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:
[ ] Preliminary proxy statement
[x] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
INTERWEST BANCORP, INC.
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(Name of Registrant as Specified in Its Charter)
INTERWEST BANCORP, INC.
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(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
N/A
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(2) Aggregate number of securities to which transactions applies:
N/A
- ----------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
N/A
- ----------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
N/A
- ----------------------------------------------------------------------------
[ ] 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:
N/A
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(2) Form, schedule or registration statement no.:
N/A
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(3) Filing party:
N/A
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(4) Date filed:
N/A
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<PAGE>
<PAGE>
December 17, 1996
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of
Shareholders of InterWest Bancorp, Inc., to be held at the Elks Club, 155
Northeast Ernst Street, Oak Harbor, Washington, on Tuesday, January 21, 1997,
at 2:00 p.m., local time.
The Notice of Annual Meeting of Shareholders and Proxy Statement
on the following pages describe the formal business to be transacted at the
meeting. During the meeting, we will also report on the operations of the
Company. Directors and Officers of the Company, as well as a representative
of Ernst & Young LLP, the Company's independent auditors, will be present to
respond to any questions our shareholders may have.
Please sign, date and return the enclosed proxy card. If you
attend the meeting, you may vote in person even if you have previously mailed
a proxy card.
We look forward to seeing you at the meeting.
Sincerely, Sincerely,
Barney R. Beeksma Stephen M. Walden
Chairman of the Board President and Chief
Executive Officer
<PAGE>
<PAGE>
INTERWEST BANCORP, INC.
275 Southeast Pioneer Way
Oak Harbor, Washington 98277
(360) 679-4181
- ----------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held on January 21, 1997
- ----------------------------------------------------------------------------
NOTICE IS HEREBY GIVEN that the 1997 Annual Meeting of Shareholders of
InterWest Bancorp, Inc. ("Company") will be held at the Elks Club, 155
Northeast Ernst Street, Oak Harbor, Washington, on Tuesday, January 21, 1997,
at 2:00 p.m., local time, for the following purposes:
(1) To elect four directors to three-year terms and one
director to a two-year term;
(2) To approve the adoption of the Company's 1996 Outside
Directors Stock Options-for-Fees Plan; and
(3) To consider and act upon such other matters as may
properly come before the meeting or any adjournments
thereof.
NOTE: The Board of Directors is not aware of any other business
to come before the meeting.
Any action may be taken on the foregoing proposals at the meeting
on the date specified above or on any date or dates to which, by original or
later adjournment, the meeting may be adjourned. Shareholders of record at
the close of business on December 5, 1996, are entitled to notice of and to
vote at the meeting and any adjournments or postponements thereof.
You are requested to complete and sign the enclosed form of proxy,
which is solicited by the Board of Directors, and to mail it promptly in the
enclosed envelope. The proxy will not be used if you attend the meeting and
vote in person.
BY ORDER OF THE BOARD OF DIRECTORS
MARGARET MORDHORST
SECRETARY
Oak Harbor, Washington
December 17, 1996
- ----------------------------------------------------------------------------
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES IN ORDER TO ENSURE A QUORUM. A SELF-ADDRESSED
ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED
IN THE UNITED STATES.
- ----------------------------------------------------------------------------
<PAGE>
<PAGE>
- ----------------------------------------------------------------------------
PROXY STATEMENT
OF
INTERWEST BANCORP, INC.
275 Southeast Pioneer Way
Oak Harbor, Washington 98277
(360) 679-4181
- ----------------------------------------------------------------------------
ANNUAL MEETING OF SHAREHOLDERS
January 21, 1997
- ----------------------------------------------------------------------------
This Proxy Statement is furnished in connection with the
solicitation of proxies by the Board of Directors of InterWest Bancorp, Inc.
("Company"), the holding company for InterWest Bank ("Bank"), to be used at
the 1997 Annual Meeting of Shareholders of the Company. The Annual Meeting
will be held at the Elks Club, 155 Northeast Ernst Street, Oak Harbor,
Washington on January 21, 1997, at 2:00 p.m., local time. This Proxy
Statement and the enclosed proxy card are being first mailed to shareholders
on or about December 17, 1996.
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VOTING AND PROXY PROCEDURE
- ----------------------------------------------------------------------------
Shareholders of record as of the close of business on December 5,
1996 are entitled to one vote for each share of common stock ("Common Stock")
of the Company then held. As of December 5, 1996, the Company had 8,005,742
shares of Common Stock issued and outstanding. 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 will be counted as shares present and entitled
to vote at the Annual Meeting for purposes of determining the existence of a
quorum. Broker non-votes will not be considered shares present and will not
be included in determining whether a quorum is present.
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 FOR
the nominees for directors set forth below and FOR adoption of the 1996
Outside Directors Stock Options-for-Fees Plan. If a shareholder attends the
Annual Meeting, he or she may vote by ballot.
Shareholders who execute proxies retain the right to revoke them
at any time. Proxies may be revoked by written notice delivered in person or
mailed to the Secretary of the Company or by filing a later 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 in attendance may request a ballot and vote in person, thereby
revoking a prior granted proxy.
If a shareholder is a participant in InterWest Bank's Employee
Stock Ownership Plan (the "ESOP"), the proxy card represents a voting
instruction to the trustees of the ESOP as to the number of shares in the
participant's plan account. Each participant in the ESOP may direct the
trustees as to the manner in which shares of Common Stock allocated to the
participant's plan account are to be voted. Unallocated shares of Common
Stock held by the ESOP and allocated shares for which no voting instructions
are received will be voted by the trustees.
The directors to be elected at the Annual Meeting will be elected
by a plurality of the votes cast by shareholders present in person or by
proxy and entitled to vote. 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 directors will be elected by a
plurality of votes cast. With respect to the proposal to approve the 1996
Outside Directors Stock Option-for-Fees Plan, shareholders may vote for the
proposal, against the proposal or may abstain from voting. Adoption of
<PAGE>
<PAGE>
the 1996 Outside Directors Stock Option-for-Fees Plan will require the
affirmative vote of a majority of shares of Common Stock present or
represented and entitled to vote at the Annual Meeting. Abstentions will be
counted as present and will have the effect of a vote against the proposal.
Broker non-votes will not be treated as entitled to vote and will have no
effect on the outcome.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
- ----------------------------------------------------------------------------
Persons and groups who beneficially own in excess of five percent
of the Company's Common Stock are required to file certain reports disclosing
such ownership pursuant to the Securities Exchange Act of 1934, as amended
("Exchange Act"). Based on such reports, management knows of no person who
owned more than five percent of the outstanding shares of Common Stock at
December 5, 1996. The following table sets forth, as of December 5, 1996,
information as to the shares of the Common Stock beneficially owned by each
director, by the Chief Executive Officer of the Company, by the Company's
executive officers who received salaries and bonuses in excess of $100,000
during the year ended September 30, 1996 ("named executive officers") and by
all executive officers and directors of the Company as a group.
