SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant x☒
Filed by a Party other than the Registrant ¨☐
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Preliminary Proxy Statement | Confidential, for Use of the Commission Only | ||
x | Definitive Proxy Statement | (as permitted by Rule 14a-6(e)(2)) | |
Definitive Additional Materials | |||
Soliciting Material Pursuant to §240.14a-11(c) or §240.14a-12 |
COLUMBIA BANKING SYSTEM, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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No fee required. |
¨ | Fee computed on table below per Exchange Act Rules 12a(6)(i)(1) and 0-11. |
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(3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): |
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Fee paid previously with preliminary materials. |
¨ | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
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COLUMBIA BANKING SYSTEM, INC.
Columbia Banking System, Inc. 1301 “A” Street Tacoma, Washington 98402 |
April 12, 20192021
Dear Shareholder:
We are pleasedIn light of continued restrictions on in-person gatherings related to invite you tothe coronavirus and after careful consideration, the Board of Directors of Columbia Banking System’s Annual Meeting of Shareholders.System, Inc. has determined to hold a virtual annual meeting. The meeting will be conducted exclusively via live webcast at 1:www.virtualshareholdermeeting.com/COLB2021 at 10:00 p.m.a.m. on Wednesday, May 22, 201926, 2021. You will not be able to attend the annual meeting physically.
The virtual annual meeting is intended to facilitate shareholder attendance and participation by enabling shareholders to participate from any location and at no cost. We believe this is the William W. Philip Hallright choice for Columbia at this time, as it enables engagement with our shareholders, regardless of size, resources, or physical location, while safeguarding the Universityhealth of Washington Tacoma, 1918 Pacific Avenue, Tacoma, Washington 98402.our shareholders, Board members and management. You will be able to attend the meeting online, vote your shares electronically and submit questions during the meeting by visiting www.virtualshareholdermeeting.com/COLB2021. To participate in the virtual meeting, you will need the 16-digit control number included on your Notice, proxy card or voting instruction form. The meeting webcast will begin promptly at 10:00 a.m. We encourage you to access the meeting prior to the start time. Online check-in will begin at 9:45 a.m., and you should allow ample time for the check-in procedures. If you experience technical difficulties during the check-in process or during the meeting, please call (844) 976-0738 (U.S.) or (303) 562-9301 (International)for assistance.
At the meeting, you and the other shareholders will be asked to consider and vote on proposals with respect to (i) the election of eleven13 nominees for director to serve on our Board of Directors;Directors, including two new directors who were appointed in January 2021; (ii) the approval of an Amendment to our 2018 Equity Incentive Plan (iii) the approval, on an advisory basis (non-binding), of the compensation of our named executive officers; and (iv)(iii) the approval, on an advisory basis (non-binding), of the appointment of our independent registered public accounting firm for the 20192021 fiscal year.
You also will have the opportunity to hear Columbia’s management discuss the developments in our business and industry in the past year and to ask questions. You will find additional information concerning Columbia Banking System and its operations, including its audited financial statements, in the Annual Report for the year ended December 31, 2018,2020, which is available on our website at www.columbiabank.com.
We hope that you can join us online on May 22nd .26th. Whether or not you plan to attend the virtual meeting, please take the time to vote online, by telephone or by completing and mailing the proxy card (if you received one) as soon as possible.Your opinion and your vote are important to us. Voting by proxy will not prevent you from voting in persononline if you attend the meeting, but it will ensure that your vote is counted if you are unable to attend.
President & Chief Executive Officer |
COLUMBIA BANKING SYSTEM, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 22, 201926, 2021
TIME | 10:00 | VOTING | ||||
By Internet To vote before the meeting, visit www.proxyvote.com. By Toll Free Number 1-800-690-6903 By Mail Follow the instructions on your proxy card | ||||||
VIRTUAL MEETING www.virtualshareholdermeeting.com/COLB2021 | ||||||
HOW TO PARTICIPATE Visit www.virtualshareholdermeeting.com/COLB2021 and enter the control number found on your notice, proxy card or instruction form. | ||||||
ITEMS OF BUSINESS | The purposes of the meeting are as follows: |
Board | Page | ||
(1) To elect the | FOR | 1 |
(2) |
To approve, on an advisory basis (non-binding), the compensation of the Company’s named executive officers. | FOR | 44 |
(3) To approve, on an advisory basis (non-binding), the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, |
2021. |
VOTING BY PROXY | Please vote online or by telephone or submit your proxy card (if you received one) as soon as possible so that your shares can be voted at the annual meeting in accordance with your instructions. For specific instructions on voting, please refer to the instructions in the proxy statement and on the Notice of Internet Availability of Proxy Materials you received in the mail or, if you received a hard copy of the proxy materials, on the enclosed proxy card. |
(4) To transact such other business as may properly come before the meeting or any adjournment thereof. | FOR | ||
RECORD DATE You are entitled to vote at the annual meeting and at any adjournments or postponements of the | |||
business on March 31, 2021. | |||
The proxy statement was first made available or mailed to shareholders onDated: April 12, 2019.2021
By order of the Board of Directors
Kumi Y. Baruffi
Executive Vice President, General Counsel & Corporate Secretary
Tacoma, Washington
Page | |
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 48 |
Fees Paid to Independent Registered Public Accounting Firm | 48 |
i
Columbia Banking System, Inc. | 1301 “A” Street Tacoma, Washington 98402 (253) 305-1900 |
COLUMBIA BANKING SYSTEM, INC.
1301 “A” Street
Tacoma, Washington 98402-4200
(253) 305-1900
Important Notice Regarding the Availability of Proxy Materials for the 20192021 Shareholder Meeting:
This proxy statement, the Notice of Internet Availability of Proxy Materials (the “Notice”) and our annual report to shareholders for the year ended December 31, 20182020 (the “2018“2020 Annual Report”) are available at www.columbiabank.com.*
The Columbia Board of Directors (the “Board”) is soliciting proxies for this year’s Annual Meeting of Shareholders (the “Annual Meeting”). This proxy statement contains important information for you to consider when deciding how to vote on the matters brought before the meeting. Please read it carefully. In this proxy statement, the terms the “Company,” “Columbia,” “we,” “us” or “our” refer to Columbia Banking System, Inc., and the terms “the Bank,” or “Columbia Bank” refer to Columbia State Bank, our wholly owned subsidiary.
INFORMATION ABOUT THE ANNUAL MEETING
The meeting will be a virtual meeting conducted exclusively via live webcast at 1:www.virtualshareholdermeeting.com/COLB2021 at 10:00 p.m.a.m. on Wednesday, May 22, 2019 at the William W. Philip Hall, University of Washington, 1918 Pacific Avenue, Tacoma, Washington 98402.26, 2021.
The Board set March 25, 201931, 2021 as the record date for the meeting (the “Record Date”). Shareholders who owned Columbia common stock at the close of business on that date are entitled to vote at the Annual Meeting, with each share entitled to one vote for each matter to be voted on at the meeting. There were 73,469,79771,739,143 shares of Columbia common stock outstanding on the Record Date.
In this proxy statement, the terms the “Company,” “Columbia,” “we,” “us” or “our” refer to Columbia Banking System, Inc.
Under the rules of the Securities and Exchange Commission (the “SEC”), we are furnishing proxy materials to our shareholders on the Internet, rather than mailing paper copies of the materials (including the 20182020 Annual Report) to each shareholder. As a result, unless you previously elected to receive paper copies or request them this year, you will not receive paper copies of these proxy materials. We are sending to our shareholders (other than those that previously elected to receive paper copies) a copy of the Notice, which will instruct you as to how you may access and review the proxy materials over the Internet. The Notice will also instruct you as to how you may access your proxy card to vote your shares by telephone or over the Internet. If you would like to receive a paper copy of our proxy materials, free of charge, please follow the instructions included in the Notice.
The Notice was mailed, and the accompanying Notice of Annual Meeting of Shareholders and this proxy statement are first being made available, to shareholders on April 12, 2019.2021.
Our goal isFor additional information regarding the matters to be a leading Northwest regional community bank, with a significant presence in selected markets, and to consistently increase earnings per share and shareholder value. Management believes that there continues to be opportunity for organic growth based upon branch footprint andvoted on at the organization’s commitment to delivering exceptional customer satisfaction and quality` products, and growth through selective acquisitions. Our business strategyAnnual Meeting including, among others, who is to provide our customers with the financial sophistication and breadth of products of a regional banking company while retaining the appeal and service level of a community bank. We continually evaluate our existing business processes while focusing on maintaining asset quality and balanced loan and deposit portfolios, building our strong core deposit base, expanding total revenue and controlling expenses in an effort to increase our return on average equity and gain operational efficiencies. We believe that, as a result of our strong commitment to highly personalized, relationship-oriented customer service, our varied products, our strategic branch locations and the long-standing community presence of our managers, banking officers and branch personnel, we are well positioned to attract and retain new customers and to increase our market share of loans, deposits, and other financial services in the communities we serve. We are committed to increasing market share in the communities we serve by continuing to leverage our existing branch network and considering business combinations that are consistent with our expansion strategy. We believe that achievement of these goals will create long-term value for our shareholders, consistent with protecting the interests of depositors.
Why did I receive a Notice of Internet Availability of Proxy Materials instead of paper copies of the proxy materials?
In accordance with rules and regulations adopted by the SEC, instead of mailing a printed copy of our proxy materials to all shareholders entitled to vote at the Annual Meeting, we are furnishing the proxy materials to our shareholders over the Internet. If you received the Notice by mail, you will not receive a printed copy of the proxy materials. Instead, the Notice will instruct you as to how you may access and review the proxy materials and submit your vote via the Internet. If you received the Notice by mail and would like to receive a printed copy of the proxy materials, please follow the instructions included in the Notice for requesting such materials.
We mailed the Notice on April 12, 2019 to all shareholders entitled to vote, and the minimum vote required for each proposal, please see the section of this proxy statement entitled “Questions and Answers About Voting and the Meeting” beginning at the Annual Meeting. As of the date of mailing of the Notice, all shareholders and beneficial owners have the ability to access all of our proxy materials on a website referred to in the Notice. These proxy materials are available free of charge.
What is being voted on at the Annual Meeting?
At the Annual Meeting you will be asked to vote on:
Only shareholders who owned Columbia common stock, either directly or beneficially, as of the close of business on the Record Date are entitled to receive notice of the Annual Meeting and to vote the shares that they held on that date at the Annual Meeting, or any postponement or adjournment of the Annual Meeting.
At the Meeting. Shares held in your name as the shareholder of record may be voted by you in person at the Annual Meeting. Shares held beneficially in “street name” may be voted by you in person at the Annual Meeting only if you obtain a legal proxy from the broker or other agent that holds your shares, giving you the right to vote the shares, and you bring the legal proxy to the Annual Meeting.
By Mail. Shareholders who ask for and receive a paper proxy card may vote by mail and should complete, sign and date their proxy card and mail it in the pre-addressed envelope that will accompany the delivery of the paper proxy card. Proxy cards submitted by mail must be received by the time of the meeting in order for your shares to be voted.
By Internet. For shares registered in your name, you may go to http://www.proxyvote.com to transmit a proxy to vote your shares by means of the Internet. You will be required to provide our number and the control number, both of which are contained on the Notice or the proxy card, as applicable. You will then be asked to complete an electronic proxy card. The votes represented by such proxy will be generated on the computer screen, and you will be prompted to submit or revise them as desired. We must receive votes submitted via the Internet by 11:59 p.m. ET on May 21, 2019.
By Telephone. You may grant a proxy to vote your shares by telephone. The telephone voting procedures are designed to authenticate your identity, to allow you to grant a proxy to vote your shares, and to confirm that your instructions have been recorded properly. To vote by telephone, call 1-800-690-6903 by 11:59 p.m. ET on May 21, 2019. Please see the instructions on the Notice or the proxy card, as applicable.
For shares registered in the name of a broker or bank. Most beneficial owners, whose stock is held in “street name,” receive instructions for granting proxies from their banks, brokers or other agents, rather than a proxy card. If your shares are held in a stock brokerage account or by a bank or other nominee, you are considered the beneficial owner of shares held in “street name,” and as the beneficial owner, you have the right to direct your broker on how to vote.
A number of brokers and banks are participating in a program provided through Broadridge Financial Solutions Inc. that offers the means to grant proxies to vote shares over the telephone and Internet. If your shares are held in an account with a broker or bank participating in the Broadridge program, you may grant a proxy to vote those shares by calling the telephone number or visiting the website shown on the instruction form received from your broker or bank.
Can I revoke my proxy and/or change my vote?
Yes. You may revoke your proxy and change your vote at any time before the proxy is exercised by filing with Columbia’s Secretary a notice of revocation, voting again by Internet or telephone (only your last Internet or telephone proxy submitted prior to the meeting will be counted), signing and returning a new proxy card with a later date, obtaining a legal proxy from the broker or other agent that holds your shares, or attending the Annual Meeting and voting in person. The powers of the proxy holders will be suspended if you attend the Annual Meeting in person and so request, although attendance at the meeting will not by itself revoke a previously granted proxy.
What are the Board’s recommendations?
The Board recommends a vote (i) FOR the election of the director nominees listed* References in this proxy statement (ii) FOR the approvalto our website address are provided only as a convenience and do not constitute, and should not be viewed as, an incorporation by reference of the Amendment toinformation contained on, or available through, the 2018 Equity Incentive Plan, (iii) FOR the approval, on an advisory basis (non-binding), of the compensation of Columbia’s named executive officers, and (iv) FOR the approval, on an advisory basis (non-binding), of Deloitte as the independent registered public accounting firm for the fiscal year 2019.
If you indicate when voting by Internet or by telephone that you wish to vote as recommended by the Board, or if you sign and return a proxy card without specific instructions as to how to vote, Craig D. Eerkes and Hadley S. Robbins, as the persons named as proxy holders on the proxy card, will vote as recommended by the Board of Directors. If any other matters are considered at the meeting, Mr. Eerkes and Mr. Robbins will vote as recommended by the Board. If the Board does not give a recommendation, Mr. Eerkes and Mr. Robbins will have discretion to vote as they think best.
Will my shares be voted if I do not vote by using the Internet, by telephone or by signing and returning my proxy card?
If your shares are registered in your name and you do not vote by using the Internet, by telephone or by returning a signed proxy card or do not vote in person at the Annual Meeting, your shares willwebsite. Therefore, such information should not be voted.
If your shares are held in “street name” and you do not submit voting instructions to your broker, your broker may vote your shares atconsidered part of this meeting on the advisory (non-binding) approval of the appointment of the independent registered public accounting firm only. If no instructions are given with respect to the election of directors, the approval, on an advisory basis (non-binding), of the compensation of Columbia’s named executive officers or the selection on an advisory (non-binding) basis of the frequency for holding future advisory shareholder votes to approve executive compensation, your broker cannot vote your shares on these proposals.
How many votes are needed to hold the Annual Meeting?
A majority of Columbia’s outstanding shares as of the Record Date (a quorum) must be present at the Annual Meeting in order to hold the meeting and conduct business. Shares are counted as present at the meeting if a shareholder is present and votes in person at the meeting or has properly submitted a proxy card. As of the Record Date for the Annual Meeting, 73,469,797 shares of Columbia common stock were outstanding and eligible to vote. Both abstentions and broker non-votes are counted as present for the purpose of determining the presence of a quorum. Broker non-votes, however, are not counted as shares present and entitled to be voted with respect to a matter on which the broker has expressly not voted. Generally, broker non-votes occur when shares held by a broker for a beneficial owner are not voted with respect to a particular proposal because (i) the broker has not received voting instructions from the beneficial owner and (ii) the broker lacks discretionary voting power to vote such shares.
What vote is required to elect directors?
In an uncontested election, a nominee for election to a position on the Board will be elected as a director if the votes cast Forstatement. the nominee exceed the votes cast Against the nominee (known as majority voting). The term of any director who does not receive a majority of votes cast in an election held under that standard terminates on the earliest to occur of: (i) 90 days after the date election results are certified; (ii) the date the director resigns; and (iii) the date the Board fills the position. Our Bylaws provide that an election is considered “contested,” and will be held under a plurality standard, if there are shareholder nominees for director pursuant to the advance notice provision in Section 1.17 of our Bylaws who are not withdrawn by the advance notice deadline set forth in that section. You may vote For, Against, or Abstain from voting for the listed nominees. The following will not be votes cast and will have no effect on the election of any director nominee: (i) a share whose ballot is marked as abstain; (ii) a share otherwise present at the meeting but for which there is an abstention; and (iii) a share otherwise present at the meeting as to which a shareholder gives no authority or direction. Shareholders may not cumulate their votes in the election of directors.
What vote is required to approve the Amendment to the 2018 Equity Incentive Plan?
To approve the Amendment to the 2018 Equity Incentive Plan, we must receive the affirmative vote For the proposal by holders of a majority of the shares present in person or by proxy and voting on the proposal. You may vote For, Against or Abstain from approving the proposal. Abstentions and broker non-votes will have no effect on the outcome of the proposal.
What vote is required to approve the advisory (non-binding) resolution on the compensation of Columbia’s executive officers?
The affirmative vote For by a majority of those shares present in person or by proxy and voting on this matter is required on the advisory (non-binding) resolution on the compensation of Columbia’s named executive officers. You may vote For, Against or Abstain from approving the advisory (non-binding) resolution to approve named executive officer compensation. Abstentions and broker non-votes will have no effect on the outcome of the proposal.
What vote is required to approve the advisory (non-binding) proposal on the appointment of the independent registered public accountants?
The proposal to approve, on an advisory basis (non-binding), the appointment of Deloitte as Columbia’s independent registered public accounting firm will be adopted if a majority of the votes present in person or by proxy and voting on this matter are cast For the proposal. You may vote For, Against or Abstain from approving the proposal. Abstentions and broker non-votes will have no effect on the outcome of the proposal.
We have not received timely notice of any shareholder proposals to be considered at the Annual Meeting, and the Board does not know of any other matters to be brought before the Annual Meeting.
Who is soliciting my proxy and who is paying the cost of solicitation?
The Board is soliciting proxies for use at the 2019 Annual Meeting. Certain directors, officers and employees of Columbia and its banking subsidiary, Columbia State Bank, or its trust company subsidiary, Columbia Trust Company, may solicit proxies by mail, telephone, facsimile, or in person.
We will pay for the costs of solicitation. We do not expect to pay any compensation for the solicitation of proxies, except to brokers, nominees and similar record holders for reasonable expenses in mailing proxy materials to beneficial owners of our common stock. However, management may, if it determines it necessary to obtain the requisite shareholder vote, retain the services of a proxy solicitation firm.
How can I find out the results of the voting at the annual meeting?
Preliminary voting results will be announced at the Annual Meeting. We will publish final results in a Current Report on Form 8-K to be filed with the SEC within four business days after the Annual Meeting. After the Form 8-K is filed, you may obtain a copy by visiting our website at www.columbiabank.com, the SEC’s website at www.sec.gov, or by writing to: Columbia Banking System, Inc., Attention: Corporate Secretary, 1301 “A” Street, Tacoma, Washington, 98402-4200.
When are proposals and director nominations for the 2020 Annual Meeting due?
Proposals by shareholders to transact business at Columbia’s 2020 Annual Meeting must be delivered to Columbia’s Secretary no later than January 23, 2020 in order to be considered for inclusion in our proxy statement and proxy card and should contain such information as is required under our Bylaws. Such proposals will also need to comply with the SEC’s regulations regarding the inclusion of shareholder proposals in Columbia-sponsored proxy materials. In order for a shareholder proposal to be raised from the floor during next year’s annual meeting, or for a shareholder to nominate a person or persons for a director, written notice must be received by us no earlier than the 150th day and no later than the 120th day prior to the first anniversary of the 2019 Annual Meeting (meaning no earlier than December 24, 2019, and no later than January 23, 2020), and should contain such information as required under our Bylaws. However, if the date of the 2020 Annual Meeting is more than 30 days before or more than 60 days after the anniversary of the 2019 Annual Meeting, notice must be delivered no earlier than the 150th day and no later than the 120th day prior to the date of the 2020 Annual Meeting or, if the first public announcement of the 2020 Annual Meeting date is less than 100 days before the meeting date, notice must be delivered no later than the 10th day following the date of the Company’s first public announcement of the 2020 Annual Meeting date.
To be in proper form, a shareholder’s notice must include the specified information concerning the proposal or director nominee as described in our Bylaws. The Company will not consider any proposal or nomination that is not timely or otherwise does not meet the Bylaw and SEC requirements for submitting a proposal or nomination.
Notice of intention to present proposals at the 2020 Annual Meeting, or to obtain a copy of the detailed procedures regarding notice requirements for proposals or director nominations, should be directed to Columbia’s Corporate Secretary, 1301 “A” Street, Tacoma, Washington 98402.
Beneficial Owners of More Than Five Percent
As of March 15, 2019 (except as otherwise noted), the shareholders identified in the table below beneficially owned more than 5% of the outstanding Columbia shares. To the Company’s knowledge, based on the public filings which beneficial owners of more than 5% of the outstanding shares of Columbia common shares are required to make with the SEC, there are no other beneficial owners of more than 5% of the outstanding Columbia common shares as of March 15, 2019, other than those set forth below. The percentage ownership data is based on 73,467,373 Columbia common shares outstanding as of March 15, 2019.
Name and Address Number of Shares (1) Percentage Blackrock, Inc. (2) 10,189,781 13.87 % 55 East 52nd Street New York, NY 10055 The Vanguard Group, Inc. (3) 7,687,182 10.46 % 100 Vanguard Blvd. Malvern, PA 19355 T Rowe Price (4) 4,335,517 5.9 % 100 East Pratt St. Baltimore, MD 21202
2021 Proxy Statement |
Beneficial Ownership of Directors and Executive Officers
The following table shows, as of March 15, 2019, the amount of Columbia common stock directly owned (unless otherwise indicated) by (a) each director and director nominee; (b) the executive officers named in the Summary Compensation Table below; and (c) all of our directors and executive officers (including those not named in the Summary Compensation Table) as a group. Except as otherwise noted, we believe that the beneficial owners of the shares listed below, based on information furnished by such owners, have or share with a spouse voting and/or investment power with respect to the shares. Beneficial ownership is determined under the rules of the SEC.
Name Position Number Percentage Craig D. Eerkes Chairman of the Board 10,322 (1) * Hadley S. Robbins Director, President, and Chief Executive Officer 64,964 (2) * Kumi Y. Baruffi Executive Vice President, General Counsel 20,148 (3) * David A. Dietzler Director 12,303 (1) * Ford Elsaesser Director 41,264 (1) * Mark A. Finkelstein Director 7,691 (1) * John P. Folsom Director 48,329 (4) * Eric S. Forrest Director 7,463 (5) * Thomas M. Hulbert Director 47,706 (1) * Michelle M. Lantow Director 15,191 (1) * David C. Lawson Executive Vice President, Chief Human Resources Officer 20,856 (6) * Randal L. Lund Director 3,524 (1) * Andrew L. McDonald Executive Vice President, Chief Credit Officer 43,683 (7) * S. Mae Fujita Numata Director 14,516 (8) * Elizabeth W. Seaton Director 9,691 (1) * Gregory A. Sigrist Executive Vice President, Chief Financial Officer 5,910 (9) * Clint E. Stein Executive Vice President, Chief Operating Officer 35,728 (10) * Janine T. Terrano Director 2,525 (1) * William T. Weyerhaeuser Director 253,437 (11) * Directors and executive officers as a group (20) 677,924 0.92 %
INFORMATION ABOUT THE DIRECTORS AND NOMINEESTable of Contents
Our Bylaws provide that the number of directors to be elected by the shareholders will be at least five and not more than 17. Under the Bylaws, the Board has authority to decide the exact number of directors to be elected within these limits. The Board has fixed the number of directors to be elected at the Annual Meeting at eleven and has nominated the persons listed on the following pages, each of whom has consented to serve as a director if elected, for election as directors to serve until the 2020 Annual Meeting or until their successors are elected.
Our Bylaws provide that any person who has or will attain the age of 75 prior to a meeting of shareholders may not stand for election at such meeting. As a result, Mr. Dietzler, Mr. Folsom, and Mr. Weyerhaeuser, who have served as directors since, respectively, 2013, 1997 and 1998, have not been nominated for election at the Annual Meeting.
If a nominee refuses or is unable to stand for election, the Board may reduce the number of seats on the Board or designate a replacement nominee. If the Board designates a substitute, shares represented by proxy will be voted FOR the substitute nominee. The Board presently has no knowledge that any of the nominees will refuse or be unable to serve.
PROPOSAL NO. 1
Information regarding each of the nominees is provided below, including each nominee’s name, age as of the Record Date, principal occupation and public company directorships during the past five years, and the year first elected or appointed a director of Columbia, its predecessor corporation or one of its former or current subsidiaries. All of the nominees are presently directors of Columbia and Columbia Bank. There are no family relationships among any of our directors or executive officers, nor are any of the corporations or organizations referenced in the biographical information below a parent, subsidiary or affiliate of Columbia.
Craig D. Eerkes | |||
Chair of the Board | |||
Mr. Eerkes Qualifications: Mr. Eerkes has an extensive financial background and broad experience in highly regulated industries, including his current position as President and Chief Executive Officer of Sun Pacific Energy, Inc. His expertise in community banking and risk management brings strong operational depth to the Board. | |||
Director since:2014 | |||
Age:69 | |||
Other public company directorships: None |
Laura Alvarez Schrag | |||
Ms. Alvarez Schrag is the President of Pondera Consulting, a human resources management, leadership development and CIS/CRM consulting firm that she founded in 2009. In her prior role as Qualifications: Ms. Alvarez Schrag’s extensive experience in human resources and organizational and leadership development, as well as her expertise in diversity, equity and inclusion consulting, bring valuable perspective to the Board. She is also an ACC Certified Executive Coach from the International Coaching Federation. | |||
Director since:2021 | |||
Age:53 | |||
Other public company directorships: None | |||
Ford Elsaesser | |||
Mr. Elsaesser Qualifications: Mr. Elsaesser has extensive business experience and | |||
Director since:2014 | |||
Age: 69 Other public company directorships: None |
3 | 2021 Proxy Statement |
Mark A. Finkelstein | |||
Mr. Finkelstein Qualifications: Mr. Finkelstein has extensive legal background and |
Age: 62 Other public company directorships: None |
Eric S. Forrest | |||
Mr. Forrest Qualifications: Mr. | |||
Director since:2017 | |||
Age:53 | |||
Other public company directorships: None | |||
Thomas M. Hulbert | |||
Mr. Hulbert Qualifications: Mr. Hulbert has served on numerous boards of local private | |||
Director since:1999 | |||
Age:74 | |||
Other public company directorships: None |
2021 Proxy Statement | 4 |
Michelle M. Lantow | ||||
Ms. Lantow Qualifications: Ms. Lantow has a | ||||
Director since:2012 | ||||
Age:59 | ||||
Other public company directorships: None |
Randal L. Lund | ||||
Mr. Lund Qualifications: Mr. Lund is a retired member of the American Institute of Certified Public Accountants and the Oregon Society of Certified Public Accountants. | ||||
Director since:2017 | ||||
Age:63 Other public company directorships: None |
Tracy Mack-Askew | |||
Ms. Mack-Askew is the General Manager-HD Vocational Platform Development of Daimler Trucks North America (DTNA), a position she has held since 2016. She previously served as the Vice President of Engineering for Thomas Built Buses OEM subsidiary of DTNA from 2014-2016. Ms. Mack-Askew has led engineering, purchasing and manufacturing teams over the course of her career and is Executive Sponsor of the Daimler African American Employee Resource Group. She currently serves as a Finance Committee member on the Governing Board of Ronald McDonald House Charities of Oregon and Southwest Washington and is National Chair for the Policies and Procedures Committee of Jack and Jill of America. She holds a Bachelor of Science in Mechanical Engineering from Rensselaer Polytechnic Institute, a Master of Science in Mechanical Engineering from Purdue University and a Master of Arts in Management from Harvard University. Qualifications: Ms. Mack-Askew brings business and organizational leadership, financial acumen and depth of operational experience to the Board. She is also an NACD Governance Fellow. | |||
Director since:2021 | |||
Age: 44 Other public company directorships: None | |||
5 | 2021 Proxy Statement |
S. Mae Fujita Numata | |||
Ms. Numata Qualifications: Ms. Numata’s extensive accounting and banking background provide the Board and Audit Committee with valuable expertise, and she is one of the Board’s designated audit committee financial experts. | |||
Director since:2012 | |||
Age:64 Other public company directorships: None |
Elizabeth W. Seaton |
| |||
Ms. Seaton Qualifications: Ms. Seaton has broad experience in business leadership, change management, strategic development, mergers and acquisitions and enterprise risk | ||||
Director since:2014 | ||||
Age:60 Other public company directorships: None |
Clint E. Stein | |||
Mr. Stein was named President and Chief Executive Officer of Columbia and Columbia Bank effective January 1, 2020. He joined Columbia in December 2005 as Senior Vice President, Chief Accounting Officer and Controller. In May 2012, he was appointed as the acting Chief Financial Officer, and in August 2012, he was appointed Executive Vice President and Chief Financial Officer of Columbia and Columbia Bank. In July 2017, Mr. Stein was appointed Executive Vice President and Chief Operating Officer, while continuing to serve as Chief Financial Officer until May 2018. Mr. Stein is a Certified Public Accountant and holds a Bachelor’s degree in Accounting and Business Administration from the University of Idaho. His post-graduate education includes Graduate School of Bank Financial Management and the Graduate School of Banking at the University of Wisconsin. Mr. Stein was named a CFO of the year in 2015 by the Puget Sound Business Journal. He currently serves on the Executive Council For A Greater Tacoma and the boards for the Washington Bankers Association, and Pacific Coast Banking School. He previously served as a board member for the Tacoma Pierce County Chamber of Commerce and the Oregon Bankers Association. | |||
Director since:2020 | |||
Age:49 Other public company directorships: None |
2021 Proxy Statement | 6 |
Janine T. Terrano | |||
Ms. Terrano Qualifications: Ms. Terrano has a depth of technology, data security and business experience, | |||
Director since:2018 | |||
Age:59 Other public company directorships: None |
The Board unanimously recommends a vote “FOR” each of the nominees for director.
Guidelines
7 | 2021 Proxy Statement |
Governance Practices and Framework
The Board is committed to sound business practices, transparency in financial reporting and high standards of corporate governance. We operate within a comprehensive plan of corporate governance with the purpose of defining responsibilities, setting high standards of professional and personal conduct and assuring compliance with such responsibilities and standards. We regularly monitor developments in the area of corporate governance and our corporate governance policies, practices and committee charters are reviewed periodically and updated as necessary to reflect changes in regulatory requirements and evolving oversight practices. Our current best practices include:
Independent Oversight | ü Other than the CEO, all directors are independent ü Independent committees ü Separation of Board Chair and CEO |
Engaged Board/ Shareholder Rights | ü Annual election of all directors ü Majority vote standard (with plurality carve-out for contested elections) ü No directors currently serve on other public company boards üShareholder right to call special meetings ü Annual Say-on-Pay voting ü Annual Board and committee self-evaluations |
Other Governance Practices | ü Board diversity of experience, tenure, age and gender ü Mandatory retirement age of 75 ü Annual review of CEO succession plan by the independent directors with the CEO ü Annual review of senior management long-term and emergency succession plans ü Executive and director stock ownership requirements ü Board oversight of ESG through Corporate Governance Committee |
The Corporate Governance and Nominating Committee of the Board has the authority and responsibility to monitor and review the appropriateness of the Company’s principles and practices of corporate governance in light of emerging standards and best practices and the needs of the Company and its shareholders, and make such recommendations to the full Board as the Committee considers appropriate.
Board Leadership and Company Leadership StructureDirector Independence
The Board is committed to maintaining an independent board, and an overwhelming majority has been comprised of outside directors for many years. It has further been the practice of Columbia to separate the duties of ChairmanBoard Chair and Chief Executive Officer. In keeping with good corporate governance practices, the Board believes that the separation of the duties of ChairmanBoard Chair and Chief Executive Officer eliminates any inherent conflict of interest that may arise when the roles are combined, and that an independent director can best provide the leadership and objectivity required as Chairman.Chair.
The Board annually reviews director independence under applicable law, the listing standards of Nasdaq and our Corporate Governance Policy. In addition, in order to identify potential conflicts of interest and to monitor and preserve independence, directors must consult the Chair of the Corporate Governance and Nominating Committee and the Board Chair before accepting membership on other boards or other significant commitments involving affiliation with other businesses or governmental entities.
The Board has affirmatively determined that all directors other than Clint Stein, who serves as the President and Chief Executive Officer of the Company, are independent. In determining the independence of directors, the Board considered responses to annual Director Qualification& Officer questionnaires that indicated no transactions between the Company or its affiliates and directors other than banking transactions with Columbia Bank. The Board also considered the lack of any reported conflicts of interest and transactions with the Company, which directors are required to report pursuant to the Corporate Governance Policy.
