1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
Columbia Bancorp
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
---------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
---------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
---------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
---------------------------------------------------------------------
(5) Total fee paid:
---------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
---------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
---------------------------------------------------------------------
(3) Filing Party:
---------------------------------------------------------------------
(4) Date Filed:
---------------------------------------------------------------------
2
COLUMBIA BANCORP
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 16, 1999
TO OUR SHAREHOLDERS:
NOTICE IS HEREBY GIVEN that the 1999 Annual Meeting of
shareholders of Columbia Bancorp ("Columbia"), will be held at 7:00 p.m. Pacific
Time on Friday, April 16, 1999 at the Columbia Gorge Discovery Center, 5000
Discovery Drive, The Dalles, Oregon, for the following purposes:
1. To consider and act upon the election of three (3) directors
of Columbia.
2. To consider and vote on an amendment to the Articles of
Incorporation of Columbia to increase the number of
authorized shares of common stock from 10,000,000 to
20,000,000.
3. To consider and vote on the adoption of the 1999 Columbia
Bancorp Stock Incentive Plan.
4. To transact such other business as may properly come before
the Annual Meeting and any adjournment or adjournments
thereof.
Only shareholders of record at the close of business on March 1,
1999 are entitled to vote at the Annual Meeting or any postponement or
adjournment.
All shareholders are invited to attend the Annual Meeting
personally. If you are not able to do so and wish your shares to be voted, it is
important that you either vote by telephone (see the attached instruction form)
or complete, sign, date and promptly return the accompanying proxy in the
enclosed postage-paid envelope.
By order of the Board of Directors.
Richard J. Croghan
Secretary
March 5, 1999
- --------------------------------------------------------------------------------
WE URGE YOU TO VOTE BY TELEPHONE OR SIGN AND RETURN THE ENCLOSED PROXY AS
PROMPTLY AS POSSIBLE WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON.
IF YOU DO ATTEND THE MEETING, YOU MAY WITHDRAW YOUR PROXY AND VOTE IN PERSON.
- --------------------------------------------------------------------------------
3
COLUMBIA BANCORP
420 East Third Street, Suite 200
The Dalles, Oregon 97058
(541) 298-6649
ANNUAL MEETING PROXY STATEMENT
Date of Proxy Statement: March 5, 1999
This Proxy Statement, dated March 5, 1999, is furnished in
connection with the solicitation of proxies by the Board of Directors of
Columbia Bancorp ("Columbia") to be used at the 1999 Annual Meeting of
Columbia's shareholders to be held on April 16, 1999, at 7:00 p.m. Pacific Time,
at the Columbia Gorge Discovery Center, 5000 Discovery Drive, The Dalles,
Oregon. The approximate date of mailing of this Proxy Statement and the
accompanying form of proxy is March 9, 1999. Columbia's 1998 Annual Report to
Shareholders is being mailed to shareholders of Columbia with this Proxy
Statement.
PROXIES AND VOTING AT THE ANNUAL MEETING
The only class of issued and outstanding stock of Columbia is its
common stock, no par value. At March 1, 1999, the record date for determining
shareholders entitled to vote at the Annual Meeting, there were 7,964,932 shares
of common stock issued and outstanding. Each holder of record of outstanding
shares of common stock on the record date is entitled to one vote for each share
held on every matter submitted at the Annual Meeting.
A majority of the outstanding common stock must be represented at
the Annual Meeting in person or by proxy in order to constitute a quorum for the
transaction of business. The matters to be voted on must be approved by an
affirmative vote of the holders of a majority of the common stock of Columbia,
except as otherwise described below. Shareholders who do not vote (either in
person or by submitting a proxy), including broker non-votes, will be considered
abstentions and will not be counted toward the quorum.
If a proxy in the accompanying form is executed and returned the
shares represented thereby will be voted in accordance with the instructions
given in the proxy. If no instructions are given, the proxyholders will vote in
favor of management's nominees for director and in favor of the other proposals
described in this Proxy Statement, and in their discretion as to any other
matters which may come before the Annual Meeting. Any proxy may be revoked prior
to its exercise by giving written notice of revocation to the Secretary of
Columbia or by submitting to the Secretary a duly executed proxy bearing a later
date. The attendance of a shareholder at the Annual Meeting will not by itself
revoke such shareholder's proxy. Ballots on proxies may be counted by personnel
of Columbia's subsidiaries, Columbia River Bank ("CRB") and Valley Community
Bank ("VCB"), or by Columbia's transfer agent, Norwest Shareowner Services.
The cost of this proxy solicitation will be borne by Columbia.
Columbia does not expect to pay any compensation for the solicitation of proxies
but may reimburse brokers, banks and other nominees for their expenses in
sending proxy material to principals and obtaining their proxies. In addition to
the solicitation of proxies by mail, Columbia may also use its officers, or the
officers and employees of CRB or VCB, to solicit proxies from shareholders,
either in person or by telephone, telegraph, or letter. Such persons will not be
specially compensated for these activities.
BUSINESS OF THE ANNUAL MEETING
Management knows of only three matters, which are discussed
below, to be presented at the Annual Meeting for shareholder action.
2
4
SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the
beneficial ownership of Columbia's common stock at February 15, 1999 by: (i)
each person who is known by Columbia to own beneficially more than 5% of the
common stock; (ii) each director and each nominee for director; (iii) certain
executive officers, and (iv) all listed executive officers and nominees as a
group.
NAME OF BENEFICIAL OWNER SHARES BENEFICIALLY OWNED(1) PERCENT OF CLASS
------------------------ ---------------------------- ----------------
BENEFICIAL OWNERS OF MORE THAN 5% OF
OUTSTANDING COMMON STOCK
George Layman 515,048 6.5%
Layman Lumber
P.O. Box 235
Naches, WA 98937
DIRECTORS AND EXECUTIVE OFFICERS
Robert L.R. Bailey (2) 259,418 3.3%
Charles F. Beardsley (3) 41,828 (*)
William A. Booth (4) 90,174 1.1
Dennis Carver (5) 38,938 (*)
Terry L. Cochran (6) 347,600 4.4
Ted M. Freeman (7) 16,350 (*)
Jane F. Lee (8) 16,910 (*)
James C. McCall (9) 43,911 (*)
Jean S. McKinney (10) 18,976 (*)
Neal T. McLaughlin (11) 8,035 (*)
Donald T. Mitchell (12) 29,012 (*)
Craig J. Ortega (13) 19,468 (*)
James B. Roberson 59,294 (*)
Greg P. Walden (14) 16,258 (*)
ALL DIRECTORS AND EXECUTIVE OFFICERS AS
A GROUP (14 persons) 1,006,172 12.6%
========= ====
- -------------------------
* Less than 1%
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission, based on factors including voting
and investment power with respect to shares. Shares of common stock
subject to options currently exercisable, or exercisable within 60 days
after February 15, 1999, are deemed outstanding for the purpose of
computing the percentage ownership interest of the person holding such
options, but are not deemed outstanding for the purpose of computing the
percentage ownership for any other person. Applicable percentage
ownership is based on 7,964,932 aggregate shares outstanding as of
February 15, 1999, together with the applicable options of such
shareholder.
(2) Includes 15,000 shares covered by stock options and the following shares
over which Mr. Bailey shares voting and investment power: (i) 43,064
shares owned by Mr. Bailey's spouse; (ii) 30,000 shares held in a
family partnership; (iii) 16,800 shares held in a pension trust; and
(iv) 20,000 shares held in a foundation.
(3) Includes 23,414 shares held in trust, 12,414 shares held in his spouse's
trust, and 6,000 shares covered by stock options.
(4) Includes 15,000 shares covered by stock options.
3
5
(5) Includes 14,260 shares held in an IRA, 4,000 shares covered by stock
options, and 3,406 shares for which Mr. Carver's spouse serves as
custodian for the benefit of their children and over which Mr. Carver
shares voting and investment power. Also includes 16,816 shares jointly
owned with his spouse over which Mr. Carver shares voting and investment
power. Includes 456 shares held in his spouse's IRA, and excludes
approximately 6,000 shares held jointly by his wife and his
mother-in-law, in both cases over which he disclaims beneficial
ownership.
(6) Includes 47,000 shares held through the ESOP and 16,000 shares covered
by stock options; also includes 123,948 shares held by Mr. Cochran's
spouse as to which Mr.
Cochran disclaims beneficial ownership.
(7) Includes 12,000 shares covered by stock options and the following shares
over which Mr. Freeman shares voting and investment power: 3,550 shares
jointly owned with his spouse and 800 shares in a family trust.
(8) Includes 6,000 shares covered by stock options.
(9) Includes 13,752 shares covered by stock options and 24,403 shares held
through the ESOP. Also includes 2,970 shares jointly owned with his
spouse over which Mr. McCall shares voting and investment power.
(10) Includes 900 shares owned by her son as to which Ms. McKinney disclaims
beneficial ownership. Also includes 1,498 shares held in an IRA and
10,770 shares covered by stock options.
(11) Includes 2,201 shares held through the ESOP and 3,000 shares covered by
stock options.
(12) Includes 14,012 shares in pension plan and 9,000 shares covered by stock
options. Also includes 6,000 shares held jointly with Mr. Mitchell's
spouse over which Mr. Mitchell shares voting and investment power.
(13) Includes 584 shares held in Mr. Ortega's IRA, 2,952 shares held in the
ESOP, 8,400 shares covered by stock options and 404 shares held in Mr.