Number of Shares Percent of Shares
Name Beneficially Owned (1) Outstanding
- -------------- ---------------------- ------------------
Directors
Barney R. Beeksma 259,906 3.3%
Gary M. Bolyard 67,301 *
Larry Carlson 67,722 *
Michael T. Crawford 6,000 *
Jean Gorton 6,800 *
Henry Koetje 113,965 1.4
C. Stephen Lewis 18,375 *
Clark H. Mock 3,000 *
Russel E. Olson 6,564 *
Vern Sims 182,900 2.3
Named Executive Officers
Stephen M. Walden** 201,754 2.5
Clark W. Donnell 86,697 1.1
Kenneth G. Hulett 64,651 *
H. Glenn Mouw 63,879 *
All Executive Officers 1,149,514 14.1
and Directors as a
Group (14 persons)
_______________
* Less than 1 percent of shares outstanding.
** Mr. Walden is also a director of the Company.
(1) In accordance with Rule 13d-3 under the Exchange Act, a person is deemed
to be the beneficial owner, for purposes of this table, of any shares of
Common Stock if he or she has voting and/or investment power with
respect to such security. The table includes shares owned by spouses,
other immediate family members in trust, shares held in retirement
accounts or funds for the benefit of the named individuals, and other
forms of ownership, over which shares the persons named in the table
possess voting and/or investment power. The amounts shown also include
the following amounts of Common Stock which the indicated individuals
have the right to acquire within 60 days of December 5, 1996 through the
exercise of stock options
-2-
<PAGE>
<PAGE>
granted pursuant to the Company's stock option plans: Mr. Beeksma,
3,625; Mr. Bolyard, 14,100; Mr. Carlson, 0; Mr. Crawford, 2,500; Ms.
Gorton, 2,875; Mr. Koetje, 0; Mr. Lewis, 2,875; Mr. Mock, 2,000; Mr.
Olson, 2,875; Mr. Sims, 0; Mr. Walden, 41,400; Mr. Donnell, 28,175; Mr.
Hulett, 28,175; Mr. Mouw, 28,175; and all executive officers and
directors as a group, 156,775. Shares held in accounts under the Bank's
ESOP, as to which the holders have voting power but not investment
power, are also included as follows: Mr. Beeksma, 39,428 shares; Mr.
Walden, 26,513 shares; Mr. Donnell, 10,449 shares; Mr. Hulett, 10,838
shares; Mr. Mouw, 12,426 shares; and all executive officers and
directors as a group, 99,654 shares.
- ----------------------------------------------------------------------------
PROPOSAL I - ELECTION OF DIRECTORS
- ----------------------------------------------------------------------------
The Company's Board of Directors is currently composed of eleven
members. The Company's bylaws provide that directors will be elected for
three-year staggered terms with approximately one third of the directors
elected each year. At the Annual Meeting, four directors will be elected to
the class of directors whose terms end in 2000, and one director will be
elected to the class of directors whose terms end in 1999. Barney R.
Beeksma, Larry Carlson, C. Stephen Lewis and Russel E. Olson, all of whom are
presently serving as directors of the Company, have been nominated for
election to the term ending in 2000. Gary M. Bolyard has been nominated by
the Board of Directors for election to the class of directors whose terms end
in 1999. Messrs. Bolyard and Carlson were elected as directors by the Board
of Directors in August of 1996 in connection with the Company's acquisition
of Central Bancorporation. To satisfy the requirement that the classes of
directors be as nearly as equal as possible, Mr. Bolyard has agreed to stand
for election for a two year term ending in 1999.
It is intended that the proxies solicited by the Board of
Directors will be voted for the election of the above named nominees. If any
nominee is unable to serve, the shares represented by all valid proxies will
be voted for the election of such substitute as the Board of Directors may
recommend. At this time the Board of Directors knows of no reason why the
nominees might be unavailable to serve.
The Board of Directors recommends a vote "FOR" the election of
Messrs. Beeksma, Bolyard, Carlson, Lewis and Olson.
The following table sets forth certain information regarding the
nominees for election at the Annual Meeting, as well as information regarding
those directors continuing in office after the Annual Meeting.
Year First
Elected Term to
Name Age Director(1) Expire
- --------------------- ----- ------------ ----------
BOARD NOMINEES
Barney R. Beeksma 64 1974 2000(2)
Gary M. Bolyard 60 1996 1999(2)
Larry Carlson 64 1996 2000(2)
C. Stephen Lewis 54 1988 2000(2)
Russel E. Olson 65 1988 2000(2)
(footnotes on following page)
<PAGE>
<PAGE>
Year First
Elected Term to
Name Age Director(1) Expire
- -------------------- ----- ------------ ----------
DIRECTORS CONTINUING IN OFFICE
Michael T. Crawford 58 1994 1998
Jean Gorton 62 1991 1998
Henry Koetje 73 1957 1999
Clark H. Mock 60 1993 1999
Vern Sims 71 1976 1998
Stephen M. Walden 53 1988 1999
_______________
(1) Includes service on the Board of Directors of the Bank.
(2) Assuming the individual is re-elected.
The present principal occupation and other business experience
during the last five years of each nominee for election and each director
continuing in office is set forth below:
BARNEY R. BEEKSMA has been associated with the Bank since 1960.
He currently serves as the Chairman of the Board after retiring from the
position of President and Chief Executive Officer of the Bank in January
1990. Mr. Beeksma served as a representative for the 10th District in the
Washington State legislature from 1994 through 1996. Mr. Beeksma formerly
served as a director of the Seattle Branch of the Federal Reserve Bank of San
Francisco and was actively involved with the U.S. League of Savings
Institutions (now America's Community Bankers) having served as Chairman of
the organization from November 1988 to November 1989.
GARY M. BOLYARD currently serves as Vice Chairman/Commercial
Banking and a director of the Company and the Bank, positions he has held
since August 1996. Prior to that time, Mr. Bolyard was President, Chief
Executive Officer and a Director of Central Bancorporation and Central
Washington Bank and a Director of North Central Washington Bank.
LARRY CARLSON is a partner in the law firm of Carlson Drewelow &
McMahon, Inc. PS, in Wenatchee, Washington. Mr. Carlson previously served on
the Board of Directors of Central Bancorporation and Central Washington Bank.
MICHAEL T. CRAWFORD is a Vice President, General Manager of
Concrete Nor'West, a division of Miles Sand & Gravel Co., Inc., with which he
has been associated since 1968.
JEAN GORTON is Senior Vice President of Planning for Trillium
Corporation, Bellingham, Washington, a land development and resource
management firm, with which she has been associated since 1983. For
1996-1997 she is serving as a loaned executive to the College of Business and
Economics at Washington State University in Pullman, Washington.
HENRY KOETJE is a shareholder and part-time employee of Koetje
Agency, Inc., an insurance and real estate agency located in Oak Harbor,
Washington. Mr. Koetje is currently serving as a director and Chairman of
the Board of Island Title Co. located in Oak Harbor, Washington.
C. STEPHEN LEWIS is President and Chief Executive Officer of
Weyerhaeuser Real Estate Company, a real estate construction and development
subsidiary of the Weyerhaeuser Corporation with which he has been associated
since 1970.
-4-
<PAGE>
<PAGE>
CLARK H. MOCK is a management consultant in banking and real
estate having retired in May 1993 as Executive Vice President and Chief
Credit Officer of Seattle First National Bank. Mr. Mock's career with
Seattle First National Bank covered all phases of credit administration
together with the disposition of problem loans and assets.
RUSSEL E. OLSON retired in December 1994 as Vice President of
Finance and Treasurer for the Puget Sound Power & Light Company located in
Bellevue, Washington, an electric company with which he had been associated
for over 35 years.
