<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>
[LOGO]
DECEMBER 23, 1999
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 19,
2000, 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
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JANUARY 19, 2000
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NOTICE IS HEREBY GIVEN that the 2000 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 19, 2000, AT 2:00
P.M., local time, for the following purposes:
(1) ELECTION OF DIRECTORS. To elect three directors to three-year
terms, and one director to a one-year term; 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 November 30, 1999, 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 23, 1999
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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.
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<PAGE>
- --------------------------------------------------------------------------------
PROXY STATEMENT
OF
INTERWEST BANCORP, INC.
275 SOUTHEAST PIONEER WAY
OAK HARBOR, WASHINGTON 98277
(360) 679-4181
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ANNUAL MEETING OF SHAREHOLDERS
JANUARY 19, 2000
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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 National Bank of Tukwila ("Tukwila"), to be used
at the 2000 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 19, 2000, AT 2:00 P.M., local time. This Proxy Statement
and the enclosed proxy card are being mailed to shareholders on or about
December 23, 1999.
VOTING AND PROXY PROCEDURE
RECORD OWNERSHIP; QUORUM. Shareholders of record as of the close of
business on November 30, 1999, are entitled to one vote for each share of
common stock ("Common Stock") of Bancorp then held. As of November 30, 1999,
Bancorp had 16,082,312 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.
SOLICITATION OF PROXIES. 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.
VOTING OF PROXIES BY RECORD HOLDER. 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.
VOTING OF PROXIES BY BENEFICIAL HOLDER. If your shares of the Bancorp
Common Stock are held by a bank, broker or other holder of record, you will
need proof of ownership to be admitted to the meeting. A recent brokerage
statement or letter from your bank or broker are examples of proof of
ownership. If you are a beneficial owner of Common Stock and want to vote
your shares in person, you must obtain a proxy in your name from your bank,
broker or other holder of record in order to vote at the Annual Meeting.
1
<PAGE>
VOTING OF PROXIES BY ESOP HOLDERS. 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.
VOTING FOR DIRECTORS. The four nominees for election as directors at the
Annual Meeting who receive the highest number of affirmative votes will be
elected. Shareholders are not permitted to cumulate their votes for the
election of directors. Votes may be cast for or withheld from the 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 NATIONAL BANK OF TUKWILA
Effective October 1, 1999, National Bank of Tukwila became a wholly
owned subsidiary of Bancorp. Consistent with the terms of the merger
agreement governing the merger, shareholders of NBT Northwest Bancorp, the
parent company of Tukwila that was merged with Bancorp, became shareholders
of Bancorp, and are therefore eligible to vote at the 2000 Annual Meeting of
Shareholders.
PENDING TRANSACTION WITH LIBERTY BAY FINANCIAL CORPORATION
On September 14, 1999, Bancorp and Liberty Bay Financial Corporation
("Liberty") entered into an Agreement and Plan of Merger, which provides that
Liberty will merge with and into Bancorp and North Sound Bank, the bank
subsidiary of Liberty, will operate as a separate subsidiary of Bancorp. The
merger agreement, which must be approved by the shareholders of Liberty,
provides that shareholders of Liberty will be entitled to receive shares of
Bancorp Common Stock, pursuant to an exchange ratio. The merger is scheduled
to close prior to April 30, 2000, subject to regulatory approval and the
approval of Liberty shareholders.
INTERNAL MERGERS
Consistent with Bancorp's plans, in an effort to control costs and
streamline procedures, an application to merge Kittitas with and into Pacific
Northwest Bank was filed with the appropriate bank regulators. The merger is
scheduled to close in January 2000. As you are aware, during 1998 and 1999,
Bancorp's bank subsidiaries First National Bank of Port Orchard and Pioneer
National Bank were merged with Pacific Northwest Bank.
2
<PAGE>
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MANAGEMENT
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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
November 30, 1999. The following table sets forth, as of November 30, 1999,
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, 1999, ("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) SHARES OUTSTANDING
- ---- --------------------- ------------------
<S> <C> <C>
DIRECTORS:
Barney R. Beeksma 369,627 (2)(3) 2.3%
Gary M. Bolyard 82,618 (4)
Larry Carlson 48,698 (5) *
Michael T. Crawford 10,500 *
Jean Gorton 12,074 *
C. Stephen Lewis 29,812 *
Clark H. Mock 7,000 *
Russel E. Olson 10,971 *
Vern Sims 288,934 (6) 1.8%
EXECUTIVE OFFICERS:
Stephen M. Walden** 328,637 (3)(7) 2.0%
Clark W. Donnell 148,504 (8) *
Patrick M. Fahey** 238,038 (3)(9) 1.5%
Kenneth G. Hulett 108,112 (10) *
H. Glenn Mouw 93,898 (3)(11) *
All Executive Officers 1,777,423 (3) 10.9%
and Directors as a Group
(14 persons)
</TABLE>
- ---------------
* Less than one percent of shares outstanding.
