<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER16, 1998
REGISTRATION NO. 333-_____
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------------------
FORM S-8
REGISTRATION UNDER THE SECURITIES ACT OF 1933
INTERWEST BANCORP, INC.
(Exact name of registrant as specified in its charter)
WASHINGTON 91-1691216
(State or other jurisdiction (I.R.S. Employer Identification Number)
of incorporation or organization)
275 S.E. PIONEER WAY, OAK HARBOR, WASHINGTON 98277
(Address of Principal Executive Offices) (Zip Code)
KITTITAS VALLEY BANCORP 1996 DIRECTOR STOCK OPTION PLAN
KITTITAS VALLEY BANCORP EMPLOYEE STOCK OPTION PLAN
(Full title of plan)
Please send copies of all communications to:
STEPHEN M. WALDEN STEPHEN M. KLEIN
InterWest Bancorp, Inc. Graham & Dunn PC
275 S.E. Pioneer Way 1420 Fifth Avenue, 33rd Floor
Oak Harbor, WA 98277 Seattle, WA 98101
(360) 679-4181 (206) 624-8300
CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------
Proposed
Proposed maximum maximum
Title of Amount offering aggregate Amount of
securities to to be price offering registration
be registered registered per share (1) price (1) fee
- ------------- ---------- ------------- --------- ---
Common shares, 48,000(2) $18.50 $888,000.00 $259.60
$.20 par value
- -------------------------------------------------------------------------------
NOTES:
1. Estimated solely for the purpose of calculating the amount of the
registration fee. Pursuant to Rule 457(c) under the Securities Act
of 1933, as amended ("Securities Act"), the price per share is
estimated to be $18.50 based upon the average of the high ($19.00)
and the low ($18.00) trading prices of the common stock, $.20 par
value per share ("Common Stock") of InterWest Bancorp, Inc. (the
"Registrant") as reported on the Nasdaq Stock Market on October 13,
1998.
2. Shares of Registrant's Common Stock issuable upon exercise of options
outstanding under the Kittitas Valley Bancorp 1996 Director Stock
Option Plan and the Kittitas Valley Bancorp Employee Stock Option Plan
(collectively, the "Plans"), together with an indeterminate number of
additional shares which may be necessary to adjust the number of
shares reserved for issuance under the Plans as a result of any future
stock split, stock dividend or similar adjustment of the outstanding
Common Stock, as provided in Rule 416(a) under the Securities Act.
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PART II. INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The documents listed below are incorporated by reference in the
Registration Statement. In addition, all documents subsequently filed by
Registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934, as amended ("Exchange Act") prior to Registrant's filing
of a post-effective amendment which indicates that all securities offered have
been sold or which deregisters all securities then remaining unsold, shall be
deemed to be incorporated by reference into this Registration Statement and to
be a part hereof from the date of filing of such documents.
(a) The Registrant's Current Report on Form 8-K, filed July 23, 1998,
which contains audited Supplemental Consolidated Financial Statements of the
Registrant for the fiscal year ended September 30, 1997, as restated to reflect
the Registrant's mergers with Pacific Northwest Bank, Pioneer Bancorp, Inc. and
Puget Sound Bancorp, Inc.
(b) All other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act since the end of the fiscal year covered by the Annual Report on
Form 10-K (fiscal year ended September 30, 1997), except to the extent restated
or superseded by the Current Report on Form 8-K referred to in (a) above.
(c) The description of the Common Shares contained in the Registrant's
Prospectus/ Proxy Statement dated July 16, 1998 and included in the Registrant's
Registration Statement on Form S-4 (Registration No. 333-57861, declared
effective on July 16, 1998), including any amendments or reports filed for the
purpose of updating such description.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The validity of the shares offered pursuant to the Plans will be passed
upon by Graham & Dunn PC, 1420 Fifth Avenue, 33rd Floor, Seattle, Washington
98101.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Washington Business Corporation Act ("WBCA") sets forth certain
mandatory and permissive provisions which a Washington corporation may utilize
in indemnifying and/or advancing expenses to its directors, officers, employees
and agents. The WBCA also authorizes a corporation to adopt its own provisions
governing indemnification and advancement of expenses. Such provisions must be
contained in the corporation's articles of incorporation, a
2
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bylaw adopted or ratified by shareholders, or a resolution adopted or ratified
by shareholders. In no case, however, may such provisions authorize
indemnification or advancement of expenses to any director, officer, employee
or agent for (a) acts or omissions finally adjudged to be intentional
misconduct or a knowing violation of law, (b) conduct finally adjudged to be
in violation of Section 23B.08.310 of the WBCA (regarding unlawful
distributions), and (c) conduct from which the person received a benefit in
money, property or services to which he or she was adjudged to be not legally
entitled.
Pursuant to the Registrant's Articles of Incorporation, the Registrant
will, to the fullest extent permitted by the WBCA, indemnify the officers,
directors, agents and employees of the Registrant with respect to expenses,
settlements, judgments and fines in suits in which such person was made a party
by reason of the fact that he or she is or was an agent of the Registrant. No
such indemnification may be given if the acts or omissions of the person are
adjudged to be in violation of law, if such person is liable to the corporation
for an unlawful distribution, or if such person personally received a benefit to
which he or she was not entitled. In addition, the Registrant's Articles of
Incorporation provide that the directors of the Registrant shall not be
personally liable for monetary damages to the Registrant for certain breaches of
their fiduciary duty as directors, except for liabilities that involve
intentional misconduct by the director, the authorization or illegal
distributions or receipt of an improper personal benefit from their actions as
directors. This provision might, in certain instances, discourage or deter
stockholders or management from bringing a lawsuit against directors for a
breach of their duties even though such an action, if successful, might have
benefited the Registrant.
In addition to the indemnification provisions set forth in the Registrant's
Articles, the Registrant has entered into separate Indemnity Agreements with the
directors of the Registrant and its subsidiaries which provide for the
indemnification of such directors by the Registrant to the fullest extent
allowed by the WBCA. The Indemnity Agreements indemnify each director and hold
such director harmless against any loss arising from a claim or action relating
to his or her services as a director. The Indemnity Agreements further provides
that the Registrant will advance sufficient funds as may be necessary to
investigate or defend claims against a director, and to reimburse funds that may
be incurred by the director, with the proviso that the director will reimburse
the Registrant any expenses paid to such director in the event it is later
determined that the payment of such sums were not allowable under Washington
law.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
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ITEM 8. EXHIBITS.
