<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. ___)
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
INTERWEST BANCORP, INC
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE>
December 15, 1998
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders of
InterWest Bancorp, Inc. ("Bancorp"), to be held at the Elks Club, 155 Northeast
Ernst Street, Oak Harbor, Washington, on Wednesday, January 20, 1999, 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 bancorp. Directors
and Officers of Bancorp, as well as a representative of Ernst & Young LLP,
Bancorp'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,
Barney R. Beeksma Stephen M. Walden
Chairman of the Board President and Chief
Executive Officer
<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 20, 1999
- ------------------------------------------------------------------------------
NOTICE IS HEREBY GIVEN that the 1999 Annual Meeting of Shareholders of
InterWest Bancorp, Inc. ("Bancorp") will be held at the ELKS CLUB, 155 NORTHEAST
ERNST STREET, OAK HARBOR, WASHINGTON, ON WEDNESDAY, JANUARY 20, 1999, AT 2:00
P.M., local time, for the following purposes:
(1) ELECTION OF DIRECTORS. To elect four directors to three-year terms;
and
(2) OTHER BUSINESS. 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 proposal at the Annual Meeting or
on any subsequent adjournments. Shareholders of record at the close of business
on December 1, 1998, are entitled to notice of and to vote at the meeting and
any adjournments or postponements.
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 15, 1998
- ------------------------------------------------------------------------------
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE BANCORP 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>
- ------------------------------------------------------------------------------
PROXY STATEMENT
OF
INTERWEST BANCORP, INC.
275 SOUTHEAST PIONEER WAY
OAK HARBOR, WASHINGTON 98277
(360) 679-4181
- ------------------------------------------------------------------------------
ANNUAL MEETING OF SHAREHOLDERS
JANUARY 20, 1999
- ------------------------------------------------------------------------------
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of InterWest Bancorp, Inc. ("Bancorp"), the
holding company for InterWest Bank, Pacific Northwest Bank, Kittitas Valley
Bank, N.A. ("Kittitas"), and Pioneer National Bank ("Pioneer"), to be used at
the 1999 Annual Meeting of Shareholders of Bancorp. The subsidiary banks are
collectively referred to as (the "Banks"). The Annual Meeting will be held
at the ELKS CLUB, 155 NORTHEAST ERNST STREET, OAK HARBOR, WASHINGTON ON
WEDNESDAY, JANUARY 20, 1999, AT 2:00 P.M., local time. This Proxy Statement
and the enclosed proxy card are being mailed to shareholders on or about
December 15, 1998.
VOTING AND PROXY PROCEDURE
Shareholders of record as of the close of business on December 1, 1998,
are entitled to one vote for each share of common stock ("Common Stock") of
Bancorp then held. As of December 1, 1998, Bancorp had 15,810,436 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 proposal to be considered at the Annual Meeting.
When a proxy card is returned properly signed and dated, the shares
represented by the proxy 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. 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 Bancorp 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 Bancorp's Employee Stock
Ownership Plan ("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.
1
<PAGE>
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 the slate
of directors as a group, or for each individual 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.
RECENT DEVELOPMENTS
ACQUISITION OF PACIFIC NORTHWEST BANK AND PIONEER NATIONAL BANK
Effective June 15, 1998 and June 16, 1998, respectively, Pacific Northwest
Bank and Pioneer National Bank became wholly owned subsidiaries of Bancorp.
Consistent with the terms of the respective merger agreements governing these
mergers, shareholders of Pacific Northwest Bank and shareholders of Pioneer
Bancorp, Inc., the parent company of Pioneer that was merged with Bancorp,
became shareholders of Bancorp, and are therefore eligible to vote at the 1999
Annual Meeting of Shareholders.
ACQUISITION OF KITTITAS VALLEY BANK, N.A.
Effective August 31, 1998, Kittitas Valley Bancorp, Inc. ("KVB") was
acquired by Bancorp and Kittitas Valley Bank, N.A., a wholly owned subsidiary of
KVB became a separate subsidiary of Bancorp. Consistent with the terms of the
merger agreement governing the merger, shareholders of KVB who became
shareholders of Bancorp, will be eligible to vote at the 1999 Annual Meeting of
Shareholders.
INTERNAL MERGERS
In an effort to control costs and streamline procedures, Bancorp determined
it advisable to consolidate certain of its subsidiary banks. On October 15,
1998, First National Bank of Port Orchard ("FNBPO") was merged with and into
Pacific Northwest Bank, resulting in the branch offices of FNBPO operating as
branches of Pacific Northwest Bank. An application has also been filed with the
appropriate banking regulators to merge Pioneer with Pacific Northwest Bank.
The merger is scheduled to close by early 1999.
