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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a
WESTBANK CORPORATION
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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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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(5) Total fee paid:
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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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NOTICE OF
ANNUAL MEETING
OF SHAREHOLDERS
APRIL 18, 2001
AND
PROXY STATEMENT
Your Vote Is Important
You are urged to exercise your right to vote by indicating your choices on
the enclosed proxy card. Please date, sign and promptly return
your proxy card in the enclosed postage-paid envelope. You may,
nevertheless, vote in person if you attend the meeting.
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WESTBANK CORPORATION
225 PARK AVENUE
WEST SPRINGFIELD, MASSACHUSETTS 01089-3310
NOTICE OF 2001 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD WEDNESDAY, APRIL 18, 2001
MARCH 16, 2001
TO THE SHAREHOLDERS OF WESTBANK CORPORATION:
Notice is hereby given that the 2001 Annual Meeting of Shareholders of Westbank
Corporation (the "Corporation") will be held at 9:00 AM on Wednesday, April 18,
2001, at the Carriage House at Storrowton Tavern, 1305 Memorial Avenue, West
Springfield, Massachusetts 01089, for the following purposes, all as set forth
in the Proxy Statement accompanying this notice:
1. Election of the individuals listed as nominees in the Proxy
Statement accompanying this notice of meeting.
2. Ratification of the appointment of the firm of Deloitte &
Touche LLP as the Corporation's independent public accountants
for the fiscal year ending December 31, 2001.
3. To act upon such other maters as may properly be brought
before the meeting or any adjournment thereof.
The record date and hour for determining shareholders entitled to notice of, and
to vote at, the meeting has been fixed at 5:00 PM, March 5, 2001.
By order of the Board of Directors
Robert J. Perlak
Clerk
West Springfield, Massachusetts
March 16, 2001
PLEASE SIGN THE ENCLOSED FORM OF PROXY AND RETURN IT PROMPTLY IN THE ENVELOPE
ENCLOSED FOR THAT PURPOSE. YOU MAY, NEVERTHELESS, VOTE IN PERSON IF YOU DO
ATTEND THE MEETING.
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PROXY STATEMENT
Approximate date of mailing
March 16, 2001
WESTBANK CORPORATION
225 PARK AVENUE
WEST SPRINGFIELD, MASSACHUSETTS 01089-3310
(413) 747-1400
NOTICE OF 2001 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 18, 2001
INTRODUCTION
This Proxy Statement is furnished to shareholders in connection with the
solicitation of proxies on behalf of the Board of Directors of Westbank
Corporation (the "Corporation") to be used at the 2001 Annual Meeting of
Shareholders of the Corporation to be held at the Carriage House at Storrowton
Tavern, 1305 Memorial Avenue, West Springfield, Massachusetts 01089 on
Wednesday, April 18, 2001 at 9:00 AM and at any adjournments thereof.
The close of business on March 5, 2001 has been fixed as the record date for
determination of shareholders of the Corporation entitled to notice of and to
vote at the 2001 Annual Meeting of Shareholders. The only class of issued and
outstanding voting securities of the Corporation is the $2.00 par value Common
Stock (the "Common Stock"). As of the record date, the number of shares of
Common Stock outstanding and entitled to vote at the 2001 Annual Meeting of
Shareholders is 4,238,462. Each share of Common Stock is entitled to one vote.
The affirmative vote of a majority of the shares of Common Stock of the
Corporation represented at the 2001 Annual Meeting is required to approve the
auditor of the Corporation. The affirmative vote of a plurality of the votes
cast by shareholders is required to elect Directors.
Execution of the enclosed proxy will not affect the shareholder's right to
attend the meeting and vote in person. A shareholder that has given a proxy has
the power to revoke it at any time before it is exercised by delivering notice
of revocation, or a duly executed proxy bearing a later date, to the Treasurer
of the Corporation.
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ELECTION OF DIRECTORS
The By-Laws of the Corporation provide, in substance, that the Board of
Directors shall be divided into three classes as nearly equal in number as
possible and that the term of office of one class shall expire and a successor
class shall be elected at each Annual Meeting of the Shareholders. The
Corporation's Board of Directors presently consists of nine members.
