<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
West Coast Bancorp
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] 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
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.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
WEST COAST BANCORP
5335 MEADOWS ROAD, SUITE 201
LAKE OSWEGO, OREGON 97035
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 24, 1998
To the Shareholders of West Coast Bancorp:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of West
Coast Bancorp ("Company") will be held at the Crowne Plaza Holiday Inn, located
at 14811 Kruse Oaks Drive, Lake Oswego, Oregon, on Friday, April 24, 1998, 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 directors for a term of
three years, or until their successors have been elected and
qualified.
2. AMENDMENT TO ARTICLES OF INCORPORATION. To approve an amendment
to the Company's Articles of Incorporation to increase the number
of authorized shares of common stock from 15 million to 50
million, as more fully outlined in the accompanying proxy
statement.
3. WHATEVER OTHER BUSINESS may properly come before the Annual
Meeting or any adjournments thereof.
Only those shareholders of record at the close of business on March 6,
1998, are 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.
The directors, officers, and personnel who serve you genuinely appreciate your
continued interest as a shareholder in the affairs of the Company, its growth,
and development.
March __, 1998 BY ORDER OF THE BOARD OF DIRECTORS
Shauna L. Vernal, 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 MEADOWS ROAD, SUITE 201
LAKE OSWEGO, OREGON 97035
(503) 684-0884
PRELIMINARY PROXY STATEMENT
This Proxy Statement and the accompanying Proxy are being sent to
shareholders on or about March __, 1998, for use in connection with the annual
meeting of shareholders ("Annual Meeting") of West Coast Bancorp ("Company") to
be held on Friday, April 24, 1998. Only those shareholders of record at the
close of business on March 6, 1998 ("Record Date"), are entitled to vote. The
number of shares of the Company's no par value common stock ("Common Stock"),
outstanding on the Record Date and entitled to vote at the Annual Meeting is
_____________.
The enclosed Proxy is solicited by and on behalf of the Company's board
of directors ("Board"), 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") (including
those branches of BON d/b/a Valley Commercial Bank), The Bank of Vancouver
("BOV"), Centennial Bank ("Centennial") and West Coast Trust ("WCT"),
(collectively, the "Subsidiaries"). Solicitation may be made through the mail,
or by telephone, facsimile, or 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.
Shares of Common Stock represented by properly executed proxies that are
received in time and not revoked, will be voted in accordance with the
instructions indicated on the proxies. If no instructions are indicated, the
persons named in the Proxy will vote the shares represented by the Proxy FOR the
four nominees listed in this Proxy Statement and FOR the amendment to the
Articles of Incorporation, unless otherwise directed. Any proxy given by a
shareholder may be revoked before its exercise by (1) notice to the Company in
writing, (2) delivery to the Company of a subsequently dated proxy, or (3)
notifying the Company at the Annual Meeting before the shareholder vote is
taken. 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
Acquisition of Centennial Bank
Effective February 28, 1998, Centennial Holdings, Ltd. ("CHL") was
merged with and into the Company and Centennial Bank, a wholly owned bank
subsidiary of CHL, became a separate bank subsidiary of the Company. Consistent
with the terms of the merger agreement governing this merger, shareholders of
CHL became shareholders of the Company, and are therefore eligible to vote at
the 1998 annual shareholder meeting.
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<PAGE> 4
BUSINESS OF THE MEETING
There are two matters being presented for consideration by the
shareholders at the Annual Meeting.
PROPOSAL NO. 1 - ELECTION OF DIRECTORS
GENERAL
The Company's Restated Articles of Incorporation ("Articles") allow the
Board to set the number of directors on the Board within a range of 8 to 20.
Currently, this number is 12. The Articles also allow the Board to fill
vacancies created on the Board.
Directors are elected for terms of three years or until their successors
are elected and qualified. The Company's Articles provide for staggered terms
with approximately one-third of the directors elected each year. Lester D.