VERN SIMS is the principal owner, President and Chairman of Vern
Sims Ford, Inc., a Ford dealership in Sedro-Woolley, Washington and is a part
owner, President and Chairman of Honda dealerships in Mount Vernon,
Wenatchee, and Bellingham, Washington.
STEPHEN M. WALDEN is President and Chief Executive Officer of the
Company and the Bank. Mr. Walden started his career at the Bank in 1966 and
became Vice President in 1974, Senior Vice President in 1977, Executive Vice
President in 1984, President and Chief Operating Officer in 1988 and
President and Chief Executive Officer in January 1990. He became President
and Chief Executive Officer of the Company upon its formation in 1995.
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MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
- -----------------------------------------------------------------------------
The Boards of Directors of the Company and the Bank conduct their
business through meetings of the Boards and through their committees. During
the fiscal year ended September 30, 1996, the Board of Directors of the
Company held 12 meetings and the Board of Directors of the Bank held 15
meetings. No director of the Company or the Bank attended fewer than 75
percent of the total meetings of the Boards and committees on which such
person served during this period.
The Board of Directors of the Company has an Audit Committee
currently consisting of Messrs. Olson (Chairman), Mock, Crawford, Carlson and
Ms. Gorton. The purpose of the Committee is to provide direction and
oversight to the Internal Auditor and to review the examinations of the
Company and the Bank by federal and state regulatory authorities and the
audit by the independent auditing firm. The Audit Committee met five times
during the 1996 fiscal year.
The Board of Directors of the Company has an Executive Committee
currently consisting of Messrs. Beeksma (Chairman), Sims, Koetje, Olson,
Bolyard and Walden. The Committee acts as a decision-making body in lieu of
the entire Board of Directors. The Executive Committee meets on an as-needed
basis. The Executive Committee met four times during the year ended
September 30, 1996.
The Board of Directors has a Compensation and Stock Option
Committee, consisting of Messrs. Sims (Chairman), Lewis, Koetje and Beeksma.
The purpose of the Compensation and Stock Option Committee is to act as an
ongoing advisory group to the Board of Directors on executive compensation
policies and procedures and other compensation-related items that are
corporate in nature (i.e., Bank-wide profit-sharing plans, stock option
plans, benefit plans, etc.). The Committee meets annually or on an as-needed
basis and met three times during the year ended September 30, 1996.
The Board of Directors of the Company has appointed a Nominating
Committee consisting of Messrs. Koetje (Chairman), Walden and Sims. The
Nominating Committee is responsible for selecting nominees for election as
director except that the Board of Directors shall act as a nominating
committee for selecting management nominees for election as directors.
-5-
<PAGE>
<PAGE>
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DIRECTORS' COMPENSATION
- -----------------------------------------------------------------------------
Currently, each director of the Company is also a director of the
Bank. Directors of the Company received no additional compensation for
attendance at any meeting of the Company's Board of Directors or committees
thereof during the year ended September 30, 1996. Members of the Bank's
Board of Directors receive $800 for attendance at each of the first five
monthly Board meetings attended in a semi-annual period, except for Mr.
Beeksma and Mr. Walden who do not receive any fees for service on the Bank's
Board of Directors. Directors also receive $200 for each committee meeting
attended held on the day of a regular Board meeting or a special Board
meeting held by telephone conference call and $400 for attendance at a
special Board meeting or a committee meeting held on a day other than the day
of a regular Board meeting.
- -----------------------------------------------------------------------------
EXECUTIVE COMPENSATION
- -----------------------------------------------------------------------------
Summary Compensation Table. The following table sets forth the
compensation received by the Chief Executive Officer of the Company and the
named executive officers for each of the three fiscal years ended September
30, 1996. All compensation is paid by the Bank.
<PAGE>
<TABLE>
Long-Term
Compensation
Annual Compensation Awards
-------------------------------- -------------
Securities
Name and Other Annual Underlying All Other
Position Year Salary($) Bonus($) Compensation($)Options(#) Compensation($)
- -------------------- ---- --------- -------- -------------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Stephen M. Walden 1996 273,239 74,565 22,500(1) 2,500 13,626(2)
President and Chief 1995 163,749 73,024 22,125 -- 12,000
Executive Officer 1994 154,596 75,520 19,375 -- 12,514
Clark W. Donnell 1996 162,544 34,263 -- 2,500 12,847(3)
Executive Vice 1995 98,745 31,920 -- -- 10,453
President 1994 86,502 32,006 -- -- 9,480
Kenneth G. Hulett 1996 136,509 29,815 -- 2,500 10,787(4)
Executive Vice 1995 85,377 29,868 -- -- 9,696
President 1994 84,377 31,191 -- -- 9,326
H. Glenn Mouw 1996 152,014 32,768 -- 2,500 12,016(5)
Executive Vice 1995 95,765 31,808 -- -- 10,206
President 1994 88,254 32,899 -- -- 9,694
_____________
(1) Includes contribution by the Bank of $1,700 to a non-qualified deferred compensation arrangement and
an elective deferral contribution by Mr. Walden of $20,800.
(2) Includes contributions to the Bank's ESOP of $8,516 and to the Bank's Salary Deferral 401(k) Plan and
Trust ("401(k) Plan") of $5,110.
(3) Includes contributions to the Bank's ESOP of $8,029 and to the Bank's 401(k) Plan of $4,818.
(4) Includes contributions to the Bank's ESOP of $6,742 and to the Bank's 401(k) Plan of $4,045.
(5) Includes contributions to the Bank's ESOP of $7,510 and to the Bank's 401(k) Plan of $4,506.
</TABLE>
<PAGE>
Employment Agreements. The Bank has entered into employment
contracts with Messrs. Walden, Mouw, Hulett and Donnell. The employment
agreements provide for severance benefits in the event employment is
terminated following a change in control of the Bank. Under these
agreements, a change in control is defined generally to include a merger
involving the Bank, an acquisition of the Bank by another institution or
entity, a sale of substantially all of the assets of the Bank, a change in
beneficial ownership of 25 percent of the Bank stock
-6-
<PAGE>
<PAGE>
or a change in the majority of the Board of Directors. Upon a change in
control, Messrs. Walden, Mouw, Hulett and Donnell shall be entitled to a
position of the same or similar responsibility or authority and in the same
geographical areas and total annual compensation and other benefits equal to
or in excess of the total annual compensation and benefits available to the
employee during the prior 12 months. The employer may terminate the
agreement after a change in control, but will be obligated to pay the
employee twice the employee's average annual compensation for the past five
years.
Severance Pay Agreements. The Bank entered into Severance Pay
Agreements (the "Severance Agreement") with Messrs. Walden, Mouw, Hulett and
Donnell to provide these employees with severance pay in the event of
termination. The terms of the Severance Agreements provide the employee an
amount equal to three week's total compensation for each 12 months of
employment with the Bank and, as the case may be, its successors. Total
severance would not, however, exceed an amount equal to an employee's total
compensation during the prior 12-month period.
Option Grants in Last Fiscal Year. The following table sets forth
information concerning the grant of stock options to each of the named
executive officers during the fiscal year ended September 30, 1996.