Exhibit
Number Description
------- -----------
5.1 Opinion of Graham & Dunn PC, Registrant's legal counsel,
regarding legality of the Common Stock being registered.
23.1 Consent of Graham & Dunn PC (included in Exhibit 5.1).
23.2 Consent of Ernst & Young LLP.
23.3 Consent of Deloitte & Touche LLP.
24.1 Powers of Attorney (see the Signature Page and certified
resolutions of the Registrant's Board of Directors).
99.1 Kittitas Valley Bancorp 1996 Director Stock Option Plan.
99.2 Kittitas Valley Bancorp Employee Stock Option Plan.
99.3 First Amendment to Kittitas Valley Bancorp Employee Stock
Option Plan.
99.4 Agreement and Plan of Merger among Registrant, Kittitas
Valley Bancorp and Kittitas Valley Bank, N.A., dated as of
April 20, 1998.(1)
(1) Incorporated by reference from Exhibit 2.1 to Registrant's Registration
Statement on Form S-4 (Registration No. 333-57861) declared effective on
July 16, 1998.
ITEM 9. UNDERTAKINGS.
A. The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate, represent
a fundamental change in the information set forth in the Registration Statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
4
<PAGE>
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective Registration Statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement;
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) of
this section do not apply if the Registration Statement is on Form S-3, Form S-8
or Form F-3, and the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed with or
furnished to the Commission by the Registrant pursuant to Section 13 or Section
15(d) of the Securities Exchange Act that are incorporated by reference in the
Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
B. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
C. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer of controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Oak Harbor, State of Washington, on the 13th day of
October, 1998.
INTERWEST BANCORP, INC.
By: /s/ Stephen M. Walden
-------------------------------
Stephen M. Walden
President and Chief Executive Officer
POWER OF ATTORNEY
Each person whose individual signature appears below hereby authorizes and
appoints Stephen M. Walden and H. Glenn Mouw, and each of them, with full power
of substitution and full power to act without the other, as his true and lawful
attorney-in-fact and agent to act in his name, place and stead, and to execute
in the name and on behalf of each person, individually and in each capacity
stated below, and to file any and all amendments to this Registration Statement,
including any and all post-effective amendments.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities indicated,
on the 13th day of October, 1998.
Signature Title
--------- -----
/s/ Stephen M. Walden President, Chief Executive Officer and Director
----------------------------- (Principal Executive Officer)
Stephen M. Walden
/s/ H. Glenn Mouw Executive Vice President
----------------------------- (Principal Financial Officer)
H. Glenn Mouw
/s/ Eric D. Jensen Chief Accounting Officer
----------------------------- (Principal Accounting Officer)
Eric D. Jensen
/s/ Barney R. Beeksma Chairman of the Board
-----------------------------
Barney R. Beeksma
6
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/s/ Gary M. Bolyard Director
-----------------------------
Gary M. Bolyard
/s/ Larry Carlson Director
-----------------------------
Larry Carlson
/s/ Michael T. Crawford Director
-----------------------------
Michael T. Crawford
/s/ Patrick M. Fahey
----------------------------- Director
Patrick M. Fahey
/s/ Jean Gorton Director
-----------------------------
Jean Gorton
Director
-----------------------------
Henry Koetje
/s/ Stephen Lewis Director
-----------------------------
Stephen Lewis
/s/ Clark H. Mock Director
-----------------------------
Clark H. Mock
/s/ Russel E. Olson Director
-----------------------------
Russel E. Olson
/s/ Vern Sims Director
-----------------------------
Vern Sims
7
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INDEX OF EXHIBITS
Exhibit
Number Description
------- -----------
5.1 Opinion of Graham & Dunn PC, Registrant's legal counsel,
regarding legality of the Common Stock being registered.
23.1 Consent of Graham & Dunn PC (included in Exhibit 5.1).
23.2 Consent of Ernst & Young LLP.
23.3 Consent of Deloitte & Touche LLP.
24.1 Powers of Attorney (see the Signature Page) and certified
resolutions of the Registrant's Board of Directors).
99.1 Kittitas Valley Bancorp 1996 Director Stock Option Plan.
99.2 Kittitas Valley Bancorp Employee Stock Option Plan.
99.3 First Amendment to Kittitas Valley Bancorp Employee Stock
Option Plan.
99.4 Agreement and Plan of Merger among Registrant and Kittitas
Valley Bancorp, dated as of April 20, 1998.(1)
(1) Incorporated by reference from Exhibit 2.1 to Registrant's Registration
Statement on Form S-4 (Registration No. 333-57861) declared effective on
July 16, 1998.
8
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Exhibit 5.1
October 15, 1998
The Board of Directors
InterWest Bancorp, Inc.
275 S.E. Pioneer Way
Oak Harbor, Washington 98277
RE: LEGAL OPINION REGARDING VALIDITY OF SECURITIES OFFERED
Ladies and Gentlemen:
We have acted as counsel to you in connection with the preparation of a
Registration Statement on Form S-8 (the "Registration Statement") under the
Securities Act of 1933, as amended (the "Act"), which you are filing with the
Securities and Exchange Commission (the "Commission") with respect to up to
48,000 shares of common stock, $.20 par value per share (the "Shares"), of
InterWest Bancorp, Inc., a Washington corporation ("InterWest") authorized for
issuance under the Kittitas Valley Bancorp 1996 Director Stock Option Plan and
the Kittitas Valley Bancorp Employee Stock Option Plan, as amended
(collectively, the "Plans").
In connection with the Shares that will be issued under the Plans, we have
examined the following: (i) the Plans, which are filed as Exhibit 99.1 and 99.2,
respectively, to the Registration Statement; (ii) the Registration Statement,
including the remainder of the exhibits; (iii) the Agreement and Plan of Merger
among InterWest, Kittitas Valley Bancorp, Inc. and Kittitas Valley Bank, N.A.,
dated as of April 20, 1998 (the "Merger Agreement"); and (iv) such other
documents as we have deemed necessary to form the opinions hereinafter
expressed. As to various questions of fact material to such opinions, where
relevant facts were not independently established, we have relied upon
statements of officers of InterWest.
Our opinion assumes that the Shares are issued in accordance with the terms
of the Plans and the Merger Agreement after the Registration Statement has
become effective under the Act.
