The Grants of Plan-based Awards Table provides additional detail relating to the 20142016 equity awards to the named executive officers.
respect to unvested shares. If Banner is required to prepare an accounting restatement due to error, omission or fraud, executive officers may be required to reimburse Banner for part or the entire incentive award made to the officer on the basis of having met or exceeded specific targets for performance periods. With the exception of incentive awards intended to be qualified performance-based awards (as defined in the 2012 Restricted Stock and2014 Omnibus Incentive Bonus Plan), the Compensation Committee has the discretion to adjust awards as needed to reflect the business environment and market conditions that may affect Banner’sBanner's performance and incentive plan funding.
Roberto R. Herencia | | | DavidBrent A. KlaueOrrico | |
This report shall not be deemed to be incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, and shall not otherwise be deemed filed under such acts.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table presents information regarding compensation for our named executive officers: (1) Mark J. Grescovich, our President and Chief Executive Officer; (2) Lloyd W. Baker, our Chief Financial Officer; and (3) our three other most highly compensated executive officers, who are Richard B. Barton, Cynthia D. Purcell and Douglas M Bennett.officers. No executive officer of Islanders Bank or Community Financial Corporation is an executive officer of Banner.
Name and Principal Position | | Year | | Salary ($) | | Bonus ($) | | Stock Awards ($)(1) | | Non- equity Incentive Plan Compen- sation ($) | | Change in Pension Value and Non- qualified Deferred Compensation Earnings ($)(2) | | All Other Compen- sation ($)(3) | | Total ($) | | | | | | | | | | | | | | | | | | Mark J. Grescovich | | 2016 | | 744,825 | | -- | | 1,342,509 | | 368,536 | | -- | | 48,723 | | 2,504,593 | President and Chief | | 2015 | | 716,415 | | -- | | 616,437 | | 279,518 | | -- | | 28,673 | | 1,641,043 | Executive Officer | | 2014 | | 715,000 | | -- | | 569,385 | | 343,272 | | -- | | 34,915 | | 1,662,572 | | | | | | | | | | | | | | | | | | Lloyd W. Baker | | 2016 | | 269,282 | | 50,000 | | 193,723 | | 53,439 | | 94,581 (4) | | 25,535 | | 686,560 | Executive Vice President, | | 2015 | | 260,724 | | 65,181 | | 125,038 | | 34,155 | | 114,031 (4) | | 24,761 | | 623,890 | Chief Financial Officer, Banner | | 2014 | | 258,613 | | 30,000 | | 113,943 | | 62,250 | | 59,383 (4) | | 21,204 | | 545,393 | | | | | | | | | | | | | | | | | | Richard B. Barton | | 2016 | | 273,590 | | 50,000 | | 196,801 | | 54,294 | | 154,647 (5) | | 37,413 | | 766,745 | Executive Vice President, | | 2015 | | 264,895 | | 66,224 | | 127,084 | | 34,701 | | 254,338 (5) | | 37,779 | | 785,021 | Chief Lending Officer | | 2014 | | 262,750 | | 25,000 | | 115,794 | | 63,246 | | 181,679 (5) | | 35,079 | | 683,548 | | Cynthia D. Purcell | | 2016 | | 303,971 | | 60,000 | | 219,132 | | 60,323 | | 246,885 (4) | | 20,208 | | 910,519 | Executive Vice President, | | 2015 | | 294,311 | | 73,578 | | 141,142 | | 38,555 | | 337,450 (4) | | 18,176 | | 903,212 | Retail Banking and Administration | | 2014 | | 292,759 | | 25,000 | | 129,937 | | 70,469 | | 245,346 (4) | | 11,446 | | 774,957 | | | | | | | | | | | | | | | | | | Keith A. Western (6) | | 2016 | | 315,430 | | 40,000 | | 184,966 | | 62,597 | | 139 (7) | | 23,533 | | 626,665 | Executive Vice President, | | | | | | | | | | | | | | | | | Commercial Banking | | | | | | | | | | | | | | | | |
Name and Principal Position | | Year | | Salary ($) | | Bonus ($) | | Stock Awards ($)(1) | | Non- equity Incentive Plan Compen- sation ($) | | Change in Pension Value and Non- qualified Deferred Compensation Earnings ($)(2) | | All Other Compen- sation ($)(3) | | Total ($) | | | | | | | | | | | | | | | | | | Mark J. Grescovich | | 2014 | | 715,000 | | -- | | 569,385 | | 343,272 | | -- | | 34,915 | | 1,662,572 | President and Chief | | 2013 | | 715,000 | | -- | | 812,924 | | 360,131 | | -- | | 26,297 | | 1,914,352 | Executive Officer | | 2012 | | 670,833 | | 290,000 | | 300,000 | | -- | | -- | | 7,540 | | 1,268,373 | | | | | | | | | | | | | | | | | | Lloyd W. Baker | | 2014 | | 258,613 | | 30,000 | | 113,943 | | 62,250 | | 59,383 (4) | | 21,204 | | 545,393 | Executive Vice President, | | 2013 | | 253,542 | | -- | | 117,276 | | 70,485 | | 4,485 (4) | | 17,990 | | 463,778 | Chief Financial Officer | | 2012 | | 250,000 | | 50,000 | | 65,820 | | -- | | 107,012 (4) | | 9,238 | | 482,070 | | | | | | | | | | | | | | | | | | Richard B. Barton | | 2014 | | 262,750 | | 25,000 | | 115,794 | | 63,246 | | 181,679 (5) | | 35,079 | | 683,548 | Executive Vice President, | | 2013 | | 257,598 | | -- | | 119,117 | | 71,612 | | 178,409 (5) | | 29,578 | | 656,314 | Chief Lending Officer | | 2012 | | 254,000 | | 75,000 | | 65,820 | | -- | | 139,723 (5) | | 22,580 | | 514,826 | | Cynthia D. Purcell | | 2014 | | 292,759 | | 25,000 | | 129,937 | | 70,469 | | 245,346 (4) | | 11,446 | | 774,957 | Executive Vice President, | | 2013 | | 289,038 | | -- | | 133,793 | | 80,352 | | 102,820 (4) | | 11,018 | | 617,021 | Retail Banking and Administration | | 2012 | | 285,000 | | 45,000 | | -- | | -- | | 134,798 (4) | | 4,951 | | 469,749 | | | | | | | | | | | | | | | | | | Douglas M. Bennett | | 2014 | | 240,897 | | 15,000 | | 106,134 | | 57,986 | | 254,732 (6) | | 16,392 | | 691,141 | Executive Vice President, | | 2013 | | 236,174 | | -- | | 109,168 | | 65,656 | | 215,161 (6) | | 13,666 | | 639,825 | Real Estate Lending Operations | | 2012 | | 230,578 | | 50,000 | | 65,820 | | -- | | 172,601 (6) | | 6,461 | | 525,460 |
_____________________________
(1) | Represents the aggregate grant date fair value of awards, computed in accordance with FASB ASC Topic 718. For a discussion of valuation assumptions, see Note 1614 of the Notes to Consolidated Financial Statements in Banner’sBanner's Annual Report on Form 10-K for the year ended December 31, 2014. For 2014 and 2013, included2016. Includes time-based and performance-based restricted stock awards as described beginning on page 1823 of this Proxy Statement under “Short-term"Long-term Incentive Compensation.”" For Mr. Grescovich, the 20132016 entry also includes a restricted stock unit grant with a grant date fair value of $459,140 awarded pursuant to his 2015 discretionary bonus. For Messrs. Baker and Barton and Ms. Purcell, the 2016 entry also includes a restricted stock grant with a grant date fair value of $224,994$38,192, $38,776 and $43,577, respectively, awarded pursuant to his 2012their 2015 discretionary bonus. | (2) | See “Pension Benefits”"Pension Benefits" below for a detailed discussion of the assumptions used to calculate the Change in Pension Value. | (3) | Please see the table below for more information on the other compensation paid to our executive officers in 2014.2016. | (4) | Represents an increase in the value of the executive’sexecutive's SERP. | (5) | Consists of the following increases in the value of Mr. Barton’sBarton's SERP: $154,292 for 2016, $254,096 for 2015 and $181,478 for 2014, $178,326 for 2013 and $139,405 for 2012; and the following amounts of above-market earnings on deferred compensation: $201for 2014, $83 for 2013 and $318 for 2012. | (6) | Consists of an increase in the value of Mr. Bennett’s SERP of $254,650 for 2014, $215,127 for 2013 and $172,471 for 2012 and above-market earnings on deferred compensation of $82$355 for 2014, $342016, $242 for 20132015 and $130$201 for 2012.2014. | (6) | Not a named executive officer in 2015 or 2014. | (7) | Consists of above-market earnings on deferred compensation. |
All Other Compensation. The following table sets forth details of “All"All other compensation,”" as presented above in the Summary Compensation Table. The amounts reflected constitute contributions by Banner or Banner Bank for 2014.2016.
Name | | Employer 401(k) Matching Contribution ($) | | Dividends on Unvested Restricted Stock ($) | | Life Insurance Premium ($) | | Club Dues ($) | | Company Car Allowance ($) | | Total ($) | | Employer 401(k) Matching Contribution ($) | | Dividends on Unvested Restricted Stock ($) | | Life Insurance Premium ($) | | Club Dues ($) | | Company Car Allowance ($) | | Total ($) | | | | | | | | | | | | | | | | | | | | | | | | | | Mark J. Grescovich | | 7,800 | | 17,954 | | 3,793 | | 3,476 | | 1,892 | | 34,915 | | 10,600 | | 17,135 | | 17,326 | | 3,662 | | -- | | 48,723 | Lloyd W. Baker | | 7,701 | | 2,572 | | 6,264 | | 3,476 | | 1,191 | | 21,204 | | 10,600 | | 3,533 | | 6,630 | | 3,662 | | 1,110 | | 25,535 | Richard B. Barton | | 7,800 | | 2,597 | | 8,627 | | 10,055 | | 6,000 | | 35,079 | | 10,600 | | 3,589 | | 7,211 | | 10,013 | | 6,000 | | 37,413 | Cynthia D. Purcell | | 3,737 | | 1,769 | | 4,053 | | 1,305 | | 582 | | 11,446 | | 10,600 | | 4,011 | | 3,981 | | 1,397 | | 219 | | 20,208 | Douglas M . Bennett | | 7,190 | | 2,465 | | 5,071 | | -- | | 1,666 | | 16,392 | | Keith A. Western | | | 10,600 | | 8,125 | | 4,808 | | -- | | -- | | 23,533 |
Employment Agreements and Perquisites. We have entered into an amended and restated employment agreement with Mr. Grescovich, effective June 1, 2013, and new employment agreements (replacing existing agreements) with each of the other named executive officers,Messrs. Baker and Barton and Ms. Purcell, effective July 1, 2014.2014, and Mr. Western, effective October 1, 2015. The initial three-year term of each agreement (two-year term for Mr. Western) may be extended annually for an additional year at the discretion of the Board of Directors or a committee appointed by the Board. Mr. Grescovich’s agreement wasThe employment agreements were extended on June 1, 2014.2016 for Mr. Grescovich, July 1, 2016 for Messrs. Baker and Barton and Ms. Purcell, and October 1, 2016 for Mr. Western. Under the employment agreements, the current base salaries for Mr. Grescovich, Mr. Baker, Mr. Barton, Ms. Purcell and Mr. BennettWestern are $715,000, $260,100, $264,262, $293,607$750,000, $270,608, $274,938, $305,469 and $242,283,$316,983, respectively. Each executive’sexecutive's annual base salary must be reviewed annually and will be adjusted from time to time to reflect amounts approved by the Board or Board Committee.
The executives may participate with other executive officers of Banner Bank in such performance-based and discretionary bonuses, and incentive compensation opportunities, if any, as are authorized by the Board or Board committee. The executives also may be eligible to participate in equity or incentive award programs sponsored by Banner Bank. The executives may participate, to the same extent as executive officers of Banner Bank generally, in all Bank plans relating to pension, retirement, thrift, profit-sharing, savings, group or other life insurance, hospitalization, medical and dental coverage, travel and accident insurance, education, cash bonuses, and other retirement or employee benefits or combinations thereof. In addition, the executives are entitled to participate in any other fringe benefit plans or perquisites which are generally available to Banner Bank’sBank's executive officers, including but not limited to supplemental retirement, deferred compensation programs, supplemental medical or life insurance plans, company cars, club dues and physical examinations. The executives also will be provided an automobile for their business use (except that Mr. Barton will receive a monthly automobile allowance), monthly club and/or gym membership dues, (for Messrs. Grescovich, Baker and Barton and Ms. Purcell), and other employee benefits such as vacation and sick leave. The agreements also provide that compensation may be paid in the event of disability, death, involuntary termination or a change in control, as described below under “Potential"Potential Payments Upon Termination or Change in Control.”"