Individual Grants
------------------------------------
Percent
Number of of Total
Securities Options
Underlying Granted to Exercise
Options Employees in Price
Name Granted(1) Fiscal Year ($/sh)
- ----------------- ---------- ------------ --------
Stephen M. Walden 2,500 4.3% 19.50
Clark W. Donnell 2,500 4.3 19.50
Kenneth G. Hulett 2,500 4.3 19.50
H. Glenn Mouw 2,500 4.3 19.50
Potential Realizable Value at
Assumed Annual Rates of Stock Price
Appreciation for Option Term(2)
----------------------------------
Expiration
Date 5%($) 10%($)
---------- ------ ------
12/19/05 30,659 77,695
12/19/05 30,659 77,695
12/19/05 30,659 77,695
12/19/05 30,659 77,695
(1) Each option granted vests at the rate of 20 percent per
annum. Options will become immediately exercisable in the
event of a change in control of the Company. Each option
was granted under the Company's 1993 Incentive Stock Option
Plan and has an exercise price equal to the fair market
value of the Common Stock on the date of grant. Each of
the indicated options was granted on December 19, 1995.
(2) The dollar gains under these columns result from
calculations required by the Securities and Exchange
Commission's rules and are not intended to forecast future
price appreciation of the Common Stock of the Company. It
is important to note that options have value to the listed
executives only if the stock price increases above the
exercise price shown in the table during the effective
option period. In order for the listed executives to
realize the potential values set forth in the 5% and 10%
columns in the table, the price per share of the Company's
Common Stock would be approximately $31.76 and $50.58,
respectively, as of the expiration date of the options.
-7-
PAGE
<PAGE>
Option Exercise/Value Table. The following information with
respect to options exercised during the fiscal year ended September 30, 1996,
and remaining unexercised at the end of the fiscal year, is presented for the
Chief Executive Officer and the named executive officers.
Shares
Acquired on Value
Name Exercise (#) Realized($)
Stephen M. Walden 2,703 $55,060
Clark W. Donnell 1,725 35,138
Kenneth G. Hulett 1,725 35,138
H. Glenn Mouw 1,725 35,138
Value of Unexercised
Number of Securities In-the-Money Options
Underlying Unexercised Options at Fiscal Year End($)
Exercisable Unexercisable Exercisable Unexercisable
41,400 7,100 $908,178 $112,952
28,175 5,950 616,446 90,964
28,175 5,950 616,446 90,964
28,175 5,950 616,446 90,964
Notwithstanding anything to the contrary set forth in any of the
Company's previous filings under the Securities Act of 1933, as amended, or
the Exchange Act that might incorporate future filings, including this Proxy
Statement, in whole or in part, the following Report of the Compensation
Committee and Performance Graph shall not be incorporated by reference into
any such filings.
Report of the Compensation Committee. The Compensation and Stock
Option Committee of the Board of Directors is responsible for establishing
and implementing all compensation policies of the Bank and its subsidiaries.
The Committee is also responsible for evaluating the performance of the Chief
Executive Officer of the Bank and approving an appropriate compensation
level. The Chief Executive Officer evaluates the performance of the
executive vice presidents of the Bank and recommends to the Compensation and
Stock Option Committee individual compensation levels for approval by the
Committee.
The Committee believes that a compensation plan for executive
officers should take into account management skills, long-term performance
results and shareholder returns. The principles underlying compensation
policies are: (i) to attract and retain key executives who are highly
qualified and are vital to the long-term success of the Bank and its
subsidiaries; (ii) to provide levels of compensation competitive with those
offered throughout the banking industry; (iii) to motivate executives to
enhance long-term shareholder value by helping them build their own ownership
in the corporation; and (iv) to integrate the compensation program with the
Bank's long-term strategic planning and measurement processes.
The Bank's current compensation plan involves a combination of
salary, bonuses to reward short-term performance, deferred compensation, and
grants of stock options to encourage long-term performance. The salary
levels of executive officers are designed to be competitive within the
banking and financial services industries. The Committee annually reviews
the Bank's industry peer group and the Washington Financial Industry Survey
and the America's Community Banker's Survey of salaries to determine
competitive salary levels. Individual annual performance is reviewed to
determine appropriate salary adjustments.
A performance bonus plan is in effect for the officers of the Bank
which is designed to compensate for performance. The plan is designed to
provide for bonuses of up to 60 percent of salary for the chief executive
officer, up to 45 percent of salary level for executive vice presidents, up
to 25 percent of salary for vice presidents, and up to 10 percent of salary
for certain other officers. Approximately half of the performance bonus is
based on quantifiable data such as return on average equity and the Bank's
efficiency ratio. The remainder is based on subjective evaluations of
performance.
The Compensation and Stock Option Committee has awarded stock
options to employees of the Bank and its subsidiaries in accordance with the
provisions of the 1993
-8-
PAGE
<PAGE>
Incentive Stock Option Plan approved by the Board of Directors and the
shareholders. Stock options are the Bank's primary long-range compensation
program designed to reward executive performance consistent with performance
that benefits shareholders. Awards of stock options are intended to provide
executives with increased motivation and incentive to exert their best
efforts on behalf of the company by enlarging their personal stake in its
success through the opportunity to increase their stock ownership in the
company. Options issued to executives are at a price equal to the average of
the closing bid and ask prices of the Common Stock on the date of the grant
in order to ensure that any value derived from the grant is realized by
shareholders generally. The amount of options granted to an executive
officer is based on the officer's performance and relative responsibilities
within the Bank. Options may have a deferred vesting and will not be
exercisable prior to vesting, but generally are not exercised until the end
of the option period.
During the fiscal year ended September 30, 1996, the Compensation
and Stock Option Committee granted stock options totaling 58,200 shares to
Bank employees.
During the fiscal year ended September 30, 1996, the base salary
of Stephen M. Walden, President and Chief Executive Officer of the Bank, was
$273,239. In addition to this, he received a performance bonus of $74,565
and was credited with $36,857 in deferred compensation. This resulted in
total compensation of $384,661, which represents a 48.6 percent increase from
the previous year. The performance bonus was paid based on his meeting the
performance criteria established by the Committee in the performance bonus
plan. The Committee believes the increase in compensation is appropriate
based on competitive salary surveys and the excellent performance of the
Bank.
The Compensation and Stock Option Committee also recommends to the
Board of Directors the amount of fees paid for service on the Board. The
Committee recommended an increase in directors' fees from $750 to $800 for
attendance at each of the first five monthly Board meetings attended in a
semi-annual period.
Compensation and Stock Option Committee
Vern Sims (Chairman)
Barney R. Beeksma
Henry Koetje
C. Stephen Lewis
Compensation Committee Interlocks and Insider Participation. Mr.
Beeksma, a member of the Compensation and Stock Option Committee, was
formerly President and Chief Executive Officer of the Bank. He retired from
those positions in 1990. Although the Committee approved compensation paid
to executive officers, the entire board of directors of the Bank sets the
compensation for Mr. Beeksma as Chairman of the Board of Directors.
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<PAGE>
Performance Graph. The following graph compares the cumulative
total shareholder return on the Company's Common Stock with the cumulative
total return on the Nasdaq (U.S. Companies) Index and peer groups of the SNL
Thrift Index, the SNL $1-5 Billion Asset Thrift Index and the SNL Western
Thrift Index. Total return assumes the reinvestment of all dividends.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN *
9/30/91 9/30/92 9/30/93 9/30/94 9/30/95 9/30/96
------- ------- ------- ------- ------- -------
InterWest
Bancorp,
Inc. 100 114 174 163 179 348
Nasdaq
(U.S.
