<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:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Common Only (as permitted by Rule 14a-6(e)(2))
[X] 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):
[ ] No fee required
[ ] Fee computed on table below per Exchange Act Rules 12a-6(i)(1) 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.:
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(3) Filing Party:
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(4) Date Filed:
March 24, 2000
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<PAGE> 2
STEPHEN M. KLEIN
(206) 340-9648
[email protected]
March 24, 2000
VIA EDGAR
Securities and Exchange Commission
450 Fifth St NW
Judiciary Plaza
Washington, D.C. 20549-1004
Re: West Coast Bancorp, Lake Oswego, Oregon
Definitive Proxy Materials
File No. 0-10997
Ladies and Gentlemen:
On behalf of West Coast Bancorp, Lake Oswego, Oregon (the "Company"),
we are transmitting the Definitive Proxy Materials for the Company's 2000 Annual
Meeting of Shareholders which are being filed electronically via the EDGAR
system. The definitive proxy materials for the Annual Meeting of Shareholders
will be sent or distributed to shareholders on or about March 24, 2000. The
Proxy Materials are being forwarded pursuant to Rule 14a-6(c).
The items to be voted on at the shareholder meeting are (i) the
election of directors; and (ii) the adoption of the 2000 Restricted Stock Plan.
In that regard, pursuant to Item 3, Instruction 3 of Schedule 14A, the Plan is
attached as an appendix to the Proxy Statement filed with the SEC, but will not
be disseminated to shareholders as part of the Proxy Statement.
In accordance with Rule 14a-3, seven copies of the 1998 Annual Report
to Shareholders will be submitted to your office on the date the Proxy Materials
are distributed to shareholders.
In the event there are any questions concerning the enclosed materials,
please feel free to contact me at (206) 340-9648.
Sincerely,
GRAHAM & DUNN
/s/ Stephen M. Klein
Stephen M. Klein
Enclosure
cc: Shauna L. Vernal, Esq.
<PAGE> 3
WEST COAST BANCORP
PROXY
PLEASE SIGN AND RETURN IMMEDIATELY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Robert D. Sznewajs 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 9, 2000, at the Annual Meeting of
Shareholders to be held on April 27, 2000, 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 - C. Douglas McGregor - Robert D. Sznewajs
2. ADOPTION OF 2000 RESTRICTED STOCK PLAN. The adoption of a new
Restricted Stock 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.
______________________, 2000
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.
<PAGE> 4
March 24, 2000
Dear Shareholder:
You are cordially invited to attend the annual meeting of shareholders
of West Coast Bancorp to be held at the Embassy Suites Hotel, located at 9000
S.W. Washington Square Road, Tigard, Oregon, on Thursday, April 27, 2000, at
2:00 p.m. local time. The Embassy Suites is located near Washington Square. Take
Interstate 5 to Highway 217 (west bound). Exit at Scholls Ferry/Progress and
turn right onto Scholls Ferry. Take a right onto Hall. The Embassy Suites is on
the right.
At the annual meeting, you will be asked to elect three director
nominees to a term of three years and to approve a new 2000 Restricted Stock
Plan, along with any other business that properly is raised 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 of your mailing envelope. Please
indicate your voting instructions and sign, date, and return the proxy card
promptly in the business reply envelope provided. You also have the option of
voting via the Internet or by telephone. If you choose one of these options,
please do not also mail your proxy card to us. Instructions on how to vote
through the internet or by telephone are located in the enclosed Proxy
Statement. Whether or not you plan to attend the annual meeting in person, it is
important that you return the enclosed proxy card, or vote via the Internet or
telephonically, so that your votes will be counted, even if you are unable to
attend the meeting. A proxy that is returned with no voting instructions will be
voted in favor of the matters and, in appropriate circumstances, will enable
West Coast Bancorp's management to adjourn the meeting to continue to solicit
votes to approve these matters. You may revoke your proxy after you have given
it to us, as long as you do so before the official vote is taken at the annual
meeting, by (1) providing written notice of your revocation to the Secretary of
West Coast Bancorp, (2) submitting a later-dated proxy, or (3) appearing at the
meeting and electing to vote in person.
We value you as a West Coast Bancorp shareholder, and we look forward
to reporting our 1999 activities to you.
Sincerely,
Robert D. Sznewajs
President and CEO
<PAGE> 5
WEST COAST BANCORP
5335 MEADOWS ROAD, SUITE 201
LAKE OSWEGO, OREGON 97035
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 27, 2000
2:00 P.M., PACIFIC TIME
To the Shareholders of West Coast Bancorp:
We invite you to attend the 2000 Annual Shareholders Meeting of West
Coast Bancorp at the Embassy Suites Hotel, located at 9000 S.W. Washington
Square Road, Tigard, Oregon, on Thursday, April 27, 2000, at 2:00 p.m. local
time. The meeting's purpose is to vote on the following proposals, together with
any other business that may properly come before the meeting:
1. ELECT DIRECTORS. The Board has nominated for re-election
current directors Lloyd D. Ankeny, C. Douglas McGregor and
Robert D. Sznewajs for three-year terms.
2. APPROVE 2000 RESTRICTED STOCK PLAN. The Board asks you to
approve a restricted stock plan.
If you were a shareholder of record on March 9, 2000, you may vote on
these proposals at the Annual Meeting in person or by proxy. We encourage you to
promptly complete and return the enclosed proxy card, or to vote electronically
by telephone or internet, in order to ensure that your shares will be
represented and voted at the meeting in accordance with your instructions. If
you attend the meeting in person, you may withdraw your proxy and vote your
shares.
Further information regarding voting rights and the business to be
transacted at the Annual Meeting is included 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 and in its growth and development.
March 24, 2000 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. Instead of
submitting your proxy vote with the paper Proxy Card, you can vote
electronically via the Internet or by telephone. See "Voting Via the Internet or
By Telephone" in the Proxy Statement for further details.
================================================================================
<PAGE> 6
WEST COAST BANCORP
5335 MEADOWS ROAD, SUITE 201
LAKE OSWEGO, OREGON 97035
(503) 684-0884
PROXY STATEMENT
MEETING INFORMATION. This Proxy Statement and the accompanying Proxy
are being sent to shareholders on or about March 24, 2000, for use in connection
with the Annual Meeting of Shareholders of West Coast Bancorp ("Bancorp" or
"Company") to be held on Thursday, April 27, 2000. If you were a shareholder on
March 9, 2000, you are entitled to vote at the Annual Meeting. There were
approximately 15,372,435 shares of common stock outstanding on the Record Date.
SOLICITATION OF PROXIES. The Board of Directors is soliciting
shareholder Proxies, and Bancorp will pay the associated costs. Solicitation may
be made by our directors and officers and by our subsidiaries West Coast Bank
("Bank") and West Coast Trust, Inc. ("WCT") (collectively, the "Subsidiaries").
In addition, we may engage an outside proxy solicitation firm to render proxy
solicitation services and, if we do, we will pay a fee for such services.
Solicitation may be made through the mail, or by telephone, facsimile, or
personal interview.
QUORUM. At least a majority of the shares entitled to vote at the
Annual Meeting constitutes a quorum. Abstentions will be counted as shares
present and entitled to vote for purposes of determining the presence of a
quorum. Broker non-votes will not be considered shares present and will not be
included in determining whether a quorum is present.
VOTING ON MATTERS PRESENTED. The three nominees for election as
directors at the Annual Meeting who receive the highest number of affirmative
votes will be elected. Shareholders are not permitted to cumulate their votes
for the election of directors. Votes may be cast for or withheld from each
nominee. Votes that are withheld and broker non-votes will have no effect on the
outcome of the election. With respect to the proposal to approve the 2000
Restricted Stock Plan, stockholders may vote for the proposal, against the
proposal or may abstain from voting. The affirmative vote of a majority of the
total votes present, in person or by proxy, at the Annual Meeting is required
for the approval to adopt the plan. Shareholders of record will be entitled to
one vote per share on any matter that may properly come before the Annual
Meeting.
VOTING OF PROXIES. Shares 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
three nominees listed in this Proxy Statement, and FOR the adoption of the 2000
Restricted Stock Plan, unless otherwise directed. Any proxy given by a
shareholder may be revoked before its exercise by (1) giving 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.
VOTING OF PROXIES BY BENEFICIAL HOLDER. If your shares are held by a
bank, broker or other holder of record and you want to attend the meeting and
vote in person, you will need to bring an account statement or letter from the
nominee indicating that you were the beneficial owner of the shares on March 9,
2000, the record date.
2
<PAGE> 7
VOTING ELECTRONICALLY OR BY TELEPHONE. Shareholders with shares
registered directly with our transfer agent, Norwest Shareowner Services
("Norwest"), may also vote via the Internet at Norwest's Internet address, or
telephonically. Shareholders holding shares with a brokerage firm or a bank may
also be eligible to vote via the Internet or to vote telephonically by calling
the telephone number referenced on their voting form. For further information on
voting via the Internet or telephonically, see "Voting Via the Internet or by
Telephone" set forth below.
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
Our Restated Articles of Incorporation allow the Board to set the
number of directors on the Board within a range of eight to 20. The Articles
also authorize the Board to fill vacancies that occur on the Board. The Board
has set the number of directors at nine.
Directors are elected for terms of three years or until their
successors are elected and qualified. The Articles provide for staggered terms,
with approximately one-third of the directors elected each year. In addition to
the elected Board, Chester C. Clark serves as an emeritus director to the Board.
The Board has nominated Lloyd D. Ankeny, C. Douglas McGregor and Robert
D. Sznewajs for election as directors for three-year terms to expire in the year
2003. Messrs. Ankeny, McGregor and Sznewajs are presently directors of Bancorp.
Mr. Sznewajs, who was appointed President and Chief Executive Officer of Bancorp
and the Bank effective January 1, 2000, was also appointed to the Boards of
Bancorp and the Bank in January 2000, to fill the vacancies caused by the
resignation of Victor L. Bartruff, the Company's former President and Chief
Executive Officer. Phillip G. Bateman and James J. Pomajevich are retiring from
the Board. If any of the nominees should refuse or become unable to serve, your
Proxy will be voted for the person the Board designates to replace that nominee.