401(k) Profit Sharing Plan. We provide a 401(k) profit sharing plan. The Board of Directors has appointed an administrative committee of Banner Bank officers to administer the 401(k) plan, and the named executive officers participate in this plan. On an annual basis, the Board of Directors establishes the level of employer contributions to the 401(k) plan, which applies to all eligible participants including the named executive officers. In 2014,2016, we matched participants’participants' contributions into the 401(k) plan up to twofour percent of eligible earnings for each payroll period through July 2014 and up to three percent of eligible earnings for each payroll period beginning August 1, 2014.period.
Phantom Stock Plan. On June 13, 2006, the Board of Directors adopted the Banner Corporation Long-Term Incentive Plan, in accordance with the recommendations made by Banner’s Compensation Committee. The plan is an account-based type of benefit, the value of which is directly related to changes in the value of Banner common stock, commonly known as a “phantom stock plan.” The primary objective of the plan is to encourage retention and reward performance by allowing executives who remain with Banner or Banner Bank for a five-year period of time to share in increases in the value of Banner’s common stock. Although the plan benefits are tied to the increase in value of Banner stock during the vesting period, the plan benefit is paid in cash rather than Banner stock, hence the term “phantom stock.” The plan was amended in 2008 to eliminate the 25% cap on the amount of any annual increase in the value of an award, to clarify certain provisions and to allow for the repricing of existing and future awards. Initial awards under this program were made in July 2006. Subsequent awards are granted at the discretion of the Compensation Committee as it deems appropriate. No awards were made under the Long-Term Incentive Plan in 2013 or 2014.
Grants of Plan-Based Awards
The following table shows information regarding grants of plan-based awards made to our named executive officers for 2014.2016.
| | | | Estimated future payouts under non-equity incentive plan awards (1) | | Estimated future payouts under equity incentive plan awards (2) | | All other stock awards: number of shares of stock or units (#) | | Grant date fair value of stock and option awards ($) | Name | | Grant Date | | Threshold ($) | | Target ($) | | Maximum ($) | | Threshold (#) | | Target (#) | | Maximum (#) | | | | | | | | | | | | | | | | | | | | Mark J. Grescovich | | 03/14/16 | | | | | | | | | | | | | | 11,000 | | 459,140 | | | 04/01/16 | | 260,689 | | 591,378 | | 782,066 | | | | | | | | 6,806 | | 287,349 | | | 04/01/16 | | | | | | | | 4,254 | | 8,507 | | 12,761 | | | | 496,020 | | | | | | | | | | | | | | | | | | | | Lloyd W. Baker | | 03/14/16 | | | | | | | | | | | | | | 915 | | 38,192 | | | 04/01/16 | | 47,124 | | 94,249 | | 141,373 | | | | | | | | 1,547 | | 65,314 | | | 04/01/16 | | | | | | | | 774 | | 1,547 | | 2,321 | | | | 90,217 | | | | | | | | | | | | | | | | | | | | Richard B. Barton | | 03/14/16 | | | | | | | | | | | | | | 929 | | 38,776 | | | 04/01/16 | | 47,878 | | 95,757 | | 143,635 | | | | | | | | 1,572 | | 66,370 | | | 04/01/16 | | | | | | | | 786 | | 1,572 | | 2,358 | | | | 91,655 | | | | | | | | | | | | | | | | | | | | Cynthia D. Purcell | | 03/14/16 | | | | | | | | | | | | | | 1,044 | | 43,577 | | | 04/01/16 | | 53,195 | | 106,390 | | 159,585 | | | | | | | | 1,746 | | 73,716 | | | 04/01/16 | | | | | | | | 873 | | 1,746 | | 2,620 | | | | 101,839 | | | | | | | | | | | | | | | | | | | | Keith A. Western | | 04/01/16 | | 55,200 | | 110,401 | | 165,601 | | | | | | | | 1,840 | | 77,685 | | | 04/01/16 | | | | | | | | 920 | | 1,840 | | 2,760 | | | | 107,281 | ___________ | | | | | | | | | | | | | | | | | | | (1) Represents the potential range of awards payable under our 2016 Annual Incentive Plan. The performance goals and measurements associated with this Plan that generate the awards set forth above are provided in the "Short-term Incentive Compensation" section beginning on page 21. | (2) Represents the potential range of restricted stock awards payable under our 2016 Long-term Incentive Plan subject to performance measurements. The performance goals and measurements associated with this Plan that generate the awards set forth above are provided in the "Long-term Incentive Compensation" section beginning on page 23. | (3) The fair value of the portion of the performance-based stock that is tied to return on average assets is based on the stock price on the date of grant at the maximum performance level. The fair value of the portion of the performance-based stock that is tied to total shareholder return is based on a statistical "Monte Carlo simulation" modeling technique that simulates potential stock price movements and all potential outcomes of achievement of the goal. |
| | | | Estimated future payouts under non-equity incentive plan awards (1) | | Estimated future payouts under equity incentive plan awards (2) | | All other stock awards: number of shares of | | | Grant date fair value of stock and | | Name | | Grant Date | | Threshold ($) | | Target ($) | | Maximum ($) | | Threshold (#) | | Target (#) | | Maximum (#) | | stock or units (#) | | | option awards ($) | | | | | | | | | | | | | | | | | | | | | | | Mark J. Grescovich | | 3/28/14 | | 178,750 | | | 357,500 | | | 536,250 | | | | | | | | | 5,180 | | | | 209,427 | | | | 3/28/14 | | | | | | | | | | | 3,453 | | | 6,906 | | | 10,360 | | | | | | | 359,958 | (3) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Lloyd W. Baker | | 3/28/14 | | 32,327 | | | 64,653 | | | 96,980 | | | | | | | | | | | | 1,231 | | | | 49,769 | | | | 3/28/14 | | | | | | | | | | | 615 | | | 1,231 | | | 1,847 | | | | | | | 64,174 | (3) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Richard B. Barton | | 3/28/14 | | 32,844 | | | 65,688 | | | 98,531 | | | | | | | | | | | | 1,251 | | | | 50,578 | | | | 3/28/14 | | | | | | | | | | | 625 | | | 1,251 | | | 1,877 | | | | | | | 65,216 | (3) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cynthia D. Purcell | | 3/28/14 | | 36,595 | | | 73,190 | | | 109,785 | | | | | | | | | | | | 1,404 | | | | 56,764 | | | | 3/28/14 | | | | | | | | | | | 702 | | | 1,404 | | | 2,106 | | | | | | | 73,173 | (3) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Douglas M. Bennett | | 3/28/14 | | 30,112 | | | 60,224 | | | 90,336 | | | | | | | | | | | | 1,147 | | | | 46,373 | | | | 3/28/14 | | | | | | | | | | | 573 | | | 1,147 | | | 1,720 | | | | | | | 59,761 | (3) |
___________
(1) | Represents the potential range of awards payable under our 2014 Annual Incentive Plan. The performance goals and measurements associated with this Plan that generate the awards set forth above are provided in the “Short-term Incentive Compensation” section beginning on page 18. | (2) | Represents the potential range of restricted stock awards payable under our 2014 Long-term Incentive Plan subject to performance measurements. The performance goals and measurements associated with this Plan that generate the awards set forth above are provided in the “Long-term Incentive Compensation” section beginning on page 20. | (3) | The fair value of the portion of the performance-based stock that is tied to return on average assets is based on the stock price on the date of grant. The fair value of the portion of the performance-based stock that is tied to total shareholder return is based on a statistical “Monte Carlo simulation” modeling technique that simulates potential stock price movements and all potential outcomes of achievement of the goal. |
Outstanding Equity Awards
The following information with respect to outstanding stock awards as of December 31, 20142016 is presented for the named executive officers. The named executive officers have no stock optionsoption awards outstanding.
Name | | Number of Shares or Units of Stock That Have Not Vested (#) | | Market Value of Shares or Units of Stock That Have Not Vested ($) | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(1) | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | | Number of Shares or Units of Stock That Have Not Vested (#) | | Market Value of Shares or Units of Stock That Have Not Vested ($) | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | | | | | | | | | | | | | | | | | | Mark J. Grescovich | | 19,363 (2) | | 836,482 | | 23,452 | | 1,013,126 | | 11,693 (1) | | 652,586 | | 32,601 (2) | | 1,819,462 | | | | | | | | | | | | | | | | | | Lloyd W. Baker | | 3,269 (3) | | 141,221 | | 4,181 | | 180,619 | | 2,724 (1) | | 152,026 | | 5,892 (2) | | 328,833 | | | | | | | | | | | | | | | | | | Richard B. Barton | | 3,305 (3) | | 142,776 | | 4,247 | | 183,470 | | 2,768 (1) | | 154,482 | | 5,987 (2) | | 334,134 | | | | | | | | | | | | | | | | | | Cynthia D. Purcell | | 2,587 (4) | | 111,758 | | 4,770 | | 206,064 | | 3,079 (1) | | 171,839 | | 6,672 (2) | | 372,364 | | | | | | | | | | | | | | | | | | Douglas M. Bennett | | 3,113 (3) | | 134,482 | | 3,892 | | 168,134 | | Keith A. Western | | | 7,972 (3) | | 444,917 | | 2,760 (4) | | 154,036 |
_____________ (1) | Consists of awards of restricted stock on June 3, 2013 and March 28, 2014, which vest after attainment of performance goals. | (2) | Consists of awards of restricted stock onMarch 27, 2015 and April 24, 2012, March 1, 2013, June 3, 2013 and March 28, 20142016 which vest pro rata over a three-year period from the grant date, with the first one-third vesting one year after the applicable grant date. | (2) | Consists of awards of restricted stock on March 28, 2014, March 27, 2015 and April 1, 2016 which vest after attainment of performance goals. | (3) | Consists of awards of restricted stock on July 2, 2012, June 3, 2013October 6, 2015 and March 28, 2014April 1, 2016 which vest pro rata over a three-year period from the grant date, with the first one-third vesting one year after the applicable grant date. | (4) | Consists of awardsan award of restricted stock on June 3, 2013 and March 28, 2014April 1, 2016 which vest pro rata over a three-year period from the grant date, with the first one-third vesting one yearvests after the applicable grant date.attainment of performance goals. |
Option Exercises and Stock Vested
The following table shows the value realized upon vesting of stock awards for our named executive officers in 2014.2016. The named executive officers have no option awards outstanding.
| | Stock Awards | | Stock Awards | Name | | Number of Shares Acquired on Vesting (#) | | Value Realized on Vesting ($) | | Number of Shares Acquired on Vesting (#) | | Value Realized on Vesting ($) | | | | | | | | | | Mark J. Grescovich | | 15,410 | | 614,754 | | 22,611 | | 944,204 | Lloyd W. Baker | | 1,518 | | 59,781 | | 2,875 | | 120,750 | Richard B. Barton | | 1,527 | | 60,130 | | 2,920 | | 122,639 | Cynthia D. Purcell | | 591 | | 22,922 | | 3,276 | | 137,597 | Douglas M. Bennett | | 1,483 | | 58,423 | | Keith A. Western | | | 3,066 | | 136,529 |
Pension Benefits
The following information is presented with respect to the nature and value of pension benefits for the named executive officers at December 31, 2014. 2016.