Ortega's spouse's IRA as to which Mr. Ortega disclaims beneficial
ownership. Also includes 7,128 shares held as custodian for Mr. Ortega's
children over which Mr. Ortega shares voting and investment power.
(14) Includes 1,538 shares held in Mr. Walden's IRA, 10,800 shares covered by
stock options, and 1,575 shares held in Mr. Walden's spouse's IRA as to
which Mr. Walden disclaims beneficial ownership. Also includes 2,634
shares held jointly with Mr. Walden's spouse over which Mr. Walden
shares voting and investment power.
PROPOSAL ONE: ELECTION OF DIRECTORS
ELECTION OF DIRECTORS
Columbia's Board is divided into three classes of directors. At
each annual meeting, members of one of the classes, on a rotating basis, are
elected for a three-year term.
Three individuals have been nominated by the Columbia Board for a
term expiring in the year 2002. The persons nominated are Robert L.R. Bailey,
Dennis Carver, and Donald T. Mitchell, all of whom presently serve on
Columbia's Board and on the Board of Columbia's subsidiary CRB.
Although Columbia knows of no reason why any of the nominees may
be unable or unwilling to serve, if any nominee becomes unable or unwilling to
serve, it is the intention of the persons named in the proxy to vote for any
substitute nominee the Board of Directors of Columbia may recommend. The
Columbia Board does not have a standing nominating committee nor does it have a
formal procedure to receive shareholder nominations, but it will consider any
written recommendations sent to the attention of the Board at Columbia's
administrative offices at 420 East Third Street, Suite 200, The Dalles, Oregon
97058. For information concerning the procedures provided by Columbia's Articles
of Incorporation for the presentation of business by shareholders at an annual
meeting, see the section below entitled "PROPOSALS OF SHAREHOLDERS".
4
6
NOMINEES FOR ELECTION AS DIRECTORS TO THE BOARD OF DIRECTORS OF COLUMBIA FOR A
TERM EXPIRING IN 2002
Robert L.R. Bailey, age 57, has been a director of Columbia since
its formation. Mr. Bailey has been a director of CRB since 1977 and served as
chairman of the CRB Board from 1981 to 1995. Since 1985 Mr. Bailey has been the
president and general manager of Orchard View Farms, Inc., a fruit growing and
packing company headquartered in The Dalles, Oregon.
Dennis Carver, age 50, was elected to the Columbia Board at the
1997 annual meeting. He had been a director of Klickitat Valley Bank ("KVB")
since 1984 and was elected to the Board of CRB in 1997. He has worked as a
chiropractor in Goldendale, Washington since 1973, and presently runs the
Goldendale Chiropractic Clinic.
Donald T. Mitchell, age 54, has been a director of Columbia since
its inception and has served as Chairman since December 18, 1998. He was a
director of Juniper Banking Company ("JBC") for six years and became a director
of CRB following the merger. Since 1982, he has been a partner in Lacy Forest
Products, a lumber brokerage firm.
To be elected, each nominee must receive the affirmative vote of
the holders of a simple majority of Columbia's common stock represented in
person or by proxy at the Annual Meeting. Abstentions and broker non-votes will
be considered votes against the nominee.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE ABOVE
NAMED NOMINEES.
DIRECTORS CONTINUING IN OFFICE
Charles F. Beardsley, age 58, has served as a director of
Columbia since its formation, and as a director of CRB since April 1994. Since
1972 Mr. Beardsley has been a principal owner of Hershner & Bell Realty, a real
estate brokerage firm, and of Hershner & Bell-Farrell Agency, an insurance
agency, both in Hood River, Oregon. He also served as Mayor of the City of Hood
River for six years
William A. Booth, age 58, has served as a director of Columbia
since its formation, and as a director of CRB since 1977. Since 1968 Mr. Booth
has been a principal in Booth & Kelly Insurance & Real Estate, a real estate and
insurance agency in The Dalles, Oregon.
Terry L. Cochran, age 54, has been a director and the Chief
Executive Officer of Columbia since its inception and has been CRB's Chief
Executive Officer and a director since 1981. After Columbia acquired VCB in
1998, he was elected to and now sits on VCB's Board. He holds an A.A. degree
from Yakima Valley College, a B.A. degree in Business Administration from
Washington State University, and is a graduate of Pacific Coast Banking School
at the University of Washington.
Jane F. Lee, age 46, was elected to the Columbia Board at the
1997 Annual Meeting. She had been a director of KVB since 1987. She was elected
to the Board of CRB in 1997. Ms. Lee has worked in cattle ranching and hay
operations since 1972, and is the President of the Washington State Association
of Cattle Women. She also serves as Chairman of the Commissioners for Rural #7
Fire Protection District in Goldendale, Washington.
Jean S. McKinney, age 60, has been a director of Columbia since
its formation, and has been a director of CRB since April 1994. Ms. McKinney has
served for over 20 years as president and business manager of McKinney Ranches,
Inc., a grain farming business in Wasco, Oregon.
James B. Roberson, age 64, was elected to the Columbia Board at
the 1998 Annual Meeting. He had been a director of KVB since 1977, and became a
director of CRB in 1997 following KVB's acquisition by Columbia in that year.
Prior to his retirement in 1996, Mr. Roberson was an optometrist in the
Bingen/White Salmon, Washington area for 34 years.
Greg P. Walden, age 42, has been a director of Columbia since its
formation, and has been a director of CRB since April 1994. Congressman Walden
was elected to the U.S. House of Representatives in 1998 and took office in
January 1999. Since 1986, he has served as president of Columbia Gorge
Broadcasters, Inc. in Hood River, Oregon. In 1989-95 he served as an Oregon
state representative, and in 1995-97 as a state senator, in the Oregon
legislature.
5
7
The following table sets forth the term expiration dates of the
directors of Columbia continuing in office.
NAME AGE POSITION TERM EXPIRES
---- --- -------- ------------
William A. Booth 58 Vice-Chairman of the Board of Columbia and 2001
CRB
Terry L. Cochran 54 Director, President and Chief Executive 2001
Officer of Columbia and CRB
Charles F. Beardsley 58 Director 2001
Jane F. Lee 46 Director 2000
Jean S. McKinney 60 Director 2000
James B. Roberson 64 Director 2001
Greg P. Walden 42 Director 2000
DIRECTORS RETIRING OR RESIGNING FROM OFFICE
Ted M. Freeman, age 72, was a director of JBC for eight years. He
served as Chairman of its Board for a number of years prior to its merger with
CRB, and became a director of CRB following the merger. Prior to his retirement
in 1993, Mr. Freeman managed a seed, fertilizer and grain business for 35 years.
Presently a director of Columbia and CRB, Mr. Freeman will retire from these
Boards when his term expires in April 1999.
Steve Martin, age 55, resigned from Columbia's and CRB's Boards
on December 19, 1998, citing health reasons. Mr. Martin had been a director of
Columbia since its inception and served as Chairman of Columbia since that time.
Mr. Martin had been a director of CRB since 1977, and served as Chairman of
the CRB Board since April 1995. Mr. Martin is owner-operator of the Stephanie,
Surfsand Resort, Haystack Motel, and Wayfarer Restaurant. He is chief executive
officer of Steve Martin Management corporation, a hospitality management company
in Cannon Beach, Oregon.
MEETINGS OF THE BOARDS OF DIRECTORS AND COMMITTEES
The following section describes the 1998 meetings of the Boards
of Directors of Columbia and of Columbia's two wholly-owned bank subsidiaries,
CRB and VCB. (Columbia's acquisition of VCB was effective November 30, 1998.)
Board and Board Committees of Columbia
The Board of Directors of Columbia held 12 meetings during 1998.
Each member of the Columbia Board attended at least 90% of the meetings.
The Columbia Board of Directors has two committees, the Executive
Committee and the Audit/Examination Committee. The members of the Executive
Committee are Chairperson Donald T. Mitchell, Terry L. Cochran, William A.
Booth, Jean S. McKinney, James B. Roberson, Greg P. Walden, and prior to his
retirement, Stephen D. Martin. This Committee acts for the Board on matters
requiring prompt action, serves as the Board nominating committee, recommends
long range planning activities to the full board, and evaluates the Chief
Executive Officer, recommending appropriate compensation, benefits, and
employment contracts. The Committee met four times in 1998. All members of the
Executive Committee attended each meeting, except for Stephen D. Martin, who
missed one meeting. The members of the Audit/Examination Committee are
Chairperson Greg Walden, Donald T. Mitchell, and Jane F. Lee. It reviews the
results of Columbia's annual audit. The Committee met once in 1998. All members
were in attendance.
Board and Board Committees of CRB
The Board of Directors of CRB held 12 meetings during 1998. Each
member of the CRB Board attended at least 90% of the meetings they were entitled
to attend.
6
8
The CRB Board of Directors has five committees, the Executive
Committee, the Audit/Examination Committee, the Human Resources Committee, the
Loan Committee, and the Investment/Asset-Liability Committee.
The CRB Executive Committee is identical in membership to the
Columbia Executive Committee, consisting of Chairperson Donald T. Mitchell,
Terry L. Cochran, William A. Booth, Jean S. McKinney, James B. Roberson, Greg P.
Walden, and prior to his resignation, Stephen D. Martin. This Committee acts for
the CRB Board on matters requiring prompt action, serves as the CRB Board's
Nominating Committee, and recommends long range planning activities to the CRB
Board. This Committee also evaluates CRB's Chief Executive Officer, recommending
appropriate compensation, benefits and employment contracts. The Executive
Committee met four times in 1998. All members of the Executive Committee
attended each meeting, except for Stephen D. Martin, who missed one meeting.