Other nominations, if any, may be made only in accordance with the
prior notice provisions contained in our Bylaws. These notice provisions require
that a shareholder provide us with written notice at least 60 days before the
annual meeting (or, if less than 90 days' notice is given by Bancorp, no later
than 15 days after the date of the notice). We first provided public notice of
our annual meeting date on March 24, 2000.
3
<PAGE> 8
INFORMATION WITH RESPECT TO NOMINEES AND
DIRECTORS WHOSE TERMS CONTINUE
The following tables set forth certain information with respect to the
director nominees and the other continuing directors, including the number of
shares beneficially held by each. Beneficial ownership is a technical term
broadly defined by the SEC to mean more than ownership in the usual sense. In
general, beneficial ownership includes any shares a director or executive
officer can vote or transfer and stock options that are exercisable currently or
become exercisable within 60 days. Except as noted below, each holder has sole
voting and investment power for all shares shown as beneficially owned. Where
beneficial ownership was less than one percent of all outstanding shares, the
percentage is not reflected in the table. As of December 31, 1999, directors of
Bancorp also served as directors of the Bank, with the exception of Mr.
Sznewajs, who was appointed to the Board of Bancorp and the Bank in January
2000.
<TABLE>
<CAPTION>
PROPOSAL NO. 1 - ELECTION OF DIRECTORS
<S> <C>
SHARES AND
PERCENTAGE OF
PRINCIPAL OCCUPATION COMMON STOCK
NAME, AGE AND OF DIRECTOR DURING BENEFICIALLY
TENURE AS DIRECTOR LAST FIVE YEARS OWNED AS OF
- ------------------ --------------- DECEMBER 31, 1999
-----------------
(1)(2)
BOARD NOMINEES
--------------
TERM EXPIRING IN 2003
Lloyd D. Ankeny, 62 Personal Investments, former Owner, 116,756
Since 1995 Landmar Development Corporation
C. Douglas McGregor, 61 Personal Investments, former 41,859
Since 1994 Chairman, Access Long Distance (OR)
Robert D. Sznewajs, 53 President and CEO of the Company and 0 (3)
Since 2000 the Bank since 1/1/00; former Vice
Chairman of U.S. Bancorp
</TABLE>
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE
NOMINEES TO BE ELECTED AS DIRECTORS.
(1) Share amounts include stock options which are exercisable within 60
days as follows: Lloyd D. Ankeny 21,254 shares; Michael J. Bragg 550
shares; William B. Loch 21,254 shares; Jack E. Long 21,254 shares; C.
Douglas McGregor 2,200 shares; J.F. Ouderkirk 39,156 shares; Gary D.
Putnam 29,490 shares; and Robert D.
Sznewajs 100,000 shares.
(2) Share amounts include shares deferred under the Director's Deferred
Compensation Plan as follows: Lloyd D. Ankeny 1,281 shares; Michael J.
Bragg 784 shares; William B. Loch 1,327 shares; Jack E. Long 4,106
shares; C. Douglas McGregor 6,400 shares; J.F. Ouderkirk 2,877 shares;
Mary Pearmine 724 shares; and Gary D. Putnam 4,190 shares.
4
<PAGE> 9
<TABLE>
<CAPTION>
DIRECTORS CONTINUING IN OFFICE
- ------------------------------
<S> <C> <C>
TERM EXPIRING IN 2001
Jack E. Long, 61 Secretary/Treasurer Performance 45,591
Since 1990 Northwest, Inc.; Secretary/
Treasurer and former President, J&L
Nursery, Inc.
J. F. Ouderkirk, 49 Attorney, Partner of Ouderkirk and 66,746
Since 1995 Hollen; director of WCT
Gary D. Putnam, 55 President & CEO Superior Electrical 46,206
(Board Chair) Construction Co.; former Executive
Since 1995 Vice President/CFO, Brentwood, Inc.,
Treasurer/CFO of Pump & Drilling
Supply, Inc., President, Pacific
Drilling Supply Inc.; Chair of Bank;
director of WCT
TERM EXPIRING IN 2002
Michael J. Bragg, 50 Attorney and Partner of Grenley, 17,191 (4)(5)
Since 1999 Rotenberg, Evans, Bragg & Bodie,
P.C.; WCT Board Chair
William B. Loch, 66 Chair and CEO of Capital City 68,794 (4)(5)
Since 1982 Companies, Inc. and Capital
Warehouse Company, Inc.
Mary B. Pearmine, 53 Project Director of the Pacific 724 (6)
Since 1999 Institute; former Marion County
Commissioner, serving from 1991 to
1998; former Chair of the County
Commission
</TABLE>
(3) Does not include 100,000 shares subject to an option granted to Mr.
Sznewajs under the terms of his employment agreement that became
exercisable at the time of grant on January 1, 2000, or 20,000 shares
purchased by Mr. Sznewajs on the open market in February 2000.
(4) Share amount includes shares held in an IRA, 401(k) or Keogh account
for the benefit of the individual as follows: Michael J. Bragg 1,641
shares and William B. Loch 1,761.
(5) Share amounts include shares owned by the spouses of Michael J. Bragg
3,542 shares and William B. Loch 7,331 shares, each of whom disclaims
any beneficial ownership of the shares.
(6) Under the Company's Corporate Governance Policy, Ms. Pearmine must
accumulate at least 1,000 shares within the first three years of being
elected a director, in order to be eligible for nomination to any
additional terms.
5
<PAGE> 10
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors met 15 times during the fiscal year. In addition
to meetings of the full Board, directors attended meetings of Board committees.
The Board of Directors has established, among others, an Audit and Compliance
Committee, a Compensation and Personnel Committee and an Executive Committee.
Each director attended at least 75% of the meetings of the Board and of the
committees on which he or she served. The following table shows the membership
of the various committees during the fiscal year.
COMMITTEE MEMBERSHIP
<TABLE>
<CAPTION>
NAME AUDIT AND COMPLIANCE COMPENSATION AND EXECUTIVE
PERSONNEL
- -------------------------- ------------------------- -------------------------- ------------------------
<S> <C> <C> <C>
Lloyd D. Ankeny |X| * |X|
Victor L. Bartruff ** |X|
Phillip G. Bateman |X| |X|
Michael J. Bragg |X|
William B. Loch |X|
Jack E. Long |X| |X| * |X|
C. Douglas McGregor |X|
J. F. Ouderkirk |X|
Mary B. Pearmine |X| |X|
James J. Pomajevich |X| |X|
Gary D. Putnam |X| *
- ----------------
* Chairman
** Mr. Bartruff served on the Executive Committee, as well as certain other
board committees until his resignation from the Board effective July 16, 1999.
</TABLE>
Audit and Compliance 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 Bancorp's records
and its business practices, and reviews the adequacy and implementation of the
internal auditing, accounting and financial controls. The Committee operates
under a formal, written charter. The Committee held 12 meetings during the year.
Compensation and Personnel Committee. The Compensation and Personnel
Committee met nine times for the purposes of reviewing salary and incentive
compensation for the Chief Executive Officer and certain other executive
officers, and reviewing and recommending to the full Board stock option grants
for executive officers. The Compensation Committee also met to review and
recommend to the full Board the compensation to be paid to directors.
6
<PAGE> 11
Executive Committee. The Executive Committee's primary functions are to
address urgent matters on behalf of the full Board, to monitor any material
litigation matters that may arise, and to work with management to resolve other
critical issues that may arise outside the normal course of business. The
Committee held three meetings during the year. The Executive Committee is
comprised of the Chief Executive Officer and the Chair from each of the
respective Board committees.
COMPENSATION OF DIRECTORS
Directors who are Bancorp employees receive no fees for their services
as directors. Non-employee "outside" directors receive annual retainers as
members of the Board and established fees for committee participation. For their
service on the Boards of the Company and the Bank, the Board Chair and each
committee Chair each received a retainer of $1,750 per month (from January to
June 1999) and $2,750 per month (from July to December 1999), and each other
director received a retainer of $1,500 per month (from January to June 1999) and
$2,500 per month (from July to December 1999). Each director received $200 for
each committee meeting they attended in 1999, either as a member of the
committee or at the request of the committee. Mr. Clark received $200 for each
board meeting he attended. The directors of WTC receive $400 per meeting, with
the WCT Chair receiving $500 per meeting.
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 Bancorp 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. Contributions are transferred to a so-called
"rabbi trust." A director may invest deferred fees in a number of investment
funds or in Bancorp stock. Bancorp will make distributions in accordance with
individual elections. Directors are fully vested in their benefits under the
Directors' DCP at all times.
Benefit payments from the Directors' DCP are taxed as ordinary income
in the year they are received by participants. Bancorp 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, which was subsequently amended by the shareholders in 1997
("DSOP"). The DSOP authorizes the Board (or a committee of the Board) to
administer the DSOP and to grant nonqualified stock options to directors of
Bancorp. 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 726,000 shares of 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 capitalization. Of those
shares, 257,613 remain available for option under future grants.
7
<PAGE> 12
EXECUTIVE COMPENSATION
The following table summarizes the compensation awarded or paid to the
Chief Executive Officer and to the four most highly compensated executive
officers of Bancorp and its Subsidiaries, whose total compensation during the
last fiscal year exceeded $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION AWARDS
--------------------------------------------- --------------------
OTHER
NAME AND ANNUAL LTIP ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION OPTIONS PAYOUTS COMPENSATION
(1) (2) (3) (4)(5)
- ------------------------ ------- --------------- ------------ ---------------- ---------- ---------- ------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Victor L. Bartruff, 1999 $ 199,446(6) $ 0 $ 0 11,000 0 $ 278,947(8)
Former President and 1998 220,000 77,000 0 16,500 0 13,087
CEO of Bancorp and Bank 1997 165,000 82,500 34,590(7) 13,612 0 10,790
Ronald T. DeLude, 1999 $ 150,030 $ 85,000(10) 0 11,000 0 $ 6,129
EVP/COO of Bancorp and 1998 88,340(9) 35,000 0 9,020 0 0
Bank
Donald A. Kalkofen 1999 $ 142,015 $ 28,000 0 8,800 0 $ 6,097
EVP/CFO of Bancorp and 1998 135,015 67,500 0 10,588 0 6,060
Bank 1997 116,378 67,500 0 9,074 0 4,699
James D. Bygland 1999 $ 118,037 $ 28,000 0 3,850 0 $ 0
SVP/Chief Information 1998 98,030 65,000 0 4,070 0 0
Officer of Bancorp and
Bank
David Prysock 1999 $ 108,208 $ 20,000 0 3,850 0 $ 3,963
EVP/Chief Credit 1998 $ 97,348 23,500 0 5,720 0 2,920
Officer of Bancorp and 1997 92,199 21,443 0 3,630 0 2,130
Bank
</TABLE>
- -------------------
(1) Represents bonuses earned during the year indicated but paid in a
subsequent year only; does not include bonuses earned in a subsequent
year and paid in 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, 1999 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 as adjusted for subsequent stock dividends and
stock splits.
