SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. _)
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|_| 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 Rule 14a-11(c) or Rule 14a-12
Cowlitz Bancorporation
(Names of Registrant as Specified in Its Charter)
(Names of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (check appropriate box):
X No fee required.
|_| Fee computed on table below per Exchange Act rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction
computes 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:
|_| 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>
(Cowlitz Bancorporation Logo)
NOTICE OF THE ANNUAL MEETING OFSHAREHOLDERS
To Be Held May 15, 1999
To the Shareholders of Cowlitz Bancorporation:
NOTICE IS HEREBY GIVEN that the Annual Meeting of the shareholders of
Cowlitz Bancorporation will be held at the DoubleTree Hotel, 510 Kelso Drive,
Kelso, Washington, on Saturday, May 15, 1999at 10:00 a.m. local time for the
purpose of considering and voting upon the following matters:
1. Election of Directors. To elect five directors to serve; and
2. Whatever other business may properly be brought before the Annual
Meeting or any adjournment thereof.
Only those shareholders of record at the close of business on April 1, 1999
will be entitled to notice of and to vote at the Annual Meeting or any
adjournment thereof.
Please complete and sign the enclosed form of proxy, which is solicited by
the Board of Directors, and mail it promptly. The proxy will not be used if you
attend the meeting and vote in person.
All shareholders are urged to attend the Annual Meeting either in person or
by proxy.
BY ORDER OF THE BOARD OFDIRECTORS
Donna P. Gardner
Vice President &Secretary/Treasurer
Longview, Washington
April 13, 1999
<PAGE>
(Cowlitz Bancorporation Logo)
Cowlitz Financial Center
927 Commerce Avenue
Longview, WA 98632
(360) 423-9800
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
May 15,1999
This Proxy Statement and the accompanying Proxy are being sent to
shareholders on or about April 13, 1999, for use in connection with the Annual
Meeting of Shareholders (the "Meeting") of Cowlitz Bancorporation (the
"Company") to be held on Saturday, May15, 1999 at the Double Tree Hotel, 510
Kelso Drive, Kelso, Washington, at 10:00 a.m. local time.
VOTING AND PROXY PROCEDURE
Shareholders Entitled to Vote. Shareholders of record as of the close of
business on April1, 1999 are entitled to vote at the Annual Meeting. Each share
of common stock ("Common Stock") is entitled to one vote on each matter properly
presented at the Annual Meeting. As of April 1, 1999, the Company had 4,002,377
shares of Common Stock issued and outstanding.
Quorum. The presence, in person or by proxy, of at least a majority of the
total number of outstanding shares of Common Stock entitled to vote is necessary
to constitute a quorum at the Annual Meeting. Abstentions and broker non-votes
will be counted as shares present at the Annual Meeting for purposes of
determining the existence of a quorum.
Voting. The Board of Directors solicits proxies so that each shareholder
has the opportunity to vote on the proposals to be considered at the Annual
Meeting. When a proxy card is returned properly signed and dated, the shares
represented thereby will be voted in accordance with the instructions on the
proxy card. Where no instructions are indicated, proxies will be voted in
accordance with the recommendations of the Board of Directors. If a shareholder
of record attends the Annual Meeting, he or she may vote by ballot.
The affirmative vote of a plurality of the votes cast at the Annual Meeting
is required for the election of directors. 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 because the nominees receiving the
greatest number of votes will be elected.
Revocation of a Proxy. Shareholders who execute proxies retain the right to
revoke them at anytime before they are voted. Proxies may be revoked by written
notice delivered in person or mailed to the Secretary of the Company or by
filing a later dated proxy prior to a vote being taken on a particular proposal
at the Annual Meeting. Attendance at the Annual Meeting will not automatically
revoke a proxy, but a shareholder of record in attendance may request a ballot
and vote in person, thereby revoking a prior granted proxy.