The Audit/Examination Committee consists of Chairperson Greg P.
Walden, Donald T. Mitchell, and Jane F. Lee. It reviews the scope of internal
and external audit activities. The Committee met four times in 1998. All members
were in attendance.
The Human Resources Committee provides oversight of the ESOP,
401(k) and stock incentive plan, and reviews and makes recommendations on
corporate compensation and personnel policies. The members of the Human
Resources Committee are Chairperson Jean McKinney, Robert L.R. Bailey, Charles
F. Beardsley and Terry L. Cochran. The Committee met three times in 1998. All
members were in attendance.
The Investment/Asset-Liability Committee consists of Chairperson
James B. Roberson, Ted Freeman, Dennis Carver and Terry L. Cochran. Its
charge is to establish, update, and monitor policies related to asset,
liability, liquidity, interest rate management and investments. It also
recommends approval of securities advisors and brokers. The Committee met four
times in 1998. All members were in attendance.
The Loan Committee consists of Chairperson William A. Booth,
Charles F. Beardsley and James B. Roberson. It reviews the loan portfolio for
safety and soundness, monitors concentrations in industry and loan type, and
oversees the loan policy of CRB. The Committee met 23 times in 1998. William A.
Booth missed one meeting, Charles F. Beardsley missed three meetings, and James
B. Roberson missed two meetings.
Board and Board Committees of VCB
The Board of Directors of VCB held 12 meetings during 1998. Each
member of the VCB Board attended at least 90% of the meetings they were entitled
to attend, with the exceptions of Carolyn Fox who attended two meetings and Mike
Hilts who attended one meeting. Ms. Fox resigned from VCB's Board on November
30, 1998, and in 1998, Mr. Hilts was not re-elected to the Board. Following the
completion of Columbia's acqusition of VCB, Terry L. Cochran, the President and
Chief Executive Officer of Columbia and of CRB, joined VCB's Board effective
December 18, 1998.
The VCB Board of Directors has three committees: the
Audit/Examination Committee, the Loan Committee, and the Asset-Liability
Committee.
VCB's Loan Committee consists of Chairperson Ward Eason, Norm
Bernards, Jim Doran and Bruce G. Bryant. This Committee reviews all loan
requests above individual officer limits, reviews all loans made during the
prior month under individual assigned limits, reviews the status of all
delinquent loans, and recommends loan policy to the VCB Board. The Loan
Committee met 12 times in 1998. All members of the Loan Committee attended at
least 85% of this Committee's meetings.
The members of the Asset/Liability Committee are Chairperson Dan
Corrigan, Ward Eason, Carolyn Fox (prior to her resignation), and Bruce G.
Bryant. It reviews the financial performance of VCB, reviews for approval
management's recommendations regarding the pricing of assets/liabilities, and
reviews investments over assigned officer limits. The Asset/Liability Committee
met nine times in 1998. All members of this Committee attended at least 75% of
the Committee's meetings, except for Carolyn Fox, who missed seven meetings.
7
9
The Audit/Examination Committee consists of Chairperson Jim
Doran, Ward Eason, Ray Kauer and Bruce G. Bryant. It reviews all audit and
examination reports prepared by regulatory authorities or outside auditors. The
Audit/Examination Committee met one time in 1998. All members attended this
meeting with the exception of Ray Kauer.
PROPOSAL TWO: APPROVAL OF AMENDMENT TO COLUMBIA'S ARTICLES OF INCORPORATION
TO INCREASE AUTHORIZED SHARES
The Board of Directors has approved a resolution to amend
Article II, Section (1) of the Articles of Incorporation of Columbia to
increase the number of authorized shares of Columbia's common stock from
10,000,000 to 20,000,000. The amendment is subject to the ratification and
approval of Columbia's shareholders through an affirmative vote of the holders
of a majority of Columbia's common stock. As of March 1, 1999, there were
7,964,932 shares of Columbia common stock issued and outstanding, constituting
the only class of securities presently issued by Columbia. The Board of
Directors has determined that an increase in the number of authorized shares of
Columbia common stock is necessary and desirable to allow for possible future
stock splits and stock dividends, for issuance of shares to the Employee Stock
Ownership Plan, for the grant of stock options, and for other corporate
purposes.
The approval of the amendment to the Articles of Incorporation
requires the affirmative vote of the holders of a simple majority of Columbia's
common stock represented in person or by proxy at the Annual Meeting.
Abstentions and broker non-votes will be considered votes against approval of
the amendment.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THE
ABOVE-DESCRIBED AMENDMENT TO THE COLUMBIA ARTICLES OF INCORPORATION.
PROPOSAL THREE: APPROVAL OF 1999 STOCK INCENTIVE PALN
In February 1999, Columbia's Board of Directors adopted, subject
to shareholder approval, the Columbia Bancorp 1999 Stock Incentive Plan (the
"Plan"). The Plan restates and re-authorizes, with some revisions, the terms of
Columbia's presently effective stock incentive program, which was first adopted
by CRB prior to Columbia's formation in 1993 and revised in 1996. If approved by
shareholders, the Plan will allow Columbia to continue to grant stock options,
stock bonuses and certain other forms of stock-based compensation in connection
with the hiring and retention of qualified personnel for Columbia and its
banking subsidiaries. Approval of the Plan will effectively increase the number
of shares of Columbia's common stock now available for issuance as incentive
compensation. No more than 4% of Columbia's issued and outstanding common stock
may be issued in the form of stock options or other stock-based incentives under
the proposed Plan.
A complete copy of the Plan is attached to this Proxy Statement
as Exhibit 1. Below is a summary of certain key features of the Plan. The
following discussion is a summary only, and is qualified in its entirety by the
complete text of the Plan attached hereto as Exhibit 1. In addition, references
to certain tax matters and effects is qualified in its entirety by reference to
the applicable sections of the Internal Revenue Code of 1986, as amended,
together with all relevant regulations and letter rulings.
PURPOSE OF THE PLAN
As with Columbia's present stock incentive program, the purpose
of the Plan is to enable Columbia and its subsidiaries to attract and retain
experienced and able directors, employees and other key contributors, and to
provide an incentive to these individuals to exert their best efforts for
Columbia and its shareholders. Stock-based compensation is a key tool for the
retention of employees. For employees, stock-based compensation, particularly
stock options, have value only if Columbia's stock price increases above the
fair market value of the stock on the grant date and the employee remains on the
job for the period required for the option to be exercised. In addition,
stock-based compensation links the value of the grant to the value of Columbia's
stock. This aligns the interests of the recipient with the interests of all
shareholders, providing an incentive for the recipient to maximize shareholder
value. Management believes that Columbia's present stock incentive program has
been very effective in motivating and retaining employees and directors, and
that the continuation of the program is in the best interests of Columbia and
its shareholders.
8
10
TYPES OF INCENTIVES AVAILABLE UNDER THE PLAN
The proposed Plan authorizes three kinds of stock-based
incentives: (1) stock options, including incentive stock options as defined in
the Internal Revenue Code of 1986, as amended, and non-statutory stock options;
(2) incentives tied to the value of Columbia's stock in the form of stock
appreciation rights and cash bonus rights; and (3) bonuses paid in stock rather
than cash.
Stock Options
Under the Plan, each stock option grant must be designated as
either an incentive stock option or a non-statutory stock option. The difference
between the two types of stock options arises chiefly from the tax consequences
associated with the option.
At the time an incentive stock option is exercised, the recipient
does not recognize the gain (or loss), if any, on the difference between the
exercise price and the market price of the stock covered by the option on the
date of exercise. The recipient is therefore able to defer the recognition of
gain (or loss) to the date on which the stock acquired through exercise is sold.
This deferral of the recognition of gain for tax purposes can be of benefit to
the recipient.
Non-statutory stock options do not provide the same potential tax
benefit to the recipient. At the time of exercise, the recipient must recognize
the gain (or loss), if any, on the difference between the exercise price and the
market price of the stock covered by the option on the date of exercise. The
recipient may therefore not defer the recognition of gain (or loss) beyond the
exercise date. Non-statutory stock options are nonetheless a useful form of
incentive compensation, especially in cases where incentive stock options are
not available.
Stock Appreciation Rights and Cash Bonus Rights
The proposed Plan allows Columbia to grant stock appreciation
rights and cash bonus rights. A stock appreciation right entitles the recipient
to the increase in value, if any, in Columbia's stock price between the date of
the grant and the date of exercise of the right. A cash bonus right entitles the
recipient to a cash bonus upon the exercise of a stock option or stock
appreciation right. While stock appreciation rights and cash bonus rights are
authorized under Columbia's present stock incentive program, Columbia has never
awarded either form of incentive, and has no present plans to do so. However,
Columbia's management believes that the proposed Plan should continue this
authority, so that Columbia will have the flexibility to award such incentives
as an alternative or supplement to stock options and stock bonuses.
Stock Bonuses
The proposed Plan continues Columbia's authority to grant stock
bonuses. Columbia has granted stock bonuses under its present stock incentive
program on only a few occasions. Columbia's management believes that the
proposed Plan should continue the authority to grant stock bonuses, as this form
of incentive can be a useful alternative to the other incentive tools available
under the Plan.
PERSONS ELIGIBLE FOR GRANTS UNDER THE PLAN
Grants may be made under the proposed Plan to directors,
officers, key employees and other persons whom Columbia's Board of Directors
believes have made or will make an essential contribution to Columbia, although
grants of incentive stock options are limited to employees of Columbia and its
subsidiaries only.