Six Directors will continue to serve after the 2001 Annual Meeting of
Shareholders. In accordance with the By-Laws of the Corporation, three (3)
nominees shall be elected to serve a three(3)-year term, until the 2004 Annual
Meeting of Shareholders and for such further time as may be required for the
election and qualification of their successors. Unless returned proxies properly
indicate that authority to vote for any of the nominees named herein is
withheld, all proxies received by the Corporation in time for the 2001 Annual
Meeting of Shareholders will be voted in favor of the election of the nominees
listed below. In the event any of the nominees named herein becomes unable or
unwilling to accept nomination for election, the persons identified as proxies
in the accompanying form of proxy will vote the shares represented by executed
proxies in favor of the nomination and election of such substitute nominees as
the Board of Directors of the Corporation may select.
The following tables name the individuals nominated for Director and those
Directors of the Corporation who will continue to serve after the Meeting, and
indicate their age, the period of time they have served as Director of the
Corporation or its predecessor, their position with the Corporation, and their
principal occupation or employment. No nominee or Director holds a directorship
in any corporation, other than the Corporation, with a class of securities
registered pursuant to Section 12 of the Securities and Exchange Act of 1934 or
subject to the requirements of Section 15(d) of such Act or any corporation
registered as an investment company under the Investment Company Act of 1940.
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The following individuals are nominees for election as a Director of the
Corporation at the 2001 Annual Meeting to serve for a three-year term until the
2004 Annual Meeting of Shareholders:
NOMINEE AND CURRENT OCCUPATION HAS SERVED ON BOARD OF
OR EMPLOYMENT; BUSINESS DIRECTORS OF THE CORPORATION CORPORATE
EXPERIENCE DURING THE PAST 5 YEARS AGE OR ITS PREDECESSOR SINCE OFFICES HELD
---------------------------------- --- ------------------------ ------------
Roland O. Archambault
President and Owner
Pinnacle Raceway 68 1989 Director
Donald R. Chase
President and Chief Executive Officer
Westbank Corporation; Director, Vice Chairman of
President and Chief Executive Officer the Board, President and
Park West Bank and Trust Company 54 1990 Chief Executive Officer
George R. Sullivan
Chief Executive Officer 47 1997 Director
Sullivan Paper Company, Inc.
The following Directors will continue to serve after the meeting:
Director and Current Occupation Has Served on Board of
Or Employment; Business Directors of the Corporation Corporate
Experience During the Past 5 years Age or Its Predecessor Since Offices Held Term Expires In
---------------------------------- --- ------------------------ ------------ ---------------
Mark A. Beauregard
Attorney
Resnic, Beauregard, Waite and Driscoll 49 1986 Director 2002
David R. Chamberland
President
Chicopee Building Supply, Inc. 62 1989 Director 2002
Ernest N. Laflamme, Jr.
Treasurer Director,
City of Chicopee 69 1987 Chairman of the Board 2003
G. Wayne McCary
President and Chief Executive Officer
Eastern States Exposition 58 1999 Director 2003
Robert J. Perlak
Corporate Clerk
Westbank Corporation;
Private Investor 65 1987 Director and Clerk 2002
James E. Tremble
President
Valley Communications Systems, Inc. 62 1986 Director 2002
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The total number of special and regular meetings of the Board of Directors of
the Corporation during the fiscal year ended December 31, 2000 was twelve (12).
Each Director attended at least 75% of all Board of Directors meetings held in
2000 during the period for which each was a Director. In addition to serving as
Directors of the Corporation, board members also serve as the Board of Directors
of the Corporation's wholly owned subsidiary, Park West Bank and Trust Company
("Park West"). During 2000, the Board of Directors of Park West met twelve (12)
times. All Directors attended at least 75% of all board meetings of Park West
during the period for which each was a Director.
COMMITTEES
The Board of Directors each year appoints Directors to serve on standing
committees of the Board of Directors, including the Executive Committee, the
Compensation Committee, the Nominating Committee and the Audit Committee. The
members of the Executive Committee, the Compensation Committee, the Nominating
Committee and the Audit Committee of the Corporation also make up these same
committees for Park West. All Directors attended at least 75% of the meetings of
committees of which they were a member during the period each was a Director.
EXECUTIVE COMMITTEE
The members of the Executive Committee in 2000 were Messrs. Laflamme,
Beauregard, Chase, Sullivan and Tremble. The Executive Committee met fourteen
(14) times during 2000.
COMPENSATION COMMITTEE
The members of the Compensation Committee in 2000 were Messrs. Laflamme,
Beauregard, Sullivan and Tremble. The Compensation Committee met once in 2000.