Name | | Plan Name | | Number of Years Credited Service (#) | | Present Value of Accumulated Benefit ($)(1) | | Payments During Last Fiscal Year ($) | | | | | | | | | | Mark J. Grescovich | | N/A | | -- | | -- | | -- | Lloyd W. Baker | | Supplemental Executive Retirement Program | | 22 | | 2,008,512 | | -- | Richard B. Barton | | Supplemental Executive Retirement Program | | 10 | | 1,489,947 | | -- | Cynthia D. Purcell | | Supplemental Executive Retirement Program | | 32 | | 2,128,446 | | -- | Keith A. Western | | N/A | | -- | | -- | | -- |
Name | | Plan Name | | Number of Years Credited Service (#) | | Present Value of Accumulated Benefit ($)(1) | | Payments During Last Fiscal Year ($) | | | | | | | | | | Mark J. Grescovich | | N/A | | -- | | -- | | -- | Lloyd W. Baker | | Supplemental Executive Retirement Program | | 20 | | 1,799,900 | | -- | Richard B. Barton | | Supplemental Executive Retirement Program | | 8 | | 1,081,559 | | -- | Cynthia D. Purcell | | Supplemental Executive Retirement Program | | 30 | | 1,544,111 | | -- | Douglas M. Bennett | | Supplemental Executive Retirement Program | | 8 | | 1,162,337 | | -- |
______________________________
(1) | Amounts shown assume normal retirementsretirement age as defined in individual agreements and an assumed life of 82 years, but not less than 15 years following retirement, for the recipient and recipient's spouse, with the projected cash flows discounted at 5%4½% to calculate the restultingresulting present value. |
Supplemental Executive Retirement Program. We have adopted a SERP for each of the named executive officers except for Mr. Grescovich.Messrs. Baker and Barton, and Ms. Purcell. Banner Bank has purchased life insurance on each of the executives in an amount sufficient to recover the benefits payable under the SERP, payable upon their deaths. The SERP provides for payments in the event of retirement, early retirement, disability, involuntary termination following a change in control and death. These payments are discussed in further detail below, under “Potential"Potential Payments Upon Termination or Change in Control.”"
Nonqualified Deferred Compensation
The following information is presented with respect to plans that provide for the deferral of compensation on a basis that is not tax-qualified in which the named executive officers participated in 2014.2016.
Name | | Executive Contributions in Last FY ($) | | Registrant Contributions in Last FY ($) | | Aggregate Earnings in Last FY ($)(1) | | Aggregate Withdrawals/ Distributions ($) | | Aggregate Balance at FYE ($)(2) | | | | | | | | | | | | Mark J. Grescovich | | -- | | -- | | -- | | -- | | -- | Lloyd W. Baker | | -- | | -- | | (524) | | -- | | 23,010 | Richard B. Barton | | -- | | -- | | 848 | | -- | | 20,513 | Cynthia D. Purcell | | -- | | -- | | 1,957 | | -- | | 16,741 | Douglas M. Bennett | | -- | | -- | | 329 | | -- | | 9,140 |
____________
Name | | Executive Contributions in Last FY ($) | | Registrant Contributions in Last FY ($) | | Aggregate Earnings in Last FY ($)(1) | | Aggregate Withdrawals/ Distributions ($) | | Aggregate Balance at FYE ($)(2) | | | | | | | | | | | | Mark J. Grescovich | | -- | | -- | | -- | | -- | | -- | Lloyd W. Baker | | -- | | -- | | 5,847 | | -- | | 30,737 | Richard B. Barton | | -- | | -- | | 937 | | -- | | 22,334 | Cynthia D. Purcell | | -- | | -- | | 2,011 | | -- | | 18,716 | Keith A. Western | | 10,000 | | -- | | 366 | | -- | | 10,366 | ______________ | | | | | | | | | | |
(1) | The following amounts,For Mr. Barton, $355, constituting above-market earnings, werewas reported as compensation in 20142016 in the Summary Compensation Table: for Mr. Barton, $201; and for Mr. Bennett, $82. Table. |
(2) | Includes prior period executive contributions and employer contributions to the deferred compensation plan and for Mr. Barton, and Mr. Bennett, also includes above-market earnings. Of these amounts, the following amounts were previously reported as other compensation to the officers in the Summary Compensation Table: for Mr. Baker, $4,310;$6,762; for Mr. Barton, $6,002;$9,755; and for Ms. Purcell, $4,772; and for Mr. Bennett, $164.$8,421. |
In 2004, we adopted deferred compensation plans which allow executive officers of Banner to defer all or part of their cash compensation or non-qualified stock options until retirement. Each executive officer may direct the investment of the deferred compensation toward the purchase of life insurance, Banner common stock, mutual fund-style investments or a stable value account. We established grantor trusts to hold the common stock and mutual fund-style investments. The assets of the trusts are considered part of our general assets and the executive officers have the status of unsecured creditors of Banner with respect to the trust assets. The deferred compensation agreements provide pre-retirement death and disability benefits in an amount based on the value of the executive officer’sofficer's account balance upon the occurrence of either event. At retirement, an executive officer, as previously elected, may receive the balance of his or her account in a lump sum or in annual installments over a period not exceeding ten years. At December 31, 2014, 2016, our estimated deferred compensation liability accrual with respect to executive officers under these agreements was $331,000.$511,000.
Section 401(a)(17) of the Internal Revenue Code limits the amount of compensation that is considered for purposes of determining the maximum contribution to Banner Bank’sBank's tax-qualified profit sharing plan by eligible employees. For 2014,2016, this limit was $260,000 and increased to $265,000 for 2015.$265,000. In previous years, we have credited executive officers whose total compensation exceeds this amount with additional deferred compensation to restore amounts that could not be contributed to the profit sharing plan as a result of the Section 401(a)(17) limitation. However, for 2012, 2013 and 2014, we didhave not provideprovided any such credits to our executive officers.officers since 2008.
Potential Payments Upon Termination or Change in Control
We have entered into agreements with the named executive officers that provide for potential payments upon disability, termination, early retirement, normal retirement and death. In addition, our equity plans also provide for potential payments upon termination. The following table shows, as of December 31, 2014,2016, the value of potential payments and benefits following a termination of employment under a variety of scenarios.
| Death ($) | | Disability ($) | | Involuntary Termination ($) | | Involuntary Termination Following Change in Control ($) | | Early Retirement ($) | | Normal Retirement ($) | | | | | | | | | | | | | | | | | | | Mark J. Grescovich | | | | | | | | | | | | | | | | | | Employment Agreement | -- | | | 604,286 | (1) | | 2,163,572 | | | 3,245,358 | | | -- | | | -- | | Equity Plans | 1,849,608 | (2) | | 1,849,608 | (2) | | -- | | | 1,849,608 | (2) | | -- | | | -- | | | | | | | | | | | | | | | | | | | | Lloyd W. Baker | | | | | | | | | | | | | | | | | | Employment Agreement | -- | | | -- | | | 670,631 | | | 883,746 | | | -- | | | -- | | SERP | 81,486 | (4) | | 162,971 | (4) | | 162,971 | (5) | | 162,971 | (5) | | 162,971 | (5) | | 162,971 | (4) | Equity Plans | 321,840 | (2) | | 321,840 | (2) | | -- | | | 321,840 | (2) | | -- | | | -- | | | | | | | | | | | | | | | | | | | | Richard B. Barton | | | | | | | | | | | | | | | | | | Employment Agreement | -- | | | -- | | | 664,799 | | | 909,079 | | | -- | | | -- | | SERP | 51,105 | (4) | | 102,209 | (4) | | 102,209 | (3) | | 102,209 | (6) | | 102,209 | (6) | | 102,209 | (4) | Equity Plans | 326,246 | (2) | | 326,246 | (2) | | -- | | | 326,246 | (2) | | -- | | | -- | | | | | | | | | | | | | | | | | | | | Cynthia D. Purcell | | | | | | | | | | | | | | | | | | Employment Agreement | -- | | | 195,738 | (3) | | 757,183 | | | 992,757 | | | -- | | | -- | | SERP | 85,108 | (4) | | 170,215 | (4) | | 135,722 | (5) | | 135,722 | (5) | | 135,722 | (5) | | 155,423 | (4) | Equity Plans | 317,822 | (2) | | 317,822 | (2) | | -- | | | 317,822 | (2) | | -- | | | -- | | | | | | | | | | | | | | | | | | | | Douglas M. Bennett | | | | | | | | | | | | | | | | | | Employment Agreement | -- | | | 161,522 | (3) | | 625,687 | | | 808,096 | | | -- | | | -- | | SERP | 45,835 | (4) | | 91,669 | (4) | | 91,669 | (5) | | 91,669 | (5) | | 91,669 | (5) | | 91,669 | (4) | Equity Plans | 302,616 | (2) | | 302,616 | (2) | | -- | | | 302,616 | (2) | | -- | | | -- | |
____________
| | Death ($) | | Disability ($) | | Involuntary Termination ($) | | Involuntary Termination Following Change in Control ($) | | Early Retirement ($) | | Normal Retirement ($) | | | | | | | | | | | | | | | | | | | | Mark J. Grescovich | | | | | | | | | | | | | | | | | | | Employment Agreement | | -- | | | 642,310 | (1) | | 2,574,621 | | | 3,861,931 | | | -- | | | -- | | Equity Plans | | 2,478,048 | (2) | | 2,478,048 | (2) | | -- | | | 2,478,048 | (2) | | -- | | | -- | | | | | | | | | | | | | | | | | | | | | Lloyd W. Baker | | | | | | | | | | | | | | | | | | | Employment Agreement | | -- | | | -- | | | 705,427 | | | 867,766 | | | -- | | | -- | | SERP | | 91,846 | (3) | | 183,691 | (3) | | 183,691 | (4) | | 183,691 | (4) | | 183,691 | (4) | | 183,691 | (3) | Equity Plans | | 480,859 | (2) | | 480,859 | (2) | | -- | | | 480,859 | (2) | | -- | | | -- | | | | | | | | | | | | | | | | | | | | | Richard B. Barton | | | | | | | | | | | | | | | | | | | Employment Agreement | | -- | | | -- | | | 692,089 | | | 889,206 | | | -- | | | -- | | SERP | | 68,133 | (3) | | 136,265 | (3) | | 136,265 | (5) | | 136,265 | (6) | | 136,265 | (6) | | 136,265 | (3) | Equity Plans | | 488,616 | (2) | | 488,616 | (2) | | -- | | | 488,616 | (2) | | -- | | | -- | | | | | | | | | | | | | | | | | | | | | Cynthia D. Purcell | | | | | | | | | | | | | | | | | | | Employment Agreement | | -- | | | 203,646 | (5) | | 785,963 | | | 969,993 | | | -- | | | -- | | SERP | | 96,639 | (3) | | 193,278 | (3) | | 169,698 | (4) | | 169,698 | (4) | | 169,698 | (4) | | 183,709 | (3) | Equity Plans | | 544,203 | (2) | | 544,203 | (2) | | -- | | | 544,203 | (2) | | -- | | | -- | | | | | | | | | | | | | | | | | | | | | Keith A. Western | | | | | | | | | | | | | | | | | | | Employment Agreement | | -- | | | 211,322 | (5) | | 573,146 | | | 938,421 | | | -- | | | -- | | Equity Plans | | 598,953 | (2) | | 598,953 | (2) | | -- | | | 598,953 | (2) | | -- | | | -- | | ______________ | | | | | | | | | | | | | | | | | | |
(1) | Annually through the term of the employment agreement unless the Board exercises an election to discontinue. |
(2) | Represents accelerated vesting of restricted stock. Performance-based vesting would be determined based on actual performance.performance; for purposes of this calculation, assumes that all shares vested at the maximum performance level. |
(3) | Indicates annual payments; payable only until age 65. | (4) | Indicates annual payments. |
(5) (4) | Indicates annual payments (which may not begin before age 62). |
(5) | Indicates annual payments; payable only until age 65. |
(6) | Indicates annual payments (which may not begin before age 68). |
Employment Agreements. The employment agreements with Messrs. Grescovich, Baker, Barton and BennettWestern and Ms. Purcell provide for payments in the event of death, disability or termination. In the event of an executive’sexecutive's death during the term of his or her employment agreement, we will pay to the executive’sexecutive's estate the compensation due through the last day of the calendar month in which his or her death occurred.
Mr. Grescovich’sGrescovich's agreement provides that if he becomes entitled to benefits under the terms of the then-current disability plan, if any, of Banner or Banner Bank or becomes otherwise unable to fulfill his duties under his employment agreement, he shall be entitled to receive such group and other disability benefits as are then provided for executive employees. In the event of his disability, the employment agreement is not suspended, except that (1) the obligation to pay Mr. Grescovich’sGrescovich's salary will be reduced by the amount of disability income benefits he receives and (2) upon a resolution adopted by a majority of the disinterested members of the Board of Directors or the Compensation Committee, Banner or Banner Bank may discontinue payment of his salary beginning six months following a determination that he has become entitled to benefits under the disability plan or otherwise unable to fulfill his duties under his agreement. If Mr. Grescovich’sGrescovich's disability does not constitute a disability within the meaning of Section 409A of the Internal Revenue Code, and he is a “specified employee”"specified employee" within the meaning of Section 409A, then disability payments will not begin until the earlier of his death or the sixth month anniversary of his separation from service.