LIMITATION ON NUMBER OF SHARES AVAILABLE UNDER THE PLAN
The total number of shares of Columbia's common stock that may be
issued upon the exercise of all options and grants of rights or stock bonuses
under the Plan may at no time exceed in the aggregate four percent (4%) of the
Company's total issued and outstanding shares of stock. For example, if Columbia
had 10,000,000 shares of its common stock issued and outstanding, no more than
400,000 shares of stock would be available for grants or awards under the Plan.
The number of shares available under the Plan will therefore increase if and
when the number of shares
9
11
of issued and outstanding common stock increase, subject to the 4% limitation.
Any increase in the 4% limitation imposed by the Plan requires shareholder
approval.
IMPLEMENTATION AND ADMINISTRATION OF THE PLAN
As with Columbia's present stock incentive program, the Plan will
be administered by Columbia's Board of Directors, which may adopt or amend rules
and regulations for its administration. The Board may delegate the Plan's
administration to a committee of the Board. The grant of stock options and other
incentives authorized under the Plan shall continue to be at the complete
discretion of Columbia's Board, which shall retain the sole authority to make
such grants. Nothing in the Plan requires the Board to make grants or awards
under the Plan in any amount, at any time, or to any group of individuals. The
amount, terms, conditions and restrictions of all grants and awards under the
Plan will be determined by the Board, subject to the limitations imposed by the
Plan and by applicable law and regulation.
VALUATION OF STOCK
When the operation of the Plan requires that the fair market
value of Columbia's common stock be determined, such as setting the exercise
price of an incentive stock option, the fair market value shall be the closing
price of the stock as quoted on the Nasdaq National Market on the date of the
grant or award, or on the next business day if the date of the grant or award is
a holiday. In the event of a stock split, recapitalization or other similar
event, the exercise price of outstanding options or rights already awarded shall
be adjusted in order to prevent either the dilution or the enlargement of the
benefit intended at the time of the original grant. The Plan permits the
exercise price for non-statutory stock options to be set at a price either above
or below the fair market value of Columbia's common stock on the date of grant.
PLAN AMENDMENTS
Columbia's Board may amend the Plan to comply with changes in the
law or for other reasons. Shareholder approval of amendments shall be sought if
such approval is necessary to comply with applicable law, or if the Board
believes that submission of the amendment to shareholders for approval is
desirable or appropriate. Shareholder approval is required for any amendment
increasing the total number of shares that may be issued under the Plan.
Amendments to the Plan may not affect or change an option or stock appreciation
right granted prior to the amendment without the written consent of the
recipient.
EXISTING INCENTIVE PROGRAM
The Plan, if approved, will replace and supersede Columbia's
existing stock incentive program. Under the existing program, a total of 522,000
split-adjusted shares of common stock have either been issued or committed for
issuance since 1993, leaving a total of 78,000 shares of common stock presently
available for awards or grants. Columbia's Board has no plans to issue
additional grants or awards under its existing stock incentive program prior to
the date of the Annual Meeting, and upon approval of the Plan, unused shares
under the existing stock incentive program will no longer be available for
commitment.
The terms of the Plan are substantially the same as those of the
existing stock incentive program. The only significant differences are: (1) the
elimination of provisions authorizing the sale of stock subject to restrictions,
a type of incentive that Columbia's Board determined it was unlikely to ever
utilize; and (2) the use of a percentage formula, rather than a fixed amount, to
limit the number of shares available for issuance.
MANAGEMENT'S RECOMMENDATION
Shareholder approval of the Plan will allow Columbia to continue
an incentive program which, in the opinion of the Board, has been highly
successful in attracting and retaining qualified employees and directors. If the
Plan is approved, the number of shares of Columbia's common stock available for
issuance as incentive compensation will effectively increase, from 78,000 under
the present stock incentive program to 4% of total issued and outstanding
shares. The Board believes that this increase and the other changes from the
present incentive program contained in the Plan are appropriate and necessary.
10
12
The approval of the Plan requires the affirmative vote of the
holders of a simple majority of Columbia's common stock represented in person or
by proxy at the Annual Meeting. Abstentions and broker non-votes will be
considered votes against approval of the Plan.
THE BOARD OF DIRECTORS OF COLUMBIA RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE PROPOSED COLUMBIA BANCORP 1999 STOCK INCENTIVE PLAN.
OTHER BUSINESS
Columbia's management knows of no other matters to be brought
before the Annual Meeting for a vote. However, if other matters are presented
for a vote at the Annual Meeting, the proxy holders will vote the shares
represented by properly executed proxies according to their best judgment on
those matters. At the Annual Meeting, management will report on Columbia's
business, and shareholders will have an opportunity to ask questions. For
information concerning the procedures provided by Columbia's Articles of
Incorporation for the presentation of business by shareholders at an annual
meeting, see the section below entitled "PROPOSALS OF SHAREHOLDERS".
INFORMATION REGARDING MANAGEMENT
EXECUTIVE OFFICERS
The following table sets forth summary information about the
executive officers of Columbia and CRB.
YEARS OF BANKING
NAME AGE POSITION EXPERIENCE
---- --- -------- ----------
Terry L. Cochran 54 President and Chief Executive Officer of 33
Columbia and CRB and a director of Columbia,
CRB and VCB
James C. McCall 53 Executive Vice President and Chief Lending 30
Officer of CRB
Craig J. Ortega 42 Executive Vice President and Head of Community 19
Banking of CRB
Neal T. McLaughlin 30 Executive Vice President and Chief Financial 7
Officer of Columbia and CRB
The business experience of each of these executive officers is
described below.
Terry L. Cochran has been a director of Columbia and its
President and Chief Executive Officer since its formation, and has been
President and Chief Executive Officer and a director of CRB since 1981. See
"Directors Continuing in Office" for more information about Mr. Cochran.
James C. McCall is Executive Vice President and Chief Lending
Officer of CRB. He has been employed by CRB since April 1982, and served as
Chief Lending Officer since November 1988. He holds a B.S. degree in Business
from Oregon State University, and is a 1993 graduate of the Pacific Coast
Banking School at the University of Washington. Mr. McCall has 30 years of
banking experience. He presently is a director of Network of Oregon Affordable
Housing, and is past Chairman of the Oregon Bankers Association Lending
Committee.
Craig J. Ortega is Executive Vice President and Head of Community
Banking of CRB, a position held since July 1997. Prior to that, he was manager
of CRB's Hood River branch. Mr. Ortega has been with CRB for five years, and has
19 years of banking experience. He attended Blue Mountain Community College and
holds a B.S. degree in Business Administration from Eastern Oregon State
College, and is a graduate of the Pacific Coast Banking School at the University
of Washington.
Neal T. McLaughlin has been an Executive Vice President and the
Chief Financial Officer of since July 1997, and also serves as Columbia's Chief
Financial Officer. Mr. McLaughlin started his career with JBC, and joined CRB
after the merger between CRB and JBC in 1995. Since joining CRB, he has served
in a number of positions, most recently as Vice President and Controller. He
holds a B.S. Degree in Accounting from the University of Oregon, and is a
Certified Public Accountant in the State of Oregon. Mr. McLaughlin has 7 years
of banking experience. He has attended the Pacific
11
13
Coast Banking School at the University of Washington. Mr. McLaughlin is a member
of the Financial Officers/Investment Committee of the Oregon Bankers
Association.
INFORMATION REGARDING COMPENSATION
EXECUTIVE COMPENSATION
The following table sets forth, for the three years ended
December 31, 1998, the compensation awarded, paid to, or earned by Terry L.
Cochran, the President and Chief Executive Officer of Columbia and CRB. No other
executive officer of Columbia received salary and bonus in excess of $100,000
for this three-year period.
SUMMARY COMPENSATION TABLE
Long-Term
Annual Compensation Compensation Awards
------------------------------------------ -------------------
Securities
Other Underlying
Name and Annual Options All Other
Position Year Salary Bonus Compensation ESOP(2) Granted Compensation
-------- ---- ------ ----- ------------ ------- ---------- ------------
Terry L. Cochran 1998 $143,333(3) $50,166 - $ 7,906 - $1,600(5)
President and CEO 1997 $126,875(3) $57,304 - $11,277 6,000 shares(4) $1,600(5)
1996 $ 93,634(3) $70,071 $2,000(1) $12,542 - $1,500(5)
- ----------------------
(1) Director's fees.
(2) As of December 31, 1998, the ESOP held 47,000 shares of Columbia stock for
the account of Mr. Cochran, with an estimated market value of $429,118
plus uninvested cash of $9,062. All of the shares described are vested,
and dividends are payable to the account of Mr. Cochran under the ESOP.
(3) Includes monthly auto allowance of $500 in 1995 and 1996, and $700
beginning in May 1997.
(4) The exercise price of the described options is $5.59 per share. The
options are immediately exercisable and expire in August 2007. The
exercise price has been restated for subsequent stock splits.
(5) Annual 401(k) employer contribution.
The following table sets forth information regarding option
exercises during 1998 and holdings at December 31, 1998 by the executive officer
named in the compensation table shown above.