Green, retired from the Board last year and Rodney B. Tibbatts, whose term
expires in 1999, resigned from the Board, effective February 28, 1998. To fill
the vacancies caused by Mr. Green's and Mr. Tibbatts' departures, and to satisfy
a condition of the merger with CHL, Thomas W. Healy was appointed to replace Mr.
Green on the Board and Joe L. Snyder was appointed to replace Mr. Tibbatts. Each
of Messrs. Healy and Snyder were previously directors of CHL. Due to the death
of Stanley Green, Chester Clark and Lester D. Green will be the only individuals
who continue to serve the Board as directors emeritus.
In accordance with the above, the Board has nominated Messrs. Healy,
Long, Ouderkirk and Putnam for election as directors for three-year terms to
expire in the year 2001. All nominees are presently directors of the Company. If
either Messrs. Healy, Long, Ouderkirk, or Putnam should refuse or be unable to
serve, your Proxy will be voted for the person the Board designates to replace
that nominee. To date, the Board has received no indication 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 Company's Bylaws.
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<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 below
includes their (1) ages, (2) principal occupations during the past five years,
and (3) year of first election or appointment to the Board. The table also shows
the number of shares of Common Stock beneficially owned by each individual on
December 31, 1997, and the percentage of Common Stock outstanding that the
individual's holdings represented on that date. 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, 1997 *
------------------ --------------- -------------------
(1)(2)(3)
<S> <C> <C>
NOMINEES FOR DIRECTOR FOR THREE YEAR TERM EXPIRING 2001
Thomas W. Healy, 58 Chairman and CEO of 0 (4)
Since 1998 Centennial; former CEO of
CHL
Jack E. Long, 59 Part Owner/Manager, J&L 26,396
Since 1990 Nursery Co., Inc.; Chairman of
CB
J. F. Ouderkirk, 47 Attorney, Partner of Ouderkirk 46,125
Since 1995 and Hollen; Chairman of BON;
director of WTC
Gary D. Putnam, 53 Executive Vice President, 22,732
(Chairman of the Board) Brentwood, Inc.; former
Since 1995 Treasurer/Chief Financial
Officer of Pump & Drilling
Supply, Inc.; former
President, Pacific Drilling
Supply Inc.; director of BON
and WTC
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE NOMINEES TO BE
ELECTED AS DIRECTORS.
3
<PAGE> 6
DIRECTORS WITH TERM EXPIRING IN 1999
<TABLE>
<S> <C> <C>
Victor L. Bartruff, 50 President and Chief Executive 120,675(5)
Since 1995 Officer of the Company; former (1.17%)
President and CEO of BON;
director of BON and CB
William B. Loch, 64 President of Capital City 38,780(5)(6)
Since 1982 Companies, Inc. and Capital
Warehouse Company, Inc.;
director of CB
Robert D. Morrison, 66 First Vice President, 43,193
Since 1982 Financial Consultant, Smith
Barney, Inc.; director of CB
Joe L. Snyder, 51 Attorney; Vice-Chairman of 0(7)
Since 1998 Centennial
DIRECTORS WITH TERM EXPIRING IN 2000
Lloyd D. Ankeny, 60 Personal Investments, formerly 82,892
Since 1995 Owner, Landmar Development
Corporation; director of BON
Phillip G. Bateman, 57 President, Bateman Funeral 44,321(5)
Since 1995 Homes, Central Coast
Crematorium and Chelan Abbey
Mausoleum and Columbarium;
director of BON
C. Douglas McGregor, 59 Chairman, Access Long Distance 18,732
Since 1994 (OR); director of CB and BOV
James J. Pomajevich, 54 Owner and President, 63,125(6)
Since 1996 Pomajevich Properties, Inc.;
Chairman of BOV
</TABLE>
* Share amounts reflect a stock split in the form of a 50% dividend, declared
September 26, 1997.