** Mr. Walden and Mr. Fahey are also directors of Bancorp.
3
<PAGE>
(1) The amounts shown also include the following amounts of Common Stock
which the indicated individuals have the right to acquire within 60
days of November 30, 1999, through the exercise of stock options
granted pursuant to Bancorp's stock option plans: Mr. Beeksma 11,943,
Mr. Bolyard 881, Mr. Crawford 1,500, Ms. Gorton 1,125, Mr. Lewis 2,250,
Mr. Mock 1,500, Mr. Olson 1,125, Mr. Sims 2,250, Mr. Walden 42,250, Mr.
Donnell 36,937, Mr. Fahey 3,837, Mr. Hulett 25,387, Mr. Mouw 36,712,
and all executive officers and directors as a group, 167,697. 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 59,675 shares, Mr. Bolyard 248 shares, Mr. Fahey 4,096
shares, Mr. Walden 40,576 shares, Mr. Donnell 16,778 shares, Mr. Hulett
17,380 shares, Mr. Mouw 19,760 shares, and all executive officers and
directors as a group, 158,513 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:
(2) Includes 10,125 shares owned by Mr. Beeksma's spouse.
(3) Does not include 128,110 shares held by the ESOP of which Messrs. Beeksma,
Walden, Fahey and Mouw are trustees, and over which they share equal voting
power.
(4) Includes 3,390 shares held in an IRA Account for the benefit of Mr.
Bolyard.
(5) Includes 5,254 shares held in an IRA Account for the benefit of Mr. Carlson
(6) Includes 286,684 shares held in a Limited Liability Corporation.
(7) Includes 2,476 shares owned by Mr. Walden's spouse.
(8) Includes 4,245 shares owned by Mr. Donnell's minor children.
(9) 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.
(10) 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.
(11) 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 (44) 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 (52) 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 (46) is Executive Vice President and Treasurer 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>
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ELECTION OF DIRECTORS
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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, three directors will be elected to
the class of directors whose terms end in 2003. Barney R. Beeksma, C. Stephen
Lewis and Russel E. Olson, all of whom presently are serving as directors of
Bancorp, have been nominated for election to the term ending in 2003. Under
Bancorp's bylaws, a director may not stand for re-election to the Board if he
has attained the age of 75. Accordingly, Vern Sims, who will turn 75 before
his term expires in 2001, will not stand for re-election at the 2001 Annual
Meeting. Since this vacancy will cause the classes to be unequal in size,
Larry Carlson, who is currently up for re-election to the Board, has been
nominated to serve for a one-year term ending in 2001, thereby maintaining
the equal division of directors between the three classes.
It is intended that the proxies solicited by the Board of Directors will
be voted for the election of the above named nominees. If any nominee is
unable to serve, the shares represented by all valid proxies will be voted
for the election of such substitute as the Board of Directors may recommend.
At this time the Board of Directors knows of no reason why the nominees might
be unavailable to serve.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF MESSRS.
BEEKSMA, CARLSON, LEWIS AND OLSON.
The following table sets forth certain information regarding the
nominees for election at the Annual Meeting, as well as information regarding
those directors continuing in office after the Annual Meeting.
<TABLE>
<CAPTION>
YEAR FIRST
NAME AGE ELECTED DIRECTOR(1) TERM TO EXPIRE
- ---- --- ------------------- --------------
<S> <C> <C> <C>
BOARD NOMINEES
Larry Carlson 67 1996 2001 (2)
Barney R. Beeksma 67 1974 2003 (2)
C. Stephen Lewis 57 1988 2003 (2)
Russel E. Olson 68 1988 2003 (2)
DIRECTORS CONTINUING IN OFFICE
Michael T. Crawford 61 1994 2001
Jean Gorton 65 1991 2001
Vern Sims 74 1976 2001
Gary M. Bolyard 63 1996 2002
Patrick M. Fahey 57 1998 2002
Clark H. Mock 63 1993 2002
Stephen M. Walden 56 1988 2002
</TABLE>
5
<PAGE>
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(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.