Companies)
Index 100 112 147 148 204 243
SNL Thrift
Index 100 118 186 205 270 326
SNL $1-5
Billion
Thrift
Index 100 131 220 243 323 390
SNL Western
Thrift
Index 100 90 124 119 153 187
* Assumes that the value of the investment in the Company's Common Stock and
each index was $100 on September 30, 1991, and that all dividends were
reinvested.
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COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
- -----------------------------------------------------------------------------
Section 16(a) of the Exchange Act requires the Company's executive
officers and directors, and persons who beneficially own more than 10 percent
of any registered class of the Company's equity securities, to file reports
of ownership and changes in ownership with the Securities and Exchange
Commission. Executive officers, directors and greater than 10 percent
shareholders are required by regulation to furnish the Company with copies of
all Section 16(a) forms they file.
Based solely on a review of the copies of such forms it has
received and written representations provided to the Company by the above
referenced persons, the Company believes that during the fiscal year ended
September 30, 1996, all filing requirements applicable to its reporting
officers, directors and greater than ten percent beneficial owners were
properly and timely complied with, except that Messrs. Koetje, Olson, Sims,
Donnell, Hulett, Mouw and Bolyard each filed a late statement of change in
beneficial ownership on Form 4, Mr. Beeksma filed two late reports on Form 4
and Mr. Walden filed three late reports on Form 4.
- -----------------------------------------------------------------------------
TRANSACTIONS WITH MANAGEMENT
- -----------------------------------------------------------------------------
Federal regulations require that all loans or extensions of credit
to executive officers and directors must be made on substantially the same
terms, including interest rates and collateral, as those prevailing at the
time for comparable transactions with other persons and must not involve more
than the normal risk of repayment or present other unfavorable features. The
Bank is therefore prohibited from making any new loans or extensions of
credit to the Bank's executive officers and directors at different rates or
terms than those offered to the general public and has adopted a policy to
this effect. In addition, loans made to a director or executive officer in
an amount that, when aggregated with the amount of all other loans to such
person and his or her related interests, are in excess of the greater of
$25,000 or 5 percent of the Bank's capital and surplus (up to a maximum of
$500,000) must be approved in advance by a majority of the disinterested
members of the Board of Directors.
- -----------------------------------------------------------------------------
PROPOSAL II -- RATIFICATION OF OUTSIDE DIRECTORS
STOCK OPTIONS-FOR-FEES PLAN
- -----------------------------------------------------------------------------
On November 19, 1996, the Board of Directors of the Company
adopted, subject to stockholder approval, the InterWest Bancorp, Inc. 1996
Outside Directors Stock Options-for-Fees Plan (the "1996 Director Plan").
The Board of Directors believes that it will be advantageous to the Company
and its stockholders to maintain a stock option program for those directors
of the Company who are not also employees of the Company or of any
subsidiary. The purpose of the 1996 Director Plan is to provide such
directors with an increased incentive to make significant and extraordinary
contributions to the long-term performance and growth of the Company and its
subsidiaries, to join the interests of such directors with the interests of
the Company's stockholders, and to facilitate attracting and retaining
non-employee directors of exceptional ability.
Under the 1996 Director Plan, options to purchase up to 25,000
shares of Common Stock of the Company may be granted to present and
prospective directors of the Company. Subject to shareholder approval of the
1996 Director Plan, assuming that all directors elect to receive options in
lieu of all cash compensation, options covering 4,000 shares of Common Stock
would be granted, in the aggregate, to eligible directors in lieu of
otherwise payable cash compensation during calendar year 1997.
The full text of the 1996 Director Plan is set forth as Exhibit A
to this Proxy Statement. The major features of the 1996 Director Plan are
summarized below, but this summary is qualified in its entirety by reference
to the actual text of the 1996 Director Plan.
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<PAGE>
Description of the 1996 Director Plan. Each member of the
Company's Board of Directors who is not an employee of the Company or any
subsidiary of the Company may participate in the 1996 Director Plan. In
connection with adoption of the 1996 Director Plan, the Board has fixed the
regular retainer fee for directors at $8,000 per year over the five-year term
of the plan. The plan provides that each eligible director may elect from
among three options: (i) receive the $8,000 retainer in cash, payable
quarterly, (ii) receive an option covering 250 shares of Common Stock and a
$4,000 retainer in cash, payable quarterly, or (iii) receive an option
covering 500 shares of Common Stock.
Pursuant to director elections, which must be submitted by
December 31 of each year during the term of the plan, directors will be
granted options on the first business day of the calender year. All stock
options awarded under the 1996 Director Plan will have an exercise price
equal to 100 percent of the fair market value of the Common Stock on the date
of grant. For purposes of the 1996 Director Plan, the "fair market value" of
the Common Stock on any day is the closing price of the Common Stock on the
Nasdaq Stock Market.
Each option granted under the 1996 Director Plan will become
exercisable on the first anniversary of the grant date. If a director leaves
the Board prior to such date, all unexercisable options will be cancelled.
Each option granted under the 1996 Director Plan has a five-year term. If a
director terminates service, other than for cause, any options held by a
director upon termination remain exercisable for a 90-day period.
Notwithstanding the foregoing, if a director terminates as a result of
reaching the Board's mandatory retirement age or, with Committee approval,
for any other reason other than voluntary resignation or termination for
cause, each option will remain exercisable for a three-year period.
Administration. The 1996 Director Plan is administered by a
Committee (the "Committee") appointed by the Board of Directors. Shares
covered by canceled or expired options under the 1996 Director Plan are again
available for option and sale thereunder. The plan authorizes the Committee
to make appropriate adjustments to outstanding options in the event of a
stock split, stock dividend or similar corporate event.
Exercise of Stock Options. At the time of the exercise of any
option granted pursuant to the 1996 Director Plan, the director must pay the
full option price for all shares purchased in cash, or, with the consent of
the Committee, in Common Stock. The plan also authorizes the "cashless
exercise" of options in accordance with procedures established by the
Committee.
Sequential Exercise. Successive stock options may be granted to
the same director whether or not any stock option previously granted to such
director remains unexercised. An option may be exercised even though stock
options previously granted to such director remain unexercised.
Non-Transferability of Stock Options. Except to the extent
authorized by the Committee, no stock option granted under the 1996 Director
Plan may be transferred by a director other than by will or by the laws of
descent and distribution, and such stock option is exercisable, during the
lifetime of the director, only by the director.
Amendment or Termination of the Plan. The Board of Directors may
terminate or amend the 1996 Director Plan at any time, provided that no
amendment may be made without shareholder approval if such approval is
necessary to comply with any tax or regulatory requirement.
Unless sooner terminated by the Board of Directors, the 1996
Director Plan will terminate on November 19, 2001. The termination of the
1996 Director Plan will not affect the validity of any stock option
outstanding on the date of termination.
Federal Income Tax Consequences. All options granted under the
1996 Director Plan will be nonqualified stock options which are not intended
to comply with the requirements of Section 422 of the Internal Revenue Code
of 1986, as amended. A director who is granted a nonqualified option
generally will not realize any taxable income upon the grant of the option.