Based upon and subject to the foregoing, we are of the opinion that the
Shares have been duly authorized and that, upon the due execution by InterWest
and the registration by its registrar of the Shares, issuance by InterWest and
receipt of the consideration for the Shares, consistent with the terms of the
Plans and the Merger Agreement, the Shares will be validly issued, fully paid,
and nonassessable.
<PAGE>
InterWest Bancorp, Inc.
October 15, 1998
Page 2
We consent to the filing of this opinion as Exhibit 5.1 to the Registration
Statement. This consent shall not be construed to cause us to be in the
category of persons whose consent is required to be filed pursuant to Section 7
of the Act or the rules and regulations of the Commission promulgated
thereunder.
Very truly yours,
/s/ Graham & Dunn
<PAGE>
Exhibit 23.2
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement on
Form S-8, pertaining to the Kittitas Valley Bancorp 1996 Director Stock Option
Plan and the Kittitas Valley Bancorp Employee Stock Option Plan of our report
dated October 30, 1997, except for Note 23 as to which the date is June 16,
1998, with respect to the supplemental consolidated financial statements of
InterWest Bancorp, Inc. included in its Current Report on Form 8-K/A, filed with
the Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
Seattle, Washington
October 14, 1998
<PAGE>
Exhibit 23.3
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
InterWest Bancorp, Inc. on Form S-8 of our report dated January 19, 1996
(relating to the consolidated statements of operations, stockholders' equity and
cash flows of Central Bancorporation and subsidiaries for the year ended
December 31, 1995, not presented separately herein) appearing in the Current
Report on Form 8-K of InterWest Bancorp, Inc. for the year ended September 30,
1997.
/s/ DELOITTE & TOUCHE LLP
Seattle, Washington
October 14, 1998
<PAGE>
Exhibit 24.1
SECRETARY'S CERTIFICATE
I certify that I am the Secretary of INTERWEST BANCORP, INC., located in
Oak Harbor, State of Washington ("InterWest"), and that I have been duly elected
and am presently serving in that capacity in accordance with the Bylaws of
InterWest.
I further certify that:
Attached as Exhibit A is a full, true and correct copy of resolutions
passed and adopted by a majority of the Board of Directors of Bancorp at a
meeting of the Board duly held and convened on October 13, 1998.
The attached resolutions are in full force and effect and have not been
revoked or rescinded as of the date hereof.
IN WITNESS WHEREOF, I have affixed my signature as of this 13th day of
October, 1998.
/s/ Margaret Mordhorst
--------------------------------
Margaret Mordhorst, Secretary
<PAGE>
Exhibit A
RESOLUTIONS
OF
THE BOARD OF DIRECTORS
OF
INTERWEST BANCORP, INC.
(FOR MEETING OF OCTOBER 13, 1998)
RECITALS
(KITTITAS VALLEY BANCORP 1996 DIRECTOR STOCK OPTION PLAN: KITTITAS VALLEY
BANCORP EMPLOYEE STOCK OPTION PLAN)
1. On August 31, 1998, Kittitas Valley Bancorp, Inc., a Washington
corporation and bank holding company ("KVB"), merged with and into InterWest
Bancorp, Inc., a Washington corporation and bank holding company ("InterWest"),
under the terms of an Agreement and Plan of Merger (the "Merger Agreement")
among InterWest, KVB and Kittitas Valley Bank, N.A., dated as of April 20,
1998.
2. On the effective date of the merger (August 31, 1998), a total of
7,030 shares of KVB common stock, $1.00 par value per share, were subject to
outstanding options under the Kittitas Valley Bancorp 1996 Director Stock Option
Plan (the "KVB Director Plan") and a total of 10,950 shares of KVB common stock
were subject to outstanding options under the Kittitas Valley Bancorp Employee
Stock Option Plan, as amended (the "KVB Employee Plan"). The KVB Director Plan
and the KVB Employee Plan are referred to collectively as the "KVB Plans".
3. Pursuant to Section 2.3 (B) of the Merger Agreement, all 17,980 shares
of KVB common stock subject to unexercised options at the effective time of the
merger were automatically converted into options to purchase shares of up to
46,226 (adjusted to account for rounding), of InterWest common stock, $.20 par
value per share, based on the merger exchange ratio of 2.571 shares of
InterWest common stock for each share of KVB common stock. No further options
will be granted under the KVB Plans.
4. InterWest now wishes to register the shares of InterWest common stock
issuable upon exercise of outstanding options under the KVB Plans with the
Securities and Exchange Commission (the "SEC"), and to comply with applicable
state blue sky laws. The Board of Directors has reviewed the draft registration
statement on Form S-8 ("Registration Statement") presented at this meeting and
attached as EXHIBIT A to these Resolutions, and deems it appropriate and in the
best interests of InterWest to take the actions necessary to register the shares
of InterWest common stock required to satisfy all converted KVB options
originally issuable under the KVB Plans, and to comply with all state blue sky
laws applicable to the KVB Plans.
<PAGE>
RESOLUTIONS
[SEC REGISTRATION AND BLUE SKY FILINGS]
1. The proper officers of InterWest, with the assistance of counsel, are
hereby authorized to execute and file with the SEC, and any applicable state
securities authorities, the Registration Statement and any necessary amendments
thereto, in substantially the form presented at this meeting, to cause the
shares of InterWest common stock issuable pursuant to the Plan to be properly
registered or otherwise exempt from registration.
[ADDITIONAL LISTING APPLICATION]
2. The Proper Officers of InterWest, with the assistance of counsel, are
authorized to execute and file with The Nasdaq National Market, Inc. ("Nasdaq")
a Notification Form for Listing of Additional Shares ("Notification") and such
other documents, and any necessary amendments thereto, and to take any and all
actions as they deem necessary or appropriate to effect the additional listing
of the Shares with Nasdaq in connection with the issuance of shares in the
transactions contemplated by the Merger Agreement, including the payment of such
filing fees as may be deemed payable for the filing of the Notification.
[POWER OF ATTORNEY]
3. The proper officers of InterWest are hereby authorized to execute a
Power of Attorney for the Registration Statement appointing Stephen M. Walden
and H. Glenn Mouw, and each of them, to sign the Registration Statement and all
amendments and related documents on behalf of InterWest, and to file the same
with the SEC.