(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, 7,178 shares; Victor L. Bartruff, 93,403
shares; Phillip G. Bateman, 19,020 shares; William B. Loch, 11,549
shares; Jack E. Long, 11,549 shares; Robert D. Morrison, 11,549 shares;
J.F. Ouderkirk, 23,366 shares; James J. Pomajevich 14,760 shares; Gary
D. Putnam, 18,848 shares.
4
<PAGE> 7
(3) Share amounts include shares deferred under the Director's Deferred
Compensation Plan as follows: Lloyd D. Ankeny, 653 shares; Victor L.
Bartruff, 332 shares; William B. Loch, 1,076 shares; Jack E. Long, 2,088
shares; C. Douglas McGregor, 2,298 shares; Robert D. Morrison, 1,569
shares; J.F. Ouderkirk, 2,335 shares, James J. Pomajevich 2,242 shares;
Gary D. Putnam, 1,162 shares.
(4) On February 28, 1998, the effective date of the merger of CHL with the
Company, Mr. Healy's shares of CHL common stock were converted into the
right to receive 1,007,352 shares of Company Common Stock (or
approximately 8%).
(5) Share amount includes shares held in an IRA or 401(k) account for the
benefit of the individual as follows: Victor L. Bartruff, 1,018 shares;
William B. Loch 1,456; and Phillip Bateman 4,765 shares.
(6) Share amounts include shares owned by the spouses of William B. Loch
(866) and James J. Pomajevich (10,159) each of whom disclaims any
beneficial ownership of the shares.
(7) On February 28, 1998, the effective date of the merger of CHL with the
Company, Mr. Snyder's shares of CHL common stock were converted into the
right to receive the following shares of Company Common Stock or stock
options, as applicable: 85,986 shares and 612 shares subject to options
that could be exercised within 60 days.
INFORMATION REGARDING THE BOARD OF DIRECTORS AND ITS COMMITTEES
The following sets forth information concerning the Board and Committees
of the Company during the fiscal year ended 1997.
BOARD OF DIRECTORS
The Company held 12 Board meetings in 1997. Each director attended at
least 75 percent of the aggregate of (i) the total number of meetings of the
Board, and (ii) the total number of meetings held by all committees on which he
served.
CERTAIN COMMITTEES OF THE BOARD OF DIRECTORS
The Board has 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. 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 nine meetings during the
year. For fiscal year 1997, members of the Audit Committee consisted of Messrs.
Ankeny (Chairperson), Bateman, Loch, Morrison, and Pomajevich.
5
<PAGE> 8
Compensation Committee. The Compensation Committee met eight times for
the purposes of (1) reviewing salary and incentive compensation for Mr. Bartruff
and certain other executive officers, and (2) for reviewing and recommending to
the full Board stock option grants for executive officers. The Compensation
Committee consisted of Messrs. Loch (Chairperson), Ankeny, Green, McGregor,
Morrison, and Putnam. Mr. Bartruff did not participate in the Board's action on
his compensation.
Executive Committee. The main functions of the Executive Committee are
(1) to establish the agenda for the Company's Board meetings, (2) to receive
reports from the executive officers regarding their activities and the
implementation of the Company's business plan, and (3) to ensure the Company is
appropriately on track and that its strategic planning process is being
followed. The committee held 12 meetings during the year. For the fiscal year
1997, members of the Executive Committee consisted of Messrs.
McGregor, Bartruff, Long, Putnam (Chairman), and Ouderkirk.
COMPENSATION OF DIRECTORS
The Company has established a program through which non-employee
directors receive annual retainers as members of the Board; directors also
receive fees for committee participation. 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; the 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 the
procedures of its peer and affiliate banks.
DIRECTORS' DEFERRED COMPENSATION PLAN
The Board adopted a Directors' Deferred Compensation Plan ("Directors
DCP") which went into effect during the 1996 fiscal year. This Plan 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 some
or all of their directors' fees. There are no Company paid contributions under
this plan. Contributions are transferred to a so-called "rabbi trust." A
director may invest deferred fees in a number of investment funds similar to
those offered under the 401(k) Plan. Directors may also invest deferred fees in
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.
