WESTBANK CORPORATION
Notice of
Annual Meeting
of Shareholders
April 15, 1998
and
Proxy Statement
Your Vote is Important
You are urged to exercise your right to vote by indicating your
choices on the enclosed proxy card. Please date, sign and
promptly return your proxy card in the enclosed
postage-paid envelope. You may, nevertheless, vote in
person if you attend the meeting.
<PAGE>
WESTBANK CORPORATION
225 Park Avenue
West Springfield, Massachusetts 01089-3310
NOTICE OF 1998 ANNUAL MEETING OF SHAREHOLDERS
To be held Wednesday, April 15, 1998
March 12, 1998
To the Shareholders of Westbank Corporation:
Notice is hereby given that the 1998 Annual Meeting of
Shareholders of Westbank Corporation (the "Corporation") will be
held at 9:00 A.M., on Wednesday, April 15, 1998 at the Carriage
House at Storrowton Tavern, 1305 Memorial Avenue, West Springfield,
Massachusetts, 01089, for the following purposes, all as set forth
in the Proxy Statement accompanying this notice:
1. To fix the number of Directors of the Corporation at eleven.
2. Election of the individuals listed as nominees in the
Proxy Statement accompanying this notice of meeting.
3. To approve an amendment to the 1996 Stock Incentive Plan
to increase the number of shares of Common Stock reserved
for issuance thereunder by 200,000 shares.
4. Ratification of the appointment of the firm of Deloitte &
Touche LLP as the Corporation's independent public
accountants for the fiscal year ending December 31, 1998.
5. To act upon such other matters as may properly be
brought before the meeting or any adjournment thereof.
The record date and hour for determining shareholders entitled
to notice of, and to vote at, the meeting has been fixed at 5:00
P.M., March 2, 1998.
By order of the Board of Directors
Robert J. Perlak
Clerk
West Springfield, Massachusetts
March 12, 1998
PLEASE SIGN THE ENCLOSED FORM OF PROXY AND RETURN IT PROMPTLY IN THE
ENVELOPE ENCLOSED FOR THAT PURPOSE. YOU MAY NEVERTHELESS VOTE IN
PERSON IF YOU DO ATTEND THE MEETING.
<PAGE>
PROXY STATEMENT
Approximate date of mailing
March 12, 1998
WESTBANK CORPORATION
225 Park Avenue
West Springfield, Massachusetts 01089-3310
(413) 747-1400
NOTICE OF 1998 ANNUAL MEETING OF SHAREHOLDERS
To be held April 15, 1998
INTRODUCTION
This Proxy Statement is furnished to shareholders in connection with
the solicitation of proxies on behalf of the Board of Directors of
Westbank Corporation (the "Corporation") to be used at the 1998
Annual Meeting of Shareholders of the Corporation to be held at the
Carriage House at Storrowton Tavern, 1305 Memorial Avenue, West
Springfield, Massachusetts 01089 on Wednesday, April 15, 1998 at
9:00 A.M. and at any adjournments thereof.
The close of business on March 2, 1998, has been fixed as the record
date for determination of shareholders of the Corporation entitled
to notice of and to vote at the 1998 Annual Meeting of Shareholders.
The only class of issued and outstanding voting securities of the
Corporation is the $2.00 par value Common Stock (the "Common
Stock"). As of the record date the number of shares of Common Stock
outstanding and entitled to vote at the 1998 Annual Meeting of
Shareholders is 3,747,121. Each share of Common Stock is entitled
to one vote.
The affirmative vote of a majority of the shares of Common Stock of
the Corporation represented at the 1998 Annual Meeting is required
to fix the number of Directors, to approve the amendment to the 1996
Stock Incentive Plan and to appoint the auditor of the Corporation.
The affirmative vote of a plurality of the votes cast by
shareholders is required to elect Directors.
Execution of the enclosed proxy will not affect the shareholder's
right to attend the meeting and vote in person as a shareholder
giving a proxy has the power to revoke it any time before it is
exercised by delivering notice of revocation, or a duly executed
proxy bearing a later date, to the Treasurer of the Corporation.
<PAGE>
ELECTION OF DIRECTORS
The By-Laws of the Corporation provide in substance that the Board
of Directors shall be divided into three classes as nearly equal in
number as possible, and that the term of office of one class shall
expire and a successor class shall be elected at each annual meeting
of shareholders. The By-Laws of the Corporation also provide that
the shareholders fix the exact number of Directors at the annual
meeting of shareholders. The Corporation's Board of Directors
presently consists of eleven members.
It is proposed by the Board of Directors that at the 1998 Annual
Meeting the number of Directors who shall constitute the full Board
of Directors until the next annual meeting be fixed at eleven. In
accordance with the By-Laws of the Corporation four nominees shall
be elected to serve a three-year term until the 2001 Annual Meeting
of Shareholders and for such further time as may be required for the
election and qualification of their successors. Unless returned
proxies properly indicate that authority to vote for any of the
nominees named herein is withheld, all proxies received by the
Corporation in time for the 1998 Annual Meeting of Shareholders will
be voted to fix the number of Directors at eleven and, in the event
the number of Directors is so fixed, in favor of the election of the
nominees listed below. In the event any of the nominees named
herein becomes unable or unwilling to accept nomination for
election, the persons identified as proxies in the accompanying form
of proxy and authorized to vote in the election will vote the shares
represented by executed proxies in favor of the nomination and
election of such substitute nominees as the Board of Directors of
the Corporation may select.