The employment agreements with Messrs. Baker, Barton and BennettWestern and Ms. Purcell provide that if the executive becomes disabled or incapacitated to the extent that he or she is unable to perform the duties of his or her position, he or she shall receive short-term disability benefits equal to 100% of his or her monthly compensation beginning on the 15th day of disability and continuing until the 180th day of disability and long-term disability benefits equal to 66⅔% of monthly salary beginning on the 181st day of disability and continuing until he or she attains age 65. These benefits will be reduced by the amount of any benefits payable to the executive under any other disability program of Banner Bank. The Bank currently provides disability benefits with certain limitations to all full time employees. In addition, during any period of disability, the executive and his or her dependents shall, to the greatest extent possible, continue to be covered under all executive benefits plans of Banner Bank, including without limitation, its retirement plans, life insurance plan and health insurance plans, as if actively employed by Banner Bank. If the executive is disabled for a continuous period exceeding six calendar months, Banner Bank may, at its election, terminate the employment agreement. If the executive’sexecutive's disability does not constitute a disability within the meaning of Section 409A of the Internal Revenue Code, and the executive is a “specified employee”"specified employee" within the meaning of Section 409A, then disability payments will not begin until the earlier of the executive’sexecutive's death or the sixth month anniversary of the executive’sexecutive's separation from service.
The employment of the executives is terminable at any time for just cause as defined in the agreements. In addition, the employment of an executive may be terminated without just cause, in which case the agreements provide that the named executive officers other than Mr. Grescovich would continue to receive base salary over the remaining term and continue the executive’sexecutive's group life insurance, hospitalization, medical, dental, prescription drug and other health benefits, and long-term disability insurance for the remaining term. Mr. Grescovich’sGrescovich's agreement provides that we must pay him a lump sum equal to two times the sum of (1) his annual salary in effect on the date of termination and (2) any unearned performance-based bonus based on the target opportunity on the date of termination. We would also be required to pay to him any earned but unpaid performance-based bonus and continue his group life insurance, hospitalization, medical, dental, prescription drug and other health benefits, and long-term disability insurance for 24 months after the date of termination.
The employment agreements also provide for benefits in the event of the executives’executives' termination in connection with a change in control. For the named executive officers other than Mr. Grescovich, if, within six months prior to a change in control or 24 months after a change in control, we (or our acquiror) terminate an executive’sexecutive's employment or otherwise change the circumstances in which he or she is employed, or cause a reduction in responsibilities or authority or compensation or other benefits provided under the employment agreement without consent, other than for just cause, the agreements provide that we must pay to the executive and provide him or her, or the his or her beneficiaries, dependents and estate, with the following: (1) 2.99 times the executive’sexecutive's base amount (as defined in Section 280G of the Internal Revenue Code); and (2) during the period of 36 calendar months beginning with the event of termination, continued coverage under all Banner employee benefit plans as if the executive were still employed during that period under the employment agreement. If Mr. Grescovich’sGrescovich's employment is terminated within 24 months of a change in control, we must pay him a lump sum equal to three times the sum of (1) his annual salary in effect on the date of termination and (2) any unearned performance-based bonus based on the target opportunity on the date of termination. We would also be required to pay to him any earned but unpaid performance-based bonus and continue his group life insurance, hospitalization, medical, dental, prescription drug and other health benefits, and long-term disability insurance for 36 months after the date of termination. The employment agreements limit these payments and do not allow payments of amounts in excess of the limits imposed by Section 280G of the Internal Revenue Code.
Supplemental Executive Retirement Program. We have adopted a SERP for each of the named executive officers, except Mr. Grescovich.Messrs. Baker and Barton, and Ms. Purcell. At termination of employment at or after attaining age 62 (age 68 for Mr. Barton) and having achieved a service requirement, the executive’sexecutive's annual benefit under the SERP would be computed as the product of 3% (4% for Messrs. Barton and Bennett)Mr. Barton) of the executive’sexecutive's final average compensation (defined as the three calendar years of the executive’sexecutive's annual cash compensation, including bonuses, which produce the highest average within the executive’sexecutive's final eight full calendar years of employment) and the executive’sexecutive's annual years of service (subsequent to January 1, 2007 for Messrs. Barton and Bennett)Mr. Barton) (called the “supplemental benefit”"supplemental benefit"). However, the supplemental benefit would be limited such that the sum of (1) amounts payable from the executive’sexecutive's other retirement benefits from Banner and Banner Bank and (2) the supplemental benefit may not exceed 60% of final average compensation (for Mr. Barton, the supplemental benefit may not exceed the product of 3% times his total years of service and his final average compensation). Payment of the supplemental benefit begins on the first day of the month next following the executive’sexecutive's retirement date and continues monthly for the executive’sexecutive's life, unless the executive is a specified employee (as defined in Section 409A of the Internal Revenue Code), in which case payment begins on the first day of the month following the six-month anniversary of the executive’sexecutive's termination of employment. The executives are eligible for a reduced benefit upon retirement prior to age 62 (age 68 for Mr. Barton) if they meet the years of service requirements in their individual agreements; however, no benefit payment will begin before age 62 (age 68 for Mr. Barton) and payments will be subject to the delayed distribution requirements if the executive is a specified employee.
In the event of an executive’sexecutive's death, the executive’sexecutive's surviving spouse shall receive a spouse’sspouse's supplemental benefit. If the death occurs following the executive’sexecutive's retirement date, the surviving spouse shall be entitled to a spouse’sspouse's supplemental benefit, payable for life, equal to 50% of the monthly amount of the supplemental benefit payable to the executive prior to his or her death. If the death occurs while the executive is actively employed by Banner or any of its affiliates, the surviving spouse shall receive a spouse’sspouse's supplement benefit equal to 50% of the amount the executive would have received as a supplemental benefit if the executive’sexecutive's retirement date had occurred on the date immediately preceding the executive’sexecutive's death.
With respect to each of the named executive officers, the agreement provides that in the event of the executive’sexecutive's involuntary termination of employment on or after the effective date of a change in control, the date of termination shall be treated as the executive’sexecutive's retirement date and he or she shall be entitled to receive a supplemental benefit. If the executive had reached his or her retirement date, the supplemental benefit would be calculated as described above for normal retirement and if the executive had not reached his or her retirement date but had satisfied the years of service requirement, the supplemental benefit would be calculated as described above for early retirement. No benefit payment will begin before age 62 (age 68 for Mr. Barton) and payments will be subject to the delayed distribution requirements if the executive is a specified employee.
The supplemental benefit shall cease to be paid to the executive (and rights to the spouse’sspouse's supplemental benefit shall terminate) if the executive (1) discloses material confidential information or trade secrets concerning Banner Bank or any of its subsidiaries without its consent or (2) engages in any activity that is materially damaging to the Bank including engaging in competitive employment during the three-year period beginning on the executive’sexecutive's retirement date (or in the case of Messrs. Barton and Bennett, during the two-year period beginning on the date of his involuntary termination of employment on or after the effective date of a change of control).
Equity Plans. Our 2001 Stock Option Plan, Long-Term Incentive Plan,The 2012 Restricted Stock and Incentive Bonus Plan and 2014 Omnibus Incentive Plan provide for accelerated vesting of awardsprovides that in the event of a change in control. Only shares of restricted stock and phantom stock remain unvested. If a change in control, occurs: (1) awards of phantom stock will vest fully and be payable within 60 days; and (2) all unvested awards of restricted stock made prior to the amendment of the 2012 Restricted Stock and Incentive Bonus Plan on April 23, 2013 will vest fully. For unvested awards of restricted stock pursuant to the 2012 Restricted Stock and Incentive Bonus Plan made after April 23, 2013, accelerated vesting of restricted stock will occur only upon completion of a change in control and involuntary separation from employment (including voluntary separation for good reason) of the recipient during the 12-month period following the effective date of the change in control (known as a “double trigger”"double trigger"). Although theThe 2014 Omnibus Incentive Plan provideswas amended in 2015 to provide that unvestedrestricted stock, restricted stock units and performance awards will vest in the event of a change in control, it has been the Compensation Committee’s practice to provide in award agreements that unvested awards requirebecome fully vested and stock options and stock appreciation rights will become fully exercisable only upon a double trigger to accelerate vesting.trigger. Our 2012 Restricted Stock and Inventive Bonus Plan and 2014 Omnibus Equity Plan also provide for accelerated vesting of awards if a recipient’srecipient's service is terminated as a result of death or disability. The Long-Term Incentive Plan also provides that a participant who (1) has attained age 65, (2) voluntarily terminates employment with Banner and its affiliates, (3) is not vested at the time of the termination of employment and (4) enters into a non-competition agreement for a period equal to the greater of two years from the participant’s separation from service or the period of time necessary for the participant to fully vest in his or her benefit, shall have continuous service credited on his or her behalf for vesting purposes for a period equal to the term of the non-competition agreement.
Compensation Committee Interlocks and Insider Participation
The members of the Compensation Committee are Michael M. Smith, Connie R. Collingsworth, DavidRoberto R. Herencia and Brent A. Klaue and Constance H. Kravas.Orrico. No members of the Compensation Committee were officers or employees of Banner or any of its subsidiaries during the year ended December 31, 2014,2016, nor were they formerly Banner officers or had any relationships otherwise requiring disclosure.
PROPOSAL 2 – ADVISORY VOTE ON EXECUTIVE COMPENSATION
Under the Dodd-Frank Wall Street Reform and Consumer Protection Act (“("Dodd-Frank Act”Act"), we are required to periodically include in our annual meeting proxy statements and present at the annual meeting of shareholders a non-binding shareholder resolution to approve the compensation of our named executive officers, as disclosed in the proxy statement pursuant to the compensation disclosure rules of the SEC. This proposal, commonly known as a “say-on-pay”"say-on-pay" proposal, gives shareholders the opportunity to endorse or not endorse the compensation of Banner’sBanner's executives as disclosed in the Proxy Statement. At last year’sthe 2013 annual meeting of shareholders, we were also required under the Dodd-Frank Act to include a non-binding shareholder resolution regarding the frequency of future votes on executive compensation. Shareholders voted in favor of holding an annual vote and the Board of Directors determined to hold an annual shareholder advisory vote to approve the compensation of our named executive officers, beginning with last year’sthe 2014 annual meeting of shareholders. We will continue to hold an annual vote until such time that the frequency vote is next presented to shareholders or until the Board determines that a different frequency is in the best interest of Banner.
The say-on-pay proposal will be presented at the annual meeting in the form of the following resolution:
RESOLVED, that the shareholders approve the compensation of Banner Corporation’sCorporation's named executive officers, as disclosed in the Compensation Discussion and Analysis, the compensation tables and related material in the Proxy Statement for the 20152017 annual meeting of shareholders.
This vote will not be binding on our Board of Directors or Compensation Committee and may not be construed as overruling a decision by the Board or create or imply any additional fiduciary duty on the Board. It will also not affect any compensation paid or awarded to any executive. The Compensation Committee and the Board may, however, take into account the outcome of the vote when considering future executive compensation arrangements.
Our executive compensation policies are designed to establish an appropriate relationship between executive pay and the annual and long-term performance of Banner and Banner Bank, to reflect the attainment of short- and long-term financial performance goals, to enhance our ability to attract and retain qualified executive officers, and to align to the greatest extent possible the interests of management and shareholders. Our Board of Directors believes that our compensation policies and procedures achieve these objectives. The Board of Directors unanimously recommends that you vote FOR approval of the compensation of our named executive officers as disclosed in this Proxy Statement.
AUDIT COMMITTEE MATTERS
Audit Committee Charter. The Audit Committee operates pursuant to a charter approved by our Board of Directors. The Audit Committee reports to the Board of Directors and is responsible for overseeing and monitoring our financial accounting and reporting, system of internal controls established by management and audit process. The charter sets out the responsibilities, authority and specific duties of the Audit Committee. The charter specifies, among other things, the structure and membership requirements of the Audit Committee, as well as the relationship of the Audit Committee to our independent auditor, the internal audit department and management.