(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 the Federal Home Loan Bank of Seattle, 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 a director of Bancorp, InterWest
Bank, Pacific Northwest Bank, and Kittitas. Mr. Bolyard served as an
executive officer of Bancorp and InterWest Bank between August 1996 and his
retirement on June 30, 1999. Prior to that time, he was the 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 an attorney at law. On January 1, 1997, Mr. Carlson
terminated his ownership relationship in the law firm of Carlson, Drewelow,
McMahon & Kottkamp, Inc. PS, in Wenatchee, Washington and continues to engage
in selective representation of clients. 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 recently announced his retirement as President and
Chief Executive Officer of Pacific Northwest Bank, effective July 1, 2000, a
position he has held since October 1987. After his retirement, Mr. Fahey will
continue as Chairman of Pacific Northwest Bank. 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 Tukwila. 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.
6
<PAGE>
CLARK H. MOCK is a management consultant in banking and real estate
having retired in May 1993 as Executive Vice President and Chief Credit
Officer of Seattle First National Bank. Mr. Mock's career with Seattle First
National Bank covered all phases of credit administration together with the
disposition of problem loans and assets.
RUSSEL E. OLSON retired in 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, and Kittitas. 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, 1999, the Board of Directors of Bancorp held twelve 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 1999 fiscal year.
The Board of Directors of Bancorp has an Executive Committee currently
consisting of Messrs. Beeksma (Chairman), Bolyard, Fahey, Mock, Olson 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 1999 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 three times during
the 1999 fiscal year.
7
<PAGE>
The Board of Directors of Bancorp has appointed a Nominating Committee
consisting of Messrs. Crawford (Chairman), Mock and Walden. 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.
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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.
In addition to director's fees, each director will receive $400 for each
Committee meeting attended unless such meeting is held on the day of a
scheduled Board meeting, in which case, the director will be paid $200 for
each Committee meeting attended.
As Chairman of the Board, during the fiscal year 1999, Barney R. Beeksma
received an annual retainer of $66,000 and contributions to Bancorp's ESOP in
the amount of $3,300 and to Bancorp's 401(k) Plan in the amount of $1,980.
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>
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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,
1999. 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 1999 $270,000 $173,700 $30,000(2) 30,000 $ 12,800(3)
President and Chief 1998 261,000 133,120 29,000 40,500 11,560
Executive Officer 1997 227,250 122,360 25,250 3,000 12,414
Patrick M. Fahey 1999 296,303(4) 100,000 -- 3,500 24,180(4)
Vice Chairman/ 1998 84,608(5) -- -- -- 7,620
Commercial Banking
Clark W. Donnell 1999 181,746 79,310 -- 4,500 12,800(6)
Executive Vice 1998 170,000 58,993 -- 1,500 11,889
President 1997 150,000 55,876 -- 1,500 14,291
Kenneth G. Hulett 1999 139,500 60,485 -- 4,500 14,037(7)
Executive Vice 1998 131,350 43,296 -- 1,500 13,595
President 1997 117,501 44,616 -- 900 12,640
H. Glenn Mouw 1999 165,254 73,360 -- 4,500 12,800(8)
Executive Vice 1998 155,000 53,578 -- 1,500 13,113
President and Treasurer 1997 136,251 51,075 -- 1,200 14,431
Gary M. Bolyard 1999 110,042(9) 56,218 57,365(10) -- 10,003(11)
Vice Chairman/ 1998 140,750 49,115 -- 750 13,477
Corporate Development 1997 135,960 -- -- 675 4,072
</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, 1999, 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.
(3) Includes contributions to Bancorp's ESOP of $8,000 and to Bancorp's
Salary Deferral 401(k) Plan and Trust ("401(k) Plan") of $4,800.
9
<PAGE>
(4) Salary includes director fees of $21,000. All other compensation
includes contributions to Bancorp's ESOP of $8,000 and to Bancorp's
401(k) Plan of $16,180.
(5) Reflects compensation earned from June 16, 1998, the day that Mr. Fahey
joined Bancorp, through September 30, 1998.
(6) Includes contributions to Bancorp's ESOP of $8,000 and to Bancorp's
401(k) Plan of $4,800.
(7) Includes contributions to Bancorp's ESOP of $8,773 and to Bancorp's
401(k) Plan of $5,264.
(8) Includes contributions to Bancorp's ESOP of $8,000 and to Bancorp's
401(k) Plan of $4,800.
(9) Includes the salary paid to Mr. Bolyard through June 30, 1999, the last
day of Mr. Bolyard's employment with Bancorp, and outside director fees
paid subsequent to June 30, 1999.
(10) Represents an annual payment to Mr. Bolyard under a non-qualified
deferred compensation plan.