In addition to mailing this material to shareholders, the Company has asked
banks and brokers to forward copies to persons for whom they hold shares of
Common Stock and request authority to execute the proxies. The Company will
reimburse the banks and brokers for their reasonable out-of-pocket expenses in
doing so. Officers and regular employees of the Company may, without being
additionally compensated, solicit proxies by mail, telephone, telegram,
facsimile or personal contact.
<PAGE>
SECURITY OWNERSHIP
OF
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth information regarding the beneficial
ownership of the Common Stock of the Company with respect to each person known
to the Company to own more than 5% of the outstanding Common Stock, directors,
and the named executive officers ("Named Executive Officers") of the Company as
identified herein and by all directors and executive officers as a group as of
February 28, 1999.Each beneficial owner has the sole power to vote and to
dispose of all shares of Common Stock owned by such beneficial owner.
<TABLE>
<CAPTION>
Name of Beneficial Owner Shares Percentage
<S> <C> <C>
Benjamin Namatinia (1)................................. 610,282 14.63
Charles W. Jarrett (1)................................. 294,127 7.05
Mark F. Andrews, Jr. (2)............................... 38,065 *
Larry M. Larson (2).................................... 251,214 6.02
E. Chris Searing (2)................................... 20,267 *
Donna P. Gardner (3)................................... 46,962 1.13
Jim Wills(4)........................................... 106,140 2.54
All directors and executive officers as a group (7 persons) 1,367,057 32.76
*Less than 1%
(1)Includes presently exercisable options to purchase 82,500 shares of Common Stock.
(2)Includes presently exercisable options to purchase 1,000 shares of Common Stock.
(3)Includes presently exercisable options to purchase 1,400 shares of Common Stock.
(4)Includes presently exercisable options to purchase 800 shares of Common Stock.
</TABLE>
ELECTION OF DIRECTORS
Five directors will be elected at the Annual Meeting to serve until the
next Annual Meeting of the shareholders or until the director's successor is
elected and qualified.
Unless authority to vote is withheld on a proxy, proxies in the form
enclosed will be voted FOR the director-nominees identified below. Each of the
nominees has indicated that he is willing and able to serve as a director. If
any nominee is not available for election(a contingency which the Company does
not now foresee), it is the intention of the Board of Directors to recommend the
election of a substitute nominee, and proxies in the form enclosed will be voted
FOR the election of such substitute nominee unless authority to vote such
proxies in the election of directors has been withheld.
In accordance with the above, the Board of Directors has nominated:
Mark F. Andrews, Jr.
Charles W. Jarrett
Larry M. Larson
Benjamin Namatinia
E. Chris Searing
The Board of Directors recommends a vote FOR each of the nominees.
<PAGE>
The following table sets forth certain information regarding the nominees
for election at the Annual Meeting. All of the nominees have served as directors
of the Company since its incorporation in 1991.
<TABLE>
<CAPTION>
Name Age Position
<S> <C> <C>
Mark F. Andrews, Jr. 66 Director, Cowlitz Bancorporation & Cowlitz Bank
Charles W. Jarrett 58 President & Chief Operating Officer & Director, Cowlitz
Bancorporation; President & Chief Executive Officer &
Director, Cowlitz Bank; Director, Business Finance
Corporation
Larry M. Larson 60 Director, Cowlitz Bancorporation; Chairman, Cowlitz Bank
Benjamin Namatinia 55 Chairman & Chief Executive Officer, Cowlitz
Bancorporation; Director, Cowlitz Bank; Chairman,
Business Finance Corporation
E. Chris Searing 45 Director, Cowlitz Bancorporation & Cowlitz Bank
</TABLE>
Mark F. Andrews, Jr. has served as a director of Cowlitz Bank since 1988
and as Secretary of the Board since 1990. Mr. Andrews' principal occupation is
the management and operation of his tree farms. In addition, Mr. Andrews serves
as a court commissioner for Cowlitz County and he is also a retired attorney.
Mr. Andrews is Chairman of the Audit Committee and serves on the Compensation
Committee and the Board Development Committee.
