<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
WESTBANK CORPORATION
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
N/A
(NAME OF PERSON(S) FILING PROXY STATEMENT IF OTHER THAN THE REGISTRANT)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(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.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
WESTBANK CORPORATION
NOTICE OF
ANNUAL MEETING
OF SHAREHOLDERS
APRIL 21, 1999
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> 3
WESTBANK CORPORATION
225 PARK AVENUE
WEST SPRINGFIELD, MASSACHUSETTS 01089-3310
NOTICE OF 1999 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD WEDNESDAY, APRIL 21, 1999
MARCH 17, 1999
TO THE SHAREHOLDERS OF WESTBANK CORPORATION:
Notice is hereby given that the 1999 Annual Meeting of Shareholders of
Westbank Corporation (the "Corporation") will be held at 9:00 A.M., on
Wednesday, April 21, 1999 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. Election of the individuals listed as nominees in the Proxy Statement
accompanying this notice of meeting.
2. 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, 1999.
3. 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 1,
1999.
By order of the Board of Directors
Robert J. Perlak
Clerk
West Springfield, Massachusetts
March 17, 1999
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.
1
<PAGE> 4
PROXY STATEMENT
Approximate date of mailing
March 17, 1999
WESTBANK CORPORATION
225 PARK AVENUE
WEST SPRINGFIELD, MASSACHUSETTS 01089-3310
(413) 747-1400
NOTICE OF 1999 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 21, 1999
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 1999 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 21, 1999 at 9:00 A.M. and at any adjournments thereof.
The close of business on March 1, 1999, has been fixed as the record date for
determination of shareholders of the Corporation entitled to notice of and to
vote at the 1999 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 1999 Annual Meeting of
Shareholders is 4,214,193. 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 1999 Annual Meeting is required 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.
2
<PAGE> 5
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 Corporation's Board of
Directors presently consists of twelve members.
In accordance with the By-Laws of the Corporation four nominees shall be elected
to serve a three-year term until the 2002 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 1999 Annual Meeting of Shareholders will be voted 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.
3
<PAGE> 6
The following individuals are nominees for election as a Director of the
Corporation at the 1999 Annual Meeting to serve for a three-year term until the
2002 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>
Mark A. Beauregard 47 1986 Director
Attorney - Resnic, Beauregard,
Waite and Driscoll
David R. Chamberland 60 1989 Director
President, Chicopee Building
Supply, Inc.
Robert J. Perlak 63 1987 Director
Private Investor - Formerly and Clerk
Assistant Chief Probation Officer
of Hampden County
James E. Tremble 60 1986 Director
President
Valley Cinema, 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>
Leroy F. Jarrett 71 1961 Director 2000
President and Treasurer, (retired)
New England Church Interiors
Ernest N. Laflamme, Jr. 67 1987 Director, 2000
Treasurer, Vice Chairman
City of Chicopee of the Board
G. Wayne McCary 56 1999 Director 2000
President & Chief Executive Officer
Eastern States Exposition
</TABLE>
4
<PAGE> 7
<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>
Roland O. Archambault 66 1989 Director 2001
President - Pinnacle Raceway
Donald R. Chase 52 1990 Director, 2001
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 72 1961 Director 2001
Orthodontist
George R. Sullivan 45 1997 Director 2001
Executive Vice President
Sullivan Paper Company, Inc.
Alfred C. Whitaker 72 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, 1998 was 14. Each
Director attended at least 75% of all Board of Directors meetings held in 1998
during the period for which each was a Director with the exception of Director
Archambault, who attended 10 meetings. 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 1998, the Board of Directors of Park West met 18 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,
with the exception of Director Archambault who was absent at 2 of the
Corporation's Audit Committee meetings.
EXECUTIVE COMMITTEE
The members of the Executive Committee of the Corporation and Park West in 1998
were Messrs. Laflamme, Beauregard, Chase, Jarrett and Whitaker. The Executive
Committee met 17 times during 1998.
COMPENSATION COMMITTEE
The members of the Compensation Committee in 1998 were Messrs. Laflamme,
Beauregard, Jarrett and Whitaker. The Compensation Committee met 4 times in
1998.
5
<PAGE> 8
NOMINATING COMMITTEE
The members of the Nominating Committee in 1998 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 1 time during 1998. 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 1998 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 1998.
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 48, is Executive Vice President - Lending of Park
West; John M. Lilly, age 50, 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 55, 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:
<TABLE>
<CAPTION>
NUMBER OF PERCENT OF
NAME AND ADDRESS SHARES BENEFICIALLY OUTSTANDING
OF OWNER OWNED(1) SHARES
-------- -------- ------
<S> <C> <C>
Richard S. Sullivan
Carol B. Sullivan 304,929 7.24%
96 Prynwood Road
Longmeadow, MA 01106
Donald R. Chase
Diana L. Chase 237,179(2) 5.63%
39 Timber Ridge Road
West Springfield, MA 01089
</TABLE>
(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 100,000
unexercised stock options.