AGGREGATED OPTION EXERCISES IN 1998 AND FY-END OPTION VALUES
Fiscal Year-end Option Values
------------------------------
Number of Securities Value of Unexercised
Shares Underlying Unexercised In-The-Money Options
Acquired on Value Options At Fiscal Year-End At Fiscal Year-End
Name Exercise(#) Realized($) Exercisable/Unexercis Exercisable/Unexercisable
---- ----------- ----------- -------------------------- -------------------------
Terry L. Cochran 3,500 $23,998 16,000/0 $79,060/$0
(1) On December 31, 1998, the closing sales price of Columbia's stock was
$9.125. For purposes of the foregoing table, stock options with an
exercise price less than that amount are considered to be "in-the-money"
and are considered to have a value equal to the difference between this
amount and the exercise price of the stock option multiplied by the number
of shares covered by the stock option.
EMPLOYMENT AND DEFERRED COMPENSATION AGREEMENTS
Columbia and Terry L. Cochran, Columbia's President and Chief
Executive Officer, are parties to an employment agreement of May 1, 1998. Under
the agreement, upon a change of control of Columbia, such as its acquisition by
or merger with another company, Mr. Cochran has the right to terminate his
employment within 90 days and to receive certain payments and benefits,
including yearly retirement benefits under a Deferred Compensation Agreement
between Mr. Cochran and Columbia. The employment agreement also contains
noncompetition provisions which restrict Mr. Cochran from competing with
Columbia for one year following his termination of employment under certain
conditions.
12
14
EXECUTIVE AND EMPLOYEE COMPENSATION PLANS
401 (k) Plan. Under CRB's 401(k) Plan, officers and employees of
CRB may elect to defer up to 10% of their compensation, and CRB makes matching
contributions to the accounts of officers and employees of CRB equal to 25
percent of the first four percent of compensation that any officer or employee
elects to defer, subject to limitations under the Internal Revenue Code of 1986.
Amounts contributed or deferred are distributed to employees upon retirement,
permanent disability, death, termination of employment, or the occurrences of
conditions constituting extraordinary hardship.
ESOP. Columbia maintains an Employee Stock Ownership Plan (the
"ESOP") for the benefit of employees. All employees of CRB who have been
credited with at least 1,000 hours of service in the prior year, and have
attained age 20, including officers, are eligible to participate in the ESOP.
The sole source of funding for the ESOP is contributions made by CRB.
Contributions made by participants are not permitted. Assets of the ESOP are
used primarily to purchase shares of Columbia's common stock. The ESOP may not
purchase Columbia common stock for a price in excess of its fair market value.
As of January 1, 1999, the ESOP held 284,766 shares of Columbia common stock and
$19,588 in cash. At that date, 159 employees of CRB were participating in the
ESOP.
Incentive Cash Compensation. CRB has adopted an incentive cash
compensation program under which employees at all levels can receive incentive
compensation, limited to a fixed percentage of base compensation, for helping
CRB achieve certain goals and objectives. For example, branch managers and loan
officers are eligible for cash compensation based on increases in branch income,
loan and deposit growth, maintenance of asset quality, and the cross-selling of
products and services. Non-officer employees are graded and rewarded based on
the delivery of quality customer service, as determined by the employee's
supervisor, and on branch income growth. Most new employees become eligible to
participate in the program within a short time after beginning employment. For
the year ended December 31, 1998, bonus payments totaling $636,169 were made to
Bank employees, including $105,821 paid to executive officers as a group.
Existing Stock Incentive Plan. Since 1993 Columbia has utilized
a stock incentive plan (the "Incentive Plan") administered by the Columbia Board
to advance Columbia's business interests. The Incentive Plan enables Columbia
and its subsidiaries to attract and retain qualified and talented employees and
Board members by offering them an opportunity to participate in the growth and
ownership of Columbia. Stock options and other stock-based incentives may be
granted under the Incentive Plan at the discretion of and with the approval of
the Columbia Board. Employees are eligible to receive incentive stock options,
which are intended to qualify for favorable tax treatment, and which must have
an exercise price equal to not less than the fair market value of the common
stock on the date of grant. In addition, employees and directors are eligible
for non-statutory stock options, which do not qualify for favorable tax
treatment, and which may have an exercise price set at the discretion of the
Columbia Board. The option exercise price for non-statutory stock options may be
either greater or less than the fair market value of the common stock on the
date of grant, although in practice the Columbia Board has always set the
exercise price for such options at fair market value. Options vest and are
exercisable in accordance with the terms of the individual grant. The Incentive
Plan also allows the Columbia Board to offer other forms of stock-related
incentives, including stock appreciation rights, stock bonuses and sales of
stock subject to restrictions. However, apart from grants of 200 shares of
common stock to each of two retiring outside directors, the Board has never
approved awards under the Incentive Plan other than stock options.
In 1998 options covering a total of 5,000 shares of Columbia's
common stock were granted to employees of Columbia's bank subsidiaries, and
options covering a total of 400 shares of common stock were granted to two
retiring non-employee members of Columbia's Board. Between January 1, 1999 and
the date of this Proxy Statement, no new grants and awards were made under the
Incentive Plan. Adjusted for stock splits, an aggregate of no more than 600,000
shares of common stock may be issued under the Incentive Plan. As of December
31, 1998 a total of 522,000 split-adjusted shares of common stock had been
either issued or committed for issuance under the Incentive Plan, leaving a
total of 78,000 shares of common stock available for awards or grants.
At Columbia's 1999 Annual Meeting, shareholders will be asked to
approve Columbia's 1999 Stock Incentive Plan, which restates and re-authorizes,
with some revisions, the terms of the existing Incentive Plan. The proposed 1999
Stock Incentive Plan, if approved, will replace the existing Incentive Plan. See
"PROPOSAL THREE: APPROVAL OF 1999 STOCK INCENTIVE PLAN."
13
15
Directors, officers and other employees of VCB are eligible to
participate either in the plans and programs described above or in comparable
plans and programs kept in place by VCB for the benefit of its directors,
officers and employees following VCB's acquisition by Columbia.
DIRECTOR COMPENSATION
The CRB Chairperson is paid an attendance fee of $1,000 for each
regular monthly meeting of the Board. Each other CRB director is paid an
attendance fee of $700 for each regular monthly meeting of the CRB Board. Each
CRB director also receives $100 for each meeting attended of any committee of
the Board to which the director belongs. VCB directors received no compensation
for their services as directors in 1998. Columbia does not pay any separate
attendance fees to its directors. Since his election to the U.S. House of
Representatives, Greg P. Walden will not accept director's fees for his service
on the CRB Board.
CERTAIN TRANSACTIONS
Some of the directors and officers of Columbia and members of
their immediate families and firms, and corporations with which they are
associated have been parties to transactions with Columbia, including
borrowings and investments in time deposits. All such loans and investments in
time deposits have been made in the ordinary course of business, have been made
on substantially the same terms, including interest rates paid or charged and
collateral required, as those prevailing at the time for comparable transactions
with unaffiliated persons, and did not involve more than the normal risk of
collectibility or present other unfavorable features. As of December 31, 1998,
the aggregate outstanding amount of all loans to officers and directors was
approximately $2.82 million, which represented approximately 8.12% of Columbia's
consolidated shareholders' equity at that date. All such loans are currently in
good standing, and are being paid in accordance with their terms.
Robert L.R. Bailey, a director of Columbia and CRB, and Orchard
View Farms, a company controlled by Mr. Bailey, as well as Dry Hollow Limited
Partnership, a partnership for which Mr. Bailey is the general partner, borrowed
sums from CRB in excess of $60,000 in the aggregate under revolving and
nonrevolving lines of credit and a Visa card. As of December 31, 1998 the total
balance due by Mr. Bailey from these borrowings was $1.38 million.
Charles F. Beardsley, a director of Columbia and CRB, borrowed
sums from CRB in excess of $60,000 in the aggregate under term loans, a
revolving line of credit, and a Visa card. As of December 31, 1998 the balance
due by Mr. Beardsley from these borrowings was $95,000.
Terry L. Cochran, the Chief Executive Officer and President of
Columbia and CRB and a director of Columbia, CRB and VCB, borrowed sums from
CRB in excess of $60,000 in the aggregate under revolving lines of credit
and a Visa card. As of December 31, 1998 the total balance due by Mr. Cochran
from these borrowings was $141,000.
Dennis Carver, a director of Columbia and CRB, borrowed sums from
CRB in excess of $60,000 in the aggregate under term loans. As of December 31,
1998 the total balance due by Mr. Carver from these borrowings was $324,000.
NO MATERIAL ADVERSE PROCEEDINGS
No director, officer, affiliate, beneficial owner of more than 5%
of the common stock of Columbia or security holder is an adverse party in any
material proceeding against Columbia, or has a material interest adverse to
Columbia.
COMPLIANCE WITH SECTION 16 FILING REQUIREMENTS
Section 16 of the Securities Exchange Act of 1934, as amended,
requires that all executive officers and directors of Columbia and all persons
who beneficially own more than 10% of Columbia's common stock file an initial
report of their ownership of Columbia's securities on Form 3 and report
changes in their ownership of Columbia's securities on Form 4 or Form 5. These
filings must be made with the United States Securities and Exchange Commission
with a copy sent to Columbia. As of the date of this Proxy Statement all
executive officers and directors of Columbia are in compliance with such filing
requirements.
14
16
INDEPENDENT AUDITORS
Moss Adams LLP, independent auditors, were selected by the
Columbia Board of Directors to conduct an audit of Columbia's financial
statements for the year ended December 31, 1998. Management has not followed the
practice of presenting the selection of auditors to the stockholders for
approval. Audit services provided by Moss Adams LLP for the year ended 1998
included the examination of Columbia's consolidated financial statements, and
the review of materials used in various filings with the United States
Securities and Exchange Commission. No representative of Moss Adams LLP will be
in attendance at the annual meeting.