2
<PAGE>
- ------------------------------------------------------------------------------
MANAGEMENT
- ------------------------------------------------------------------------------
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Persons and groups who beneficially own in excess of five percent of
Bancorp'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 as of
December 1, 1998. The following table sets forth, as of December 1, 1998,
information as to the shares of the Common Stock beneficially owned by each
director, by the Chief Executive Officer of Bancorp, by Bancorp's executive
officers who received salaries and bonuses in excess of $100,000 during the
year ended September 30, 1998, ("named executive officers") and by all
executive officers and directors of Bancorp as a group.
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENT OF
NAME BENEFICIALLY OWNED (1)(2) SHARES OUTSTANDING
- ---- ------------------------- ------------------
<S> <C> <C>
DIRECTORS:
Barney R. Beeksma 375,378(3)(4) 2.4%
Larry Carlson 48,698(5) *
Michael T. Crawford 10,125 *
Jean Gorton 11,700 *
C. Stephen Lewis 29,062 *
Clark H. Mock 5,625 *
Russel E. Olson 10,596 *
Vern Sims 275,837(6) 1.7%
EXECUTIVE OFFICERS:
Stephen M. Walden** 311,980(4)(7) 2.0%
Gary M. Bolyard** 88,757(8) *
Clark W. Donnell 145,551(9) *
Patrick M. Fahey** 233,067(10) 1.5%
Kenneth G. Hulett 106,810(11) *
H. Glenn Mouw 104,613(4)(12) *
All Executive Officers 1,757,799(2)(4) 10.9%
and Directors as a Group
(14 persons)
</TABLE>
- -------------------
* Less than 1 percent of shares outstanding.
** Mr. Walden, Mr. Bolyard and Mr. Fahey are also directors of Bancorp.
(1) Shares have been adjusted to reflect a 3-for-2 stock split paid on
August 17, 1998.
3
<PAGE>
(2) 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 1, 1998, through the exercise of stock options granted pursuant to
Bancorp's stock option plans: Mr. Beeksma 8,494, Mr. Crawford 1,125, Ms.
Gorton 750, Mr. Lewis 1,500, Mr. Mock 1,125, Mr. Olson 750, Mr. Sims 1,500,
Mr. Walden 56,812, Mr. Bolyard 21,676, Mr. Donnell 51,374, Mr. Fahey
88,437, Mr. Hulett 28,724, Mr. Mouw 51, 224, and all executive officers and
directors as a group, 313,491. Shares held in accounts under Bancorp's
ESOP, as to which the holders have voting power but not investment power,
are also included as follows: Mr. Beeksma 59,605 shares, Mr. Walden 40,457
shares, Mr. Bolyard 132 shares, Mr. Donnell 16,638 shares, Mr. Hulett
17,221 shares, Mr. Mouw 19,612 shares, and all executive officers and
directors as a group, 153,665 shares.
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 as follows:
(3) Includes 10,125 shares owned by Mr. Beeksma's spouse.
(4) Does not include 147,055 shares held by the ESOP of which Messrs. Beeksma,
Walden and Mouw are trustees, and over which they share equal voting
power.
(5) Includes 5,254 shares held in an IRA Account for the benefit of Mr. Carlson
(6) Includes 271,837 shares held in a Limited Liability Corporation.
(7) Includes 2,476 shares owned by Mr. Walden's spouse.
(8) Includes 3,390 shares held in an IRA Account for the benefit of
Mr. Bolyard.
(9) Includes 4,245 shares owned by Mr. Donnell's minor children.
(10) Includes 26,703 shares held in an IRA Account for the benefit of Mr. Fahey,
177 shares owned by Mr. Fahey's spouse, 705 shares held in an IRA Account
for the benefit of Mr. Fahey's spouse, and 592 shares owned by Mr. Fahey's
minor children.
(11) Includes 3,580 shares held in an IRA Account for the benefit of Mr. Hulett
and 4,797 shares in an IRA Account for the benefit of Mr. Hulett's
spouse.
(12) Includes 1,191 shares owned by Mr. Mouw's spouse.
EXECUTIVE OFFICERS
The following table sets forth the age, position, and the business
experience during the past five years of those executive officers of Bancorp who
are not also directors of Bancorp.
CLARK W. DONNELL (43) is Executive Vice President of Bancorp. He has also
served as Executive Vice President and Chief Administrative Officer of InterWest
Bank since 1988. During 1987 through 1988, Mr. Donnell held the position of
Senior Vice President of InterWest Bank, and from1984 through 1987, served as
Vice President of InterWest Bank.
KENNETH G. HULETT (51) is Executive Vice President of Bancorp, and since
1988, has served as Executive Vice President and Chief Lending Officer of
InterWest Bank. From 1977 to 1987, Mr. Hulett served as Vice President of
InterWest Bank.
H. GLENN MOUW (45) is Executive Vice President of Bancorp and has served as
Executive Vice President and Chief Financial Officer of InterWest Bank since
1988. Prior to that time, Mr. Mouw served as Senior Vice President and
Treasurer of InterWest Bank from 1987 to 1988 and Vice President and Treasurer
from 1981 to 1987.