[GENERAL]
4. The proper officers of InterWest are hereby authorized and directed to
do and perform all such other acts and things, to pay all necessary fees, to
sign all such documents and certificates and to take such other steps as may be
necessary, advisable, convenient or proper to carry out the full intent of the
foregoing Resolutions, and to comply fully with all applicable rules and
regulations.
5. For purposes of the foregoing Resolutions, the proper officers of
InterWest are Stephen M. Walden and H. Glenn Mouw, each with full power to act
alone.
<PAGE>
Exhibit 99.1
KITTITAS VALLEY BANCORP
1996 DIRECTOR STOCK OPTION PLAN
1. PURPOSE. The purpose of this 1996 Director Stock Option Plan (the
"Plan") of KITTITAS VALLEY BANCORP (the "Corporation") is to encourage
significant ownership in the Corporation by outside directors of the
Corporation whose services are considered essential to the Corporation's
progress and to provide them with an incentive to remain directors of the
Corporation.
2. ADMINISTRATION. The Board of Directors shall supervise and
administer the Plan. Grants of stock options under the Plan and the amount
and nature of the awards to be granted shall be automatic in accordance with
Section 5. However, all questions of interpretation of the Plan or of any
options issued under it shall be determined by the Board of Directors and
such determination shall be final and binding upon all persons having an
interest in the Plan.
3. PARTICIPATION IN THE PLAN. Directors of the Corporation who are
not employees of the Corporation or any subsidiary of the Corporation shall
be eligible to participate in the Plan. For purposes of this Section 3, a
person shall not be considered an employee solely by reason of serving as
Chairman of the Board.
4. STOCK SUBJECT TO THE PLAN.
(a) MAXIMUM NUMBER OF SHARES. The maximum number of shares which
may be issued under the Plan shall be 30,000 shares of the Corporation's
common stock, par value $1.00 per share ("Common Stock"), subject to
adjustment as provided in Section 9 of this Plan.
(b) UNEXERCISED OPTIONS. If any outstanding option under the Plan
for any reason expires or is terminated without having been exercised in
full, the shares allocable to the unexercised portion of such option shall
again become available for grant pursuant to the Plan.
(c) NON-QUALIFIED OPTIONS. All options granted under the Plan
shall be non-qualified options not entitled to special tax treatment under
Section 422 of the Internal Revenue Code of 1986, as amended to date and as
may be amended from time to time (the "Code").
5. TERMS, CONDITIONS AND FORM OF OPTIONS. Each option granted under
the Plan shall be evidenced by a written agreement in such form as the Board
of Directors shall from time to time approve, which agreements shall comply
with and be subject to the following terms and conditions.
(a) GRANT OF OPTIONS. Options shall be granted as follows:
(i) Options to purchase 1,000 shares of Common Stock shall be
granted to each current director on the date the Plan is approved by
the
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shareholders in recognition of prior service, and such options shall
be fully vested on the date of the grant;
(ii) An option to purchase an additional 1,000 shares of Common
Stock shall be granted to each current director on October 23, 1996,
the fifth anniversary of the date the current directors commenced
service as organizers/directors of the corporation or one of its
subsidiaries, such option shares shall vest in equal installments over
a five (5) year period (20% on the date of appointment and 20% on each
anniversary, thereafter for the next four (4) years);
(iii) New directors shall receive an option to purchase 1,000
shares of Common Stock on the date the director is appointed to the
Board and such option shares shall vest in equal installments over a
five (5) year period (20% on the date of appointment and 20% on each
anniversary, thereafter for the next four (4) years); and
(iv) Each director shall receive an option to purchase an
additional 1,000 shares of Common Stock automatically on the fifth
anniversary of the date they received their last grant (October 23,
2001 for current directors), and every five (5) years thereafter, and
such option shares shall vest equally over a five (5) year period
following the date of grant (20% on the date of grant and 20% for the
next four (4) years).
(b) OPTION EXERCISE PRICE. All options granted under the terms
and conditions of the Plan shall be granted at fair market value on the date
of the grant. Fair market value shall be determined in accordance with a
method approved by the Board of Directors. For purposes of this Plan, the
determination by the Board of Directors of the fair market value shall be
conclusive.
The number of option shares granted shall be modified to take into
account any adjustments as set forth in Section 9 hereof.
(c) EXPIRATION OF OPTIONS. The right to purchase the option
shares shall expire at the earliest of the following:
(i) ten (10) years from the date of grant; or
(ii) the 91st day following the date the optionee ceases to
serve as a member of the Board of Directors.
(d) EXERCISE PROCEDURE. Options granted under the Plan shall be
exercised by the optionee as to all or part of the shares covered thereby by the
giving of written notice of the exercise thereof to the Corporate Secretary of
the Corporation at the principal business office of the Corporation. The notice
of exercise shall be accompanied by payment in full for the shares to be
acquired. In no event shall an option granted hereunder be exercised for a
fraction of a share.
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If an option granted hereunder shall be exercised by the estate or by the
legal representative of a deceased director or former director, or by a person
who acquired an option granted hereunder by bequest or inheritance or by reason
of the death of any director or former director, written notice of such exercise
shall be accompanied by payment in full for the shares to be acquired and
evidence of authority to so act in form reasonably satisfactory to Corporation.
6. AMENDMENT OF THE PLAN. The Board of Directors may suspend or
discontinue the Plan or review or amend it in any respect whatsoever; provided,
however, that no such action may have the effect of altering or impairing any
rights or obligations of any option previously granted without the consent of
the optionee, and that without approval of the shareholders of the Corporation
no revision or amendment shall change the number of shares subject to this Plan
(except as provided in Section 9 hereof), change the definition of participants
eligible to receive options, or materially increase the benefits accruing to
participants under this Plan.
7. NON-TRANSFERABILITY OF OPTIONS. Each option granted under the Plan by
its terms shall not be transferable by the optionee otherwise than by will, or
by the laws of descent and distribution, and shall be exercised during the
lifetime of the optionee only by the optionee.
8. LIMITATION OF RIGHTS.
(a) NO RIGHT TO CONTINUE AS A DIRECTOR. Neither Plan, nor the
granting of an option nor any other action taken pursuant to the Plan, shall
constitute or be evidence of any agreement or understanding, express or implied,
that the Corporation will retain a director for any period of time.