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<PAGE> 9
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.
DIRECTORS STOCK OPTION PLAN
In 1995, the Board adopted and the shareholders approved a Director
Stock Option Plan ("DSOP"), which was subsequently amended in 1997. The DSOP
authorizes the Board (or a committee of the Board) to administer the DSOP and to
grant nonqualified stock options to directors of the Company. At the 1997 annual
shareholders' meeting, the DSOP was amended to allow the Board, in accordance
with Section 16 of the Securities Act of 1934, to grant options to purchase
shares of the Company's Common Stock in the Board's discretion (rather than
pursuant to a pre-authorized schedule) to non-employee directors of the Company
and its Subsidiaries. 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 600,000 shares of the
Company's Common Stock may currently be optioned and issued under the DSOP,
subject to appropriate adjustments for any future stock splits, stock dividends,
or other changes in the capitalization of the Company.
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 to the five most highly compensated executive officers of the
Company and its Subsidiaries, whose total compensation during the last fiscal
year exceeded $100,000.
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<PAGE> 10
SUMMARY COMPENSATION TABLE
<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, * 1997 $ 165,000 $ 82,500 $ 34,590(4) 11,250 0 $ 10,790
President and 1996 150,000 60,000 0 9,375 0 10,262
Chief Executive 1995 125,000 62,500 0 7,755 0 8,733
Officer; 0 (5)
- ------------------------------------------------------------------------------------------------------------------------
Rodney B Tibbatts, * 1997 $ 125,000 $ 15,000 0 3,000 0 $ 9,546
Executive Vice 1996 150,000 37,500 0 9,375 0 7,994
President-Corporate 1995 125,004 47,000 0 7,755 0 21,719
Development (6)
- ------------------------------------------------------------------------------------------------------------------------
Edgar B. Martin, 1997 $ 122,000 $ 29,800 0 5,250 0 $ 23,224
President and Chief 1996 118,200 39,900 0 6,187 0 23,164
Executive 1995 114,579 25,207 0 5,428 0 27,590
Officer-CB (7)
- ------------------------------------------------------------------------------------------------------------------------
Lee S. Stenseth, 1997 $ 85,000 $ 97,588 0 1,500 0 $ 8,640
President of BOV (8)
- ------------------------------------------------------------------------------------------------------------------------
Donald A. Kalkofen 1997 $ 116,378 $ 67,000 0 7,500 0 $ 4,693
Executive Vice 1996 100,200 40,080 0 7,500 0 4,026
President/Chief 1995 80,000 34,000 0 9,306 0 3,420
Financial Officer (9)
========================================================================================================================
</TABLE>
* The positions listed are as of December 31, 1997. Effective February 1,
1997, Mr. Bartruff assumed the role of President and Chief Executive Officer of
the Company (which was previously held jointly by Messrs. Bartruff and
Tibbatts), 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.
(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, 1997 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, including a stock split in the form of a 50%
dividend, declared September 26, 1997.
(4) Includes a one-time payment made by the Company on behalf of Mr. Bartruff
of $33,000 for a golf club membership to be used primarily for business
development purposes.
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<PAGE> 11
(5) Includes 401(k) Plan contribution in the amount of $4,500, life insurance
premium in the amount of $3,947, and 401(k) Plan contribution in the
amount of $2,343 deferred pursuant to the Company's Deferral Compensation
Plan ("DCP"), paid by the Company on behalf of Mr. Bartruff for the year
ended 1997.
(6) Includes 401(k) Plan contribution in the amount of $4,500, life insurance
premium in the amount of $3,344, and 401(k) Plan contribution in the
amount of $851 deferred pursuant to the DCP, paid by the Company on behalf
of Mr. Tibbatts for the year ended 1997.