(11) Includes contributions to Bancorp's ESOP of $6,252 and to Bancorp's
401(k) Plan of $3,751.
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.
10
<PAGE>
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.
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. As a result
of his retirement on June 30, 1999, Mr. Bolyard is entitled to receive
$57,635 annually 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 $500,000
was purchased to offset future payments that will be made under this deferred
compensation agreement.
11
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR. The following table sets forth
information concerning the grant of stock options to the Chief Executive
Officer and the named executive officers during the fiscal year ended
September 30, 1999.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------- ----------------------------
POTENTIAL REALIZABLE
VALUE AT
ASSUMED ANNUAL RATES
INDIVIDUAL GRANTS OF STOCK PRICE
APPRECIATION
FOR OPTION TERM (2)
- --------------------------------------------------------------------------------------- ----------------------------
NUMBER OF % OF TOTAL
NAME SHARES OPTIONS
UNDERLYING GRANTED TO EXERCISE
OPTIONS EMPLOYEES PRICE EXPIRATION 5% 10%
GRANTED(1) IN FISCAL YEAR ($/SHARE) DATE
- --------------------------- -------------- -------------- -------------- -------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Stephen M. Walden 30,000 15.0% $20.75 12/16/03 $171,985 $380,042
- --------------------------- -------------- -------------- -------------- -------------- -------------- -------------
Patrick M. Fahey 3,500 1.8% 20.75 12/16/08 45,673 115,746
- --------------------------- -------------- -------------- -------------- -------------- -------------- -------------
Clark W. Donnell 4,500 2.3% 20.75 12/16/08 58,723 148,816
- --------------------------- -------------- -------------- -------------- -------------- -------------- -------------
Kenneth G. Hulett 4,500 2.3% 20.75 12/16/08 58,723 148,816
- --------------------------- -------------- -------------- -------------- -------------- -------------- -------------
H. Glenn Mouw 4,500 2.3% 20.75 12/16/08 58,723 148,816
- --------------------------- -------------- -------------- -------------- -------------- -------------- -------------
Gary M. Bolyard 0 0 -- -- 0 0
- --------------------------- -------------- -------------- -------------- -------------- -------------- -------------
</TABLE>
(1) Each option granted vests at the rate of 25 percent per annum, with the
exception of Mr. Walden's options that vest at the rate of 33 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
December 16, 1998.
(2) The hypothetical dollar gains under these columns result from
calculations required by the Securities and Exchange Commission rules.
The gains are based on assumed rates of annual compound stock price
appreciation of 5% and 10% from the date the options were granted over
the full option term. The actual value, if any, that the executive
officers may realize will depend on the spread between the market price
and the exercise price on the date the option is exercised. Actual
gains, if any, on stock options exercised and common stock holding are
dependent upon future performance of Bancorp and overall stock market
conditions. There can be no assurance that the amounts reflected in
this table will be achieved.
12
<PAGE>
OPTION EXERCISE/VALUE TABLE. The following information with respect to
options exercised during the fiscal year ended September 30, 1999, 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
NAME ($) OPTIONS AT YEAR END FISCAL YEAR END (1)
- -------------------------- -------------- ------------- --------------------------------- ----------------------------------
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -------------------------- -------------- ------------- --------------- ----------------- ---------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Stephen M. Walden 0 $ 0 76,750 52,250 $826,990 $ 0
- -------------------------- -------------- ------------- --------------- ----------------- ---------------- -----------------
Patrick M. Fahey 85,475 1,509,061 3,837 2,625 38,966 0
- -------------------------- -------------- ------------- --------------- ----------------- ---------------- -----------------
Clark W. Donnell 17,250 274,823 36,937 4,500 488,409 0
- -------------------------- -------------- ------------- --------------- ----------------- ---------------- -----------------
Kenneth G. Hulett 0 0 31,387 4,350 405,500 0
- -------------------------- -------------- ------------- --------------- ----------------- ---------------- -----------------
H. Glenn Mouw 17,250 311,104 36,712 4,425 488,409 0
- -------------------------- -------------- ------------- --------------- ----------------- ---------------- -----------------
Gary M. Bolyard 21,150 403,701 881 544 0 0
- -------------------------- -------------- ------------- --------------- ----------------- ---------------- -----------------
</TABLE>
(1) On September 30, 1999, the closing price of Common Stock was $20.75.
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.
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 InterWest 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, 1999, the Committee granted
stock options totaling 199,610 shares to employees of Bancorp and its
subsidiaries.