4
<PAGE>
- ------------------------------------------------------------------------------
ELECTION OF DIRECTORS
- ------------------------------------------------------------------------------
Bancorp's Board of Directors is currently composed of eleven members.
Bancorp's articles and 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 2002. Gary M. Bolyard, Patrick M. Fahey, Clark H.
Mock and Stephen M. Walden, all of whom presently are serving as directors of
Bancorp, have been nominated for election to the term ending in 2002. Henry
Koetje, who would have been up for re-election this year, retired from Bancorp's
Board in September of 1998.
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.
BOLYARD, FAHEY, MOCK, AND WALDEN.
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.
<TABLE>
<CAPTION>
YEAR FIRST
NAME AGE ELECTED DIRECTOR(1) TERM TO EXPIRE
---- --- ------------------- --------------
<S> <C> <C> <C>
BOARD NOMINEES
Gary M. Bolyard 62 1996 2002 (2)
Patrick M. Fahey 56 1998 2002 (2)
Clark H. Mock 62 1993 2002 (2)
Stephen M. Walden 55 1988 2002 (2)
DIRECTORS CONTINUING
IN OFFICE
Barney R. Beeksma 66 1974 2000
Larry Carlson 66 1996 2000
C. Stephen Lewis 56 1988 2000
Russel E. Olson 67 1988 2000
Michael T. Crawford 60 1994 2001
Jean Gorton 64 1991 2001
Vern Sims 73 1976 2001
</TABLE>
- ---------------
(1) Includes service on the Board of Directors of InterWest Bank, as
applicable, of which all of the directors, with the exception of Mr.
Fahey, are members.
5
<PAGE>
(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 InterWest Bank since 1960. He
currently serves as the Chairman of the Board of Bancorp and InterWest Bank,
after retiring from the position of President and Chief Executive Officer of
InterWest Bank in January 1990. Mr. Beeksma is the father-in-law of Clark
Donnell. Mr. Beeksma served as a representative for the 10th District in the
Washington State legislature from 1994 through 1996. Mr. Beeksma 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/Corporate Development and
a director of Bancorp, InterWest Bank, Pacific Northwest Bank, Kittitas and
Pioneer. Mr. Bolyard has been an executive officer of Bancorp and InterWest
Bank 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 &
Kottkamp, 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 Vice President, General Manager of Concrete
Nor'West, a division of Miles Sand & Gravel Co., Inc., with which he has been
associated since 1968.
PATRICK M. FAHEY has served as the Chairman, President and Chief Executive
Officer of Pacific Northwest Bank since October 1987. In June 1998, upon
consummation of the acquisition of Pacific Northwest Bank by Bancorp, Mr. Fahey
was appointed a director of Bancorp. Mr. Fahey was also appointed a member of
Bancorp's Executive Committee and Vice Chairman/Commercial Banking. Mr. Fahey
is also Chairman of the Board of Pacific Northwest Bank, and serves on the Board
of Directors of Kittitas and Pioneer. Mr. Fahey serves on the Board of
Directors of Premera Blue Cross.
JEAN GORTON is a consultant to Trillium Corporation, Bellingham,
Washington, a land development and resource management firm. Ms. Gorton has
been associated with Trillium Corporation since 1983, and retired as Senior Vice
President of Planning in July 1998. She served as a loaned executive to the
College of Business and Economics at Washington State University in Pullman,
Washington from 1996 through July 1998.
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.
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.
6
<PAGE>
RUSSEL E. OLSON retired in January 1995 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 Bancorp and
InterWest Bank, and also serves as a director of Bancorp, InterWest Bank,
Pacific Northwest Bank, Kittitas and Pioneer. Mr. Walden started his career at
InterWest 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. Mr. Walden
has also served as a member of the Board of Directors of the Federal Home Loan
Bank of Seattle since January 1998.
- ------------------------------------------------------------------------------
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
- ------------------------------------------------------------------------------
The Board of Directors of Bancorp conducts its business through meetings of
the Board and through its committees. During the fiscal year ended September 30,
1998, the Board of Directors of Bancorp held 13 meetings. No director of
Bancorp attended fewer than 75 percent of the total meetings of the Board and
committees on which such person served during this period.
The Board of Directors of Bancorp has an Audit Committee currently
consisting of Messrs. Olson (Chairman), Carlson, Crawford, and Ms. Gorton. The
purpose of the Committee is to provide direction and oversight to the Internal
Auditor and to review the examinations of Bancorp by federal and state
regulatory authorities and the audit by the independent auditing firm. The
Audit Committee met six times during the 1998 fiscal year.
The Board of Directors of Bancorp has an Executive Committee currently
consisting of Messrs. Beeksma (Chairman), Bolyard, Fahey, Olson, Sims 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 once during the 1998 fiscal year.