(4) Includes 401(k) Plan contributions paid by Bancorp during 1999 as
follows: Ronald T. DeLude $4,800, Donald A. Kalkofen $4,800, and David
Prysock $3,963.
(5) Includes Bancorp contributions deferred in 1999 pursuant to the Executive
DCP as follows: Ronald T. DeLude $1,329 and Donald A. Kalkofen $1,297.
(6) Represents the salary paid to Mr. Bartruff through October 31, 1999, his
last day of employment with Bancorp.
(7) Includes a one-time payment made by Bancorp on behalf of Mr. Bartruff of
$33,000 for a golf club membership to be used primarily for business
development purposes.
8
<PAGE> 13
(8) Includes life insurance premium paid by Bancorp in the amount of $3,947
and severance payment of $275,000 paid under Mr. Bartruff's Separation
and Release Agreement dated July 16, 1999.
(9) Reflects the amount paid to Mr. DeLude beginning on his employment date
in 1998.
(10) Includes $50,000 paid to Mr. DeLude under the terms of his employment
agreement dated July 16, 1999.
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, 1999.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT
ASSUMED ANNUAL RATES
OF STOCK PRICE
APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM(1)
--------------------------------------------------------- -----------------------------
% OF TOTAL
OPTIONS
OPTIONS GRANTED TO EXERCISE EXPIRATION
NAME GRANTED (2) EMPLOYEES PRICE (3) DATE 5% 10%
- --------------------------- -------------- -------------- ------------- -------------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Victor L. Bartruff 11,000 5.04% $15.17 5/26/09 $105,128 $ 265,323
Ronald T. DeLude 11,000 5.04% 15.17 5/26/09 105,128 265,323
Donald A. Kalkofen 8,800 4.03% 15.17 5/26/09 84,102 212,258
James D. Bygland 3,850 1.76% 15.17 5/26/09 36,730 93,082
David Prysock 3,850 1.76% 15.17 5/26/09 36,730 93,082
</TABLE>
- ----------------
(1) The potential realizable value is based on the assumption that the stock
price appreciates at the annual rate shown (compounded annually) from the
date of grant until the end of the ten-year option term. These numbers are
calculated based on the requirements of the SEC and do not reflect
Bancorp's estimate of future stock price performance.
(2) Bancorp's stock option plan is administered by a Committee of the Board,
and determines to whom options are granted, as well as the number of
shares and the exercise price. Options are granted at the fair market
value, vest over a period of time, and are exercisable for ten years.
Options may be exercised for a period of 90 days following termination of
employment and for one year following death or disability.
(3) The option exercise price may be paid in cash or by surrendering for
cancellation vested shares owned by the executive officer or a combination
of the foregoing.
9
<PAGE> 14
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, 1999, and stock options
held at year-end.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND YEAR END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF
SHARES NUMBER OF UNEXERCISED IN-THE-MONEY
ACQUIRED ON VALUE UNEXERCISED OPTIONS AT
NAME EXERCISE REALIZED(1) OPTIONS AT YEAR END YEAR END (2)
- -------------------------- ----------- ------------- ---------------------------------- -----------------------------------
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
--------------- ------------------ ---------------- ------------------
<S> <C> <C> <C> <C> <C> <C>
Victor L. Bartruff 0 0 136,742 0 $882,040 $ 0
Ronald T. DeLude 0 0 20,020 0 0 0
Donald A. Kalkofen 3,410 38,047 69,517 0 306,947 0
James D. Bygland 0 0 17,737 0 24,772 0
David Prysock 0 0 7,920 0 0 0
</TABLE>
- ----------------
(1) Reflects the amount realized from the aggregate of the current market
price of Bancorp stock less the exercise price.
(2) On December 31, 1999, the closing price of Bancorp stock was $13.50.
For purposes of the foregoing table, stock options with an exercise
price less than that amount are considered to be "in-the-money" and are
considered to have a value equal to the difference between this amount
and the exercise price of the stock option multiplied by the number of
shares covered by the stock option.
EMPLOYMENT ARRANGEMENTS
Below are summaries of certain agreements between executive officers
listed in the compensation table and the Company or its Subsidiaries. These
summaries are qualified in their entirety by the individual agreements.
Robert T. Sznewajs. On January 1, 2000, the Company and the Bank
entered into an employment agreement with Robert D. Sznewajs, to serve as the
President and Chief Executive Officer of the Company and the Bank. The agreement
is for a term of three years, expiring on January 1, 2003. Under the agreement,
Mr. Sznewajs will receive an initial annual salary of $250,000 and a cash bonus
opportunity of up to 100% of his annual salary; however, for the Year 2000, he
will receive a minimum bonus of $125,000. In the event Mr. Sznewajs's employment
is terminated before the term ends by Mr. Sznewajs for "good reason" or by
Bancorp, without "cause," Mr. Sznewajs will be entitled to receive a payment for
the remainder of the term based on his unpaid salary, the greater of his most
recent bonus, or $125,000, and any accrued vacation. The Company (or its
successor) will also pay Mr. Sznewajs a gross-up payment if the contract payout
triggers excise taxes to Mr. Sznewajs. If such excise taxes are triggered, the
Company may also be unable to deduct the resulting compensation expense for
federal income tax purposes. In addition, any stock options previously granted
to Mr. Sznewajs will become immediately exercisable and Mr. Sznewajs will be
entitled to health and welfare benefits for the remainder of the term.
10
<PAGE> 15
On January 1, 2000, the Company also entered into a change of control
agreement with Mr. Sznewajs. The agreement has an initial three-year term, which
automatically extends for one year on each anniversary date of the agreement. If
a "change of control" of the Company occurs (as defined in the agreement), the
agreement provides for a three-year employment agreement for Mr. Sznewajs. If,
following a change of control of the Company, Mr. Sznewajs' employment is
terminated by Mr. Sznewajs for "good reason" or by the Company without "cause,"
Mr. Sznewajs will receive a three-year contract payout. Mr. Sznewajs may also
receive the contract payout if he terminates the agreement for any reason within
a 30-day window period one year after a change of control of the Company. The
contract payout will include base salary (determined at the highest monthly rate
paid in the twelve months preceding the change of control of the Company) and
bonus (determined at the highest bonus paid in the preceding three years). The
Company (or its successor) will also pay Mr. Sznewajs a gross-up payment if the
contract payout triggers excise taxes to Mr. Sznewajs. If such excise taxes are
triggered, the Company may also be unable to deduct the resulting compensation
expense for federal income tax purposes. In addition to the contract payout, (i)
any stock options previously granted to Mr. Sznewajs will become immediately
exercisable; (ii) Mr. Sznewajs will receive an amount equal to what he otherwise
would have received under the Company's 401(k) plan matching provisions for the
next three years; and (iii) Mr. Sznewajs and his family will continue to receive
health and welfare benefits from the Company (or its successor) for a three-year
period.
Victor L. Bartruff. On July 16, 1999, Bancorp entered into a Separation
and Release Agreement with Victor L. Bartruff. Under the terms of this
agreement, Mr. Bartruff remained employed through October 31, 1999, in a
capacity determined by Bancorp. The agreement provided for a lump sum severance
payment to Mr. Bartruff of $275,000 payable on January 4, 2000, as well as the
payment of certain benefits.
Ronald T. DeLude. On July 16, 1999, Bancorp entered into an Employment
Agreement with Ronald T. DeLude, Acting President and Chief Executive Officer
for a term of the lesser of one year, or until a permanent President and Chief
Executive Officer was hired. Under the terms of this Agreement, Mr. DeLude
received a base salary of $150,000, a cash bonus of $25,000 upon execution of
the agreement, and a supplemental bonus of $25,000 upon completion of the term.
The agreement further provides for a lump sum severance payment equal to
one-twelfth of the amount of Mr. DeLude's salary reported on his most recent W-2
times 24 months, in the event he is terminated by Bancorp without "cause" or Mr.
DeLude resigns for "good reason" at any time following the hiring of a permanent
President and Chief Executive Officer. Mr. DeLude will not be entitled to this
lump-sum payment if his salary continuation agreement (described below) is
triggered.
Donald A. Kalkofen. Mr. Kalkofen resigned as Chief Financial Officer
effective March 31, 2000. To assist the Company with its transition to a new
Chief Financial Officer, Mr. Kalkofen agreed to serve as a consultant through
June 30, 2000. The Bank entered into a Consultant Services Agreement with Mr.
Kalkofen, effective as of April 1, 2000. Under the terms of this agreement, Mr.
Kalkofen has agreed to provide up to 250 hours of financial and accounting
support services, as requested by the Bank. In exchange, the Bank will pay to
Mr. Kalkofen $62,500 in three monthly installments of approximately $20,833
each. The agreement may be terminated at any time by mutual consent of the
parties. As part of the agreement, the Company and Mr. Kalkofen entered into a
confidentiality agreement that prohibits Mr. Kalkofen from disclosing certain
information pertaining to the Company or its Subsidiaries.
SALARY CONTINUATION AGREEMENTS
Bancorp, 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 or her
employment is terminated, following a "change in control" (as defined) (i) by
the executive for any reason other than retirement, disability or death; (ii) by
Bancorp, other than for "cause,"
11
<PAGE> 16
retirement, disability or death; or (iii) by Bancorp, other than for cause,
retirement, disability or death prior to a change in control, within six months
of signing a definitive agreement, if in fact a change in control occurs. 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
payable on the later of the date executive's employment terminates, or the date
the change in control occurs. The payment amount is equal to executive's base
salary and bonus over a period of 24 months following the termination event (as
defined) for Messrs. DeLude and Kalkofen, and 12 months for Messrs. Bygland and
Prysock.