Upon exercise of the option, the amount by which the fair market value of the
shares at the time of exercise exceeds the option
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<PAGE>
<PAGE>
price is treated as compensation (ordinary income) received by the director.
The Company will ordinarily be entitled to a corresponding tax deduction at
the time that the director realizes compensation income. Upon a subsequent
disposition by sale of any of the shares acquired, the director recognizes
a long-term or short-term capital gain or loss equal to the difference
between any amount realized and the director's basis in the shares.
Vote Required and Board of Directors' Recommendation. THE BOARD
OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE 1996 OUTSIDE DIRECTORS
STOCK OPTIONS-FOR-FEES PLAN. The affirmative vote of a majority of the votes
present in person or represented by proxy at the Annual Meeting will be
required to approve the 1996 Outside Directors Stock Options-for-Fees Plan.
- -----------------------------------------------------------------------------
AUDITORS
- -----------------------------------------------------------------------------
The Board of Directors has appointed Ernst & Young LLP,
independent public accountants, to serve as the Company's auditors for the
fiscal year ending September 30, 1997. A representative of Ernst & Young LLP
is expected to be present at the Annual Meeting to respond to appropriate
questions from shareholders and will have the opportunity to make a statement
if he or she so desires.
The Company's former independent public accountants were dismissed
by the Bank on February 21, 1995. The former accountants' report on the
financial statements of the Bank for the past two years did not contain an
adverse opinion, and was not qualified or modified as to uncertainty, audit
scope or accounting principles. The decision to change accountants was
recommended by the Bank's Audit Committee and approved by the Bank's Board of
Directors. The Bank's Board of Directors approved the engagement of Ernst &
Young LLP on February 21, 1995 and entered into an engagement letter with
Ernst & Young LLP on March 20, 1995. In connection with the audits
of the two most recent fiscal years and the subsequent first quarter of
fiscal 1995 preceding the engagement of Ernst & Young LLP there were no
disagreements with the former accountants on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope or
procedure which, if not resolved to the satisfaction of the former
accountants, would have caused it to make reference to the subject matter of
the disagreement in connection with its report.
- -----------------------------------------------------------------------------
OTHER MATTERS
- -----------------------------------------------------------------------------
The Board of Directors is not aware of any business to come before
the Annual Meeting other than those matters described above 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 respect thereof in accordance with the judgment of the person or
persons voting the proxies.
- -----------------------------------------------------------------------------
SHAREHOLDER PROPOSALS
- -----------------------------------------------------------------------------
In order to be eligible for inclusion in the proxy materials of
the Company for next year's Annual Meeting of Shareholders, any shareholder
proposal to take action at such meeting must be received at the Company's
main office at 275 Southeast Pioneer Way, Oak Harbor, Washington no later
than August 19, 1997. Any such proposals shall be subject to the
requirements of the proxy rules adopted under the Exchange Act.
In addition, the Company's Bylaws provide that if a shareholder
intends to nominate a candidate for election as a director, the shareholder
must deliver written notice of his or her intention to the Secretary of the
Company not less than thirty days nor more than sixty days prior to the date
of a meeting of shareholders; provided, however, that if less than thirty-one
days' notice of the meeting is given to shareholders, such written notice
must be delivered to the Secretary of the Company not later than the close of
the tenth day following the
-13-
<PAGE>
<PAGE>
day on which notice of the meeting was mailed to shareholders. The notice
must set forth (i) the name, age, business address and, if known, residence
address of each nominee for election as a director, (ii) the principal
occupation or employment of each nominee, (iii) the number of shares of stock
of the corporation which are beneficially owned by each such nominee, (iv)
such other information as would be required to be included in a proxy
statement soliciting proxies for the election of the proposed nominee
pursuant to the Exchange Act, including, without limitation, such person's
written consent to being named in the proxy statement as a nominee and to
serving as a director, if elected, and (v) as to the shareholder giving such
notice (a) his or her name and address as they appear on the Company's books
and (b) the class and number of shares of the Company which are beneficially
owned by such shareholder.
- -----------------------------------------------------------------------------
MISCELLANEOUS
- -----------------------------------------------------------------------------
The cost of solicitation of proxies will be borne by the Company.
The Company will reimburse brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending proxy
materials to the beneficial owners of the Common Stock. In addition to
solicitations by mail, directors, officers and regular employees of the
Company may solicit proxies personally or by telecopier or telephone at their
regular salary or hourly compensation.
The Company's 1996 Annual Report to Shareholders has been mailed
to all shareholders of record as of the close of business on December 5,
1996. Any shareholder who has not received a copy of such annual report may
obtain a copy by writing to the Company. Such annual report is not to be
treated as part of the proxy solicitation material or having been
incorporated herein by reference.
A copy of the Company's Form 10-K as filed with the Securities and
Exchange Commission will be furnished without charge to shareholders of
record as of December 5, 1996 upon written request to Margaret Mordhorst,
Secretary, InterWest Bancorp, Inc., 275 Southeast Pioneer Way, Oak Harbor,
Washington 98277.
BY ORDER OF THE BOARD OF DIRECTORS
MARGARET MORDHORST
SECRETARY
Oak Harbor, Washington
December 17, 1996
-14-
<PAGE>
<PAGE>
Exhibit A
InterWest Bancorp, Inc.
1996 Outside Directors Stock Options-for-Fees Plan
1. Purpose of Plan. The purpose of the Plan is to provide non-employee
directors of the Corporation with an increased incentive to make significant
and extraordinary contributions to the long-term performance and growth of
the Corporation and its Affiliates, to join the interests of non-employee
directors with the interests of the stockholders of the Corporation, and to
facilitate attracting and retaining non-employee directors of exceptional
ability.
2. Definitions. As used herein, the following definitions shall apply:
"Affiliate" shall mean any corporation in which the Corporation
owns, directly or indirectly, stock possessing more than fifty percent of the
combined voting power of all classes of stock.
"Board of Directors" shall mean the board of directors of the
Corporation.
"Committee" shall mean a committee of the Board of Directors
designated by the Board to administer the Plan.
"Common Stock" shall mean the common stock, $.20 par value per
share, of the Corporation.
"Corporation" shall mean InterWest Bancorp, Inc., a Washington
corporation, or any successor thereof.
"Director Notice" shall mean a written notice setting forth the
Participant's election under Section 4(b) of the Plan and delivered by a
Participant to the Corporation prior to the first day of the calendar year,
to be effective for such year or years as are specified in such notice. A
Director Notice shall be irrevocable for the current calendar year but may be
modified by a Participant with respect to a future year(s).
"Fair Market Value" shall mean, as of any date, the closing price
of the Corporation's Common Stock on the Nasdaq National Market System. If
the Common Stock is not traded on a national securities exchange or quoted on
the Nasdaq Stock Market, and there are not at least two brokerage companies
reporting a bid price per share on the Option Grant Date, then the Fair
Market Value shall be that value determined in good faith by the Committee in
such manner as it deems appropriate.
"Nonqualified Option" shall mean an option to purchase Common
Stock which meets the requirements set forth in the Plan but does not meet
the definition of an incentive stock option set forth in Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code").
"Option Grant Date" shall mean the first business day of each
calendar year following the effective date of the Plan.
"Option Price" shall mean the price at which a Nonqualified Option
may be exercised which shall be the Fair Market Value on the Option Grant
Date of such Nonqualified Option.