Report of the Audit Committee. The Audit Committee reports as follows with respect to Banner’sBanner's audited financial statements for the year ended December 31, 2014:2016:
The Audit Committee has completed its review and discussion of the 2016 audited financial statements with management; • | The Audit Committee has completed its review and discussion of the 2014 audited financial statements with management; |
• | The Audit Committee has discussed with the independent auditor (Moss Adams LLP) the matters required to be discussed by Auditing Standard No. 16,The Audit Committee has discussed with the independent auditor (Moss Adams LLP) the matters required to be discussed by Public Company Accounting Oversight Board Auditing Standard 1301, Communications with Audit Committees, as amended, as adopted by the Public Company Accounting Oversight Board in Rule 3200T;; |
• | The Audit Committee has received written disclosures and the letter from the independent auditor required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent auditor’s communications with the Audit Committee concerning independence, and has discussed with the independent auditor the independent auditor’s independence; and |
The Audit Committee has received written disclosures and the letter from the independent auditor required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent auditor's communications with the Audit Committee concerning independence, and has discussed with the independent auditor the independent auditor's independence; and
• | The Audit Committee has, based on its review and discussions with management of the 2014 audited financial statements and discussions with the independent auditors, recommended to the Board of Directors that Banner’s audited financial statements for the year ended December 31, 2014 be included in its Annual Report on Form 10-K. |
The Audit Committee has, based on its review and discussions with management of the 2016 audited financial statements and discussions with the independent auditors, recommended to the Board of Directors that Banner's audited financial statements for the year ended December 31, 2016 be included in its Annual Report on Form 10-K.
The foregoing report is provided by the following directors, who constitute the Audit Committee: | Audit Committee | | Gordon E. Budke, Chairman | | Robert D. Adams | | David A. Klaue | | John R. Layman David I. Matson |
This report shall not be deemed to be incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, and shall not otherwise be deemed filed under such acts.
PROPOSAL 3 – RATIFICATION OF SELECTION OF INDEPENDENT AUDITOR
The Audit Committee of the Board of Directors has selected Moss Adams LLP as our independent auditor for the year ending December 31, 20152017 and that selection is being submitted to shareholders for ratification. Although ratification is not required by our Bylaws or otherwise, the Board is submitting the selection of Moss Adams LLP to our shareholders for ratification as a matter of good corporate practice. If the selection is not ratified, the Audit Committee will consider whether it is appropriate to select another registered public accounting firm. Even if the selection is ratified, the Audit Committee in its discretion may select a different registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of Banner and our shareholders. Moss Adams LLP served as our independent auditor for the year ended December 31, 20142016 and a representative of the firm will be present at the annual meeting to respond to shareholders’shareholders' questions and will have the opportunity to make a statement if he or she so desires.
The Board of Directors unanimously recommends that you vote FOR the ratification of the appointment of Moss Adams LLP as our independent auditor.
The following table sets forth the aggregate fees billed, or expected to be billed, to us by Moss Adams LLP for professional services rendered for the fiscal years ended December 31, 20142016 and 2013. 2015.
| | Year Ended December 31, | | | | 2016 | | | 2015 | | | | | | | | | Audit Fees (1) | | $ | 987,542 | | | $ | 1,129,037 | | Audit-Related Fees (2) | | | 87,219 | | | | 319,574 | | Tax Fees | | | -- | | | | 7,500 | | All Other Fees | | | -- | | | | -- | |
| Year Ended December 31, | | 2014 | | 2013 | | | | | Audit Fees (1) | $505,228 | | $472,948 | Audit-Related Fees | 78,043 | | 29,620 | Tax Fees | 3,475 | | 117,075 | All Other Fees | -- | | -- | ____________ | | | | (1) | Fees for 2014 include estimated amounts to be billed. |
_____________(1) | Fees for 2016 include estimated amounts to be billed. | (2) | For 2015, includes filing a Registration Statement on Form S-1 and related comfort letter procedures. |
The Audit Committee will establish general guidelines for the permissible scope and nature of any permitted non-audit services to be provided by the independent auditor in connection with the Committee’sCommittee's annual review of its charter. Pre-approval may be granted by action of the full Audit Committee or by delegated authority to one or more members of the Audit Committee. If this authority is delegated, all approved non-audit services will be presented to the Audit Committee at its next meeting. In considering non-audit services, the Audit Committee or its delegate will consider various factors, including but not limited to, whether it would be beneficial to have the service provided by the independent auditors and whether the service could compromise the independence of the independent auditors. For the year ended December 31, 2014,2016, the Audit Committee approved all of the services provided by Moss Adams LLP that were designated as audit-related fees, tax fees and all other fees as set forth in the table above.
The Audit Committee of the Board of Directors determined that all of the services performed by Moss Adams LLP in fiscal year 20142016 were not incompatible with Moss Adams LLP maintaining its independence.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act requires our executive officers and directors, and persons who own more than 10% of any registered class of Banner’sBanner's equity securities, to file reports of ownership and changes in ownership with the SEC. Executive officers, directors and greater than 10% shareholders are required by regulation to furnish us with copies of all Section 16(a) forms they file. Based solely on our review of the copies of such forms we have received and written representations provided to us by these persons, we believe that during the year ended December 31, 2014,2016, all filing requirements applicable to our reporting officers, directors and greater than 10% shareholders were properly and timely complied with, except for a Form 4 covering one filing by Mr. Bennett covering three transactions,transaction which was inadvertently filed three days late.one day late by Kayleen R. Kohler.
MISCELLANEOUS
MISCELLANEOUS
The Board of Directors is not aware of any business to come before the annual meeting other than those matters described in this Proxy Statement. However, if any other matters should properly come before the 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.
We will bear the cost of solicitation of proxies, and 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 Banner’sBanner's common stock. In addition to solicitations via the Internet and by mail, our directors, officers and regular employees may solicit proxies personally or by telecopier or telephone without additional compensation.
Banner’s 2014Banner's 2016 Annual Report to Shareholders, including financial statements, has been mailed to all shareholders of record as of the close of business on February 27, 2015.March 1, 2017. Any shareholder who has not received a copy of the Annual Report may obtain a copy by writing to us or by accessing our proxy materials online at
www.bannerbank.com/proxymaterials. The Annual Report is not to be treated as part of the proxy solicitation material or having been incorporated herein by reference.
A copy of Banner’sBanner's Annual Report on Form 10-K for the year ended December 31, 2014,2016, as filed with the SEC, will be furnished without charge to shareholders of record as of February 27, 2015March 1, 2017 upon written request to Albert H. Marshall, Secretary, Banner Corporation, 10 S. First Avenue, Post Office Box 907, Walla Walla, Washington 99362.
SHAREHOLDER PROPOSALS
SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at our annual meeting to be held in 20162018 must be received by us no later than November 25, 201524, 2017 to be considered for inclusion in the proxy materials and form of proxy relating to that meeting. Any such proposals shall be subject to the requirements of the proxy rules adopted under the Securities Exchange Act.
In addition, our Articles of Incorporation provide that in order for business to be brought before the annual meeting, a shareholder must deliver notice to the Secretary not less than 30 nor more than 60 days prior to the date of the annual meeting; provided that if less than 31 days’days' notice of the annual meeting is given to shareholders, such notice must be delivered not later than the close of the tenth day following the day on which notice of the annual meeting was mailed to shareholders. The notice must state the shareholder’sshareholder's name, address and number of shares of Banner common stock held, and briefly discuss the business to be brought before the annual meeting, the reasons for conducting such business at the annual meeting and any interest of the shareholder in the proposal.
Our Articles of Incorporation 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 our Secretary not less than 30 days nor more than 60 days prior to the date of the annual meeting of shareholders; provided, however, that if less than 31 days’days' notice of the annual meeting is given to shareholders, such written notice must be delivered to our Secretary not later than the close of the tenth day following the day on which notice of the annual meeting was mailed to shareholders. The notice must set forth (1) the name, age, business address and, if known, residence address of each nominee for election as a director, (2) the principal occupation or employment of each nominee, (3) the number of shares of Banner common stock which are beneficially owned by each such nominee, (4) such other information as would be required to be included pursuant to the Securities Exchange Act in a proxy statement soliciting proxies for the election of the proposed nominee, including, without limitation, such person’sperson's written consent to being named in the proxy statement as a nominee and to serving as a director, if elected, and (5) as to the shareholder giving such notice (a) his or her name and address as they appear on our books and (b) the class and number of Banner shares which are beneficially owned by such shareholder. | BY ORDER OF THE BOARD OF DIRECTORS | | | | | /s/ALBERT H. MARSHALL | | | | ALBERT H. MARSHALL | | SECRETARY |
Walla Walla, Washington March 24, 20152017 35Appendix A BANNER CORPORATION AUDIT COMMITTEE CHARTER I.Purpose The Audit Committee ("Committee") is a standing committee of the Board of Directors ("Board") of Banner Corporation and its subsidiaries ("Corporation"). The primary function of the Committee is to oversee the accounting and financial reporting processes of the Corporation and subsidiaries and the audits of the Corporation's financial statements. In addition, the Committee also assists the Board in fulfilling its oversight responsibilities relating to (a) the quality and integrity of financial reports and other financial information provided by the Corporation and the Corporation's systems of internal accounting and financial controls; (b) the registered public accounting firm ("independent auditor") and the evaluation of the independent auditor's qualifications and independence and oversight over the independent auditor's performance; (c) the performance of the Corporation's internal audit function; (d) the compliance by the Corporation with legal and regulatory requirements, including disclosure, controls and procedures with respect to financial matters; and (e) the fulfillment of the other responsibilities set forth herein. The Committee shall also prepare the report of the Committee required to be included in the Corporation's annual meeting proxy statement. While the Committee has the responsibilities and powers set forth in this Audit Committee Charter, it is not the duty of the Committee to prepare financial statements, plan or conduct audits or to determine that the Corporation's financial statements and disclosures are complete and accurate and are in accordance with generally accepted accounting principles ("GAAP") and applicable rules and regulations. These are the responsibilities of management and the Corporation's independent auditor. II.Composition The Committee shall consist of three or more directors as determined by the Board, each of whom shall be an independent director, and free from any relationships that, in the opinion of the Board, would interfere with the exercise of his or her independent judgment, as a member of the Committee. No member of the Committee can have participated in the preparation of the Corporation's financial statements at any time during the past three years. All members of the Committee shall have a working familiarity with basic finance and accounting practices, including being able to read and understand fundamental financial statements, including the Corporation's balance sheet, income statement and cash flow statement. At least one member of the Committee must be an "audit committee financial expert" as defined in Item 407(d)(5)(ii) of Regulation S‑K. A person who satisfies this definition of an audit committee financial expert will also be presumed to have financial sophistication. The Committee will also include members with banking or related financial management expertise. Furthermore, the Committee will not include any members who are large customers of the Corporation or any of its subsidiaries. Member independence, experience and financial expertise will be in conformance with rules established by the SEC, the rules of the NASDAQ Stock Market, FDIC, PCAOB and the AICPA, including, but not limited to, the requirements of Rule 10A‑3 of the Securities Exchange Act of 1934 and 12 C.F.R. 363.5. The members of the Committee shall be elected by the Board, based on recommendations from the Corporate Governance/Nominating Committee, at the annual organizational meeting of the Board and shall serve until their successors shall be duly elected and qualified. Unless a Chair is selected by the full Board, the members of the Committee may designate a Chair by majority vote of the full Committee membership. The Board may remove any member from the Committee at any time with or without cause. III.Meetings and Structure The Committee shall meet as often as it determines, but not less than eight times per year. As part of its job to foster open communication, the Committee shall meet periodically with management, the head of internal audit and the independent auditor in separate executive sessions to discuss any matters that the Committee or each of these groups believes should be discussed privately. In addition, the Committee shall meet with the independent auditor and management quarterly to review the Corporation's financial statements. The Committee may also meet separately with regulatory examiners. Appendix A
Banner Corporation
CharterThe Committee is governed in accordance with Article IV of the Banner Corporation's Bylaws and such other procedures as may be fixed by the Committee to the extent consistent with the Bylaws.
Corporate Governance/NominatingAn agenda and supporting materials shall be sent to members prior to each meeting. Minutes will be prepared to document the discharge of the Committee's responsibilities. The Committee shall make regular reports to the Board of Directors.