(6) Includes 401(k) Plan contribution in the amount of $3,881, life insurance
premium in the amount of $15,482, and 401(k) Plan contribution in the
amount of $3,881 deferred pursuant to the DCP, paid by the Company on
behalf of Mr. Martin for the year ended 1997.
(7) Includes 401(k) Plan contribution in the amount of $4,500, life insurance
premium in the amount of $3,127, and 401(k) Plan contribution in the
amount of $1,013 deferred pursuant to the DCP, paid by the Company on
behalf of Mr. Stenseth for the year ended 1997.
(8) Includes 401(k) Plan contribution in the amount of $4,500, and 401(k) Plan
contributions in the amount of $193 deferred pursuant to the DCP, paid by
the Company on behalf of Mr. Kalkofen.
STOCK OPTIONS
Option Grants. The following table sets forth certain information
concerning individual grants of stock options under the stock option plans to
the named executive officers during the year ended December 31, 1997.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
===============================================================================================
POTENTIAL REALIZABLE
VALUE AT
ASSUME ANNUAL RATES
OF STOCK PRICE
APPRECIATION
INDIVIDUAL GRANTS(1) FOR OPTION TERM(3)
- -----------------------------------------------------------------------------------------------
% OF TOTAL
OPTIONS
OPTIONS GRANTED TO EXERCISE EXPIRATION
NAME GRANTED EMPLOYEES PRICE(2) DATE 5% 10%
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Victor L. Bartruff 11,250 9.42% $16.67 5/29/07 $117,918 $298,828
- -----------------------------------------------------------------------------------------------
Rodney B. Tibbatts 3,000 2.51% $16.67 5/29/07 $ 31,445 $ 79,687
- -----------------------------------------------------------------------------------------------
Edgar B. Martin 5,250 4.40% $16.67 5/29/07 $ 55,028 $139,453
- -----------------------------------------------------------------------------------------------
Lee S. Stenseth 1,500 1.26% $16.67 5/29/07 $ 15,722 $ 39,844
- -----------------------------------------------------------------------------------------------
Donald A. Kalkofen 7,500 6.29% $16.67 5/29/07 $ 78,612 $199,218
- -----------------------------------------------------------------------------------------------
</TABLE>
(1) Share amounts reflect a stock split in the form of a 50% dividend,
declared on September 26, 1997.
(2) 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.
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<PAGE> 12
(3) The potential realizable value portion of the foregoing table illustrates
values that might be realized upon exercise of the options immediately
prior to the expiration of their term based upon the assumed compounded
rates of appreciation in the value of Common Stock as specified in the
table over the term of the options. These amounts do not take into account
provisions of the options providing for termination of the option
following termination of employment or nontransferability.
Option Exercises. The following table sets forth certain information
concerning exercises of stock options under the stock option plans by the named
executive officers during the year ended December 31, 1997 and stock options
held at year end.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND YEAR END OPTION VALUES
<TABLE>
<CAPTION>
==================================================================================================
SHARES
ACQUIRED NUMBER OF VALUE OF
ON VALUE UNEXERCISED UNEXERCISED OPTIONS AT
NAME EXERCISE REALIZED OPTIONS AT YEAR END YEAR END (1)
- --------------------------------------------------------------------------------------------------
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Victor L. Bartruff 0 $0 93,254 669 $1,754,337 $12,365
- --------------------------------------------------------------------------------------------------
Rodney B. Tibbatts 12,528 $285,443 66,090 0 $1,167,488 $0
- --------------------------------------------------------------------------------------------------
Edgar B. Martin 25,799 $672,459 28,739 0 $ 498,310 $0
- --------------------------------------------------------------------------------------------------
Lee S. Stenseth 0 $0 83,300 0 $1,780,679 $0
- --------------------------------------------------------------------------------------------------
Donald A. Kalkofen 0 $0 44,647 669 $ 735,059 $12,365
==================================================================================================
</TABLE>
(1) On December 31, 1997, the closing price of the Common Stock was $25.25.