Charles W. Jarrett held the position of President and Chief Executive
Officer of Cowlitz Bancorporation from 1992 until November 1994, at which time
he became President and Chief Operating Officer. Mr. Jarrett joined Cowlitz Bank
in 1986 and has served as President and Chief Executive Officer and as a
director since 1989. He has served as a director of Business Finance Corporation
since the acquisition in 1998.
Larry M. Larson has served as a director of Cowlitz Bank since 1984. He
served as Secretary of the Board from 1987 to 1988, Vice Chairman from 1988 to
1990, and has served as Chairman since 1990. Mr. Larson owns the Bridgeview
Tobacco Shop located in Rainier, Oregon. He serves in an elected position on the
Port Commission for the Port of Longview. Mr. Larson serves on the Compensation
Committee, the Board Development Committee, and the Audit Committee.
Benjamin Namatinia has served as Chairman of Cowlitz Bancorporation since
its incorporation in 1991 and was appointed Chief Executive Officer in November
1994. He has served as a director of Cowlitz Bank since 1991. He has served as a
director of Business Finance Corporation since the acquisition in 1998. Since
1990, Mr. Namatinia has been the President and owner of BMN, Inc., a securities
brokerage franchise of Raymond James Financial Services, Inc. From 1984 to 1989,
he was Senior Vice President and head of the Bond Department in Portland, Oregon
for Shearson Lehman.
E. Chris Searing has served as a director of Cowlitz Bank since 1986. He
served as Secretary of the Board from 1988 to 1990 and has served as Vice
Chairman since 1990.Mr. Searing owns Searing Electric & Plumbing, Inc. located
in Longview, Washington. Mr. Searing serves on the Compensation Committee and
the Audit Committee.
<PAGE>
INFORMATION REGARDING THE BOARD OF DIRECTORS
AND ITS COMMITTEES
The Board of Directors conducts its business through meetings of the Board
and through its committees. During1998, the Company held thirteen regular
meetings and thirteen special meetings of the Board as well as committee
meetings. No director in office in 1998 attended fewer than 75% of the meetings
of the Board of Directors and the total number of all meetings of all committees
of the Board of Directors on which he served.
The Board of Directors has established an Audit Committee, a Compensation
Committee, and a Board Development Committee. The Audit Committee recommends the
selection of the Company's independent auditors and consults with the
independent auditors on the Company's internal accounting controls. The
Compensation Committee recommends to the Board salaries and bonuses for the
Company's executive officers and administers the Company's Stock Option Plan and
Employee Stock Purchase Plan. The Board Development Committee identifies and
recommends potential candidates for the Company and its subsidiary's Boards of
Directors.
DIRECTORS' COMPENSATION
In 1998, Directors of the Company received a fee of $900 per month except
that Mr. Namatinia as Chairman of the Board received a fee of $1,000 per month.
Directors of Cowlitz Bank received a fee of $600 per month and the Chairman, Mr.
Larson, received a fee of$1,800 per month. Directors of Business Finance
Corporation received a fee of $300 per month.
EXECUTIVE COMPENSATION
Summary Compensation Table. The following table sets forth the annual
compensation earned during 1997 and 1998 for the Company's Chief Executive
Officer and each of the Company's other executive officers who earned in excess
of $100,000 in salary and bonus during the last two fiscal years (the "Named
Executive Officers").