IV.Responsibilities and Duties
The Committee is directly responsible for the selection, appointment, compensation, retention, termination and oversight of the work of any registered public accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Corporation, and each such registered accounting firm shall report directly to the Committee. To fulfill its responsibilities and duties, the Committee shall have the following authority and responsibilities and any other activities consistent with this Charter, Banner Corporation's Bylaws, and governing law as the Board or Committee deems necessary or appropriate:
Independent Auditor I. 1. | Approve all audit engagement fees and terms and pre‑approve all audit and permitted non‑audit engagements and services with the independent auditor. The Committee may delegate authority to pre‑approve audit and permitted non‑audit services to one or more members of the Committee. If this authority is delegated, all pre‑approved audit and permitted non‑audit services will be presented to the Committee at its next scheduled meeting. |
2. | AUTHORIZATION: The Corporate Governance CommitteeEnsure that engagement letters and any related agreements with independent auditors do not include any limitation of liability provisions that (i) indemnify the Board of Directors of Bannerindependent auditor against claims made by third parties; (ii) hold harmless or release the independent public accountant from liability for claims or potential claims that might be asserted by the Corporation (the “Committee”) is authorized by a resolution ofor its subsidiaries, other than claims for punitive damages; or (iii) limit the Board of Directors approved at November 22, 2002, subjectremedies available to the powers, duties and limitations as provided in this Charter, and shall remain in continuous existence until such time as it is dissolved by an act of the Board.Corporation or its subsidiaries.
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II. 3. | PURPOSE: The primary function ofReceive directly from the independent auditor any and all reports and annually a formal written statement delineating all relationships between the auditor and the Corporation, consistent with Independence Standards Board Standard 1. On an annual basis, the Committee is to assure thatshould review and discuss with the Corporation maintainsauditor, and obtain a written statement from the highest standardsindependent auditor describing, any relationships between the independent auditor and best practices in all critical areas relating to the management of the business of the company. To this end, the Committee will remain current with all of the pertinent rules and regulations applicable to the Corporation in order to meet the community’s expectations with respect to the governance of a public corporation. The Committee is intended to be consistent with and fulfill the objectives of Public Law # 107-204 (Sarbanes-Oxley Act of 2002, or the “Act”) as issued July 30, 2002 and as it may be revised from time to time.
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III. | DUTIES AND RESPONSIBILITIES: The Committee will monitor and evaluate the practices and procedures of the Corporation and whenany relationships or services that may impact the objectivity and independence of the auditors, to determine the auditor's independence and objectivity. The Committee shall take appropriate adviseaction to oversee the Boardindependence of Directorsthe auditor.
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4. | Not less than quarterly, consult with the independent auditor out of the presence of management about internal controls and the completeness and accuracy of the Corporation's financial statements. |
5. | Ensure that the lead audit partner of the independent auditor and the audit partner responsible for reviewing the audit are rotated at least every five years and does not serve as the lead audit partner or primary reviewing partner at any time during the five year period after being rotated (or such shorter period as may be required relatingby law, rule or regulation). |
Financial Reporting Processes 6. | Review and discuss with financial management and the independent auditor the financial statements, including disclosures made in Management's Discussion and Analysis of Financial |
| Condition and Results of Operations, in the Corporation's reports on Forms 10‑Q and 10‑K and annual reports to eachshareholders prior to any such report's filing with the SEC or prior to the release of earnings. The Committee shall determine whether or not the audited financial statements should be included in the Corporation's Form 10‑K. The Committee shall also produce the audit committee report required to be included in the Corporation's annual proxy statement. |
7. | Review and discuss with management and the independent auditor the Corporation's quarterly financial statements prior to the filing of its Form 10‑Q, including the results of the following:independent auditor's review of the quarterly financial statements. |
8. | Discuss with management and the independent auditor significant financial reporting issues and judgments made in connection with the preparation of the |
| 1. Corporation's financial statements, including any significant changes in the Corporation's selection or application of accounting principles, any major issues as to the adequacy of the Corporation's internal controls over financial reporting and any special steps adopted in light of material control deficiencies. |
9. | The qualifications requiredReview and discuss with management and the independent auditor any major issues as to the adequacy of individuals proposedthe Corporation's internal controls over financial reporting, any special steps adopted in light of material control deficiencies and the adequacy of disclosures about changes in internal control over financial reporting. |
10. | Review and discuss with management and the independent auditor the Corporation's internal controls report and the independent auditor's attestation of the report prior to the filing of the Corporation's Form 10‑K. |
11. | Review and discuss reports/presentations from the independent auditor on: |
· | All critical accounting policies and practices to be used. |
· | All alternative treatments of financial information within GAAP that have been discussed with management, ramifications of the use of such alternative disclosures and treatments, and the treatment preferred by the independent auditor. |
· | Other material written communication between the independent auditor and management, such as candidatesany management letter or schedule of unadjusted differences. |
12. | Review and discuss with management the Corporation's earnings press releases, including the use of "pro forma" or "adjusted" non‑GAAP information, as well as financial information and earnings guidance provided to analysts and rating agencies. Such review may be done generally (consisting of discussing the types of information to be disclosed and the types of presentations to be made) and the chair of the Committee may represent the entire Committee for the Boardpurposes of Directorsthis review. |
13. | Discuss with management and the independent auditor the effect of regulatory and accounting initiatives as well as off‑balance sheet structures on the Corporation's financial statements. |
14. | In coordination and consultation with the Board‑level Risk Committee, discuss with management the Corporation's major financial risk exposures and the steps management has taken to monitor and control such exposures. |
15. | Discuss with the independent auditor the matters required to be discussed by AU Section 380 relating to the conduct of the audit, including any difficulties encountered in the course of the audit work, any restrictions on the scope ofactivities or access to requested information, and any significant disagreements with management. |
16. | Review disclosures made to the Committee by the Corporation's CEO and CFO during their certification process for the Form 10‑K and Form 10‑Q about any significant deficiencies in the design or operation of internal controls or material weaknesses therein and any fraud involving management or other employees who have a significant role in the Corporation's internal controls. |
17. | Review the minutes of the Corporation's Disclosure Committee and consider, when practicable, having a member of the Committee attend such meetings. |
Internal Audit 18. | Oversee the Internal Auditor such that the Internal Auditor shall functionally report directly to the Committee and administratively to the Chief Executive Officer. |
19. | Review and approve the Internal Audit charter annually and proposed annual internal audit plan, financial budget and resources, and overall risk assessment methodology, and approve any significant interim changes to the foregoing. |
20. | Receive periodic communications from Internal Audit on the completion status of the annual plan, including any significant changes made to the plan. The internal auditor will also provide the Committee a periodic "Open Issues" report. |
21. | Review and discuss with the independent auditor and management the internal audit department responsibilities, including approval of the annual internal audit plan and budget, adequacy of staffing and any recommended changes in the planned scope of the internal audit. |
22. | Ensure there are no unjustified restrictions or limitations on the internal audit function. |
23. | Review the effectiveness of the internal audit activity. |
Financial Compliance 24. | Maintain procedures for the receipt, retention and treatment of complaints received by the Corporation regarding accounting, internal accounting controls or auditing matters and the confidential, anonymous submission by employee or others of concerns regarding questionable accounting and auditing matters. |
25. | Obtain from the independent auditor assurance that, if it detects or becomes aware of any illegal act, to assure that the Committee is adequately informed and to provide a report if the independent auditor has reached specified conclusions with respect to such illegal acts. |
26. | Obtain reports from management, the Director of Internal Audit, Chief Risk Officer, the Board‑level Risk Committee and the independent auditor that the Corporation is in conformity with applicable legal requirements and the Corporation's Code of Business Conduct and Ethics, which includes special ethics obligations for employees with financial reporting responsibilities. |
27. | Discuss with management and the independent auditor any correspondence with regulators or governmental agencies and any published reports which raise material issues regarding the Corporation's financial statements or accounting policies. |
28. | Review the significant results of regulatory examinations of the Corporation related to the Corporation's financial statements, internal controls or accounting policies. |
29. | Discuss with the Corporation's Legal Counsel, when appropriate, legal matters that may have a material impact on the financial statements or the Corporation's compliance policies. |
Other 30. | The Committee shall, in a manner it deems appropriate, evaluate itself annually by comparing its performance with the requirements of the charter. The results shall be reported to the Board. |
31. | The Committee shall approve all material services to be performed by experts and consultants in support of internal audit activities. |
32. | Discuss with management any second opinions sought from an accounting firm other than the Corporation's independent auditor, including the substance and reasons for seeking any such opinion. |
33. | Review the Corporation's policies and procedures for regular review of the expense accounts of the Corporation's executive management. |
34. | At its discretion, request that management, the independent auditor or the internal auditors undertake special projects or investigations which the Committee deems necessary to fulfill its responsibilities. |
V.Outside Advisors The Committee shall have the authority, in its sole discretion, to retain and obtain the advice and assistance of outside advisors as it deems necessary to fulfill its duties and responsibilities under this Charter. The Committee shall have the authority and be directly responsible, in its sole discretion, for the selection, appointment, compensation and oversight of the work of any adviser retained by the Committee.The Corporation will provide for appropriate funding, as determined by the Committee, for payment of (1) compensation to any registered public accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Corporation, (2) compensation to any advisers employed by the Committee; and (3) ordinary administrative expenses of the Committee. VI.Authority to Delegate Subject to applicable law, the Committee shall have the authority to delegate any of its responsibilities, along with the authority to take action in relation to such responsibilities, to one or more subcommittees as the Committee may deem appropriate in its sole discretion. VII.Charter At least annually, this charter will be reviewed and updated, as conditions dictate, with such changes submitted to the Board of Directors for approval. Appendix B COMPENSATION COMMITTEE CHARTER FOR THE COMPENSATION COMMITTEE OF BANNER CORPORATION AND THE COMPENSATION COMMITTEE OF BANNER BANK The primary function of the Compensation Committee of Banner Corporation ("Corporation Compensation Committee") and the Compensation Committee of Banner Bank ("Bank Compensation Committee," and together with the Corporation Compensation Committee, the "Committees") is to work together to coordinate the compensation paid to the directors, executive officers and employees of both Banner Corporation ("Corporation") and Banner Bank ("Bank"), and ensure such compensation appropriately balances risk and reward. In achieving this goal, the Committees shall operate separately but shall coordinate their efforts in order to achieve a coordinated policy. The Corporation Compensation Committee shall set the policies and compensation levels for directors, officers and employees of the Corporation, while the Bank Compensation Committee shall set the policies and compensation levels for directors, officers and employees of the Bank. The Committees shall coordinate their efforts to ensure that compensation policies are administered fairly and consistently. The Committees shall each be comprised of three or more directors as determined by the Board of Directors of the Corporation or the Bank, as appropriate. Each member shall be an independent director of the respective entity, who is free from any relationships that, in the opinion of the relevant Board, would interfere with the exercise of his or her independent judgment as a member of the Committee. Member independence will be in conformity with rules established by the Securities and Exchange Commission, the rules of NASDAQ, the FDIC, and other applicable laws and regulations. The Board shall also consider whether it is advisable for members of the Committees to also qualify as "non‑employee directors" within the meaning of Rule 16b‑3 under the Securities Exchange Act of 1934, "outside directors" within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"), or any other standards of applicable law, rule or regulation. The members of the Committees shall be elected by the Board of Directors of the Corporation or the Bank, as appropriate, based on recommendations from the Corporate Governance/Nominating Committee at the annual organizational meeting of the relevant Board and shall serve until their successors are duly elected and qualified. Unless a Chair is selected by the relevant Board, the members of each Committee may designate a Chair by majority vote of the full Committee membership. The applicable Board may remove any member from its Committee at any time with or without cause. III. | Meetings and Structure |
The Committees shall meet as often as it determines, but not less than once each calendar quarter. As part of the job to set executive compensation levels, each Committee should meet at least annually with the appropriate Chief Executive Officer in order to discuss the Chief Executive Officer's evaluation of the executive officers and recommendations for compensation levels. In addition to the separate meetings of the Corporation Compensation Committee and the Bank Compensation Committee, the Committees shall meet together at least annually, or more frequently as circumstances dictate, to ensure that compensation policies for the Corporation and the Bank are administered consistently. The Committees will be governed in accordance with Article IV of the applicable entity's Bylaws and such other procedures as may be fixed by the Committee to the extent consistent with the bylaws of each of the Bank and the Corporation, as applicable. An agenda and supporting materials shall be sent to members prior to each meeting. Minutes will be prepared to document the discharge of each Committee's responsibilities. Each Committee will make regular reports to its applicable Board. IV. | Responsibilities and Duties |