The following tables name the individuals nominated for Director,
and those Directors of the Corporation who will continue to serve
after the meeting, and indicate their age, the period of time they
have served as Director of the Corporation or its predecessor, their
position with the Corporation, and their principal occupation or
employment. No nominee or Director holds a directorship in any
corporation, other than the Corporation, with a class of securities
registered pursuant to Section 12 of the Securities Exchange Act of
1934 or subject to the requirements of Section 15(d) of such Act or
any corporation registered as an investment corporation under the
Investment Company Act of 1940.
<PAGE>
The following individuals are nominees for election as a Director of
the Corporation at the 1998 Annual Meeting to serve for a three-year
term until the 2001 Annual Meeting of Shareholders:
<TABLE>
<CAPTION>
Has Served
Nominee and On Board of
Current Occupation Directors of the
or Employment; Corporation or Corporate
Business Experience Its Predecessor Offices
During Past 5 Years Age Since Held
<S> <C> <C> <C>
Roland O. Archambault 65 1989 Director
Owner - Park Supply Co.
Donald R. Chase 51 1990 Director,
President and Chief Executive Officer, President and
Westbank Corporation; President and Chief Executive
Chief Executive Officer; Park West Officer
Bank and Trust Company
Paul J. McKenna 71 1961 Director
Orthodontist
George R. Sullivan 44 1997 Director
Executive Vice President
Sullivan Paper Company, Inc.
</TABLE>
The following Directors will continue to serve after the meeting:
<TABLE>
<CAPTION>
Has Served
Nominee and On Board of
Current Occupation Directors of the
or Employment; Corporation or Corporate Term
Business Experience Its Predecessor Offices Expires
During Past 5 Years Age Since Held In
<S> <C> <C> <C> <C>
Mark A. Beauregard 46 1986 Director 1999
Attorney - Resnic, Beauregard,
Waite and Driscoll
David R. Chamberland 59 1989 Director 1999
President, Chicopee Building
Supply, Inc.
Leroy F. Jarrett 70 1961 Director 2000
President and Treasurer, (retired)
New England Church Interiors
Ernest N. Laflamme, Jr. 66 1987 Director, 2000
Treasurer, Vice Chairman
City of Chicopee of the Board
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Has Served
Nominee and On Board of
Current Occupation Directors of the
or Employment; Corporation or Corporate Term
Business Experience Its Predecessor Offices Expires
During Past 5 Years Age Since Held In
<S> <C> <C> <C> <C>
Robert J. Perlak 62 1987 Director 1999
Private Investor - Formerly and Clerk
Assistant Chief Probation Officer
of Hampden County
James E. Tremble 59 1986 Director 1999
President,
Valley Cinema, Inc.
Alfred C. Whitaker 71 1961 Director, 2000
Sales Consultant, Burke-Whitaker Chairman of the
Pontiac Cadillac Board and
Assistant Clerk
</TABLE>
The total number of special and regular meetings of the Board of
Directors of the Corporation during the fiscal year ended December
31, 1997 was 12. Each Director attended at least 75% of all Board
of Directors meetings held in 1997 during the period for which each
was a Director. In addition to serving as Directors of the
Corporation, board members also serve as the Board of Directors of
the Corporation's wholly owned subsidiary, Park West Bank and Trust
Company ("Park West"). During 1997, the Board of Directors of Park
West met 22 times. All Directors attended at least 75% of all board
meetings of Park West during the period for which each was a
Director.
Committees
The Board of Directors each year appoints Directors to serve on
standing committees of the Board of Directors, including the
Executive Committee, the Compensation Committee, the Nominating
Committee and the Audit Committee. The members of the Executive
Committee, the Compensation Committee, the Nominating Committee and
the Audit Committee of the Corporation also make up these same
committees for Park West. All Directors attended at least 75% of
the meetings of committees of which they were a member during the
period each was a Director.
Executive Committee
The members of the Executive Committee of the Corporation and Park
West in 1997 were Messrs. Laflamme, Beauregard, Chase, Jarrett and
Whitaker. The Executive Committee met 24 times during 1997.
Compensation Committee
The members of the Compensation Committee in 1997 were Messrs.
Laflamme, Beauregard, Jarrett and Whitaker. The Compensation
Committee met 9 times in 1997.
<PAGE>
Nominating Committee
The members of the Nominating Committee in 1997 were Messrs.
Chamberland, Chase, Laflamme and Whitaker. The Committee nominates
Directors for election by shareholders at the annual meeting,
reports to the Board of Directors on or before December 31 of each
year its nominations and submits its nominees for Directors for
publication in the Notice of Annual Meeting of Shareholders and
Proxy Statement. The Committee met 4 times during 1997. The
Nominating Committee will consider nominees recommended by the
Corporation's shareholders prior to December 1 of each year.
