0 51,281 3,386 $543,773 $37,974
Rodney B. Tibbatts 0 0 50,413 0 $377,699 0
Edgar B. Martin 0 0 32,860 0 238,508 0
Donald A. Kalkofen 0 0 22,773 2,438 $162,021 $23,124
Cora A. Hallauer 16,107 $102,047 0 0 $ 0 $ 0
- ----------------------------------------------------------------------------------------------------------
</TABLE>
(1) On December 31, 1996, the closing price of Common Stock was $18.125. 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 - 1996 EXPIRATION
Employment Agreements. In 1995 in connection with the merger ("Merger")
whereby WCB was merged with and into 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, were assumed by the Company and
replaced any employment or severance agreements to which such executives were
parties.
Each executive employment agreement provided that the executive officer
hold such office through December 31, 1996. In addition to their base salary,
the executive officers were eligible to receive bonuses and such other benefits
as was determined by the Company. These employment agreements expired on
December 31, 1996.
11
<PAGE> 15
Salary Continuation Agreements. In conjunction with the Merger, CB and BON
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 remained in effect and provided
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. All obligations under these salary continuation agreements expired during
the fiscal year 1996.
CURRENT SALARY CONTINUATION AGREEMENTS
In December 1996 the Company, and as applicable, its Subsidiaries, and
certain executive officers entered into new salary continuation agreements (the
"Agreements"). Under these Agreements, the executive is entitled to receive a
salary continuation payment if their employment is terminated (i) by the
executive for good reason, following a change in control (as defined); (ii) by
the Company, without cause, following a change in control; or (iii) by the
Company, without cause, resulting from a contemplated change in control. 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 termination event (as defined) for
Messrs. Bartruff and Tibbatts, for a period of 18 months for Mr. Kalkofen and
for a period of 12 months for certain other executives including Mr. Martin.
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 Subsidiaries.
12
<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 PLANS
The Company and its Subsidiaries have each adopted a Bonus Compensation
Plan for persons who generally are eligible to receive benefits. Under the Bonus
Compensation Plans, participants receive additional compensation based on the
Company's and the respective subsidiaries 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.
13
<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 1996. 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 1996
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.
14
<PAGE> 18
Company Performance and Compensation. Compensation for the current year is
based upon performance for the prior year. During 1995, the Company met or
exceeded its strategic, operating and financial goals of asset quality, earnings
per share, and operating income. Considering these accomplishments, which were
not specifically weighted, for the fiscal year 1996 the Board 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 compared very favorable with publicly traded western U.S.
banks, the Board granted Mr. Bartruff and Mr. Tibbatts stock options for
6,250 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 - Lester D. Green
Stanley M. Green - Robert D. Morrison - C. Douglas McGregor (Chair)
PROPOSAL NO. 2 - AMENDMENT TO DIRECTOR STOCK OPTION PLAN
In 1995, the Board of Directors, with the approval of the shareholders,
adopted a Director Stock Option Plan. As stated in the preceding section under
"Compensation of Directors", the DSOP currently provides that up to 275,000
shares of the Company's Common Stock be available for issuance pursuant to the
grant and exercise of stock options, as adjusted for stock dividends and splits.
In May 1996, the Board amended the option pricing under the DSOP, subject to
shareholder approval, by amending the granting schedule, to provide for the
grant of options to directors of the Company, BON, CB and VCB. These grants are
subject to a three-year vesting schedule. In addition, in October 1996, the
Board approved amendments to the DSOP generated by the recent amendments adopted
by the Securities and Exchange Commission to Section 16 of the Securities
Exchange Act of 1934.
As a result of the acquisition of BOV, the Board in January 10, 1997
approved the grant of options to certain directors of BOV, subject to
shareholder approval, thereby amending Schedule A to reflect the grant. In
February 1997, the Board approved further amendments to the DSOP to (i) increase
the number of shares on which options may be granted under the DSOP from 275,000
to 400,000; (ii) allow the Board to grant future options at the Board's
discretion rather than in accordance with a specific schedule, as provided by
the recent amendments to Section 16; and (ii) make further technical amendments
with respect to the Section 16 amendments and revisions to certain tax laws.
In order for the above amendments 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
AMENDMENTS.
15
<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, 1996, 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, 1991, 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>
PERIOD ENDING
-------------------------------------------------------------
INDEX 12/31/91 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96
- --------------------------------------------------------------------------------
<S> <C>
West Coast Bancorp 100.00 188.83 197.05 200.28 256.22 354.23
Nasdaq - Total US 100.00 116.38 133.59 130.59 184.67 227.16
Nasdaq - Banks 100.00 145.55 165.99 165.38 246.32 325.60
</TABLE>
16
<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, 1996, beneficially owned more than five percent of its
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 (57) President and CEO of 37,451(1)(2)
301 Church Street N.E. CB since 1991;
P.O. Box 1012 employed by CB in
Salem, OR 93708 various capacities
since 1973
Donald A. Kalkofen (33) SVP and CFO of the 23,617(1)
5335 SW Meadows Road Company since 1995;
Suite 201 SVP and Treasurer of
Lake Oswego, OR 97305 WCB and SVP and CFO of
BON from 1993
Cora A. Hallauer (57) ** SVP and Secretary of 1,501
301 Church Street N.E. the Company and SVP
P.O. Box 1012 Operations and
Salem, OR 93708 Secretary of CB since
1990; VP & Systems
Operations Officer of
CB from 1985
12.18%(1)
</TABLE>
* Unless otherwise noted, all shares owned represent less than one percent.
** Effective January 31, 1997, Ms. Hallauer retired from her positions
with the Company and CB.
(1) Share amounts include options which are exercisable within 60 days as
follows: Edgar B. Martin 32,860 shares, Donald A. Kalkofen 23,271 shares,
directors and executive officers as a group 340,010 shares.
(2) Includes 821 shares held in an IRA account for the benefit of Mr.
Martin.
17
<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 Subsidiaries during 1996 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, 1996, 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, Bank of
Vancouver, Valley Commercial Bank and West Coast Trust, for the year ended
December 31, 1996. 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.
18
<PAGE> 22
INFORMATION CONCERNING SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the 1998 Annual
Shareholders' Meeting must be received by the Secretary of the Company prior to
December 1, 1997, for inclusion in the 1998 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, 1996, INCLUDING
FINANCIAL STATEMENTS. Written requests for the Form 10-K should be addressed to
Carolyn R. Williams, Secretary to the Board of Directors of West Coast Bancorp,
at P.O. Box 428; Salem, Oregon 97308-0428.
March 14, 1997 BY ORDER OF THE BOARD OF DIRECTORS
Carolyn R. Williams, Secretary
19
<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 Victor L. Bartruff and Carolyn R.
Williams, 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, 1997, at the Annual Meeting of
Shareholders to be held on April 18, 1997, 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 [ ]
Lloyd D. Ankeny - Phillip G. Bateman - C. Douglas
McGregor - James J. Pomajevich
2. APPROVE AMENDED AND RESTATED DIRECTOR STOCK OPTION PLAN AND RATIFY
ACTIONS TAKEN BY THE BOARD OF DIRECTORS WITH RESPECT TO THE PLAN.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. 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
PROPOSALS 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 proposals.
________________, 1997 ________________________________________
________________________________________
________________________________________
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.