DEFERRED COMPENSATION PLANS
Effective January 1, 1996, the Company adopted an Executives' Deferred
Compensation Plan ("Executives' DCP"). Only executives of Bancorp and its
Subsidiaries, who are designated by the Board at its discretion, may participate
in the plan.
Participants may elect to defer payment of a specified portion of their
salary and bonus. The amount of participants' annual deferral contributions is
unlimited. In addition, the Company will contribute the amount, if any, that the
executives cannot receive under the 401(k) Plan because of the deferral
limitations under IRS regulations. 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." Bancorp will make distributions in accordance with
individual elections. Participants are fully vested in their portion of
contributions under the Executives' DCP at all times.
Benefits under the Executives' DCP will be taxed to participants as
they receive them after termination of employment. Bancorp 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 has adopted bonus compensation plans to provide incentive
bonuses for eligible employees. Under the bonus compensation plans, participants
receive additional compensation based on the levels of profitability and
employees' individual goals.
401(K) PLAN
The Company maintains a 401(k) profit sharing plan ("401(k) Plan") that
qualifies for special tax treatment under Section 401(k) of the Internal Revenue
Code, to provide for a single retirement plan to cover all employees.
The 401(k) Plan allows for pre-tax employee contributions up to IRS
maximum limits. For eligible employees, the Company will match 50% of the first
6% of the 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 vest over the first five years of employment, after which the
employee is fully vested in all contributions. Employees must complete at least
1,000 hours of service in a given year to receive vesting for that year.
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, our contributions or earnings thereon until those amounts are
distributed from the 401(k) Plan, although we continue to receive a compensation
expense deduction for compensation paid.
12
<PAGE> 17
EMPLOYEE STOCK OPTION PLANS
In 1999, the shareholders approved the 1999 Employee Stock Option Plan
("1999 Plan"). This plan provides for the grant of options to purchase up to
1,650,000 shares of common stock, subject to appropriate adjustments for any
stock splits, stock dividends, or other changes in capitalization. Under the
1999 Plan, key employees and consultants are eligible to receive incentive or
nonqualified stock options. The exercise price in the case of an incentive stock
option must be no less than the fair market value, and in the case of a
nonqualified option, no less than the greater of (i) the fair market value or
(ii) the net book value at the date of grant. The 1999 Plan is administered by
the Board (or a committee of non-employee directors). The 1999 Plan replaced the
Company's 1991 Combined Incentive Stock Option Plan and Nonqualified Stock
Option Plan.
The Company also inherited several option plans through acquisitions.
Options are no longer granted under these plans. However, the terms of these
plans and the 1991 Plan continue to govern the options granted to employees that
are currently outstanding. At December 31, 1999, unexercised options to purchase
1,130,902 shares were outstanding under the various employee stock option plans.
STOCK REPURCHASE PROGRAM
On December 2, 1998, the Board approved a stock repurchase program that
allows for the repurchase of up to 1,650,000 shares through open market
transactions, block purchases, or through privately negotiated transactions. The
plan repurchases are limited by the anticipated timing of stock option
exercises, as well as by other factors. The repurchased shares will be available
for use under the various stock option plans. To date, a total of 720,500 shares
have been repurchased under this program.
13
<PAGE> 18
REPORT ON EXECUTIVE COMPENSATION
Below is our report of the Compensation and Personnel Committee of the
Board ("Committee"). The Committee is comprised of non-employee directors and is
responsible for establishing and administering the Company's Executive
Compensation Program and general compensation policies and incentive plans. This
report is specific to compensation during the fiscal year 1999; however the
Committee does not intend to dramatically alter its basic philosophies and
objectives in the near future.
COMPENSATION PHILOSOPHY, OBJECTIVES AND STRUCTURE. The Committee's
principal objective is to is the align executive compensation with shareholder
value. Key elements of this philosophy include:
* Establish compensation plans that 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 our 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.
Components of executive compensation include base salaries, annual
incentive bonuses, and stock options. Executive base salaries are structured to
be competitive within the marketplace. Annual incentive bonuses allow executives
to earn additional compensation if performance goals are met. These goals are
based on individual and Company performance objectives, which are set annually.
Our incentive bonus plans are discretionary, allowing the Board latitude to
weigh all important factors when considering executive incentive bonuses.
Performance objectives generally include operating, financial and strategic
goals, such as earnings per share, return on assets, return on equity, loan to
deposit levels, asset quality, operating income, and efficiency ratio.
Consistent with our long-term incentive strategy, the Committee
previously awarded stock options to employees of the Company and its
Subsidiaries in accordance with the provisions of the 1991 Combined Incentive
and Non-Qualified Stock Option Plan. At the 1999 Annual Meeting, the
shareholders approved the 1999 Stock Option Plan that replaced the 1991 Plan,
and from that date forward, no further grants were made under the 1991 Plan.
Under the Plans, grants are considered at the then value of the Company's Common
Stock, thereby providing an additional incentive for executives to build
shareholder value.
BASE SALARIES. The Committee establishes the CEO's salary by comparison
to the salaries of chief executive officers of comparable companies. The initial
salary set for Mr. Sznewajs was the result of a negotiated agreement. The
Committee determined this salary was appropriate based on industry comparables
and Mr. Sznewajs' previous experience. The Committee uses the services of an
outside consultant who compiles salary data for a group of companies that are
similar to the Company. The Committee also considers other factors, such as
Company performance, the executive's past experience and performance, and the
executive's potential.
ANNUAL INCENTIVE BONUSES. The Committee determines the CEO's annual
cash bonus based on performance objectives, such as those described above. Mr.
Bartruff received no incentive bonus for 1999, due to his resignation in July;
however, Mr. Bartruff received a cash payout under an agreement with the Company
described previously in this proxy. Following Mr. Bartruff's resignation, the
Company appointed Ronald T. DeLude to serve as Acting President and Chief
Executive Officer of the Company while a national
14
<PAGE> 19
search was conducted for a permanent President and Chief Executive Officer. The
Committee determined compensation paid to Mr. DeLude to perform this interim
role, and the agreement with Mr. DeLude is described previously in this proxy.
Mr. DeLude received bonuses totaling $50,000, in lieu of a salary increase for
his agreement to perform the additional duties, while continuing to perform his
duties as Chief Operating Officer. In addition, Mr. DeLude received an incentive
bonus for his 1999 performance as Chief Operating Officer and Acting President
and Chief Executive Officer. Executive bonuses for 1999 were determined by the
Committee based on achievement of individual performance goals. Executives did
not receive the portion of the incentive bonus for 1999 tied to corporate
performance, as those goals were not achieved. As a result, executive bonuses
were significantly less than the bonus opportunities achievable under the
Company's incentive plans. However, the Committee determined that some incentive
bonus was appropriate, given the additional challenges faced and accomplished
during 1999, as a result of the consolidation of the Company's bank subsidiaries
into West Coast Bank.
OPTIONS. Our long-term incentive program currently consists of the 1999
Stock Option Plan. The Committee believes that stock options are an essential
element of executive compensation because they focus management's attention on
shareholder interests. The Committee uses stock options to encourage executive
officers and other key employees to increase shareholder value. Options granted
in 1999 have a term of 10 years. Options are granted based on the market value
of our common stock on the date of the grant. Executives receive value from
these grants if strategic goals are achieved and our common stock appreciates.
The proposed 2000 Restricted Stock Plan will provide the Committee with a second
important tool to attract and retain key employees and to further align the
interests of management with those of our shareholders. Stock options granted to
key officers in 1999 were based upon individual performance, the executive's
potential, and the executive's role in implementing important Company projects,
such as, among others, the consolidation of the bank subsidiaries and year 2000
preparations.
POLICY WITH RESPECT TO $1 MILLION DOLLAR DEDUCTION LIMIT. Section
162(m) of the Internal Revenue Code of 1986, as amended generally limits the
federal corporate income tax deduction for compensation paid to executive
officers named in the summary compensation table in the proxy statement of a
public company to $1 million, unless the compensation is "performance-based
compensation" or qualifies under certain other exceptions. The Committee intends
to qualify executive compensation for deductibility under Section 162(m) to the
extent consistent with the best interests of the Company. Since corporate
objectives may not always be consistent with the requirements for full
deductibility, it is conceivable that the Company may enter into compensation
arrangements in the future under which payments are not deductible under Section
162(m); deductibility will not be the sole factor used by the Committee in
ascertaining appropriate levels or modes of compensation.
CONCLUSION. The Committee believes these executive compensation
policies and programs serve the interests of our shareholders and Bancorp
effectively. The various pay vehicles offered are appropriately balanced to
provide increased motivation for executives to contribute to our overall future
success, thereby enhancing the value of our company for the benefit of
shareholders.
Compensation Committee Members
Jack E. Long (Chair), Phillip G. Bateman, J. F. Ouderkirk,
Mary B. Pearmine, James J. Pomajevich
15
<PAGE> 20
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, 1999, 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, 1994, 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 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99
- ----- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
West Coast Bancorp 100.00 128.00 176.88 373.64 344.80 247.08
NASDAQ - Total US* 100.00 141.33 173.89 213.07 300.25 542.43
NASDAQ Bank Index 100.00 149.00 196.73 329.39 327.11 314.42
</TABLE>
PROPOSAL NO. 2 - APPROVAL OF 2000 RESTRICTED STOCK PLAN
At its February 2000 meeting, the Board of Directors adopted the 2000
Restricted Stock Plan (the "Award Plan"), which became effective February 23,
2000, subject to shareholder approval at the 2000 Annual Meeting. The purpose of
the Award Plan is to promote and advance the interests of Bancorp and its
shareholders by enabling us to attract and retain individuals of outstanding
ability, and to reward employees and outside consultants or other service
providers. It is also intended to align the interests between our employees,
service providers and the shareholders, providing them with a proprietary
interest in pursuing the
16
<PAGE> 21
long-term growth, profitability, and financial success of our company. The
material features of the Award Plan are summarized below.