NOMINATING COMMITTEE
The members of the nominating Committee in 2000 were Messrs. Chamberland, Chase,
Laflamme and Sullivan. The Committee nominates Directors for election by
shareholders at the Annual Meeting, reports to the Board of Directors on or
before December 31 of each year its nominations and submits its nominees for
Directors for publication in the Notice of Annual Meeting of Shareholders and
Proxy Statement. The Committee met one time during 2000. The Nominating
Committee will consider nominees recommended by the Corporation's shareholders
prior to December 1 of each year.
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REPORT OF THE AUDIT COMMITTEE
The following Report of the Audit Committee does not constitute soliciting
material and should not be deemed filed or incorporated by reference into any
other Corporation filing under the Securities Act of 1933 or the Securities
Exchange Act of 1934, except to the extent the Corporation specifically
incorporates this Report by reference therein.
The Audit Committee of the Board of Directors has developed a charter for the
Committee, which was approved by the full Board on May 17, 2000. The complete
text of the new charter, which reflects standards set forth in new SEC
regulations and Nasdaq rules, is reproduced in the Appendix to this Proxy
Statement.
As set forth in more detail in the charter, the Audit Committee's primary
responsibilities fall into three (3) broad categories:
- first, the Committee is charged with monitoring the preparation of
quarterly and annual financial reports by the Corporation's
management, including discussions with management and the
Corporation's outside auditors about draft annual financial
statements and key accounting and reporting matters;
- second, the Committee is responsible for matters concerning the
relationship between the Corporation and its outside auditors,
including recommending their appointment or removal; reviewing the
scope of their audit services and related fees, as well as any
other services being provided to the Corporation; and determining
whether the outside auditors are independent (based in part on the
annual letter provided to the Corporation pursuant to Independence
Standards Board Standard No. 1); and
- third, the Committee oversees management's implementation of
effective systems of internal controls, including review of
policies relating to legal and regulatory compliance, ethics and
conflicts of interests; and review of the activities and
recommendations of the Corporation's internal auditing program.
The Committee has implemented procedures to ensure that during the course of
each fiscal year it devotes the attention that it deems necessary or appropriate
to each of the matters assigned to it under the Committee's charter. To carry
out its responsibilities, the Committee met four (4) times during Fiscal Year
2000.
In overseeing the preparation of the Corporation's financial statements, the
Committee met with both management and the Corporation's outside auditors to
review and discuss all financial statements prior to their issuance and to
discuss significant accounting issues. Management advised the Committee that all
financial statements were prepared in accordance with generally accepted
accounting principles, and the Committee discussed the statements with both
management and the outside auditors. The Committee's review included discussion
with the outside auditors of matters required to be discussed pursuant to
Statement on Auditing Standards No. 61 (Communication With Audit Committees).
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With respect to the Corporation's outside auditors, the Committee, among other
things, discussed with Deloitte & Touche, LLP matters relating to its
independence, including the disclosures made to the Committee as required by the
Independence Standards Board Standard No. 1 (Independence Discussions with Audit
Committees). Listed below are aggregate fees billed to the Corporation for the
fiscal year ended December 31, 2000 by the Corporation's principal accounting
firm, Deloitte & Touche LLP, the member firms of Deloitte Touche Tohmatsu and
their respective affiliates (collectively, "Deloitte"):
Audit Fees $118,015
All Other Fees 32,820 (a) (b)
(a) Includes fees for tax, compliance, consulting and other non-audit services.
(b) The Audit Committee has considered whether the provision of these services
is compatible with maintaining the principal accountant's independence.
Finally, the Committee continued to monitor the scope and adequacy of the
Corporation's internal auditing program, including proposals for adequate
staffing and to strengthen internal procedures and controls where appropriate.
On the basis of these reviews and discussions, the Committee recommended to the
Board of Directors that the Board approve the inclusion of the Corporation's
audited financial statements in the Corporation's Annual Report on Form 10-K for
the fiscal year ended December 31, 2000, for filing with the Securities and
Exchange Commission.
EXECUTIVE OFFICERS
In addition to the President of the Corporation, who is a Director and is listed
in the tables above, the other executive officers of the Corporation are as
follows: Gary L. Briggs, age 50, is Executive Vice President of the Corporation
and Park West; John M. Lilly, age 52, is Treasurer and Chief Financial Officer
of the Corporation and is also Executive Vice President and Treasurer of Park
West. Each executive officer serves for a one-year term or until their successor
is elected and qualified.