"Participant" shall mean a member of the Board of Directors who is
not an employee of the Corporation or an Affiliate.
"Plan" shall mean this InterWest Bancorp, Inc. 1996 Outside
Directors Stock Options-for-Fees Plan.
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"Total Director Fees" shall mean, with respect to any calendar
year, $8,000, as the retainer fee payable to an outside Director for service
on the Board of Directors of the Corporation.
3. Administration. The Plan shall be administered by the Committee.
Subject to the provisions of the Plan, the Committee is authorized to
interpret the Plan, to promulgate, amend and rescind rules and regulations
relating to the Plan and to make all other determinations necessary or
advisable for its administration. Interpretation and construction of any
provision of the Plan by the Committee shall be final and conclusive. Acts
approved by a majority of the members present at any meeting at which a
quorum is present, or acts unanimously approved in writing by the Committee,
shall be the acts of the Committee.
4. Annual Grants.
(a) Each Participant shall deliver a Director Notice to the
Corporation on or before the date specified in the Plan. During the term of
this Plan, on the first business day of each calendar year following the
effective date of the Plan, each Participant shall receive a Nonqualified
Option to the extent of the Participant's election in his or her Director
Notice in effect for such year. The option exercise price for each such
Nonqualified Option shall be the Option Price. If, with respect to any
calendar year, a Director Notice is not received from a Participant, the
Participant's Total Director Fees shall be payable in cash.
(b) Each Participant may specify one of the following
elections in a Director Notice:
(i) Option 1. Receive Total Director Fees in cash,
payable quarterly;
(ii) Option 2. Receive a Nonqualified Option covering two
hundred fifty (250) shares of Common Stock
and one-half of Total Director Fees in
cash, payable quarterly, or
(iii) Option 3. Receive a Nonqualified Option covering five
hundred (500) shares of Common Stock.
5. Vesting. Each Nonqualified Option issued pursuant to this Plan shall be
conditioned on the Participant continuing to serve as a member of the Board
for a period of one (1) year following the Option Grant Date. The
Nonqualified Option may not be exercised during said one (1) year period. If
a Participant ceases to be a member of the Board prior to the expiration of
the one (1) year period, all unexercisable Nonqualified Options held by the
Participant shall be cancelled as of the Participant's last day of service.
6. Indemnification of Committee Members. In addition to such other rights
of indemnification as they may have, the members of the Committee shall be
indemnified by the Corporation against the reasonable expenses, including
attorneys' fees, actually and necessarily incurred in connection with the
defense of any action, suit or proceeding, or in connection with any appeal
therein, to which they or any of them may be a party by reason of any action
taken or failure to act under or in connection with the Plan or any option
granted hereunder, and against all amounts paid by them in settlement thereof
(provided such settlement is approved by independent legal counsel selected
by the Corporation) or paid by them in satisfaction of a judgment in any such
action, suit or proceeding, except in relation to matters as to which it
shall be adjudged in such action, suit or proceeding that such Committee
member has acted in bad faith; provided, however, that within sixty (60) days
after receipt of notice of institution of any such action, suit or proceeding
a Committee member shall offer the Corporation in writing the opportunity, at
its own cost, to handle and defend the same.
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7. Maximum Number of Shares Subject to Plan. The maximum number of shares
with respect to which stock options may be granted under the Plan shall be
25,000 shares in the aggregate of Common Stock of the Corporation, which may
consist in whole or in part of the authorized and unissued or reacquired
Common Stock of the Corporation. If a stock option expires or terminates for
any reason without having been fully exercised, the number of shares with
respect to which the stock option was not exercised at the time of its
expiration or termination shall again become available for the grant of stock
options under the Plan, unless the Plan shall have been terminated.
The number of shares subject to each outstanding stock option, the
option price with respect to outstanding stock options, and the aggregate
number of shares remaining available under the Plan shall be subject to such
adjustment as the Committee, in its discretion, deems appropriate to reflect
such events as stock dividends, stock splits, recapitalization, mergers,
consolidations or reorganizations of or by the Corporation; provided,
however, that no fractional shares shall be issued pursuant to the Plan, no
rights may be granted under the Plan with respect to fractional shares, and
any fractional shares resulting from such adjustments shall be eliminated
from any outstanding stock option.
8. Written Agreement. Each stock option shall be evidenced by a written
agreement and shall contain such provisions as may be approved by the
Committee. Such agreements shall constitute binding contracts between the
Corporation and the Participant, and every Participant, upon acceptance of
such agreement, shall be bound by the terms and restrictions of the Plan and
of such agreement. The terms of each such agreement shall be in accordance
with the Plan, but the agreements may include such additional provisions and
restrictions determined by the Committee, provided that such additional
provisions and restrictions are not inconsistent with the terms of the Plan.
9. Payment of Stock Option Price. To exercise in whole or in part any stock
option granted hereunder, payment of the option price in full in cash shall
be made by the Participant for all shares so purchased. No Participant shall
have any of the rights of a stockholder of the Corporation under any stock
option until the actual issuance of shares to said Participant, and prior to
such issuance no adjustment shall be made for dividends, distributions or
other rights in respect of such shares, except as provided in Paragraph 7.
10. Exercise of Stock Options. A Participant may exercise a stock option,
in whole or in part, by delivery to the Corporation of written notice of the
exercise, in such form as the Committee may prescribe, accompanied by (i)
full payment for the shares with respect to which the stock option is
exercised, in cash, or (ii) in the sole discretion of the Committee,
irrevocable instructions to a stock broker to promptly deliver to the
Corporation full payment for the shares with respect to which the stock
option is exercised from the proceeds of the stock broker's sale of or loan
against the shares. Successive stock options may be granted to the same
Participant, whether or not the stock option(s) previously granted to such
Participant remain unexercised. A Participant may exercise a stock option,
if then exercisable, notwithstanding that stock options previously granted to
such Participant remain unexercised.
11. Nontransferability of Stock Options. Except to the extent authorized by
the Committee, no stock option granted under the Plan to a Participant shall
be transferable by such Participant otherwise than by will, or by the laws of
descent and distribution, and stock options shall be exercisable, during the
lifetime of the Participant, only by the Participant.
12. Term of Stock Options. If not sooner terminated, each stock option
granted hereunder shall expire upon the earlier to occur of the date five (5)
years from Option Grant Date or the date ninety (90) days (three (3) years in
the event a
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director attains the Board's mandatory retirement age or, with Committee
approval, upon termination of service for any other reason, other than
voluntary resignation or termination for cause) following the date upon which
the Participant ceases to be a member of the Board of Directors.
Notwithstanding the foregoing, all outstanding options held by a Participant
shall expire immediately upon the Participant's termination for cause. For
purposes of this plan, "termination for cause" shall mean termination because
of a Participant's personal dishonesty, incompetence, willful misconduct,
breach of fiduciary duty involving personal profit, intentional failure to
perform stated duties, or willful violation of any law, rule, or regulation
(other than traffic violations or similar offenses).