Each Committee shall have the following authority and responsibilities and any other activities consistent with this Charter, the applicable entity's Bylaws, and governing law as the relevant Board or Committee deems necessary or appropriate (with the understanding that the Corporation Compensation Committee shall take all action with respect to the Corporation and the Bank Compensation Committee shall take all action with respect to the Bank): 1. | Develop guidelines and policies for director compensation, coordinating actions between the Corporation Compensation Committee and the Bank Compensation Committee. |
2. | Develop guidelines and policies for executive compensation, coordinating actions between the Corporation Compensation Committee and the Bank Compensation Committee. |
3. | At least annually, review the compensation policies to ensure that they are effective in meeting goals for compensation and make new recommendations, as needed. |
4. | Review and approve the list of a peer group of companies to which the Corporation and the Bank shall compare themselves for compensation purposes. |
5. | If necessary, engage consultants, legal counsel or other advisers ("compensation advisers") to provide comparative information regarding compensation and benefits, and advice on issues involving laws and regulations governing compensation. |
6. | Review and approve other large compensation expense categories such as employee benefit plans. |
7. | Review director compensation levels and recommend, as necessary, changes in the compensation levels, with an equity ownership requirement in the Corporation based on the annual recommendation of the Committee. |
8. | Receive and review an annual report from the Chief Executive Officer which includes the performance assessment for all executive officers and recommendations for compensation levels, and which also includes salary recommendations for all employees. |
9. | On an annual basis, review and approve goals and objectives relevant to compensation of the Chief Executive Officer, evaluate the Chief Executive Officer's performance in light of those goals and objectives, and determine the Chief Executive Officer's compensation based on this evaluation. In evaluating and determining CEO compensation, the Committee shall consider the results of the most recent stockholder advisory vote on executive compensation ("Say on Pay Vote") required by Section 14A of the Exchange Act. The Chief Executive Officer shall not be present during voting on deliberations on his/her compensation. |
10. | Review and approve compensation for all executive officers, other than the Chief Executive Officer with input from the Chief Executive Officer. In evaluating and determining executive compensation, the Committee shall consider the results of the most recent Say on Pay Vote. |
11. | Annually review and approve any (i) employment agreements, severance agreements and change in control agreements or provisions, in each case, when and if appropriate, and (ii) any special or supplemental benefits. |
12. | Adopt, administer, approve and ratify awards, as the Committee deems appropriate, under incentive compensation and stock plans, including amendments to the awards made under any such plans, and review and monitor awards under such plans. |
13. | Work closely with each Board's Risk Committee to ensure that incentive compensation arrangements do not encourage employees to take risks beyond the Corporation and its subsidiaries' risk tolerance and risk policies and evaluate whether incentive compensation practices may increase the potential for imprudent risk taking. |
14. | Adopt, administer and approve clawback provisions for incentive-based compensation arrangements for senior executives and significant risk takers as the Committee deems necessary or as required by applicable law and review the facts and circumstances regarding whether to exercise any claw-back right on behalf of the Corporation or its subsidiaries. |
15. | Receive and review data and analysis from management or other sources and assess whether incentive compensation arrangements are consistent with the safety and soundness of the Corporation and its subsidiaries and the Corporation's risk policies. |
| Conduct of Annual Evaluation of CEO |
| As may be directed and requested by the Boards of Directors, and as supplemental to and distinct from an evaluation based on performance goals and metrics, evaluate the Chief Executive Officer relative to all relevant aspects of his or her performance, including, without limitation: his or her working relationship and communication with the Boards and with senior management; his or her overall leadership of the Corporation; and his or her role in the community. |
1. | Review and approve the Corporation's Compensation Discussion and Analysis and related executive compensation information to be included in the Corporation's annual report and proxy Statement. |
2. | Prepare a report on executive compensation for inclusion in the Corporation's annual report and proxy statement, consulting with the Corporation's legal counsel, if necessary. |
3. | Review and recommend for approval by the Board the frequency with which the Company will conduct a shareholder advisory vote on executive compensation, taking into account the results of the most recent shareholder advisory vote on the frequency of shareholder advisory votes on executive compensation required by Section 14A of the Exchange Act, and review and approve the proposals regarding the shareholder advisory vote on executive compensation and the frequency of the shareholder advisory vote on executive compensation to be included in the Company's proxy statement. |
Each Committee shall have the authority, in its sole discretion, to retain and obtain the advice and assistance of outside legal counsel and such other advisors as it deems necessary to fulfill its duties and responsibilities under this Charter. Each Committee shall have the authority and be directly responsible, in its sole discretion, for the selection, appointment, compensation and oversight of the work of any compensation adviser retained by that Committee. The Corporation and the Bank must provide for appropriate funding, as determined by the Committee, for payment of reasonable compensation to an adviser retained by the Committee. Prior to selecting or receiving advice from a compensation adviser, the appropriate Committee must take into account the following factors: · | the provision of other services to the Corporation by the person that employs the compensation adviser; |
· | the amount of fees received from the Corporation or its subsidiaries by the person that employs the compensation adviser, as a percentage of the total revenue of the person that employs the compensation adviser; |
· | the policies and procedures of the person that employs the compensation adviser that are designed to prevent conflicts of interest; |
· | any business or personal relationship of the compensation adviser with a member of the Committee; |
· | any stock of the Corporation owned by the compensation adviser; and |
· | any business or personal relationship of the compensation adviser or the person employing the adviser with an executive officer of the Corporation or its subsidiaries. |
Although these factors must be considered, there is no requirement that when selecting or receiving advice from a compensation adviser, the compensation adviser must be independent. The Corporation Compensation Committee shall evaluate whether any compensation consultant retained or to be retained by it has any conflict of interest in accordance with Item 407(e)(3)(iv) of Regulation S‑K. At least annually, this charter will be reviewed and updated, as conditions dictate, with such changes submitted to the Board of Directors of the Corporation and the Bank for approval. Furthermore, the Committee shall, in a manner it deems appropriate, evaluate itself annually by comparing its performance with the requirements of the charter. The results shall be reported to the Board. Appendix C
BANNER CORPORATION CHARTER OF THE CORPORATE GOVERNANCE/NOMINATING COMMITTEE The primary function of the Corporate Governance/Nominating Committee (the "Committee") of Banner Corporation and its subsidiaries ("Corporation") is to assure that the Corporation maintains the highest standards and best practices in all critical areas relating to the management of the business of the Corporation and to do so, the Committee is to carry out responsibilities relating to director nomination process and procedures, developing and maintaining the Corporation's corporate governance policies, and any related matters required by federal securities laws. To this end, the Committee will remain current with all of the pertinent rules and regulations applicable to the Corporation in order to meet the community's expectations with respect to the governance of a public corporation. The Committee will be composed of no less than three (3) directors, as determined by the Board of Directors of Banner Corporation (the "Board"). Each member shall be an independent director of the Corporation, who is free from any relationships that, in the opinion of the Board, would interfere with the exercise of his or her independent judgment as a member of the Committee. Member independence will be in conformity with rules established by the Securities and Exchange Commission and the listing rules of NASDAQ. The members of the Committee shall be elected by the Board of the Corporation at the annual organizational meeting of the Board and shall serve until their successors are duly elected and qualified. Unless a Chair is selected by the Board, the members of each Committee may designate a Chair by majority vote of the full Committee membership. The Board may remove any member from the Committee at any time with or without cause. III. | Meetings and Structure |
The Committee shall meet as often as it determines, but not less frequently than once each calendar quarter. The Committee is governed in accordance with Article IV of the Corporation's Bylaws and such other procedures as may be fixed by the Committee to the extent consistent with the Bylaws. An agenda and supporting materials shall be sent to members prior to each meeting. Minutes will be prepared to document the discharge of the Committee's responsibilities. The Committee shall make regular reports to the Board. IV. | Responsibilities and Duties |
The Committee shall have the following authority and responsibilities and any other activities consistent with this Charter, Banner Corporation's Bylaws, and governing law as the Board or the Committee deems necessary or appropriate: Board and Committee Composition and Selection of Directors 1. | The Review and make recommendations to the Board regarding the process and procedures by which a candidate shall be nominated for election to the Board of Directors and be submitted to a shareholder vote at the annual meeting of shareholders.
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3. 2. | The In accordance with the Banner Corporation's Articles of Incorporation and Bylaws, evaluate the size and composition of the Board, of Directors, including procedures for filling Director positions vacated other than at the completion of an appointed term and make recommendations regarding the
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| selection and approval of candidates to fill such vacancy either by election by shareholders or appointment by the Board. |
4. 3. | Recommend to the Board prospective candidates for election to the Board. In assessing the qualifications of prospective candidates, the Committee will: |
a. | Have sole authority to retain and terminate search firms, including the approval of all fees and contract terms. |
b. | Set board member qualifications. |
d. | The dutiesDetermine whether or not a candidate would qualify as an independent board member in accordance with rules established by the Securities and responsibilitiesExchange Commission, the listing rules of elected Board Members includingthe NASDAQ and other applicable laws and regulations.
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a. 4. | Responsibilities to shareholders |
b. | Attendance at meetings |
c. | Avoidance of conflicts of interest and inappropriate transactions |
5. | Director training and information resources including
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a. | An orientation program for new directors` |
b. | Continuing education opportunities |
c. | Clear and adequate reports |
d. | Notification of significant events and transactions |
6. | TheReview the form, composition and effectiveness of authorized Board committees under the same standards applied to the Board as a whole and in accordance with the requirements under the Securities and Exchange Commission, listing rules of NASDAQ and other applicable laws and regulations, and make recommendations to the Board regarding the appointment of directors to serve as members of each committee. |
7. 5. | Membership,Review membership, composition, qualifications, duties and obligations of subsidiary boards,, subject to the requirements of the Securities and Exchange Commission, listing rules of NASDAQ, and Nasdaq,other applicable laws and regulations consistent with the standards of governance applicable to the entire Corporation.
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6. | Develop and recommend to the Board approval standards for determining whether the director has a relationship with the Corporation that would impair his or her independence. |
7. | Develop and recommend the duties and responsibilities of elected Board Members including: |
a.Responsibilities to shareholders. b.Attendance at meetings. c.Avoidance of conflicts of interest and inappropriate transactions. 8. | Acknowledging that the Board and the Board of Banner Bank each have a Compensation Committee with oversight over compensation matters, establish criteria for evaluation of members of the Board and oversee annual evaluation of the Board and the executives. |
9. | Develop and oversee director training and information resources including: |
a.An orientation program for new directors. b.Continuing education opportunities. c.Clear and adequate reports. d.Notification of significant events and transactions. Corporate Governance Practices 1. | Review and discuss with management disclosure of the Corporation's corporate governance practices, including information regarding the operations of the Committee and other Board committees, director independence and the director nominations process, and to recommend that this disclosure be, included in the Corporation's proxy statement or annual report on Form 10-K, as applicable. |
2. | DocumentationMonitor documentation of Board activities including the timing and content of board reports, board communication, documents retention, adequacy of minutes and committee deliberations including an effective summary of discussion points and dissenting opinions
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9. 3. | MeetingMonitor meeting schedule and agendas, including the required frequency of meetings, materials supplied to members, minutes taken and other record keeping requirementsrequirements.
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4. | Review director access to management, employees, regulators and independent advisors. |
5. | Review and oversee shareholder access to director information. |
6. | Develop and recommend to the Board for approval a management succession plan ("Succession Plan"), review the Succession Plan periodically, develop and evaluate potential candidate for executive positions and recommend to the Board any changes to any candidates for succession under the Succession Plan. |
7. | Ensure that the Corporation conducts on an ongoing basis an appropriate review of all related party transactions and that all such transactions are approved by the Committee and to initiate any special investigations of conflicts of interest and compliance with federal, state, local and foreign laws and regulations, including the Foreign Corrupt Practices Act, as may be warranted. |
Code of Ethics 10. 1. | Director access to management, employees, internalCreate and external auditors, regulators and independent advisors
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11. | Shareholder access to director information
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12. | Evaluation ofmaintain the Chief Executive Officer and senior management
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13. | Management succession |
14. | Creation and maintenance of the Corporation’s Corporation's Code of Ethics including review, revision, disclosure, and application application. |
IV. | COMPOSITION OF COMMITTEE: The Committee will be composed of no less than three (3) members, each of whom shall be a member in good standing of the Board of Directors who is determined to be an Independent member of the Board as defined in the Act. Members shall be appointed by the Board of Directors and shall serve at the will of the Board until dismissed. Provided, however, that any Committee member who is determined to cease to be an Independent director, as that term is defined by the National Association of Security Dealers, will resign immediately from the Committee and that position will be filled by the Board at the first practicable opportunity. Annually, the Board of Directors will designate a member of the Committee to serve as its Chair.