The audit services provided to Columbia were approved by the
Audit Committee of the Board of Directors of CRB prior to being rendered. Other
specific services were approved by officers of Columbia after a determination
that none of such services would affect Moss Adams LLP's independence as
auditors of Columbia's financial statements.
PROPOSALS OF SHAREHOLDERS
Shareholders may present matters for consideration at any annual
meeting of Columbia. Shareholders are reminded that under Article VII of the
Articles of Incorporation of Columbia, there are certain procedural requirements
relating to the presentation of business at an annual meeting by a shareholder.
Unless the Board of Directors permits otherwise, any business, including
nominations of directors, may be properly brought before an annual shareholders
meeting by a shareholder only upon the shareholder's timely notice in writing to
Columbia's Secretary. To be timely, the notice must be delivered to or mailed
and received at the principal executive offices of Columbia not later than the
close of business on the tenth (10th) business day following the day on which
notice or disclosure of the date of the annual meeting is given or made to
shareholders.
The notice provided by the shareholder must set forth (i) a brief
description of each matter desired to brought before the annual meeting and the
reason for conducting such business at the meeting, (ii) the name and address of
the proposing shareholder, (iii) the class and number of shares of stock of
Columbia which are beneficially owned by the proposing shareholder, (iv) any
material interest of the shareholder in the business proposed, and (v) as for
each person whom the shareholder proposes to nominate for election as a director
(a) the name, age, business address, and residence address of such person, (b)
the principal occupation or employment of such person, (c) the class and number
of shares of stock, if any, of Columbia which are beneficially owned by such
person, (d) the proposed nominee's written consent, and (e) any other
information relating to such person that is required to be disclosed or is
otherwise required by any applicable law.
With respect to proposals to be considered at the 2000 annual
meeting of shareholders, if a shareholder wishes to present a proposal at that
annual meeting and also wishes to have the proposal included in Columbia's
official Proxy Statement for the 1999 annual meeting, the written notice of
proposal must be submitted to the Secretary of Columbia no later than December
31, 1999.
INFORMATION AVAILABLE TO SHAREHOLDERS
COLUMBIA'S 1998 ANNUAL REPORT IS BEING MAILED TO SHAREHOLDERS
WITH THIS PROXY STATEMENT. ADDITIONAL COPIES OF THE ANNUAL REPORT AND COLUMBIA'S
FORM 10-K (WHEN AVAILABLE) FILED WITH THE UNITED STATES SECURITIES AND EXCHANGE
COMMISSION (NOT INCLUDING EXHIBITS) MAY BE OBTAINED WITHOUT CHARGE FROM NEAL T.
MCLAUGHLIN, CHIEF FINANCIAL OFFICER, COLUMBIA BANCORP, POST OFFICE BOX 1050, THE
DALLES, OREGON 97058. COPIES OF SUCH MATERIALS MAY ALSO BE OBTAINED FROM THE
WEBSITE THAT THE SEC MAINTAINS AT HTTP://WWW.SEC.GOV. COPIES OF EXHIBITS TO THE
FORM 10-KSB WILL BE SUPPLIED UPON PAYMENT OF COLUMBIA BANCORP'S REASONABLE
EXPENSES IN FURNISHING SUCH EXHIBIT IN THE AMOUNT OF $.25 PER PAGE.
15
17
STOCK PERFORMANCE GRAPH
The graph below compares the yearly percentage change in the
cumulative shareholder return on the Columbia's common stock during the five
years ended December 31, 1998, with: (i) the All Nasdaq U.S. Stocks Index as
reported by the Center for Research in Security Prices; and (ii) the Nasdaq Bank
Index as reported by the Center for Research in Security Prices. This comparison
assumes $100.00 was invested on December 31, 1993, in Columbia's common stock
and the comparison groups and assumes the reinvestment of all cash dividends
prior to any tax effect and retention of all shares issued pursuant to stock
dividends and splits.
COLUMBIA BANCORP
TOTAL CUMULATIVE SHAREHOLDER RETURN FOR
THE PERIOD ENDING DECEMBER 31, 1998
[GRAPH]
- ----------------------------------------------------------------------------------
1993 1994 1995 1996 1997 1998
- ----------------------------------------------------------------------------------
Columbia Bancorp 100.00 94.94 201.94 162.96 276.27 309.10
- ----------------------------------------------------------------------------------
Nasdaq Bank Stocks 100.00 99.64 148.38 195.91 328.02 324.90
- ----------------------------------------------------------------------------------
Nasdaq US Market 100.00 97.75 138.94 170.01 208.58 293.21
- ----------------------------------------------------------------------------------
March 5, 1999
16
18
COLUMBIA BANCORP 1999 STOCK INCENTIVE PLAN
1. Purpose. The purpose of this 1999 Stock Incentive Plan (the "Plan")
is to enable Columbia Bancorp (the "Company") and its subsidiaries to attract
and retain experienced and able directors, officers, employees and other key
contributors and to provide an additional incentive to these individuals to
exert their best efforts for the Company, its subsidiaries and its shareholders.
2. Administration.
2.1 Board of Directors. The Plan shall be administered by the
board of directors of the Company (the "Board of Directors"), which shall
determine and designate from time to time the persons to whom grants and awards
shall be made and the amounts, terms and conditions of such grants and awards.
Subject to the provisions of the Plan, the Board of Directors may from time to
time adopt or amend rules and regulations relating to administration of the
Plan, and the interpretation and construction of the provisions of the Plan by
the Board of Directors shall be final and conclusive. Whenever the operation of
the Plan requires that the fair market value of the Company's common stock (the
"Stock") be determined, the fair market value shall be the closing price of the
Stock as quoted on the Nasdaq National Market on the date of the grant or award,
or on the next business day if the date of the grant or award is a holiday. No
employee who receives an option or other grant or award under the Plan shall
participate in the decision of the Board of Directors with respect to the grant
or award to that employee.
2.2 Committee. The Board of Directors may delegate to a committee
of the Board of Directors (the "Committee") any or all authority for
administration of the Plan. If authority is delegated to a Committee, all
references to the Board of Directors in the Plan shall mean and relate to the
Committee except (i) as otherwise provided by the Board of Directors and (ii)
that only the Board of Directors may amend or terminate the Plan as provided
elsewhere herein.
3. Eligibility. Grants and awards may be made under the Plan to
directors, officers and key employees of the Company or any parent or subsidiary
of the Company, and other key individuals such as consultants to the Company who
the Board of Directors believes have made or will make an essential contribution
to the Company; provided, however, that only employees of the Company or its
parent or subsidiary corporations shall be eligible to receive Incentive Stock
Options under the Plan.
4. Shares Subject to the Plan. Only common stock may be issued under
the Plan. The total number of shares of Stock that may be issued upon the
exercise of all options or pursuant to grants of rights or stock bonuses under
the Plan shall at no time exceed in the aggregate four percent (4%) of the
Company's total issued and outstanding shares of Stock. If any option under the
Plan or stock appreciation right granted without a related option expires or is
canceled or terminated and is unexercised in whole or in part, the shares
allocable to the unexercised portion shall again become available for awards
under the Plan, except that shares that are
Page 1 - COLUMBIA BANCORP 1999 STOCK INCENTIVE PLAN
19
issued on exercise of a stock appreciation right that were allocable to an
option, or portion thereof, surrendered in connection with the exercise of the
stock appreciation right shall not again become available for awards under the
Plan. If Stock awarded as a bonus under the Plan is forfeited or repurchased
pursuant to applicable restrictions, the number of shares forfeited or purchased
shall again be available under the Plan. Stock issued under the Plan may be
subject to such restrictions on transfer, repurchase rights, or other
restrictions as are determined by the Board of Directors. Any certificates
representing such Stock shall bear such legends as are determined by the Board
of Directors.
5. Effective Date and Duration of Plan.
5.1 Effective Date. The Plan was adopted by a majority vote of
the Board of Directors on February 19, 1999 subject to shareholder approval, and
shall become effective (the "Effective Date") on the date when the Plan is
approved by a vote of a simple majority of the shareholders of the Company
entitled to vote on the matter. The approval of the Plan shall be submitted to
shareholders for a vote at the 1999 Annual Meeting of the Company. Options and
stock appreciation rights may be granted and Stock may be awarded as bonuses
under the Plan at any time after the Effective Date and before termination of
the Plan.
5.2 Duration of the Plan. The Plan shall continue until, in the
aggregate, options and stock appreciation rights have been granted and exercised
and Stock has been awarded as bonuses and the restrictions on any such Stock
have lapsed with respect to all shares subject to the Plan under paragraph 4
(subject to any adjustments under paragraph 9). The Board of Directors may
suspend or terminate the Plan at any time except with respect to options, stock
appreciation rights and bonus rights, and Stock subject to restrictions then
outstanding under the Plan. Termination shall not affect any right of the
Company to repurchase shares or the forfeitability of shares issued under the
Plan.
6. Grants, Awards and Sales.
6.1 Types of Securities. The Board of Directors may, from time to
time, take the following actions, separately or in combination, under the Plan:
(i) grant Incentive Stock Options, as defined in Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"); (ii) grant options other than
Incentive Stock Options (hereinafter "Non-Statutory Stock Options"); (iii) grant
stock appreciation rights or bonus rights; and (iv) award bonuses of Stock. The
Board of Directors shall specify the action taken with respect to each person
granted or awarded any option or Stock under the Plan and shall specifically
designate each option granted under the Plan as an Incentive Stock Option or a
Non-Statutory Stock Option.