The Board of Directors of InterWest Bank has a Compensation and Stock
Option Committee ("Committee") that acts on behalf of InterWest Bank and
Bancorp, consisting of Messrs. Sims (Chairman), Beeksma, Lewis and Mock. The
purpose of the 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. company-wide
profit-sharing plans, stock option plans, benefit plans, etc.). All
compensation paid to employees is paid by the respective banks, with the
exception of Mr. Beeksma's salary which is paid by Bancorp. The Committee also
administers the 1996 Outside Directors Stock Options-For-Fees Plan. The
Committee meets annually or on an as-needed basis and met five times during the
1998 fiscal year.
The Board of Directors of Bancorp has appointed a Nominating Committee
consisting of Messrs. Sims (Chairman), Lewis and Beeksma. 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.
7
<PAGE>
- ------------------------------------------------------------------------------
DIRECTORS' COMPENSATION
- ------------------------------------------------------------------------------
1996 OUTSIDE DIRECTORS STOCK OPTIONS-FOR-FEES PLAN ("1996 DIRECTOR PLAN").
Each member of Bancorp's Board of Directors who is not an employee of Bancorp or
any subsidiary of Bancorp may participate in the 1996 Director Plan. The 1996
Director Plan, adopted at the 1997 Annual Meeting of Shareholders, establishes
the regular retainer fee for directors at $8,000 per year over the five-year
term of the plan. The 1996 Director 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 375 shares of Common Stock
and a $4,000 retainer in cash, payable quarterly, or (iii) receive an option
covering 750 shares of Bancorp 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 calendar 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 Bancorp Common Stock on the date of grant. Each option granted
under the 1996 Director Plan has a five-year term and 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.
As Chairman of the Board, during the fiscal year 1998, Barney R. Beeksma
received an annual retainer of $66,000 and contributions to Bancorp's ESOP in
the amount of $3,330 and to Bancorp's 401(k) Plan in the amount of $1,485.
InterWest Bank has entered into an employment agreement with Mr. Beeksma that
provides for severance benefits in the event of termination. Under the terms of
Mr. Beeksma's employment agreement, in the event of termination, Mr. Beeksma
will be paid the balance of his annual salary for the calendar year, plus one
additional year's salary.
8
<PAGE>
- ------------------------------------------------------------------------------
EXECUTIVE COMPENSATION
- ------------------------------------------------------------------------------
SUMMARY COMPENSATION TABLE. The following table sets forth the
compensation received by the Chief Executive Officer of Bancorp and the named
executive officers for each of the three fiscal years ended September 30, 1998.
InterWest Bank pays all compensation of the executive officers, with the
exception of Mr. Fahey, whose compensation is paid for by Pacific Northwest
Bank.
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation Awards
------------------- -------------------
Securities
Other Annual Underlying All Other
Name and Position Year Salary($) Bonus($) Compensation(1) Options(#) Compensation($)
----------------- ---- --------- -------- --------------- ---------- ---------------
($)
<S> <C> <C> <C> <C> <C> <C>
Stephen M. Walden 1998 $261,000 133,120 $ 29,000(2) 40,500 $ 11,560(3)
President and Chief 1997 227,250 122,360 25,250 3,000 12,414
Executive Officer 1996 198,674 74,565 22,500 3,750 13,626
Patrick M. Fahey 1998 (4) 84,608(4) -- -- -- 7,620(4)
Vice Chairman/
Commercial Banking
Clark W. Donnell 1998 170,000 58,993 -- 1,500 11,889(5)
Executive Vice 1997 150,000 55,876 1,500 14,291
President 1996 128,281 34,263 -- 3,750 12,847
Kenneth G. Hulett 1998 131,350 43,296 -- 1,500 13,595(6)
Executive Vice 1997 117,501 44,616 -- 900 12,640
President 1996 106,694 29,815 -- 3,750 10,787
H. Glenn Mouw 1998 155,000 53,578 -- 1,500 13,113(7)
Executive Vice 1997 136,251 51,075 1,200 14,431
President 1996 119,246 32,768 -- 3,750 12,016
Gary M. Bolyard 1998 140,750 49,115 -- 750 13,477(8)
Vice Chairman/ 1997 135,960 -- -- 675 4,072
Corporate Development 1996 (9) 11,000 -- -- -- 330
</TABLE>
- ------------------
(1) Does not include amounts attributable to miscellaneous benefits received by
executive officers. In the opinion of management, the costs to Bancorp of
providing such benefits to any individual executive officer during the year
ended September 30, 1998, did not exceed the lesser of $50,000 or 10% of the
total annual salary and bonuses reported for the individual.
(2) Represents an elective contribution by Mr. Walden to a non-qualified
deferred compensation plan.
9
<PAGE>
(3) Includes contributions to Bancorp's ESOP of $7,225 and to Bancorp's Salary
Deferral 401(k) Plan and Trust ("401(k) Plan") of $4,335.
(4) Includes director's fees paid to Mr. Fahey in the amount of $4,400, and
reflects compensation earned and a contribution to Pacific Northwest Bank's
401(k) and Retirement Plan in the amount of $7,620 from June 16, 1998, the
day that Mr. Fahey joined Bancorp through September 30, 1998.