In 2020, the Corporate Governance and Nominating Committee recommended to the Board that the Company undertake a search to identify new director candidates who would complement the skills and attributes of the existing directors, better position the Board to oversee the Company’s long-term strategy, and diversify the gender and ethnic composition of the Board. In keeping with the Company’s commitment to community-based directors, the Committee focused
2021 Proxy Statement | 8 |
its search within Columbia Bank’s Northwest footprint. After reviewing a deep and diverse slate, the Committee identified two excellent candidates in Laura Alvarez Schrag and Tracy Mack-Askew. Both of them joined the Board in January 2021. As described above, Ms. Alvarez Schrag and Ms. Mack-Askew bring to the Board extensive leadership experience and strong community ties.
The Board believes each of the Company’s directors should bring a rich mix of qualities and skills to the Board. All of our directors bring to the Board a wealth of leadership experience derived from their service in a variety of professional and executive positions and extensive board experience.
The Corporate Governance and Nominating Committee is responsible for the oversight and nomination process for director nominees. The committee is authorized to establish guidelines for the qualification, evaluation and selection of new directors to serve on the Board. The committee has not adopted, nor does it anticipate adopting, specific minimum qualifications for committee-recommended nominees, nor has the committee adopted a formal policy relating to Board diversity, although the committee and the Board value and seek to include members with diversity in gender, age, race, professional experience and skills relevant to the Company. The committee instead evaluates each nominee on a case-by-case basis, including assessment of each nominee’s business experience, involvement in the communities served by Columbia, diversity and special skills. The Corporate Governance and Nominating Committee has not historically adopted formal “director qualification standards”also evaluates whether the nominee’s skills are complementary to existing Board members’ skills, and the Board’s need for recommended nominees. However, theoperational, management, financial, technological or other expertise. The Corporate Governance and Nominating Committee annually reviews the experience, qualifications, attributes and skills of each director and nominee as part of its evaluation of whether these are the right individuals to serve on Columbia’s Board to help Columbia successfully meet its strategic plans. Because directors are elected for one-year terms, the Corporate Governance and Nominating Committee has an annual opportunity to assess these factors and, if appropriate, determine not to re-nominate any director. A more detailed discussion regarding the considerations given by the Corporate Governance and Nominating Committee when considering director nominees is set forth below in the section entitled “Board Structure and Compensation—Board Committees—Corporate Governance and Nominating Committee.”
The biographical information set forth above summarizes the experience, qualifications, attributes and skills that Columbia believes qualifies each director to serve on the Board. The Corporate Governance and Nominating Committee and the Board believe each respective director’s professional and business acumen and board experience, and the total mix of all directors’ experience and skills, are beneficial to the Company and the Board.
Code of Ethics and Corporate Governance Documents
We have adopted a Code of Ethics for senior financial officers, which applies to our principal executive officer, principal financial officer, principal accounting officer or controller, and any persons performing similar functions.
You can access our Code of Ethics, Audit Committee, Corporate Governance and Nominating Committee and Personnel and Compensation Committee charters, and our Bylaws in the “About—Investor Relations— Governance Documents” section of our website at www.columbiabank.com, or by writing to: Columbia Banking System, Inc., Attention: Corporate Secretary, 1301 “A” Street, Tacoma, Washington, 98402-4200.
With the assistance of legal counsel to Columbia, the Corporate Governance and Nominating Committee has reviewed the applicable legal standards for Board and committee member independence, and the criteria applied to determine “audit committee financial expert” status. The Corporate Governance and Nominating Committee has also reviewed the answers to annual questionnaires completed by each of the directors, which included questions regarding any potential director-affiliated transactions.
The Board then analyzed the independence of each director and nominee and determined that the following members of the Board meet the standards regarding “independence” required by applicable law, regulation and NASDAQ listing standards, and that each such director is free of relationships that would interfere with the exercise of independent judgment. In determining the independence of each director, the Board considered many factors, including any loans to the directors, each of which (i) were made in the ordinary course of business; (ii) were substantially made on the same terms, including interest rates and collateral, as those prevailing at the time for comparable loans with persons not related to the Company or the Bank; and (iii) did not involve more than the normal risk of collectability or present other unfavorable features. Such arrangements are discussed in detail in the section entitled “Certain Relationships and Related Transactions.”
Based on these standards, the Board has determined that each of the following current non-employee directors and director nominees is independent:
Based on the standards described above, the Board determined that Hadley S. Robbins, who serves as the President and Chief Executive Officer of the Company, is not independent because he is an executive officer of the Company.
Compensation Committee Interlocks and Insider Participation
During 2018, the Personnel and Compensation Committee consisted of Ms. Lantow (Chair), Mr. Eerkes, Mr. Finkelstein, Mr. Forrest , Mr. Hulbert and Ms. Numata and Mr. Weyerhaeuser, who was appointed in June, 2018. During 2018, none of our executive officers served on the compensation committee (or equivalent body) or board of directors of another entity whose executive officer served on the Personnel and Compensation Committee.
Shareholder Communications with the Board
Shareholders and other interested parties may communicate with the Board by writing to the Chairman of the Board c/o Columbia’s Corporate Secretary, Columbia Banking System, Inc., 1301 “A” Street, Tacoma, Washington, 98402-4200. These communications will be reviewed by our Corporate Secretary and if they are relevant to, and consistent with, our operations and policies, they will be forwarded to the Chairman of the Board.
BOARD STRUCTURE AND COMPENSATION
The Board met 11 times during 2018. Each director attended at least 75% of the total number of meetings of the Board and committees on which he or she served. Columbia directors are expected to attend the annual shareholder meeting. Last year, all of our directors who were then serving on the Board, with the exception of Ms. Seaton, attended the annual shareholder meeting. During 2018, the independent directors held 11 meetings without management present.
The Board has established, among others, an Audit Committee, a Personnel and Compensation Committee, a Corporate Governance and Nominating Committee, and an Enterprise Risk Management Committee.
The following table shows the membership of these committees during 2018.
Committee Membership
Audit Committee. The Audit Committee is comprised of eight directors, each of whom is considered “independent” as defined by the NASDAQ listing standards and applicable SEC rules. The Audit Committee operates under a formal written charter, a copy of which is posted on our website at www.columbiabank.com. The Board has determined that Mr. Dietzler, Ms. Lantow, Mr. Lund and Ms. Numata are “Audit Committee Financial Experts” as defined by SEC rules.
The Audit Committee is responsible for the oversight of the quality and integrity of Columbia’s financial statements, its compliance with legal and regulatory requirements, the qualifications and independence of its independent auditors, the performance of its internal audit function and independent auditors and other significant financial matters. In discharging its duties, the Audit Committee is expected to, among other things:
Personnel and Compensation Committee. The Personnel and Compensation Committee is comprised of seven directors, each of whom is considered independent as defined by the NASDAQ listing standards and applicable SEC and IRS rules. The Personnel and Compensation Committee is charged with the responsibility of reviewing the performance of our Chief Executive Officer and other key employees and determines, approves and reports to the Board on the elements of their compensation and long-term equity based incentives. The committee may periodically retain an independent consultant to assist the committee in its deliberations regarding compensation for the Chief Executive Officer and other key executives. The committee is directly responsible and has full authority for the appointment, compensation and oversight of compensation consultants, legal counsel and any other advisors retained by the committee. The committee solicits and receives input and recommendations from the Chief Executive Officer with respect to the compensation of the other executive officers. In addition, the Chief Human Resources Officer assists the committee in its work.
The Personnel and Compensation Committee commissioned Pearl Meyer and Partners (“Pearl Meyer”), an independent outside compensation consultant, to conduct a study in June 2017 of the Company’s executive compensation compared to a peer group comprised of other publicly traded financial services companies. The committee has used this report as a reference in making compensation decisions. The Pearl Meyer report provided information on executive base salaries and short-term and long-term incentives based on competitive data from published proxy filings of a peer group of 17 bank holding companies. Further information relating to the Pearl Meyer report is discussed in the section entitled “Compensation Discussion and Analysis.”
In addition, the Personnel and Compensation Committee:
The Personnel and Compensation Committee operates under a written charter, a copy of which is posted on our website at www.columbiabank.com. The committee meets as needed, and may delegate to one or more of its members the responsibility of meeting with consultants and management to obtain information for presentation and consideration by the entire committee.
Corporate Governance and Nominating Committee. The Corporate Governance and Nominating Committee is currently comprised of five directors, each of whom is considered “independent” as defined by the NASDAQ listing standards. The committee is responsible for recommending a slate of directors to the full Board for election at the annual meeting, recommending directors to fill vacancies as they occur, monitoring Columbia’s corporate governance principles and practices and making appropriate recommendations for enhancements or other changes to the full Board.
The Corporate Governance and Nominating Committee will consider nominees recommended by shareholders provided that the recommendations are made in accordance with the procedures described in this proxy statement under the section “General Information—When are proposals and director nominations for the 20202022 Annual Meeting due?” The committee evaluates all candidates, including shareholder-proposed candidates, using generally the same methods and criteria.
The biographical information set forth above summarizes the experience, qualifications, attributes and skills that Columbia believes qualifies each director to serve on the Board. The Corporate Governance and Nominating Committee operates under a formal written charter, a copy of which is posted on our website at www.columbiabank.com.
In deciding whether to recommend incumbent directors for re-nomination, the committee evaluates Columbia’s evolving needs and assesses the effectiveness and contributions of its existing directors. The committee is authorized to establish guidelines for the qualification, evaluation and selection of new directors to serve on the Board. The committee has not adopted, nor does it anticipate adopting, specific minimum qualifications for committee-recommended nominees, nor has the committee adopted a formal policy relating to Board diversity, although the committee and the Board valuebelieve each respective director’s professional and seek to include members with diversity in gender, age, race, professionalbusiness acumen and board experience, and the total mix of all directors’ experience and skills, relevantare beneficial to the Company. Company and the Board.
Environmental, Social and Governance Matters
The committee instead evaluates each nominee on a case-by-case basis, including assessment of each nominee’s business experience, involvement inBoard is committed to overseeing Columbia’s corporate responsibility strategy, and the communities served by Columbia, diversity and special skills. The Corporate Governance and Nominating Committee also evaluates whetheris chartered with providing oversight of Columbia’s Environmental, Social and Corporate Governance (ESG) matters. In 2020, the nominee’s skillsCompany formalized an internal management structure to strengthen its ESG presence by establishing a cross-functional working group that reports to executive leadership though the Corporate Risk Committee, a management committee. The working group’s mission is to integrate ESG strategies across the company, deploy ESG reporting and monitor ESG progress. In the future, it is anticipated that Columbia’s annual corporate responsibility reporting will be aligned with the “Commercial Banks” standard from the Sustainability Accounting Standards Board (SASB) and Task-force for Climate-related Financial Disclosures (TCFD).
Columbia is working towards launching an online channel dedicated to reporting ESG matters. From the Company’s inception in 1993, Columbia has been committed to building long-term value for clients, employees and shareholders, and it is committed to share its actions related to sustainability and social goals. This commitment is embedded in Columbia’s Do RIGHT values, which are complementary to existing Board members’ skills, and the Board’s needguiding principles for operational, management, financial, technological or other expertise.our culture.
The committee hasDo RIGHT values consist of:
R: Build enduring RELATIONSHIPS with clients and each other
I: Drive INNOVATION that simplifies life and work
G: Seek continuous GROWTH in your personal and professional development
H: Commit with HEART to serve others
T: Extend TRUST in order to receive it
9 | 2021 Proxy Statement |
Employee Demographics:
As of December 31, 2020 the authorityCompany employed 2,187 full and responsibilitypart-time employees. None of these employees are represented by a collective bargaining agreement. During fiscal year 2020, we hired 340 employees. Our voluntary turnover rate was 18.3% in 2020, which compares to monitor19.6% in 2019. As of December 31, 2020, the population of our workforce was distributed as follows:
% of Total | |||
RACE | Male | Female | Total |
American Indian or Alaska Native | 0.14% | 0.46% | 0.60% |
Asian | 1.60% | 3.39% | 4.99% |
Black or African American | 1.24% | 1.05% | 2.29% |
Hispanic or Latino | 1.65% | 4.71% | 6.36% |
Native Hawaiian or Other Pacific Islander | 0.50% | 0.73% | 1.23% |
Two or More Races | 0.64% | 1.37% | 2.01% |
White | 22.23% | 51.28% | 73.51% |
Not Specified | 3.47% | 5.54% | 9.01% |
Total | 31.47% | 68.53% | 100.00% |
2020 Accomplishments:
Environmental Sustainability
• | Placed 12th of 467 teams in “The People’s Ecochallenge to make Earth a healthier, more equitable, more sustainable place” |
Social Equity
Corporate Governance
Board’s Enterprise Risk Management Committee.
2021 Proxy Statement | 10 |
Code of Ethics and Corporate Governance Documents The
We have adopted a Code of Ethics for senior financial officers, which applies to our principal executive officer, principal financial officer, principal accounting officer or controller, and any persons performing similar functions.
You can access our Code of Ethics, as well as the following documents, in the “About—Investor Relations— Governance Documents” section of our website at www.columbiabank.com, or by writing to: Columbia Banking System, Inc., Attention: Corporate Secretary, 1301 “A” Street, Tacoma, Washington, 98402-4200:
• | Corporate Governance Policy |
Compensation Committee (the “ERM Committee”) was formedInterlocks and Insider Participation
During 2020, the Personnel and Compensation Committee consisted of Ms. Lantow (Chair), Mr. Eerkes, Mr. Finkelstein, Mr. Forrest , Mr. Hulbert and Ms. Numata. During 2020, none of our executive officers served on the compensation committee (or equivalent body) or board of directors of another entity whose executive officer served on the Personnel and Compensation Committee. For information about related person transactions involving members of our Compensation Committee, see the section entitled “Certain Relationships and Related Transactions.”
Shareholders and other interested parties may communicate with the Board by writing to the Chair of the Board c/o Columbia’s Corporate Secretary, Columbia Banking System, Inc., 1301 “A” Street, Tacoma, Washington, 98402-4200. The Corporate Secretary will relay appropriate questions or messages to the Chair of the Board. Only items related to the duties and responsibilities of the Board will be forwarded.
Anyone interested in 2009 and is comprised of six directors, each of whom is considered independent under NASDAQ rules. The ERM Committee works closelyraising a complaint or concern regarding accounting issues or other compliance matters directly with the Audit Committee may do so anonymously and is responsible forconfidentially by contacting EthicsPoint:
By Internet | By Telephone |
Visit 24/7 | 1-866-EthicsP |
www.ethicspoint.com | (1-866-384-4277) |
11 | 2021 Proxy Statement |
BOARD STRUCTURE AND COMPENSATION
The Board met 15 times during 2020. Each director attended at least 75% of the oversighttotal number of Columbia’s policies, procedures, and practices related to business, market, and operational risks as they impact the strategic, operational, reporting, and compliance objectivesmeetings of its strategic plan. The ERM Committee is responsible for reporting risk issues and events to the Board and providingcommittees on which he or she served. Columbia directors are expected to attend the annual shareholder meeting. Last year, all of our directors who were then serving on the Board with necessary oversight and advice to set risk tolerances. In 2018,attended the Company appointed a Chief Risk Officer who assistsvirtual annual shareholder meeting. During 2020, the committee in its work.independent directors held eight meetings without management present.
The Board’s primary standing committees are the Audit; Personnel and Compensation; Corporate Governance and Nominating; and Enterprise Risk OversigManagement committees. The Board has determined that all of the members of such committees qualify as “independent” under applicable laws, the listing standards of Nasdaq and our Corporate Governance Policy. The current members of the Board, the primary standing committees on which they serve and the key functions of each committee are identified below.
AUDIT COMMITTEE | |
CURRENT MEMBERS: | |
R. Lund (Chair)* F. Elsaesser T. Hulbert M. Lantow* T. Mack-Askew S. Numata* J. Terrano MEETINGS IN 2020: 8 *The Board has determined that these members are “audit committee financial experts” within the meaning of the SEC’s regulations and are “financially sophisticated” within the meaning of Nasdaq rules | The Audit Committee is responsible for the oversight of the quality and integrity of Columbia’s financial statements, its compliance with legal and regulatory requirements, the qualifications and independence of its independent auditors, the performance of its internal audit function and independent auditors and other significant financial matters. In discharging its duties, the Audit Committee is expected to, among other things: •have the sole authority to appoint, retain, compensate, oversee, evaluate and replace the independent auditors; •review and approve the engagement of the independent auditors to perform audit and non-audit services and related fees; •review the integrity of the financial reporting process; •review the financial reports and disclosures submitted to appropriate regulatory authorities; •maintain procedures for the receipt, retention and treatment of complaints regarding financial matters; and •review and approve related party transactions. The Audit Committee operates under a formal written charter, a copy of which is available in the “About - Investor Relations - Overview - Governance Documents” section of our website at www.columbiabank.com |
PERSONNEL AND COMPENSATION COMMITTEE | |
CURRENT MEMBERS: | |
M. Lantow (Chair) L. Alvarez Schrag C. Eerkes M. Finkelstein E. Forrest T. Hulbert S. Numata MEETINGS IN 2020: 6 | The Personnel and Compensation Committee is charged with the responsibility of reviewing the performance of our Chief Executive Officer and other key executives and evaluating the elements of their compensation and long-term equity based incentives. In discharging its duties, the committee also: •administers the Company’s incentive compensation plans; •appoints and oversees the independent compensation consultant, and annually reviews the consultant’s independence; and •periodically review management development activities and succession plans. The Personnel and Compensation Committee operates under a written charter, a copy of which is available in the “About-Investor Relations – Overview – Governance Documents” section of our website at www.columbiabank.com. |
2021 Proxy Statement | 12 |
CORPORATE GOVERNANCE AND NOMINATING COMMITTEE | |
CURRENT MEMBERS: | |
C. Eerkes (Chair) F. Elsaesser M. Finkelstein S. Numata MEETINGS IN 2020: 10 | The Corporate Governance and Nominating Committee oversees the Company’s corporate governance principles and practices. It is also responsible for evaluating overall Board composition, assessing the skills, backgrounds and experience that are represented on the Board, and making recommendations for Board nominees accordingly. The committee also: •reviews the level and form of director compensation; •manages the Board and committee self-evaluation process; and •provides oversight of ESG matters The Corporate Governance and Nominating Committee operates under a written charter, a copy of which is available in the “About-Investor Relations – Overview – Governance Documents” section of our website at www.columbiabank.com. |
ENTERPRISE RISK MANAGEMENT COMMITTEE | |
CURRENT MEMBERS: | |
E. Seaton (Chair) L. Alvarez Schrag E. Forrest R. Lund S. Numata J. Terrano MEETINGS IN 2020: 4 | The Enterprise Risk Management Committee is responsible for the oversight of Columbia’s policies, procedures, and practices related to business, market, and operational risks as they impact the strategic, operational, reporting, and compliance objectives of its strategic plan. The ERM Committee is responsible for reporting risk issues and events to the Board and providing the Board with necessary oversight and advice to set risk tolerances. The Company’s Chief Risk Officer assists the committee in its work. The Enterprise Risk Management Committee operates under a written charter, a copy of which is available in the “About-Investor Relations – Overview – Governance Documents” section of our website at www.columbiabank.com. |
The Board has ultimate authority and responsibility for overseeing risk management at Columbia. We have a Risk Appetite Framework that is reviewed by the Board at least annually. Some aspects of risk oversight are fulfilled at the full Board level. For example, the Board regularly receives reports from management on credit risk, liquidity risk and operational risk, including cybersecurity. The Board delegates other aspects of its risk oversight function to its committees. The Audit Committee oversees financial, accounting and internal control risk management; the head of the Company’s internal audit function reports directly to the Audit Committee.
BOARD OF DIRECTORS | |||||||
Audit The Audit Committee oversees financial, accounting and internal control risk management. To support independence, the head of the Company’s internal audit function reports directly to the Audit Committee. | Enterprise Risk Management The ERM Committee is responsible for the oversight of Columbia’s policies, procedures, and practices related to business, market, and operational risks as they impact the strategic, operational, reporting, and compliance objectives of its strategic plan. The ERM Committee defines the Company’s overarching risk objectives through risk policies, limits and a risk appetite statement. | Personnel and Compensation The Personnel and Compensation Committee oversees the management of risks that may be posed by the Company’s compensation practices and programs. As part of this process, the Personnel and Compensation Committee is responsible for reviewing the compensation policies and practices for all employees, not just executive management. | |||||
The executive officers have regularly reportedreport on the risk they are responsible for managing directly to the entire Board and to appropriate Board committees withcommittees.
13 | 2021 Proxy Statement |
With respect to cybersecurity risk oversight - information security, corporate risk and internal audit support executive officers, as well as the risks they are responsible for managing.
TheBoard and its Audit and ERM Committee is responsible for the oversightCommittees, with regular evaluations and reporting on Columbia’s cybersecurity risk management posture. This includes evaluation of Columbia’s policies, procedures and practices relatedcontrol activities to business, market,manage, prevent, detect and operational risks as they impact the strategic, operational, reporting,respond to cybersecurity incidents and/or exercises (initiated by Columbia). Lessons learned and/or recommendations made are actioned, and compliance objectives of its strategic plan. The ERM Committee defines the Company’s overarching risk objectives through risk policies, limits and a risk appetite statement.executive officers provide oversight to improve cyber-defenses.
The Personnel andDirector Compensation Committee oversees the management of risks that may be posed by the Company’s compensation practices and programs. As part of this process, the Personnel and Compensation Committee is responsible for reviewing the compensation policies and practices for all employees, not just executive management. In its review of these policies and practices, the Personnel and Compensation Committee has determined that the current policies and practices do not create or encourage risks that are reasonably likely to have a material adverse effect on the Company.
The Corporate Governance and Nominating Committee has authority over director compensation subject to the Board’s authority to approve changes. Directors receive compensation in the form of cash and, as applicable, equity awards in the form of restricted stock or, in the past, stock options.stock. We do not pay directors who are also employees of Columbia or Columbia Bank additional compensation for their service as directors.
Cash Compensation.For the 2020-2021 Board service year, non-employee directors received a $47,000 annual cash retainer and a $70,000 annual equity grant of restricted stock awards, which compensation was unchanged from the 2019-2020 Board service year. Non-employee directors are paid an annual retainer as compensation plus a per-meeting attendance feealso receive cash retainers for service on the Board’s standing committees and for serving as a director. MembersChair of any such committees except as noted below.
Annual Cash Fees
Cash compensation for the ERM,2020-2021 Board service year is set forth below.
Annual Cash Compensation | Director Compensation Program |
Annual Board Retainer | $47,000 |
Board Chair Retainer | $45,000 |
Committee Chair Retainer | $15,000 – Audit Committee $12,000 – Personnel $ 9,000 – All other standing committees* |
Committee Retainer | $ 8,000 – Audit Committee $ 6,000 – Personnel and Compensation Committee $ 4,000 – All other standing committees |
*Excludes the Corporate Governance and Nominating Committees, respectively, receive an additional per meeting attendance fee forCommittee, whose committee meetings. The Chairman ofChair retainer is included in the Board and the Chairs of the Audit, the Personnel and Compensation, ERM and certain other committees receive an additional retainer in light of the increased demands associated with those positions. Non-employee directors may elect to defer the receipt of meeting and/or director fees in accordance with the terms of the Company’s Deferred Compensation Plan.Chair retainer.
Annual Equity CompensationGrant. Non-employee
In 2020, non-employee directors may from time to time be grantedreceived an annual equity grant of approximately $70,000, payable in restricted stock awards pursuant to our 2018 Equity Compensation Plan, the material terms of which are discussed under the section “Executive Compensation – Equity Compensation.” Restricted
The restricted stock awards generally vest overat the end of the Board service year. Resignation from the Board will result in a pre-determined period.forfeiture of all unvested restricted stock awards at the time of such resignation unless otherwise determined by the Corporate Governance and Nominating Committee. However, restricted stock awards will automatically vest upon the occurrence of any of the following events: (a) death of the director; (b) disability of the director, as defined in the 2018 Equity Compensation Plan; or (c) a “change in control” as defined in the 2018 Equity Incentive Plan.
Other.
Long Term Care ProgramProgram. . In 2001, we implemented a long-term care program for directors serving at that time, which provides benefits in the event those individuals become chronically ill. The coverage is for a period of three years up to a lifetime, depending on the age of the director, and the amount of the benefit is based on the director’s years of service with Columbia after the inception of the long-term care program. We paid a one-time premium for the long-term care policies. Expenses are allocated to the directors participating in the program on an annual basis. All directors covered by this plan are fully vested. The long-term care program was available to all directors when the plan was implemented, including executive officers that were also directors. We have purchased Bank Owned Life Insurance policies to fund this program. The Board has no plans to extend the program to any officers or directors who were not directors in 2001.
Deferred Compensation Plan. We maintain a deferred compensation plan known as the 401 Plus Plan (the “Deferred Compensation Plan”) for certain directors, a select group of senior management and key employees, as designated by resolution of the Board. The Deferred Compensation Plan generally provides for the deferral of certain taxable income earned by participants in the Deferred Compensation Plan. Non-employee directors may elect to have any portion, up to 100%, of his or her director’s fees deferred.
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Stock Ownership Guidelines and Restrictions on Hedging/Trading.
The Company’s Stock Ownership Policy requires non-executive directors to hold shares equal in value to five times the annual Board cash retainer. As of year-end 2018,2020, all non-executive directors satisfied the Stock Ownership Policy requirements other than Mr. Lund, who joined the Board in 2017, and Ms. Terrano, who joined the Board in 2018. See “Stock Ownership Guidelines and No Hedging” in the Compensation Discussion & Analysis below for additional details regarding the Stock Ownership Policy.
Our Insider Trading Policy prohibits all hedging activities by directors and requires directors to obtain pre-clearance by the company to engage in transactions involving Columbia stock. Even if pre-clearance is granted, directors must make an independent determination that they do not possess material nonpublic information. The Insider Trading Policy also establishes quarterly blackout periods during which directors are prohibited from transacting in Company stock during the periods beginning 15 days before the end of each quarter and ending after the second full trading day after the Company releases its financial results for that period to the public.
The following table shows compensation paid or accrued for the last fiscal year to our non-employee directors. The footnotes to the table describe the details of each form of compensation paid to directors.
2020 Director Compensation Table
Name | Fees Earned or Paid in Cash ($) (1) | Stock Awards ($) (2) | Option Awards ($) | Non-Equity Incentive Plan Compensation | Change In Pension Value and Nonqualified Deferred Compensation Earnings (3) | All Other Compensation ($) | Total ($) | |||||||||||||||||||||
David A. Dietzler | $ | 78,000 | $ | 69,974 | — | — | — | — | $ | 147,974 | ||||||||||||||||||
Craig D. Eerkes | 99,250 | 69,974 | — | — | — | — | 169,224 | |||||||||||||||||||||
Ford Elsaesser | 72,000 | 69,974 | — | — | — | — | 141,974 | |||||||||||||||||||||
Mark A. Finkelstein | 67,000 | 69,974 | — | — | — | — | 136,974 | |||||||||||||||||||||
John P. Folsom | 75,750 | 69,974 | — | — | — | — | 145,724 | |||||||||||||||||||||
Eric Forrest | 66,000 | 69,974 | — | — | 346 | — | 136,320 | |||||||||||||||||||||
Thomas M. Hulbert | 82,000 | 69,974 | — | — | — | — | 151,974 | |||||||||||||||||||||
Michelle M. Lantow | 80,000 | 69,974 | — | — | 4,158 | — | 154,132 | |||||||||||||||||||||
Randal Lund | 69,000 | 69,974 | — | — | — | — | 138,974 | |||||||||||||||||||||
S. Mae Fujita Numata | 69,000 | 69,974 | 2,857 | — | 141,831 | |||||||||||||||||||||||
Elizabeth W. Seaton | 69,250 | 69,974 | — | — | — | — | 139,224 | |||||||||||||||||||||
Janine Terrano | 65,000 | 107,704 | 172,704 | |||||||||||||||||||||||||
William T.Weyerhaeuser | 85,750 | 69,974 | — | — | — | — | 155,724 |
Name | Fees Earned or Paid in Cash ($) (1) | Stock Awards ($) (2) | Option Awards ($) | Non-Equity Incentive Plan Compensation | Change In Pension Value and Nonqualified Deferred Compensation Earnings (3) | All Other Compensation ($) | Total ($) | ||||||||||||||
Craig D. Eerkes | 106,000 | 69,986 | — | — | — | — | 175,986 | ||||||||||||||
Ford Elsaesser | 72,000 | 69,986 | — | — | — | — | 141,986 | ||||||||||||||
Mark A. Finkelstein | 61,000 | 69,986 | — | — | — | — | 130,986 | ||||||||||||||
Eric Forrest | 61,000 | 69,986 | — | — | 1,064 | — | 132,050 | ||||||||||||||
Thomas M. Hulbert | 74,000 | 69,986 | — | — | — | — | 143,986 | ||||||||||||||
Michelle M. Lantow | 77,000 | 69,986 | — | — | 5,973 | — | 152,959 | ||||||||||||||
Randal Lund | 78,000 | 69,986 | — | — | — | — | 147,986 | ||||||||||||||
S. Mae Fujita Numata | 67,333 | 69,986 | — | — | 8,388 | — | 145,707 | ||||||||||||||
Elizabeth W. Seaton | 68,000 | 69,986 | — | — | — | — | 137,986 | ||||||||||||||
Janine Terrano | 63,000 | 69,986 | — | — | — | — | 132,986 |
(1) | Amount shown for |
For Mr. Eerkes, represents (i) a retainer in the amount of $35,000; (ii) $26,250$45,000 received as ChairmanChair of the Board from June through December; (iii) aggregate per meeting board and $14,000 received for committee attendance fees of $11,000 and $27,000, respectively.
For Mr. Elsaesser, represents (i) a retainer in the amount of $35,000; (ii) $9,000 received as chairmanchair of the Columbia Trust Company;Company board of directors and (iii) aggregate per meeting board and$16,000 received for committee attendance fees of $11,000 and $17,000, respectively.
For Mr. Finkelstein, represents (i) a$14,000 received for committee retainer in the amount of $35,000; and (ii) aggregate per meeting board and committee attendance fees of $11,000 and $21,000, respectively.
For Mr. Forrest, represents (i) a$14,000 received for committee retainer in the amount of $35,000; and (ii) aggregate per meeting board and committee attendance fees of $11,000 and $20,000, respectively.
For Mr. Hulbert, represents (i) a retainer in the amount of $35,000; (ii) $9,000 received as chairmanchair of the M&A Committee;a standing committee and (iii) aggregate per meeting board and$18,000 received for committee attendance fees of $11,000 and $27,000, respectively.
For Ms. Lantow, represents (i) a retainer in the amount of $35,000; (ii) $12,000 received as chairwomanchair of the Personnel and Compensation Committee;Committee and (iii) aggregate per meeting board and$18,000 received for committee attendance fees of $11,000 and $22,000, respectively.
For Mr. Lund, represents (i) a$15,000 as chair of the Audit Committee and $16,000 received for committee retainer in the amount of $35,000; and (ii) aggregate per meeting board and committee attendance fees of $11,000 and $23,000, respectively.
For Ms. Numata, represents (i) a$20,333 received for committee retainer fees, including partial fees for the Enterprise Risk Management Committee to which she was appointed in the amount of $35,000; and (ii) aggregate per meeting board and committee attendance fees of $11,000 and $23,000, respectively.
For Ms. Seaton, represents (i) a retainer in the amount of $35,000; (ii) $5,250$9,000 received as chairwomanchair of the ERMEnterprise Risk Management Committee from June through December; and aggregate per meeting board and$12,000 received for committee attendance fees of $10,000 and $19,000, respectively.
For Ms. Terrano, represents (i) a$16,000 received for committee retainer in the amount of $35,000; and (ii) aggregate per meeting board and committee attendance fees of $11,000 and $19,000, respectively.
(2) | For each director, |
(3) | Represents above-market earnings on Mr. Forrest’s, Ms. Lantow’s and Ms. Numata’s |
15 | 2021 Proxy Statement |
Compensation Committee Report
The Personnel and Compensation Committee of the Board makes the following report which, notwithstanding anything to the contrary set forth in any of Columbia’s filings under the Securities Act of 1933 or the Securities Exchange Act of 1934, will not be incorporated by reference into any such filings and will not otherwise be deemed to be proxy soliciting materials or to be filed under such Acts.
The Personnel and Compensation Committee of the Board met and discussed with management the Compensation Discussion and Analysis (“CD&A”) required by Item 402(b) of Regulation S-K, and based on that review and discussion, the committee recommended to the Board that the CD&A be included as part of this proxy statement and the 20182020 10-K Annual Report.