13. Investment Purpose. If the Committee in its discretion determines that
as a matter of law such procedure is or may be desirable, it may require a
Participant, upon any acquisition of stock hereunder and as a condition to
the Corporation's obligation to deliver certificates representing such
shares, to execute and deliver to the Corporation a written statement, in
form satisfactory to the Committee, representing and warranting that the
Participant's acquisition of shares of stock shall be for such person's own
account, for investment and not with a view to the resale or distribution
thereof and that any subsequent offer for sale or sale of any such shares
shall be made either pursuant to (a) a Registration Statement on an
appropriate form under the Securities Act of 1933, as amended (the
"Securities Act"), which Registration Statement has become effective and is
current with respect to the shares being offered and sold, or (b) a specific
exemption from the registration requirements of the Securities Act, but in
claiming such exemption the Participant shall, prior to any offer for sale or
sale of such shares, obtain either the Corporation's approval or a favorable
written opinion from counsel for or approved by the Corporation as to the
availability of such exemption. The Corporation may endorse an appropriate
legend referring to the foregoing restriction upon the certificate or
certificates representing any shares issued or transferred to the Participant
under this Plan.
14. No Right to Continued Service as a Director. Nothing contained in the
Plan or in any stock option granted pursuant to the Plan, nor any action
taken by the Committee hereunder, shall confer upon any Participant any right
with respect to continuation of service as a director of the Corporation or
an Affiliate nor interfere in any way with the right of the Corporation, any
Affiliate, or their stockholders to terminate such Participant's service as a
director at any time.
15. Withholding Payments. If upon the exercise of an option there shall be
payable by the Corporation any amount for income tax withholding, then in the
Committee's sole discretion, either the Corporation shall appropriately
reduce the amount of stock to be paid to the Participant or the Participant
shall pay such amount to the Corporation to reimburse it for such income tax
withholding. The Committee may, in its sole discretion permit Participants
to satisfy such withholding obligations, in whole or in part, by electing to
have the amount of Common Stock delivered or deliverable upon exercise of a
stock option appropriately reduced, or by electing to tender Common Stock
back to the Corporation subsequent to exercise of a stock option, to
reimburse the Corporation for such income tax withholding, subject to such
rules and regulations as the Committee may adopt. The Committee may make
such other arrangements with respect to income tax withholding as it shall
determine.
16. Effectiveness of Plan. The Plan shall be effective on the date the
Board of Directors adopts the Plan, provided that the stockholders of the
Corporation approve the Plan within twelve (12) months of its adoption by the
Board of Directors. Stock options may be granted prior to stockholder
approval of the Plan, but all such stock option grants shall be subject to
stockholder approval of the Plan. No stock option may be exercised prior to
stockholder approval. If the stockholders of the Corporation do not approve
the Plan within twelve (12) months of its adoption by the Board of Directors,
each Participant shall be entitled to receive in cash all director fees
previously applied toward the grant of Nonqualified Options hereunder.
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17. Termination, Duration, and Amendment of Plan.
(a) The Plan may be terminated at any time by the Board of
Directors of the Corporation. Unless sooner terminated, the Plan shall
terminate on the date five (5) years after its adoption by the Board of
Directors, and no stock options may be granted thereafter. The termination
of the Plan shall not affect the validity of any stock option outstanding on
the date of termination.
(b) The Board of Directors may amend, alter, suspend,
discontinue, or terminate the Plan or any portion thereof at any time;
provided that no such amendment, alteration, suspension, discontinuation or
termination shall be made without shareholder approval if such approval is
necessary to comply with any tax or regulatory requirement.
18. Rule 16b-3 Compliance. With respect to persons subject to Section
16 of the Exchange Act, transactions under this Plan are intended to comply
with all applicable terms and conditions of Rule 16b-3 and any successor
provisions. To the extent that any provision of the Plan or action by the
Committee or the Board of Directors fails to so comply, it shall be deemed
null and void, to the extent permitted by law and deemed advisable by the
Committee.
19. Governing Law. The validity, construction, and effect of the Plan
and any rules and regulations relating to the Plan shall be determined in
accordance with the laws of the State of Washington, without giving effect to
the choice of law principles thereof.
A-5
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REVOCABLE PROXY
INTERWEST BANCORP, INC.
ANNUAL MEETING OF SHAREHOLDERS
January 21, 1997
The undersigned hereby appoints Directors Koetje, Sims and Walden
of the Board of Directors of InterWest Bancorp, Inc. (the "Company") with
full powers of substitution to act as attorneys and proxies for the
undersigned, to vote all shares of Common Stock of the Company which the
undersigned is entitled to vote at the Annual Meeting of Shareholders to be
held at the Elks Club, 155 Northeast Ernst Street, Oak Harbor, Washington, on
Tuesday, January 21, 1997, at 2:00 p.m., local time, and at any and all
adjournments thereof, as follows:
VOTE WITHHELD
1. The election as director of the nominees ------- --------
listed below (except as marked to the [ ] [ ]
contrary below).
Barney R. Beeksma
Gary M. Bolyard
Larry Carlson
C. Stephen Lewis
Russell E. Olson
INSTRUCTIONS: To withhold your vote
for any individual nominee, write the
nominee's name on the line below.
_________________________________
VOTE AGAINST ABSTAIN
2. To approve the adoption of the ----- ------- -------
Company's 1996 Outside Directors [ ] [ ] [ ]
Stock Options-for-Fees Plan.
3. To consider and act upon such other matters as may properly come before
the Annual Meeting or any adjournments thereof.
The Board of Directors recommends a vote "FOR" the listed propositions.
This proxy also provides voting instructions to the Trustees of InterWest
Bank's Employee Stock Ownership Plan for participants with shares allocated
to their accounts.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED
THIS PROXY WILL BE VOTED FOR THE PROPOSITIONS STATED. IF ANY OTHER BUSINESS
IS PRESENTED AT SUCH MEETING, THIS PROXY WILL BE VOTED BY THE BOARD OF
DIRECTORS IN ITS BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD OF DIRECTORS
KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE ANNUAL MEETING. THIS PROXY
ALSO CONFERS DISCRETIONARY AUTHORITY ON THE BOARD OF DIRECTORS TO VOTE WITH
RESPECT TO APPROVAL OF THE MINUTES OF THE PRIOR MEETING OF SHAREHOLDERS, THE
ELECTION OF ANY PERSON AS DIRECTOR WHERE THE NOMINEES ARE UNABLE TO SERVE OR
FOR GOOD CAUSE WILL NOT SERVE, AND MATTERS INCIDENT TO THE CONDUCT OF THE
1997 ANNUAL MEETING.
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THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
Should the undersigned be present and elect to vote at the Meeting
or at any adjournment thereof and after notification to the Secretary of the
Company at the Annual Meeting of the shareholder's decision to terminate this
proxy, then the power of said attorneys and proxies shall be deemed
terminated and of no further force and effect.
The undersigned acknowledges receipt from the Company prior to the
execution of this proxy of Notice of Annual Meeting of Shareholders, a proxy
statement dated December 17, 1996 and an Annual Report to Shareholders.
Dated: ___________________, 199_
_________________________ __________________________
PRINT NAME OF SHAREHOLDER PRINT NAME OF SHAREHOLDER
________________________ _________________________
SIGNATURE OF SHAREHOLDER SIGNATURE OF SHAREHOLDER
Please sign exactly as your name appears on the enclosed card. When signing
as attorney, executor, administrator, trustee or guardian, please give your
full title. If shares are held jointly, each holder should sign.
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED
POSTAGE-PREPAID ENVELOPE.
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