(5) Includes contributions to Bancorp's ESOP of $7,393 and to Bancorp's 401(k)
Plan of $4,496.
(6) Includes contributions to Bancorp's ESOP of $8,497 and to Bancorp's 401(k)
Plan of $5,098.
(7) Includes contributions to Bancorp's ESOP of $8,196 and to Bancorp's 401(k)
Plan of $4,917.
(8) Includes contributions to Bancorp's ESOP of $7,781 and to Bancorp's 401(k)
Plan of $5,696.
(9) Reflects compensation earned from September 1, 1996, the day that Mr.
Bolyard joined InterWest Bank through September 30, 1996.
EMPLOYMENT AGREEMENTS. InterWest Bank has entered into employment
contracts with Messrs. Walden, Mouw, Hulett and Donnell that provide for
severance benefits in the event employment is terminated following a change in
control of InterWest Bank. Under these agreements, a change in control is
defined generally to include a merger involving InterWest Bank, an acquisition
of InterWest Bank by another institution or entity, a sale of substantially all
of the assets of InterWest Bank, a change in beneficial ownership of 25 percent
of InterWest Bank stock 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 area 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.
Pacific Northwest Bank entered into an employment agreement with Mr. Fahey
for a term of three years, expiring on June 15, 2001, that provides Mr. Fahey
with an annual salary of $275,000. The agreement further provides payment to
Mr. Fahey of his W-2 income (before salary deferrals) for the 12-month period
preceding termination of his employment if: (i) Bancorp terminates employment
without cause or Mr. Fahey terminates his employment for good reason, (ii)
employment terminates (for any reason) in connection with a change in control of
Bancorp, or (iii) Mr. Fahey elects to terminate his employment during the period
commencing on the 25th month of the employment term and ending on the 30th month
of the term.
Mr. Fahey is also a beneficiary participant in Pacific Northwest Bank's
"make-whole" benefit plan, the purpose of which is to provide benefits to
Pacific Northwest Bank employees whose benefits under qualified retirement plans
are limited by the application of sections 415 and/or 401(a)(7) of the Internal
Revenue Code.
SEVERANCE PAY AGREEMENTS. InterWest Bank entered into Severance Pay
Agreements (the "Severance Agreements") 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 weeks total compensation for each 12 months of employment
with InterWest 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.
10
<PAGE>
DEFERRED COMPENSATION ARRANGEMENTS - InterWest Bank has entered into a
Deferred Compensation Agreement with Mr. Walden, the President, Chief Executive
Officer of Bancorp and InterWest Bank. This agreement has provided for specific
contributions from InterWest Bank during the period from January 1990 through
January 1995. Currently, Mr. Walden makes elective contributions under the
approval of the Compensation Committee. All contributions to this Deferred
Compensation Agreement are fully vested at all times and increase in value at a
rate equal to InterWest Bank's annual portfolio yield, less 0.5 percent.
Commencing January 1, 2002, InterWest Bank will make payments to Mr. Walden at
his option either through a lump sum payment, or an annuity over a specified
period of time.
Central Bancorporation ("Central") had previously entered into an Executive
Deferred Compensation Agreement with Gary M. Bolyard, who was the President,
Chief Executive Officer and a director of Central. Pursuant to the acquisition
of Central and its bank subsidiary, Central Washington Bank, by Bancorp in
August 1996, Bancorp assumed the agreement with Mr. Bolyard that provides for
certain deferred payments in consideration of Mr. Bolyard's services and
contributions to the growth and progress of Central. Upon retirement on January
1, 2001, death, termination in connection with a disability or a change in
control, Mr. Bolyard is entitled to receive $57,635 annually from the date of
such event for a period of 15 years. In connection with this agreement, an
insurance policy on the life of Mr. Bolyard in the face amount of $500,000 was
purchased to offset future payments which may be made under this deferred
compensation agreement.
11
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR. The following table sets forth
information concerning the grant of stock options to the Chief Executive Officer
and the named executive officers during the fiscal year ended September 30,
1998.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
POTENTIAL REALIZABLE
VALUE AT
ASSUMED ANNUAL RATES
OF STOCK PRICE
INDIVIDUAL GRANTS APPRECIATION
FOR OPTION TERM(2)
- -------------------------------------------------------------------------------------------------------------------------------
NUMBER OF % OF TOTAL
NAME SHARES OPTIONS
UNDERLYING GRANTED TO EXERCISE
OPTIONS EMPLOYEES PRICE EXPIRATION 5% 10%
GRANTED(1) IN FISCAL YEAR ($/SHARE) DATE
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Stephen M. Walden 37,500 22.1% $ 27.73 3/17/03 $287,264 $639,778
3,000 1.8% 24.92 1/9/08 47,010 119,132
- -------------------------------------------------------------------------------------------------------------------------------
Patrick M. Fahey 0 0 0 0 0 0
- -------------------------------------------------------------------------------------------------------------------------------
Clark W. Donnell 1,500 0.9% 24.92 1/9/08 23,505 59,566
- -------------------------------------------------------------------------------------------------------------------------------
Kenneth G. Hulett 1,500 0.9% 24.92 1/9/08 23,505 59,566
- -------------------------------------------------------------------------------------------------------------------------------
H. Glenn Mouw 1,500 0.9% 24.92 1/9/08 23,505 59,566
- -------------------------------------------------------------------------------------------------------------------------------
Gary M. Bolyard 750 0.4% $24.92 1/9/08 11,752 29,783
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Each option granted vests at the rate of 25 percent per annum, with the
exception of Mr. Walden's 37,500 options that vest at the rate of 20
percent per annum. Options will become immediately exercisable in the
event of a change in control of Bancorp. Each option was granted under
Bancorp's 1993 Plan and has an exercise price equal to the fair market
value of the Common Stock on the date of grant and, under the terms of the
Plan, contains a reload option. Each of the indicated options were granted
on January 9, 1998, except Mr. Walden's 37,500 options which were granted
on March 17, 1998.