Audit Committee
The members of the Audit Committee of Park West in 1997 were Messrs.
Perlak, Archambault, Jarrett, McKenna and Tremble. The Committee
makes recommendations concerning the selection of an independent
auditor for the Corporation, and reviews the reports of the
independent auditor and that of the internal auditor. The Audit
Committee of Park West met 4 times during 1997.
Executive Officers
In addition to the President of the Corporation who is a Director
and is listed in the tables above, the other Executive Officers of
the Corporation are as follows: Gary L. Briggs, age 47, is Executive
Vice President - Lending of Park West; John M. Lilly, age 49, is
Treasurer and Chief Financial Officer of the Corporation and is also
Executive Vice President and Treasurer of Park West; and Robert A.
Gibowicz, age 54, is Senior Trust Officer of Park West. Each
Executive Officer serves for a one-year term or until their
successor is elected and qualified.
BENEFICIAL OWNERSHIP OF STOCK
The following table sets forth certain information as of the record
date with respect to all individuals known to the Corporation to be
the beneficial owner of more than 5% of the outstanding Common Stock
of the Corporation:
Number of Percent of
Name and Address Shares Beneficially Outstanding
of Owner Owned(1) Shares
Richard S. Sullivan
Carol B. Sullivan 295,580 7.89%
96 Prynwood Road
Longmeadow, MA 01106
Donald R. Chase
Diana L. Chase 187,179(2) 5.00%
39 Timber Ridge Road
West Springfield, MA 01089
(1) Under regulations of the Securities and Exchange Commission, a
person is treated as the beneficial owner of a security if the
person directly or indirectly (through contract, arrangement,
understanding, relationship or otherwise) has or shares (a)
voting power, including the power to vote or to direct the
voting, of such security, or (b) investment power with respect
to such security, including the power to dispose or direct the
disposition of such security. A person is also deemed to have
beneficial ownership of any security that such person has the
right to acquire within 60 days.
(2) Included in the shares beneficially owned by Mr. Chase are
50,000 unexercised stock options.
<PAGE>
The following table and related notes set forth information as of
the record date regarding the Corporation's Common Stock
beneficially owned by each Director and nominee and by Directors,
nominees and Officers of the Corporation and Park West:
Number of Percent of
Name of Individual Shares Beneficially Outstanding
or Persons in Group Owned(1)(2)(3) Shares
Roland O. Archambault 21,823(4) .6%
Mark A. Beauregard 15,373 .4
David R. Chamberland 17,499 .5
Donald R. Chase 187,179(4)(5) 5.0
Leroy F. Jarrett 71,304 1.9
Ernest N. Laflamme, Jr. 44,180 1.2
Paul J. McKenna 41,537(4) 1.1
Robert J. Perlak 49,627 1.3
George R. Sullivan 6,000(4) .2
James E. Tremble 11,267 .3
Alfred C. Whitaker 37,000 1.0
All Directors, nominees and
Executive Officers as a group
(14 persons, including those
named above)(3)(5) 669,716 17.9
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), requires the Corporation's Directors,
Executive Officers and holders of more than 10% of the Corporation's
Common Stock to file with the Securities and Exchange Commission
initial reports of ownership and reports of changes in ownership of
Common Stock and other equity securities of the Corporation. The
Corporation believes that during the fiscal year ended December 31,
1997, all such persons complied with all Section 16(a) filing
requirements. In making this statement, the Corporation has relied
upon the written representations of its Directors and Executive
Officers.
(1) Based upon information provided to the Corporation by the
indicated persons.
(2) Under regulations of the Securities and Exchange Commission, a
person is treated as the beneficial owner of a security if the
person directly or indirectly (through contract, arrangement,
understanding, relationship or otherwise) has or shares (a)
voting power, including the power to vote or to direct the
voting, of such security, or (b) investment power with respect
to such security, including the power to dispose or direct the
disposition of such security. A person is also deemed to have
beneficial ownership of any security that such person has the
right to acquire within 60 days.
(3) The information in the table includes all shares under stock
options which were exercisable on the record date or 60 days
thereafter. As of that date, Mr. Chase owned exercisable
options to purchase 50,000 shares, and all Directors and
Executive Officers as a group owned exercisable options to
purchase 179,200 shares.
(4) Indicates a nominee for election as a Director of the
Corporation at the 1998 Annual Meeting of Shareholders.
(5) For the purposes of the above table, the term "Executive
Officer" means any individual elected as an Executive Officer
of the Corporation or Park West or by their respective Boards
of Directors.
<PAGE>
EXECUTIVE MANAGEMENT COMPENSATION
Compensation decisions for Executive Officers of the Corporation are
made by the Compensation Committee, and approved by the full Board
of Directors. Mr. Chase, who is a member of the Board of
Directors, as well as an Executive Officer of the Corporation, is
not a member of the Compensation Committee, and neither participated
in nor voted upon his compensation package as a member of the Board
of Directors.