6
<PAGE> 9
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:
<TABLE>
<CAPTION>
NUMBER OF PERCENT OF
NAME OF INDIVIDUAL SHARES BENEFICIALLY OUTSTANDING
OR PERSONS IN GROUP OWNED(1)(2)(3) SHARES
------------------- -------------- ------
<S> <C> <C>
Roland O. Archambault 22,823 .5%
Mark A. Beauregard 15,569(4) .4
David R. Chamberland 20,499(4) .5
Donald R. Chase 237,179(5) 5.6
Leroy F. Jarrett 70,304 1.7
Ernest N. Laflamme, Jr. 45,180 1.1
G. Wayne McCary 500 .01
Paul J. McKenna 42,537 1.0
Robert J. Perlak 50,627(4) 1.2
George R. Sullivan 15,000 .4
James E. Tremble 12,267(4) .3
Alfred C. Whitaker 38,000 .9
All Directors, nominees and
Executive Officers as a group
(15 persons, including those
named above)(3)(5) 768,429 18.23%
</TABLE>
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, 1998, 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 100,000 shares, and all
Directors and Executive Officers as a group owned exercisable options to
purchase 289,000 shares.
(4) Indicates a nominee for election as a Director of the Corporation at the
1999 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.
7
<PAGE> 10
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 Incentive Compensation Plan"). The
Incentive Compensation Plan was adopted by the Compensation Committee and is
used as a guide in determining Executive Officer compensation.
During 1998, Chief Executive Officer, Donald R. Chase received a salary increase
of $45,000, an increase of twenty-four percent (24%) 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 1997. In addition, as a result of The
Incentive Compensation Plan Mr. Chase received a cash bonus of $58,000. In
addition, the Corporation contributed $13,278 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 1998
based on the Corporation's and their individual performance.
8
<PAGE> 11
The Compensation Committee believes that the 1998 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 $100,000.00 in cash
compensation during 1998:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
Award Payouts
Other ----------- ---------
Annual Restricted All Other
Name and Compen- Stock Options/ LTIP Compen-
Principal Position Year Salary($) Bonus($) sation ($) Award(s)($) SARs(#) Payouts sation($)
- - ------------------ ---- --------- -------- ---------- ----------- ------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Donald R. Chase, 1998 $230,000 $58,000 N/A N/A 50,000 N/A $29,870*
President and 1997 $185,000 $58,000 N/A N/A N/A N/A $25,091*
Chief Executive Officer 1996 $151,470 $49,546 N/A N/A 50,000 N/A $22,057*
Gary L. Briggs, 1998 $120,000 $24,200 N/A N/A 15,000 N/A $14,103
Executive Vice President- 1997 $110,000 $37,500 N/A N/A N/A N/A $14,824
Lending 1996 $100,980 $33,031 N/A N/A 25,000 N/A $13,535
John M. Lilly, 1998 $120,000 $24,200 N/A N/A 15,000 N/A $14,103
Treasurer and 1997 $110,000 $37,500 N/A N/A N/A N/A $14,824
Chief Financial Officer 1996 $100,980 $33,031 N/A N/A 25,000 N/A $13,535
</TABLE>
* Mr. Chase's other compensation during 1998, 1997 and 1996 respectively
consisted of a $16,592, $15,476 and $15,561 contribution to the Money
Purchase Pension Plan and a $13,278, $9,615 and $6,496 contribution to
the Corporation's Supplemental Executive Retirement Plan.
Messrs. Brigg's and Lilly's other compensation during 1998, 1997 and
1996 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.
9
<PAGE> 12
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 1998.
A total of 147,182 options were exercised in 1998. No options were terminated
during 1998 and a total of 44,284 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.
A total of 107,000 incentive stock options were granted during 1998, while no
options were exercised. A total of 228,500 options remain unexercised as of the
record date.
10
<PAGE> 13
OPTIONS/STOCK APPRECIATION RIGHTS (SAR) GRANTS IN LAST FISCAL YEAR
The charts below disclose information regarding options granted pursuant to the
1996 Stock Initiative Plan as the same apply to the named executives.
OPTIONS/STOCK APPRECIATION RIGHTS (SAR) GRANTS IN LAST FISCAL YEAR
Individual Grants
<TABLE>
<CAPTION>
Percent of
Total Options/
Option/ SARs Granted Exercise or
SARs to Employees Base Price Expiration Grant Date(1)
Name Granted # In Fiscal Year ($/Sh) Date Present Value
---- --------- -------------- ------ ---- -------------
<S> <C> <C> <C> <C> <C>
Donald R. Chase 50,000 47% $13.375 8/18/08 $ 205,000
Gary L. Briggs 15,000 14% $13.375 8/18/08 $ 61,500
John M. Lilly 15,000 14% $13.375 8/18/08 $ 61,500
</TABLE>
(1) Valued using the Black-Scholes option pricing model. The assumptions
used for the variables in the model were: 40% volatility; a risk free
rate of 5.42% (based on the yield on a U.S. Treasury Security with a
maturity approximating the expected life of the option); a dividend
yield of approximately 3% and a 10-year option term.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
The following table provides information on options exercised in fiscal 1998 by
the named Executive Officers and the value of such Officers unexercised options
at December 31, 1998.