ANNUAL COMPENSATION
<TABLE>
<CAPTION>
Other Annual All Other Stock Option
Name of Principal and Position Salary Bonus Compensation Compensation(1) Grants
<S> <C> <C> <C> <C> <C>
Benjamin Namatinia 1998 $200,000 $75,000 - $14,400 10,000
Chairman & 1997 $178,224 $20,000 - $14,258 192,500
Chief Executive Officer
Charles W. Jarrett 1998 $200,000 $52,356 - $14,400 10,000
President & 1997 $161,532 $40,975 - $12,923 192,500
Chief Operating Officer
Jim Wills 1998 $105,455 $13,678 - $ 8,436 4,000
Vice President 1997 $ 98,556 $24,585 - $ 7,884 -
Donna P. Gardner 1998 $ 76,340 $23,678 - $ 6,108 7,000
Vice President & 1997 $ 66,840 $21,390 - $ 5,347 -
Secretary/Treasurer
(1) Company contribution to 401(K)plan
</TABLE>
<PAGE>
STOCK OPTIONS
Stock Option Plan. Awards of stock options under the Company's stock option
plan are designed to closely tie together the long term interest of the Company
and its subsidiary's directors, employees, and shareholders and to assist in the
retention of directors, officers, and key employees. The Board of Directors
selects the individuals to receive stock options and determines the number of
shares subject to each grant. The Board's determination of the size of option
grants is generally intended to reflect the individual's position with the
Company or its subsidiary and the individual's contribution. Any options granted
under the plan will have an exercise period of time, and options become
exercisable on a gradual basis as stated in each grant. The Board of Directors
reviews the stock option plan annually.
The following table sets forth information concerning the award of stock
options to the Named Executive Officers during fiscal 1998.
Option/SAR Grants in the Last Fiscal Year
<TABLE>
<CAPTION>
Potential Realizable
Number of % of Total Value at Assumed
Securities Options/SARs Annual Rates of Stock
Underlying Granted to Price Appreciation for
Options/SARs Employees Exercise or Base Expiration Option Term (1)
Name Granted (#) Fiscal Year Price ($/Sh) Date 5% ($) 10% ($)
-------- --------
<S> <C> <C> <C> <C> <C>
Benjamin Namatinia 10,000 16.4 % $ 7.94 12/31/08 $129,344 / $205,943
Charles W. Jarrett 10,000 16.4 % $ 7.94 12/31/08 $129,344 / $205,943
Jim Wills 4,000 6.5 % $ 7.94 12/31/08 $ 51,755 / $ 82,360
Donna P. Gardner 7,000 11.5 % $ 7.94 12/31/08 $ 90,533 / $144,130
(1) These assumed rates of appreciation are provided in order to comply
with the requirements of the Securities and Exchange Commission (the "SEC") and
do not represent the Company's expectation or projections as to the actual rate
of appreciation of the Common Stock. These gains are based on assumed rates of
annual compound stock price appreciation of 5% and 10% from the date options
were granted over the full option term. The actual value of the options will
depend on the performance of the Common Stock and may be greater or less than
the amounts shown.
</TABLE>
The table below provides information on exercises of options during 1998 by
the Named Executive Officers and information with respect to unexercised options
held by the Named Executive Officers at December 31, 1998:
Aggregated Option/SAR Exercises in Last Fiscal Year
and Fiscal Year-End Option/SAR Values
<TABLE>
<CAPTION>
Number of Securities
Underlying Value of Unexercised
Unexercised in-the-Money
Options/SARs at Options/SARs at
Fiscal Year-End (#) Fiscal Year-End ($)
Shares Acquired Exercisable/ Exercisable/
Name On Exercise (#) Value Realized ($) Unexercisable Unexercisable (1)
- ---- --------------- ------------------ -------------------- ----------------------
<S> <C> <C> <C> <C>
Benjamin Namatinia - - 82,500 / 120,000 $639,170 /$952,800
Charles W. Jarrett - - 82,500 / 120,000 $639,170 /$952,800
Jim Wills - - 800 / 3,200 -
Donna Gardner - - 1,400 / 5,600 -
</TABLE>
<PAGE>
Employment Agreements. Messrs. Namatinia and Jarrett entered into
employment agreements with the Company effective January 1, 1998. Under the
employment agreements, both Mr. Namatinia and Mr. Jarrett receive a base annual
salary. Mr. Jarrett also receives an annual cash bonus equal to the sum of five
percent of Cowlitz Bank's net profits in excess of a one percent Return on
Assets(OROAO) for the calendar year and seven and one-half percent of the Bank's
net profits in excess of one and one-half percent ROA for the calendar year.