Report of the Compensation Committee on Executive Management
Compensation
Set forth below is the report of the Compensation Committee of the
Corporation regarding executive management compensation, as required
by applicable rules of the Securities and Exchange Commission.
The executive compensation program of the Corporation consists of
three primary components: base salary, cash incentive compensation,
and stock options, all which are administered by the Compensation
Committee.
Decisions by the Compensation Committee relating to the compensation
of the Corporation's Executive Officers are approved by the full
Board of Directors, except as otherwise set forth herein. In
determining the proper amount of compensation for each Executive
Officer, the Compensation Committee considers various factors,
including, inter alia:
the performance of the Corporation;
the individual's performance as an Executive Officer of the
Corporation;
the amount of compensation paid to similarly situated
executive officers in similar sized corporations; and
the length of service with the Corporation.
During 1995, the Corporation engaged the firm of Deloitte & Touche
LLP to review the Bank's retirement plan for Executive Officers. As
a result of this review the Compensation Committee adopted the
Westbank Supplemental Executive Retirement Plan, (the "Supplemental
Plan"). The purpose of the Supplemental Plan is to provide
executives with retirement benefits that are comparable to those
provided to its other employees.
In early 1997, the Compensation Committee engaged Thomas Warren &
Associates, Inc. to assist in establishing salary levels and an
incentive compensation plan for the Corporation's senior executives.
The compensation process recommended by Thomas Warren & Associates,
Inc. was adopted by the Compensation Committee and is used as a
guide in determining Executive Officer compensation.
During 1997, Chief Executive Officer, Donald R. Chase received a
salary increase of $33,530, an increase of twenty-two percent (22%)
of his base salary. The increase was recommended by the
Compensation Committee following its evaluation of Mr. Chase's
performance as Chief Executive Officer, and the overall performance
of the Corporation for 1996. In addition, as a result of the
incentive compensation plan Mr. Chase received a cash bonus of
$58,000. In addition, the Corporation contributed $9,615 to the
Supplemental Plan for the benefit of Mr. Chase.
The other Executive Officers named in the Summary Compensation
Table, Messrs. Briggs and Lilly were granted a salary increase of
nine percent (9%) during 1997 based on the Corporation's and their
individual performance.
<PAGE>
The Compensation Committee believes that the 1997 compensation of
Executive Officers is reasonable given the Corporation's performance
and utilizing the criteria listed above.
Respectfully submitted by:
Ernest N. Laflamme, Jr. Mark A. Beauregard
Chairman Leroy F. Jarrett
Alfred C. Whitaker
The Compensation Committee
Compensation Information
The following table sets forth the cash compensation paid to, as
well as long-term compensation paid for each of the last three
fiscal years, to all Executive Officers of the Corporation who
received over $100,000.00 in cash compensation during 1997:
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Annual Compensation Long Term Compensation
Award Payouts
Other
Annual Restricted All Other
Name and Compen- Stock Options/ LTIP Compen-
Principal Position Year Salary($) Bonus($) sation ($) Award(s)($) SARs(#) Payouts sation($)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Donald R. Chase, 1997 $185,000 $58,000 N/A N/A N/A N/A $25,091*
President and 1996 $151,470 $49,546 N/A N/A 50,000 N/A $22,057*
Chief Executive Officer 1995 $141,561 $46,305 N/A N/A N/A N/A $15,595
Gary L. Briggs, 1997 $110,000 $37,500 N/A N/A N/A N/A $14,824
Executive Vice President- 1996 $100,980 $33,031 N/A N/A 25,000 N/A $13,535
Lending 1995 $ 94,374 $30,870 N/A N/A N/A N/A $12,199
John M. Lilly, 1997 $110,000 $37,500 N/A N/A N/A N/A $14,824
Treasurer and 1996 $100,980 $33,031 N/A N/A 25,000 N/A $13,535
Chief Financial Officer 1995 $ 94,374 $30,870 N/A N/A N/A N/A $12,199
</TABLE>
* Mr. Chase's other compensation during 1997 and 1996 consisted of
a $15,476 and $15,561 contribution to the Money Purchase
Pension Plan and a $9,615 and $6,496 contribution to the
Corporation's Supplemental Executive Retirement Plan in 1997
and 1996. Mr. Chase's other compensation during 1995
consisted solely of the contribution to the Money Purchase
Pension Plan.
Messrs. Brigg's and Lilly's other compensation during 1997, 1996
and 1995 consisted solely of contributions to the Money
Purchase Pension Plan.
1985 Incentive Stock Option Plan for Key Employees
In February, 1985, the Board of Directors of the Corporation
unanimously adopted the 1985 Incentive Stock Option Plan for Key
Employees (the "1985 Stock Plan"), which was approved by the
shareholders at the Annual Meeting in April, 1985. The 1985 Stock
Plan was amended by shareholders at the Corporation's 1994 Annual
Meeting, which amendment increased the number of shares of Common
Stock reserved thereunder by 200,000 shares.