(b) NO SHAREHOLDERS' RIGHTS UNTIL ISSUANCE OF SHARES. An optionee
shall have no rights as a shareholder with respect to the shares covered by an
option granted hereunder until the date of the issuance of a stock certificate
therefor, and no adjustment will be made for dividends or other rights (except
as provided in Section 9) for which the record date is prior to the date such
certificate is issued.
9. CHANGES IN COMMON STOCK.
(a) If the outstanding shares of common stock are increased,
decreased or exchanged for a different number or kind of shares or other
securities, or if additional shares or new or different shares or other
securities are distributed with respect to such shares of common stock or other
securities, through merger, consolidation, sale of all or substantially all of
the assets of the Corporation, reorganization, recapitalization,
reclassification, stock dividend, stock split, reverse stock split or other
distribution with respect to such shares of common stock, or other securities,
an appropriate and proportionate adjustment may be made in:
(i) the maximum number and kind of shares reserved for issuance
under this Plan:
(ii) the number and kind of shares or other securities subject
to then outstanding options under this Plan; and
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(iii) the price for each share subject to any then outstanding
options under this Plan, without changing the aggregate purchase price
as to which such options remain exercisable.
No fractional shares will be issued under this Plan on account of any
such adjustments.
(b) In the event the Corporation is merged or consolidated into or
with another corporation (in which consolidation or merger the shareholders of
the Corporation receive distributions of cash or securities of another issuer as
a result thereof), or in the event that all or substantially all of the assets
of the Corporation are acquired by any other person or entity, or in the event
of a reorganization or liquidation of the Corporation, the Board of Directors of
the Corporation, or the board of directors of any corporation assuming the
obligations of the Corporation, shall, as to outstanding options, either:
(i) provide that such options shall be assumed or equivalent
options shall be substituted, by the acquiring or successor
corporation (or an affiliate thereof); or
(ii) upon written notice to the optionees, provide that all
unexercised options will terminate immediately prior to the
consummation of such merger, consolidation, acquisition,
reorganization or liquidation unless exercised by the optionee within
a specified number of days following the date of such notice.
10. CHANGE IN CONTROL. Notwithstanding any other provision to the
contrary in this Plan, in the event of a Change of Control (as defined below),
all options outstanding as of the date of such Change of Control occurs shall
become exercisable in full, whether or not exercisable in accordance with their
terms. A "Change in Control" shall occur or be deemed to have occurred only if
any of the following events occur:
(a) any "person", as such term is used in Sections 13(d) and 14(d) of
the Securities and Exchange Act of 1934, as amended (the "Exchange Act"), (other
than the Corporation, any trustee or other fiduciary holding securities under an
employee benefit plan of the Corporation, or any corporation owned directly or
indirectly by the shareholders of the Corporation in substantially the same
proportion as their ownership of stock of the Corporation) is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Corporation representing fifty percent (50%)
or more of the combined voting power of the Corporation's then outstanding
securities;
(b) individuals who, as of January 1, 1996, constitute the Board of
Directors of the Corporation (as of the date thereof, the "Incumbent Board")
cease for any reason to constitute at least a majority of the Board, provided
that any person becoming a director subsequent to the date thereof whose
election or nomination for election by the Corporation's shareholders, was
approved by a vote of at least a majority of the directors then comprising the
Incumbent Board (other than an election or nomination of an individual whose
initial assumption of office is in connection with an actual or threatened
election contest relating to the election of
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the directors of the Corporation, as such terms are used in Rule 14a-11 of
Regulation 14 under the Exchange Act) shall be, for purposes of this Plan,
considered as though such person were a member of the Incumbent Board;
(c) the shareholders of the Corporation approve a merger or
consolidation of the Corporation with any other corporation, other than:
(i) a merger or consolidation which would result in the voting
securities of the Corporation outstanding immediately prior thereto
continuing to represent (whether by remaining outstanding or by being
converted into voting securities of the surviving entity) more than
eighty percent (80%) of the combined voting power of the voting
securities of the Corporation or such surviving entity outstanding
immediately after such merger or consolidation; or
(ii) a merger or consolidation effected to implement a
recapitalization of the Corporation (or similar transaction) in which
no "person" (as hereinabove defined) acquires more than thirty percent
(30%) of the combined voting power of the Corporation's then
outstanding securities; or
(d) the shareholders of the Corporation approve a plan of complete
liquidation of the Corporation or an agreement for the sale or disposition by
the Corporation of all or substantially all of the Corporation's assets.
11. NOTICE. Any written notice to the Corporation required by any of the
provisions of the Plan shall be addressed to the President of the Corporation
and shall become effective when it is received.
12. GOVERNING LAW. The Plan and all determinations made and actions taken
pursuant hereto shall be governed by the laws of the State of Washington.
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Exhibit 99.2
KITTITAS VALLEY BANK, NATIONAL ASSOCIATION
EMPLOYEE STOCK OPTION PLAN
1. PURPOSE OF THE PLAN. The purpose of this Plan is to provide
additional incentives to key employees of Kittitas Valley Bank, National
Association and any of its future Subsidiaries, thereby helping to attract and
retain the best available personnel for positions of responsibility with said
corporations and otherwise promoting the success of the business activities of
said corporations. It is intended that Options issued pursuant to this Plan
shall constitute either "incentive stock options" within the meaning of Section
422A of the Internal Revenue Code or nonqualified stock options.
2. DEFINITIONS. As used herein, the following definitions shall apply:
(a) "Board" shall mean the Board of Directors of the Employer.
(b) "Common Stock" shall mean the Employer's common stock, par value
$1.00 per share.
(c) "Committee" shall mean the Board or the Committee appointed by
the Board in accordance with Section 4(a) of the Plan.
(d) "Continuous Status as an Employee" shall mean the absence of any
interruption or termination of service as an Employee. Continuous Status
as an Employee shall not be considered interrupted in the case of sick
leave, military leave, or any other approved leave of absence.
(e) "Employee" shall mean any person employed by the Employer or any
Parent or Subsidiary of the Employer which is hereafter organized or is
acquired by the Employer.
(f) "Employer" shall mean Kittitas Valley Bank, National Association,
a national banking association.
(g) "Option" shall mean a stock option granted pursuant to the Plan.
Options shall include both Incentive Stock Options under Section 422A of
the Internal Revenue Code and Nonqualified Stock Options.
(h) "Optioned Stock" shall mean the Common Stock subject to an
Option.
(i) "Optionee" shall mean an Employee who receives an Option.