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 AGREEMENT
In connection with the acquisition of BOV, the Company entered into an
employment agreement with Mr. Stenseth that provided for his continued
employment as President of BOV after the acquisition. The employment agreement,
the term of which will expire on May 31, 1998, provides that Mr. Stenseth will
receive $85,000 in annual base salary, in addition to an incentive bonus ranging
from 2.5 percent to 5 percent of the pre-tax earnings of BOV, depending on BOV's
performance. The Company may terminate the agreement at any time for cause
without incurring any post-termination obligation to Mr. Stenseth, or without
cause, in which case the agreement provides severance benefits equal to the
salary and benefits which Mr. Stenseth would have been entitled but for such
termination.
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<PAGE> 13
SALARY CONTINUATION AGREEMENTS
The Company, and as applicable, its Subsidiaries, have entered into
salary continuation agreements with certain executive officers. Under these
agreements, the executive is entitled to receive a salary continuation payment
if his 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 his or her most
recent bonus. This payment is a lump sum payment equal to executive's base
salary and bonus over 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 shortfall, which he would
have otherwise received as a participant in CB's Defined Benefit Plan, which was
terminated on December 31, 1992. The deferred plan is being 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 the Company or its Subsidiaries.
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 portion of contributions 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.
11
<PAGE> 14
401(K) PLAN
The Company maintains a 401(k) profit sharing 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.
Effective June 1, 1997, the Employee Stock Ownership Plan for BOV
employees that was adopted by the Company at the time it merged with Vancouver
Bancorp, Inc., was rolled into the Company's existing 401(k) Plan. Employees of
BOV therefore became participants of the Company's 401(k) Plan.
REPORT ON EXECUTIVE COMPENSATION
The following is a report of the non-employee members of the
compensation committee of the Board ("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 1997. 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 executives if shareholders receive an above-average return
on their investment over the long-term.
12
<PAGE> 15
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 1997
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.
Company Performance and Compensation. Compensation for the current year
is based upon performance for the prior year. During 1997, 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 1997 the Board awarded the
Company's President and CEO, Victor L. Bartruff, an incentive bonus payment. In
addition, the Board increased his base salary by 33%. Despite this increase, Mr.
Bartruff's base salary remains comparable to or less than salaries generally
paid by WCB's peer banks to their CEO's.
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 stock options for 11,250 shares. This
award provides an incentive for Mr. Bartruff to continue to build shareholder
value over the long-term. In making this award, the Board did not consider prior
grants or stock options
EXECUTIVE COMPENSATION COMMITTEE
Lloyd D. Ankeny o Robert D. Morrison o C. Douglas McGregor (Chair)
PROPOSAL NO. 2 - AMENDMENT TO ARTICLES OF INCORPORATION
It is proposed that the Company's Articles of Incorporation be amended
to increase the number of shares of common stock that the Company is authorized
to issue from 15 million shares to 50 million shares, thereby increasing the
total number of authorized shares (common and preferred) from 25 million to 60
million.
Article II of the Company's Articles of Incorporation currently provides
that the Company is authorized to issue 15 million shares of its no par value
common stock and 10 million shares of blank-check preferred stock, no par value.
On the record date, ________ shares of common stock, and no shares of preferred
stock were issued and outstanding.
As a result of recent acquisitions, stock splits, and the Company's
various stock plans, the authorized shares available for issuance are nearly
exhausted.
13
<PAGE> 16
The Board believes it to be in the best interests of the Company that
additional shares of common stock be authorized to enable the Company to satisfy
ongoing corporate requirements and to take advantage of opportunities that may
be presented in the future. In particular, the additional common stock may be
issued in connection with future stock splits, stock dividends, and the
Company's acquisition of businesses, assets, securities or other property. The
Board expects that opportunities will continue to arise for the Company to
expand both its markets and its services through further acquisitions, some of
which may involved the use of stock. The authorization of additional common
stock will allow the Company to respond promptly and effectively to such
opportunities as they arise. Furthermore, such stock could be issued for cash to
provide capital for the continued growth of the Company's existing corporate
family. If authorization of such additional approval were deferred until a
specific need arose, the time and expense required to obtain necessary
shareholder approval could prevent the Company from taking advantage of
favorable business or financing opportunities. Finally, sufficient common stock
must remain available for issuance under the Company's various stock option
plans.