This formula was used by the Board of Directors to determine Mr. Jarrett's bonus
in 1996 and 1997. Mr. Namatinia's annual cash bonus will be determined by the
Company's Board of Directors based on the growth, profitability and performance
of the Company, the expansion of services provided by the Company and the market
value of the Company's Common Stock.
The agreements contain a covenant not to compete for a period of eighteen
months in the event of termination of employment for any reason. If employment
is terminated by the Company without cause or by death or disability, the
executive officer will receive a lump sum equal to three times the employee's
annual base salary for the calendar year in which such employment terminates
plus the amount of cash bonus earned prior to termination. Upon termination
without cause, the employee will receive such benefits to which he has become
entitled under the terms of the Company's Stock Option Plan and any other
benefit plan or program.
REPORT OF COMPENSATION COMMITTEE
The Company's executive compensation program is designed to attract,
motivate, and retain key executive officers and to align their compensation with
the Company's business objectives, long-term objectives of shareholders, and the
executive's individual performance.
The Company's executive compensation program is administered by the
Compensation Committee. The membership of the committee consists of three
nonemployee directors. The Compensation Committee works with management to
develop compensation plans for the Company and is responsible for determining
the compensation of the Chairman and Chief Executive Officer and the President
and Chief Operating Officer.
The Compensation Committee has through retention of external compensation
specialists and an accounting firm completed industry surveys to determine the
compensation levels of executive officers employed by similar financial
institutions that are comparable in size, region, and performance.
Using the information provided by this research along with other factors in
consideration of the Company's long range goals, implementation of strategies
and overall performance, the Compensation Committee has established salary
levels, bonuses based on reaching prescribed income levels, and retention
incentives based on long term equity compensation.
Components of Chief Executive Officer Compensation. At present, the Chief
Executive Officer's compensation program is comprised of base salary, annual
cash bonus consideration, and long-term incentive compensation in the form of
stock options. He also participates with other Company employees in the
Company's 401(K) and other benefit programs.
The base salary of the Chief Executive Officer is based on compensation
surveys and data relating to the Company's peer group of similar financial
institutions that are comparable in size, region, and performance. These surveys
are used to determine whether his base compensation is competitive with that
offered by these other financial institutions.
The annual bonus review by the Compensation Committee for the Chief
Executive Officer is based on the growth, profitability, and performance of the
Company, the expansion of services provided by the Company, and the market value
of the Company's Common Stock. Mr. Namatinia's bonus for 1998 was based on the
recognition of the following factors: completion of the acquisition of Business
Finance Corporation; the performance of the branches acquired by the Company
in1997; and the increases in revenue and net income of the Company. The
Committee also recognized that the Company's stock price had declined since the
Company's initial public offering, but believed that this decline was
attributable more to market conditions than the Company's performance.
<PAGE>
The Compensation Committee meets several times a year to continuously
evaluate the criteria used to establish the levels of compensation and to
consider any changes in the manner or method of approving the appropriate
compensation. Both the amount of compensation and the formulas used to compute
the compensation are subject to annual review by the Compensation Committee.
Submitted by the Compensation Committee:
Mark F. Andrews, Jr.
Larry M. Larson
E. Chris Searing
STOCK PRICE PERFORMANCE GRAPH
The chart below depicts the total return to shareholders during the period
beginning March 12, 1998, when the Company first issued its shares publicly, and
ending December 31, 1998. The definition of total return includes appreciation
in market value of the stock as well as the actual cash dividends paid to
shareholders. The comparable indices utilized are the NASDAQ Bank Index and the
NASDAQ Market Index. The chart assumes that the value of the investment in the
Company's Common Stock and each of the two indices was $100 on March 12,1998,
and that all dividends were reinvested.