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BENEFICIAL OWNERSHIP OF STOCK
The following table sets forth certain information as of the record date with
respect to all individuals known to the Corporation to be the beneficial owner
of more than 5% of the outstanding Common Stock of the Corporation:
NUMBER OF SHARES
NAME AND ADDRESS OF OWNER BENEFICIALLY OWNED (1) PERCENT OF OUTSTANDING SHARES
------------------------- ---------------------- -----------------------------
Richard S. Sullivan
Carol B. Sullivan
96 Prynwood Road
Longmeadow, MA 01106 332,738 7.9%
Donald R. Chase
Diana L. Chase
39 Timber Ridge Road
West Springfield, MA 01089 273,179 (2) 6.4%
- - --------
(1) Under regulations of the Securities and Exchange Commission, a person
is treated as the beneficial owner of a security if the person directly
or indirectly (through contract, arrangement, understanding,
relationship or otherwise) has or shares (a) voting power, including
the power to vote or to direct the voting, of such security, or (b)
investment power with respect to such security, including the power to
dispose or direct the disposition of such security. A person is also
deemed to have beneficial ownership of any security that such person
has the right to acquire within 60 days.
(2) Included in the shares beneficially owned by Mr. Chase are 136,000
unexercised stock options.
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The following table and related notes set forth information as of the record
date regarding the Corporation's Common Stock beneficially owned by each
Director and nominee and by Directors, nominees and officers of the Corporation:
NAME OF INDIVIDUAL NUMBER OF SHARES
OR PERSONS IN GROUP BENEFICIALLY OWNED (1) (2) (3) PERCENT OF OUTSTANDING SHARES
------------------- ------------------------------ -----------------------------
Roland O. Archambault 21,431 (4) .5%
Mark A. Beauregard 23,517 .6
David R. Chamberland 20,245 .5
Donald R. Chase 273,179 (4) (5) 6.4
Ernest N. Laflamme, Jr. 55,861 1.3
G. Wayne McCary 8,500 .2
Robert J. Perlak 51,892 1.2
George R. Sullivan 25,000 (4) .6
James E. Tremble 19,062 .4
All Directors, nominees and
Executive Officers as a group
(11 persons, including those 688,289 16.2
named above)(3) (5)
Section 16(a) Beneficial Ownership Reporting Act of 1934, as amended (the
"Exchange Act"), requires the Corporation's Directors, Executive Officers and
holders of more than 10% of the Corporation's Common Stock to file with the
Securities and Exchange Commission initial reports of ownership and reports of
changes in ownership of Common Stock and other equity securities of the
Corporation. The Corporation believes that, during the fiscal year ended
December 31, 2000, all such persons complied with all Section 16(a) filing
requirements. In making this statement, the Corporation has relied upon the
written representations of its Directors and Executive Officers.
- - --------
(1) Based upon information provided to the Corporation by the indicated
persons.
(2) Under regulations of the Securities and Exchange Commission, a person
is treated as the beneficial owner of a security if the person directly
or indirectly (through contract, arrangement, understanding,
relationship or otherwise) has or shares (a) voting power, including
the power to vote or to direct the voting of such security, or (b)
investment power with respect to such security, including the power to
dispose or direct the disposition of such security. A person is also
deemed to have beneficial ownership of any security that such person
has the right to acquire within 60 days.
(3) The information in the table includes all shares under stock options
that were exercisable on the record date or 60 days thereafter. As of
that date, Mr. Chase owned exercisable options to purchase 136,000
shares, and all Directors and Officers as a group owned exercisable
options to purchase 348,000 shares.
(4) Indicates a nominee for election as a Director of the Corporation at
the 2001 Annual Meeting of Shareholders.
(5) For the purposes of the above table, the term "Executive Officer" means
any individual elected as an Executive Officer of the Corporation.
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EXECUTIVE MANAGEMENT COMPENSATION
Compensation decisions for executive officers of the Corporation are made by the
Compensation Committee and approved by the full Board of Directors. Mr. Chase,
who is a member of the Board of Directors, as well as an executive officer of
the Corporation, is not a member of the Compensation Committee and neither
participated in nor voted upon his compensation package as a member of the Board
of Directors.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE MANAGEMENT COMPENSATION
Set forth below is the report of the Compensation Committee of the Corporation
regarding executive management compensation, as required by applicable rules of
the Securities and Exchange Commission.
The executive compensation program of the Corporation consists of three (3)
primary components: base salary, cash incentive compensation and stock options,
all of which are administered by the Compensation Committee.
Decisions by the Compensation Committee relating to the compensation of the
Corporation's executive officers are approved by the full Board of Directors,
except as otherwise set forth herein. In determining the proper amount of
compensation for each executive officer, the Compensation Committee considers
various factors, including, inter alia:
- the performance of the Corporation;
- the individual's performance as an executive officer of the
Corporation;
- the amount of compensation paid to similarly situated executive
officers in similar sized corporations; and
- the length of service with the Corporation.