Members of the Personnel and Compensation Committee
Michelle M. Lantow, Chairwoman
Chair
Laura Alvarez Schrag
Craig D. Eerkes
Mark A. Finkelstein
Thomas M. Hulbert
Eric S. Forrest
S. Mae Fujita Numata
2021 Proxy Statement | 16 |
The Personnel and Compensation Committee (as referred to in this Compensation Discussion and Analysis, the “Committee”) made compensation decisions for our executive team in the context of Columbia’s core performance results and other achievements.
• | Consolidated |
(1) | Non-GAAP financial measure. Please refer to Appendix A for additional information and reconciliations to the most directly comparable GAAP financial measure. |
2020 Shareholder Return |
• | Market Share. As of June 30, |
economic downturn it caused. Services offered range from food deliveries and home maintenance to dental work and auto body repair. The Bank reached more than 350 small businesses and many more individuals and families in the Northwest through this initiative.
Industry Accolades. In 2020, Columbia received multiple industry accolades. For the | |||
Changes in Leadership
Clint E. Stein became President and Chief Executive Officer effective January 1, 2020. The transition was the result of a planned, multi-year succession process that included Mr. Stein’s transition from Chief Financial Officer to Chief Operating Officer in 2017. Christopher M. Merrywell succeeded Mr. Stein as Chief Operating Officer effective January 1, 2020.
Additionally, Eric J. Eid, our Chief Digital and Technology Officer, was appointed Interim Chief Financial Officer effective February 28, 2020, following the departure of Gregory A. Sigrist on that date. On April 6, 2020, the Company appointed Aaron J. Deer as Chief Financial Officer effective April 27, 2020.
Target Direct Compensation
The table below shows the 20182020 total target direct compensation opportunities for our Named Executives.Executive Officers (referred to as our “Named Executives” or “NEOs”) in the roles in which they served in 2020. The Committee focuses on target direct compensation as shown below in making annual compensation decisions.
2018 Target Direct Compensation* | ||||||||||||||||
Current Named Executive | Annual Base Salary | Target Annual Incentive | Target Long-Term Incentive | Total | ||||||||||||
Hadley S. Robbins, President and Chief Executive Officer | $ | 730,000 | $ | 438,000 | $ | 675,000 | $ | 1,825,000 | ||||||||
Gregory A. Sigrist** Executive Vice President, Chief Financial Officer | 375,000 | 150,000 | 206,250 | 731,250 | ||||||||||||
Clint E. Stein, Executive Vice President, Chief Operating Officer*** | 427,000 | 213,500 | 277,550 | 918,050 | ||||||||||||
Andrew L. McDonald, Executive Vice President, Chief Credit Officer | 336,000 | 134,000 | 184,800 | 655,200 | ||||||||||||
David C. Lawson, Executive Vice President, Chief Human Resources Officer | 290,000 | 116,000 | 159,500 | 565,500 | ||||||||||||
Kumi Y. Baruffi, Executive Vice President, General Counsel | 290,000 | 116,000 | 159,500 | 565,500 |
2020 Target Direct Compensation* | ||||||||||||||||
Current Named Executive | Annual Base Salary | Target Annual Incentive | Target Long-Term Incentive | Total | ||||||||||||
Clint E. Stein, President and Chief Executive Officer | $ | 800,000 | $ | 640,000 | $ | 960,000 | $ | 2,400,000 | ||||||||
Aaron J. Deer** Executive Vice President, Chief Financial Officer | 385,000 | 192,500 | 250,250 | 827,750 | ||||||||||||
Eric J. Eid Executive Vice President, Interim Chief Financial Officer, Chief Digital and Technology Officer | 325,000 | 162,500 | 211,250 | 698,750 | ||||||||||||
Christopher M. Merrywell, Executive Vice President, Chief Operating Officer | 425,000 | 255,000 | 340,000 | 1,020,000 | ||||||||||||
Andrew L. McDonald, Executive Vice President, Chief Credit Officer | 400,000 | 160,000 | 220,000 | 780,000 |
2020 Target Direct Compensation* | ||||||||||||||||
Current Named Executive | Annual Base Salary | Target Annual Incentive | Target Long-Term Incentive | Total | ||||||||||||
Kumi Y. Baruffi, Executive Vice President, General Counsel | 325,000 | 130,000 | 178,750 | 633,750 | ||||||||||||
Former Named Executive | ||||||||||||||||
Gregory A. Sigrist*** Executive Vice President, Chief Financial Officer | 395,000 | -- | -- | 395,000 |
* The amounts reported differ from the amounts determined under SEC rules as reported for 2020 in the Summary Compensation Table set forth under “Compensation Tables” below. The above table is not a substitute for the Summary Compensation Table.
** The amounts reflected in the table above are Mr. Deer’s annual compensation levels. Mr. Deer’s base salary and target annual incentive for 2020 were prorated to reflect the portion of 2020 in which he was employed following his start date on April 27, 2020. Additionally, the one-time signing and relocation bonus paid to Mr. Deer in connection with his appointment is not included in this table.
*** The base salary in the table above is Mr. Sigrist’s annual base salary. Mr. Sigrist’s annual base salary was prorated to reflect the portion of 2020 in which he was employed through his separation date on February 28, 2020. Additionally, because Mr. Sigrist’s employment terminated on February 28, 2020, the Committee did not set target annual incentive or target long-term incentive amounts for him.
What Guides Our Program
Compensation Philosophy
In keeping with our long-term goal to consistently increase earnings per share and shareholder value, the Committee is guided by the following key principles in determining the compensation of our Named Executives:
Accountability for Business Performance. The executives’ compensation in salary, as well as annual incentive and long-term incentive compensation opportunities, should be tied in part to overall Company performance, including financial results. |
Accountability for Individual Performance. To encourage and reflect individual contributions to the Company’s performance, compensation should be tied in part to the individual’s performance. |
Alignment with Shareholder Interests. Compensation should be tied in part to the Company’s stock performance through the granting of stock awards with multi-year vesting and performance-based vesting, which serves to align executives’ interests with those of our shareholders. |
Competition. Compensation should reflect the competitive marketplace, so that we can attract, retain, and motivate key executives of superior ability who are critical to our future success. |
Reasonable Levels of Compensation. Total compensation opportunities and payouts should be reasonable and not excessive. We do not rigidly target or formulaically set compensation at a specific percentile compared to our peers. However, we do target overall compensation for executive officers in amounts that are roughly in line with the median of our peers. |
Independent Oversight. The Committee, composed solely of independent directors, is responsible for reviewing and establishing the compensation for the Named Executives. The Committee periodically receives advice from an independent compensation consultant who has been retained by and reports directly to the Committee and performs no other work for management without the authorization of the Committee. In addition, the Committee may choose to review compensation analyses prepared by consultants retained by management. |
Risk Management. Compensation policies and practices should align with sound risk management and be structured not to create incentives that subject the Company to excessive risk. Such policies and practices should strike a healthy balance between contributing to the Company’s growth and promoting a conservative exposure to risk. |
Our Key Compensation Best Practices | |||
Emphasis on Pay-for-performance | X | No tax gross-ups on severance payments | |
ü | Share ownership guidelines | X | No equity grants below 100% of fair market value |
ü | Independent compensation consultant | X | No |
ü | Clawback policy | ||
ü | Anti-hedging policy |
19 | 2021 Proxy Statement |
Factors in Setting Overall Compensation Levels
When establishing overall compensation opportunities for the Named Executives,NEOs, the Committee considers the following factors:
The Committee generally follows this process for determining executive compensation;compensation; however, other discretionary and subjective components may also be considered if appropriate.
Role and Relationship of the Compensation Consultant
The Committee has the sole authority to retain and terminate a compensation consultant and to approve the consultant’s fees and all other terms of the engagement. The Committee has direct access to outside advisors and consultants throughout the year.
As the Committee’s compensation decisions. The Committee made these decisions in part based onconsultant, Pearl Meyer’s study ofMeyer provides advice about the Company’s executive compensation program in June 2017 (the “2017 Executive Compensation Study”), as describedprograms for senior executives. Pearl Meyer considers the objectives of these programs, compares the programs to designated peer group companies (discussed below inunder “The Role of Benchmarking.”
The Role of Benchmarking
With the assistance of its independent advisor, the Committee evaluates, on a periodic basis, industry-specific and general market compensation practices and trends to ensure that our program and NEO pay opportunities remain appropriately competitive. To inform their evaluation, the Committee compares the total compensation opportunities to the compensation programs of a peer group comprised of other publicly traded financial services companies, as described below. The Committee used the report as a tool in setting compensation levels in 2018.
Great Western Bancorp, Inc. | |
Old National Bancorp | |
Pacific Premier Bancorp, Inc.* | |
CenterState Bank Corporation** | Pinnacle Financial Partners, Inc. |
CVB Financial Corp. | Simmons First National Corporation* |
First Financial Bancorp | |
First Interstate BancSystem, Inc. | |
First Midwest Bancorp, Inc. | |
Fulton Financial | |
Glacier Bancorp Inc. | Western Alliance Bancorporation |
* Denotes a company added to the peer group in 2019
** CenterState Bank Corporation was removed from the peer group following an acquisition by South State Corporation on June 7, 2020.
2021 Proxy Statement | 20 | |
Chemical Financial Corporation, MB Financial Inc., Sterling Bancorp and Texas Capital Bancshares, Inc. were removed from the peer group in 2019 because their asset size, institution loan mix model, operating revenue size, market capitalization, revenue mix and tangible capital equity were determined to no longer fit within the parameters of the peer group.
Compensation Structure
Principal Elements of Compensation
Our overall executive compensation program for executives currently consists of sixthe following key elements:
The combination of these elements reinforces our pay-for-performance philosophy and strengthens our ability to attract and retain qualified executives in our highly competitive banking environment. We believe that this mix of fixed and variable pay advances both the short- and long-term interests of our business and creates long-term shareholder value. The Committee’s decisions regarding the executive compensation program design and individual pay are made in the context of the total compensation philosophy outlined above, including our financial performance.
Base Salary
Salaries are used to provide a competitive fixed amount of base compensation. Our goal is to provide base salary levels that reflect a combination of factors, including competitive pay levels relative to our peer group (as in effect at the time of the determination), the executives’ individual performance and overall contribution to the organization, the relevant position’s scope of responsibilities, the executives’ experience and tenure, and our overall annual budget, which takes into account Company financial performance. The salaries of the Named ExecutivesNEOs are reviewed on an annual basis, as well as at the time of a promotion or other change in responsibilities. In 2018,Mr. Stein’s base salary increased effective January 1, 2020, in connection with his appointment as President and Chief Executive Officer. Effective March 1, 2020, the Committee approved merit-based adjustments to the base salaries of Messrs. Robbins, Stein, McDonald and Lawson of approximately 4%, 5%, 4% and 5%, respectively effective March 2018. The Committee also approved an adjustment to the base salary of Mr. Eid and Ms. Baruffi and Mr. McDonald, of approximately 14%4.84%, 8.33% and 15.08%, respectively, which adjustment was both merit-basedadjustments were a combination of annual merit base and intended to generally reflect market observations from the 2017 Executive Compensation Study.
Annual Cash Incentive Compensation
Consistent with competitive practices, we believe that a portion of our Named Executives’NEOs’ target compensation should be at risk, contingent upon the Committee’s assessment of performance. When determining earnedThe 2020 Annual Incentive Plan provided our NEOs the opportunity to earn a performance-based annual cash incentive awards,bonus. In early 2020, the Committee considersapproved the Company’s performance against pre-established financial performance measurestarget award opportunities below for each of the NEOs (expressed as well as the executive’s individual performance and contribution to the Company’s overall performance. Annual cash incentive awards therefore seek to drive progress toward achieving the Company’s annual business objectives and permit individual performance to be recognized.
NEO | Target Award Opportunity (as a % of Base Salary) |
Clint E. Stein | 80% |
Aaron J. Deer | 50% |
Eric J. Eid | 50% |
Christopher M. Merrywell | 60% |
Andrew L. McDonald* | 40% |
Kumi Y. Baruffi* | 40% |
Former NEO | |
Gregory A. Sigrist | -- |
* | The Committee determined to take into account Mr. McDonald’s and Ms. Baruffi’s SERP entitlements when setting their target annual cash bonus award opportunity. |
Actual award payouts for the NEOs depend on the achievement of base salary). In connection with his appointment as Chief Financial Officer, the Committee established Mr. Sigrist’spre-established performance objectives and can range from 0% to 150% of individual target annual cash incentive opportunity for 2018 equal to 40% of base salary (with a maximum of 60% of base salary). Earned annual incentive awards were determinedaward amounts based on the level of achievement of a weighted combination of Corporate (85% of award) and individual performance (15% of award).
21 | 2021 Proxy Statement |
Corporate Performance Measures & Goals
For the 2020 Annual Incentive Plan, the Committee approved the following Corporate performance goals:measures:
Performance Goals | Weighting | 2018 Actual | % Achieved | |||
Threshold (50% of Target) | Target (100% of Target) | Stretch (150% of Target) | ||||
Core Pretax Return on Average Assets (%)* | 1.48% | 1.64% | 1.80% | 30% | 1.73% | 128.13% |
Core Pretax Return on Average Tangible Common Equity (%)* | 16.61% | 18.61% | 20.61% | 25% | 20.21% | 140.00% |
Ratio of Operating Noninterest Expense to Average Assets (%)* | 2.81% | 2.61% | 2.41% | 15% | 2.60% | 102.50% |
Ratio of Average Non-Performing Assets to period end Total Loans, OREO and OPPO (%)* | 1.00% | 0.75% | 0.50% | 15% | 0.88% | 74.00% |
Individual Performance | N/A | N/A | N/A | 15% | ** | 100% |
Total: | 115% of Target |
When setting the goals for these measures in early 2020, and prior to onset of the COVID 19 pandemic, the |
Performance Measures (a) | Threshold | Target (Budget) | Maximum | Weighting | 2020 Actual | % of Target Payout Achieved | ||||||
Core Pre-tax ROAA (%) (b) (f) | 1.34% | 1.54% | 1.91% | 30% | 1.69% | 120.27% | ||||||
Core Pre-tax ROATCE (%) (c) (f) | 14.10% | 16.10% | 21.81% | 25% | 18.38% | 119.96% | ||||||
Operating Noninterest Expense / Average Assets (%) (d) | 2.77% | 2.57% | 2.37% | 15% | 2.15% | 150.00% | ||||||
Avg. NPA / Total Loans & OREO (%) (e) | 1.125% | 0.875% | 0.625% | 15% | 0.49% | 150.00% | ||||||
Individual Performance | N/A | N/A | N/A | 15% | * | 100% | ||||||
Total | 126.07% |
(a) Core Pre-tax ROAA, Core Pre-tax ROATCE, Operating Noninterest Expense / Average Assets and Avg. NPA / Total Loans & OREO are non-GAAP financial measures. Please refer to Appendix A for additional information and reconciliations to the most directly comparable GAAP financial measure.
(b) Defined as net income before taxes, excluding merger-related expenses, divided by average assets.
(c) Defined as net income before taxes, excluding amortization of intangibles and merger-related expenses, divided by average tangible common equity.
(d) Operating Noninterest Expense is defined as noninterest expense less (i) acquisition-related expense and (ii) net cost or benefit of OREO.
(e) Average of NPAs / Total Loans & OREO as of 3/31/2020, 6/30/2020, 9/30/2020 and 12/31/2020, as reported in Columbia’s SEC filings. For this purpose, restructured loans are not included in the definition of NPAs.
(f) Core ROAA and ROATCE are calculated assuming no variance between budget and actual with regard to the provision for credit losses.
* The individual performance factorsresults for each of the Chief Executive Officer, and the Chief Executive Officer established the individual performance factors for the other Named Executives, which factorsNEOs are discussed in more detail below.
The Bank's 2020 provision for credit losses, calculated under the “threshold” level results in no payout earned for the applicable performance goal. If performance falls between the “threshold” and “target” or “target” and “stretch” levels, then the earned payout is determined using straight line interpolation. Once earned annual incentive awards were calculated based on actual performance asnew CECL methodology, was $77.7 million compared to $3.5 million in 2019, which was calculated under the goals set forth above,prior accounting methodology. The significant increase in the Committeeprovision, which was much higher than we could have reasonably forecasted, was principally the result of the COVID-19 pandemic. With the national guidance regarding social distancing and state and county mandates to shelter or stay at home, many large and small businesses had to close and there was a dramatic increase in new unemployment claims.
With these realities as the discretion to reduce or increasebackdrop, the payouts toplan feature that used budgeted loan loss provision for calculating actual Core ROAA and Core ROATCE resulted in above-target total award levels. Given the extent it determined appropriate to reflect theextraordinary business environment and market conditions that may affect Columbia’sinfluenced actual Corporate financial performance results, and stock price performance. Based in part on the recommendations of the Chief Executive Officer,unusual circumstances under which our senior leadership team was operating, the Committee approveddetermined that the final annual incentive award payouts to the Named Executives other than the Chief Executive Officer. The Committee approved and recommended to the Boardpayout for approval the final annual incentive award payout to the Chief Executive Officer.corporate performance of 126.07% of target was appropriate.
2021 Proxy Statement | 22 |
Individual Performance
For the individual performance component of the Companyaward, the Committee considered the following achievements for each Named Executive with respect to his or her individual performance factors. For Mr. Robbins, who was responsible for leading the performance of the Company as a whole, the Committee considered the advancement of the bank’s digital technology and change management road map initiative, the design and launch of our cultural rebranding program along with building out a scalable risk management organization to optimize long-term shareholder value while supporting employees, clients and communities. For Mr. Sigrist, the Company considered establishing an effective leadership presence within the executive leadership team and organizational-wide leaders as a strategic business partner along with maintaining stability within the accounting and finance departments following the transition in leadership from the prior Chief Financial Officer. For Mr. Stein, the Company considered his reorganization of the commercial leadership to scale and align with the Company’s Retail organizational structure and the reorganization of Information Technology, Banking Solutions and Operations into the Innovation and Technology group. Additionally, the Company considered Mr. Stein’s dual Chief Financial Officer and Chief Operating Officer roles for the first five months of 2018 and his transition of the Chief Financial Officer role to Mr. Sigrist. For Mr. Lawson, the Company considered his execution of expanded talent and leadership development programs, actionable succession plans for critical roles and charter development and approval to deploy a new human capital management workforce solution in 2019. For Mr. McDonald, the Company considered his active role in the current expected credit losses (CECL) project and collaboration with the Finance team along with his work in integrating and stabilizing the former Pacific Continental Bank credit administration team. For Ms. Baruffi, the Company considered her successful implementation of corporate governance objectives and continued achievement of in-house legal support initiatives. NEO:
NEO | Individual Performance Highlights |
Clint E. Stein | •Provided leadership, direction, and oversight to ensure the successful execution of the Company’s Pandemic Response Plan, resulting in a safe work environment for employees and normal course of business operations with limited interruption of service to our clients •Continued the expansion of the Company’s Diversity, Equity, and Inclusion program |
Aaron J. Deer | •Established an effective leadership presence within the executive leadership team and organizational-wide leaders as a strategic business partner •Maintained stability within the accounting and finance departments following the transition in leadership from the prior Chief Financial Officer •Provided financial leadership and contributions in our COVID response following his appointment partway through 2020 |
Eric J. Eid | •Contributed significantly to our PPP efforts by rapidly expanding our remote work capabilities and increasing our technological capabilities to streamline the PPP processes from end to end •Collaborated with Mr. Merrywell on process improvement, operational efficiencies, and strategies resulting in improved expense leverage •Served as interim CFO and facilitated a smooth transition of duties to Mr. Deer |
Christopher M. Merrywell | •Exhibited decisive and highly effective leadership during the most difficult operating environment in the Company’s history, including the pandemic and wildfires •Collaborated with Mr. Eid on process improvement, operational efficiencies, and strategies resulting in improved expense leverage •Was the primary executive leader of our PPP program and resulting performance, helping the Bank set the standard in its market for forgiveness and prepare for round 2 performance |
Andrew L. McDonald | •Led efforts to evaluate and respond to the impact of the pandemic and associated lockdowns on our clients and the loan portfolio, which enabled the Bank to develop appropriate strategies and solutions for our clients while preserving shareholder value •Through his work with our investors during the year, played a significant role in providing transparency surrounding the pandemic’s impact on specific sectors within our loan portfolio •Collaborated with Messrs. Merrywell and Eid on enhancing our loan operations capacity for PPP |
Kumi Y. Baruffi | •Led the newly combined Legal and Enterprise Project Management team to facilitate stronger operational collaboration on company-wide initiatives •Improved and strengthened our vendor management program •Provided valuable leadership, particularly with respect to analyzing and responding to the legal implications of our pandemic response |
Former NEO | |
Gregory A. Sigrist | N/A |
After considering each Named Executive’sNEO’s performance in 2018,2020, the Committee approved the achievement of the individual performance component at 100% of the annual incentive awards at the following percentages of each individual’s target levellevel: 135% for each Named Executive.
Final Award Payouts
Based on these 2018 Companythe 2020 Corporate financial and individual performance results and decisions described above, the Committee approved final annual incentive awardsaward payouts to the Named ExecutivesNEOs for 20182020 as follows:
Named Executive | Target Annual Incentive | Earned Annual Incentive | |||||||
Hadley S. Robbins | $ | 438,000 | $ | 503,317 | |||||
Gregory A. Sigrist | 87,500 | * | 100,548 | ||||||
Clint E. Stein | 213,500 | 245,338 | |||||||
Andrew L. McDonald | 134,400 | 154,442 | |||||||
David C. Lawson | 116,000 | 133,299 | |||||||
Kumi Y. Baruffi | 116,000 | 133,299 | |||||||
NEO | Target Annual Incentive Opportunity ($) | Earned Annual Incentive Award ($) | Percentage of Target Annual Incentive Opportunity Earned | |||
Clint E. Stein | $ 640,000 | $ 826,063 | 129% | |||
Aaron J. Deer (1) | 130,963 | 165,108 | 126 | |||
Eric J. Eid | 162,500 | 213,399 | 131 | |||
Christopher M. Merrywell | 255,000 | 331,429 | 130 | |||
Andrew L. McDonald | 160,000 | 201,716 | 126 | |||
Kumi Y. Baruffi | 130,000 | 163,894 | 126 | |||
Former NEO | ||||||
Gregory A. Sigrist (2) | -- | -- | -- |
(1) | Mr. |
(2) | Because Mr. Sigrist’s employment with the Company terminated on February 28, 2020, the Committee did not set a target annual incentive opportunity for him, and he did not earn an annual incentive award, for 2020. |
23 | 2021 Proxy Statement |
Long-Term Equity Incentive Compensation
Columbia believes executive officers and other key management positions should have a meaningful portion of their competitive total compensation opportunity linked to shareholder return, which is directly tied to our long-term vision of growth, stability, asset quality and our commitment to a personalized banking approach. Long-term incentives take the form of equity awards that are intended to align the interests of the executive with those of our shareholders by encouraging ownership of our common stock and tying value to the long-term market value of the Company’s stock. These awards also serve to promote an executive’s continued service to the organization by vesting over a period of years and encourage sound risk management by providing a balanced view of performance and aligning awards with the longer-term time horizon of risk outcomes.
Our long-term incentive compensation has consistedconsists of a combination of (i) performance-based restricted stock awards (“Performance Shares”) or, for 2020 to align with general market practice, performance-based restricted stock units (“Performance Stock Units”) that are earned over a three-year performance period and (ii) time-based restricted stock awards (“Restricted Stock”) or, for 2020 to align with general market practice, time-based restricted stock units (“Restricted Stock Units”), in each case issued under the Company’s 2014 Stock Option & Equity Compensation Plan (the “2014 Plan”) or the Company’s 2018 Equity Incentive Plan (the “2018 Plan”), which was approved by our shareholders at our 2018 Annual Meeting and amended in 2019 with the approval of our shareholders at our 2019 Annual Meeting.
Grant of 20182020 Long-Term Incentive Awards
In 2018,2020, we granted our Named ExecutivesNEOs Performance SharesStock Units that are earned and vest at the end of a three-year performance period based on achieving relative total shareholder return (“TSR”) compared to the KBW Regional Banking Index (KRX) and our return on average assets (“ROAA”) against targets established bycompared to the Committee.KBW Regional Banking Index (KRX). After the end of the performance period, the Committee will assess performance against the goals and determine the amount, if any, of earned Performance Shares.Stock Units. We also granted our Named ExecutivesNEOs Restricted Stock awardsUnits that vest ratably over fourthree years 20% on the second anniversary of grant, 30% on the third anniversary, and the remaining 50% on the fourth anniversary subject to continued service.
A Closer Look at 2020 Performance Shares
For 2018,2020, Performance SharesStock Units are earned and vest based on achievement of the following performance goals for the period from January 1, 20182020 through December 31, 2020,2022, as established by the Committee:
Performance Measure | Weighting | Measurement Perspective | Performance Goals | ||
Threshold | Target | Stretch | |||
Return on Average Assets (“ROAA”) | 50% | Relative to KBW Regional Banking Index (KRX) | 30th Percentile | 50th Percentile | 80th Percentile |
Total Shareholder Return (“TSR”) | 50% | Relative to KBW Regional Banking Index (KRX) | 30th Percentile | 50th Percentile | 80th Percentile |
Payout as % of Target | 50% | 100% | 150% |
Performance Measure | Weighting | Measurement Perspective | Threshold | Performance Goals Target | Stretch |
“ROAA” | 50% | Relative to KRX | 25th Percentile | 50th Percentile | 75th Percentile |
“TSR” | 50% | Relative to KRX | 25th Percentile | 50th Percentile | 75th Percentile |
Payout as % of Target | 50% | 100% | 150% |
The performance measures are calculated as follows:
ROAA: Average of the Company’s ROAA for the 12 calendar quarters (with each calendar quarter calculated separately) measured on a relative basis against a defined group of peer banks over the period January 1, 2022. |
TSR: Measured on a relative basis against a defined group of peer banks over the period January 1, |
For purposes of the performance measures, the peer banks will consist of all companies included in the KBW Regional Banking IndexKRX as of December 31, 2020.2022.
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Payout Determination for Performance Shares
At the end of the performance period, the Committee will review the Company’s actual performance and determine the number of earned awards. Performance below “threshold” for a given performance measure will result in forfeiture of the respective shares;shares; performance at or above “stretch” for a given performance measure will result in payout equal to 150% of the respective target shares. Performance between threshold and target and target and stretch will be determined using straight line interpolation and rounded up to the nearest whole number of shares. All financial performance determinations for the Company and the peer banks will be made at the ultimate parent company level. DividendsDividend equivalents earned on Performance SharesStock Units will accrue but will not be paid until vesting is determinable and will only be paid on those sharesPerformance Stock Units earned and released from restriction.
2020 Target Long-Term Equity Incentive Award Opportunities
The target long-term equity incentive award opportunities grantedthat the Committee set in early 2020 under the 2020 Long-Term Incentive Plan, a sub-plan under the 2018 Plan, represented, (or, for Mr. Sigrist, in June 2018 in connection with his appointment), in the aggregate, approximately 90%120% of base salary for Mr. Robbins,Stein, approximately 80% of base salary for Mr. Merrywell, approximately 65% of base salary for Mr. SteinMessrs. Deer and Eid, and approximately 55% of base salary for our other Named Executives. Mr. Robbins’McDonald and Ms. Baruffi. The lower target long-term equity incentive award opportunities for Mr. McDonald and Ms. Baruffi are a result of the Committee’s decision to take into account Mr. McDonald’s and Ms. Baruffi’s SERP entitlements when setting such target opportunities. Mr. McDonald and Ms. Baruffi’s SERP entitlements for 2020 are reflected in the 2020 Summary Compensation Table, and the SERP is discussed in further detail under “Post Employment and Termination Benefits-Legacy Supplemental Executive Retirement Plan.” As shown in the table below, Mr. Stein’s total long-term incentive award opportunity was granted 25%one-third in the form of restricted stockRestricted Stock Units and 75%two-thirds in the form of Performance Shares,Stock Units, in order to increase thetie a higher proportion of his total compensation opportunity that is tied to the achievement of objective performance criteria in light of his role as Chief Executive Officer. ForOfficer, and each of our other Named Executives, approximately 50% of theNEOs’ total targetlong-term incentive award opportunity was granted half in the form of restricted stockRestricted Stock Units and 50%half in the form of Performance Shares.
NEO | Restricted Stock Units (as a % of Base Salary) | Target Performance Stock Units (as a % of Base Salary) | Total Target Award Opportunity (as a % of Base Salary) | |||
Clint E. Stein | 40% | 80% | 120% | |||
Aaron J. Deer | 32.5% | 32.5% | 65% | |||
Eric J. Eid | 32.5% | 32.5% | 65% | |||
Christopher M. Merrywell | 40% | 40% | 80% | |||
Andrew L. McDonald* | 27.5% | 27.5% | 55% | |||
Kumi Y. Baruffi* | 27.5% | 27.5% | 55% | |||
Former NEO | ||||||
Gregory A. Sigrist | — | — | — |
* The Committee determined to take into account Mr. McDonald’s and Ms. Baruffi’s SERP entitlements when setting their target long-term equity incentive award opportunities.
Equity award values are based on the closing market price of our stock on the date the Board approves the grant.
NEO | Target Performance Stock Units (Performance-Based Vesting) | Restricted Stock Units (Time-Based Vesting) | ||
Clint E. Stein | 18,450 | 9,498 | ||
Aaron J. Deer | 4,210 | 4,222 | ||
Eric J. Eid | 3,070 | 3,080 | ||
Christopher M. Merrywell | 4,950 | 4,948 | ||
Andrew L. McDonald | 3,200 | 3,204 | ||
Kumi Y. Baruffi | 2,600 | 2,604 | ||
Former NEO | ||||
Gregory A. Sigrist | — | — |
25 | 2021 Proxy Statement |
Current Named Executive | Target Performance Shares (Performance-Based Vesting) | Restricted Stock (Time-Based Vesting) |
Hadley S. Robbins | 11,790 | 3,936 |
Gregory A. Sigrist | 2,360 | 2,370 |
Clint E. Stein | 3,320 | 3,324 |
Andrew L. McDonald | 2,210 | 2,214 |
David C. Lawson | 1,900 | 1,918 |
Kumi Y. Baruffi | 1,900 | 1,918 |
2018 Performance Share Award Payout
The Performance Shares granted in 20162018 were subject to performance vesting conditions tied to the Company’s ROAA and TSR relative to a defined group of peer banks, in each case over the period from January 1, 20162018 through December 31, 2018.2020. In February 2019,2021, the Committee reviewed the Company’s actual performance against the ROAA and TSR targets and determined that the awards would pay out at 128%124% of target. A summary of the Company’s performance as measured against the goals, and the resulting payout, is set forth below:
Performance Measure | Weighting | Measurement Perspective | Performance Goals | Results | |||
Threshold (50% Payout) | Target (100% Payout) | Stretch (150% Payout) | Actual Performance | Percent of Target Payout | |||
ROAA | 50% | Columbia | 0.85% | 1.00% | 1.25% | 1.21% | 142% |
TSR | 50% | Relative to KRX | 30th Percentile | 50th Percentile | 80th Percentile | 58th Percentile | 113% |
Total: | 128% |
Performance Goals | Results | ||||||
Performance | Weighting | Measurement | Threshold | Target (100% | Stretch | Actual | Percent of |
ROAA | 50% | Relative to KRX | 30th Percentile | 50th Percentile | 80th Percentile | 72nd Percentile | 137% |
TSR | 50% | Relative to KRX | 30th Percentile | 50th Percentile | 80th Percentile | 57th Percentile | 112% |
Total: | 124% |
Other Compensation Practices, Policies and Guidelines
Retirement Benefits
In 2001, the Company implemented a SERPSupplemental Executive Retirement Plan (“SERP”) for certain executive officers to provide retirement benefits to those officers. The SERP provides a lifetime annual retirement benefit, the amount of which declines to the extent the executive retires before a specified retirement age. The SERPs serve asupport our leadership retention purposeobjectives by vesting over a period of time and by restricting the executive from working for a competitor for a period following termination of employment. Starting in 2004, the Company began using supplemental compensation arrangements, which we called Unit Plans to provide retirement benefits for executive officers instead of SERPs. BetweenSince 2004, and 2012, we awarded a Unit Plan to Mr. Stein, two separate Unit Plans to Mr. Eid, two separate Unit Plans to Mr. Merrywell and three separate Unit Plans to Mr. McDonald and a Unit Plan to Mr. Stein.
In 2013, the Committee approved offering SERPs to replace the Named Executives’certain NEOs’ Unit Plans. Accordingly, the Company entered into SERPs with Messrs. McDonaldStein and Stein,McDonald, which provide that amounts drawn under their SERPs will be reduced by the amount that is attributable to each respective Unit Plan. This approach provides these executives with a retirement benefit that is consistent with Columbia’s compensation philosophy, while optimally leveraging the expense already incurred in funding the Unit Plans.
In 2013, following the acquisition of West Coast Bancorp, the Company assumed the SERP that was provided to Mr. Robbins as an executive of West Coast Bancorp;2015, the Company also entered into a SERP with Mr. Lawson in 2013 and Ms. Baruffi in 2015.Baruffi. A more detailed description regarding payments under the SERPs and Unit Plans is set forth below under “Compensation Tables—PostTables-Post Employment and Termination Benefits.”