During the fiscal year ended September 30, 1999, the base salary of
Stephen M. Walden, President and Chief Executive Officer of Bancorp, was
$270,000. In addition to this, he received a performance bonus of $173,700
and was credited with $30,000 in deferred compensation. This resulted in
total compensation of $473,700, which represents a 12 percent increase from
the previous year. The performance bonus was paid based on his meeting the
performance criteria established by the Committee
14
<PAGE>
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*
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERIOD ENDING
------------ ------------ ------------ ------------ ------------ ------------
INDEX 09/30/1994 09/30/1995 09/30/1996 09/30/1997 09/30/1998 09/30/1999
- ----------------------------------------- ------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
InterWest Bancorp, Inc. 100.00 110.00 213.68 296.44 257.62 239.70
Nasdaq (Total U.S.)* 100.00 138.07 163.84 224.97 228.77 371.52
SNL Thrift Index 100.00 130.96 158.17 274.83 246.40 234.70
SNL $1-$5 Billion Thrift Index 100.00 131.91 161.23 275.61 262.71 268.08
SNL Western Thrift Index 100.00 129.06 157.09 285.32 233.22 218.17
</TABLE>
* Assumes that the value of the investment in Bancorp's Common Stock and each
index was $100 on September 30, 1994, 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 ten 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, 1999, 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.
- --------------------------------------------------------------------------------
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 is a member of the Board of Directors of Premera Blue Cross,
an insurance healthcare provider. Subsequent to Mr. Fahey's election to the
Premera 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. On January 1, 1999, Bancorp contracted with Premera Blue Cross
for health insurance coverage.
- --------------------------------------------------------------------------------
AUDITORS
- --------------------------------------------------------------------------------
Ernst & Young LLP, currently serves as Bancorp's independent auditors.
As has historically been the practice of Bancorp, the formal selection of
independent auditors for the fiscal year ending September 30, 2000, will not
be made by the Board of Directors until the Spring of 2000. 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.
16
<PAGE>
- --------------------------------------------------------------------------------
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 2001 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 18, 2000.
Any such proposals shall be subject to the requirements of the proxy rules
adopted under the Exchange Act. In addition, if Bancorp receives notice of a
shareholder proposal after October 31, 2000, the persons named as proxies in
such proxy statement and form of proxy will have discretionary authority to
vote on such shareholder proposal.
NOMINATION OF CANDIDATE FOR DIRECTOR. 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 30 days nor more than 60 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 paid 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 1999 Annual Report to Shareholders has been mailed along with
this Proxy Statement to all shareholders of record as of the close of business
on November 30, 1999. 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
November 30, 1999, 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 23, 1999
18
<PAGE>
----------------------------------------------------------------------
REVOCABLE PROXY
INTERWEST BANCORP, INC.
----------------------------------------------------------------------
ANNUAL MEETING OF SHAREHOLDERS
January 19, 2000
The undersigned hereby appoints Directors Jean Gorton and Vern
Sims 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 19, 2000, at 2:00 p.m.,
local time, and at any and all adjournments thereof, as follows:
- --------------------------------------------------------------------------------
^ FOLD AND DETACH HERE ^
<PAGE>
<TABLE>
<S><C>
Please mark
your votes as /X/
indicated in
this example
1. ELECTION OF DIRECTORS 2. To consider and act upon such other matters as
FOR WITHHELD may properly come before the Annual Meeting or
I vote FOR all nominees listed below any adjournments thereof.
(except as marked to the contrary below) / / / /
The Board of Directors recommends a vote "FOR"
FOR THREE-YEAR TERM FOR ONE-YEAR TERM the directors listed above.
Barney R. Beeksma Larry Carlson
C. Stephen Lewis This proxy also provides voting instructions to
Russel E. Olson the Trustees of Bancorp's Employee Stock Ownership
Plan for participants with shares allocated to
I withhold authority to vote for any individual their accounts.
nominee whose name I have stuck a line through in
the list above. 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 2000 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 23, 1999, and an Annual Report to
Shareholders.
Dated ___________________, _____
Please sign exactly as your name appears on the enclosed card. _________________________ _________________________
When signing as attorney-in-fact, executor, administrator, PRINT NAME OF SHAREHOLDER PRINT NAME OF SHAREHOLDER
trustee or guardian, please give your full title. If shares
are held jointly, each holder should sign. _________________________ _________________________
SIGNATURE OF SHAREHOLDER SIGNATURE OF SHAREHOLDER
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED, POSTAGE-PREPAID ENVELOPE.
</TABLE>
- --------------------------------------------------------------------------------
^ FOLD AND DETACH HERE ^