Page 2 - COLUMBIA BANCORP 1999 STOCK INCENTIVE PLAN
20
6.2 General Rules Relating to Options.
6.2.1 Time of Exercise. Except as provided in paragraph 8,
options granted under the Plan may be exercised over the period stated in each
option in amounts and at times prescribed by the Board of Directors and stated
in the option, provided that options shall not be exercised for fractional
shares. If the optionee does not exercise an option in any period with respect
to the full number of shares to which the optionee is entitled in that period,
the optionee's rights shall be cumulative and the optionee may purchase those
shares in any subsequent period during the term of the option.
6.2.2 Purchase of Shares. Shares may be purchased or
acquired pursuant to an option granted under the Plan only on receipt by the
Company of notice in writing from the optionee of the optionee's intention to
exercise, specifying the number of shares the optionee desires to purchase and
the date on which the optionee desires to complete the transaction, which may
not be more than 30 days after receipt of the notice. On or before the date
specified for completion of the purchase, the optionee must have paid the
Company the full purchase price in cash, including cash that may be the proceeds
of a loan from the Company, in shares of Stock previously acquired by the
optionee valued at fair market value, or in any combination of cash and shares
of Stock. No shares shall be issued until full payment therefor has been made.
Each optionee who has exercised an option shall, on notification of the amount
due, if any, and prior to or concurrently with delivery of the certificates
representing the shares for which the option was exercised, pay to the Company
amounts necessary to satisfy any applicable federal, state, and local
withholding tax requirements. If additional withholding becomes required beyond
any amount deposited before delivery of the certificates, the optionee shall pay
such amount to the Company on demand. If the employee fails to pay the amount
demanded, the Company shall have the right to withhold that amount from other
amounts payable by the Company to the optionee, including salary, subject to
applicable law.
6.3 Incentive Stock Options. Incentive Stock Options shall be
subject to the following additional terms and conditions:
6.3.1 Limitation on Amount of Grants. No employee may be
granted Incentive Stock Options under the Plan such that the aggregate fair
market value on the date of grant of the Stock with respect to which Incentive
Stock Options are exercisable for the first time by that employee during any
calendar year, under the Plan and under any other incentive stock option plan
(within the meaning of Section 422 of the Code) of the Company or any parent or
subsidiary of the Company, exceeds $100,000.
6.3.2 Option Price. The option price per share under each
option granted under the Plan shall be determined by the Board of Directors, but
the option price with respect to an Incentive Stock Option shall be not less
than 100 percent of the fair market value of the shares covered by the option on
the date the option is granted.
Page 3 - COLUMBIA BANCORP 1999 STOCK INCENTIVE PLAN
21
6.3.3 Duration of Options. Subject to paragraphs 6.3.4 and
8, each option granted under the Plan shall continue in effect for the period
fixed by the Board of Directors, except that no Incentive Stock Option shall be
exercisable after the expiration of 10 years from the date it is granted.
6.3.4 Limitations on Grants to 10 Percent Shareholders. An
Incentive Stock Option may be granted under the Plan to an employee of the
Company, or of any parent or subsidiary of the Company, possessing more than 10
percent of the total combined voting power of all classes of stock of the
Company, or of any parent or subsidiary of the Company, only if the option price
is at least 110 percent of the fair market value of the Stock subject to the
option on the date it is granted, and the option by its terms is not exercisable
after the expiration of five years from the date it is granted.
6.3.5 Limitation on Time of Grant. No Incentive Stock
Option may be granted on or after the tenth anniversary of the Effective Date.
6.4 Non-Statutory Stock Options. Non-Statutory Stock Options
shall be subject to the following additional terms and conditions:
6.4.1 Option Price. The option price per share under each
option granted under the Plan shall be determined by the Board of Directors in
its discretion.
6.4.2 Duration of Options. Non-Statutory Stock Options
granted under the Plan shall continue in effect for the period fixed by the
Board of Directors.
6.5 Stock Bonuses. Stock awarded as a bonus shall be subject to
the terms, conditions, and restrictions determined by the Board of Directors at
the time the Stock is awarded as a bonus. The Board of Directors may require the
recipient to sign an agreement as a condition of the award, but may not require
the recipient to pay any money consideration except as provided in the last
sentence of this paragraph. The agreement may contain such terms, conditions,
representations, and warranties as the Board of Directors may require. The
Company may require any recipient of a Stock bonus to pay to the Company amounts
necessary to satisfy any applicable federal, state, or local tax withholding
requirements prior to delivery of certificates.
6.6 Stock Appreciation Rights.
6.6.1 Description. Each stock appreciation right shall
entitle the holder, on exercise, to receive from the Company in exchange
therefor an amount equal in value to the excess of the fair market value on the
date of exercise of one share of Stock over its fair market value on the date of
grant (or, in the case of a stock appreciation right granted in connection with
an option, the option price per share under the option to which the stock
appreciation right relates), multiplied by the number of shares covered by the
stock appreciation right or the option, or portion thereof, that is surrendered.
Page 4 - COLUMBIA BANCORP 1999 STOCK INCENTIVE PLAN
22
6.6.2 Exercise. A stock appreciation right shall be
exercisable only at the time or times established by the Board of Directors. If
a stock appreciation right is granted in connection with an option, then it
shall be exercisable only to the extent and on the same conditions that the
related option is exercisable. Upon exercise of a stock appreciation right, any
option or portion thereof to which the stock appreciation right relates must be
surrendered unexercised.
6.6.3 Payment. Payment by the Company upon exercise of a
stock appreciation right may be made in shares of Stock valued at fair market
value, or in cash, or partly in Stock and partly in cash, as determined by the
Board of Directors. No fractional shares shall be issued upon exercise of a
stock appreciation right. In lieu thereof, cash may be paid in an amount equal
to the value of the fraction or, in the discretion of the Board of Directors,
the number of shares may be rounded to the next whole share.
6.6.4 Adjustment. In the event of any adjustment pursuant
to paragraph 9 in the number of shares of Stock subject to an option granted
under the Plan, any stock appreciation right granted hereunder in connection
with such option shall be proportionately adjusted.
6.7 Cash Bonus Rights.
6.7.1 Grant. The Board of Directors may grant bonus rights
under the Plan in connection with: (i) an option or stock appreciation right
granted or previously granted, and (ii) Stock awarded, or previously awarded, as
a bonus. Bonus rights will be subject to such rules, terms, and conditions as
the Board of Directors may prescribe.
6.7.2 Bonus Rights in Connection with Options and Stock
Appreciation Rights. A bonus right granted in connection with an option will
entitle an optionee to a cash bonus when the related option is exercised (or is
surrendered in connection with the exercise of a stock appreciation right
related to the option) in whole or in part. A bonus right granted in connection
with a stock appreciation right will entitle the holder to a cash bonus when the
stock appreciation right is exercised. Upon exercise of an option, the amount of
the bonus shall be determined by multiplying the excess of the total fair market
value of the shares to be acquired upon the exercise over the total option price
for the shares by the applicable bonus percentage. Upon exercise of a stock
appreciation right, the bonus shall be determined by multiplying the total fair
market value of the shares or cash received pursuant to the exercise of the
stock appreciation right by the applicable bonus percentage. The bonus
percentage applicable to a bonus right shall be determined from time to time by
the Board of Directors but shall in no event exceed 100 percent.
6.7.3 Bonus Rights in Connection with Stock Bonus. A bonus
right granted in connection with Stock awarded as a bonus will entitle the
person awarded such Stock to a cash bonus either at the time the Stock is
awarded or at such time as restrictions, if any, to which the Stock is subject
lapse. If Stock awarded is subject to
Page 5 - COLUMBIA BANCORP 1999 STOCK INCENTIVE PLAN
23
restrictions and is forfeited by the holder, the bonus right granted in
connection with such Stock shall terminate and may not be exercised. The amount
of cash bonus to be awarded and the time such cash bonus is to be paid shall be
determined from time to time by the Board of Directors.
6.7.4 Bonus Rights in Connection with Stock Purchase. A
bonus right granted in connection with Stock purchased hereunder (excluding
Stock purchased pursuant to an option) shall terminate and may not be exercised
in the event the Stock is repurchased by the Company or forfeited by the holder
pursuant to restrictions applicable to the Stock. The amount of cash bonus to be
awarded and the time such cash bonus is to be paid shall be determined from time
to time by the Board of Directors.
7. Nontransferability. Each option, stock appreciation right, or cash
bonus right granted under the Plan by its terms shall be nonassignable and
nontransferable by the holder except by will or by the laws of descent and
distribution of the state or country of the holder's domicile at the time of
death, and each option, stock appreciation right, or cash bonus right by its
terms shall be exercisable during the holder's lifetime only by the holder.
8. Termination of Employment.
8.1 Retirement or General Termination. Unless otherwise
determined by the Board of Directors, if an employee's employment by the Company
or by any parent or subsidiary of the Company is terminated by retirement or for
any reason other than in the circumstances specified in 8.2 below, any option,
stock appreciation right or cash bonus right held by the employee may be
exercised at any time prior to its expiration date or the expiration of three
months after the date of the termination, whichever is the shorter period, but
only if and to the extent the employee was entitled to exercise the option,
stock appreciation right or cash bonus right on the date of termination. The
transfer of an employee by the Company or any parent or subsidiary of the
Company to the Company or any parent or subsidiary of the Company shall not be
considered a termination for purposes of the Plan.