ADMINISTRATION OF THE PLAN. The full Board, or a committee of
non-employee directors designated by the Board (the "Committee"), will
administer the Award Plan. Subject to the specific provisions of the Award Plan,
the Board or Committee decides who will receive awards and determines the amount
and terms of the awards, including vesting periods, timing, form of payment, and
any other terms and conditions of each award. One or more executive officers may
also be authorized by the Committee to grant awards for up to 1,000 shares per
person per year to employees not considered "Reporting Persons" (generally,
senior management insiders) of Bancorp.
PARTICIPANTS. Officers and key employees of Bancorp and its
Subsidiaries are eligible to participate in the Award Plan. Participants will be
selected based on an evaluation of Bancorp's strategic plan and goals, the role
of employees in the pursuit of the plan and goals, and the employee's expected
performance.
NUMBER OF SHARES AVAILABLE UNDER AWARD PLAN. The Award Plan provides
for the award of restricted shares to be granted in any combination up to an
aggregate of 250,000 shares of Bancorp common stock, subject to appropriate
adjustments for any stock splits, stock dividends, or other changes in
capitalization. If an award is cancelled or expires for any reason before it is
fully vested, or is settled in cash rather than in shares, the shares covered by
the award will become available for future awards. As of March 15, 2000, the
closing price of Bancorp's common stock was $11.41.
AWARDS. Awards will be in the form of restricted shares. Restricted
shares are shares of Bancorp common stock that are subject to forfeiture
provisions and restrictions on sale or other transfer for a period of time (the
"restriction period"), as determined by the Board or Committee. A participant
holding an award is entitled to receive dividends, vote and exercise all other
rights of a shareholder as to the underlying common stock. No awards will be
made under the Award Plan prior to the 2000 Annual Meeting. The Board or
Committee will have the discretion to authorize any future awards or determine
that no awards will be granted.
VESTING OF AWARDS. The restricted share awards may be subject to a
vesting schedule, as determined by the Committee. Prior to vesting, the
restricted shares may be forfeited back to Bancorp if the participant's
employment (or status as a service provider) is terminated for specified reasons
or upon other conditions, as specified in the award agreement. Each award will
become immediately vested in full in the event of the death or disability of the
participant or a change in control of Bancorp (as defined in the Plan).
FEDERAL TAX TREATMENT. Generally, a participant will not recognize any
income for federal income tax purposes upon the award of restricted shares that
are subject to forfeiture during a restriction period. Dividends paid with
respect to restricted shares prior to vesting will be taxable as ordinary income
to the participant and deductible as such by Bancorp. Generally, a participant
will recognize compensation income upon the vesting of restricted shares in an
amount equal to the fair market value as of the vesting date of the unrestricted
shares delivered to the participant. Bancorp will be entitled to a tax deduction
in the amount of the participant's compensation income.
A participant may elect, pursuant to Section 83(b) of the Internal
Revenue Code, to recognize compensation income upon the grant of restricted
shares based on the fair market value of the shares subject to the award at the
date of grant, not taking into account the effect of the restrictions. Bancorp
would receive a corresponding deduction at that time. If a participant timely
files a Section 83(b) election with the Internal Revenue Service, dividends paid
with respect to the restricted shares will not be treated as compensation
income, but rather as dividend income, and the participant will not recognize
additional income when the restricted shares vest. If the shares are later
forfeited, the participant will not be entitled to any income tax
17
<PAGE> 22
deduction or refund as a result of the forfeiture. Bancorp, however, would be
required to include as ordinary income the lesser of the fair market value of
the forfeited shares or the amount of the deduction originally claimed.
If vesting of a restricted share award is accelerated due to a change
in control of Bancorp, the participant may be deemed to have received an "excess
parachute payment" under the Internal Revenue Code. In that event, Bancorp may
not be able to deduct the resulting compensation income, and the participant may
be subject to a 20 percent excise tax.
SECTION 162(M) QUALIFICATION. Section 162(m) of the Internal Revenue
Code of 1986, as amended generally limits the federal corporate income tax
deduction for compensation paid to executive officers named in the summary
compensation table in the proxy statement of a public company to $1 million,
unless the compensation is "performance-based compensation" or qualifies under
certain other exceptions. The Board does not intend the restricted stock awards
under the Award Plan to qualify for deductibility under Section 162(m).
AMENDMENT OR TERMINATION OF AWARD PLAN. The Board may amend or
terminate the Award Plan at any time unless applicable law or the rules of the
stock exchange or over-the-counter trading system on which Bancorp's common
stock is traded requires shareholder approval. A material increase in the number
of shares issuable under the Award Plan is likely to require shareholder
approval.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR APPROVAL OF
THE 2000 RESTRICTED STOCK PLAN.
18
<PAGE> 23
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table provides information as of December 31, 1999, with
respect to the shares beneficially owned by (i) the non-director executive
officers named in the compensation table; and (ii) all executive officers and
directors of Bancorp as a group. We are not aware of any person who beneficially
owns more than five percent of Bancorp's common stock. Except as noted below,
each holder has sole voting and investment power with respect to shares listed
as owned. Unless otherwise noted, all shares owned represent less than one
percent of the outstanding shares of Bancorp.
EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
CURRENT POSITION SHARES AND PERCENTAGE
WITH THE COMPANY AND PRIOR FIVE OF COMMON STOCK
YEAR BUSINESS EXPERIENCE BENEFICIALLY OWNED (1)(2)(3)
------------------------------- ----------------------------
<S> <C> <C>
NAME AND AGE
Ronald T. DeLude, 63 EVP and COO of Bancorp and 24,156
Bank; former President and CEO
of Bank of Vancouver; former
SVP/Manager Western Bank
Donald A. Kalkofen, 36 EVP and CFO of Bancorp and Bank 75,953
James D. Bygland, 38 SVP/Chief Information 8,397
Officer of Bancorp and Bank;
formerly consultant at
Sheshenoff Management
Services; VP FiServe
David Prysock, 56 EVP and Chief Credit Officer of 17,907
Bancorp and Bank; former EVP
of The Commercial Bank
Executive officers and directors as a group 1,598,731
(18 individuals) (10.16%)
</TABLE>
- ---------------
(1) Share amounts include options which are exercisable within 60 days as
follows: Donald A. Kalkofen 69,517 shares, James D. Bygland 7,920 shares,
David Prysock 17,737 shares, and directors and executive officers as a
group 361,405 shares.
(2) Includes 477 shares deferred under the Executive DCP for James D. Bygland.
(3) Does not include 100,000 shares subject to an option granted to Mr.
Sznewajs under the terms of his employment agreement that became
exercisable at the time of grant on January 1, 2000, or 20,000 shares
purchased by Mr. Sznewajs on the open market in February 2000.
MANAGEMENT
19
<PAGE> 24
The following table sets forth information with respect to executive
officers that are not directors or nominees for director of Bancorp, and are not
otherwise named in the compensation table.
<TABLE>
<CAPTION>
CURRENT POSITION WITH THE COMPANY AND
NAME AND AGE PRIOR FIVE YEAR BUSINESS EXPERIENCE
------------ -----------------------------------
<S> <C>
Cynthia J. Haworth, 47 EVP/Human Resources Administration of Bancorp and
Bank; former Senior Vice President of Bancorp and
Bank
Adeline C. Hesse, 55 EVP/Marketing Director of Bancorp and Bank; former
Senior Vice President of Bancorp and Bank
Kevin McClung, 30 VP and Controller of Bancorp and Bank
Rodney B. Tibbatts, 60 EVP/Corporate Development of Bancorp; director of
WCT; former Co-President and Co-CEO of the Company
Shauna L. Vernal, 30 SVP, General Counsel, and Corporate Secretary of
Bancorp and Bank; formerly, attorney in private
practice
</TABLE>
TRANSACTIONS WITH MANAGEMENT
Various of our directors and officers, members of their immediate
families, and firms in which they had an interest were customers of and had
transactions with the Subsidiaries during 1999 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 Bancorp
and all persons who beneficially own more than 10 percent of Bancorp's common
stock file reports with the Securities and Exchange Commission with respect to
beneficial ownership of Bancorp's stock. Bancorp has adopted procedures to
assist its directors and executive officers in complying with the Section 16(a)
filings.
Based solely upon Bancorp's review of the copies of the filings which
it received with respect to the fiscal year ended December 31, 1999, or written
representations from certain reporting persons, we believe that all reporting
persons made all filings required by Section 16(a) on a timely basis, except
that as a result of an inaccurate interpretation of a complicated provision
received from our outside compensation plan advisors, phantom stock acquisitions
under our deferred compensation plans were inadvertently not reported.
Accordingly, Forms 5 have been filed for the following individuals to report all
unreported acquisitions (in the aggregate) of phantom stock made under the
deferred compensation plans during 1996, 1997 and 1998: Lloyd D. Ankeny 750
shares; Victor L. Bartruff 514 shares; Cynthia J. Haworth 217 shares; Adeline
Hesse 48 shares; William B. Loch 651 shares; Jack E. Long 2,424 shares; C.
Douglas McGregor 3,070 shares; Robert Morrison 1,668 shares; J. F. Ouderkirk
1,579 shares; James J. Pomajevich 2,591; Gary D. Putnam 2,373; and
20
<PAGE> 25
Joe L. Snyder 720 shares. All required Forms 5 for phantom stock acquisitions
during 1999 were timely filed. A breakdown of the phantom stock acquisitions by
year is included on the respective Forms 5 filed with the SEC. Consistent with
the SEC's rules relating to the calculation of "beneficial ownership," the stock
ownership disclosure for each of these individuals was accurately described in
prior year proxy statements.
AUDITORS
Arthur Andersen LLP, independent certified public accountants,
performed the audit of our consolidated financial statements, which include our
wholly owned subsidiaries, the Bank, WCT, Totten, Inc. and Centennial Funding
Corporation, for the year ended December 31, 1999. A representative of Arthur
Andersen LLP will be present at the Annual Meeting, and will have the
opportunity to make a statement if desired. Arthur Andersen 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.