[graph]
Cumulative Total Return
Among Cowlitz Bancorporation,
NASDAQ Market Index and NASDAQ Bank Index
<TABLE>
<CAPTION>
COMPANY INDEX /MARKET 3/12/98 3/31/98 6/30/98 9/30/98 12/31/98
<S> <C> <C> <C> <C> <C>
Cowlitz Bancorporation 100.00 97.14 92.42 67.48 60.84
NASDAQ Bank Index 100.00 142.95 140.22 118.26 133.94
NASDAQ Market Index 100.00 102.90 105.55 95.13 123.67
Assumes $100 invested on Mar. 12, 1998
Assumes Dividend Reinvested
Fiscal Year Ending Dec. 31, 1998
</TABLE>
<PAGE>
RELATED PARTY TRANSACTIONS
The Company has outstanding loans to officers, directors, their spouses,
associates, and related organizations. All such loans were made in the ordinary
course of business, have been made on substantially the same terms and
conditions; including collateral required, as comparable transactions with
unaffiliated parties and did not involve more than the normal risk of
collectibility or present other unfavorable features. Directors and executive
officers are charged the same rates of interest and loan fees as are charged to
employees of the Company, which interest rates and fees are slightly lower than
charged to non-employee borrowers. All such loans are presently in good standing
and are being paid in accordance with their terms.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended ("Section
16(a)") requires that all executive officers and directors of the Company and
all persons who beneficially own more than 10 percent of the Company's Common
Stock file reports with the Securities and Exchange Commission with respect to
beneficial ownership of the Company's Securities.
Based solely on its review of copies of reports made pursuant to Section
16(a) of the Securities Exchange Act of1934, related regulations, and written
representations, no other reports were required. The Company believes that
during the year ended December 31,1998 all filing requirements applicable to its
directors, executive officers, and greater than 10% shareholders were satisfied.
AUDITORS
The Board of Directors has appointed Arthur Andersen, LLP, Portland,
Oregon, independent public accountants, to serve as the Company's auditors for
the 1999 fiscal year. A representative of Arthur Andersen will be present at the
Annual Meeting to respond to questions from shareholders and will have the
opportunity to make a statement if he or she so desires.
OTHER MATTERS
The Board of Directors is not aware of any business to come before the
Annual Meeting other than those matters described in this Proxy Statement.
However, if any other matters should properly come before the Annual Meeting, it
is intended that proxies in the accompanying form will be voted in accordance
with the best judgment of the person or persons voting the proxies.
SHAREHOLDER PROPOSALS FOR THE 2000 ANNUAL MEETING
The Company must receive a shareholder proposal by December 15, 1999 to
consider it for inclusion in the Company's proxy statement and form of proxy
relating to the Company's Annual Meeting of Shareholders in 2000. In addition,
if the Company is not notified prior to February 28, 2000 that a shareholder
intends to present a proposal at the Annual Meeting in 2000, management of the
Company will have discretionary authority with respect to each proxy received by
it to vote on such matter. The Company's address for these purposes is P. O.
Box 1518, Longview, Washington 98632.
<PAGE>
FINANCIAL STATEMENTS
The Company's 1998 Annual Report to Shareholders, including financial
statements prepared in conformity with generally accepted accounting principles,
are being mailed to shareholders with these proxy materials. Any shareholder who
has not received a copy of such Annual Report may obtain a copy by writing the
Company. Such Annual Report is not to be treated as part of the proxy
solicitation material or as having been incorporated by reference.
WE URGE YOU TO SIGN AND RETURN THE ENCLOSED PROXYCARD AS PROMPTLY AS POSSIBLE,
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUALMEETING IN PERSON. IF YOU DO ATTEND
THE ANNUAL MEETING, YOU MAY THENWITHDRAW YOUR PROXY. THE PROXY MAY BE REVOKED AT
ANY TIME PRIOR TO ITSEXERCISE.
BY ORDER OF THE BOARD OFDIRECTORS
Donna P. Gardner
Vice President & Secretary/Treasurer
Longview, Washington
April 13, 1999