As more fully described below under “Compensation Tables—PostTables-Post Employment and Termination Benefits,” we also provide non-employee directors and highly-compensated employees (as defined by IRS rules) with the opportunity to defer compensation through two Executive Deferred Compensation Plans. The participation in our 401(k) plan for these individuals is limited under federal income tax rules, and we believe they should have other similar means of saving for retirement. Currently, interest paid on the participant deferrals is three-month LIBOR (the “London Interbank Offered Rate”) plus 3.58%.
Executive Employment and Change-in-Control Agreements
We provide severance and change-in-control benefits to executives that are payable in circumstances the Committee believes are appropriate and market-competitive. Change-in-control benefits are generally “double-trigger,” meaning they are payable only if the executive experiences a qualifying termination of employment in connection with a change-in-control of the Company.
Employment Agreement with Mr. RobbinsStein
In general, upon a qualifying termination, Mr. Robbins’Stein’s agreement entitles him to receive any earned but unpaid bonus for a prior fiscal year, cash severance equal to two times Mr. Robbins’Stein’s annual base salary, a prorated bonus for the year of termination based on actual performance, a prorated portion of any long-term incentive awards (based on actual performance in the case of awards subject to performance-based vesting) and continued health and welfare benefits for twenty-four months.
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Upon a qualifying termination related to a change-in-control, Mr. Robbins’Stein’s agreement entitles him to receive any earned but unpaid bonus for a prior fiscal year, cash severance equal to two and a half times the sum of Mr. Robbins’Stein’s annual base salary and target annual bonus, a prorated target bonus for the year of termination and continued health and welfare benefits for thirty months. Mr. RobbinsStein is subject to customary restrictive covenants, including non-competition and non-solicitation covenants, during his employment and for two years following termination of employment for any reason.
Change-in-Control Agreements with Other Named ExecutivesNEOs
Additionally, as discussed under “Compensation Tables—Post-EmploymentTables-Post-Employment and Termination Benefits” below, unvested Sharesawards will vest in full as of the date of the closing of a change-in-control transaction (for Performance Shares,performance-based awards, based on the greater of target or actual performance) unless the Sharesawards are replaced or assumed, in which case the Sharesawards will continue as replaced or assumed.
Retirement Vesting of Earned Performance Awards
. In the event that aPerquisites and General Employee Benefits
We strive to assist all of our employees, we strive to assistincluding our executivesNEOs, in meeting their retirement income, health care, disability income, time off and other needs through competitive, cost-effective, Company-sponsored programs that provide individuals with reasonable flexibility in the context of their individual circumstances, and the Named Executivescircumstances. The NEOs participate in these and other benefits to the same extent as other employees. These benefits include medical and dental insurance, disability insurance, and the Company’s 401(k) plan. The Named ExecutivesNEOs do not receive any perquisites or similar benefits such as Company-provided cars, car allowances, or country club memberships.
Clawback Policies for the Recovery of Incentive Compensation
Our annual and long-term incentive compensation programs provide for the recovery of incentive compensation under certain circumstances. Under these programs, the Company will recover incentive compensation awarded to current or former executive officers (during the preceding three years) if the Company restates its financial results due to material noncompliance with any financial reporting requirement under the securities laws, (a “restatement”), to the extent the original awards exceeded the amounts that would have been paid under the restated results.
In June 2017, the Committee approved, and in July 2017, the Board adopted, a new Clawback Policy that covers current and former executive officers of the Company and applies to all incentive compensation granted following the date of adoption. The Clawback Policy provides that, to the full extent permitted by law, the Committee may require the forfeiture and/or repayment of unpaid incentive compensation (whether vested or unvested) and incentive compensation paid in the preceding three-year period (but not prior to July 2017) if a “triggering event” occurs.
For purposes of the Clawback Policy, a “triggering event” is any of the following events: (1) the Company is required to prepare a restatement, (2) the executive engages in conduct that causes material financial or reputational harm to the Company or its business activities, (3) the grant or payment of incentive compensation was based on materially inaccurate performance metrics or a material misrepresentation by the executive, (4) the executive improperly or with gross negligence failed to identify, raise or assess, in a timely manner, risks material to the Company or its business activities or (5) the executive engages in a fraudulent act or knowing and willful misconduct or violates restrictive covenants or employment restrictions to which the executive is subject.
Stock Ownership Guidelines and No-Hedging
In March 2017, the Board adopted a Stock Ownership Policy, which replaced our prior stock ownership guidelines effective as of January 1, 2017. The Stock Ownership Policy requires each Named ExecutiveNEO to own shares equal in value to a multiple of his or her annual base salary rather than a fixed number of shares, as was required under the prior stock ownership guidelines. For the Chief Executive Officer, the multiple is three;three; for Executive Vice Presidents serving on the executive team, which include the
27 | 2021 Proxy Statement |
Chief Financial Officer, Chief Operating Officer, Chief Credit Officer, Chief Human Resources Officer, andChief Risk Officer, General Counsel and Chief Digital and Technology Officer, the multiple is two. The Stock Ownership Policy also requires non-employee directors to own shares equal in value to five times the annual Board cash retainer. The share value is based on the average closing price of Company’s common stock over the 200 trading days preceding December 31 of the applicable calendar year.
The Named ExecutivesNEOs and non-employee directors may satisfy the ownership requirements in the Stock Ownership Policy with common stock owned directly or indirectly (if the participant has a pecuniary interest in the shares), vested stock-based awards (other than options) and unvested restricted stock or restricted stock unit awards that are subject to time-based vesting requirements. If a participant is not in compliance with the Stock Ownership Policy as of December 3131st of any year, he or she must retain all of the shares held as of that date and all shares acquired in the following year (including any shares granted to the participant pursuant to an equity award or acquired on exercise of an option), other than any shares withheld to pay an option exercise price or tax obligations.
At year-end 2018, each Named Executive satisfied2020, Mr. McDonald and Ms. Baruffi were the new Stock Ownership Policy requirementsonly NEOs who met this criteria, as the other than Mr. Robbins, who joined the Company in 2013 following its acquisition of West Coast Bancorp and whose salary was increased in connection with his appointment as our Chief Executive Officer in 2017; andNEOs (except Mr. Sigrist, who joined the Companywhose employment terminated) were all new to their positions in June, 2018. Accordingly, Mr. Robbins and Mr. Sigrist will be required to retain the shares that each held as of December 31, 2018 and any shares acquired in 2019, except as described above.
No-Hedging
Our executive officers, including each of our NEOs, directors and certain other individualspersons designated from (1) time to time as being the subject to the Company’s pre-clearance procedures, together with their family members (“Access Persons”), are prohibited from engaging in the following transactions:
Prior to engaging in any transaction involving the Company’s securities, Access Persons must first obtain pre-clearance of the transaction from the Chief Financial Officer or General Counsel.
Our non-executive officer employees and certain of their family members and entities under their control (who are not subject to the policies applicable to Access Persons described above) are subject to policies and procedures designed to ensure that transactions in Company stock are conducted in compliance with the applicable rules and regulations and do not bear the appearance of improper conduct.
Impact of Tax Treatment of Compensation
The Committee annually reviews and management considerconsiders the accounting and tax impacts of various programs designed to balance the potential cost to the Company with the benefit/value to the executive. Section 162(m)deductibility of the Code generally prohibits publicly held companies from deducting compensation paid to a Named Executive that exceeds $1 million duringour executive officers, which includes each of the tax year. Prior to the adoption ofNEOs. However, under the Tax Cuts and Jobs Act (the “Tax Act”), which was enacted on December 22,of 2017, to the extent thatexemption for qualifying performance-based compensation was based upon the attainment of performance goals set by the Committee pursuant to plans approved by our shareholders, the compensation generally was not included in the $1 million limit. The Tax Act repealed this exemption, and, asfor taxable years beginning after December 31, 2017. As a result, compensation paid to Named Executiveour executive officers (on or after January 1, 2018) in excess of $1 million will no longermay not be deductible even if performance-based, other than with respectunless it qualifies for certain transition relief. While the Company will monitor guidance and developments in this area, the Committee believes that its primary responsibility is to certain arrangements in place on November 2, 2017. Theprovide a compensation program that attracts, retains and rewards the executive talent necessary for our success. Consequently, the Committee continues to consider the deductibility of compensation, including in light of the changes to Section 162(m); however, the primary goals of our executive compensation programs are to attract, incentivizemay pay or provide, and retain key employees and align pay with individual and business performance. The Committee retains the ability to payhas paid or provided, compensation that exceeds deductibility limitsis not tax deductible or is otherwise limited as it determines.
Compensation Tablesto tax deductibility.
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The following table shows compensation paid or accrued in the years shown for Columbia’s Named Executives. As required by SEC rules, Columbia’s Named Executives includecomprise Columbia’s Chief Executive Officer; Mr. Stein, who served asOfficer; the Chief Financial Officer for a portion of 2018 and Mr. Sigristthree individuals who served as Chief Financial Officer beginning on June 4, 2018;during 2020, and the three other most highly paid executive officers.
2018 Summary Compensation Table | ||||||||||||||||||||||||||||||||||
Name and Principal Position | Year | Salary | Bonus | Stock | Option Awards | Non-Equity Incentive Plan Compensation (5) | Change in and Non- Compensation | All Other | Total | |||||||||||||||||||||||||
Hadley S. Robbins | 2018 | 724,231 | — | 866,297 | — | 503,317 | 252,367 | 55,774 | 2,401,986 | |||||||||||||||||||||||||
President, Chief | 2017 | 538,616 | — | 919,666 | — | 441,593 | 1,561,485 | 39,770 | 3,501,130 | |||||||||||||||||||||||||
Executive Officer | 2016 | 374,000 | — | 222,319 | — | 162,630 | 166,147 | 41,772 | 966,868 | |||||||||||||||||||||||||
Gregory A. Sigrist Executive Vice President, Chief Financial Officer (7) | 2018 | 187,500 | 100,000 | 229,875 | — | 100,548 | 77,081 | 18,010 | 713,014 | |||||||||||||||||||||||||
Clint E. Stein | 2018 | 423,077 | — | 336,458 | — | 245,338 | 37,224 | 45,704 | 1,087,801 | |||||||||||||||||||||||||
Executive Vice President, Chief | 2017 | 385,300 | — | 623,572 | — | 220,541 | 278,731 | 41,671 | 1,549,815 | |||||||||||||||||||||||||
Operating Officer (7) | 2016 | 349,865 | — | 208,068 | — | 152,205 | 148,412 | 40,996 | 899,546 | |||||||||||||||||||||||||
David C. Lawson | 2018 | 287,308 | — | 193,208 | — | 133,299 | 130,068 | 32,004 | 775,887 | |||||||||||||||||||||||||
Executive Vice President, | 2017 | 273,885 | — | 157,545 | — | 148,047 | 197,959 | 30,064 | 807,500 | |||||||||||||||||||||||||
Chief Human Resources Officer | 2016 | 253,327 | — | 151,123 | — | 110,505 | 130,978 | 31,124 | 677,057 | |||||||||||||||||||||||||
Andrew L. McDonald | 2018 | 333,500 | — | 224,222 | — | 154,442 | 88,445 | 55,780 | 856,389 | |||||||||||||||||||||||||
Executive Vice President, Chief | 2017 | 320,500 | — | 184,336 | — | 173,258 | 286,740 | 50,595 | 1,015,429 | |||||||||||||||||||||||||
Credit Officer | 2016 | 297,603 | — | 176,821 | — | 129,270 | 206,825 | 48,202 | 858,721 | |||||||||||||||||||||||||
Kumi Y. Baruffi | 2018 | 283,269 | — | 193,208 | — | 133,299 | 121,333 | 28,950 | 760,059 | |||||||||||||||||||||||||
Executive Vice President, General Counsel | 2017 | 253,077 | — | 145,558 | — | 136,783 | 141,430 | 27,019 | 703,867 |
2020 Summary Compensation Table
Name and | Salary | Bonus | Stock Awards | Option | Non-Equity Incentive Plan Compensation | Change in Pension Value and Non- Qualified Deferred Compensation Earnings | All Other Compensation | Total | ||||||||||
Principal Position | Year | ($)(1) | ($)(2) | ($)(3)(4) | Awards | ($)(5) | ($)(6) | ($)(7) | ($) | |||||||||
Clint E. Stein President, Chief Executive Officer (8) | 2020 | 817,308 | — | 1,277,308 | — | 826,063 | 586,885 | 66,745 | 3,574,309 | |||||||||
2019 | 445,577 | — | 306,286 | — | 249,907 | 70,622 | 50,176 | 1,122,568 | ||||||||||
2018 | 423,077 | — | 336,458 | — | 245,338 | 37,224 | 45,704 | 1,087,801 | ||||||||||
Aaron J. Deer Executive Vice President, Chief Financial Officer (9) | 2020 | 259,135 | 75,000 | 282,935 | — | 165,108 | — | 27,157 | 809,335 | |||||||||
Eric J. Eid Executive Vice President, Interim Chief Financial Officer, Chief Digital and Technology Officer(10) | 2020 | 334,327 | — | 264,049 | — | 213,399 | — | 56,111 | 867,886 | |||||||||
Christopher M. Merrywell Executive Vice President, Chief Operating Officer (11) | 2020 | 437,115 | — | 425,124 | — | 331,429 | — | 63,532 | 1,257,200 | |||||||||
Andrew L. McDonald Executive Vice President, Chief Credit Officer | 2020 | 413,369 | — | 508,589 | — | 201,716 | 1,246,056 | 66,197 | 2,435,927 | |||||||||
2019 | 345,363 | — | 200,179 | — | 154,428 | 494,739 | 60,691 | 1,255,400 | ||||||||||
2018 | 333,500 | — | 224,222 | — | 154,442 | 88,445 | 55,780 | 856,389 | ||||||||||
Kumi Y. Baruffi Executive Vice President, General Counsel | 2020 | 332,212 | — | 223,471 | — | 163,894 | 511,640 | 34,385 | 1,265,602 | |||||||||
2019 | 298,077 | — | 172,790 | — | 129,684 | 419,092 | 34,163 | 1,053,806 | ||||||||||
2018 | 283,269 | — | 193,208 | — | 133,299 | 121,333 | 28,950 | 760,059 | ||||||||||
Former Named Executive | ||||||||||||||||||
Gregory A. Sigrist Executive Vice President, Chief Financial Officer (12) | 2020 | 83,558 | — | — | — | — | — | 285,535 | 369,093 | |||||||||
2019 | 391,154 | — | 305,073 | — | — | 235,397 | 32,151 | 963,775 | ||||||||||
2018 | 187,500 | 100,000 | 229,875 | — | 100,548 | 77,081 | 18,010 | 713,014 |
(1) | Amounts include |
(2) | For Mr. |
29 | 2021 Proxy Statement |
For Mr. Sigrist for 2018, reflects a one-time signing and relocation bonus paid in connection with the commencement of his employment, a portion of which Mr. Sigrist was required to repay if his employment is terminated for cause or he resigns within two years following his start date of June 4, 2018. The portion that must be repaid is determined on a straight-line basis over the two-year period. Subject to his execution of a release of claims, Mr. Sigrist is not required to repay the signing and relocation bonus in connection with the termination of his employment in February 2020.
(3) | For 2020, amounts shown include (a) the grant date fair value of Restricted Stock Units granted on February 27, 2020 (or, in the case of Mr. Deer, on April 27, 2020) that vest one-third each year on February 15, 2021, 2022, and 2023, (b) in the case of Mr. McDonald, his Restricted Stock award granted on January 22, 2020 that vest 100% on January 22, 2022, and (c) the grant date fair value of Performance Stock Units granted on February 27, 2020 (or, in the case of Mr. Deer, on April 27, 2020) for the period commencing January 1, 2020 and ending December 31, 2022 (the 2020-2022 performance period). At stretch performance, the Performance Stock Units grant date fair value would be $951,051 for Mr. Stein, $171,010 for Mr. Deer, $158,251 for Mr. Eid, $255,160 for Mr. Merrywell, $164,952 for Mr. McDonald, and $134,024 for Ms. Baruffi. For 2019, amounts shown include (a) the grant date fair value of Restricted Stock awards granted on March 27, 2019 that vest 20% on the second anniversary of grant date, 30% on the third anniversary of grant date and the remaining 50% vesting on March 27, 2023, (b) in the case of Mr. Sigrist, Restricted Stock awards granted on March 22, 2019 that vest 20% on the September 4, 2020, 30% on September 3, 2020, and the remaining 50% vesting on September 2, 2022, and (c) the grant date fair value of Performance Shares granted on March 27, 2019 for the period commencing January 1, 2019 and ending December 31, 2021 (the 2019-2021 performance period). At stretch performance, the Performance Shares grant date fair value would be $160,064 for Mr. Stein, $104,725 for Mr. McDonald, $90,365 for Ms. Baruffi and $118,735 for Mr. Sigrist. |
For 2018, amounts shown for the NEOs other than Mr. Sigrist include the grant date fair value of Restricted Stock awards granted on February 28, 2018, that vest 20% on the second anniversary of grant date, 30% on the third anniversary of grant date and the remaining 50% vesting on February 28, 2022 and the grant date fair value of Performance Shares granted on March 28, 2018 for the period commencing January 1, 2018 and ending December 31, 2020. For Mr. Sigrist, amounts shown include the grant date fair value of Restricted Stock awards granted on June 4, 2018 that vest 20% on February 28, 2020, 30% on February 26, 2021 and the remaining 50% vesting on February 28, 2022 and the grant date fair value of Performance Shares granted on June 28, 2018 for the period commencing January 1, 2018 and ending December 31, 2020. At stretch performance, the Performance Shares grant date fair value would be $701,851 for Mr. Robbins, $126,520 for Mr. Sigrist, $197,582 for Mr. Stein, $113,074 for Mr. Lawson, $131,721 for Mr. McDonald, and $113,074 for Ms. Baruffi.
For 2017, amounts shown include the grant date fair value of (a) Restricted Stock awards granted on February 22, 2017 that vest 20% on the second anniversary of grant date, 30% on the third anniversary of grant date and the remaining 50% vesting on February 22, 2021, (b) in the case of Messrs. Robbins28, 2022 and Stein, Restricted Stock awards granted on April 26, 2017 that vest on April 26, 2019, (c) in the case of Mr. Robbins, Restricted Stock awards granted on July 3, 2017 that vest on the same schedule as the Restricted Stock awards granted on February 22, 2017 and (d) the grant date fair value of Performance Shares granted on February 22, 2017 and, in the case of Mr. Robbins, July 3, 2017March 28, 2018 for the period commencing January 1, 20172018 and ending December 31, 20192020. For Mr. Sigrist, amounts shown include the grant date fair value of Restricted Stock awards granted on June 4, 2018 that vest 20% on February 28, 2020, 30% on February 26, 2021 and the remaining 50% vesting on February 28, 2022 and the grant date fair value of Performance Shares granted on June 28, 2018 for the period commencing January 1, 2018 and ending December 31, 2020 (the 2017-20192018-2020 performance period). At stretch performance, the Performance Shares grant date fair value would be $389,547 for Mr. Robbins, $129,258$197,582 for Mr. Stein, $94,006 for Mr. Lawson, $109,844$131,721 for Mr. McDonald, and $86,853$113,074 for Ms. Baruffi.
For 2016, amounts shown include the grant date fair value of Restricted Stock awards granted on February 24, 2016 that vest 20% on the second anniversary of the grant date, 30% on the third anniversary of the grant dateBaruffi and the remaining 50% of which vest on February 24, 2020 and the grant date fair value of Performance Shares granted on March 23, 2016 for the period commencing January 1, 2016 and ending December 31, 2018 (the 2016-2018 performance period). At stretch performance, the Performance Shares grant date fair value would be $135,571$126,520 for Mr. Robbins, $126,891 for Mr. Stein, $92,171 for Mr. Lawson, and $107,878 for Mr. McDonald.
Sigrist.
(4) | The grant date fair value of stock awards was determined in accordance with FASB ASC 718. Assumptions used to calculate these amounts are set forth in footnote |
(5) | The amounts in this column reflect the annual incentive awards earned under the |
(6) | The amounts in this column do not represent amounts actually paid to a Named Executive. Includes the change in actuarial present value of the accumulated projected benefit under the SERP, which is a non-cash amount that can vary significantly from year-to-year based upon assumptions underlying the actuarial calculations. Assumptions such as discount rate and retirement age are reviewed annually by the Company and are intended to be individually appropriate. The SERP is discussed in further detail under “Post Employment and Termination |
For 2018,2020, amounts shown include: for Mr. Robbins $229,538 of change in the actuarial present value of projected benefit under the Supplemental Executive Retirement Plan (the “SERP”), which he is not currently entitled to receive because such amounts are not fully vested, and $22,829 of above-market earnings on his DCA; for Mr. SigristStein includes $77,081$574,126 of change in the actuarial present value of projected benefit under the SERP, which he is not currently entitled to receive because such amounts are not fully vested;vested, and $12,759 of above-market earnings on his DCA; for Mr. McDonald includes $1,241,763 of change in the actuarial present value of projected benefit under the SERP, which amounts are partially vested and eligible to be received, and $4,293 of above-market earnings on his DCA; for Ms. Baruffi includes $507,192 of change in the actuarial present value of projected benefit under the SERP, which she is not currently entitled to receive because such amounts are not fully vested, and $4,448 of above-market earnings on her DCA. In connection with his termination of employment, Mr. Sigrist forfeited his pension benefits under the SERP. Thus, Mr. Sigrist’s change in pension value for 2020 was -$312,478, which represents the loss of the actuarial present value of projected benefit under the SERP at December 31, 2019.
2021 Proxy Statement | 30 |
For 2019, amounts shown include: for Mr. Stein includes $59,071 of change in the actuarial present value of projected benefit under the SERP, which he is not currently entitled to receive because such amounts are not fully vested, and $11,551 of above-market earnings on his DCA; for Mr. McDonald includes $490,457 of change in the actuarial present value of projected benefit under the SERP, which amounts are partially vested and eligible to be received, and $4,282 of above-market earnings on his DCA; for Ms. Baruffi includes $415,460 of change in the actuarial present value of projected benefit under the SERP, which she is not currently entitled to receive because such amounts are not fully vested, and $3,632 of above-market earnings on her DCA; for Mr. Sigrist includes $235,397 of change in the actuarial present value of projected benefit under the SERP, although Mr. Sigrist forfeited his pension benefits upon his termination.
For 2018, amounts shown include: for Mr. Stein includes $30,100 of change in the actuarial present value of projected benefit under the SERP, which he is not currently entitled to receive because such amounts are not fully vested, and $7,124 of above-market earnings on his DCA; for Mr. Lawson includes $127,188 of change in the actuarial present value of projected benefit under the SERP, which he is not currently entitled to receive because such amounts are not fully vested, and $2,880 of above-market earnings on his DCA;DCA; for Mr. McDonald includes $85,456 of change in the actuarial present value of projected benefit under the SERP, which he is not currently entitled to receive because such amounts are not fullypartially vested and eligible to be received, and $2,989 of above-market earnings on his DCA; for Ms. Baruffi includes $119,676 of change in the actuarial present value of projected benefit under the SERP, which she is not currently entitled to receive because such amounts are not fully vested, and $1,657 of above-market earnings on her DCA.
For 2017, amounts shown include:DCA; for Mr. Robbins $1,546,008Sigrist includes $77,081 of change in the actuarial present value of projected benefit under the SERP, and which he is not currently entitled to receive because such amounts are not fully vested, and $15,477 of above-market earnings onalthough Mr. Sigrist forfeited his DCA; for Mr. Stein, $276,704 of change in the actuarial present value of projected benefit under the SERP, which he is not currently entitled to receive because such amounts are not fully vested, and $2,027 of above-market earnings onpension benefits upon his DCA; for Mr. Lawson, $196,366 of change in the actuarial present value of projected benefit under the SERP, which he is not currently entitled to receive because such amounts are not fully vested, and $1,593 of above-market earnings on his DCA; for Mr. McDonald, $282,604 of change in the actuarial present value of projected benefit under the SERP, which he is not currently entitled to receive because such amounts are not fully vested, and $2,027 of above-market earnings on his DCA; and for Ms. Baruffi, $140,390 of change in the actuarial present value of projected benefit under the SERP, which she is not currently entitled to receive because such amounts are not fully vested, and $1,040 of above-market earnings on her DCA.
For 2016, amounts shown include: for Mr. Stein, $144,953 of change in the actuarial present value of projected benefit under the SERP, which he is not currently entitled to receive because such amounts are not fully vested, and $3,459 of above-market earnings on his DCA; for Mr. Lawson, $129,771 of change in the actuarial present value of projected benefit under the SERP, which he is not currently entitled to receive because such amounts are not fully vested, and $1,207 of above-market earnings on his DCA; for Mr. McDonald, $204,854 of change in the actuarial present value of projected benefit under the SERP, which he is not currently entitled to receive because such amounts are not fully vested, and $1,971 of above-market earnings on his DCA; and for Mr. Robbins, $151,430 of change in the actuarial present value of projected benefit under the SERP and $14,717 of above-market earnings on his DCA.
termination.
(7) | Amount shown for Mr. |
Amount shown for Mr. SigristDeer includes $5,409$8,550 in 401(k) plan matching contributions, $9,014$14,250 in 401(k) discretionary contributions, $1,478$129 in split dollar life insurance premiums, $842$86 in split dollar bonus earnings, and $99earnings. $1,490 in group term life insurance premiums, and $1,168$2,652 in accrued dividends on unvested Performance Shares.
Amount shown for Mr. SteinEid includes $8,250 in 401(k) plan matching contributions, $13,750 in 401(k) discretionary contributions, $2,970$2,050 in split dollar life insurance premiums, $1,980 in split dollar bonus earnings, $195$33 in group term life insurance, premiums, $4,036 in accrued dividends on unvested Performance Shares, 3,686 in non-qualified deferred compensation matching contributions, and $10,837 in Company contributions to a supplemental retirement benefit plan (“UNIT plan”). UNIT plans are described in further detail under “Post Employment and Termination Benefits—Unit Plans.”
Amount shown for Mr. Lawson includes $8,250 in 401(k) plan matching contributions, $13,750 in 401(k) discretionary contributions, $3,290 in split dollar life insurance premiums, $2,193 in split dollar bonus earnings, $132 in group term life insurance premiums, $2,581$3,883 in accrued dividends on unvested Performance Shares and $1,808$50,145 in non-qualified deferred compensation matching contributions.
Company contributions to his two Unit Plans.
Amount shown for Mr. McDonaldMerrywell includes $8,250$8,550 in 401(k) plan matching contributions, $13,750$14,250 in 401(k) discretionary contributions, $4,602$830 in split dollar life insurance premiums, $3,068$553 in split dollar bonus earnings, $155 in group term life insurance premiums, $3,011$5,089 in accrued dividends on unvested Performance Shares and $22,944$34,260 in Company contributions to a UNIT plan.his two Unit Plans.
Amount shown for Ms. BaruffiMr. McDonald includes $8,250$8,550 in 401(k) plan matching contributions, $13,750$14,250 in 401(k) discretionary contributions, $2,108$5,739 in split dollar life insurance premiums, $1,405$3,826 in split dollar bonus earnings, $121 in group term life insurance premiums, $2,484$7,246 in accrued dividends on unvested Performance Shares and $832$26,586 in Company contributions to two of his three Unit Plans.
Amount shown for Ms. Baruffi includes $8,550 in 401(k) plan matching contributions, $14,250 in 401(k) discretionary contributions, $2,638 in split dollar life insurance premiums, $1,758 in split dollar bonus earnings, $12 in group term life insurance, $1,037 in non-qualified deferred compensation matching contributions.contributions and $6,140 in accrued dividends on unvested Performance Shares.
Amount shown for Mr. Sigrist includes $8,550 in 401(k) plan matching contributions, $14,250 in 401(k) discretionary contributions, $492 in split dollar life insurance premiums, $243 in split dollar bonus earnings, $250,000 in cash severance payments, and a $12,000 discretionary bonus in connection with his termination of employment to assist with COBRA health insurance continuation or to be used by him as he deemed needed.
(8) | Mr. Stein served as the Company’s Chief |
(9) | Mr. |
(10) | Mr. Eid, the Company’s Chief Digital and Technology Officer, served as the Company’s Interim Chief Financial Officer effective February 28, 2020, following Mr. Sigrist’s departure on that date, until Mr. Deer became the Company’s Chief Financial Officer on April 27, 2020. |
(11) | Mr. Merrywell succeeded Mr. Stein as the Company’s Chief Operating Officer effective January 1, 2020. |
(12) | Mr. Sigrist served as the Company’s Chief Financial Officer through his departure from the Company on February 28, 2020. |
31 | 2021 Proxy Statement |
E
Stock Option and Equity Compensation Plan. The 2018 Plan provides for the grant of restricted stock, incentive stock options, nonqualified stock options, restricted stock units and stock appreciation rights. All eligible employees and directors may participate in the 2018 Plan. As of December 31, 2018, 3,015,9572020, 2,292,751 shares remained available for future grant under the 2018 Plan. The 2018 Plan replaced the 2014 Plan;Plan; however, any awards remaining outstanding under the 2014 Plan continue to be governed by the terms of that plan.