(j) "Plan" shall mean this Employee Stock Option Plan.
(k) "Parent" shall mean any corporation having a relationship with
the Employer as described in Section 425(e) of the Internal Revenue Code.
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(l) "Shareholder-Employee" shall mean an Employee who owns stock
representing more than ten percent (10%) of the total combined voting power
of all classes of stock of the Employer or of any Parent or Subsidiary.
For this purpose, the attribution of stock ownership rules provided in
Section 425(d) of the Internal Revenue Code shall apply.
(m) "Subsidiary" shall mean any bank or other corporation of which
not less than 50% of the voting shares are held by the Employer or a
Subsidiary, whether or not such corporation now exists or is hereafter
organized or acquired by the Employer or a Subsidiary.
3. STOCK SUBJECT TO OPTIONS.
(a) NUMBER OF SHARES RESERVED. The maximum number of shares which
may be optioned and sold pursuant to the Plan shall be 20,000 shares of
the Common Stock of the Employer (subject to adjustment as provided in
subparagraph 6(i) of the Plan). During the term of this Plan, the Employer
will at all times reserve and keep available a sufficient number of shares
of its Common Stock to satisfy the requirements of the Plan.
(b) EXPIRED OPTIONS. If any outstanding Option expires or becomes
unexercisable for any reason without having been exercised in full, the
shares of Common Stock allocable to the unexercised portion of such Option
shall again become available for other Options.
4. ADMINISTRATION OF THE PLAN.
(a) THE COMMITTEE. The Plan shall be administered by the Board
directly, acting as a Committee of the whole, or if the Board elects, by a
separate Committee appointed by the Board for that purpose and consisting
of at least three Board members. All references in the Plan to the
"Committee" shall refer to such separate Committee, if any is established,
or if none is then in existence, shall refer to the Board as a whole. Once
appointed, any such Committee shall continue to serve until otherwise
directed by the Board. From time to time the Board may increase the size
of the Committee and appoint additional members thereof, remove members
(with or without cause), appoint new members in substitution therefor, and
fill vacancies however caused. The Committee shall select one of its
members as chairman, and shall hold meetings at such times and places as
the chairman or a majority of the Committee may determine.
At all times, a majority of the members of the Committee shall consist
of members of the Board who are not eligible to receive Options under the
Plan. Members of the Committee who are either eligible for Options or who
have been granted Options shall be counted for all purposes in determining
the existence of a quorum at any meetings of the Committee and shall be
eligible to vote on all matters before the Committee respecting the
granting of Options or administration of the Plan, except only
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that no such members shall vote or otherwise act upon the grant or the
modification of the terms of any Option granted or to be granted to
himself.
At least annually, the Committee shall present a written report to the
Board indicating the Employees to whom Options have been granted since the
date of the last such report, and in each case the date or dates of Options
granted, the number of shares optioned, and the Option price per share.
At all times, the Board shall have the power to remove all members of
the Committee and thereafter to directly administer the Plan as a Committee
of the whole.
(b) POWERS OF THE COMMITTEE. Subject to all provisions and
limitations of the Plan, the Committee shall have the authority and
discretion:
(1) to determine the Employees to whom Options are to be
granted, the times of grant, and the number of shares to be
represented by each Option;
(2) to determine the Option price for the shares of Common Stock
to be issued pursuant to each Option, subject to the provisions of
subparagraph 6(b) of the Plan in the case of Incentive Stock Options;
(3) to determine all other terms and conditions of each Option
granted under the Plan (including specifying the dates upon which
Options become exercisable), which need not be identical;
(4) to modify or amend the terms of any Option previously
granted, or to grant substitute Options, subject to the provisions of
subparagraphs 6(1) and 6(m) of the Plan;
(5) to interpret the Plan;
(6) to authorize any person or persons to execute and deliver
Option agreements or to take any other actions deemed by the Committee
to be necessary or appropriate to effectuate the grant of Options by
the Committee;
(7) to make all other determinations and take all other actions
which the Committee deems necessary or appropriate to administer the
Plan in accordance with its terms and conditions.
All actions of the Committee shall be either by (i) a majority vote of the
members of the full Committee at a meeting of the Committee, or (ii) by
unanimous written consent of all members of the full Committee without a meeting
thereof.
All decisions, determinations and interpretations of the Committee shall be
final and binding upon all persons, including all Optionees and any other
holders or persons interested in any Options, unless otherwise expressly
determined by a vote of the majority of the entire Board.
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No member of the Committee or of the Board shall be liable for any action or
determination made in good faith with respect to the Plan or any Option.
5. ELIGIBILITY. Options may be granted only to Employees whom the
Committee, in its discretion, determines to be key Employees.
Granting of Options pursuant to the Plan shall be entirely discretionary
with the Committee, and the adoption of this Plan shall not confer upon any
Employee any right to receive any Option or Options pursuant to the Plan unless
and until said Options are granted by the Committee, in its sole discretion.
Neither the adoption of the Plan nor the granting of any Options pursuant to the
Plan shall confer upon any Employee or Optionee any right with respect to
continuation of employment, nor shall the same interfere in any way with his
right or with the right of the Employer or any Subsidiary to terminate his
employment at any time.
6. TERMS AND CONDITIONS OF OPTIONS. All Options granted pursuant to the
Plan must be authorized by the Committee, and must be documented in written
agreements in such form as the Committee shall from time to time approve, which
agreements shall comply with and be subject to all of the following terms and
conditions:
(a) NUMBER OF SHARES; ANNUAL LIMITATION. Each Option agreement shall
state whether the Option is an Incentive Stock Option or a Nonqualified
Stock Option and the number of shares subject to Option. Any number of
Options may be granted to a single eligible Employee at any time and from
time to time, except that, in the case of Incentive Stock Options, the
aggregate fair market value (determined as of the time each Option is
granted) of all shares of Common Stock with respect to which Incentive
Stock Options become exercisable for the first time by such Employee in any
one calendar year (under all incentive stock option plans of the Employer,
its Parent and all of its Subsidiaries taken together) shall not exceed
$100,000.
(b) OPTION PRICE AND CONSIDERATION. The Option price for the shares
of Common Stock to be issued pursuant to the Option shall be such price,
not less than the par value, as is determined by the Committee, but, in the
case of Incentive Stock Options, shall in no event be less than the fair
market value of the Common Stock on the date of grant of the Incentive
Stock Option.