INFORMATION CONCERNING SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the 2001 annual
shareholder's meeting must be received by the Secretary of the Company before
November 23, 2000, for inclusion in the 2001 Proxy Statement and form of proxy.
In addition, if the Company receives notice of a shareholder proposal after
February 6, 2001, the persons named as proxies in such proxy statement and form
of proxy will have discretionary authority to vote on such shareholder proposal.
ANNUAL REPORT TO SHAREHOLDERS
ANY SHAREHOLDER MAY OBTAIN WITHOUT CHARGE A COPY OF OUR 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, 1999, INCLUDING
FINANCIAL STATEMENTS. Written requests for the Form 10-K should be addressed to
Shauna L. Vernal, Corporate Secretary of West Coast Bancorp, at 5335 Meadows
Road, Suite 201, Lake Oswego, OR 97035.
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<PAGE> 26
VOTING VIA THE INTERNET OR BY TELEPHONE
FOR SHARES DIRECTLY REGISTERED IN THE NAME OF THE SHAREHOLDER.
Shareholders with shares registered directly with Norwest may vote
telephonically by calling Norwest at (800) 240-6326 or you may vote via the
Internet at the following address on the World Wide Webb:
WWW.EPROXY.COM/WCBO/
FOR SHARES REGISTERED IN THE NAME OF A BROKERAGE FIRM OR BANK. A number
of brokerage firms and banks are participating in a program provided through ADP
Investor Communication Services that offers telephone and Internet voting
options. This program is different than the program provided by Norwest for
shares registered in the name of the shareholder. If your shares are held in an
account at a brokerage firm or bank participating in the ADP program, you may
vote those shares telephonically by calling the telephone number referenced on
your voting form. If your shares are held in an account at a brokerage firm or
Bank participating in the ADP program, you already have been offered the
opportunity to elect to vote via the Internet. Votes submitted via the Internet
through the ADP program must be received by 12:00 p.m. (noon) (EDT) on April 26,
2000. The giving of such proxy will not effect your right to vote in person
should you decide to attend the Annual Meeting.
The telephone and Internet voting procedures are designed to
authenticate shareholders identities, to allow shareholders to give their voting
instructions and to confirm that shareholders' instructions have been recorded
properly. Shareholders voting via the Internet through either Norwest or ADP
Investor Communication Services should understand that there may be costs
associated with electronic access, such as usage charges from Internet access
providers and telephone companies, that must be borne by the shareholder.
March 24, 2000 BY ORDER OF THE BOARD OF DIRECTORS
Shauna L. Vernal, Secretary
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<PAGE> 27
WEST COAST BANCORP
2000 RESTRICTED STOCK PLAN
ARTICLE 1
ESTABLISHMENT AND PURPOSE
1.1 Establishment. West Coast Bancorp ("Bancorp"), an Oregon
corporation, has established the West Coast Bancorp 2000 Restricted Stock Plan
(the "Plan"), effective as of February 23, 2000, subject to shareholder approval
as provided in Article 12 of the Plan.
1.2 Purpose. The purpose of the Plan is to promote and advance the
interests of Bancorp and its shareholders by enabling Bancorp to attract,
retain, and reward its Employees and Service Providers. It is also intended to
strengthen the mutuality of interests between Bancorp's shareholders and its
Employees and Service Providers. The Plan is designed to meet this intent by
offering grants of Restricted Stock, thereby providing a proprietary interest in
pursuing the long-term growth, profitability, and financial success of Bancorp.
ARTICLE 2
DEFINITIONS
2.1 Defined Terms. For purposes of the Plan, the following terms
have the meanings set forth below:
"AFFILIATE" means a corporation or other entity controlled by,
controlling, or under common control with Bancorp.
"AWARD" means a Restricted Share granted to a Participant
pursuant to the Plan.
"AWARD AGREEMENT" means an agreement as described in Section 6.4.
"BANCORP" means West Coast Bancorp, an Oregon corporation, or any
successor corporation.
"BOARD" means the Board of Directors of Bancorp.
"CAUSE" means:
(a) For an Employee who has an employment agreement with an
Employer, Cause has the meaning set forth in such agreement;
(b) For all other Participants, Cause means material or
flagrant violation of the policies and procedures of Bancorp or other
job performance or conduct that is materially detrimental to the best
interests of Bancorp, and, in the case of a Service Provider, also
includes any material breach of any applicable agreement with Bancorp
or a Subsidiary or Affiliate.
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<PAGE> 28
"CHANGE IN CONTROL" means:
(i) The acquisition by any Person (or by any group of Persons
that would constitute a "group" for purposes of Section 13(d) and Rule
13d-5, as in effect on the Grant Date, under the Exchange Act) of
beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act), other than a Person or group that acquires
such beneficial ownership solely because such Person or group has
voting power with respect to Voting Securities arising from a revocable
proxy or consent given in response to a public proxy or consent
solicitation made pursuant to the Exchange Act (as in effect from time
to time), of 20 percent or more of the combined voting power of the
then outstanding Voting Securities; provided, however, that for
purposes of this paragraph (i), the following acquisitions will not
constitute a Change in Control: (A) any acquisition directly from
Bancorp; (B) any acquisition by Bancorp or a Subsidiary, (C) any
acquisition by any employee benefit plan (or related trust) sponsored
or maintained by Bancorp or any corporation controlled by Bancorp, or
(D) any acquisition by any corporation pursuant to a transaction which
complies with clauses (A), (B), and (C) of paragraph (iii) below; or
(ii) Individuals who, as of the Grant Date, constitute the
Board (the "Incumbent Board") cease for any reason to constitute at
least a majority of the Board; provided, however, that any individual
becoming a director subsequent to the Grant Date whose election, or
nomination for election by Bancorp's shareholders, was approved by a
vote of at least two-thirds of the directors then comprising the
Incumbent Board will be considered as though such individual were a
member of the Incumbent Board, but excluding for this purpose, any such
individual whose initial assumption of office occurs as a result of an
actual or threatened election contest with respect to the election or
removal of directors or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the Board;
or
(iii) Consummation of a reorganization, merger, or
consolidation or sale or other disposition of all or substantially all
of the assets of Bancorp (a "Business Combination") in each case,
unless, following such Business Combination, (A) all or substantially
all of the individuals and entities who were the beneficial owners of
the Voting Securities outstanding immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 50
percent of, respectively, the then outstanding shares of common stock
and the combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the case
may be, of the corporation resulting from such Business Combination
(including, without limitation, a corporation that as a result of such
transaction owns Bancorp or all or substantially all of Bancorp's
assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately
prior to such Business Combination, of the Voting Securities, (B) no
Person (excluding any employee benefit plan (or related trust) of
Bancorp or such corporation resulting from such Business Combination)
beneficially owns, directly or indirectly, 20 percent or more of,
respectively, the then outstanding shares of common stock of the
corporation resulting from such Business Combination or the combined
voting power of the then outstanding voting securities of such
corporation except to the extent that such ownership existed
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<PAGE> 29
prior to the Business Combination and (C) at least a majority of the
members of the board of directors of the corporation resulting from
such Business Combination were members of the Incumbent Board at the
earlier of the time of the execution of the initial agreement with
respect to such Business Combination, or of the action of the Board
providing for such Business Combination; or
(iv) Approval by the shareholders of Bancorp of any plan or
proposal for the liquidation or dissolution of Bancorp.
For purposes of this definition, a Change in Control "occurs" on the
date the Change in Control first occurs; provided, however, that if:
(A) (1) An Employee's employment is terminated
without Cause by an Employer (and Employee is not employed by
another Employer within 14 days thereafter) after a tender
offer or exchange offer by a Person for more than 20 percent
of Bancorp's Voting Securities is made, (2) it is reasonably
demonstrated that the Employee's termination was at the
request of a third party who is seeking to effect a Change in
Control or otherwise occurred as a result of an anticipated
Change in Control, and (3) a Change in Control in fact occurs
within nine months after the Employee's termination; or
(B) An Employee's employment is terminated without
Cause by an Employer (and Employee is not employed by another
Employer within 14 days thereafter) following the execution by
Bancorp of a definitive agreement for a transaction that will
constitute a Change in Control and such Change in Control
transaction is in fact closed within six months after the
Employee's termination;
then for purposes of determining the Employee's Vesting under any Award granted
under this Plan, such Change in Control will be deemed to have occurred
immediately before the Termination Date. If this paragraph may potentially
apply, the portion of any Award that appears unvested at the time of the
Employee's termination will not expire or be forfeited until the earliest to
occur of the following: (1) the six or nine month period identified above, as
applicable, has elapsed without a Change in Control occurring, (2) the
applicable Change in Control has terminated, or (3) it is otherwise reasonably
determined to the satisfaction of the Committee that Vesting of the Award will
not accelerate under the terms of this Plan in the particular case. The Employee
will not be entitled to receive any part of the portion of the Award appearing
unvested at the Employee's termination until it is finally determined that
Vesting did in fact accelerate under the terms of this Plan.
"CODE" means the Internal Revenue Code of 1986, as amended and
in effect from time to time, or any successor thereto, together with rules,
regulations, and interpretations promulgated thereunder. Where the context so
requires, any reference to a particular Code section will be construed to refer
to the successor provision to such Code section.
"COMMITTEE" means the committee appointed by the Board to
administer the Plan as provided in Article 3 of the Plan.
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"COMMON STOCK" means the Common Stock, no par value, of
Bancorp or any security of Bancorp issued in substitution, in exchange, or in
lieu of such stock.
"CONTINUING RESTRICTION" means a Restriction contained in
Sections 7.4 and 11.4 of the Plan and any other Restrictions expressly
designated by the Committee in an Award Agreement as a Continuing Restriction.
"DISABILITY" means inability to perform a Participant's duties
(or equivalent duties) for an Employer on a full-time basis by reason of a
medically determinable (to the reasonable satisfaction of the Committee)
physical or mental condition that results in absence from such duties for a
period of 90 consecutive days or a total of 120 days during any calendar year.
"EMPLOYEE" means any person employed by Bancorp or a Subsidiary
or Affiliate.