During 1995, the Corporation engaged the firm of Deloitte & Touche LLP to review
the Bank's retirement plan for executive officers. As a result of this review,
the Compensation Committee adopted the Westbank Supplemental Executive
Retirement Plan (the "Supplemental Plan"). The purpose of the Supplemental Plan
is to provide executives with retirement benefits that are comparable to those
provided to its other employees.
During 1997, the Compensation Committee engaged Thomas Warren & Associates, Inc.
to assist in establishing salary levels and an incentive compensation plan for
the Corporation's senior executives ("The Incentive Compensation Plan"). The
Incentive Compensation Plan was adopted by the Compensation Committee and is
used as a guide in determining executive officer compensation.
During 2000, the Chief Executive Officer, Donald R. Chase, received a salary
increase of $55,500, an increase of twenty-one percent (21%) of his base salary.
The increase was recommended by the Compensation Committee following its
evaluation of Mr. Chase's performance as Chief Executive Officer and the overall
performance of the Corporation for 1999. In addition, as a result of The
Incentive Compensation Plan, Mr. Chase received a cash bonus of $74,060. In
addition, the Corporation contributed $33,987 to the Supplemental Plan for the
benefit of Mr. Chase.
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The other executive officers named in the Summary Compensation Table, Messrs.
Briggs and Lilly, were granted a salary increase of twenty percent (20%) during
2000, based on the Corporation's and their individual performances. As a result
of the Incentive Compensation Plan, each received a cash bonus of $30,360. In
addition, the Corporation contributed $25,417 and $25,697, respectively, to the
Supplemental Retirement Plan.
The Compensation Committee believes that the 2000 compensation of executive
officers is reasonable, given the Corporation's performance and utilizing the
criteria listed above.
Respectfully submitted by:
Ernest N. Laflamme, Jr. Mark A. Beauregard
Chairman George R. Sullivan
James E. Tremble
The Compensation Committee
COMPENSATION INFORMATION
The following table sets forth the cash compensation paid, as well as long-term
compensation paid, for each of the last three fiscal years to all executive
officers of the Corporation who received over $100,000.00 in cash compensation
during 2000.
SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term Compensation
Award Payouts
Other
Annual Restricted All Other
Name and Compen- Stock Options/ LTIP Compen-
Principal Position Year Salary Bonus sation ($) Award(s)($) SAR's(#) Payouts sation ($)
- - ------------------ ---- ------ ----- ---------- ----------- -------- ------- ----------
Donald R. Chase 2000 $320,000 $74,060 N/A N/A N/A N/A $51,234 *
President and 1999 $264,500 $50,600 N/A N/A 36,000 N/A $36,505 *
Chief Executive Officer 1998 $230,000 $58,000 N/A N/A 50,000 N/A $29,870 *
Gary L. Briggs 2000 $165,000 $30,360 N/A N/A N/A N/A $25,417 **
Executive Vice President- 1999 $138,000 $21,600 N/A N/A 12,000 N/A $16,182 **
Lending 1998 $120,000 $24,200 N/A N/A 15,000 N/A $14,103 **
John M. Lilly 2000 $165,000 $30,360 N/A N/A N/A N/A $25,697 **
Treasurer and 1999 $138,000 $21,600 N/A N/A 12,000 N/A $16,182 **
Chief Financial Officer 1998 $120,000 $24,200 N/A N/A 15,000 N/A $14,103 **
* Mr. Chase's other compensation during 2000, 1999 and 1998,
respectively, consisted of a $17,247, $16,182 and $16,592 contribution
to the Money Purchase Pension Plan and a $33,987, $20,321 and $13,278
contribution to the Corporation's Supplemental Executive Retirement
Plan and 401K Plan.
** Messrs. Briggs and Lilly's other compensation during 2000, 1999 and
1998, respectively, consisted of contributions to the Money Purchase
Pension Plan totaling $17,247, $16,182 and $14,103 and a contribution
to the Corporation's Supplemental Executive Retirement Plan and 401K
Plan of $8,170 and $8,451 during 2000.
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1985 INCENTIVE STOCK OPTION PLAN FOR KEY EMPLOYEES
In February, 1985, the Board of Directors of the Corporation unanimously adopted
the 1985 Incentive Stock Option Plan for Key Employees (the "1985 Stock Plan"),
which was approved by the shareholders at the Annual Meeting in April, 1985. The
1985 Stock Plan was amended by shareholders at the Corporation's 1994 Annual
Meeting, which amendment increased the number of shares of Common Stock reserved
thereunder by 200,000 shares.