The 1985 Stock Plan is administered by the Board of Directors. The
Board of Directors was authorized to grant stock options to the
professional and supervisory employees of the Corporation and its
subsidiaries at any time until February 19, 1995.
<PAGE>
All options were granted at 100% of the fair market value of the
Common Stock of the Corporation on the date of the grant. Each
stock option terminates not more than 10 years after the date of the
grant. Options are exercisable in such installments as may be
determined by the Board of Directors. Payment of stock purchased on
the exercise of a stock option must be made in full at the time the
stock option is exercised. Options may not be assigned or
transferred other than by will or the laws of descent or
distribution.
As of February 19, 1995, the 1985 Stock Option Plan expired. No
options were granted or available for granting during 1997.
A total of 85,656 options were exercised in 1997. No options were
terminated during 1997 and a total of 48,266 options remain
unexercised as of the record date.
1996 Stock Incentive Plan
On February 21, 1996, the Board of Directors unanimously adopted the
Westbank Corporation 1996 Stock Incentive Plan, (the "1996 Plan"),
which was approved by the shareholders at the Annual Meeting in
April 1996.
The 1996 Plan is administered by the Compensation Committee (the
"Committee"). The Committee is authorized to grant Employee Awards
under the 1996 Plan to any employee. In practice, Employee Awards
are made to a group of management employees.
All options are granted at 100% of the fair market value of the
Common Stock of the Corporation on the date of the grant. Each
stock option terminates not more than 10 years after the date of the
grant. Options are exercisable in such installments as may be
determined by the Committee. Payment of stock purchased on the
exercise of a stock option must be made in full at the time the
stock option is exercised. Options may not be assigned or
transferred other than by will or the laws of descent or
distribution.
The Board of Directors may, at any time, terminate and, from time to
time, may amend or modify the 1996 Plan, without approval of
Westbank shareholders, except to the extent that such shareholder
approval is required by applicable law or regulation. There is no
set termination date for the 1996 Plan.
No incentive stock options were granted during 1997, while a total
of 500 options were exercised in 1997. A total of 122,000 options
remain unexercised as of the record date.
<PAGE>
OPTIONS/STOCK APPRECIATION RIGHTS (SAR) GRANTS IN LAST FISCAL YEAR
No options/SAR's were granted during 1997.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
The following table provides information on options exercised in
fiscal 1997 by the named Executive Officers and the value of such
Officers unexercised options at December 31, 1997.
<TABLE>
<CAPTION>
Value of
Number of Unexercised
Unexercised In-The-Money
Shares Options/SARs Options/SARs
Acquired on Value Realized at FY-End (#) at FY-End($)
Name Exercise (#) ($) (1) Exercisable Exercisable (2)(3)
<S> <C> <C> <C> <C>
Donald R. Chase, 43,058 $290,468 138,000 $859,750
President and
Chief Executive Officer
Gary L. Briggs, 18,485 $122,766 61,000 $373,875
Executive Vice President
Lending
John M. Lilly, 9,500 $61,500 61,000 $373,875
Treasurer and
Chief Financial Officer
</TABLE>
(1) Based on the difference between the option exercise price and
the average of the high and low price of the Common Stock on
the date the options were exercised.
(2) Based on the difference between the closing price of the Common
Stock on December 31, 1997, which was $13.00, and the option
exercise price for each underlying grant.
(3) The Corporation does not issue SARs.
Long Term Incentive Plans and Retirement Plans
The Corporation does not maintain any "Long Term Incentive Plans"
for its Executive Officers.
The Corporation has no pension, profit-sharing or similar plans for
its Executive Officers or employees. As set forth below, however,
the Executive Officers and employees are eligible to participate in
the Park West Money Purchase Pension Plan.
Park West maintains a Money Purchase Pension Plan (the "Plan")
available to employees of the Corporation and Park West. Full-time
employees become eligible to participate in the Plan when they have
both (i) reached the age of 20-1/2 and (ii) completed six months of
service (as defined in the Plan).
Contributions to the Plan may be made by both Park West and a
participant. Park West's contributions will be made to the Plan
whether or not a participant chooses to contribute. The annual
contribution by Park West to each participant's account for 1997
equals 7% of a participant's annual compensation plus 5.7% of a
participant's annual compensation in excess of the participant's
Social Security Taxable Wage Base. During 1997, Park West
contributed $15,476 for the account of Donald R. Chase and $14,824
each for the accounts of Messrs. Briggs and Lilly. The
contribution to the accounts of Messrs. Chase, Briggs and Lilly are
included in the "All Other Compensation" column of the Summary
Compensation Table.
During 1997, Park West contributed in the aggregate $49,674 for the
accounts of all Executive Officers of Park West to the Money
Purchase Pension Plan.
<PAGE>
Director Compensation
During 1997, Directors of the Corporation who are not salaried
employees received Directors' fees of $10,000. The Chairman of the
Board of Directors received annual remuneration of $15,000, while
the Clerk of the Corporation received an annual fee of $12,500.
Directors who are also salaried employees receive no additional
compensation for their services as Directors of the Corporation.