If the proposed amendment were adopted, the Board would be empowered,
under Oregon Corporate Law, to issue the additional authorized shares of common
stock for the purposes described above, or any other business purposes the board
may deem appropriate, without further shareholder approval. The issuance of
additional common stock could result in dilution of the percentage of equity
ownership of the Company's existing shareholders and, in certain circumstances,
may also result in a dilution of earnings per share of existing common stock.
Moreover, the authorization of additional common stock might be reviewed
as having the effect of discouraging takeover attempts. The Board is not aware
of any proposed or pending attempts to change control of the Company and intends
that the additional common stock will be used for business purposes such as
stock splits, stock dividends, acquisitions, and financing rather than to resist
takeover attempts. The Company's Articles already include other provisions,
which are intended to discourage uninvited takeover attempts that may be
disruptive to the Company's business or unfair to shareholders. These provisions
(1) impose limitations on changes in the composition of the Company's Board; (2)
require the Board to consider certain nonmonetary factors in evaluating any
takeover offer; and (3) require that certain transactions be approved by a vote
of at least 66 2/3 of the shares then outstanding and entitled to vote.
Nevertheless, blocks of common stock (or a combination of common or preferred
shares) could potentially be issued to parties sympathetic to management and
opposed to any attempt to change control of the Company. This might discourage
or make more difficult attempts to gain control of the Company through
transactions such as tender offers or proxy contests, even if such transactions
were viewed by some shareholders as potentially favorable.
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. If adopted, the amendment will be effective upon
filing the Articles of Amendment with the Oregon Secretary of State. A copy of
the full text of the Amendment is attached to this Proxy Statement as EXHIBIT A.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE PROPOSED
AMENDMENT.
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<PAGE> 17
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, 1997, with (1) the Total Return Index for the
NASDAQ Stock Market (U.S. Companies) as reported by the Center for Research in
Securities Prices and (2) 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, 1992, 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 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
West Coast Bancorp 100.00 102.00 102.77 141.40 192.77 402.99
Nasdaq-Total US 100.00 102.00 190.72 155.43 190.72 231.98
Nasdaq-Banks 100.00 141.40 238.97 189.42 238.97 390.92
</TABLE>
<PAGE> 18
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, 1997, beneficially owned more than five percent of its
outstanding Common Stock.
NAMED EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
CURRENT POSITION
WITH THE COMPANY AND SHARES AND PERCENTAGE
PRIOR FIVE YEAR BUSINESS OF COMMON STOCK
NAME, ADDRESS AND AGE EXPERIENCE BENEFICIALLY OWNED* (1)
- --------------------- ------------------------ -----------------------
<S> <C> <C>
Edgar B. Martin, (58) President and CEO of CB 43,631 (2)(3)
since 1991; employed by CB
in various capacities
since 1973
Donald A. Kalkofen, (34) EVP and CFO of the Company 46,061
since 1995; SVP and CFO of
the Company from 1993 to
1995; SVP and CFO of BON
from 1993
Lee S. Stenseth (61) President of BOV 122,124 (4)
(1.18%)
Rodney B. Tibbatts (58) Executive Vice President/ 76,081 (5)
Corp Development; former
director and Co-President
and Co-CEO WCB; former
President and CEO of
Commercial Bancorp
Executive officers and directors as
a group (19 individuals) 1,057,489
(9.87%)
</TABLE>
* Unless otherwise noted, all shares owned represent less than one
percent.
(1) Shares reflect a stock split in the form of a 50% dividend, declared on
September 26, 1997.