The 1985 Stock Plan is administered by the Board of Directors. The Board of
Directors was authorized to grant stock options to the professional and
supervisory employees of the Corporation and its subsidiaries at any time until
February 19, 1995.
All options were granted at 100% of the fair market value of the Common Stock of
the Corporation on the date of the grant. Each stock option terminates not more
than 10 years after the date of the grant. Options are exercisable in such
installments as may be determined by the Board of Directors. Payment of stock
purchased on the exercise of a stock option must be made in full at the time the
stock option is exercised. Options may not be assigned or transferred, other
than by will or the laws of descent or distribution.
As of February 19, 1995, the 1985 Stock Plan expired. No options were granted or
available for granting during 2000.
A total of 1,000 options were exercised in 2000. No options were terminated
during 2000 and a total of 38,828 options remain unexercised as of the record
date.
1996 STOCK INCENTIVE PLAN
On February 21, 1996, the Board of Directors unanimously adopted the Westbank
Corporation 1996 Stock Incentive Plan (the "1996 Plan"), which was approved by
the shareholders at the Annual Meeting in April, 1996.
The 1996 Plan is administered by the Compensation Committee (the "Committee").
The Committee is authorized to grant Employee Awards under the 1996 Plan to any
employee. In practice, Employee Awards are made to a group of management
employees.
All options are granted at 100% of the fair market value of the Common Stock of
the Corporation on the date of the grant. Each stock option terminates not more
than 10 years after the date of the grant. Options are exercisable in such
installments as may be determined by the Committee. Payment of stock purchased
on the exercise of a stock option must be made in full at the time the stock
option is exercised. Options may not be assigned or transferred, other than by
will or the laws of descent or distribution.
The Board of Directors may, at any time, terminate and, from time to time, may
amend or modify the 1996 Plan, without approval of Westbank shareholders, except
to the extent that such shareholder approval is required by applicable law or
regulation. There is no set termination date for the 1996 Plan.
No incentive stock options were granted during 2000 and no options were
exercised. A total of 312,000 options remain unexercised as of the record date.
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AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
Number of
Securities
Underlying Value of Unexercised
Shares Acquired Value Unexercised Options In-the-Money Options
Name on Exercise (#) Realized ($) at FY-End (#) at FY-End ($)
---- --------------- ------------ ------------- -------------
Donald R. Chase 0 0 136,000 $ 0
Gary L. Briggs 0 0 55,000 0
John M. Lilly 0 0 73,000 18,000
LONG-TERM INCENTIVE PLANS AND RETIREMENT PLANS
The Corporation does not maintain any "Long-Term Incentive Plans" for its
executive officers.
The Corporation has no pension, profit sharing or similar plans for its
executive officers or employees. As set forth below, however, the executive
officers and employees are eligible to participate in the Park West Money
Purchase Pension Plan.
Park West maintains a Money Purchase Pension Plan (the "Plan") available to
employees of the Corporation, Park West and Cargill Bank ("Cargill"). Full-time
employees become eligible to participate in the Plan when they have both (i)
reached the age of 20-1/2 and (ii) completed six (6) months of service (as
defined in the Plan).
Contributions to the Plan may be made by Park West, Cargill and a participant.
Park West and Cargill's contributions will be made to the Plan whether or not a
participant chooses to contribute. The annual contribution by Park West to each
participant's account for 2000 equals 7% of a participant's annual compensation,
plus 5.7% of a participant's annual compensation in excess of the participant's
Social Security Taxable Wage Base. During 2000, Park West Contributed $17,247
each for the account of the three (3) executive officers and Park West
contributed in the aggregate $51,741 for the accounts of all executive officers
to the Money Purchase Pension Plan.
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DIRECTOR COMPENSATION
During 2000, Directors of the Corporation who are not salaried employees
received Directors' fees of $12,000. The Chairman of the Board of Directors
received annual remuneration of $17,500, while the Clerk of the Corporation
received an annual fee of $14,500. Directors who are also salaried employees
receive no additional compensation for their services as Directors of the
Corporation.
1995 DIRECTORS STOCK OPTION PLAN
In February, 1995, the Board of Directors of the Corporation unanimously adopted
the 1995 Directors Stock Option Plan (the "1995 Plan"), which was approved by
the shareholders at the Annual Meeting in April, 1995.