1995 Directors Stock Option Plan
In February 1995, the Board of Directors of the Corporation
unanimously adopted the 1995 Directors Stock Option Plan (the "1995
Plan"), which was approved by the shareholders at the Annual Meeting
in April 1995.
The 1995 Plan is administered by the non-employee directors. The
purpose of the 1995 Plan is to enhance the Corporation's ability to
attract and retain highly qualified individuals to serve as members
of the Corporation's Board of Directors and to provide additional
incentives to non-employee directors to promote the success of the
Corporation.
Under the 1995 Plan eligible directors were granted options to
purchase 1,000 shares at an exercise price of $9.375 per share
during 1997. On each anniversary of the effective date of the 1995
Plan each eligible director shall be granted an option to purchase
1,000 shares of the Corporation's Common Stock. A total of 11,000
options were granted during 1997 at an option price of $9.375 per
share and a total of 9,000 options were granted during 1998 at an
exercise price of $12.813. A total of 61,000 shares remain
available for future grants under the 1995 Plan.
Each stock option terminates not more than 10 years after the date
of the grant. Payment of stock purchased on the exercise of an
option must be made in full at the time the stock option is
exercised. Options may not be assigned or transferred other than by
will or the laws of decent or distribution. A total of 2,000
options were exercised during 1997.
1996 Stock Incentive Plan
On February 21, 1996, the Board of Directors adopted the Westbank
Corporation 1996 Stock Incentive Plan (the "1996 Plan"), which was
approved by the shareholders at the Annual meeting in April 1996.
The 1996 Plan authorizes the automatic grant of nonqualified stock
options ("Director Stock Options") to non- employee Directors
("Eligible Directors") upon the terms and conditions set forth in
the 1996 Plan. The 1996 Plan is intended to provide incentives and
rewards for Employees and Eligible Directors (i) to support
Westbank's business and human resource strategies and the
achievement of its goals and (ii) to associate the interests of
Employees and Eligible Directors with those of Westbank's
shareholders.
Under the 1996 Plan Eligible Directors were granted options to
purchase 1,000 shares at an exercise price of $9.00 per share during
1997. At the 1998 Annual Meeting and each year thereafter until the
meeting in 2001, each Eligible Director, who was an Eligible
Director immediately preceding such Annual Meeting and who has been
elected as a Director at such Annual Meeting shall automatically be
granted Director Stock Options for 1,000 shares of Westbank Common
Stock if, but only if, the return on common equity of Westbank as
set forth in Westbank's annual report to shareholders for the
immediately preceding fiscal year is equal to or greater than 12%.
Based on the Corporation's 1997 financial results, each Eligible
Director is entitled to a grant of 1,000 shares of Westbank Common
Stock for 1998 at an exercise price that is equal to the fair market
value of the stock on the date of the grant.
<PAGE>
No Director Stock Option may be exercisable later than twenty years
and one day from the date of its grant. However, if an Eligible
Director ceases to be an Eligible Director for any reason, all
Director Stock Options which are otherwise exercisable shall
terminate on the earlier of three years after such cessation date or
the expiration date, whichever first occurs. No Director Stock
Options were exercised during 1997.
Employment and Termination Agreements
Donald R. Chase has entered into a Termination Agreement with Park
West regarding termination of employment subsequent to a "change in
control" of Park West, as defined in the Termination Agreement.
Following the occurrence of a change in control, if Mr. Chase's
employment is terminated (except because of retirement, death,
disability, or for "cause" as defined in the Termination Agreement)
or is voluntarily terminated by Mr. Chase for "good reason" as
defined in the Termination Agreement, then Mr. Chase shall be
entitled to a lump sum payment approximately equal to three times
his average annual compensation for the previous five years.
Performance Comparison Graph
Set forth below is a graph illustrating the return that would have
been realized (assuming reinvestment of dividends) by an investor
who invested $100 on December 31, 1992 in each of the following:
(a) The Standard & Poor's 500 Index
(b) A hypothetical fund with investments in the stock of peer
corporations (the "Peer Group")
(c) Westbank Corporation
The Peer Group consists of New England banks and thrifts with assets
totaling between $200 and $450 million. The members of the Peer
Group are:
Alliance Bancorp of New England
Bancorp Connecticut, Inc.
Central Co-operative Bank
Granite State Bankshares, Inc.
Hingham Institution for Savings
Home Port Bancorp, Inc.
Ipswich Savings Bank
Lawrence Savings Bank
Northeast Bancorp
New Hampshire Thrift Bancshares
NMBT Corp.
NewMil Bancorp, Inc.
Village Bancorp, Inc.
Wainwright Bank & Trust Co.
Warren Bancorp, Inc.
YEAR WESTBANK PEER S & P 500
1992 100.0 100.0 100.0
1993 145.5 144.8 107.1
1994 204.5 166.0 105.4
1995 261.8 214.0 141.4
1996 364.3 295.6 170.0
1997 510.0 478.7 222.7
<PAGE>
Miscellaneous
During 1997, certain of the Corporation's Executive Officers,
Directors and nominees for Director, beneficial owners of more than
5% of the outstanding common stock of the Corporation and members of
their immediate family and associates have had, and expect to have
in the future, transactions in the ordinary course of business with
Park West, including borrowings, on substantially the same terms,
including interest rates and collateral, as those prevailing at the
time for comparable transactions with other persons, and not
involving more than normal risk of collectibility or presenting
other unfavorable features.