"EMPLOYER" means Bancorp or a Subsidiary or Affiliate of Bancorp.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended and in effect from time to time, or any successor statute. Where the
context so requires, any reference to a particular section of the Exchange Act,
or to any rule promulgated under the Exchange Act, will be construed to refer to
successor provisions to such section or rule.
"FAIR MARKET VALUE" means with respect to Common Stock, on a
particular day, without regard to any restrictions (other than a restriction
which, by its terms, will never lapse), the closing price of Shares of the
Common Stock on that day or, if that day is not a trading day, the last prior
trading day, on the securities exchange or automated securities interdealer
quotation system on which such Shares have been traded.
"GRANT DATE" means the date an Award is granted.
"PARTICIPANT" means an Employee or Service Provider who is
granted an Award under the Plan.
"PERSON" means and includes any individual, corporation,
limited liability company, partnership, trust, group, association, or other
"person," as such term is used in Section 13(d)(3) or 14(d) of the Exchange Act.
"PLAN" means this West Coast Bancorp 2000 Restricted Stock Plan,
as it may be amended from time to time.
"REPORTING PERSON" means a Participant who is subject to the
reporting requirements of Section 16(a) of the Exchange Act.
"RESTRICTED SHARE" means an Award described in Section 7.1 of the
Plan.
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<PAGE> 31
"RESTRICTION" means a provision in the Plan or in an Award
Agreement which governs the forfeiture of an Award or the Shares, cash, or other
property payable pursuant to an Award.
"SERVICE PROVIDER" means any person who provides services to
Bancorp or a Subsidiary or Affiliate under contract or other agreement with
Bancorp or the Subsidiary or Affiliate.
"SHARE" means a share of Common Stock.
"SUBSIDIARY" means any subsidiary corporation of Bancorp in
which Bancorp directly or indirectly controls 50 percent or more of the total
combined voting power of all classes of stock having voting power, whether such
corporation now exists or is hereafter organized or acquired by Bancorp or
another Subsidiary.
"TERMINATION DATE" means the date a Participant ceases to be an
Employee or Service Provider.
"VEST" or "VESTED" with respect to an Award means to be or to
become nonforfeitable, freely transferable, and free of all Restrictions (other
than Continuing Restrictions).
"VOTING SECURITIES" means all issued and outstanding
securities ordinarily having the right to vote at elections of Bancorp's
directors, including without limitation the Shares.
2.2 Gender and Number. Except where otherwise indicated by the
context, any masculine or feminine terminology used in the Plan also includes
the opposite gender; and the definition of any term in Section 2.1 in the
singular also includes the plural, and vice versa.
ARTICLE 3
ADMINISTRATION
3.1 General. The Plan will be administered by a Committee composed as
described in Section 3.2.
3.2 Composition of the Committee. The Committee will be appointed by
the Board from among its members in a number and with such qualifications as
will meet the requirements for approval by a committee pursuant to Rule 16b-3
under the Exchange Act. Initially, the Committee will consist of all the members
of the Board. The Board may from time to time remove members from, or add
members to, the Committee. Vacancies on the Committee, however caused, will be
filled by the Board.
3.3 Authority of the Committee. The Committee will have full power
and authority (subject to such orders or resolutions as may be issued or adopted
from time to time by the Board) to administer the Plan in its sole discretion,
including the authority to:
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<PAGE> 32
(a) Construe and interpret the Plan and any Award Agreement;
(b) Promulgate, amend, and rescind rules and procedures
relating to the implementation of the Plan;
(c) Select the Employees and Service Providers who will be
granted Awards;
(d) Determine the number of Awards to be granted to each such
Participant;
(e) Determine the number of Shares to be subject to each
Award;
(f) Determine to what extent and under what circumstances
Shares and other amounts payable with respect to an Award may be
deferred;
(g) Determine if and under what circumstances an Award may be
settled in cash or Shares under Section 7.5; and
(h) Determine all the terms and conditions of all Award
Agreements, consistent with the requirements of the Plan.
Decisions of the Committee, or any delegate as permitted by the Plan, will be
final, conclusive, and binding on all Participants.
3.4 Action by the Committee. A majority of the members of the
Committee will constitute a quorum for the transaction of business. Action
approved by a majority of the members present at any meeting at which a quorum
is present, or action in writing by all the members of the Committee, will be
the valid act of the Committee.
3.5 Delegation. Notwithstanding the foregoing, the Committee may
delegate to one or more officers of Bancorp the authority to determine the
recipients, amounts, and terms of Awards granted to Participants who are not
Reporting Persons; provided, however, that Awards to any individual Participant
made pursuant to such delegation may not exceed 1,000 Shares in any calendar
year unless the Committee expressly provides otherwise in its delegation
resolution.
3.6 Liability of Committee Members. No member of the Committee (or
officer acting as a delegate of the Committee) will be liable for any action or
determination made in good faith with respect to the Plan, any Award, or any
Participant.
3.7 Costs of Plan. The costs and expenses of administering the Plan
will be borne by Bancorp.
ARTICLE 4
DURATION OF THE PLAN AND SHARES SUBJECT TO THE PLAN
4.1 Duration of the Plan. The Plan is effective February 23, 2000,
subject to approval by Bancorp's shareholders as provided in Article 12. The
Plan will remain in effect until Awards have been granted covering all the
available Shares or the Plan is otherwise terminated by the Board. Termination
of the Plan will not affect outstanding Awards.
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<PAGE> 33
4.2 Shares Subject to the Plan.
4.2.1 General. The shares which may be made subject to Awards under the
Plan are Shares of Common Stock, which may be either authorized and unissued
Shares or reacquired Shares. No fractional Shares may be issued under the Plan.
4.2.2 Number of Shares. The maximum number of Shares for which Awards
may be granted under the Plan is 250,000 Shares, subject to adjustment pursuant
to Article 9 of the Plan.
4.2.3 Availability of Shares for Future Awards. If an Award under the
Plan is canceled or expires for any reason prior to having been fully Vested or
is settled in cash in lieu of Shares or is exchanged for other Awards, all
Shares covered by such Award will be made available for future Awards under the
Plan.
ARTICLE 5
ELIGIBILITY
5.1 Employees and Service Providers. Officers and other key employees
of Bancorp and any Subsidiaries and Affiliates (who may also be directors of
Bancorp or a Subsidiary or Affiliate) and Service Providers who, in the
Committee's judgment, are or will be contributors to the long-term success of
Bancorp will be eligible to receive Awards under the Plan.
ARTICLE 6
AWARDS
6.1 Types of Awards. The types of Awards that may be granted under
the Plan are Restricted Awards governed by Article 7 of the Plan. In the
discretion of the Committee, any Award may be granted alone, in addition to, or
in tandem with other Awards under the Plan.
6.2 General. Subject to the limitations of the Plan, the Committee
may cause Bancorp to grant Awards to such Participants, at such times, in such
amounts, for such periods, and subject to such terms, conditions, limitations,
and restrictions as the Committee, in its discretion, deems appropriate. Awards
may be granted as additional compensation to a Participant or in lieu of other
compensation to such Participant. A Participant may receive more than one Award
under the Plan.
6.3 Nonuniform Determinations. The Committee's determinations under
the Plan or under one or more Award Agreements, including without limitation (a)
the selection of Participants to receive Awards, (b) the form, amount, and
timing of Awards, (c) the terms of specific Award Agreements, and (d) elections
and determinations made by the Committee with respect to payments of Awards,
need not be uniform and may be made by the Committee selectively among
Participants and Awards, whether or not Participants are similarly situated.
6.4 Award Agreements. Each Award will be evidenced by a written Award
Agreement between Bancorp and the Participant. Award Agreements may, subject to
the provisions of the Plan, contain any provision approved by the Committee.
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<PAGE> 34
6.5 Provisions Governing All Awards. All Awards will be subject to
the following provisions:
(a) Employment Rights. Neither the adoption of the Plan nor
the granting of any Award will confer on any person the right to
continued employment with Bancorp or any Subsidiary or Affiliate or the
right to remain as a Service Provider nor will it interfere in any way
with the right of Bancorp or a Subsidiary or Affiliate to terminate
such person's employment or to remove such person as a Service Provider
at any time for any reason or for no reason, with or without cause.
(b) Termination of Employment or Service. No Award will
continue to Vest after termination of a Participant's employment or
service as a Service Provider. The effect of such termination on Award
Shares that are not Vested as of the Termination Date will be
determined by the other provisions of this Plan. Generally, unless
otherwise specified in the Award Agreement, unvested shares will be
forfeited to Bancorp, unless Vesting is accelerated as provided below.
Temporary absences from employment because of illness, vacation, or
leave of absence and transfers among Bancorp and its Subsidiaries and
Affiliates will not be considered terminations of employment or Service
Provider status.
(c) Accelerated Vesting. Notwithstanding the Vesting schedule
set forth in any Award Agreement all Award Shares granted to a
Participant (to the extent such Award Shares have not previously either
become Vested or been forfeited) will become fully Vested, and the
Restrictions imposed by the Award Agreement(s) governing such Shares
will terminate, upon:
(i) A Change in Control of Bancorp;
(ii) Termination of a Participant's employment with
an Employer or status as a Service Provider by reason of such
Participant's death; or
(iii) Termination of employment of a Participant who
is an Employee by reason of Disability.
6.6 Share Certificates. Certificates for Award Shares will be either:
(a) Issued in Participant's name and held by Bancorp, together
with a stock power for such Shares executed in blank by the
Participant, until all restrictions lapse or the Award Shares are
forfeited as provided in the Award Agreement for such Shares; or
(b) Held in a bookkeeping account in Participant's name
subject to the transfer restrictions of the applicable Award Agreement.
Whenever certificates are issued in a Participant's name, such certificates for
Award Shares that have not yet become Vested will bear a legend in substantially
the following form:
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<PAGE> 35
THE SHARES EVIDENCED BY THIS CERTIFICATE WERE ISSUED AS
RESTRICTED SHARES UNDER THE WEST COAST BANCORP 2000 RESTRICTED STOCK
PLAN (THE "PLAN") AND ARE SUBJECT TO RESTRICTIONS ON THEIR TRANSFER,
DISPOSITION, OR ENCUMBRANCE SET FORTH IN A RESTRICTED SHARES AWARD
AGREEMENT UNDER THE PLAN. A COPY OF THE RESTRICTED SHARES AWARD
AGREEMENT MAY BE OBTAINED FROM WEST COAST BANCORP.