The 1995 Plan is administered by the non-employee Directors. The purpose of the
1995 Plan is to enhance the Corporation's ability to attract and retain highly
qualified individuals to serve as members of the Corporation's Board of
Directors and to provide additional incentives to non-employee Directors to
promote the success of the Corporation.
On each anniversary of the effective date of the 1995 Plan, each eligible
Director shall be granted an option to purchase 1,000 shares of the
Corporation's Common Stock. A total of 8,000 options were granted on February
15, 2001 at an option price of $7.88 per share. A total of 29,000 shares remain
available for future grants under the 1995 Plan.
Each stock option terminates not more than 10 years after the date of the grant.
Payment of stock purchased on the exercise of an option must be made in full at
the time the stock option is exercised. Options may not be assigned or
transferred, other than by will or the laws of descent or distribution. No
options were exercised during 2000.
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1996 STOCK INCENTIVE PLAN
On February 21, 1996, the Board of Directors adopted the Westbank Corporation
1996 Stock Incentive Plan (the "1996 Plan"), which was approved by the
shareholders at the Annual Meeting in April, 1996.
The 1996 Plan authorizes the automatic grant of nonqualified stock options
("Director Stock Options") to non-employee Directors ("Eligible Directors") upon
the terms and conditions set forth in the 1996 Plan. The 1996 Plan is intended
to provide incentives and rewards for employees and Eligible Directors (i) to
support Westbank's business and human resource strategies and the achievement of
its goals, and (ii) to associate the interests of employees and Eligible
Directors with those of Westbank's shareholders.
Under the 1996 Plan, Eligible Directors were granted options to purchase 1,000
shares at an exercise price of $9.00 per share during 2000.
No Director Stock Option may be exercisable later than twenty years and one day
from the date of its grant. However, if an Eligible Director ceases to be an
Eligible Director for any reason, all Director Stock Options which are otherwise
exercisable shall terminate on the earlier of three years after such cessation
date or the expiration date, whichever first occurs. No Director Stock Options
were exercised during 2000.
CARGILL BANK DIRECTORS AND OFFICERS STOCK OPTION PLAN
During 1992, Cargill Bancorp, Inc. adopted a Stock Option Plan for its Directors
and officers. All options expire fifteen (15) years after the date of the grant.
No options were exercised during 2000 and 43,908 options remain unexercised. No
options are available for future grants.
EMPLOYMENT AND TERMINATION AGREEMENTS
Donald R. Chase has entered into a Termination Agreement with Park West
regarding termination of employment subsequent to a "change in control" of Park
West as defined in the Termination Agreement. Following the occurrence of a
change in control, if Mr. Chase's employment is terminated (except because of
retirement, death, disability or for "cause" as defined in the Termination
Agreement) or is voluntarily terminated by Mr. Chase for "good reason" as
defined in the Termination Agreement, then Mr. Chase shall be entitled to a lump
sum payment approximately equal to three (3) times his average annual
compensation for the previous five (5) years.
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PERFORMANCE COMPARISON GRAPH
Set forth below is a graph illustrating the return that would have been realized
(assuming reinvestment of dividends) by an investor who invested $100 on
December 31, 1995, in each of the following:
a. The Standard & Poor's 500 Index
b. A hypothetical fund with investments in the stock of peer
corporations (the "Peer Group")
c. Westbank Corporation
The Peer Group consists of New England financial institutions with assets
totaling between $300 and $600 million. The members of the Peer Group are:
Alliance Bancorp of New England Hingham Institution for Savings Northeast Bancorp
Bancorp Connecticut, Inc. Ipswich Bancshares, Inc. Slade's Ferry Bancorp
Bar Harbor Bank Shares Lawrence Savings Bank Wainwright Bank & Trust Company
Central Bancorp, Inc. New Hampshire Thrift Bancshares, Inc. Warren Bancorp, Inc.
NewMil Bancorp, Inc.
Year Westbank Peer S&P 500
---- -------- ---- -------
1995 100 100 100
1996 140.11 130.13 120.26
1997 197.71 208.58 157.56
1998 203.97 163.62 199.57
1999 140.48 144.82 238.54
2000 119.49 147.06 214.36
MISCELLANEOUS
During 2000, certain of the Corporation's executive officers, Directors and
nominees for Director, beneficial owners of more than 5% of the outstanding
common stock of the Corporation and members of their immediate family and
associates have had, and expect to have in the future, transactions in the
ordinary course of business with Park West and/or Cargill, including borrowings,
on substantially the same terms, including interest rates and collateral, as
those prevailing at the time for comparable transactions with other persons, and
not involving more than normal risk of collectibility or presenting other
unfavorable features.