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V. | COMMITTEE OPERATIONS: The Committee shall meet at intervals to be determined by the Committee but not less frequently than once each calendar quarter. The Committee will conduct its meetings in an orderly manner and will memorialize its activities in the form of contemporaneous and permanently recorded minutes. The Committee also will provide a report of its activities to the Board of Directors at the Board’s next regularly scheduled meeting or at the next practicable opportunity. |
VI. | AUTHORITY TO DELEGATE: The Committee is responsible without limitation for the competent and responsible execution of the duties and obligations of the Committee. However, nothing herein is intended to prohibit the Committee from creating, at its discretion, sub-committees of the Committee or consulting with outside consultants, employees of the Corporation, or any other party selected in a good faith manner, provided that each such sub-committee will have as a member at least one Independent director.
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VII. | NOMINATIONS FOR MEMBERS OF THE BOARD OF DIRECTORS: The Committee shall be responsible for recommending to the Board of Directors prospective candidates for election to the Board of Directors. In assessing the qualifications of prospective candidates, the Committee will: |
1. Have sole authority to retain and terminate search firms, including the approval of all fees and contract terms
2. Set board member qualifications
3. Interview nominees
| 4. | Determine whether or not a candidate would qualify as an independent board member
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VIII. | EVALUATIONS OF BOARD MEMBERS AND EXECUTIVES: The Committee will establish criteria for evaluation of members of the Board and the senior executives of the Corporation and will oversee an annual evaluation of the board and the executives. The Committee will retain the exclusive right to retain outside consulting firms to assist in such evaluation and will retain the sole authority to set the fees and terms of such engagements, including particularly the sole authority to terminate any such engagement. |
IX. | OVERSIGHT OF CONDUCT AND ETHICS: The Committee will enact procedures and policies intended to assure the acts of the Corporation comply with all applicable laws and regulations relating to: |
1. | Compliance with laws and regulations |
2. | Conflicts of interestCreate and maintain policies and procedures regarding: |
3. | Full, accurate and timely disclosures |
4. | Ethics programs and compliance training and education |
5. | Insider trading involving securities issued by the Corporation |
6. a. | Corporate opportunities guidelinesguidelines. |
7. b. | Competition and fair dealingdealing. |
8. c. | Human resources, including issues of discrimination, harassment, health and safety)safety. |
d. | Customer confidentiality and privacy. |
e. | Community/public relations. |
The Committee shall have the authority, in its sole discretion, to retain and obtain the advice and assistance of outside advisors as it deems necessary to fulfill its duties and responsibilities under this Charter. The Committee shall have the authority and be directly responsible, in its sole discretion, for the selection, appointment, compensation and oversight of the work of any adviser retained by the Committee. The Corporation must provide for appropriate funding, as determined by the Committee, for payment of reasonable compensation to an adviser retained by the Committee. Subject to applicable law, the Committee shall have the authority to delegate any of its responsibilities, along with the authority to take action in relation to such responsibilities, to one or more subcommittees as the Committee may deem appropriate in its sole discretion. At least annually, this charter will be reviewed and updated, as conditions dictate, with such changes submitted to the Board of Directors for approval. Furthermore, the Committee shall, in a manner it deems appropriate, evaluate itself annually by comparing its performance with the requirements of the charter. The results shall be reported to the Board. 9. | Customer confidentiality and privacy Admission Ticket |
10. | Protection and proper use of company assets |
11. | Community/public relations |
X. | INDEPENDENCE: The Committee reports directly to the Board of Directors of the Corporation.IMPORTANT ANNUAL MEETING INFORMATION | |
Using a black ink pen, mark your votes [X] with an X as shown in this example. Please do not write outside the designated areas. | Electronic Voting Instructions Available 24 hours a day, 7 days a week! Instead of mailing your proxy, you may choose one of the voting methods outlined below to vote your proxy. VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR. Proxies submitted by the Internet or telephone must be received by 1:00 a.m., Central Time, on April 25, 2017. Vote by Internet ·Go to www.investorvote.com/Banner ·Or scan the QR code with your smartphone ·Follow the steps outlined on the secure website Vote by telephone ·Call toll free 1-800-652-VOTE (8683) within the USA, US territories & Canada on a touch tone telephone ·Follow the instructions provided by the recorded message |
Annual Meeting Proxy Card IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.A Proposals — The Board of Directors recommends a vote FOR all the nominees listed and FOR Proposals 2 and 3. 1. | Election of Directors | For | Against | Abstain | | | For | Against | Abstain | | | For | Against | Abstain | | | 01 - Mark J. Grescovich (for three-year term) | o | o | o | | 02-David A. Klaue (for three-year term) | o | o | o | | 03 - Merline Saintil (for three-year term) | o | o | o | |
A-4 | For | Against | Abstain | | | For | Against | Abstain | 2. Advisory approval of the compensation of Banner Corporation's named executive officers. | o | o | o | | 3. The ratification of the Audit Committee's selection of Moss Adams LLP as the independnet auditor for the year ending December 31, 2017. | o | o | o | | | | | | | | | | 4. In their discretion, upon such other matters as may properly come before the meeting. | | | | | | | | |
| | Meeting Attendance Mark the box to the right if you plan to attend the Annual Meeting. | |
B Non-Voting Items Change of Address — Please print your new address below. | Comments — Please print your comments below | | | | | | | | |
C Authorized Signatures — This section must be completed for your vote to be counted. — Date and Sign Below Please sign exactly as your name appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title. Date (mm/dd/yyyy) — Please print date below. | Signature 1. — Please keep signature within the box. | | Signature 2. — Please keep signature within the box. | | | | | | | | | | | |
2017 Annual Meeting Admission Ticket 2017 Annual Meeting of Banner Corporation Shareholders April 25, 2017 10:00 A.M. Local Time Marcus Whitman Hotel 6 West Rose Walla Walla, Washington Upon arrival, please present this admission ticket and photo identification at the registration desk. IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
— BANNER CORPORATION
ANNUAL MEETING OF SHAREHOLDERS APRIL 21, 2015April 25, 2017
10:00 a.m.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS The undersigned hereby appoints Gordon E. Budke and Robert D. Adams, and Brent A. Orrico, and each of them, with full powers of substitution to act as attorneys and proxies for the undersigned, to vote all shares of common stock of Banner Corporation (“Banner”("Banner") which the undersigned is entitled to vote at the annual meeting of shareholders, to be held at the Marcus Whitman Hotel, 6 W.West Rose, Street, Walla Walla, Washington, on Tuesday, April 21, 2015,25, 2017, at 10:00 a.m., local time, and at any and all adjournments thereof, as indicated.
| | FOR
| VOTE
WITHHELD
| | | | 1. | The election as director of the nominees listed below (except as marked to the contrary below) | [ ]
| [ ] | | | Gordon E. Budke | | | Constance H. Kravas | | | John R. Layman | | | Michael M. Smith | | | | | | | |
| | FOR | AGAINST | ABSTAIN | | | | | | 2. | Advisory (non-binding) vote to approve the compensation of Banner Corporation’s named executive officers. | [ ] | [ ] | [ ] |
3. | The ratification of the Audit Committee’s selection of Moss Adams LLP as the independent auditor for the year ending December 31, 2015. | [ ] | [ ] | [ ] | | | | | | 4. | In their discretion, upon such other matters as may | | | | | properly come before the meeting. | | | | | | | | | The Board of Directors recommends a vote FOR all proposals. |
The proxiesBoard of Directors recommends a vote "FOR" all propositions. This proxy also provides voting instructions to the Trustees of the Banner Corporation 401(k) Plan for participants with shares allocated to their accounts. This proxy will vote your sharesbe voted as directed, onbut if no instructions are specified, this card. If you do not indicate your choices on this card,proxy will be voted for the proxies will vote your shares in accordance with the directors’ recommendations.propositions stated. If any other business is presented at such meeting, this proxy will be voted by the annual meeting, the proxies will vote your sharesdirectors named above in accordance with the directors’ recommendations.their best judgment. At the present time, the Board of Directors knows of no other business to be presented at the annual meeting. This proxy card also confers discretionary authority onto the Board of Directorsdirectors named above to vote with respect to the election of any person as director where the nominees are unable to serve or for good cause will not serve and on matters incident to the conduct of the annual meeting. THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
Should the undersignedabove-signed be present and elect to vote at the annual meetingAnnual Meeting or at any adjournment thereof and after notification to the Secretary of Banner at the annual meeting of the shareholder’sshareholder'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 undersignedabove-signed acknowledges receipt from Banner prior to the execution of this proxy of the Notice of Annual Meeting of Shareholders, a Proxy Statement dated on or about March 24, 20152017 and the 20142016 Annual Report to Shareholders. PLEASE PROVIDE YOUR INSTRUCTIONS TO VOTE BY TELEPHONE OR THE INTERNET OR COMPLETE, DATE, SIGN, AND MAIL THIS PROXY CARD PROMPTLY IN THE ENCLOSED POSTAGE-PAID ENVELOPE. (Items to be voted appear on reverse side.) .IMPORTANT ANNUAL MEETING INFORMATION | |
Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas. | [X] |
Dated: , 2015Annual Meeting Proxy Card
PLEASE FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. A Proposals — The Board of Directors recommends a vote FOR all the nominees listed and FOR Proposals 2 and 3. 1. | Election of Directors | For | Against | Abstain | | | For | Against | Abstain | | | For | Against | Abstain | | 01 - Mark J. Grescovich (for three-year term) | o | o | o | | 02-David A. Klaue (for three-year term) | o | o | o | | 03 - Merline Saintil (for three-year term) | o | o | o |
| For | Against | Abstain | | | For | Against | Abstain | 2. Advisory approval of the compensation of Banner Corporation's named executive officers. | o | o | o | | 3. The ratification of the Audit Committee's selection of Moss Adams LLP as the independnet auditor for the year ending December 31, 2017. | o | o | o | | | | PRINT NAME OF SHAREHOLDER | | PRINT NAME OF SHAREHOLDER | | | | | | | | SIGNATURE OF SHAREHOLDER4. In their discretion, upon such other matters as may properly come before the meeting. | | SIGNATURE OF SHAREHOLDER | | | | | | |
B Authorized Signatures — This section must be completed for your vote to be counted. — Date and Sign Below
Please sign exactly as your name appears on the enclosed card.hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or guardian,custodian, please give your full title. Date (mm/dd/yyyy) — Please print date below. | Signature 1 — Please keep signature within the box. | Signature 2 — Please keep signature within the box. | | | | | | |
PLEASE FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
Revocable Proxy — Banner Corporation
ANNUAL MEETING OF SHAREHOLDERS APRIL 25, 2017 10:00 a.m. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS The undersigned hereby appoints Gordon E. Budke and Robert D. Adams, and each of them, with full powers of substitution to act as attorneys and proxies for the undersigned, to vote all shares of common stock of Banner Corporation ("Banner") which the undersigned is entitled to vote at the annual meeting of shareholders, to be held at the Marcus Whitman Hotel, 6 West Rose, Walla Walla, Washington, on Tuesday, April 25, 2017, at 10:00 a.m., local time, and at any and all adjournments thereof, as indicated. The Board of Directors recommends a vote "FOR" all propositions. This proxy also provides voting instructions to the Trustees of the Banner Corporation 401(k) Plan for participants with shares allocated to their accounts. This proxy will be voted as directed, but if no instructions are specified, this proxy will be voted for the propositions stated. If sharesany other business is presented at such meeting, this proxy will be voted by the directors named above in their best judgment. At the present time, the Board of Directors knows of no other business to be presented at the annual meeting. This proxy also confers discretionary authority to the directors named above to vote with respect to the election of any person as director where the nominees are held jointly, each holder should sign.unable to serve or for good cause will not serve and matters incident to the conduct of the annual meeting.
Should the above-signed be present and elect to vote at the Annual Meeting or at any adjournment thereof and after notification to the Secretary of Banner 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 above-signed acknowledges receipt from Banner prior to the execution of this proxy of the Notice of Annual Meeting of Shareholders, a Proxy Statement dated on or about March 24, 2017 and the 2016 Annual Report to Shareholders.
PLEASE PROVIDE YOUR INSTRUCTIONS TO VOTE BY TELEPHONE OR THE INTERNET OR COMPLETE, DATE, SIGN, AND MAIL THIS PROXY CARD PROMPTLY IN THE ENCLOSED POSTAGE-PREPAIDPOSTAGE-PAID ENVELOPE.
(Items to be voted appear on reverse side.)
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