(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. 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 Bancorp's Common Stock would be approximately $40.59 and
$64.63, respectively, as of January 9, 2008 and $35.59 and $44.65,
respectively as of March 17, 2003.
12
<PAGE>
OPTION EXERCISE/VALUE TABLE. The following information with respect to
options exercised during the fiscal year ended September 30, 1998, and remaining
unexercised at the end of the fiscal year, is presented for the Chief Executive
Officer and the named executive officers.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND YEAR END OPTION VALUES
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
SHARES
ACQUIRED ON VALUE NUMBER OF SECURITIES VALUE OF UNEXERCISED
EXERCISE(#) REALIZED UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT
($) OPTIONS AT YEAR END FISCAL YEAR END (1)
NAME
----------------------------------------------------------------------
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Stephen M. Walden 17,250 $418,108 56,812 42,188 $ 935,972 10,825
- ----------------------------------------------------------------------------------------------------------------------------------
Patrick M. Fahey 10,800 200,300 88,437(2) 0 1,639,796 0
- ----------------------------------------------------------------------------------------------------------------------------------
Clark W. Donnell 0 0 51,374 2,813 863,147 10,044
- ----------------------------------------------------------------------------------------------------------------------------------
Kenneth G. Hulett 15,600 321,672 28,724 2,513 457,984 9,732
- ----------------------------------------------------------------------------------------------------------------------------------
H. Glenn Mouw 0 0 51,224 2,663 862,991 9,888
- ----------------------------------------------------------------------------------------------------------------------------------
Gary M. Bolyard 0 0 21,676 899 402,801 351
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) On September 30, 1998, the closing price of Common Stock was $22.875.
For purposes of the foregoing table, stock options with an exercise
price less than that amount are considered to be "in-the-money" and are
considered to have a value equal to the difference between this amount
and the exercise price of the stock option multiplied by the number of
shares covered by the stock option.
(2) Represents options granted under the Pacific Northwest Bank 1988 Stock
Option Plan, as adopted by Bancorp, pursuant to the acquisition of
Pacific Northwest Bank effective June 15, 1998.
1993 INCENTIVE STOCK OPTION PLAN
The 1993 Incentive Stock Option Plan, as amended ("1993 Plan") provides
for the grant of incentive stock options ("ISO's") and nonqualified stock
options ("NQSO's") to all officers and employees of Bancorp and its
subsidiaries, as well as other persons who render their services to Bancorp.
The 1993 Plan is administered by a committee of nonemployee directors and
provides for the grant of up to 966,000 shares of Bancorp Common Stock in the
form of options.
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 Bancorp sets the compensation for Mr. Beeksma
as Chairman of the Board of Directors.
13
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE
Historically and currently, the Committee of InterWest Bank has served as
the compensation committee of Bancorp. The Committee is responsible for
establishing and implementing all compensation policies of Bancorp and its
subsidiaries, as well as setting the compensation for the executive officers of
Bancorp's subsidiaries. The Committee is also responsible for evaluating the
performance of the Chief Executive Officer and approving an appropriate
compensation level. The Chief Executive Officer evaluates the performance of
the executive vice presidents and recommends to the 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 Bancorp 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 Bancorp's long-term strategic planning and measurement
processes.
The 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 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 Bancorp and its
subsidiaries, which is designed to compensate for performance. The plan is
designed to provide for bonuses of up to 70 percent of salary for the chief
executive officer, and up to 55 percent of salary level for executive vice
presidents. Approximately half of the performance bonus is based on
quantifiable data such as return on average equity and the efficiency ratio.
The remainder is based on subjective evaluations of performance.