2018 Grants of Plan-Based Awards | ||||||||||||||||||||||||||||||||||
Name | Grant Date | Estimated Future Payments Under Non- Equity Incentive Plan Awards(1) | Estimated Future Payments Under | All Other | Grant | |||||||||||||||||||||||||||||
Threshold | Target | Maximum | Threshold | Target | Maximum | |||||||||||||||||||||||||||||
Hadley S. Robbins | 3/28/2018 | $ | 219,000 | $ | 438,000 | $ | 657,000 | |||||||||||||||||||||||||||
2/28/2018 | 3,936 | $ | 164,446 | |||||||||||||||||||||||||||||||
3/28/2018 | 5,895 | 11,790 | 17,690 | $ | 701,851 | |||||||||||||||||||||||||||||
Gregory A. Sigrist | 6/4/2018 | $ | 43,750 | $ | 87,500 | $ | 131,250 | 2,370 | $ | 103,355 | ||||||||||||||||||||||||
6/28/2018 | 1,180 | 2,360 | 3,540 | $ | 126,520 | |||||||||||||||||||||||||||||
Clint E. Stein | 3/28/2018 | $ | 106,750 | $ | 213,500 | $ | 320,250 | |||||||||||||||||||||||||||
2/28/2018 | 3,324 | $ | 138,877 | |||||||||||||||||||||||||||||||
3/28/2018 | 1,660 | 3,320 | 4,980 | $ | 197,582 | |||||||||||||||||||||||||||||
David C. Lawson | 3/28/2018 | $ | 58,000 | $ | 116,000 | $ | 174,000 | |||||||||||||||||||||||||||
2/28/2018 | 1,918 | $ | 80,134 | |||||||||||||||||||||||||||||||
3/28/2018 | 950 | 1,900 | 2,850 | $ | 113,074 | |||||||||||||||||||||||||||||
Andrew L. McDonald | 3/28/2018 | $ | 67,200 | $ | 134,400 | $ | 201,600 | |||||||||||||||||||||||||||
2/28/2018 | 2,214 | $ | 92,501 | |||||||||||||||||||||||||||||||
3/28/2018 | 1,105 | 2,210 | 3,320 | $ | 131,721 | |||||||||||||||||||||||||||||
Kumi Y. Baruffi | 3/28/2018 | $ | 58,000 | $ | 116,000 | $ | 174,000 | |||||||||||||||||||||||||||
2/28/2018 | 1,918 | $ | 80,134 | |||||||||||||||||||||||||||||||
3/28/2018 | 950 | 1,900 | 2,850 | $ | 113,074 |
2020 Grants of Plan-Based Awards
| All Other | Grant Date | |||||||
Estimated Future Payments | Estimated Future Payments | Stock Awards: | Fair Value of | ||||||
Name | Grant Date | Threshold | Target | Maximum | Threshold | Target | Maximum | ||
Clint E. Stein | 2/26/2020 | 320,000 | 640,000 | 960,000 | – | – | – | – | – |
2/27/2020 | – | – | – | 9,225 | 18,450 | 27,675 | 9,498 | $1,277,308 | |
Aaron J. Deer | 4/27/2020 | 65,482 | 130,963(5) | 196,445 | – | – | – | – | – |
4/27/2020 | – | – | – | 2,105 | 4,210 | 6,315 | 4,222 | $ 282,935 | |
Eric J. Eid | 2/26/2020 | 81,250 | 162,500 | 243,750 | – | – | – | – | – |
2/27/2020 | – | – | – | 1,535 | 3,070 | 4,605 | 3,080 | $ 264,049 | |
Christopher M. Merrywell | 2/26/2020 | 127,500 | 255,000 | 382,500 | – | – | – | – | – |
2/27/2020 | – | – | – | 2,475 | 4,950 | 7,425 | 4,948 | $ 425,124 | |
Andrew L. McDonald | 2/26/2020 | 80,000 | 160,000 | 240,000 | – | – | – | – | – |
1/22/2020(6) | – | – | – | – | – | – | 6,000 | $ 233,580 | |
2/27/2020 | – | – | – | 1,600 | 3,200 | 4,800 | 3,204 | $ 275,009 | |
Kumi Y. Baruffi | 2/26/2020 | 65,000 | 130,000 | 195,000 | – | – | – | – | – |
2/27/2020 | – | – | – | 1,300 | 2,600 | 3,900 | 2,604 | $ 223,471 | |
Former Named Executive | |||||||||
Gregory A. Sigrist | – | – | – | – | – | – | – | – | – |
(1) | Represents the possible range of |
(2) | Represents the possible range of Performance |
(3) | Represents the number of |
(4) | Amounts shown represent the grant date fair value of Restricted Stock, Restricted Stock Units and Performance |
(5) | Mr. Deer’s target annual incentive opportunity for 2020 was prorated to reflect his period of employment with the Company in 2020. |
(6) | Represents a grant of 6,000 shares of Restricted Stock awarded to Mr. McDonald as a retention incentive. Mr. McDonald’s award cliff vests 100% on January 22, 2022. |
2021 Proxy Statement | 32 |
Outstanding Equity Awards at Fiscal Year-End 2018 | ||||||||||||||||||||||||||||||||||||
Name | Option Awards | Stock Awards | ||||||||||||||||||||||||||||||||||
Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Un-exercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) (1) | Market Value of Shares or Units of Stock That Have Not Vested ($) (2) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) (3) | Equity Incentive Plan Awards: Market of Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(2)(3) | ||||||||||||||||||||||||||||
Hadley S. Robbins | — | — | — | — | — | 22,302 | 809,340 | 28,940 | 1,050,233 | |||||||||||||||||||||||||||
Gregory A. Sigrist | — | — | — | — | — | 2,370 | 86,007 | 3,540 | 128,467 | |||||||||||||||||||||||||||
Clint E. Stein | — | — | — | — | — | 19,660 | 713,461 | 8,775 | 318,445 | |||||||||||||||||||||||||||
David C. Lawson | — | — | — | — | — | 6,503 | 235,994 | 5,610 | 203,587 | |||||||||||||||||||||||||||
Andrew L. McDonald | — | — | — | — | — | 7,607 | 276,058 | 6,545 | 237,518 | |||||||||||||||||||||||||||
Kumi Y. Baruffi | — | — | — | — | — | 6,158 | 223,474 | 5,400 | 195,966 |
Outstanding Equity Awards at Fiscal Year-End 2020 | ||||||||||||||||||||||||||||||||||||
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||
Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Un-exercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option | Option Expira-tion | Number | Market | Equity | Equity | |||||||||||||||||||||||||||
Clint E. Stein | — | — | — | — | — | 17,993 | $ | 645,949 | 39,510 | $ | 1,418,409 | |||||||||||||||||||||||||
Aaron J. Deer | — | — | — | — | — | 4,222 | $ | 151,570 | 6,315 | $ | 226,709 | |||||||||||||||||||||||||
Eric J. Eid | — | — | — | — | — | 8,714 | $ | 312,833 | 7,515 | $ | 269,789 | |||||||||||||||||||||||||
Christopher M. Merrywell | — | — | — | — | — | 10,833 | $ | 388,905 | 10,365 | $ | 372,104 | |||||||||||||||||||||||||
Andrew L. McDonald | — | — | — | — | — | 15,035 | $ | 539,757 | 12,600 | $ | 452,340 | |||||||||||||||||||||||||
Kumi Y. Baruffi | — | — | — | — | — | 7,563 | $ | 271,512 | 10,620 | $ | 381,258 | |||||||||||||||||||||||||
Former Named Executive | ||||||||||||||||||||||||||||||||||||
Gregory A. Sigrist | — | — | — | — | — | — | — | — | — |
(1) | For Mr. |
For Mr. Sigrist,Deer, represents 2,3704,222 Restricted Stock Units granted on April 27, 2020 that vest one-third each year on February 15, 2021, 2022 and 2023.
For Mr. Eid, represents 1,300 shares of restricted stockRestricted Stock granted on June 4,February 22, 2017 that vest on February 22, 2021; 2,400 shares of Restricted Stock granted on February 28, 2018 that vest 37.5% on the third anniversary and 62.5% on the fourth anniversary of the grant date, respectively; 1,934 shares of Restricted Stock granted on March 27, 2019 that vest 20% on the second anniversary of the grant date, 30% on the third anniversary and the remaining 50% on the fourth anniversary of the grant date, respectively.
respectively; and 3,080 Restricted Stock Units granted on February 27, 2020 that vest one-third each year on February 15, 2021, 2022, and 2023.
For Mr. Stein,Merrywell represents 1,235 shares of restricted stock granted on March 25, 2015 that vest on March 25, 2019; 2,565 shares of Restricted Stock granted on February 24, 2016 that vest 37.5% on the third anniversary of the grant date and the remaining 62.5% on the fourth anniversary of the grant date; 2,5361,250 shares of Restricted Stock granted on February 22, 2017 that vest 20% on the second anniversaryFebruary 22, 2021; 2,659 shares of the date of grant, 30%Restricted Stock granted on February 28, 2018 that vest 37.5% on the third anniversary and 50%62.5% on the fourth anniversary of the grant date, respectively; 10,000respectively; 1,976 shares of restricted stockRestricted Stock granted on April 26, 2017 that vest on April 26, 2019; and 3,324 shares of restricted stock granted on February 28, 2018March 27, 2019 that vest 20% on the second anniversary of the grant date, 30% on the third anniversary and the remaining 50% on the fourth anniversary of the grant date, respectively.
respectively; and 4,948 Restricted Stock Units granted on February 27, 2020 that vest one-third each year on February 15, 2021, 2022, and 2023.
For Mr. Lawson,McDonald, represents 882 shares of restricted stock granted on March 25, 2015 that vest on March 25, 2019; 1,863 shares of Restricted Stock granted on February 24, 2016 that vest 37.5% on the third anniversary of the grant date and the remaining 62.5% on the fourth anniversary of the grant date; 1,8401,078 shares of Restricted Stock granted on February 22, 2017 that vest 20% on the second anniversaryFebruary 22, 2021; 1,771 shares of the date of grant, 30%Restricted Stock granted on February 28, 2018 that vest 37.5% on the third anniversary and 50%62.5% on the fourth anniversary of the grant date, respectively; and 1,918respectively; 2,982 shares of restricted stockRestricted Stock granted on February 28, 2018March 27, 2019 that vest 20% on the second anniversary of the grant date, 30% on the third anniversary and the remaining 50% on the fourth anniversary of the grant date, respectively.
For Mr. McDonald, represents 1,058 shares of restricted stock granted on March 25, 2015 that vest on March 25, 2019; 2,179respectively; 6,000 shares of Restricted Stock granted on February 24, 2016January 22, 2020 that vest 37.5%100% on the third anniversary of the grant dateJanuary 22, 2022; and the remaining 62.5%3,204 Restricted Stock Units granted on the fourth anniversary of the grant date; 2,156February 27, 2020 that vest one-third each year on February 15, 2021, 2022, and 2023.
For Ms. Baruffi, represents 850 shares of Restricted Stock granted on February 22, 2017 that vest 20% on the second anniversaryFebruary 22, 2021; 1,534 shares of the date of grant, 30%Restricted Stock granted on February 28, 2018 that vest 37.5% on the third anniversary and 50%62.5% on the fourth anniversary of the grant date, respectively; and 2,214respectively; 2,575 shares of restricted stockRestricted Stock granted on February 28, 2018March 27, 2019 that vest 20% on the second anniversary of the grant date, 30% on the third anniversary and the remaining 50% on the fourth anniversary of the grant date, respectively.
For Ms. Baruffi, represents 818 shares of restricted stock granted on March 25, 2015 that vest on March 25, 2019; 1,722 shares ofrespectively; and 2,604 Restricted Stock Units granted on February 24, 201627, 2020 that vest 37.5% on the third anniversary of the grant date and the remaining 62.5% on the fourth anniversary of the grant date; 1,700 shares of Restricted Stock grantedone-third each year on February 22, 2017 that vest 20% on the second anniversary of the date of grant, 30% on the third anniversary,15, 2021, 2022, and 50% on the fourth anniversary of the grant date, respectively; and 1,918 shares of restricted stock granted on February 28, 2018 that vest 20% on the second anniversary of the grant date, 30% on the third anniversary and the remaining 50% on the fourth anniversary of the grant date, respectively.
2023.
(2) | Amounts shown are calculated using the closing price of Columbia’s common stock on NASDAQ on December 31, |
33 | 2021 Proxy Statement |
(3) | Actual amounts vested and earned, if any, depend on actual performance against the performance measures for the |
2018 Option Exercises and Stock Vested | ||||||||||||||||
Name | Option Awards | Stock Awards | ||||||||||||||
Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of | Value | |||||||||||||
Hadley S. Robbins | — | — | 6,662 | 256,437 | ||||||||||||
Gregory A. Sigrist | — | — | — | — | ||||||||||||
Clint E. Stein | — | — | 6,298 | 242,690 | ||||||||||||
David C. Lawson | — | — | 4,839 | 187,573 | ||||||||||||
Andrew L. McDonald | — | — | 5,509 | 212,914 | ||||||||||||
Kumi Y. Baruffi | — | — | 4,799 | 184,818 |
2020 Option Exercises and Stock Vested
Option Awards | Stock Awards | |||||||||||||||
Name | Number of | Value | Number of Shares Acquired on | Value | ||||||||||||
Clint E. Stein | — | — | 3,028 | $ | 111,563 | |||||||||||
Aaron J. Deer | — | — | — | — | ||||||||||||
Eric J. Eid | — | — | 2,880 | $ | 106,318 | |||||||||||
Christopher M. Merrywell | — | — | 2,916 | $ | 107,349 | |||||||||||
Andrew L. McDonald | — | — | 2,451 | $ | 90,749 | |||||||||||
Kumi Y. Baruffi | — | — | 1,970 | $ | 72,809 | |||||||||||
Former Named Executive | ||||||||||||||||
Gregory A. Sigrist | — | — | 474 | $ | 15,737 |
(1) | For Mr. |
For Mr. Stein,Eid, represents the fair market value of 1,0001,500 shares of restricted stock granted in 2014 that vested on February 26, 2018, 741 shares of restricted stock granted in 2015 that vested on March 23, 2018, 642 shares of restricted stockRestricted Stock granted in 2016 that vested on February 23, 2018, and 3,915 performance24, 2020, 780 shares of Restricted Stock granted in 20162017 that vested on December 31, 2018.
February 22, 2020 and 600 shares of Restricted Stock granted in 2018 that vested on February 28, 2020.
For Mr. Lawson,Merrywell, represents the fair market value of 1,0001,500 shares of restricted stock granted in 2014 that vested on February 26, 2018, 529 shares of restricted stock granted in 2015 that vested on March 23, 2018, 466 shares of restricted stockRestricted Stock granted in 2016 that vested on February 23, 2018, and 2,844 performance24, 2020, 750 shares of Restricted Stock granted in 20162017 that vested on December 31, 2018.
February 22, 2020 and 666 shares of Restricted Stock granted in 2018 that vested on February 28, 2020.
For Mr. McDonald, represents the fair market value of 1,0001,362 shares of restricted stock granted in 2014 that vested on February 26, 2018, 635 shares of restricted stock granted in 2015 that vested on March 23, 2018, 545 shares of restricted stockRestricted Stock granted in 2016 that vested on February 23, 2018, and 3,329 performance24, 2020, 646 shares of Restricted Stock granted in 20162017 that vested on December 31, 2018.
February 22, 2020 and 443 shares of Restricted Stock granted in 2018 that vested on February 28, 2020.
For Ms. Baruffi, represents the fair market value of 1,2501,076 shares of restricted stock granted in 2014 that vested on November 30, 2018, 491 shares of restricted stock granted in 2015 that vested on March 23, 2018, 431 shares of restricted stockRestricted Stock granted in 2016 that vested on February 23, 2018, and 2,627 performance24, 2020, 510 shares of Restricted Stock granted in 20162017 that vested on December 31, 2018.February 22, 2020 and 384 shares of Restricted Stock granted in 2018 that vested on February 28, 2020.
For Mr. Sigrist, represents the fair market value of 474 shares of Restricted Stock granted in 2018 that vested on February 28, 2020.
2021 Proxy Statement | 34 |
P
ost-EmploymentPost-Employment and Termination Benefits
The following is a discussion regarding the post-employment and termination arrangements currently in place for the Named Executives. The amounts are based on the maximum amounts that could be paid under these arrangements.
2018
2020 Nonqualified Deferred Compensation
The following table provides information regarding nonqualified deferred compensation paid to the Named Executives during fiscal year 2018.2020.
Name | Executive (1) | Registrant | Aggregate (2) | Aggregate | Aggregate (3) | |||||||||||||||
Hadley S. Robbins | $ | — | $ | — | $ | 58,453 | $ | — | $ | 1,044,572 | ||||||||||
Gregory A. Sigrist | — | — | — | — | — | |||||||||||||||
Clint E. Stein | 46,081 | 3,686 | 18,247 | — | 342,462 | |||||||||||||||
David C. Lawson | 22,605 | 1,808 | 7,377 | — | 140,275 | |||||||||||||||
Andrew L. McDonald | — | — | 7,654 | — | 136,778 | |||||||||||||||
Kumi Y. Baruffi | 10,400 | 832 | 4,245 | — | 81,741 |
Name | Executive Contributions in Last FY ($) (1) | Registrant Contributions in Last FY ($) | Aggregate Earnings in Last FY ($) (2) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last FYE ($) (3) | |||||||||||||||
Clint E. Stein | $ | 37,991 | $ | 3,039 | $ | 20,005 | $ | — | $ | 466,856 | ||||||||||
Aaron J. Deer | — | — | — | — | — | |||||||||||||||
Eric J. Eid | — | — | — | — | — | |||||||||||||||
Andrew L. McDonald | — | — | 6,745 | — | 152,005 | |||||||||||||||
Christopher M. Merrywell | — | — | — | — | — | |||||||||||||||
Kumi Y. Baruffi | 12,968 | 1,037 | 6,969 | — | 161,269 | |||||||||||||||
Former Named Executive | ||||||||||||||||||||
Gregory A. Sigrist | — | — | — | — | — |
35 | 2021 Proxy Statement |
(1) | Amounts were deferred in |
(2) | The interest rate is the three-month LIBOR rate plus 3.58%. The Plan Administrator annually reviews for appropriateness the calculation of the rate of interest (the “Interest Crediting Rate”) that is applied to a participant’s DCA in the Deferred Compensation Plan. The Interest Crediting Rate is adjusted quarterly for fluctuations in the three-month LIBOR rate. Plan participants are notified of any adjustments to the Interest Crediting Rate. |
On the last date of each month, the each participant’s DCA is credited with an amount equal to the product of (i) one-twelfth (1/12th) of the Interest Crediting Rate for the quarter in which such month occurs, times (ii) the average balance of the DCA in the DCA for that month. The credited amount is treated as part of the credit balance for all purposes of the Deferred Compensation Plan. As used herein, the average balance in a DCA for a month is equal to the quotient determined by dividing (i) the sum of the credit balance in the DCA at the close of business each day in the calendar month, by (ii) the number of days in such month.
(3) |
Deferred Compensation Plan. In February 2004, the Board adopted the 2005 Deferred Compensation Plan for certain directors, a select group of senior management and key employees, as designated by resolution of the Board. The Deferred Compensation Plan generally provides for the deferral of certain taxable income earned by participants in the Deferred Compensation Plan. Designated officers or key employees may elect to defer annually under the Deferred Compensation Plan up to 50% of his or her salary to be earned in the calendar year, and up to 100% of any cash bonuses or other incentive compensation. In October 2016, the Board and the Committee approved an Amended and Restated 2005 Deferred Compensation Plan, which froze that plan to new participants effective as of October 26, 2016, and a 2016 Deferred Compensation Plan. Except as noted below, the 2016 Deferred Compensation Plan is substantially the same as the 2005 Deferred Compensation Plan.
Distribution Election Notice. At the time a participant first makes an election to defer covered compensation, he or she must deliver to the Company a signed “distribution election notice” in which he or she elects to receive distributions of the credit balance in his or her DCA in the form of either a single lump-sum payment or monthly installment payments over a period not to exceed 120 months. A participant may change such election from time to time;time; but if a distribution election notice is delivered to the Company less than 12 calendar months before the month in which distributions begin, such notice will not be effective and the Company will instead treat the distribution election notice that was last delivered to the Company before such 12 calendar month period as the effective notice.
Distributions Upon Retirement or Disability. The Company will distribute the credit balance in a DCA maintained for a participant at the time he or she retires or becomes disabled as either a single lump sum or monthly installment payments, as elected by the participant. If the participant has elected a single lump-sum distribution, such distribution will be made within 90 days after the date that a participant retires or becomes disabled. If the participant has elected monthly installment payments, such distribution will be made on the first day of each month, beginning with the first day of the third month following the month in which a participant retires or becomes disabled and continuing until the full amount of the DCA maintained for the participant has been distributed. Until the DCA has been distributed in full, interest will continue to be credited to the DCA. The monthly installment payments will be in as nearly equal amounts as possible. Notwithstanding any contrary provisions of the Plan, if the participant dies after monthly installment payments of the credit balance in the DCA maintained for him or her have begun, then the remaining credit balance in the DCA will be distributed to his or her designated beneficiary in a single lump sum within 30 days after the Company receives notice that the participant has died.
Lump-Sum Distributions Upon Termination of Employment Other Than Because of Death, Disability, or Retirement or if DCA is Less Than $25,000. The 2005 Deferred Compensation Plan provides that, notwithstanding a participant’s election to receive a distribution of the credit balance in the DCA maintained for him or her in the form of monthly installment payments, such credit balance will be distributed to the participant in a single lump sum within 90 days after the date on which he or she terminates his or her services or employment with the Company, if (i) such termination of services or employment is for any reason other than because he or she retires or becomes disabled, or (ii) if the credit balance of the DCA maintained for him or her does not exceed $25,000. Unlike the 2005 Deferred Compensation Plan, the 2016 Deferred Compensation Plan permits participants to elect installment payments for any termination of employment, rather than only on a termination due to retirement or disability. If a participant’s services or employment with the Company is terminated because of his or her death, the credit balance in the participant’s DCA will be distributed to his or her designated beneficiary.
2018 Pension Benefits | ||||||||||||||
Name | Plan Name | Number of Years Credited Service | Present Value of Accumulated Benefit | Payments During Last Fiscal Year | ||||||||||
Hadley S. Robbins | SERP | 12 | 2,742,105 | $ | — | |||||||||
Gregory A. Sigrist | SERP | 1 | 77,081 | |||||||||||
Clint E. Stein | SERP | 13 | 1,173,217 | — | ||||||||||
David C. Lawson | SERP | 5 | 660,623 | — | ||||||||||
Andrew L. McDonald | SERP | 14 | 1,910,671 | — | ||||||||||
Kumi Y. Baruffi | SERP | 4 | 448,620 | — |
2021 Proxy Statement | 36 |
2020 Pension Benefits | ||||||||||||||
Name | Plan Name (1) | Number of Years Credited Service (#) | Present Value of Accumulated Benefit ($) (2) | Payments During Last Fiscal Year ($) | ||||||||||
Clint E. Stein | SERP | 15 | $ | 1,806,414 | $ | — | ||||||||
Andrew L. McDonald | SERP | 16 | 3,642,891 | — | ||||||||||
Kumi Y. Baruffi | SERP | 6 | 1,371,272 | — | ||||||||||
Former Named Executive | ||||||||||||||
Gregory A. Sigrist (3) | SERP | 3 | — | — |
(1) | Under the terms of the SERP, executives must, in addition to other conditions, be fully vested. Full vesting is based on a 20 year schedule. As of December 31, |
(2) | The estimated maximum annual retirement benefit payable under the SERP for the Named Executives upon achieving age |
(3) | Mr. Sigrist |
Legacy Supplemental Executive Retirement Plan
. Over the years, ColumbiaEach SERP includes a number of restrictions on payment, including a requirement, subject to certain exceptions, that the Named Executive (other than Mr. Robbins) attain age 65 (62 in the event of a change-in-control). Each Named Executive’s SERP, other than Mr. Robbins’ SERP includes a number of potential adjustments to the date on which retirement payments are initiated and to the amount of the Named Executive’s benefit. These potential adjustments include provisions for early retirement subject to the early commencement reduction factor of 5% for each year that the benefit is paid prior to reaching age 65, payable upon reaching age 55, with a minimum of 10 years of credited service, and a 2% annual inflation adjustment to benefit payments. As of December 31, 2018,2020, Mr. McDonald was eligible for early retirement benefits. Named Executives terminated pursuant to a change-in-control of Columbia will be vested in the benefit that the executive would have received had the Named Executive remained employed by Columbia until reaching the normal retirement age. In the event the Named Executive becomes disabled, the executive will be 100% vested, regardless of tenure. Other potential SERP adjustments include an elimination of benefits if the Named Executive violates non-competition requirements or if the Named Executive is terminated for cause or resigns voluntarily before reaching the normal retirement age and does not have ten years of service or before achieving 100% vesting. Under the terms of each SERP, the Named Executive and the Company will cooperate and use all reasonable efforts, in compliance with applicable law, to minimize the amount of any excise tax imposed by Section 4999 of the Internal Revenue Code.
The SERP is unsecured and unfunded and there are no plan assets. Columbia has purchased Bank-Owned Life Insurance (“BOLI”) policies on the lives of the Named Executives and other officers and intends to use income from these policies to offset SERP benefit expenses. In 2016,2020, consistent with prior years, Columbia purchased additional BOLI policies to supplement Columbia’s existing portfolio. The BOLI policies, through the split dollar life insurance agreements with the officers, provide a death benefit equal to three times the officer’s then current base salary and approximately ten times the projected benefit at normal retirement age of the officer’s SERP. The agreements take into account any other life insurance policies purchased by and owned by the Company that pay benefits to the participant’s beneficiary at death. This split dollar benefit is payable to the officer’s beneficiaries if the officer dies while employed with the Company, in which case the officer (and his or her beneficiaries) would not be entitled to any benefits under the SERP. If the officer retires or terminates employment for any reason other than death, then the officer and his or her beneficiaries forfeit any benefits under the split dollar agreement, and all proceeds from the BOLI policies are instead paid to the Company.
37 | 2021 Proxy Statement |
The income generated from the BOLI policies is projected to, on a cumulative basis, substantially offset the ongoing costs of the SERP program. This projection includes assumptions related to future BOLI policy performance, the Bank’s cost of funds and discount rates applicable to the SERP program. Any excess revenue generated from the BOLI will be used to offset other employee benefit costs. BOLI is not a permissible bank investment but BOLI may be purchased in order to offset employee benefit expenses pursuant to the authority granted by the “Interagency Statement on the Purchase and Risk Management of Life Insurance,” dated December 7, 2004 and described for State-Chartered Federal Reserve member banks in Supervisory Letter SR 04-19.
As described below, the Company had previously entered into Unit Plans with each of Messrs. McDonaldStein and SteinMcDonald in lieu of a SERP. In 2013, the Company entered into SERPs with Messrs. McDonaldStein and Stein,McDonald, and their respective Unit Plan were frozen to new contributions. Payments under each Unit Plan were postponed until benefits are drawn from the Named Executive’s SERP (and the SERP benefits will be reduced by the amount that is attributable to the respective Unit Plan).
Long-Term Incentive Awards Change-in-Control Treatment
. In the event of a change-in-control, all unvestedExecutive Employment AgreementAgreements
Arrangements with Mr. Robbins servesStein
The Company and Columbia Bank entered into an employment agreement, effective January 1, 2020, with Mr. Stein establishing his compensation as President and Chief Executive OfficerOfficer. The employment agreement, which has a term of Columbiathree years, provides that Mr. Stein’s compensation will consist of an annual base salary of $800,000, a target annual bonus opportunity of 80% of annual base salary and an annual target long-term incentive opportunity of 120% of annual base salary.
During the term of his employment with the Company and Columbia Bank, pursuantMr. Stein will be entitled to an employment agreement entered into effective July 1, 2017. The term ofparticipate in the benefits provided by the Company to its executives on a basis no less favorable than the benefits provided to other executives. Pursuant to the employment agreement, Mr. Stein’s base salary for purposes of determining benefits under his SERP will be frozen at $450,000. Mr. Stein otherwise will continue to participate in his SERP, and remain eligible for benefits under his Unit Plans, in accordance with their terms.
If Mr. Robbins extends for three-years following its effective date.
Notwithstanding the foregoing, if Mr. Stein experiences a qualifying termination within six months prior to, or within 24 months following, a change in control of the vesting period in which Mr. Robbins remained employed with the Company), subject to achievement of any performance criteria. The employment agreement also provides for certain benefits and payments if Mr. Robbins terminates his employment within two years following a change-in-controlCompany (as defined in the employment agreement) or if, Mr. Robbins’ employment was terminated by the Company without cause or by Mr. Robbins with good reason at any time from and after six months priorStein will be entitled to the public announcement of a transaction that will result in a change-in-control. In such event, the agreement provides that Mr. Robbins would receive an amount(1) cash severance equal to 2.5 times the sum of hisMr. Stein’s annual base salary and target annual bonus, (2) a prorated target bonus for the year of termination and (3) subject to Mr. Stein’s execution of a release of claims, continued health and welfare benefits for 30 months and hismonths. On any such qualifying termination, Mr. Stein’s long-term incentive awards wouldwill be treated in accordance with their terms. In the event Mr. Robbins is terminated without cause, or he voluntarily terminates for good reason, andsuch qualifying termination occurs within six months the Company publicly announcedprior to a change-in-control, upon closing of the change-in-control, the agreement provides that heMr. Stein would be entitled to receive the change-in-control payments, set forth above, less any payments that he received as a termination payment.
If Mr. Stein’s employment is terminated due to Mr. Stein’s death or disability, Mr. Stein’s legal representatives will be entitled to receive any earned but unpaid bonus for a prior fiscal year and Mr. Stein’s long-term incentive awards will be treated in accordance with their terms.
Mr. Stein is subject to customary restrictive covenants, including non-competition and non-solicitation covenants during his employment and for two years following termination of employment for any reason.
2021 Proxy Statement | 38 |
The table below shows the maximum amounts that could be paidpayable to Mr. RobbinsStein under his agreements in each termination scenario set forth below, and (i) is based on his salary at December 31, 2018;2020; and (ii) assumes the triggering event was December 31, 2018.
2018 Termination/Change-in-Control Payments – Hadley S. Robbins | |||||||||||||||||||||||||
Death | Disability | Voluntary Termination For Good Reason (Not Due to CIC) | Termination w/o Cause (Not Due to CIC) | Termination Due to CIC(1) | Retirement | ||||||||||||||||||||
Employment Agreement(2) | $ | — | $ | — | $ | 1,460,000 | $ | 1,460,000 | $ | 1,460,000 | $ | — | |||||||||||||
Annual Incentive(3) | — | — | $ | 503,317 | $ | 503,317 | $ | 438,000 | — | ||||||||||||||||
CIC Termination Payment(4) | — | — | — | — | $ | 1,460,000 | — | ||||||||||||||||||
Benefits Payable Under SERPs or Split Dollar Life Insurance(5) | $ | 3,410,096 | $ | 4,803,858 | $ | 181,773 | * | $ | 181,773 | * | $ | 230,542 | * | — | |||||||||||
Bank Owned Life Insurance(6) | $ | 2,190,000 | — | — | — | — | — | ||||||||||||||||||
Healthcare and Other Benefits(7) | — | — | $ | 20,352 | $ | 20,352 | $ | 25,440 | — | ||||||||||||||||
FMV of Accelerated Equity Vesting(8) | $ | 1,859,572 | $ | 1,859,572 | $ | 806,703 | $ | 806,703 | $ | 1,859,572 | $ | 288,105 | |||||||||||||
Total | $ | 7,459,668 | $ | 6,663,430 | $ | 2,972,145 | $ | 2,972,145 | $ | 5,473,554 | $ | 288,105 |
2020 Termination/Change-in-Control Payments – Clint E. Stein | ||||||||||||||||||||||||
Death | Disability | Voluntary Termination For Good Reason (Not Due to CIC) | Termination w/o Cause (Not Due to CIC) | Termination Due to CIC(1) | Retirement | |||||||||||||||||||
Employment Agreement(2) | $ | — | $ | — | $ | 1,600,000 | $ | 1,600,000 | $ | — | $ | — | ||||||||||||
Annual Incentive(3) | — | — | 826,063 | 826,063 | 640,000 | — | ||||||||||||||||||
CIC Termination Payment(4) | — | — | — | — | 4,320,000 | — | ||||||||||||||||||
Benefits Payable Under SERPs, Unit Plans or Split Dollar Life Insurance(5) | 4,235,830 | * | 3,090,835 | * | — | 2,362,518 | * | 3,150,025 | * | — | ||||||||||||||
Bank Owned Life Insurance(6) | 2,400,000 | — | — | — | — | — | ||||||||||||||||||
Healthcare and Other Benefits(7) | — | — | 45,802 | 45,802 | 57,253 | — | ||||||||||||||||||
FMV of Accelerated Equity Vesting(8) | 2,064,358 | 2,064,358 | 951,817 | 951,817 | 2,064,358 | — | ||||||||||||||||||
Total | $ | 8,700,188 | $ | 5,155,193 | $ | 3,423,682 | $ | 5,786,200 | $ | 10,231,636 | $ | — |
* | Reflects the lump sum value of the benefit to be paid out in a lump sum following the triggering event under the terms of the applicable plan. |
(1) | In the event Mr. |
(2) | Represents two times Mr. |
(3) | For voluntary termination for good reason and termination without cause, represents the prorated portion of any incentive payment earned during the year of termination payable in a lump |
(4) | For termination due to change-in-control, represents |
(5) | Reflects the |
Benefits on Death
. Death benefits are not payable pursuant to theBenefits on Disability
. In the event that Mr.Benefits on Termination without Cause or Due to CIC.
(6) | Represents the amount equal to three times base salary as of the date of death that would be due to Mr. |
39 | 2021 Proxy Statement |
(7) | Represents the value of continued employer-paid health and welfare benefits for two years following termination (or in the event of a termination due to change-in-control, for 30 months following termination). |
(8) | In the case of death, disability or termination in connection with a change-in control, represents the fair market value of unvested equity awards with performance shown at stretch performance. In the case of a voluntary termination for good reason or a termination without cause not in connection with a change-in-control, represents the fair market value of a prorated portion of the unvested equity awards with performance shown at stretch performance. In the case of retirement, represents a prorated portion of Performance Shares and Performance Stock Units at stretch performance. Fair market value was determined based on the closing price of Columbia’s common stock on NASDAQ on December 31, |
Arrangements with Mr. Sigrist
On March 12, 2020, the Company entered into an employment separation agreement with Mr. Sigrist in connection with his termination of service on February 28, 2020. Under the terms of the employment separation agreement, in exchange for executing a release of claims against the Company and Columbia State Bank, Mr. Sigrist received a cash payment of $250,000, less routine payroll deductions and withholdings, to be paid bi-weekly in accordance with Columbia’s regular payroll practices. Additionally, in connection with his termination of employment, Mr. Sigrist received a $12,000 discretionary bonus to assist with COBRA health insurance continuation or to be used by him as he deemed needed.
Change-in-Control Agreements
.Columbia Bank has entered into change-in-control agreements with Messrs. Sigrist, Stein, Lawson andDeer, Eid, Merrywell, McDonald, and Sigrist and Ms. Baruffi.
The agreements contain provisions, similar to those contained in the employment agreement for Mr. RobbinsStein discussed above, that require payments in the event of termination of employment without cause or by the executive for good reason within 365 days (or, for Mr. McDonald, 730 days) following a change-in-control (as defined in the agreements) or termination of employment without cause prior to the change-in-control at any time from and after sixty days prior to the public announcement of a transaction that will result in a change-in-control, provided that the change-in-control occurs within 18 months of the executive’s termination date. Under the agreements, the executives are entitled to (i) receive their base salary for terms of two years;years; (ii) accelerated vesting of options; andoptions; (iii) removal of restrictions on any restricted stock or other restricted securities, subject to Federal securities laws.laws; and (iv) payment or reimbursement of certain COBRA premiums for a period of 18 months or until the NEO obtains employment that offers health benefits (and, if the termination occurs prior to the change in control, for the number of months the employee elected to continue healthcare coverage prior to the change in control). These agreements also contain a covenant that the executive will not compete with or solicit employee, customer or business partner of Columbia or any of its subsidiaries for up to two years after the commencement of severance benefit payments, unless payments of such severance benefits are waived by the executive.executive, and a covenant that the executive will not solicit employees, customers or business partners of Columbia or any of its subsidiaries for up to two years after the commencement of severance benefit payments. The terms of the agreements are five years unless otherwise extended in writing. In 2018, the Company extended the change-in-control agreement with Mr. Lawson for an additional five years.