8.2 Death or Disability. Unless otherwise determined by the Board
of Directors, if an employee's employment by the Company or by any parent or
subsidiary of the Company is terminated because of death or physical disability
(within the meaning of Section 22(e)(3) of the Code), any option, stock
appreciation right or cash bonus right held by the employee may be exercised at
any time prior to its expiration date or the expiration of one year after the
date of termination, whichever is the shorter period, for the greater of (a),the
number of remaining shares for which the employee was entitled to exercise the
option, stock appreciation right or cash bonus right on the date of termination
or (b) the number of remaining shares for which the employee would have been
entitled to exercise the option, stock appreciation right or cash bonus right if
such option or right had been 50 percent exercisable on the date of termination.
If an employee's employment is terminated by death, any option, stock
appreciation right or cash bonus right held by
Page 6 - COLUMBIA BANCORP 1999 STOCK INCENTIVE PLAN
24
the employee shall be exercisable only by the person or persons to whom the
employee's rights under the option, stock appreciation right or cash bonus right
pass by the employee's will or by the laws of descent and distribution of the
state or country of the employee's domicile at the time of death.
8.3 Termination of Unexercised Rights. To the extent an option,
stock appreciation right or cash bonus right held by any deceased employee or by
any employee whose employment is terminated is not exercised within the limited
periods provided above, all further rights to exercise the option, stock
appreciation right or cash bonus right shall terminate at the expiration of such
periods.
8.4 Termination of Non-Employees. With respect to options, stock
appreciation rights and cash bonus rights granted to persons who are not
employees of the Company or its parents or subsidiaries, the Board of Directors
may establish provisions relating to the termination of those persons' status
with the Company or its parents or subsidiaries.
9. Changes in Capital Structure. If the outstanding shares of Stock are
increased or decreased or changed into or exchanged for a different number or
kind of shares or other securities of the Company or of another corporation, by
reason of any reorganization, merger, consolidation, plan of exchange,
recapitalization, reclassification, stock split-up, combination of shares, or
dividend payable in shares, appropriate adjustment shall be made by the Board of
Directors in the number and kind of shares for the purchase of which options or
stock appreciation rights may be granted and for which Stock may be awarded as
bonuses subject to restrictions under the Plan. In addition, the Board of
Directors shall make appropriate adjustments in the number and kind of shares as
to which outstanding options, or portions thereof then unexercised, shall be
exercisable, and the number and kind of shares covered by outstanding stock
appreciation rights to the end that each optionee's proportionate interest shall
be maintained as before the occurrence of such event. Adjustments in outstanding
options shall be made without change in the total price applicable to the
unexercised portion of any option and with a corresponding adjustment in the
option price per share. Adjustments in outstanding stock appreciation rights
shall be made without change in their total value. Any such adjustment made by
the Board of Directors shall be conclusive. In the event of dissolution or
liquidation of the Company or a merger, consolidation, or plan of exchange
affecting the Company, in lieu of making adjustments as provided for above in
this paragraph 9, the Board of Directors may, in its sole discretion, provide a
30-day period prior to such event during which optionees shall have the right to
exercise options or stock appreciation rights.
10. Corporate Mergers, Acquisitions, Etc. The Board of Directors may
grant options and stock appreciation rights having terms and provisions which
vary from those specified in this Plan provided that any options and stock
appreciation rights granted pursuant to this section are granted in substitution
for, or in connection with the assumption of, existing options and stock
appreciation rights granted by another
Page 7 - COLUMBIA BANCORP 1999 STOCK INCENTIVE PLAN
25
corporation and assumed or otherwise agreed to be provided for by the Company
pursuant to or by reason of a transaction involving a corporate merger,
consolidation, acquisition of property or stock, separation, reorganization or
liquidation to which the Company or a parent or subsidiary is a party.
11. Amendment of Plan. The Board of Directors may amend the Plan in such
respects as it deems advisable because of changes in the law while the Plan is
in effect or for any other reason. Such amendments may include, without
limitation, an increase in the total number of shares that may be issued under
the Plan, and changes to the classes of persons eligible to receive awards or
grants under the Plan. No amendment to the Plan shall be made without
shareholder approval if such approval is necessary to comply with any regulatory
requirement, or if the Board of Directors deems the submission of the amendment
to shareholders for approval is desirable or appropriate. Without limitation of
the foregoing, shareholder approval shall be required for any amendment
increasing the total number of shares that may be issued under the Plan. Except
as may be required by applicable law, no amendment to the Plan shall affect or
change an option or stock appreciation right granted to any person prior to such
amendment without the written consent of such person.
12. Prior Plans. The Plan supersedes and replaces any prior plans of the
Company permitting or relating to the award of stock options, the grant of stock
bonuses, or the issuance of any other kinds of stock-based incentive
compensation described in the Plan; provided, that the adoption and approval of
the Plan shall not affect grants and awards made under any such prior plans or
the rights of recipients of such grants and awards, all of which such prior
grants and awards shall be and are deemed affirmed and ratified.
13. Approvals. The obligations of the Company under the Plan may be
subject to the approval of state and federal authorities or agencies with
jurisdiction in the matter. The Company will use its best efforts to take steps
required by state or federal law or applicable regulations in connection with
the granting of any option or the issuance or sale of any shares under the Plan.
The foregoing notwithstanding, the Company shall not be obligated to issue or
deliver shares of Stock under the Plan if the Company is advised by its legal
counsel that such issuance or delivery would violate applicable state or federal
laws.
14. Employment Rights. Nothing in the Plan or any grant or award made
pursuant to the Plan shall confer on any employee any right to be continued in
the employment of the Company or any parent or subsidiary of the Company, or
shall interfere in any way with the right of the Company or any parent or
subsidiary of the Company by whom such employee is employed to terminate such
employee's employment at any time, with or without cause.
15. Rights as a Shareholder. A holder of an option or a stock
appreciation right or a recipient of Stock awarded as a bonus shall have no
rights as a shareholder with
Page 8 - COLUMBIA BANCORP 1999 STOCK INCENTIVE PLAN
26
respect to any shares covered by any option, stock appreciation right, or bonus
award until the date of issue of a stock certificate to him or her for such
shares. Except as otherwise provided in the Plan, no adjustment shall be made
for dividends or other rights for which the record date is prior to the date
such stock certificate is issued.
Date of Adoption by Board of Directors: February 19, 1999.
Page 9 - COLUMBIA BANCORP 1999 STOCK INCENTIVE PLAN
27
MAP
COLUMBIA BANCORP
ANNUAL MEETING OF SHAREHOLDERS
FRIDAY, APRIL 16, 1999
7:00 P.M.
COLUMBIA GORGE DISCOVERY CENTER
5000 DISCOVERY DRIVE
THE DALLES, OR 97058
[COLUMBIA LETTERHEAD] PROXY
- -------------------------------------------------------------------------------
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR USE AT THE ANNUAL MEETING
ON APRIL 16, 1999.
The shares of stock you hold in your account will be voted as you specify below.
IF NO CHOICE IS SPECIFIED, THE PROXY WILL BE VOTED "FOR" ITEMS 1, 2, AND 3.
By signing the proxy, you revoke all prior proxies and appoint Donald T.
Mitchell, Chairman of the Board, and Terry L. Cochran, President and Chief
Executive Officer, and each of them, with full power of substitution, to vote
your shares on the matters shown on the reverse side and any other matters
which may come before the Annual Meeting and all adjournments.
See reverse for voting instructions.
28
-----------------
COMPANY #
CONTROL #
-----------------
There are two ways to vote your proxy.
Your telephone vote authorizes the named proxies to vote your shares in the same
manner as if you marked, signed and returned your proxy card.
VOTE BY TELEPHONE -- TOLL FREE -- 1-800-240-6326 -- QUICK *** EASY ***IMMEDIATE
o Use any touch-tone telephone to vote your proxy 24 hours a day, 7 days a
week.
o You will be prompted to enter your 3-digit Company Number and your 7-digit
Control Number which is located above.
o Follow the simple instructions the telephone voice provides you.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope
we've provided or return it to Columbia Bancorp, c/o Shareowner Services,
P.O. Box 64873, St. Paul, MN 55164-9397.
If you vote by telephone, please do not mail your proxy card
Please detach here
The Board of Directors Recommends a Vote FOR Items 1, 2 and 3.
1. Election of directors: 01 Robert L. R. Bailey 03 Donald T. Mitchell
02 Dennis Carver
[ ] Vote FOR [ ] Vote WITHHELD
all nominees from all nominees
(Instructions: To withhold authority to vote for -----------------------
any indicated nominee, write the number(s) of the | |
nominee(s) in the box provided to the right.) -----------------------
2. To approve an amendment to the
Articles of incorporation of
Columbia Bancorp to increase
the number of authorized
shares of common stock
from 10,000,000 to 20,000,000. [ ] For [ ] Against [ ] Abstain
3. To approve the adoption of the
1999 Columbia Bancorp Stock
Incentive Plan. [ ] For [ ] Against [ ] Abstain
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION
IS GIVEN, WILL BE VOTED FOR EACH PROPOSAL.
Address Change / Mark Box [ ] Indicate changes below: Date:
----------------
--------------------------------
| |
--------------------------------
Signature(s) in Box
Please sign exactly as your
name(s) appear on the proxy. If
held in joint tenancy, all
persons must sign. Trustees,
administrators, etc., should
include title and authority.
Corporations should provide
full name or corporation and
title of authorized officer
signing the proxy.