In the case of an Incentive Stock Option granted to an Employee who,
immediately before the grant of such Incentive Stock Option, is a
Shareholder-Employee, the Incentive Stock Option price shall be at least
110% of the fair market value of the Common Stock on the date of grant of
the Incentive Stock Option.
The fair market value shall be determined by the Committee in its
discretion; PROVIDED, HOWEVER, that in the event that there is a public
market for the Common Stock, the fair market value shall be the mean of the
bid and asked prices of the Common Stock as of the date of grant as
reported on the National Association of Securities Dealers Automatic
Quotation System (NASDAQ), or, in the event the Common Stock is listed on
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a stock exchange, the fair market value shall be the closing price on the
exchange as of the date of grant of the Option.
The Option price shall be payable either (i) in United States dollars
upon exercise of the Option, or (ii) if approved by the Board, other
consideration including without limitation Common Stock of the Employer,
services, or other property.
(c) TERM OF OPTION. No Incentive Stock Option granted pursuant to
the Plan shall in any event be exercisable after the expiration of ten (10)
years from the date such Option is granted, except that the term of an
Incentive Stock Option granted to an Employee who, immediately before such
Incentive Stock Option is granted, is a Shareholder-Employee shall be for
not more than five (5) years from the date of grant thereof. Subject to
the foregoing and other applicable provisions of the Plan including but not
limited to Section 6(e) herein, the term of each Option shall be determined
by the Committee in its discretion.
(d) MANNER OF EXERCISE; RIGHTS AS SHAREHOLDER. An Option shall be
deemed to be exercised when written notice of exercise has been given to
the Employer in accordance with the terms of the Option by the person
entitled to exercise the Option, together with full payment for the shares
of Common Stock subject to said notice.
(e) DEATH OF OPTIONEE. In the event of the death of an Optionee who
at the time of his death was an Employee and who had been in Continuous
Status as an Employee since the date of grant of the Option, the Option
shall terminate on the earlier of (i) one year after the date of death of
the Optionee, or (ii) the expiration date otherwise provided in the Option
agreement, except that if the expiration date of a Nonqualified Stock
Option should occur during the 90-day period immediately following the
Optionee's death, such Option shall terminate at the end of such 90-day
period. The Option shall be exercisable at any time prior to such
termination by the Optionee's estate, or by such person or persons who have
acquired the right to exercise the Option by bequest or by inheritance or
by reason of the death of the Optionee.
(f) DISABILITY OF OPTIONEE. If an Optionee's status as an Employee
is terminated at any time during the Option period by reason of a
disability (within the meaning of Section 22(e)(3) of the Internal Revenue
Code) and if said Optionee had been in Continuous Status as an Employee at
all times between the date of grant of the Option and the termination of
his status as an Employee, his Incentive Stock Option shall terminate on
the earlier of (i) one year after the date of termination of his status as
an Employee, or (ii) the expiration date otherwise provided in his Option
agreement.
(g) TERMINATION OF STATUS AS AN EMPLOYEE.
(1) If an Optionee's status as an Employee is terminated at any
time after the grant of his Option for any reason other than death or
disability, as provided in subparagraphs (e) and (f) above, and not by
reason of fraud or willful misconduct, as provided in (2) below, his
Option shall terminate on the earlier of
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(i) the same day of the third month after the date of termination of
his status as an Employee, or (ii) the expiration date otherwise
provided in his Option agreement.
(2) If an Optionee's status as an Employee is terminated at any
time after the grant of his Option by reason of fraud or willful
misconduct, then his Option shall terminate on the date of termination
of his status as an Employee.
(h) NON-TRANSFERABILITY OF OPTIONS. No Option granted pursuant to
the Plan may be sold, pledged, assigned, hypothecated, transferred, or
disposed of in any manner other than by will or by the laws of descent or
distribution and may be exercised, during the lifetime of the Optionee,
only by the Optionee.
(i) ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. Subject to any
required action by the shareholders of the Employer, the number of shares
of Common Stock covered by each outstanding Option, the number of shares of
Common Stock available for grant of additional Options, and the price per
share of Common Stock specified in each outstanding Option, shall be
proportionately adjusted for any increase or decrease in the number of
issued shares of Common Stock resulting from any stock split or other
subdivision or consolidation of shares, the payment of any stock dividend
(but only on the Common Stock) or any other increase or decrease in the
number of such shares of Common Stock effected without receipt of
consideration by the Employer; PROVIDED, HOWEVER, that conversion of any
convertible securities of the Employer shall not be deemed to have been
"effected without receipt of consideration." Such adjustment shall be made
by the Committee, whose determination in that respect shall be final,
binding and conclusive.
No Incentive Stock Option shall be adjusted by the Committee pursuant
to this subparagraph 6(i) in a manner which causes the Incentive Stock
Option to fail to continue to qualify as an incentive stock option within
the meaning of Section 422A of the Internal Revenue Code.
Except as otherwise expressly provided in this subparagraph 6(i), no
Optionee shall have any rights by reason of any stock split or the payment
of any stock dividend or any other increase or decrease in the number of
shares of Common Stock. Except as otherwise expressly provided in this
subparagraph 6(i), any issue by the Employer of shares of stock of any
class, or securities convertible into shares of stock of any class, shall
not affect the number of shares or price of Common Stock subject to any
Options, and no adjustments in Options shall be made by reason thereof.
The grant of an Option pursuant to the Plan shall not affect in any way the
right or power of the Employer to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure.
(j) DATE OF GRANT OF OPTION. The date of grant of an Option shall,
for all purposes, be the date on which the Committee makes the
determination granting such Option. Said date of grant shall be specified
in the Option agreement.
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(j) CONDITIONS UPON ISSUANCE OF SHARES. Shares of Common Stock shall
not be issued with respect to an Option granted under the Plan unless the
exercise of such Option and the issuance and delivery of such shares
pursuant thereto shall comply with all relevant provisions of law,
including, without limitation, the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, the rules and regulations
promulgated thereunder, and the requirements of any stock exchange upon
which the Common Stock may then be listed, and shall be further subject to
the approval of counsel for the Employer with respect to such compliance.
As a condition to the exercise of an Option, the Employer may require
the person exercising such Option to represent and warrant at the time of
exercise that the shares of Common Stock are being purchased only for
investment and without any present intention to sell or distribute such
Common Stock if, in the opinion of counsel for the Employer, such a
representation is required by any of the aforementioned relevant provisions
of law.