The Committee has awarded stock options to employees of Bancorp and its
subsidiaries in accordance with the provisions of the 1993 Plan approved by the
Board of Directors and the shareholders. Stock options are Bancorp's primary
long-range compensation program designed to reward performance that benefits
shareholders. Awards of stock options are intended to provide employees with
increased motivation and incentive to exert their best efforts on behalf of
Bancorp by enlarging their personal stake in its success through the opportunity
to increase the value of their stock ownership in Bancorp. Options issued to
employees 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 employee is based on the employee's performance and
relative responsibilities within Bancorp. Options may have a deferred vesting
and will not be exercisable prior to vesting.
During the fiscal year ended September 30, 1998, the Committee granted
stock options totaling 169,425 shares to employees of Bancorp and its
subsidiaries.
During the fiscal year ended September 30, 1998, the base salary of Stephen
M. Walden, President and Chief Executive Officer of Bancorp, was $261,000. In
addition to this, he received a performance bonus of $133,120 and was credited
with $29,000 in deferred compensation. This resulted
14
<PAGE>
in total compensation of $423,120, which represents a 13 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 performance of
Bancorp.
The Committee also administers the 1996 Director Plan, whereby outside
directors are paid an annual fee of $8,000 payable in cash, stock options, or a
combination of cash and stock options.
COMPENSATION AND STOCK OPTION COMMITTEE
Vern Sims (Chairman) C. Stephen Lewis
Barney R. Beeksma Clark Mock
PERFORMANCE GRAPH. The following graph compares the cumulative total
shareholder return on Bancorp'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*
Total Return Performance
[CHART]
<TABLE>
<CAPTION>
PERIOD ENDING
-------------
INDEX 9/30/93 9/30/94 9/30/95 9/30/96 9/30/97 9/30/98
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
InterWest Bancorp, Inc. 100.00 93.53 102.88 199.85 277.26 240.95
NASDAq (Total U.S.) 100.00 100.82 139.26 165.25 226.87 231.78
SNL Thrift Index 100.00 109.66 143.61 173.45 301.38 270.20
SNL $1B-5B Thrift
Index 100.00 109.53 144.48 176.58 301.87 287.74
SNL Western Thrift Index 100.00 96.40 124.42 151.45 275.07 224.84
</TABLE>
*Assumes that the value of the investment in Bancorp's Common Stock and each
index was $100 on September 30, 1993, and that all dividends were reinvested.
15
<PAGE>
- ------------------------------------------------------------------------------
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
- ------------------------------------------------------------------------------
Section 16(a) of the Exchange Act requires Bancorp's executive officers and
directors, and persons who beneficially own more than 10 percent of any
registered class of Bancorp'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 Bancorp 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 Bancorp by the above referenced persons,
Bancorp believes that during the fiscal year ended September 30, 1998, all
filing requirements applicable to its reporting officers, directors and greater
than ten percent beneficial owners were properly made and filed on a timely
basis, with the exception of the following: Mr. Beeksma inadvertently filed a
late Statement of Change in Beneficial Ownership on Form 4 to report the gifting
of 4,500 shares of Common Stock in December 1996; Mr. Carlson inadvertently
filed one late Form 4 to report the sale of 28,030 shares of Common Stock in
April 1998; Mr. Sims inadvertently filed three late Forms 4, one to report the
gifting of 2,512 shares of Common Stock in November 1996, one to report the
transfer of 271,837 shares of Common Stock to a Limited Liability Corporation in
April 1998, and one to report the purchase of 2,500 shares of Common Stock in
September 1998; Mr. Walden inadvertently filed one late Form 4 to report the
exercise of stock options to purchase 17,250 shares of Common Stock during July
1998; and Mr. Bolyard inadvertently filed one late Form 4 to report the sale of
9,462 shares of Common Stock in April 1998.
- ------------------------------------------------------------------------------
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 Banks are
therefore prohibited from making any new loans or extensions of credit to
executive officers and directors at different rates or terms than those offered
to the general public and has adopted a policy to this effect.
Mr. Fahey was recently elected to the Board of Directors of Premera Blue
Cross, an insurance healthcare provider. Subsequent to Mr. Fahey's election to
the Board, InterWest called for, and reviewed bids from various insurance
carriers with respect to health care insurance for InterWest and its
subsidiaries. After reviewing the bids, management decided to accept Premera's
bid. Beginning January 1, 1999, Bancorp will contract with Premera Blue Cross
for health insurance coverage.
16
<PAGE>
- ------------------------------------------------------------------------------
AUDITORS
- ------------------------------------------------------------------------------
The Board of Directors has appointed Ernst & Young LLP, independent
auditors, to serve as Bancorp's independent auditors for the fiscal year ending
September 30, 1999. 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.
- ------------------------------------------------------------------------------
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 Bancorp
for the 2000 Annual Meeting of Shareholders, any shareholder proposal to take
action at such meeting must be received at Bancorp's main office at 275
Southeast Pioneer Way, Oak Harbor, Washington, no later than August 20, 1999.
Any such proposals shall be subject to the requirements of the proxy rules
adopted under the Exchange Act.
In addition, Bancorp'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 Bancorp 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 Bancorp not later than the close of the tenth day following the
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 Bancorp that
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 Bancorp's books and (b) the number of shares of Bancorp which are
beneficially owned by such shareholder.