Unit Plans
.Columbia Bank previously entered into Unit Plans with each of Mr. Stein (in 2008), Mr. Eid (two plans, one each in 2011 and 2014), Mr. Merrywell (two plans, one each in 2015 and 2018) and Mr. McDonald (three plans, one each in 2004, 2006 and 2007) and Mr. Stein (in 2008). The plans were provided primarily to supplement retirement benefits in lieu of a SERP. Each separate Unit Plan provides that the executive will begin receiving a monthly payment beginning the first month following the tenth anniversary of each plan, based on an annual aggregate payment of $25,000 per year for ten years. In the event the executive’s employment is terminated by the CompanyBank without cause, or hein the event Mr. Stein, Mr. Eid (under his 2011 Unit Plan) or Mr. McDonald is terminated due to disability, the executive will be entitled to receive a payment based on the prorated portion of his term of employment, payable in monthly payments following the tenth anniversary of each plan. In the event Mr. Eid (under his 2014 Unit Plan) or Mr. Merrywell is terminated due to disability, the executive will be entitled to receive a payment equal to the net present value of the full benefit under the Unit Plan, payable in a lump sum following such disability. In the event Mr. Eid (under his 2014 Unit Plan) or Mr. Merrywell is terminated by the Bank without cause or by the executive for good reason, in each case following a change in control of the Bank, the executive will be entitled to receive either (i) a payment equal to one half the full benefit under the Unit Plan, if such termination occurs on or before the fifth anniversary of each plan or (ii) a payment equal to the full benefit under the Unit Plan, if such termination occurs after the fifth anniversary of each plan but on or before the tenth anniversary of each plan, in each case payable in monthly payments following the tenth anniversary of each plan. If the executive leaves the employment of Columbia Bank prior to expiration during the respective ten-year period, the entire amount is forfeited. Once receivingIn the benefit,event of the
2021 Proxy Statement | 40 |
executive’s death before the tenth anniversary of the plan, the executive’s beneficiaries will receive a payment based on the prorated portion of his term of employment, payable in monthly installments following such death. For Mr. Stein, Mr. Eid (under his 2011 Unit Plan) and Mr. McDonald, there is a non-competition clause restrictingthat provides that the executive’s right to receive benefits terminates if the executive from workingworks for a competitor.
As noted above, in 2013, the CompanyBank entered into a SERP with Messrs. McDonaldStein and Stein.McDonald. Benefits under the Unit Plans were frozen to new contributions. In the event any benefit payments due Messrs. McDonald or Stein pursuant to their respective SERP plans are to be made simultaneously with payment amounts due them pursuant to their respective Unit Plans, then any SERP benefit payments will be reduced by amounts to be paid out from their Unit Plans. The reduced SERP benefit payment will be determined by deducting the amount of the Unit Plan payments from the scheduled SERP benefit payments. Once the Unit Plan benefit payment periods expire, retirement benefit payments under the SERP plan will no longer be reduced.
The tables below show the maximum amounts that could be paid to Messrs. Sigrist, Stein, Lawson,Deer, Eid, Merrywell and McDonald and Ms. Baruffi under their respective agreements, which are based on (i) the executive’s salary at December 31, 2018;2020; and (ii) assumes the triggering event was December 31, 2018.2020.
2020 Termination/Change-in-Control Payments – Aaron J. Deer | ||||||||||||||||||||
Death | Disability | Termination w/o Cause (Not Due to CIC) | Termination Due to CIC | Retirement | ||||||||||||||||
Change in Control Agreement(1) | $ | — | $ | — | $ | — | $ | 770,000 | $ | — | ||||||||||
Benefits Payable Under SERPs, Unit Plans or Split Dollar Life Insurance | — | — | — | — | — | |||||||||||||||
Bank Owned Life Insurance(3) | 1,155,000 | — | — | — | — | |||||||||||||||
FMV of Accelerated Equity Vesting(4) | 378,279 | 378,279 | — | 378,279 | — | |||||||||||||||
Total | $ | 1,533,279 | $ | 378,279 | $ | — | $ | 1,148,279 | $ | — |
2020 Termination/Change-in-Control Payments – Eric J. Eid | ||||||||||||||||||||
Death | Disability | Termination w/o Cause (Not Due to CIC) | Termination Due to CIC | Retirement | ||||||||||||||||
Change in Control Agreement(1) | $ | — | $ | — | $ | — | $ | 650,000 | $ | — | ||||||||||
Benefits Payable Under SERPs, Unit Plans or Split Dollar Life Insurance | 416,640 | * | 469,294 | * | 416,640 | * | 495,830 | * | — | |||||||||||
Bank Owned Life Insurance(3) | 975,000 | — | — | — | — | |||||||||||||||
FMV of Accelerated Equity Vesting(4) | 582,622 | 582,622 | — | 582,622 | 124,753 | |||||||||||||||
Total | $ | 1,974,262 | $ | 1,051,916 | $ | 416,640 | $ | 1,728,452 | $ | 124,753 |
* | This reflects Mr. Eid’s two Unit Plans. See “Unit Plans” above for more details regarding these benefits. |
2020 Termination/Change-in-Control Payments – Christopher M. Merrywell | ||||||||||||||||||||
Death | Disability | Termination w/o Cause (Not Due to CIC) | Termination Due to CIC | Retirement | ||||||||||||||||
Change in Control Agreement(1) | $ | — | $ | — | $ | — | $ | 850,000 | $ | — | ||||||||||
Benefits Payable Under SERPs, Unit Plans or Split Dollar Life Insurance | 216,660 | * | 446,928 | * | 216,660 | * | 375,000 | * | — | |||||||||||
Bank Owned Life Insurance(3) | 1,275,000 | — | — | — | — | |||||||||||||||
FMV of Accelerated Equity Vesting(4) | 761,009 | 761,009 | — | 761,009 | — | |||||||||||||||
Total | $ | 2,252,669 | $ | 1,207,937 | $ | 216,660 | $ | 1,986,009 | $ | — |
* | This reflects Mr. Merrywell’s two Unit Plans. See “Unit Plans” above for more details regarding these benefits. |
41 | 2021 Proxy Statement |
2018 Termination/Change-in-Control Payments – Gregory A. Sigrist | ||||||||||||||||||||
Death | Disability | Termination w/o Cause (Not Due to CIC) | Termination Due to CIC | Retirement | ||||||||||||||||
Change in Control Agreement(1) | $ | — | $ | — | $ | — | $ | 750,000 | $ | — | ||||||||||
Benefits Payable Under SERPs, Unit Plans or Split Dollar Life Insurance(2) | $ | 2,361,540 | $ | 1,953,186 | — | $ | 1,329,637 | — | ||||||||||||
Bank Owned Life Insurance(3) | $ | 1,125,000 | — | — | — | — | ||||||||||||||
FMV of Accelerated Equity Vesting(4) | $ | 214,474 | $ | 214,474 | — | $ | 214,474 | — | ||||||||||||
Total | $ | 3,701,014 | $ | 2,167,660 | — | $ | 2,294,111 | — | ||||||||||||
2018 Termination/Change-in-Control Payments - Clint E. Stein | ||||||||||||||||||||
Death | Disability | Termination w/o Cause (Not Due to CIC) | Termination Due to CIC | Retirement | ||||||||||||||||
Change in Control Agreement(1) | $ | — | $ | — | $ | — | $ | 854,000 | $ | — | ||||||||||
Benefits Payable Under SERPs, Unit Plans or Split Dollar Life Insurance(2) | $ | 4,132,638 | * | $ | 2,873,725 | $ | 1,110,302 | $ | 1,708,157 | — | ||||||||||
Bank Owned Life Insurance(3) | $ | 1,281,000 | — | — | — | — | ||||||||||||||
FMV of Accelerated Equity Vesting(4) | $ | 1,031,906 | $ | 1,031,906 | — | $ | 1,031,906 | — | ||||||||||||
Total | $ | 6,445,544 | $ | 3,905,631 | $ | 1,110,302 | $ | 3,594,063 | — | |||||||||||
2018 Termination/Change-in-Control Payments - David C. Lawson | ||||||||||||||||||||
Death | Disability | Termination w/o Cause (Not Due to CIC) | Termination Due to CIC | Retirement | ||||||||||||||||
Change in Control Agreement(1) | $ | — | $ | — | $ | — | $ | 580,000 | $ | — | ||||||||||
Benefits Payable Under SERPs or Split Dollar Life Insurance(2) | $ | 947,460 | $ | 1,259,351 | $ | 33,759 | * | $ | 63,167 | * | — | |||||||||
Bank Owned Life Insurance(3) | $ | 870,000 | — | — | — | — | ||||||||||||||
FMV of Accelerated Equity Vesting(4) | $ | 439,581 | $ | 439,581 | — | $ | 439,581 | — | ||||||||||||
Total | $ | 2,257,041 | $ | 1,698,932 | $ | 33,759 | $ | 1,082,748 | — | |||||||||||
2018 Termination/Change-in-Control Payments - Andrew L. McDonald | ||||||||||||||||||||
Death | Disability | Termination w/o Cause (Not Due to CIC) | Termination Due to CIC | Retirement | ||||||||||||||||
Change in Control Agreement(1) | $ | — | $ | — | $ | — | $ | 672,000 | $ | — | ||||||||||
Benefits Payable Under SERPs, Unit Plans or Split Dollar Life Insurance(2) | $ | 3,141,840 | * | $ | 2,888,360 | $ | 98,354 | ** | $ | 138,195 | ** | $ | 98,354 | ** | ||||||
Bank Owned Life Insurance(3) | $ | 1,008,000 | — | — | — | — | ||||||||||||||
FMV of Accelerated Equity Vesting(4) | $ | 513,576 | $ | 513,576 | — | $ | 513,576 | $ | 77,210 | |||||||||||
Total | $ | 4,663,416 | $ | 3,401,936 | $ | 98,354 | $ | 1,323,771 | $ | 175,564 |
2018 Termination/Change-in-Control Payments – Kumi Y. Baruffi | ||||||||||||||||||||
Death | Disability | Termination w/o Cause (Not Due to CIC) | Termination Due to CIC | Retirement | ||||||||||||||||
Change in Control Agreement(1) | $ | — | $ | — | $ | — | $ | 580,000 | $ | — | ||||||||||
Benefits Payable Under SERPs or Split Dollar Life Insurance(2) | $ | 2,529,593 | $ | 1,847,427 | $ | 257,447 | $ | 1,153,915 | — | |||||||||||
Bank Owned Life Insurance(3) | $ | 870,000 | — | — | — | — | ||||||||||||||
FMV of Accelerated Equity Vesting(4) | $ | 419,440 | $ | 419,440 | — | $ | 419,440 | — | ||||||||||||
Total | $ | 3,819,033 | $ | 2,266,867 | $ | 257,447 | $ | 2,153,355 | — | |||||||||||
2020 Termination/Change-in-Control Payments – Andrew McDonald | ||||||||||||||||||||
Death | Disability | Termination w/o Cause (Not Due to CIC) | Termination Due to CIC | Retirement | ||||||||||||||||
Change in Control Agreement(1) | $ | — | $ | — | $ | — | $ | 800,000 | $ | — | ||||||||||
Benefits Payable Under SERPs, Unit Plans or Split Dollar Life Insurance(2) | 2,391,960 | ** | 4,615,776 | ** | 116,257 | * | 145,820 | * | 202,307 | * | ||||||||||
Bank Owned Life Insurance(3) | 1,200,000 | — | — | — | — | |||||||||||||||
FMV of Accelerated Equity Vesting(4) | 992,097 | 992,097 | — | 992,097 | 283,790 | |||||||||||||||
Total | $ | 4,584,057 | $ | 5,607,873 | $ | 116,257 | $ | 1,937,917 | $ | 486,097 |
* | Reflects the annual lifetime annuity payable following the triggering event under the terms of the applicable plan. Mr. McDonald's benefit reflects 100% joint and survivor annuity. |
** | This Actuarial Equivalent amount shall be paid in a lump sum following the terms of the agreement. |
2020 Termination/Change-in-Control Payments – Kumi Y. Baruffi | ||||||||||||||||||||
Death | Disability | Termination w/o Cause (Not Due to CIC) | Termination Due to CIC | Retirement | ||||||||||||||||
Change in Control Agreement(1) | $ | — | $ | — | $ | — | $ | 650,000 | $ | — | ||||||||||
Benefits Payable Under SERPs, Unit Plans or Split Dollar Life Insurance(2) | 2,793,000 | * | 3,565,182 | * | 716,000 | * | 2,211,315 | * | — | |||||||||||
Bank Owned Life Insurance(3) | 975,000 | — | — | — | — | |||||||||||||||
FMV of Accelerated Equity Vesting(4) | 652,770 | 652,770 | — | 652,770 | — | |||||||||||||||
Total | $ | 4,420,770 | $ | 4,217,952 | $ | 716,000 | $ | 3,514,085 | $ | — |
* | Reflects the lump sum value of the benefit to be paid out in a lump sum following the triggering event under the terms of the applicable plan. |
(1) |
(2) | Reflects the benefits to which each Named Executive would be entitled under their SERPs (or split dollar life insurance benefits calculated based on SERP benefits) and, in the case of |
Benefits on Death
. Death benefits are not payable pursuant to theBenefits on Disability
. In the event of disability,Benefits on Termination without Cause or Due to CIC.
Retirement Benefits
. Mr. McDonald was eligible to retire as of December 31,(3) | Represents the amount equal to three times base salary as of the date of death that would be due to each Named Executive’s beneficiaries under a bank owned life insurance policy payable by the insurer. |
2021 Proxy Statement | 42 |
(4) | Represents the fair market value of unvested equity awards (or, for |
Employee Stock Purchase Plan
. We also maintain an Employee Stock Purchase Plan (the “ESPP”) that was adopted in 1995, and amended in 2000, 2006, 2009 and 2010. The ESPP was further amended in 2018 to make certain administrative updates. The ESPP allows eligible employees to purchase shares of Columbia common stock at 90% of the lower of the market price at either the beginning or the end of each six-month offering period by means of payroll deductions. At December 31,Set forth below is the total annual compensation for 20182020 of Mr. Robbins,Stein, the median of the total annual compensation of our employees (other than Mr. Robbins)Stein) and the ratio of those two values:
CEO Total Annual Compensation as reported in the Summary Compensation Table (A) | Median Total Annual Compensation of Our Employees (B) | Ratio of (A) to (B) | ||||
$ | 2,401,986 | $ | 52,276 | 46 to 1 |
CEO Total Annual Compensation as reported in the Summary Compensation Table (A) | Median Total Annual Compensation of Our Employees (B) | Ratio of (A) to (B) |
$ 3,574,309 | $ 61,268 | 58 to 1 |
To identify our median employee, we used our entire employee population as of December 31, 2018.2020. We measured compensation based on total gross pay for 20182020 as reported to the Internal Revenue Service on Form W-2 for 20182020 and annualized the compensation of all permanent employees hired or rehired during 2018.2020. In accordance with SEC rules, after identifying our median employee, we calculated 20182020 total annual compensation for both our median employee and Mr. RobbinsStein using the same methodology that we use to determine our Named Executives’ total annual compensation for the Summary Compensation Table. This calculation produced the ratio shown in the table above.
43 | 2021 Proxy Statement |
ADVISORY (NON-BINDING) VOTE
ON EXECUTIVE COMPENSATION
At the 2017 Annual Meeting, shareholders voted on an advisory (non-binding) resolution on the frequency of a shareholder vote on named executive officer compensation. As recommended by the Board, the shareholders approved that an advisory (non-binding) vote to approve named executive officer compensation should occur on an annual basis, and that frequency was subsequently approved by the Board. Accordingly, we have included and will include a non-binding advisory vote on named executive compensation in our proxy materials on an annual basis until the next vote on the frequency of such advisory votes, which will occur no later than our 2023 annual meeting. In accordance with the vote of the shareholders and the Board, we are providing you the opportunity, as a shareholder, to endorse or not endorse our executive pay program through the following non-binding resolution:
“RESOLVED, that the shareholders approve the compensation of named executive officers as described in the Compensation Discussion & Analysis and the tabular disclosures regarding Named Executive compensation (together with the accompanying narrative disclosures) in this proxy statement.”
We believe that our compensation policies and procedures are strongly aligned with the long-term interests of our shareholders. Columbia’s compensation program is guided by the philosophy that total executive compensation should vary based on achievement of both individual and corporate goals and objectives, and should be focused on long-term strategies to build shareholder value. We invite you to consider the details of our executive compensation provided under “Executive Compensation—Compensation Discussion & Analysis” in this proxy statement. That section provides you with information about the structure of our executive compensation and the objectives that our compensation program is intended to achieve.
The compensation of our executives for 2018 is closely aligned with 2018 shareholder returns and Company financial performance. Columbia had strong financial results including significant increases in net income and shareholder return. The compensation of our executives increased along with our strong performance and Columbia’s growth.
Because your vote is advisory, it will not be binding upon the Board. However, the Personnel and Compensation Committee values the opinions that our shareholders express in their votes, and will take into account the outcome of the vote when considering future executive compensation arrangements.
VoteVote Required and Board Recommendation
The proposal on the advisory (non-binding) vote to approve executive compensation requires the affirmative vote FOR of a majority of the shares present and voting on this matter.
The Board unanimously recommends a vote “FOR” approval of the compensation of executive officers as described in the Compensation Discussion and Analysis and the tabular disclosures regarding named executive compensation (together with the accompanying narrative disclosures) in this proxy statement.
2021 Proxy Statement | 44 |
The following table sets forth information with respect to theour executive officers during 2018 who are not directors or nominees for director of Columbia, including employment history for the last five years. All executive officers are elected annually and serve at the discretion of the Board.
Name | Age | Position | Has Served as an Executive Officer of the Company since | |||
Kumi Y. Baruffi (1) | 50 | Executive Vice President/General Counsel | 2014 | |||
Aaron J. Deer (2) | 52 | Executive Vice President/Chief Financial Officer | 2020 | |||
Lisa K. Dow (3) | 61 | Executive Vice President/Chief Risk Officer | 2018 | |||
Eric J. Eid (4) | 65 | Executive Vice President/ Chief Digital & Technology Officer | 2020 | |||
David C. Lawson (5) | 62 | Executive Vice President/Chief Human Resources Officer | 2013 | |||
Andrew L. McDonald (6) | 62 | Executive Vice President/Chief Credit Officer | 2004 | |||
Christopher Merrywell (7) | 55 | Executive Vice President/Chief Operating Officer | 2020 | |||
David Moore Devine (8) | 43 | Executive Vice President/Chief Marketing & Experience Officer | 2020 |
Name | Age | Position | Has Served as an Executive Officer of the Company since | |||
Kumi Y. Baruffi (1) | 48 | Executive Vice President/General Counsel | 2014 | |||
Lisa K. Dow (2) | 59 | Executive Vice President/Chief Risk Officer | 2018 | |||
David C. Lawson (3) | 60 | Executive Vice President/Chief Human Resources Officer | 2013 | |||
Andrew L. McDonald (4) | 60 | Executive Vice President/Chief Credit Officer | 2004 | |||
Gregory A. Sigrist (5) | 51 | Executive Vice President/Chief Financial Officer | 2018 | |||
Clint E. Stein (6) | 47 | Executive Vice President/Chief Operating Officer, Chief Financial Officer | 2012 |
(1) | Ms. Baruffi joined Columbia Bank as |
(2) | Mr. Deer joined Columbia Bank as Executive Vice President and Chief Financial Officer in April 2020 from Piper Sandler, where he was a Managing Director and Senior Research Analyst. Previously, he was a Managing Director in the equity research department of Sandler O’Neill + Partners, where he covered West Coast financial institutions since 2007. |
(3) | Ms. Dow joined Columbia Bank as Senior Vice President and Credit Administrator in April 2013, when Columbia acquired West Coast Bancorp, where |
Mr. Eid joined Columbia Bank as Senior Vice President and Chief Information Officer in March 2010. He was promoted to Executive Vice President and Chief Innovation and Technology Officer in January 2020 and served as Interim Chief Financial Officer in March-April 2020. Prior to joining Columbia, he was with Russell Investments, in Tacoma, Washington. |
(5) | Mr. Lawson joined Columbia Bank as an Executive Vice President and Director of Human Resources in July 2013. He became the Chief Human Resources Officer in October 2014. Mr. Lawson has over 30 years of human resources |
Mr. McDonald joined Columbia Bank as an Executive Vice President and Chief Credit Officer in June 2004. Prior to joining Columbia Bank, Mr. McDonald was a Senior Vice President and Team Leader at US Bank. His experience in banking spans over 30 years and includes senior |
(7) | Mr. |
(8) | Mr. Moore Devine joined Columbia Bank in 2007 in the Marketing Department. He was promoted to Director of Marketing in March 2011 and was named to the Executive Management Team in January 2020 with his promotion to Executive Vice President and Chief Marketing and Experience Officer. |
45 | 2021 Proxy Statement |
Beneficial Ownership of Directors and Executive Officers
The following table shows, as of March 17, 2021, the amount of Columbia common stock directly owned (unless otherwise indicated) by (a) each director and director nominee; (b) the executive officers named in the Summary Compensation Table above; and (c) all of our directors and executive officers (including those not named in the Summary Compensation Table) as a group. Except as otherwise noted, we believe that the beneficial owners of the shares listed below, based on information furnished by such owners, have or share with a spouse voting and/or investment power with respect to the shares. Beneficial ownership is determined under the rules of the SEC.
Name | Position | Number | Percentage | |||||||
Craig D. Eerkes | Chair of the Board | 16,864 | (1) | * | ||||||
Clint E. Stein | Director, President and Chief Executive Officer | 40,245 | (2) | * | ||||||
Laura Alvarez Schrag | Director | 829 | (3) | * | ||||||
Kumi Y. Baruffi | Executive Vice President, General Counsel | 24,844 | (4) | * | ||||||
Aaron J. Deer | Executive Vice President, Chief Financial Officer | 6,371 | * | |||||||
Eric J. Eid | Executive Vice President, former Interim Chief Financial Officer, Chief Digital and Technology Officer | 22,900 | (5) | * | ||||||
Ford Elsaesser | Director | 43,656 | (6) | * | ||||||
Mark A. Finkelstein | Director | 12,233 | (6) | * | ||||||
Eric S. Forrest | Director | 12,005 | (7) | * | ||||||
Thomas M. Hulbert | Director | 57,248 | (6) | * | ||||||
Michelle M. Lantow | Director | 19,733 | (6) | * | ||||||
Randal L. Lund | Director | 8,066 | (6) | * | ||||||
Tracy Mack-Askew | Director | 829 | (3) | * | ||||||
Andrew L. McDonald | Executive Vice President, Chief Credit Officer | 46,062 | (8) | * | ||||||
Christopher M. Merrywell | Executive Vice President, Chief Operating Officer | 9,502 | (9) | * | ||||||
S. Mae Fujita Numata | Director | 19,058 | (10) | * | ||||||
Elizabeth W. Seaton | Director | 14,233 | (6) | * | ||||||
Janine T. Terrano | Director | 7,067 | (6) | * | ||||||
All directors and executive officers as a group (21 persons) | 410,505 | 0.57% | ||||||||
* | Represents less than 1% of outstanding common stock. | |||||||||
(1) | Includes 2,640 unvested time-based restricted shares for which Mr. Eerkes has voting but not investment power and 4,631 shares held |
(2) | Includes 4,124 vested performance shares, which were calculated and |
(3) | Comprised of 829 unvested time-based restricted shares for which the director has voting but not investment power. |
(4) | Includes 2,360 vested performance shares which were calculated and approved by the Personnel and Compensation Committee of the Columbia Board in February 2021, 3,534 unvested time-based restricted shares, and 3,870 unvested performance-based restricted shares, the maximum amount of performance-based shares that Ms. Baruffi is eligible to receive, which are subject to final calculation and approval by the Personnel and Compensation Committee. Ms. Baruffi has voting but not investment power for her unvested restricted shares. |
(5) | Includes 3,434 unvested time-based restricted shares and 2,910 unvested performance-based restricted shares, the maximum amount of performance-based shares that Mr. |
(6) |
2021 Proxy Statement | 46 |
IN
(7) | Includes 2,640 unvested time-based restricted shares for Mr. Forrest has voting but not investment power and 933 shares held in a joint account with his wife. |
(8) | Includes 2,746 vested performance shares, which were calculated and approved by the Personnel and Compensation Committee of the Columbia Board in February 2021, 10,089 unvested time-based restricted shares, and 4,485 unvested performance-based restricted shares, the maximum amount of performance-based shares that Mr. McDonald is eligible to receive, which are subject to final calculation and approval by the Personnel and Compensation Committee. Mr. McDonald has voting but not investment power for his unvested restricted shares. |
(9) | Includes 3,638 unvested time-based restricted shares and 2,940 unvested performance-based restricted shares, the maximum amount of performance-based shares that Mr. Merrywell is eligible to receive, which are subject to final calculation and approval by the Personnel and Compensation Committee. Mr. Merrywell has voting but not investment power for his unvested restricted shares. |
(10) | Includes 2,640 unvested time-based restricted shares for which Ms. Numata has voting but not investment power, and 825 shares held jointly with spouse. |
DEPENDENTBeneficial Owners of More Than Five Percent
As of March 17, 2021 (except as otherwise noted), the shareholders identified in the table below beneficially owned more than 5% of the outstanding Columbia shares. To the Company’s knowledge, based on the public filings which beneficial owners of more than 5% of the outstanding shares of Columbia common shares are required to make with the SEC, there are no other beneficial owners of more than 5% of the outstanding Columbia common shares as of March 17, 2021. The percentage ownership data is based on 71,780,121 Columbia common shares outstanding as of March 17, 2021.
Name and Address | Number of Shares (1) | Percentage | ||||
Blackrock, Inc. (2) | 10,548,030 | 14.69 | % | |||
55 East 52nd Street | ||||||
New York, NY 10055 | ||||||
The Vanguard Group, Inc. (3) | 7,529,642 | 10.49 | % | |||
100 Vanguard Blvd. | ||||||
Malvern, PA 19355 | ||||||
T Rowe Price (4) | 4,760,477 | 6.63 | % | |||
100 East Pratt St. | ||||||
Baltimore, MD 21202 |
(1) | Pursuant to rules promulgated by the SEC, a person or entity is considered to beneficially own shares of common stock if the person or entity has or shares (i) voting power, meaning the power to vote or direct the voting of the shares, or (ii) investment power, meaning the power to dispose of or direct the disposition of the shares. |
(2) | An amended Schedule 13G filed with the SEC on January 26, 2021 indicates that BlackRock, Inc. had sole voting power over 10,427,975 shares and sole dispositive power over 10,548,030 shares. Various persons had the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of the Columbia common shares. No one person’s interest in the Columbia common shares was more than five percent of the total outstanding Columbia common shares. |
(3) | An amended Schedule 13G filed with the SEC on February 10, 2021 indicates that The Vanguard Group, Inc. had sole voting power over 0 shares, shared voting power over 70,547 shares, sole dispositive power over 7,401,891 shares and shared dispositive power over 127,751 shares. |
(4) | A Schedule 13G filed with the SEC on February 16, 2021 indicates that T. Rowe Price Associates, Inc. had sole voting power over 1,445,494 shares and sole dispositive power over 4,760,477 shares. |
47 | 2021 Proxy Statement |
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Fees PaidPaid to Independent Registered Public Accounting Firm
The following table sets forth the aggregate fees charged to Columbia by Deloitte for audit services rendered in connection with the audited consolidated financial statements and reports for the 20182020 and 20172019 fiscal years and for other services rendered during the 20182020 and 20172019 fiscal years.
Fee Category | Fiscal 2018 | % of Total | Fiscal 2017 | % of Total | Fiscal 2020 | % of Total | Fiscal 2019 | % of Total | ||||||||||||||||||||
Audit Fees | $ | 1,345,761 | 93.4 | % | $ | 1,717,460 | 95.8 | % | $ | 1,477,500 | 90.7 | % | $ | 1,602,625 | 92.1 | % | ||||||||||||
Audit-Related Fees | 0 | 0 | % | 0 | 0 | % | ||||||||||||||||||||||
Tax Fees | 91,262 | 6.3 | % | 71,854 | 4.2 | % | 146,206 | 9.0 | % | 132,654 | 7.6 | % | ||||||||||||||||
All Other Fees | 4,173 | 0.3 | % | 4,173 | 0.2 | % | 4,177 | 0.3 | % | 4,177 | 0.3 | % | ||||||||||||||||
Total Fees | $ | 1,441,196 | 100 | % | $ | 1,793,487 | 100 | % | $ | 1,627,883 | 100 | % | $ | 1,739,456 | 100 | % |
Audit Fees. Consists of fees billed to Columbia for professional services rendered by Deloitte in connection with the audit of our financial statements included in Columbia’s Form 10-K, review of financial statements included in Columbia’s Form 10-Q’s,10-Qs, or services to Columbia in connection with statutory or regulatory filings or engagements, including comfort letters and consents.
Audit-Related Fees. Consists of acquisition audits and due diligence on mergers and acquisitions.
Tax FFeesees. .Consists of tax compliance, tax advice, and tax consulting services.
All Other FFeesees. .Consists of accounting research subscriptions.
In considering the nature of the services provided by Deloitte, the Audit Committee determined that such services are compatible with the provision of independent audit services. The Audit Committee discussed these services with Deloitte and Company management to determine that they are permitted under the rules and regulations concerning auditor independence promulgated by the SEC to implement Sarbanes-Oxley, as well as the American Institute of Certified Public Accountants.
AuditAudit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditors
The services performed by Deloitte in 20182020 and 20172019 were pre-approved in accordance with the pre-approval policy outlined in the Audit Committee’s adopted Charter. The policy specifies that pre-approval of all permissible auditing and non-auditing services to be provided by the Company’s independent auditors is the sole responsibility of the Audit Committee. Prior to commencing such services, pre-approval is required by the Audit Committee or as delegated to the Audit Committee Chair by the Committee.
The Audit Committee of the Board makes the following report, which notwithstanding anything to the contrary set forth in any of Columbia’s filings under the Securities Act of 1933 or the Securities Exchange Act of 1934, will not be incorporated by reference into any such filings and will not otherwise be deemed to be proxy soliciting materials or to be filed under such Acts.
The Audit Committee consists of the directors listed below. The Board has determined that the membership of the Audit Committee meets the independence requirements as defined under the NASDAQNasdaq listing standards.
The Audit Committee is governed by a charter. A copy of the charter is available onin the Company’s“About - Investor Relations - Overview - Governance Documents” section of our website at www.columbiabank.com under “Investor Relations.”. The charter was last amended effective July 25, 2018.30, 2020. The Audit Committee held nineeight meetings during fiscal year 2018.2020.
Management has the primary responsibility for the preparation of the financial statements and the reporting process, including the systems of internal controls. The independent auditors are responsible for auditing the Company’s financial statements, expressing an opinion as to their conformity with generally accepted accounting principles and annually auditing the Company’s internal control over financial reporting. The Audit Committee is responsible for overseeing Columbia’s financial reporting processes on behalf of the Board. With respect to fiscal year 2018,2020, the Audit Committee has:
(1)
1) reviewed and discussed the audited financial statements with management, and management represented to the Audit Committee that Columbia’s consolidated financial statements were prepared in accordance with generally accepted accounting principles;
(2) discussed with Deloitte the matters required to be discussed by the statement on Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1. AU section 380), as adopted byapplicable requirements of the Public Company Accounting Oversight Board in Rule 3200T;and the SEC;
2021 Proxy Statement | 48 |
(3) received from Deloitte the written disclosures and lettercommunications required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant’s communications with the Audit Committee concerning independence, and the Audit Committee discussed with Deloitte that firm’s independence;
(4) discussed with Columbia’s internal and independent accountants the overall scope and plans for their respective audits; and
(5) met with the internal and independent auditors, with and without management present, to discuss the results of their examinations, the evaluations of Columbia’s internal controls, and the overall quality of Columbia’s financial reporting.
The members of the Audit Committee are not full-time employees of the Company and are not performing the functions of auditors or accountants. As such, it is not the duty or responsibility of the Audit Committee or its members to conduct “field work” or other types of auditing or accounting reviews or procedures or to set auditor independence standards. Members of the Audit Committee necessarily rely on the information provided to them by management and the independent accountants. Accordingly, the Audit Committee’s considerations and discussions referred to above do not assure that the audits of the Company’s financial statements and internal control over financial reporting have been carried out in accordance with generally accepted auditing standards, that the financial statements are presented in accordance with generally accepted accounting principles or that the Company’s auditors are in fact “independent.”