(l) MERGER, SALE OF ASSETS, ETC. In the event of the merger or
reorganization of the Employer with or into any other corporation, or in
the event of a proposed sale of substantially all of the assets of the
Employer, or in the event of a proposed dissolution or liquidation of the
Employer (collectively, "sale transaction"): (1) all outstanding Options
that are not then fully exercisable shall become exercisable upon the date
of closing of any sale transaction or such earlier date as the Committee
may fix; and (2) the Committee may, in the exercise of its sole discretion,
terminate all outstanding Options as of a date fixed by the Committee. In
such event, however, the Committee shall notify each Optionee of such
action in writing not less than sixty (60) days prior to the termination
date fixed by the Committee, and each Optionee shall have the right to
exercise his Option prior to said termination date.
(m) SUBSTITUTE STOCK OPTIONS. In connection with the acquisition or
proposed acquisition by the Employer or any Subsidiary, whether by merger,
acquisition of stock or assets, or other reorganization transaction, of a
business any employees of which have been granted incentive stock options,
the Committee is authorized to issue, in substitution of any such
unexercised stock option, a new Option under this Plan which confers upon
the Optionee substantially the same benefits as the old option; provided,
however, that the issuance of any new Option for an old incentive stock
option shall satisfy the requirements of Section 425(a) of the Internal
Revenue Code.
(n) TAX COMPLIANCE. The Employer, in its sole discretion, may take
any actions reasonably believed by it to be required to comply with any
local, state, or federal tax laws relating to the reporting or withholding
of taxes attributable to the grant or exercise of any Option or the
disposition of any shares of Common Stock issued upon exercise of an
Option, including, but not limited to, (i) withholding from any Optionee
exercising an Option a number of shares of Common Stock having a fair
market value equal to the amount required to be withheld by Employer under
applicable tax laws, and (ii) withholding from any form of compensation or
other amount due an Optionee or
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holder of shares of Common Stock issued upon exercise of an Option any
amount required to be withheld by Employer under applicable tax laws.
Withholding or reporting shall be considered required for purposes of
this subparagraph if any tax deduction or other favorable tax treatment
available to Employer is conditioned upon such reporting or withholding.
(o) OTHER PROVISIONS. Option agreements executed pursuant to the
Plan may contain such other provisions as the Committee shall deem
advisable, provided in the case of Incentive Stock Options that the
provisions are not inconsistent with the provisions of Section 422A(b) of
the Internal Revenue Code or with any of the other terms and conditions of
this Plan.
7. TERM OF THE PLAN. The Plan shall become effective on the earlier of
(a) the date of adoption of the Plan by the Board; or (b) the date of
shareholder approval of the Plan as provided in paragraph 9 of the Plan. Unless
sooner terminated as provided in subparagraph 8(a) of the Plan, the Plan shall
terminate on the tenth anniversary of its effective date. Options may be
granted at any time after the effective date and prior to the date of
termination of the Plan.
8. AMENDMENT OR EARLY TERMINATION OF THE PLAN.
(a) AMENDMENT OR EARLY TERMINATION. The Board may terminate the Plan
at any time. Subject to the prior approval of the Washington Supervisor of
Banking, the Board may amend the Plan at any time and from time to time in
such respects as the Board may deem advisable, except that, without
approval of the holders of a majority of the outstanding shares of the
Common Stock, no such revision or amendment shall:
(1) increase the number of shares of Common Stock subject to the
Plan other than in connection with an adjustment under subparagraph
6(i) of the Plan; or
(2) change the designation of the class of Employees eligible to
be granted Options, as provided in paragraph 5 of the Plan.
(b) EFFECT OF AMENDMENT OR TERMINATION. No amendment or termination
of the Plan shall affect Options granted prior to such amendment or
termination, and all such Options shall remain in full force and effect
notwithstanding such amendment or termination.
9. SHAREHOLDER APPROVAL. Continuance of the Plan shall be subject to
approval of the Plan by affirmative vote of the holders of a majority of the
outstanding shares of Common Stock of the Employer at a duly convened meeting of
the shareholders of the Employer, which approval must occur within twelve (12)
months before or after the date of adoption of the Plan by the Board.
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Exhibit 99.3
FIRST AMENDMENT TO
KITTITAS VALLEY BANK, N.A.
EMPLOYEE STOCK OPTION PLAN
The Kittitas Valley Bank, N.A. Employee Stock Option Plan, adopted by the
Board of Directors of Kittitas Valley Bank, N.A. on September 1, 1992 (the
"Plan") and approved by the shareholders on September 1, 1992, is hereby amended
as follows:
1. The name of the Plan is changed from the "Kittitas Valley Bank, N.A.
Employee Stock Option Plan" to the "Kittitas Valley Bancorp Employee
Stock Option Plan", with all references in the Plan to the name
changed accordingly.
2. All options outstanding under the Plan are adopted by and assumed by
Kittitas Valley Bancorp, and any stock issued under the Plan will be
stock in Kittitas Valley Bancorp, and not Kittitas Valley Bank, N.A.
3. All references in the Plan to Section 422A of the Internal Revenue
Code shall be amended to refer to Section 422. All references to
Section 425(d) and Section 425(e) are amended to refer to Section
424(d) and Section 424(e), respectively.
4. Subparagraph 3(a) (STOCK SUBJECT TO OPTIONS/NUMBER OF SHARES RESERVED)
is amended to increase the maximum number of shares which may be
optioned and sold pursuant to the Plan to 40,000 shares from 20,000
shares.
5. Subparagraph 8(a) (AMENDMENT OR EARLY TERMINATION OF THEPLAN/AMENDMENT
OR EARLY TERMINATION) is amended to delete "Subject to the prior
approval of the Washington Supervisor of Banking," from the second
sentence of the subparagraph.
6. The Effective Date of this First Amendment to the Plan shall be March
28, 1996, the date on which the First Amendment was adopted by the
Board of Directors: provided, however, that if the provision of this
First Amendment increasing the total number of shares reserved for
options under the Plan is not approved by a vote of the shareholders
of Kittitas Valley Bancorp at an annual meeting or any special meeting
within 12 months after the Effective Date, that portion of this First
Amendment shall terminate and be of no force and effect.
DATED this 10th day May of 1996.
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