APPROVAL OF AMENDMENT TO 1996 STOCK INCENTIVE PLAN
On February 18, 1998, the Board of Directors adopted an Amendment to
the 1996 Stock Incentive Plan to increase the number of shares
reserved for issuance thereunder by 200,000. As of December 31,
1997, and without giving effect to the proposed increase in shares,
a total of 178,500 shares had been reserved for issuance in the 1996
Stock Incentive Plan and 36,500 shares remained available for future
grant under the 1996 Stock Incentive Plan.
Because of the limited number of shares remaining to be issued
pursuant to the 1996 Stock Incentive Plan, the Board of Directors
deemed it advisable that the 1996 Stock Incentive Plan be amended,
subject to approval by the shareholders, to increase the number of
shares available for issue thereunder by 200,000 shares. The Board
of Directors believes it is desirable to have the additional shares
that will be authorized by the proposed Amendment available for
issuance to those employees eligible to receive shares under the
Plan. Having such additional authorized shares available will give
the Corporation greater flexibility by permitting such shares to be
issued pursuant to the terms of the 1996 Stock Incentive Plan
without the expense and delay of a special meeting of stockholders.
The essential features of the 1996 Stock Incentive Plan are
described in the section entitled "Executive Compensation-1996 Stock
Incentive Plan". Copies of the 1996 Stock Incentive Plan are
available upon request.
At the Annual Meeting, the shareholders are being asked to approve
the increase in the number of shares reserved for issuance under the
1996 Stock Incentive Plan by 200,000 shares. The affirmative vote
of a majority of the shares of Common Stock of the Corporation
represented at the 1998 Annual Meeting is required to approve the
Amendment to the 1996 Stock Incentive Plan. The Board of Directors
has unanimously approved the proposed Amendment to the 1996 Stock
Incentive Plan and recommends that the shareholders vote FOR such
Amendment.
EMPLOYEE STOCK OWNERSHIP PLAN
On January 1, 1989, the Corporation's Employee Stock Ownership Plan
(the "ESOP") became effective. The ESOP is administered and
otherwise governed by the provisions of the ESOP and a related Trust
Agreement. Pursuant to the terms of the ESOP, the Trustee may
invest the ESOP's Trust Assets in, among other investments, shares
of the Common Stock of the Corporation. As of the record date, no
shares of the Common Stock of the Corporation were owned by the ESOP
Trust.
DIVIDEND REINVESTMENT PLAN
In 1989, the Corporation implemented a Dividend Reinvestment and
Common Stock Purchase Plan, (the "Dividend Reinvestment Plan") which
was amended during 1995 and the amendment was approved by the
shareholders at the 1995 Annual Meeting. Pursuant to the amended
Dividend Reinvestment Plan, shareholders of the Corporation's Common
Stock may invest all or a portion of that shareholder's quarterly
cash dividend, plus up to $10,000 per calendar quarter, in
additional shares of the Corporation's Common Stock. During 1997,
146,419 shares of the Corporation's Common Stock were purchased
through the Dividend Reinvestment and Common Stock Purchase Plan.
<PAGE>
RATIFICATION OF THE SELECTION OF
CERTIFIED PUBLIC ACCOUNTANTS
Deloitte & Touche LLP ("Deloitte"), certified public accountants,
have served as auditors for the Corporation and as auditors for Park
West since 1994, and subject to ratification by the shareholders,
that firm has been chosen by the Board of Directors to act as the
Corporation's auditor for 1998. During 1997, Deloitte provided
audit services in connection with the examination of the financial
statements of the Corporation and Park West and other accounting
matters. Neither Deloitte nor any of its partners has any direct or
indirect financial interest in, or connection (other than as
independent auditor) with, the Corporation or Park West.
A representative of Deloitte & Touche LLP is expected to be present
at the Corporation's 1998 Annual Meeting of Shareholders. He/she
will have the opportunity to make a statement if he/she desires to
do so and will be available to respond to appropriate questions.
The Board of Directors recommends a vote FOR ratification of the
selection of Deloitte & Touche LLP as the Corporation's auditor, and
unless otherwise directed, proxies will be voted in favor of this
selection.
OTHER BUSINESS
As of the date of this Proxy Statement, the Board of Directors of
the Corporation is not aware of any business to be presented at the
1998 Annual Meeting other than matters referred to in the Notice of
Annual Meeting and this Proxy Statement. If any other matters
properly come before the meeting, or any adjournment thereof, the
enclosed Proxy will be voted on such matters in accordance with the
recommendations of the Corporation's Board of Directors.