The Audit Committee recognizes the importance of maintaining the independence of the Company’s independent auditor, both in fact and appearance. Each year, the Audit Committee evaluates the qualifications, performance and independence of the Company’s independent auditor and determines whether to re-engage the current independent auditor. In doing so, the Audit Committee considers the quality and efficiency of the services provided by the auditors, the auditors’ capabilities and the auditors’ technical expertise and knowledge of the Company’s operations and industry. Based on this evaluation, the Audit Committee has retained Deloitte as the Company’s independent auditor for 2019.2021. Deloitte has been the independent auditor for the Company since 1997.
The members of the Audit Committee and the Board believe that, due to Deloitte’s knowledge of the Company and its industry, it is in the best interests of the Company and its shareholders to continue retention of Deloitte to serve as the Company’s independent auditor. Although the Audit Committee has sole authority to appoint the independent auditor, the Audit Committee will continue to recommend that the Board ask the shareholders, at the Annual Meeting, to ratify the appointment of the independent auditors.
Based on the review and discussions referred to in items (1) through (5) above, the Audit Committee has recommended to the Board that the audited financial statements be included in Columbia’s Annual Report on Form 10-K for the fiscal year ended December 31, 20182020 for filing with the SEC.
Audit Committee Members
David A. Dietzler, ChairmanRandal L. Lund, Chair
Ford Elsaesser
John P. Folsom
Thomas M. Hulbert
Michelle M. Lantow
Randal L. LundTracy Mack-Askew
S. Mae Fujita Numata
Janine T. Terrano
49 | 2021 Proxy Statement |
ADVISORY (NON-BINDING) VOTE ON APPOINTMENT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
Deloitte currently serves as our independent registered public accounting firm, and that firm conducted the audits of our financial statements since the fiscal year ended December 31, 1997. The Audit Committee has appointed Deloitte to serve as the Company’s independent registered public accounting firm to conduct an audit of the financial statements for fiscal year 2019.2020.
Appointment of the Company’s independent registered public accounting firm is not required to be submitted to a vote of our shareholders for approval or ratification. However, upon the recommendation of the Audit Committee, the Board has determined to submit the selection of auditors to our shareholders for an advisory (non- binding) vote. In the event our shareholders do not vote for the appointment, the Audit Committee may reconsider whether to retain Deloitte, and may retain Deloitte or another firm without re-submitting the matter to our shareholders. Even if the appointment is approved, the Audit Committee, in its discretion, may direct the appointment of a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the Company’s and its shareholders’ best interest.
Representatives of Deloitte are expected to be present virtually at the Annual Meeting and will have the opportunity to make a statement if they desire to do so. It is also expected that they will be available to respond to appropriate questions.
The Board unanimously recommends that you vote “FOR” the appointment of Deloitte to serve as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2019.2020.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires our directors and executive officers to send reports of their ownership of our stock to the SEC. We believe that all Section 16(a) filing requirements that apply to our directors and executive officers were complied with for the fiscal year ended December 31, 2018. In making this disclosure we have relied solely on written representations of our directors and executive officers, and copies of the reports that they have filed with the SEC.
CERTAINCERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Transactions between Columbia or its affiliates and related persons (including directors and executive officers of Columbia and Columbia Bank, or their immediate family) must generally be approved by the Audit Committee, in accordance with the policies and procedures set forth in the Related Persons TransactionsParty Transaction Policy adopted by the Board. Under the Related PersonsParty Transaction Policy, a transaction betweenwith a “related person” will be consummated only if the Audit Committee, or a majority of the disinterested independent members of the Board, approves or ratifies such transaction in accordance with the guidelines set forth in the policy and if the transaction is on terms comparable to those that could be obtained in arm’s length dealings with an unrelated third party.
During 2018,2020, certain directors and executive officers of Columbia and Columbia Bank, and their immediate family members, were customers of Columbia Bank, and it is anticipated that such individuals will continue to be customers of Columbia Bank in the future. All transactions between Columbia Bank and its executive officers and directors, and their associates, were made in the ordinary course of business on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other persons not related to the Company, and, in the opinion of management, did not involve more than the normal risk of collectability or present other unfavorable features.
2021 Proxy Statement | 50 |
ANNUALANNUAL REPORT TO SHAREHOLDERS AND FORM 10-K
Columbia’s 20182019 Annual Report and Form 10-K for the year ended December 31, 20182020 (which is not a part of Columbia’s proxy soliciting materials) have been filed with the SEC and are also available on our website. Copies of the 20182020 Annual Report and Form 10-K will be furnished to shareholders upon request to:
Investor Relations
P. O. Box 2156, MS 3100
Tacoma, WA 98401-2156
Email: investorrelations@columbiabank.com
(253) 305-1921471-4065
DeliveryDelivery of Documents to Shareholders Sharing an Address
In some cases, only one copy of the proxy statement or Notice, as applicable, is being delivered to multiple shareholders sharing an address unless we have received contrary instructions from one or more of the shareholders. We will deliver promptly, upon written or oral request, a separate copy of the proxy statement or Notice, as applicable, to a shareholder at a shared address to which a single copy of the document was delivered. To request a separate delivery of these materials now or in the future, a shareholder may submit a written or oral request to the Corporate Secretary at the address and number written above. Additionally, any shareholders who are presently sharing an address and receiving multiple copies of the proxy statement, annual reports or the Notice and who would rather receive a single copy of such materials may instruct us accordingly by directing their request to us in the manner provided above.
QUESTIONS AND ANSWERS ABOUT VOTING AND THE MEETING
Why did I receive a Notice of Internet Availability of Proxy Materials instead of paper copies of the proxy materials?
Instead of mailing a printed copy of our proxy materials to each shareholder of record, the SEC permits us to furnish proxy materials to our shareholders over the Internet. If you received the Notice by mail, you will not receive a printed copy of the proxy materials. Instead, the Notice will instruct you as to how you may access and review the proxy materials and submit your vote via the Internet. If you received the Notice by mail and would like to receive a printed copy of the proxy materials, please follow the instructions included in the Notice for requesting such materials.
We mailed the Notice on April 12, 2021 to all shareholders entitled to vote at the Annual Meeting. As of the date of mailing of the Notice, all shareholders and beneficial owners have the ability to access all of our proxy materials on a website referred to in the Notice. These proxy materials are available free of charge.
What is being voted on at the Annual Meeting?
At the Annual Meeting you will be asked to vote on:
• | the election of 13 nominees to serve on the Board until the 2022 Annual Meeting of Shareholders or until their successors have been elected and have qualified; |
• | the approval, on an advisory basis (non-binding), of the compensation of Columbia’s named executive officers; and |
• | the approval, on an advisory basis (non-binding), of the appointment of Deloitte & Touche LLP (“Deloitte”) as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2021. |
Only shareholders who owned Columbia common stock, either directly or beneficially, as of the close of business on the Record Date are entitled to receive notice of the Annual Meeting and to vote the shares that they held on that date at the Annual Meeting, or any postponement or adjournment of the Annual Meeting.
At the Virtual Meeting. Shares held in your name as the shareholder of record may be voted by you online at the Annual Meeting at www.virtualshareholdermeeting.com/COLB2021. Shares held beneficially in “street name” may be voted by you online at the Annual Meeting only if you obtain a legal proxy from the broker or other agent that holds your shares, giving you the right to vote the shares. Have the legal proxy available when you access the virtual meeting web page. If you experience any technical difficulties during the check-in process or during the meeting, please call (844) 976-0738 (U.S.) or (303) 562-9301 (International) for assistance
By Mail. Shareholders who ask for and receive a paper proxy card may vote by mail and should complete, sign and date their proxy card and mail it in the pre-addressed envelope that will accompany the delivery of the paper proxy card. Proxy cards submitted by mail must be received by the time of the meeting in order for your shares to be voted.
51 | 2021 Proxy Statement |
By Internet before the meeting. For shares registered in your name, you may go to http://www.proxyvote.com to transmit a proxy to vote your shares by means of the Internet. You will be required to provide our number and the control number, both of which are contained on the Notice or the proxy card, as applicable. You will then be asked to complete an electronic proxy card. The votes represented by such proxy will be generated on the computer screen, and you will be prompted to submit or revise them as desired. We must receive votes submitted before the Meeting via the Internet by 11:59 p.m. ET on May 25, 2021.
By Telephone. You may grant a proxy to vote your shares by telephone. The telephone voting procedures are designed to authenticate your identity, to allow you to grant a proxy to vote your shares, and to confirm that your instructions have been recorded properly. To vote by telephone, call 1-800-690-6903 by 11:59 p.m. ET on May 25, 2021. Please see the instructions on the Notice or the proxy card, as applicable.
For shares registered in the name of a broker or bank. Most beneficial owners, whose stock is held in “street name,” receive instructions for granting proxies from their banks, brokers or other agents, rather than a proxy card. If your shares are held in a stock brokerage account or by a bank or other nominee, you are considered the beneficial owner of shares held in “street name,” and as the beneficial owner, you have the right to direct your broker on how to vote.
A number of brokers and banks are participating in a program provided through Broadridge Financial Solutions Inc. that offers the means to grant proxies to vote shares over the telephone and Internet. If your shares are held in an account with a broker or bank participating in the Broadridge program, you may grant a proxy to vote those shares by calling the telephone number or visiting the website shown on the instruction form received from your broker or bank.
Can I revoke my proxy and/or change my vote?
Yes. You may revoke your proxy and change your vote at any time before the proxy is exercised by filing with Columbia’s Secretary a notice of revocation, voting again by Internet or telephone (only your last Internet or telephone proxy submitted prior to the meeting will be counted), signing and returning a new proxy card with a later date, obtaining a legal proxy from the broker or other agent that holds your shares, or attending the virtual Annual Meeting and voting online. The powers of the proxy holders will be suspended if you attend the Annual Meeting and so request, although attendance at the meeting will not by itself revoke a previously granted proxy.
What are the Board’s recommendations?
The Board recommends a vote (i) FOR the election of the director nominees listed in this proxy statement, (ii) FOR the approval, on an advisory basis (non-binding), of the compensation of Columbia’s named executive officers, and, (iii) FOR the approval, on an advisory basis (non-binding), of Deloitte as the independent registered public accounting firm for the fiscal year 2021.
If you indicate when voting by Internet or by telephone that you wish to vote as recommended by the Board, or if you sign and return a proxy card without specific instructions as to how to vote, Craig D. Eerkes and Clint Stein, as the persons named as proxy holders on the proxy card, will vote as recommended by the Board of Directors. If any other matters are considered at the meeting, Mr. Eerkes and Mr. Stein will vote as recommended by the Board. If the Board does not give a recommendation, Mr. Eerkes and Mr. Stein will have discretion to vote as they think best.
Will my shares be voted if I do not vote by using the Internet, by telephone or by signing and returning my proxy card?
If your shares are registered in your name and you do not vote by using the Internet, by telephone or by returning a signed proxy card or do not vote online at the Annual Meeting, your shares will not be voted.
If your shares are held in “street name” and you do not submit voting instructions to your broker, your broker may vote your shares at this meeting on the advisory (non-binding) approval of the appointment of the independent registered public accounting firm only. If no instructions are given with respect to the election of directors or the approval, on an advisory basis (non-binding), of the compensation of Columbia’s named executive officers your broker cannot vote your shares on these proposals.
How many votes are needed to hold the Annual Meeting?
A majority of Columbia’s outstanding shares as of the Record Date (a quorum) must be present at the Annual Meeting in order to hold the meeting and conduct business. Shares are counted as present at the meeting if a shareholder is present and votes online at the virtual meeting or has properly submitted a proxy card. As of the Record Date for the Annual Meeting, 71,739,143 shares of Columbia common stock were outstanding and eligible to vote. Both abstentions and broker non-votes are counted as present for the purpose of determining the presence of a quorum. Broker non-votes, however, are not counted as shares present and entitled to be voted with respect to a matter on which the broker has expressly not voted. Generally, broker non-votes occur when shares held by a broker for a beneficial owner are not voted with respect to a particular proposal because (i) the broker has not received voting instructions from the beneficial owner and (ii) the broker lacks discretionary voting power to vote such shares.
2021 Proxy Statement | 52 |
What vote is required to elect directors?
In an uncontested election, a nominee for election to a position on the Board will be elected as a director if the votes cast For the nominee exceed the votes cast Against the nominee (known as majority voting). The term of any director who does not receive a majority of votes cast in an election held under that standard terminates on the earliest to occur of: (i) 90 days after the date election results are certified; (ii) the date the director resigns; and (iii) the date the Board fills the position. Our Bylaws provide that an election is considered “contested,” and will be held under a plurality standard, if there are shareholder nominees for director pursuant to the advance notice provision in Section 1.17 of our Bylaws who are not withdrawn by the advance notice deadline set forth in that section. You may vote For, Against, or Abstain from voting for the listed nominees. The following will not be votes cast and will have no effect on the election of any director nominee: (i) a share whose ballot is marked as abstain; (ii) a share otherwise present at the meeting but for which there is an abstention; and (iii) a share otherwise present at the meeting as to which a shareholder gives no authority or direction. Shareholders may not cumulate their votes in the election of directors.
What vote is required to approve the advisory (non-binding) resolution on the compensation of Columbia’s executive officers?
The affirmative vote For by a majority of those shares present online or by proxy and voting on this matter is required on the advisory (non-binding) resolution on the compensation of Columbia’s named executive officers. You may vote For, Against or Abstain from approving the advisory (non-binding) resolution to approve named executive officer compensation. Abstentions and broker non-votes will have no effect on the outcome of the proposal.
What vote is required to approve the advisory (non-binding) proposal on the appointment of the independent registered public accountants?
The proposal to approve, on an advisory basis (non-binding), the appointment of Deloitte as Columbia’s independent registered public accounting firm will be adopted if a majority of the votes present online or by proxy and voting on this matter are cast For the proposal. You may vote For, Against or Abstain from approving the proposal. Abstentions and broker non-votes will have no effect on the outcome of the proposal.
We have not received timely notice of any shareholder proposals to be considered at the Annual Meeting, and the Board does not know of any other matters to be brought before the Annual Meeting.
Who is soliciting my proxy and who is paying the cost of solicitation?
The Board is soliciting proxies for use at the 2021 Annual Meeting. Certain directors, officers and employees of Columbia and its banking subsidiary, Columbia State Bank, or its trust company subsidiary, Columbia Trust Company, may solicit proxies by mail, telephone, facsimile, or in person.
We will pay for the costs of solicitation. We do not expect to pay any compensation for the solicitation of proxies, except to brokers, nominees and similar record holders for reasonable expenses in mailing proxy materials to beneficial owners of our common stock. However, management may, if it determines it necessary to obtain the requisite shareholder vote, retain the services of a proxy solicitation firm.
How can I find out the results of the voting at the annual meeting?
Preliminary voting results will be announced at the Annual Meeting. We will publish final results in a Current Report on Form 8-K to be filed with the SEC within four business days after the Annual Meeting. After the Form 8-K is filed, you may obtain a copy by visiting our website at www.columbiabank.com, the SEC’s website at www.sec.gov, or by writing to: Columbia Banking System, Inc., Attention: Corporate Secretary, 1301 “A” Street, Tacoma, Washington, 98402-4200.
When are proposals and director nominations for the 2022 Annual Meeting due?
In order to be considered for inclusion in our proxy statement and proxy card, proposals by shareholders to transact business at Columbia’s 2022 Annual Meeting must be delivered to Columbia’s Secretary no later than December 14, 2021 and should contain such information as is required under our Bylaws. Such proposals will also need to comply with the SEC’s regulations regarding the inclusion of shareholder proposals in Columbia-sponsored proxy materials. In order for a shareholder proposal to be raised from the floor during next year’s annual meeting, or for a shareholder to nominate a person or persons for a director, written notice must be received by us no earlier than the 150th day and no later than the 120th day prior to the first anniversary of the 2021 Annual Meeting (meaning no earlier than December 27, 2021, and no later than January 26, 2022), and should contain such information as required under our Bylaws. However, if the date of the 2022 Annual Meeting is more than 30 days before or more than 60 days after the anniversary of the 2021 Annual Meeting, notice must be delivered no earlier than the 150th day and no later than the 120th day prior to the date of the 2022 Annual Meeting or, if the first public announcement of
53 | 2021 Proxy Statement |
the 2022 Annual Meeting date is less than 10 days before the meeting date, notice must be delivered no later than the 10th day following the date of the Company’s first public announcement of the 2022 Annual Meeting date.
To be in proper form, a shareholder’s notice must include the specified information concerning the proposal or director nominee as described in our Bylaws. The Company will not consider any proposal or nomination that is not timely or otherwise does not meet the Bylaw and SEC requirements for submitting a proposal or nomination.
Notice of intention to present proposals at the 2022 Annual Meeting, or to obtain a copy of the detailed procedures regarding notice requirements for proposals or director nominations, should be directed to Columbia’s Corporate Secretary, 1301 “A” Street, Tacoma, Washington 98402.
WE URGE YOU TO VOTE VIA THE INTERNET OR TELEPHONE ACCORDING TO THE INSTRUCTIONS ON THE NOTICE OR REQUEST A PROXY CARD AND SIGN AND RETURN IT WHEN RECEIVED AS PROMPTLY AS POSSIBLE, WHETHER OR NOT YOU PLAN TO ATTEND THE VIRTUAL ANNUAL MEETING IN PERSON.MEETING. IF YOU DO ATTEND THE ANNUAL MEETING, YOU MAY THEN WITHDRAW YOUR PROXY. THE PROXY MAY BE REVOKED AT ANY TIME PRIOR TO ITS EXERCISE.
2021 Proxy Statement | 54 |
Non-GAAP Financial Measures
The Company considers its operating noninterest expense and its ratio to average assets to be important measurements as they more closely reflect the ongoing operating leverage of the Company. Additionally, presentation of this measure and ratio allows readers to compare certain aspects of the Company’s noninterest expense to other organizations. Despite the importance of these measures to the Company, there are no standardized definitions for them and, as a result, the Company’s calculations may not be comparable with other organizations. The Company encourages readers to consider its consolidated financial statements in their entirety and not to rely on any single financial measure.
The following table reconciles the Company’s calculation of pre-tax, pre-provision income:
Twelve Months Ended December 31, | ||||||||
Pre-tax, pre-provision income: | 2020 | 2019 | ||||||
($ in thousands) | ||||||||
Pre-tax income | $ | 192,392 | $ | 241,611 | ||||
Provision for credit losses | 77,700 | 3,493 | ||||||
Pre-tax, pre-provision income | $ | 270,092 | $ | 245,104 |
The following tables reconcile the Company’s calculation of the operating noninterest expense and its ratio to average assets:assets. For 2020, the annual incentive plan definition changed to exclude the difference between actual and budgeted provision for unfunded loan commitments.
Twelve Months Ended December 31, | ||||||||
2018 | 2017 | |||||||
Noninterest expense (numerator A) | $ | 340,490 | $ | 291,017 | ||||
Adjustments to arrive at operating noninterest expense: | ||||||||
Acquisition-related expenses | (8,661 | ) | (17,196 | ) | ||||
Termination of FDIC loss share agreements charge | — | (2,409 | ) | |||||
Net cost of operation of OREO and Other Personal Property Owned (OPPO) | (1,218 | ) | (466 | ) | ||||
FDIC clawback liability recovery (expense) | — | 54 | ) | |||||
Operating noninterest expense (numerator B) | $ | 330,611 | $ | 271,000 | ||||
Average assets (denominator) | $ | 12,725,086 | $ | 10,134,306 | ||||
Noninterest expense to average assets (numerator A / denominator) | 2.68 | % | 2.87 | % | ||||
Operating noninterest expense to average assets (numerator B / denominator) | 2.60 | % | 2.67 | % |
Twelve Months Ended December 31, | ||||||||
2020 | 2019 | |||||||
($ in thousands) | ||||||||
Noninterest expense (numerator A) | $ | 334,519 | $ | 345,482 | ||||
Adjustments to arrive at operating noninterest expense: | ||||||||
Acquisition-related expenses | — | — | ||||||
Provision for unfunded loan commitments | (3,300 | ) | N/A | |||||
Budgeted provision for unfunded loan commitments | — | N/A | ||||||
Net benefit of operation of OREO | 315 | 692 | ||||||
Operating noninterest expense (numerator B) | $ | 331,534 | $ | 346,174 | ||||
Average assets (denominator) | $ | 15,401,219 | $ | 13,341,024 | ||||
Noninterest expense to average assets (numerator A / denominator) | 2.17 | % | 2.59 | % | ||||
Operating noninterest expense to average assets (numerator B / denominator) | 2.15 | % | 2.59 | % |
The Company also considers its core pretaxpre-tax return, its ratio to average assets and average tangible common equity, as well as its ratio of average nonperforming assets to period end total loans +& OREO to be important measurements as they more closely reflect the ongoing operating leverage of the Company. Additionally, presentation of these measures and ratios allow readers to compare certain aspects of the Company’s pretaxpre-tax return to other organizations. Despite the importance of these measures to the Company, there are no standardized definitions for them and, as a result, the Company’s calculations may not be comparable with other organizations. The Company encourages readers to consider its consolidated financial statements in their entirety and not to rely on any single financial measure.
A-1 | 2021 Proxy Statement |
The following table reconciles the Company’s calculation of the core pretaxpre-tax return on average assets:assets. For 2020, the annual incentive plan definition changed to exclude the difference between the actual provision for credit losses and the budgeted provision for credit losses as well as the difference between the actual provision for unfunded loan commitments and the budgeted provision for unfunded loan commitments:
Twelve Months Ended December 31, | ||||||||
2020 | 2019 | |||||||
($ in thousands) | ||||||||
Income before income taxes | $ | 192,392 | $ | 241,611 | ||||
Adjustments to arrive at core pre-tax income: | ||||||||
Provision for credit losses | 77,700 | N/A | ||||||
Budgeted provision for credit losses | (12,597 | ) | N/A | |||||
Provision for unfunded loan commitments | 3,300 | N/A | ||||||
Budgeted provision for unfunded loan commitments | — | N/A | ||||||
Acquisition-related expenses | — | — | ||||||
Gain on sale-leaseback | — | (5,926 | ) | |||||
Core pre-tax income (numerator) | $ | 260,795 | $ | 235,685 | ||||
Average assets (denominator) | $ | 15,401,219 | $ | 13,341,024 | ||||
Core pre-tax return on average assets (numerator / denominator) | 1.69 | % | 1.77 | % |
Twelve Months Ended
December 31, 2018 Pretax income $ 211,836 Adjustments to arrive at core pretax return: Acquisition-related expenses 8,661 Core pretax return (numerator) $ 220,497 Average assets (denominator) $ 12,725,086 Core pretax return on average assets (numerator / denominator) 1.73 %
The following table reconciles the Company’s calculation of the core pretaxpre-tax return on average tangible common equity:equity. For 2020, the annual incentive plan definition changed to exclude the difference between the actual provision for credit losses and the budgeted provision for credit losses as well as the difference between the actual provision for unfunded loan commitments and the budgeted provision for unfunded loan commitments:
Twelve Months Ended December 31, | ||||||||
2020 | 2019 | |||||||
($ in thousands) | ||||||||
Income before taxes | $ | 192,392 | $ | 241,611 | ||||
Adjustments to arrive at core pre-tax income: | ||||||||
Provision for credit losses | 77,700 | N/A | ||||||
Budgeted provision for credit losses | (12,597 | ) | N/A | |||||
Provision for unfunded loan commitments | 3,300 | N/A | ||||||
Budgeted provision for unfunded loan commitments | — | N/A | ||||||
Amortization of intangibles | 8,724 | 10,479 | ||||||
Acquisition-related expenses | — | — | ||||||
Gain on sale-leaseback | — | (5,926 | ) | |||||
Core pre-tax income (numerator) | $ | 269,519 | $ | 246,164 | ||||
Average shareholders’ equity | $ | 2,263,276 | $ | 2,116,642 | ||||
Average intangibles | (796,762 | ) | (806,358 | ) | ||||
Average tangible common equity (denominator) | $ | 1,466,514 | $ | 1,310,284 | ||||
Core pre-tax return on average tangible common equity (numerator / denominator) | 18.38 | % | 18.79 | % |
Twelve Months Ended
December 31, 2018 Pretax income $ 211,836 Adjustments to arrive at core pretax return: Amortization of intangibles 12,236 Acquisition-related expenses 8,661 Core pretax return (numerator) $ 232,733 Average shareholder equity $ 1,969,179 Average intangibles (817,685 ) Average tangible common equity (denominator) $ 1,151,494 Tangible core pretax return on average tangible common equity (numerator / denominator) 20.21 %
2021 Proxy Statement | A-2 |
The following table reconciles the Company’s calculation of the ratio of average nonperforming assets to period end total loans, OREO and OPPO:
December 31, 2018 | September 30, 2018 | June 30, 2018 | March 31, 2018 | |||||||||||||
Nonperforming assets (numerator) | $ | 60,891 | $ | 67,747 | $ | 76,584 | $ | 89,971 | ||||||||
Loans | $ | 8,391,511 | $ | 8,514,317 | $ | 8,454,107 | $ | 8,339,631 | ||||||||
OREO and OPPO | 6,049 | 7,415 | 7,080 | 11,507 | ||||||||||||
Loans, OREO and OPPO (denominator) | $ | 8,397,560 | $ | 8,521,732 | $ | 8,461,187 | $ | 8,351,138 | ||||||||
Nonperforming assets to total loans, OREO and OPPO (numerator / denominator) | 0.73 | % | 0.79 | % | 0.91 | % | 1.08 | % | ||||||||
2018 Four Quarter Average | ||||||||||||||||
Nonperforming assets to total loans, OREO and OPPO – four quarter average | 0.88 | % |
2018 EQUITY INCENTIVE PLAN OF
COLUMBIA BANKING SYSTEM, INC.
(as amended though _______________, 2019)
December 31, 2020 | September 30, 2020 | June 30, 2020 | March 31, 2020 | |||||||||||||
($ in thousands) | ||||||||||||||||
Nonperforming assets (numerator) | $ | 35,359 | $ | 47,854 | $ | 54,479 | $ | 48,157 | ||||||||
Loans, net of unearned income | 9,427,660 | 9,688,947 | 9,771,898 | 8,933,321 | ||||||||||||
OREO and OPPO | 553 | 623 | 747 | 510 | ||||||||||||
Loans, OREO and OPPO (denominator) | $ | 9,428,213 | $ | 9,689,570 | $ | 9,772,645 | $ | 8,933,831 | ||||||||
Nonperforming assets to total loans, OREO and OPPO (numerator / denominator) | 0.38 | % | 0.49 | % | 0.56 | % | 0.54 | % |
2020 Four Quarter Average | ||||
Nonperforming assets to total loans, OREO and OPPO - four quarter average | 0.49 | % |
The purpose of the Plan is to attract and retain the most talented employees and directors available to serve in positions of responsibility with Columbia Banking System, Inc. and its subsidiaries, to provide them with both rewards for exceptional performance and long-term incentives for future so contributions to it and its subsidiaries, and to align their interests with those of its shareholders that they will exert maximum efforts to promote its growth and success for the ultimate benefit of all its shareholders.
The Plan replaces the 2014 Stock Option and Equity Compensation Plan, which was approved by the Company’s stockholders at the 2014 Annual Stockholder Meeting and effective on April 23, 2014, (the “Prior Plan”), for awards granted on or after the date the Plan is approved by the Company’s stockholders (the “Effective Date”). Awards may not be granted under the Prior Plan beginning on the Effective Date, but the Plan will not affect the terms and conditions of any equity award grants under the Prior Plan (or any predecessor plans) granted prior to the Effective Date. Awards granted prior to the Effective Date shall be governed by the terms applicable to such awards and as in effect prior to the Effective Date. The terms of the Plan are not intended to affect the interpretation of the terms of the Prior Plan for Awards granted prior to the Effective Date. In the event that the Plan is not approved by the Company’s stockholders, the Plan shall be null and void and of no force or effect, but the Prior Plan and the Awards granted thereunder (or under any predecessor plan) on or prior to the Effective Date shall remain in full force and effect.
2021 Proxy Statement |
As used herein, the following definitions shall apply:
a. “Award” means a grant of an Option, Restricted Stock, Restricted Stock Unit (which may or may not include a Dividend Equivalent), Stock Appreciation Right or Cash Award under the Plan.
b. “Award Agreement” means a written agreement entered into by and between a Grantee and the Company setting forth terms and conditions relating to an Award granted to such Grantee. The agreement shall take such form, and contain such terms and conditions, as shall be determined from time to time by the Committee in its sole discretion.
c. “Cash Award” means an Award granted as described in Section 7 herein.
d. “Board” means the board of directors of the Company.
e. “Cause” means (i) with respect to a Grantee employed pursuant to a written employment, change in control or similar agreement that includes a definition of “Cause,” “Cause” as defined in that agreement or (ii) with respect to any other Grantee, any of the following: (A) dishonesty in performing one’s duties to the Company or a Subsidiary, (B) willful misconduct, or a willful failure to act, with the intent of injuring, or having the effect of injuring, the reputation, business or business relationships of the Company or a Subsidiary, or any of their officers, directors or employees; (C) conviction of a felony or of any crime involving fraud, dishonesty or moral turpitude or that reflects unfavorably on the Company or a Subsidiary; (D) willful or prolonged absence from work or failure for any reason to perform duties as an Employee or Director, unless excused by the Company or a Subsidiary, whichever is the entity for which services are performed; (E) breach of any material terms of an employment or service agreement with the Company or a Subsidiary, including an Award Agreement; or (F) disqualification or bar by any governmental or self-regulatory authority from serving in the capacity required by his or her job description or loss of any governmental or self-regulatory license that is reasonably necessary for such Grantee to perform his or her duties or responsibilities.
f. “Change in Control” means the first to occur of the following events:
g. “Code” means the Internal Revenue Code of 1986, as amended.
h. “Common Stock” means the no par value common stock of the Company.
i. “Committee” has the meaning given such term in Section 4.a.
j. “Company” means Columbia Banking System, Inc., a Washington corporation.
k. “Director” means a person elected or appointed as a member of the Board or the board of directors of a Subsidiary.
l. “Disability” has the meaning given to such term in Code Section 22(e)(3).
m. “Dividend Equivalent” means, with respect to Restricted Stock Units, an amount equal to the total dollar value of all dividends that would have been paid on the shares of Common Stock covered by the Award between the date of grant of the Restricted Stock Units and the date on which the Restricted Stock Units are settled if such shares of Common Stock had been delivered pursuant to such Award. A Restricted Stock Unit does not include a Dividend Equivalent unless the Award Agreement for the Restricted Stock Unit clearly specifies that it does. Further, a Grantee shall have no right to receive payment of a Dividend Equivalent unless and until the Restricted Stock Unit that includes it Vests and is settled as provided herein.
n. “Employee” means a person employed by the Company or a Subsidiary.
o. “Exchange Act” means the Securities Exchange Act of 1934, as amended.
p. “Fair Market Value” means, as of any date, the value of Common Stock determined as follows:
q. “Good Reason” means (i) with respect to a Grantee employed pursuant to a written employment, change in control or similar agreement that includes a definition of “Good Reason,” “Good Reason” as defined in that agreement or (ii) with respect to any other Grantee, the occurrence of any of the following in the absence of the Grantee’s written consent: (A) any material and adverse change in the Grantee’s position or authority with the Company as in effect immediately before a Change in Control, other than an isolated and insubstantial action not taken in bad faith and which is remedied by the Company within 30 days after receipt of notice thereof given by the Grantee; (B) the transfer of the Grantee’s primary work site to a new primary work site that is more than 50 miles from the Grantee’s primary work site in effect immediately before a Change in Control; or (C) a diminution of the Grantee’s base salary in effect immediately before a Change in Control by more than 10%, unless such diminution applies to all similarly situated employees. If the Grantee does not deliver to the Company a written notice of termination within 60 days after the Grantee has knowledge that an event constituting Good Reason has occurred, the event will no longer constitute Good Reason. In addition, the Grantee must give the Company 30 days to cure the event constituting Good Reason.
r. “Grantee” means a person who has been granted an Award.
s. “Incentive Stock Option” means an Option that qualifies as an “incentive stock option,” as that term is defined in Code Section 422.
t. “Nonqualified Stock Option” means an Option, other than an Incentive Stock Option.
u. “Option” means a right granted under the Plan to purchase Common Stock. Options granted under this Plan may be either Incentive Stock Options or Nonqualified Stock Options, and the term means either or both, as the context requires. Each Award Agreement shall state whether an Option subject to the agreement is an Incentive Stock Option or a Nonqualified Stock Option.
v. “Plan” means this 2018 Equity Incentive Plan of Columbia Banking System, Inc., as amended from time to time.
w. “Restricted Stock” means a share of Common Stock, issued under the Plan that is subject to such restrictions and conditions as are set forth in the Plan and the related Award Agreement.