Certificates for the Award Shares may also bear any other restrictive legends
required by law or any other agreement.
6.7 Tax Withholding.
(a) General. Bancorp will have the right to deduct from any
settlement, including the delivery or Vesting of Shares or Awards, made
under the Plan any federal, state, or local taxes of any kind required
by law to be withheld with respect to such payments or Vesting or to
take such other action as may be necessary in the opinion of Bancorp to
satisfy all obligations for the payment of such taxes. The recipient of
any payment or distribution under the Plan will be required to make
arrangements satisfactory to Bancorp for the satisfaction of any such
withholding tax obligations. Bancorp will not be required to make any
such payment or distribution under the Plan until such obligations are
satisfied.
(b) Stock Withholding. Unless a Participant makes payment to
Bancorp (or otherwise makes arrangements acceptable to Bancorp for the
payment) of all withholding and payroll taxes with respect to the
Vesting or delivery of Shares or Awards prior to the date of such
Vesting or delivery, Bancorp will have the right to automatically
withhold a portion of the Shares that would otherwise be issuable to
the Participant having a Fair Market Value equal to the total amount of
such taxes due. Such Shares will be valued based on their Fair Market
Value on the date the tax withholding is required to be made. In no
event may the number of Shares withheld pursuant to this Section 6.7
exceed the number required to meet Bancorp's tax withholding
obligations based on the minimum statutory withholding rates for
federal, state and local tax purposes, including payroll taxes,
applicable to the supplemental taxable income attributable to the
vesting or delivery of the Shares.
6.8 Annulment of Awards. Any Award Agreement may provide that the
grant of an Award payable in cash is provisional until cash is paid in
settlement of the Award or that the grant of an Award payable in Shares is
provisional until the Participant becomes entitled to the certificate in
settlement of such Award. In the event the employment (or service as a Service
Provider) of a Participant is terminated for Cause, any Award that is
provisional will be annulled as of the date of such termination for Cause.
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<PAGE> 36
ARTICLE 7
RESTRICTED AWARDS
7.1 Restricted Awards. Restricted Awards granted under the Plan will
be in the form of Restricted Shares. A Restricted Share is an Award of Shares
transferred to a Participant subject to such terms and conditions as the
Committee deems appropriate, including, without limitation, restrictions on the
sale, assignment, transfer, or other disposition of such Restricted Shares and
may include a requirement that the Participant forfeit such Restricted Shares
back to Bancorp upon termination of Participant's employment (or service as a
Service Provider) for specified reasons within a specified period of time or
upon other conditions, as set forth in the Award Agreement for such Restricted
Shares. Each Participant receiving a Restricted Share will be required to
execute a stock power in blank with respect to the Shares. The stock power and
any certificate or bookkeeping account evidencing such Restricted Shares will be
held in custody by Bancorp or its transfer agent until the Restrictions thereon
will have lapsed.
7.2 General. Restricted Awards will be subject to the terms and
conditions of Article 6 and this Article 7 and may contain such additional terms
and conditions, not inconsistent with the express provisions of the Plan, as the
Committee deems desirable.
7.3 Restriction Period. Restricted Awards will provide that such
Awards, and the Shares subject to such Awards, may not be transferred, and may
provide that, in order for a Participant to Vest in such Awards, the Participant
must remain in the employment (or remain as a Service Provider) of Bancorp or
its Subsidiaries or Affiliates, subject to relief for reasons specified in the
Award Agreement, for a period commencing on the date of the Award and ending on
such later date or dates as the Committee designates at the time of the Award
(the "Restriction Period"). During the Restriction Period, a Participant may not
sell, assign, transfer, pledge, encumber, or otherwise dispose of Shares
received under or governed by a Restricted Award grant. The Committee, in its
sole discretion, may provide for the lapse of restrictions in installments
during the Restriction Period. Upon expiration of the applicable Restriction
Period (or lapse of Restrictions during the Restriction Period where the
Restrictions lapse in installments) the Participant will be entitled to
settlement of the Restricted Award or portion thereof, as the case may be.
7.4 Forfeiture. If a Participant ceases to be an Employee or Service
Provider during the Restriction Period for any reason, other than reasons which
may be specified in an Award Agreement or this Plan (such as death, Disability,
or Change in Control), all non-Vested Restricted Awards previously granted to
the Participant will be forfeited and returned to Bancorp.
7.5 Settlement of Restricted Awards. Upon Vesting of a Restricted
Share Award, the legend on such Shares will be removed and the Participant's
stock power will be returned and the Shares will no longer be Restricted Shares.
The Committee may also, in its discretion, permit a Participant to receive, in
lieu of unrestricted Shares at the conclusion of the Restriction Period, payment
in cash, installments, or in any other manner or combination of such methods as
the Committee, in its sole discretion, determines. Settlement or payment in cash
or other compensation in lieu of Shares will be permitted only upon Committee
approval, either as part of
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an Award Agreement or at the time of settlement, and will not otherwise be
available to a Participant.
7.6 Rights as a Shareholder. A Participant will have, with respect to
unforfeited Shares received under a grant of Restricted Shares, all the rights
of a shareholder of Bancorp, including the right to vote the Shares, and the
right to receive any cash dividends. Stock dividends issued with respect to
Restricted Shares will be treated as additional Shares covered by the grant of
Restricted Shares and will be subject to the same Restrictions. Cash dividends
will be automatically reinvested as additional Shares covered by the grant of
Restricted Shares and will be subject to the same Restrictions, unless the
Committee, in its discretion, approves an exception to allow the receipt of cash
dividends in cash.
ARTICLE 8
DEFERRAL ELECTIONS
Any Participant who is also a participant in the Bancorp Executives'
Deferred Compensation Plan (the "Deferral Plan") may, pursuant to deferral
elections otherwise meeting the requirements of the Deferral Plan, elect to
defer receipt of the payment of cash or the delivery of Shares that would
otherwise be due to such Participant by virtue of the Vesting of an Award made
under the Plan.
ARTICLE 9
ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, ETC.
9.1 Plan Does Not Restrict Bancorp. The existence of the Plan and the
Awards granted under the Plan do not affect or restrict in any way the right or
power of the Board or the shareholders of Bancorp to make or authorize any
adjustment, recapitalization, reorganization, or other change in Bancorp's
capital structure or its business, any merger or consolidation of Bancorp, any
issue of bonds, debentures, preferred or prior preference stocks ahead of or
affecting Bancorp's capital stock or the rights of such stock, the dissolution
or liquidation of Bancorp or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding.
9.2 Adjustments by the Committee. In the event of any change in
capitalization affecting the Common Stock of Bancorp, such as a stock dividend,
stock split, recapitalization, merger, consolidation, split-up, combination or
exchange of shares or other form of reorganization, or any other change
affecting the Common Stock, proportionate adjustments will be made with respect
to the aggregate number of Shares for which Awards may be granted under the Plan
and the number of Shares covered by each outstanding Award. The Committee may
also make similar adjustments in the number of Shares covered by outstanding
Awards in the event of a spin-off or other distribution (other than normal cash
dividends), of Bancorp assets to shareholders.
ARTICLE 10
AMENDMENT AND TERMINATION
The Board may amend, suspend, or terminate the Plan or any portion of
the Plan at any time, provided no amendment may be made without shareholder
approval
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if such approval is required by applicable law or the applicable requirements of
a stock exchange or over-the-counter stock trading system.
ARTICLE 11
MISCELLANEOUS
11.1 Unfunded Plan. The Plan will be unfunded and Bancorp will not be
required to segregate any assets that may at any time be represented by Awards
under the Plan. Any liability of Bancorp to any person with respect to any Award
under the Plan will be based solely upon any contractual obligations that may be
effected pursuant to the Plan. No such obligation of Bancorp will be deemed to
be secured by any pledge of, or other encumbrance on, any property of Bancorp.
11.2 Payments to Trust. The Committee is authorized (but has no
obligation) to cause to be established a trust agreement or several trust
agreements under which the Committee may make payments of amounts due or to
become due to Participants in the Plan.
11.3 Other Bancorp Benefit and Compensation Programs. Payments and
other benefits received by a Participant under an Award made pursuant to the
Plan will not be deemed a part of a Participant's regular, recurring
compensation for purposes of the termination indemnity or severance pay law of
any state or country and will not be included in, or have any effect on, the
determination of benefits under any other employee benefit plan or similar
arrangement provided by Bancorp or a Subsidiary or Affiliate unless expressly so
provided by such other plan or arrangements, or except where the Committee
expressly determines that an Award or portion of an Award should be included to
accurately reflect competitive compensation practices or to recognize that an
Award has been made in lieu of a portion of cash compensation. Awards under the
Plan may be made in combination with or in tandem with, or as alternatives to,
grants, awards, or payments under any other Bancorp, Subsidiary or Affiliate
plans, arrangements, or programs. The Plan notwithstanding, Bancorp or any
Subsidiary or Affiliate may adopt such other compensation programs and
additional compensation arrangements as it deems necessary to attract, retain,
and reward Employees and Service Providers for their service with Bancorp and
its Subsidiaries and Affiliates.
11.4 Securities Law Restrictions. No Shares may be issued under the
Plan unless counsel for Bancorp is satisfied that such issuance will be in
compliance with applicable federal and state securities laws. Certificates for
Shares delivered under the Plan may be subject to such stop-transfer orders and
other restrictions as the Committee may deem advisable under the rules,
regulations, and other requirements of the Securities and Exchange Commission,
any stock exchange upon which the Common Stock is then listed, and any
applicable federal or state securities law. The Committee may cause a legend or
legends to be put on any such certificates to make appropriate reference to such
restrictions (in addition to the legend described in Section 7.1).
11.5 Governing Law. Except with respect to references to the Code or
federal securities laws, the Plan and all actions taken thereunder will be
governed by and construed in accordance with the laws of the state of Oregon.
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ARTICLE 12
SHAREHOLDER APPROVAL
The Plan is expressly subject to the approval of the Plan by the shareholders of
Bancorp at its 2000 annual meeting.