17
<PAGE>
- ------------------------------------------------------------------------------
MISCELLANEOUS
- ------------------------------------------------------------------------------
The cost of solicitation of proxies will be borne by Bancorp. Bancorp 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 Bancorp may solicit proxies
personally or by facsimile or telephone at their regular salary or hourly
compensation.
Bancorp's 1998 Annual Report to Shareholders has been mailed along with
this Proxy Statement to all shareholders of record as of the close of business
on December 1, 1998. Any shareholder that has not received a copy of such
annual report may obtain a copy by writing to Bancorp. 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 Bancorp's Form 10-K as filed with the Securities and Exchange
Commission will be furnished without charge to shareholders of record as of
December 1, 1998, 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 15, 1998
18
<PAGE>
- ------------------------------------------------------------------------------
REVOCABLE PROXY
INTERWEST BANCORP, INC.
- ------------------------------------------------------------------------------
ANNUAL MEETING OF SHAREHOLDERS
JANUARY 20, 1999
The undersigned hereby appoints Directors Olson and Walden of the Board of
Directors of InterWest Bancorp, Inc. ("Bancorp") with full powers of
substitution to act as attorneys and proxies for the undersigned, to vote all
shares of Common Stock of Bancorp 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 Wednesday, January 20, 1999, at 2:00
p.m., local time, and at any and all adjournments thereof, as follows:
1. ELECTION OF DIRECTORS
A. I vote FOR all nominees listed below (except as marked to the contrary
below) / /
B. I WITHHOLD AUTHORITY to vote for any individual nominee whose name I
have struck a line through in the list below / /
Gary M. Bolyard
Patrick M. Fahey
Clark H. Mock
Stephen M. Walden
C. I WITHHOLD AUTHORITY to vote for all nominees listed above / /
2. 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 proposal.
This proxy also provides voting instructions to the Trustees of Bancorp'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 PROPOSAL STATED. IF ANY OTHER BUSINESS IS
PRESENTED AT SUCH MEETING, THE BOARD OF DIRECTORS IN ITS BEST JUDGMENT WILL VOTE
THIS PROXY. 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
<PAGE>
DIRECTOR WHERE THE NOMINEES ARE UNABLE TO SERVE OR FOR GOOD CAUSE WILL NOT
SERVE, AND MATTERS INCIDENT TO THE CONDUCT OF THE 1999 ANNUAL MEETING.
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 Bancorp 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 Bancorp prior to the execution of
this proxy of Notice of Annual Meeting of Shareholders, a proxy statement dated
December 15, 1998, 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-in-fact, 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.
<PAGE>
REVOCABLE PROXY
INTERWEST BANCORP, INC.
ANNUAL MEETING OF SHAREHOLDERS
January 20, 1999
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints Directors Olson and Walden of the Board
of Directors of InterWest Bancorp, Inc. ("Bancorp") with full powers of
substitution to act as attorneys and proxies for the undersigned, to vote all
shares of Common Stock of Bancorp 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 Wednesday, January 20,
1999, at 2:00 p.m., local time, and at any and all adjournments thereof, as
follows:
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE
SPECIFIED, THIS PROXY WILL BE VOTED FOR THE PROPOSAL STATED. IF ANY OTHER
BUSINESS IS PRESENTED AT SUCH MEETING, THE BOARD OF DIRECTORS IN ITS BEST
JUDGMENT WILL VOTE THIS PROXY. 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
1999 ANNUAL MEETING.
(Continued and to be signed on the reverse side)
- -------------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE>
Please mark your votes as indicated in this example /X/
The Board of Directors recommends a vote "FOR" the listed proposition.
1. The election of the nominees listed below FOR WITHHELD
(except as marked to the contrary below). / / / /
Gary M.Bolyard Patrick M. Fahey Clark H. Mock Stephen M. Walden
INSTRUCTIONS: To withhold your vote for any individual nominee, write the
nominee's name on the line below.
___________________________________________________________
2. To consider and act upon such other matters as may properly come before
the Annual Meeting or any adjournments thereof.
This proxy also provides voting instructions to the Trustees of Bancorp's
Employee Stock Ownership Plan for participants with shares allocated to their
accounts.
Should the undersigned be present and elect to vote at the Meeting or at
any adjournment thereof and after notification to the Secretary of Bancorp 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 Bancorp prior to the execution
of this proxy of Notice of Annual Meeting of Shareholders, a proxy statement
dated December 15, 1998, and an Annual Report to Shareholders.
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED,
POSTAGE-PREPAID ENVELOPE.
Signature(s)_______________________________________ Dated ______________,199_
Please sign exactly as your name appears on the enclosed card. When signing
as attorney-in-fact, executor, administrator, trustee or guardian, please
give your full title. If shares are held jointly, each holder should sign.
- -------------------------------------------------------------------------------
FOLD AND DETACH HERE