x. “Restricted Stock Unit” means a right granted under the Plan to receive a payment in cash or Common Stock, or a combination of both, as determined by the Committee, with a value equal to the sum of (i) the Fair Market Value, on the date of that the Restricted Stock Unit is settled, of one share of Common Stock per Restricted Stock Unit, and (ii) the Dividend Equivalent, if the Award Agreement for the Restricted Stock Unit clearly specifies that it includes a Dividend Equivalent. If the Committee determines to settle payment in Common Stock, then it may pay cash in lieu of fractional shares.
y. “SEC” means the U.S. Securities and Exchange Commission.
z. “Shareholder-Employee” means an Employee who owns, at the time an Incentive Stock Option is granted, stock representing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or a Subsidiary. For this purpose, the attribution of stock ownership rules of Code Section 424(d) shall apply.
aa. “Stock Appreciation Right” means a right granted under the Plan to receive a payment in cash or Common Stock, or a combination of both, as determined by the Committee, with a value equal to the excess of (i) the Fair Market Value, on the date of exercise of the right, of one share of Common Stock per Stock Appreciation Right, over (ii) the Fair Market Value, on the date of grant of the right, of such share of Common Stock. Such Fair Market Value shall not be increased or otherwise adjusted because of dividends or other distributions paid at any time on or with respect to shares of Common Stock. In addition, the following shall apply to Stock Appreciation Rights: (1) Amounts payable under the Stock Appreciation Right shall not be greater than the excess of the Fair Market Value of Common Stock (disregarding lapse restrictions as defined in Treasury Regulations §1.83-3(i)) on the date the Stock Appreciation Right is granted over the Fair Market Value of the Common Stock (disregarding lapse restrictions as defined in Treasury Regulations §1.83-3(i)) on the date the Stock Appreciation Right is exercised, with respect to the number of shares fixed on or before the date of grant of the Stock Appreciation Right; (2) the Stock Appreciation Right exercise price shall never be less than the Fair Market Value of the underlying stock (disregarding lapse restrictions as defined in Treasury Regulations § 1.83-3(i)) on the date the Stock Appreciation Right is granted; (3) the Stock Appreciation Right shall not include any feature for the deferral of compensation other than the deferral of recognition of income until the exercise of the Stock Appreciation Right, and (4) no Stock Appreciation Right shall be exercisable later than the 10th anniversary date of its grant.
bb. “Subsidiary” means, (i) in the case of an Incentive Stock Option, a corporation having a relationship with the Company described in Code Section 424(f), and (ii) in the case of any other type of Award, a corporation with which the Company is considered a single employer under Code Section 414(b).
cc. “Vest” means satisfaction in full of all conditions precedent, imposed by the Plan and the related Award Agreement, to a Grantee’s right to exercise an Option, to hold Restricted Stock free of any obligation to forfeit or retransfer the same to the Company or to receive payments under a Restricted Stock Unit, Stock Appreciation Right or Cash Award.
a. General. Subject to the adjustments provided in Section 17, the number of shares of Common Stock that may be made subject to Awards of all types shall be Three Million, Fifty Thousand (3,050,000). The Company shall reserve such shares, to the extent that it deems appropriate from authorized but unissued shares of Common Stock and from shares of Common Stock that have been reacquired by it. Shares of Common Stock subject to Awards that are assumed, converted or substituted under the Plan as a result of the Company’s acquisition of another company (including by way of merger, combination or similar transaction) will not count against the number of shares that may be granted under the Plan. Available shares under a stockholder approved plan of an acquired company (as appropriately adjusted to reflect the transaction) may be used for Awards under the Plan and do not reduce the maximum number of shares available for grant under the Plan, subject to applicable stock exchange requirements.
b. Share Counting. Shares of Common Stock that are made subject to an Award of Options, Restricted Stock, Restricted Stock Units (together with any Dividend Equivalent) or Stock Appreciation Rights that will or may be settled in stock shall be counted against the number of shares set forth in Section 3.a, unless and until the Grantee forfeits rights in the Award by failing to satisfy any condition to Vesting; and shares of Common Stock that are made subject to an Award of Restricted Stock Units (together with any Dividend Equivalent) shall not count against such number if, in either case, they are settled in cash. Any shares of Common Stock made subject to an Award shall again become available to be made subject to a new Award if the shares are not issued because the Award is forfeited or cancelled, but shares of Common Stock shall not again become available under Section 3.a to be made subject to an Award in the case of shares that are (i) used to satisfy a withholding obligation of the Grantee, (ii) tendered to the Company to pay the exercise price or consideration required to be paid with respect to an Award, and (iii) subject to a Stock Appreciation Right, to the extent the Stock Appreciation Right is exercised.
c. Maximum Awards. The maximum number of shares of Common Stock subject to Incentive Stock Options granted to any one Grantee (other than a non-employee Director) in a calendar year is 100,000.
d. Non-Employee Director Awards.
a. The Committee. The power and authority to administer the Plan is vested in the Personnel and Compensation Committee of the Board and, with respect to Awards to non-employee Directors, the Corporate Governance and Nominating Committee of the Board (each such committee as the context requires is the “Committee”), each of which shall be selected by the Board and shall consist of at least two (2) Directors. Persons selected to the Committee shall satisfy applicable independence criteria of the stock exchange or quotation system on which the Common Stock may then be listed or quoted and be a “non-employee director” within the meaning of Rule 16b-3 promulgated under the Exchange Act. If the Committee does not exist or the Board, for any reason determined by it desires to directly administer the Plan, then the Board may take any action under the Plan that would otherwise be the responsibility of the Committee. Once appointed, the Committee shall continue to serve until otherwise directed by the Board.
b. Delegation of Responsibilities. Except to the extent prohibited by applicable law or the applicable rules of a stock exchange or quotation system, the Committee may delegate all or some of its power and authority to administer the Plan to one or more of its members, or to any other person or persons selected by it. The Committee may revoke such delegation at any time.
c. Powers of the Committee. Subject to the terms and conditions explicitly set forth in the Plan, the Committee shall have the authority and discretion to do the following:
All decisions, determinations and interpretations of the Committee relating to the Plan and Awards shall be final and binding upon all persons, including all Grantees and any other persons interested in any Awards, unless otherwise expressly determined by a vote of a majority of the entire Board. No member of the Committee or the Board, or any person to whom the Committee delegates its powers, responsibilities or duties in writing (each, a “Covered Person”) shall be liable to any person (including any Grantee) for any action taken or omitted to be taken with respect to the Plan or any Awards. Each Covered Person shall be indemnified and held harmless by the Company against and from:
The foregoing right of indemnification will not be available to a Covered Person to the extent that a court of competent jurisdiction in a final judgment or other final adjudication, in either case, not subject to further appeal, determines that the acts or omissions of such Covered Person giving rise to the indemnification claim resulted from such Covered Person’s bad faith, fraud or willful misconduct. The foregoing right of indemnification will not be exclusive of any other rights of indemnification or coverage to which Covered Persons may be entitled under the Company’s articles of incorporation or bylaws or insurance policies, pursuant to any individual indemnification agreements between such Covered Person and the Company, as a matter of law, or otherwise, or any other power that the Company may have to indemnify such persons or hold them harmless.
d. Section 16(b) Compliance and Bifurcation of Plan. It is the intention of the Company that the Plan comply in all respects with Rule 16b-3 under the Exchange Act, and the Plan shall be construed in favor of its so complying. If any Plan provision is determined to not comply with such Rule 16b-3, the provision shall be deemed null and void. Notwithstanding any contrary provisions of the Plan, the Board, in its absolute discretion, may bifurcate the Plan so as to restrict, limit or condition the use of any provision of the Plan with respect to Grantees who are officers and directors subject to Section 16(b) of the Exchange Act, without so restricting, limiting, or conditioning the use of such provision of the Plan with respect to other Grantees.
All Employees and Directors are eligible to be selected to be granted an Award. Notwithstanding any contrary provisions of this Plan, a Director who is not also an Employee may not be selected to be granted an Incentive Stock Option.
a. General. Only Employees and Directors selected by the Committee, in its sole discretion, shall be granted Awards. An Award may consist solely of Incentive Stock Options, Nonqualified Stock Options, Restricted Stock, Restricted Stock Units (either including or not including a Dividend Equivalent), Stock Appreciation Rights, Cash Awards or any combination of the foregoing. All Awards are subject to the terms and conditions of the Plan. Notwithstanding any actions taken by the Company in connection with the grant of an Award to any person, such person shall have no rights to or under such Award prior to the time he first performs services as an Employee or Director. Any Restricted Stock Units that are granted with Dividend Equivalents shall accrue Dividend Equivalents at the time and at the same rate as dividends are paid on shares of Common Stock, which Dividend Equivalents shall be retained by the Company and shall be paid to the Grantee (without interest) if and to the extent that the Restricted Stock Units vest and shall be forfeited if for any reason the Restricted Stock Units are forfeited. For the avoidance of doubt, no dividends or Dividend Equivalents shall be paid on unvested Awards.
b. Award Agreement. Each Award shall be evidenced by an Award Agreement that sets forth the terms and conditions of the Award. A person who is granted an Award shall have no rights under the Award unless and until such person duly executes and delivers to the Company an Award Agreement. An Award shall expire, and the Company shall have no further obligations with respect thereto, if the person does not so execute and deliver an Award Agreement within any period of time prescribed by the Company.
c. Consideration. The Committee shall determine the form and amount, if any, of consideration required to be paid by a Grantee with respect to an Award. Such consideration may take the form of cash, property, shares of Common Stock or services.
d. Arrangements to Cancel Restricted Stock. The Company may make such arrangements as it deems necessary or appropriate to hold shares of Restricted Stock in escrow until Grantee satisfies all conditions to Vesting and to automatically cancel such shares if Grantee fails to satisfy such conditions.
a. Grant of Cash Awards. Subject to the terms of this Plan, Cash Awards (including, without limitation, retainers and meeting-based fees for Directors) may be granted to Grantees in such amounts, and upon such terms, at any time and from time to time, as shall be determined by the Committee.
b. Value of Cash Awards. Each Cash Award shall have a value as may be determined by the Committee.
c. Earning of Cash Awards. Each Cash Award shall be subject to such Vesting conditions (which may include performance goals) as determined by the Committee in its discretion.
d. Form and Timing of Cash Awards. Payment of earned Cash Awards shall be as determined by the Committee and as evidenced by the applicable Award Agreement, which shall in any event be no later than as may be required under Section 409A of the Code.
a. The Committee may impose any terms and conditions on the Vesting of an Award that it determines to be appropriate, including requiring the Grantee to continue to provide services as an Employee or Director for a specified period of time or to meet performance goals established by the Committee. Such terms and conditions shall be set forth in an Award Agreement.
b. Unless otherwise provided in an Award, in the event of the death or Disability of a Grantee who at the time of his death or cessation of service due to Disability was an Employee or Director and who was an Employee or Director at all times since the date of grant of (i) a Restricted Stock Award, or (ii) a Restricted Stock Unit Award, then the target number of shares of Restricted Stock and/or Restricted Stock Units, as the case may be, shall Vest upon such death or cessation of services due to Disability.
a. Options. Grantee shall pay the full exercise price for shares of Common Stock purchased under an Option, at the time the Option is exercised, in cash or other consideration of comparable value deemed acceptable by the Committee (including by tendering, by either actual delivery of shares or by attestation, shares of Common Stock acceptable to the Committee and valued at Fair Market Value as of the date of exercise), or in any combination thereof, as determined by the Committee. The Committee may permit a Grantee to elect to pay the exercise price upon the exercise of an Option by irrevocably authorizing a third party to sell shares of Common Stock (or a portion of the shares of Common Stock sufficient to pay the exercise price) acquired upon exercise of the Option and remit to the Company the sale proceeds therefrom sufficient to pay the entire exercise price and any tax withholding resulting from such exercise.
b. Restricted Stock. The Company shall take such actions as it determines to be reasonably necessary to release Restricted Stock from forfeiture restrictions as soon as practicable after the Restricted Stock Vests.
c. Other Equity-Based Awards. The Company shall settle payment of any amounts due under a Restricted Stock Unit (together with any Dividend Equivalent that it includes) or Stock Appreciation Right upon exercise of such right by the Grantee; provided, however, that notwithstanding any contrary provisions of the Plan, Restricted Stock Units (together with any Dividend Equivalent that it includes) that become Vested shall be settled by payment of amounts owed thereunder on or before the later of (i) the date that is two and one-half (2 1∕2) months after the end of the Grantee’s first taxable year in which such amounts are no longer subject to a substantial risk of forfeiture, or (ii) the date that is two and one-half (2 1∕2) months after the end of the first taxable year of the person for whom the Grantee performed services in which such amounts are no longer subject to a substantial risk of forfeiture.
d. Cash Awards. Cash Awards shall be paid as described in Section 7 above.
a. Limit on Value of Options Granted. Subject to Section 3.c. above, any number of Options may be granted from time to time to a person eligible to receive the same hereunder, except that in the case of Incentive Stock Options the aggregate Fair Market Value (determined as of the date each Option is granted) of all shares of Common Stock with respect to which Incentive Stock Options become exercisable for the first time by the Grantee in any one calendar year (under all incentive stock option plans of the Company and all Subsidiaries taken together) shall not exceed $100,000.
b. Exercise Price. The exercise price for shares of Common Stock subject to an Option shall not be less than 100% of the Fair Market Value of a share of Common Stock as of the date of grant of the Option; provided, however, that in the case of an Incentive Stock Option granted to an Employee who immediately before the grant of such Incentive Stock Option is a Shareholder-Employee, the Incentive Stock Option exercise price shall be at least 110% of the Fair Market Value of the Common Stock as of the date of grant of the Incentive Stock Option.
c. Term of Option. No Option granted under the Plan shall in any event be exercisable after the expiration of ten (10) years from the date such Option is granted; provided, however, that in the case an Incentive Stock Option granted to an Employee who immediately before such Incentive Stock Option is granted is a Shareholder-Employee, the term of such Incentive Stock Option shall be for not more than five (5) years from the date such Option is granted. Subject to the foregoing and other applicable provisions of the Plan, the Committee shall determine the term of each Option in its sole discretion.
d. Exercise During Lifetime of Grantee. During the lifetime of a Grantee, only the Grantee may exercise such Option.
a. Unvested Awards. Subject to the provisions of Section 8 above, a Grantee shall forfeit all rights in, to and under all Awards that have not Vested prior to the time the Grantee first ceases to be an Employee or Director. Such forfeiture shall occur without the need for further action by any person.
b. Vested Restricted Stock Units and Cash Awards. All Restricted Stock Units and Cash Awards that are Vested at the time a Grantee first ceases to be an Employee or Director shall be settled promptly following such event.
c. Vested Options and Stock Appreciation Rights. Options and Stock Appreciation Rights that are Vested at the time a Grantee first ceases to be an Employee or Director shall terminate on, if not exercised before, the earlier of (i) the same day of the third month after the date of termination of his status as an Employee or Director, or (ii) the expiration date of the Option or Stock Appreciation Right provided in the Award Agreement. Notwithstanding the immediately preceding sentence:
d. Permitted Absences From Work. A person shall not be treated as ceasing to be an Employee or Director if the interruption of his or her services as such is caused by military leave, sick leave or any other bona fide leave of absence approved by the Company or a Subsidiary, whichever is the entity for which the person primarily performs services; provided, however, that in the case of Incentive Stock Options, the foregoing is subject to any restrictions of laws or regulations applicable to such Options.
a. Shares of Common Stock shall not be issued pursuant to the Plan or any Award granted hereunder, unless the issuance and delivery of the shares will not violate, and can otherwise be done in a manner that complies with, the provisions of applicable law (including, without limitation, the Securities Act of 1933, as amended, and the Exchange Act), and the rules regulations of any stock exchange or quotation system on which the Common Stock may then be listed or quoted. Issuance of shares of Common Stock is further subject to the approval of counsel for the Company with respect to such compliance. Notwithstanding anything to the contrary, the Company will not be required to make any payment or grant any Award under the Plan or any Award Agreement that would otherwise be a prohibited golden parachute payment within the meaning of Section 18(k) of the Federal Deposit Insurance Act.
b. If the Committee at any time determines that any consent is necessary or desirable as a condition of, or in connection with, the granting of any Award, the delivery of shares of Common Stock or the delivery of any cash, securities or other property under the Plan, or the taking of any other action thereunder (each such action a “Plan Action”), then, subject to Section 22 such Plan Action will not be taken, in whole or in part, unless and until such consent will have been effected or obtained to the full satisfaction of the Committee. The Committee may direct that any certificate evidencing shares of Common Stock delivered pursuant to the Plan will bear a legend setting forth such restrictions on transferability as the Committee may determine to be necessary or desirable, and may advise the transfer agent to place a stop transfer order against any legended shares. The term “consent” for this purpose shall include (i) any listings, registrations, qualifications, consents or approvals upon or by any securities exchange or governmental agency or regulatory body, (ii) other consents or authorizations required to comply with applicable law or (iii) any consents by the Grantee to any restrictions on the shares of Common Stock or other property delivered under the Plan. Nothing herein will require the Company to list, register or qualify the Shares on any securities exchange.
c. Awards under the Plan will be subject to any clawback or recapture policy that the Company may adopt from time to time to the extent provided in such policy and, in accordance with such policy, may be subject to the requirement that the Awards be repaid to the Company after they have been distributed to the Grantee.
The Company, in its sole discretion, may take any actions that it deems to be necessary or advisable to comply with all tax reporting and withholding requirements applicable to Awards under applicable law, including, but not limited to, withholding or causing to be withheld from any form of compensation or other amount due a Grantee such amounts as the Company determines is required to be withheld. Notwithstanding anything to the contrary contained herein, in no event will the Company be liable to a Grantee on account of an Award’s failure to (a) qualify for favorable United States or foreign tax treatment or (b) avoid adverse tax treatment under United States or foreign law, including, without limitation, Section 409A.
No Award or rights under an Award may be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner, other than by will or by the laws of descent or distribution if permitted herein. Shares of Restricted Stock may be sold, pledged, assigned, hypothecated, transferred, or disposed of only after such shares Vest and are released from forfeiture restrictions in accordance with Section 9.b. and only in compliance with the Company’s policies as in effect from time to time.
a. Except as otherwise provided in the Award Agreement, in the event of a Change in Control, then all Awards (including Awards subject to performance-vesting conditions) shall immediately Vest as of the date of the closing of such transaction, unless the Committee elects to Vest the Awards as of an earlier date. Notwithstanding the immediately preceding sentence, if the surviving, successor or acquiring corporation in the transaction (or its parent) agrees to replace Awards with rights to its equity that confer substantially the same benefits as those represented by the Awards, as determined by the Committee, then the Awards shall not Vest but shall be so replaced. The Committee shall notify each Grantee in writing of any action to Vest or replace Awards hereunder not less than twenty (20) days prior to the expected closing date of the transaction that prompts such action. Unless the Committee determines otherwise or as otherwise provided in the applicable Award Agreement, if a Grantee’s Employment is terminated by the Company or any successor entity thereto without Cause, or the Grantee resigns his or her Employment for Good Reason, in either case, on or within two (2) years after a Change in Control, (i) each Award granted to such Grantee prior to such Change in Control will become fully vested (including the lapsing of all restrictions and conditions) and, as applicable, exercisable, and (ii) any Shares deliverable pursuant to Restricted Stock Units will be delivered promptly (but no later than 15 days) following such Grantee’s termination of employment.
b. Unless the Committee determines otherwise, as of the Change in Control date, any outstanding Awards that are subject to performance-vesting conditions shall be deemed earned at the greater of the target level and the actual performance level as of the date of the Change in Control with respect to all open performance periods and will cease to be subject to any further performance conditions. Such Awards will continue to be subject to time-based vesting following the Change in Control in accordance with the original performance period except as provided in Section 15.a. or as determined by the Committee in accordance with Section 15.c.
c. In the event of a Change in Control, a Grantee’s Award will be treated, to the extent determined by the Committee to be permitted under Section 409A, in accordance with one or more of the following methods as determined by the Committee in its sole discretion: (i) settle such Awards for an amount of cash or securities equal to their value, where in the case of stock options and stock appreciation rights, the value of such awards, if any, will be equal to their in-the-money spread value (if any), as determined in the sole discretion of the Committee; (ii) provide for the assumption of or the issuance of substitute awards that will substantially preserve the otherwise applicable terms of any affected Awards previously granted under the Plan, as determined by the Committee in its sole discretion; (iii) modify the terms of such awards to add events, conditions or circumstances (including termination of Employment within a specified period after a Change in Control) upon which the vesting of such Awards or lapse of restrictions thereon will accelerate; or (iv) provide that for a period of at least 20 days prior to the Change in Control, any stock options or stock appreciation rights that would not otherwise become exercisable prior to the Change in Control will be exercisable as to all Shares subject thereto (but any such exercise will be contingent upon and subject to the occurrence of the Change in Control and if the Change in Control does not take place within a specified period after giving such notice for any reason whatsoever, the exercise will be null and void) and that any stock options or stock appreciation rights not exercised prior to the consummation of the Change in Control will terminate and be of no further force and effect as of the consummation of the Change in Control. In the event that the consideration paid in the Change in Control includes contingent value rights, earnout or indemnity payments or similar payments, then the Committee will determine if Awards settled under clause (i) above are (a) valued at closing taking into account such contingent consideration (with the value determined by the Committee in its sole discretion) or (b) entitled to a share of such contingent consideration. For the avoidance of doubt, in the event of a Change in Control where all Options and Stock Appreciation Rights are settled for an amount (as determined in the sole discretion of the Committee) of cash or securities, the Committee may, in its sole discretion, terminate any Stock Option or Stock Appreciation Right for which the exercise price is equal to or exceeds the per share value of the consideration to be paid in the Change in Control transaction without payment of consideration therefor. Similar actions to those specified in this Section 15 may be taken in the event of a merger or other corporate reorganization that does not constitute a Change in Control.
No person shall have any rights as a shareholder by reason of an Award until and unless the Company actually issues and delivers shares of Common Stock to such person pursuant to the Award. In the case of Restricted Stock, the Grantee thereof shall have all the rights of a shareholder (including voting and liquidation rights) with respect to shares of Restricted Stock that are issued and delivered to the Grantee, until such shares are forfeited or reacquired by the Company in accordance with the terms of the Award. Notwithstanding the foregoing, all ordinary cash dividends or other ordinary distributions paid upon any share of Restricted Stock during the period of restriction shall be retained by the Company and shall be paid to the Grantee (without interest) if and to the extent that the Award of Restricted Stock vests and shall revert back to the Company if for any reason the share of Restricted Stock upon which such dividends or other distributions were paid reverts back to the Company. Any extraordinary dividends or other extraordinary distributions shall be treated in accordance with Section 17. If any such dividends or distributions are paid in Shares, such Shares shall automatically be subject to the same restrictions and conditions as the shares of Restricted Stock with respect to which they were paid.
Subject to any required action by the shareholders of the Company, the number of shares of Common Stock subject to Awards, the number of shares of Common Stock available for grants under additional Awards, the exercise price for shares of Common Stock specified in each outstanding Option or Stock Appreciation Right, the value of Common Stock used to determine amounts required to be paid under Restricted Stock Units (together with any Dividend Equivalent that it includes) and Stock Appreciation Rights and the individual Grantee limitations set forth in Section 3.c. shall be proportionately adjusted for any increase or decrease in the number of issued shares of Common Stock resulting from a stock split or other subdivision or consolidation of shares, the payment of any extraordinary cash or stock dividend on the Common Stock or any other increase or decrease in the number of such shares of Common Stock effected without receipt of consideration by the Company; provided, however, that conversion of any convertible securities of the Company shall not be deemed to have been “effected without receipt of consideration.” The Committee shall make such adjustments and its determination in that respect shall be final, binding and conclusive. No Incentive Stock Option shall be adjusted by the Committee pursuant to this Section 17 in a manner that causes the Incentive Stock Option to fail to continue to qualify as an “incentive stock option” within the meaning of Code Section 422. Except as otherwise expressly provided in this Section 17, no Grantee shall have any rights by reason of any stock split or other subdivision or consolidation of shares, any payment of an extraordinary cash or stock dividend, or any other increase or decrease in the number of such shares of Common Stock. Except as otherwise expressly provided in this Section 17, any issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall not affect the number of shares or price of Common Stock subject to any Award, and no adjustments in Awards shall be made by reason thereof. The grant of an Award shall not affect in any way the right or power of the Company to adjust, reclassify, reorganize or change its capital or business structure.
The Plan became effective on March 28, 2018 and was approved by shareholders on May 23, 2018. The Plan, as amended by the Board on March 27, 2019 shall be effective on shareholder approval. Revisions and amendments to the Plan requiring the approval of shareholders of the Company, as described in Section 20, shall be effective when approved by the shareholders. Subject to Section 20, the Plan shall have a term of 10 years following the date of shareholder approval on May 23, 2018. In the event the Plan terminates or is terminated as provided in this Section 18 or Section 20, it shall remain in effect with respect to any Awards granted under it that are outstanding at the time of such termination.
Neither the adoption of the Plan nor the granting of an Award shall (i) confer upon any person a right to be employed by or to provide services to the Company or any Subsidiary, or to continue such employment or service; or (ii) interfere in any way with the right of a person, or the right of the Company or a Subsidiary, to terminate such employment relationship or service at any time.
a. Amendment or Early Termination. The Board may terminate the Plan at any time. The Board may amend the Plan from time to time in such respects as the Board deems advisable, except that, without proper approval of the shareholders of the Company, no such revision or amendment shall:
Subject to the foregoing, it is specifically intended that the Board or Committee may amend the Plan without shareholder approval to comply with legal, regulatory, and stock exchange or quotation system requirements and to avoid unanticipated consequences deemed by the Committee to be inconsistent with the purposes of the Plan or any Award Agreement.
b. Modification and Amendment of Awards. The Board or Committee may modify or amend outstanding Awards granted under the Plan; provided, however that the modification or amendment shall not, without the consent of the Grantee, materially impair or diminish any of the Grantee’s rights or any of the obligations of the Company under such Award. Except as otherwise provided in this Plan, no outstanding Award shall be terminated without the consent of the Grantee. Unless the Grantee otherwise agrees, any changes or adjustments made to outstanding Incentive Stock Options granted under this Plan shall be prospective only and shall be made in a manner that will not constitute a “modification,” as defined in Code Section 424(h), and will not cause such Incentive Stock Options to fail to qualify as “incentive stock options” under Code Section 422.
c. Re-pricing or Repurchase of Options and Stock Appreciation Rights. The exercise price of outstanding Options and Stock Appreciation Rights may not be changed, and the Company may not make an offer to purchase outstanding Options or Stock Appreciation Rights for cash or exchange outstanding Options or Stock Appreciation Rights for other securities, at a time when the exercise price of the outstanding Options or Stock Appreciation Rights exceeds the Fair Market Value of the Common Stock covered by the Options or Stock Appreciation Rights, except (i) with the approval of shareholders of the Company, or (ii) as otherwise required or permitted in the Plan.
All Awards are unfunded and unsecured obligations of the Company. Any bookkeeping entries maintained by the Company with respect to Awards are merely for the convenience of the Company. The Company is not required to segregate any assets that may at any time represent an Award and no Grantee or other person shall have any rights or interests in any particular assets of the Company by reason of an Award. A Grantee is a mere general unsecured creditor of the Company with respect to an Award. Nothing contained in the Plan will be deemed in any way to limit or restrict the Company from making any award or payment to any person under any other plan, arrangement or understanding, whether now existing or hereafter in effect.
The provisions of this Plan are intended to comply with Section 409A of the Code, U.S. Treasury regulations issued thereunder, and related U.S. Internal Revenue Service guidance (“Section 409A”). Such provisions will be interpreted and applied in a manner consistent with Section 409A so that payments and benefits provided to Employee hereunder will not, to the greatest extent possible, be subject to taxation under such Section 409A. Notwithstanding any contrary provisions hereof, this Plan may be amended if and to the extent the Company determines that such amendment is necessary to comply with Section 409A. Without limiting the generality of this Section 22, with respect to any Award made under the Plan that is intended to be “deferred compensation” subject to Section 409A:
a. Any payment due upon a Grantee’s termination of employment will be paid only upon such Grantee’s separation from service from the Company within the meaning of Section 409A;
b. Any payment due upon a Change in Control of the Company will be paid only if such Change in Control constitutes a “change in ownership” or “change in effective control” within the meaning of Section 409A, and in the event that such Change in Control does not constitute a “change in the ownership” or “change in the effective control” within the meaning of Section 409A, such Award will vest upon the Change in Control and any payment will be delayed until the first compliant date under Section 409A;
c. Any payment to be made with respect to such Award in connection with the Grantee’s separation from service from the Company within the meaning of Section 409A (and any other payment that would be subject to the limitations in Section 409A(a)(2)(B) of the Code) will be delayed until six months after the Grantee’s separation from service (or earlier death) in accordance with the requirements of Section 409A;
d. To the extent necessary to comply with Section 409A, any other securities, other Awards or other property that the Company may deliver in lieu of Shares in respect of an Award will not have the effect of deferring delivery or payment beyond the date on which such delivery or payment would occur with respect to the Shares that would otherwise have been deliverable (unless the Committee elects a later date for this purpose in accordance with the requirements of Section 409A);
e. With respect to any required consent described in Section 12(b) or the applicable Award Agreement, if such consent has not been effected or obtained as of the latest date provided by such Award Agreement for payment in respect of such Award and further delay of payment is not permitted in accordance with the requirements of Section 409A, such Award or portion thereof, as applicable, will be forfeited and terminate notwithstanding any prior earning or vesting;
f. If the Award includes a “series of installment payments” (within the meaning of Section 1.409A-2(b)(2)(iii) of the Treasury Regulations), the Grantee’s right to the series of installment payments will be treated as a right to a series of separate payments and not as a right to a single payment;
g. If the Award includes Dividend Equivalents, the Grantee’s right to the Dividend Equivalents will be treated separately from the right to other amounts under the Award; and
h. For purposes of determining whether the Grantee has experienced a separation from service from the Company within the meaning of Section 409A, “subsidiary” will mean a corporation or other entity in a chain of corporations or other entities in which each corporation or other entity, starting with the Company, has a controlling interest in another corporation or other entity in the chain, ending with such corporation or other entity. For purposes of the preceding sentence, the term “controlling interest” has the same meaning as provided in Section 1.414(c)-2(b)(2)(i) of the Treasury Regulations, provided that the language “at least 20 percent” is used instead of “at least 80 percent” each place it appears in Section 1.414(c)-2(b)(2)(i) of the Treasury Regulations.
a. The Committee’s determinations under the Plan and Award Agreements need not be uniform and any such determinations may be made by it selectively among persons who receive, or are eligible to receive, Awards under the Plan (whether or not such persons are similarly situated). Without limiting the generality of the foregoing, the Committee will be entitled, among other things, to make non-uniform and selective determinations under Award Agreements, and to enter into non-uniform and selective Award Agreements, as to (a) the persons to receive Awards, (b) the terms and provisions of Awards and (c) whether a Grantee’s employment has been terminated for purposes of the Plan.
b. Each Grantee of an Award recognizes and agrees that before being selected by the Committee to receive an Award the Grantee has no right to any benefits under the Plan. Accordingly, in consideration of the Grantee’s receipt of any Award hereunder, the Grantee expressly waives any right to contest the amount of any Award, the terms of any Award Agreement, any determination, action or omission hereunder or under any Award Agreement by the Committee, the Company or the Board, or any amendment to the Plan or any Award Agreement (other than an amendment to the Plan or an Award Agreement to which his or her consent is expressly required by the Plan or the express terms of an Award Agreement). Nothing contained in the Plan, and no action taken pursuant to its provisions, will create or be construed to create a trust of any kind or a fiduciary relationship between the Company and any Grantee. The Plan is not intended to be subject to the Employee Retirement Income Security Act of 1974, as amended.
c. Except as expressly provided in an Award Agreement, neither the Plan nor any Award Agreement will confer on any person other than the Company and the Grantee of any Award any rights or remedies thereunder. The exculpation and indemnification provisions of Section 4.c. will inure to the benefit of a Covered Person’s estate and beneficiaries and legatees.
The term “Section” or “Sections,” as used herein, shall mean a Section or Sections of this Plan, unless otherwise required by the context. As required by the context (i) the masculine form of words shall include the feminine, and vice-versa, and (ii) the singular form of words shall include the plural form, and vice-versa.
This Plan and any agreements or other documents hereunder shall be interpreted and construed in accordance with the laws of the State of Washington and applicable Federal law. Any reference in this Plan or in any Award Agreement to a provision of law or to a rule or regulation shall be deemed to include any successor law, rule or regulation of similar effect or applicability.
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CERTIFICATE OF ADOPTION
I certify that the foregoing Plan was duly adopted by the Board of Directors of Columbia Banking System, Inc. on March 28, 2018 and duly approved by the shareholders of Columbia Banking System, Inc. on May 23, 2018.
CERTIFICATE OF AMENDMENT
I certify that the foregoing Plan was duly amended by the Board of Directors of Columbia Banking System, Inc. on March 27, 2019 and duly approved by the shareholders of Columbia Banking System, Inc. on [●].