MISCELLANEOUS
The expense of this solicitation on behalf of the Board of Directors
will be paid by the Corporation. To the extent necessary in order
to assure sufficient representation of shareholders at the meeting,
officers and employees of the Corporation or Park West may
personally, by telephone or by other means, contact shareholders to
request the return of proxies. Banks, brokerage houses and other
institutions, nominees or fiduciaries will be requested to forward
the proxy material to beneficial owners in order to solicit
authorizations for the execution of proxies. The Corporation may,
upon request, reimburse such banks, brokerage houses and other
institutions, nominees and fiduciaries for their expenses in
forwarding such material.
STOCKHOLDER PROPOSALS
Any stockholder proposals (including director nominations) submitted
pursuant to Exchange Act Rule 14a-8 and intended to be presented at
the Corporation's 1999 Annual Meeting of Stockholders must be
received by the Corporation by November 17, 1998 to be eligible for
inclusion in the proxy statement and form of proxy to be distributed
by the Board of Directors in connection with such meeting. Such
proposals must also comply with the requirements as to form and
substance established by the SEC if such proposals are to be
included in the proxy statement and form of proxy.
The Corporation's Amended By-Laws provide that any stockholder
proposals (including director nominations) intended to be presented
at the Corporation's 1999 Annual Meeting, other than a stockholder
proposal submitted pursuant to Exchange Act Rule 14a-8, must be
received in writing at the principal executive office of the
Corporation on or between the dates of December 16, 1998 and January
30, 1999, together with all supporting documentation required by the
Corporation's Amended By-laws. However, if the 1999 Annual Meeting
is scheduled to be held on a date more than 30 days before April 15,
1999, or more than 60 days after April 15, 1999, a stockholder's
notice shall be timely filed if delivered to, or received by, the
Corporation at its principal executive office not later than the
close of business on the later of (a) 75 days prior to the date of
such rescheduled meeting or (b) the 15th day following the day on
which public announcement of the date of such annual meeting is
first made by the Corporation.
<PAGE>
ANNUAL REPORT
A copy of the Corporation's Annual Report for 1997 including
financial statements is enclosed. The Annual Report is not to be
regarded as proxy soliciting material.
By order of the Board of Directors
Robert J. Perlak
Clerk
Dated: March 12, 1998
NOTICE
A COPY OF THE CORPORATION'S ANNUAL REPORT ON FORM 10-K FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION MAY BE OBTAINED WITHOUT
CHARGE BY ANY SHAREHOLDER OF THE CORPORATION UPON WRITTEN REQUEST
ADDRESSED TO JOHN M. LILLY, TREASURER, 225 PARK AVENUE, WEST
SPRINGFIELD, MASSACHUSETTS 01089-3310.
<PAGE>
PROXY CARD
WESTBANK CORPORATION
PROXY FOR 1998 ANNUAL SHAREHOLDERS MEETING -- April 15, 1998
I, the undersigned holder of common stock of Westbank
Corporation, hereby appoint Lloyd S. Hall and Joseph L. Rolak, or
either of them, with the power of substitution, proxies of the
undersigned to vote the shares of the undersigned at the 1998 Annual
Meeting of Shareholders of Westbank Corporation to be held at 9:00
A.M., April 15, 1998 at the Carriage House at Storrowton Tavern,
1305 Memorial Avenue, West Springfield, Massachusetts, and at any
adjournment thereof, with all the powers the undersigned would
possess if personally present. Said proxies are specifically
authorized to vote as indicated below.
THIS PROXY CONFERS AUTHORITY TO VOTE "FOR" EACH PROPOSITION
LISTED BELOW UNLESS AUTHORITY IS WITHHELD OR OTHERWISE INDICATED.
ALL PROXIES EXECUTED CORRECTLY WILL BE VOTED AS DIRECTED. IF ANY
OTHER BUSINESS IS PRESENTED AT THE MEETING, THIS PROXY SHALL BE
VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF
DIRECTORS.
1. FIXING THE NUMBER OF DIRECTORS. To fix the number of Directors
of the Corporation at eleven (11).
FOR AGAINST ABSTAIN
2. ELECTION OF DIRECTORS. To elect the following Directors of the
Corporation for a three-year term until the 2001 Annual Meeting of
Shareholders.
Roland O. Archambault FOR AGAINST ABSTAIN
Donald R. Chase FOR AGAINST ABSTAIN
Paul J. McKenna FOR AGAINST ABSTAIN
George R. Sullivan FOR AGAINST ABSTAIN
3. APPROVE AMENDMENT TO THE 1996 STOCK INCENTIVE PLAN. To approve
an amendment to the 1996 Stock Incentive Plan to
increase the number of shares of Common Stock reserved for issuance
thereunder by 200,000 shares.
FOR AGAINST ABSTAIN
4. SELECTION OF CERTIFIED PUBLIC ACCOUNTANTS. To ratify the
appointment, by the Board of Directors, of Deloitte & Touche
LLP as independent public accountants for the fiscal year
ending December 31, 1998.
FOR AGAINST ABSTAIN
5. OTHER BUSINESS. In their discretion, to act upon the
transaction of such other business as may properly come before
the meeting and any adjournment thereof.
Date:
(Signature of Shareholder)
(Signature if jointly held)
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.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