<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 88,000 $638,000 100,000 $243,750
Gary L. Briggs 36,000 $261,000 40,000 $121,875
John M. Lilly 18,000 $130,500 58,000 $247,875
</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, 1998, which was $13.00, and the option exercise price
for each underlying grant.
(3) The Corporation does not issue SARs.
11
<PAGE> 14
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 1998 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 1998, Park West contributed $16,592
for the account of Donald R. Chase and $14,103 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 1998, Park West contributed in the aggregate $49,863 for the accounts of
all Executive Officers of Park West to the Money Purchase Pension Plan.
DIRECTOR COMPENSATION
During 1998, 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 $12.875 per share during 1998. 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 9,000 options were granted during 1998 at an option price of $12.875
per share and a total of 10,000 options were granted during 1999 at an exercise
price of $12.00. A total of 48,000 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
19,000 options were exercised during 1998.
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<PAGE> 15
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 $15.25 per share during 1998. At the 1999 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 1998 financial results, each Eligible Director is
entitled to a grant of 1,000 shares of Westbank Common Stock for 1999 at an
exercise price that is equal to the fair market value of the stock on the date
of the grant.
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 1998.
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.
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<PAGE> 16
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, 1993 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 $250 and $500 million. The members of the Peer Group are:
<TABLE>
<CAPTION>
<S> <C> <C>
Alliance Bancorp of New England Lawrence Savings Bank Slade's Ferry Bancorp
Central Co-operative Bank Northeast Bancorp Village Bancorp, Inc.
Hingham Institution for Savings New Hampshire Thrift Bancshares Wainwright Bank & Trust Co.
Home Port Bancorp, Inc. NMBT Corp. Warren Bancorp, Inc.
Ipswich Savings Bank NewMil Bancorp, Inc.
</TABLE>
<TABLE>
<CAPTION>
YEAR WESTBANK PEER S&P 500
-----------------------------------------------------------------------
<S> <C> <C> <C>
1993 100.0 100.0 100.0
1994 140.6 110.1 101.3
1995 180.0 126.5 139.4
1996 250.5 167.5 171.4
1997 350.6 254.9 228.7
1998 361.4 231.6 294.1
</TABLE>
14
<PAGE> 17
MISCELLANEOUS
During 1998, 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.
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 1998, 49,115 shares of the
Corporation's Common Stock were purchased through the Dividend Reinvestment and
Common Stock Purchase Plan.
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 1999. During 1998,
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 1999 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.
15
<PAGE> 18
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 1999 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 2000
Annual Meeting of Stockholders must be received by the Corporation by November
17, 1999 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
2000 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 22, 1999 and
February 5, 2000, together with all supporting documentation required by the
Corporation's Amended By-laws. However, if the 2000 Annual Meeting is scheduled
to be held on a date more than 30 days before April 21, 2000, or more than 60
days after April 21, 2000, 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.
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<PAGE> 19
ANNUAL REPORT
A copy of the Corporation's Annual Report for 1998 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 17, 1999
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.
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<PAGE> 20
WESTBANK CORPORATION
PROXY FOR 1999 ANNUAL SHAREHOLDERS MEETING - APRIL 21, 1999
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 1999 Annual Meeting of Shareholders of Westbank Corporation to be held at
9:00 A.M., April 21, 1999 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. ELECTION OF DIRECTORS. To elect the following Directors of the Corporation
for a three-year term until the 2002 Annual Meeting of Shareholders.
Mark A. Beauregard [ ] FOR [ ] AGAINST [ ] ABSTAIN
David R. Chamberland [ ] FOR [ ] AGAINST [ ] ABSTAIN
Robert J. Perlak [ ] FOR [ ] AGAINST [ ] ABSTAIN
James E. Tremble [ ] FOR [ ] AGAINST [ ] ABSTAIN
2. SELECTION OF CERTIFIED PUBLIC ACCOUNTANTS. To ratify the appointment, by the
Board of Directors, of Deloitte & Touche LLP as independent public accounts
for the fiscal year ending December 31, 1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(over)
<PAGE> 21
3. 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