(2) Share amounts include options which are exercisable within 60 days as
follows: Edgar B. Martin 28,739 shares, Donald A. Kalkofen 44,796
shares, Lee S. Stenseth 83,330 shares; Rodney B. Tibbatts, 66,090
shares, directors and executive officers as a group 524,640 shares.
16
<PAGE> 19
(3) Includes 1,145 shares held in an IRA account for the benefit of Mr.
Martin.
(4) Includes 8,497 held by spouse and 5,175 shares held in a 401(k)
account.
(5) Includes 6,034 shares held by Mr. Tibbatts' spouse.
EXECUTIVE OFFICERS
The following table sets forth information with respect to executive
officers who are not directors or nominees for director of the Company, and are
not otherwise named in the compensation table.
CURRENT POSITION WITH THE COMPANY AND
NAME AND AGE PRIOR FIVE YEAR BUSINESS EXPERIENCE
------------ -------------------------------------
Adeline C. Hesse, 53 Senior Vice President/Marketing Director
since 1995; previously held same title
with CB since 1994; formerly, Vice
President of Marketing at West One
Bank
Cynthia I. Haworth, 45 Executive Vice President; former Senior
Vice President WCB, CB & BON
Shauna L. Vernal, 28 Vice President, General Counsel, and
Corporate Secretary; formerly, attorney
in private practice
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 1997 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.
Effective February 1, 1997, Victor L. Bartruff assumed the sole duties
of President and Chief Executive Officer of the Company. In connection with this
change, Mr. Bartruff was required to move his family and household from Newport
to Lake Oswego, Oregon. As an inducement for Mr. Bartruff to assume these
additional responsibilities and to assist in this relocation process, the
Company purchased Mr. Bartruff's home in Newport at the assessed market value of
$330,000.
17
<PAGE> 20
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, 1997, 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, except that Mr. Stenseth inadvertently failed to file a Form 4 for
the sale of 6,250 shares, and Mr. Clark inadvertently failed to file a Form 4 to
report sale of 2,000 shares. Filings with the SEC have subsequently been made to
correct this oversight.
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, and West Coast Trust, for the year ended December 31, 1997.
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 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 Annual 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 Annual Meeting, management will report on the Company's business
and shareholders will have the opportunity to ask questions.
INFORMATION CONCERNING SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the 1999 annual
shareholder's meeting must be received by the Secretary of the Company before
December 1, 1998, for inclusion in the 1999 Proxy Statement and form of proxy.
18
<PAGE> 21
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, 1997, INCLUDING
FINANCIAL statements. Written requests for the Form 10-K should be addressed to
Shauna L. Vernal, Secretary to the Board of West Coast Bancorp, at 5335 Meadows
Road, Suite 201, Lake Oswego, OR 97035.
March __, 1998 BY ORDER OF THE BOARD OF DIRECTORS
Shauna L. Vernal, Corporate Secretary
19
<PAGE> 22
EXHIBIT A
AMENDMENT TO ARTICLES OF INCORPORATION
OF
WEST COAST BANCORP
Article II, Section A, of the Articles of Incorporation of West Coast Bancorp is
amended to read as follows:
A. Common Stock. 50,000,000 shares of common stock which shall have
unlimited voting rights, subject only to such voting rights as may be
specified in respect of preferred stock, and shall have the right to
receive the net assets of the corporation upon dissolution, subject only
to prior payment of such amount of the net assets of the corporation as
may be specified in respect of shares of preferred stock.
<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 Shauna L. Vernal,
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 6, 1998, at the Annual Meeting of Shareholders to be
held on April 24, 1998, 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 [ ]
Thomas W. Healy o Jack E. Long o J. F. Ouderkirk o Gary D. Putman
2. AMENDMENT TO ARTICLES OF INCORPORATION. Approve an amendment to the Articles
of Incorporation to increase the number of authorized shares of common stock to
50,000,000
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.
, 1998
- ------------------------------
-----------------------------------
-----------------------------------
-----------------------------------
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.