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EMPLOYEE STOCK OWNERSHIP PLAN
On January 1, 1989, the Corporation's Employee Stock Ownership Plan (the "ESOP")
became effective. The ESOP is administered and otherwise governed by the
provisions of the ESOP and a related Trust Agreement. Pursuant to the terms of
the ESOP, the Trustee may invest the ESOP's Trust Assets in, among other
investments, shares of the Common Stock of the Corporation. As of the record
date, no shares of the Common Stock of the Corporation were owned by the ESOP
Trust.
DIVIDEND REINVESTMENT PLAN
In 1989, the Corporation implemented a Dividend Reinvestment and Common Stock
Purchase Plan (the "Dividend Reinvestment Plan"), which was amended during 1995
and the amendment was approved by the shareholders at the 1995 Annual Meeting.
Pursuant to the amended Dividend Reinvestment Plan, shareholders of the
Corporation's Common Stock may invest all or a portion of that shareholder's
quarterly cash dividend, plus up to $10,000 per calendar quarter, in additional
shares of the Corporation's Common Stock. During 2000, 65,121 shares of the
Corporation's Common Stock were purchased through the Dividend Reinvestment and
Common Stock Purchase Plan.
RATIFICATION OF THE SELECTION OF
CERTIFIED PUBLIC ACCOUNTANTS
Deloitte & Touche LLP ("Deloitte"), certified public accountants, have served as
auditors for the Corporation since 1994 and, subject to ratification by the
shareholders, that firm has been chosen by the Board of Directors to act as the
Corporation's auditor for 2001. During 2000, Deloitte provided audit services in
connection with the examination of the financial statements of the Corporation,
Park West and Cargill, and other accounting matters. Neither Deloitte nor any of
its partners has any direct or indirect financial interest in, or connection
with (other than as independent auditor), the Corporation, Park West or Cargill.
A representative of Deloitte & Touche LLP is expected to be present at the
Corporation's 2001 Annual Meeting of Shareholders. He/she will have the
opportunity to make a statement if he/she desires to do so and will be available
to respond to appropriate questions.
The Board of Directors recommends a vote FOR ratification of the selection of
Deloitte & Touche LLP as the Corporation's auditor and, unless otherwise
directed, proxies will be voted in favor of this selection.
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OTHER BUSINESS
As of the date of this Proxy Statement, the Board of Directors of the
Corporation is not aware of any business to be presented at the 2001 Annual
Meeting other than matters referred to in the Notice of Annual Meeting and this
Proxy Statement. If any other matters properly come before the meeting, or any
adjournment thereof, the enclosed Proxy will be voted on such matters in
accordance with the recommendations of the Corporation's Board of Directors.
MISCELLANEOUS
The expense of this solicitation on behalf of the Board of Directors will be
paid by the Corporation. To the extent necessary in order to assure sufficient
representation of shareholders at the Meeting, officers and employees of the
Corporation may personally, by telephone or by other means, contact shareholders
to request the return of proxies. Banks, brokerage houses and other
institutions, nominees or fiduciaries will be requested to forward the proxy
material to beneficial owners in order to solicit authorizations for the
execution of proxies. The Corporation may, upon request, reimburse such banks,
brokerage houses and other institutions, nominees and fiduciaries for their
expenses in forwarding such material.
STOCKHOLDER PROPOSALS
Any stockholder proposals (including Director nominations) submitted pursuant to
Exchange Act Rule 14a-8 and intended to be presented at the Corporation's 2002
Annual Meeting of Stockholders must be received by the Corporation by November
17, 2001 to be eligible for inclusion in the Proxy Statement and Form of Proxy
to be distributed by the Board of Directors in connection with such meeting.
Such proposals must also comply with the requirements as to form and substance
established by the SEC if such proposals are to be included in the Proxy
Statement and Form of Proxy.
The Corporation's By-Laws provide that any stockholder proposals (including
Director nominations) intended to be presented at the Corporation's 2002 Annual
Meeting, other than a stockholder proposal submitted pursuant to Exchange Act
Rule 14a-8, must be received in writing at the principal executive office of the
Corporation on or between the dates of December 20, 2001 and February 3, 2002,
together with all supporting documentation required by the Corporation's Amended
By-Laws. However, if the 2002 Annual Meeting is scheduled to be held on a date
more than 30 days before April 17, 2002, or more than sixty (60) days after
April 17, 2002, a stockholder's notice shall be timely filed if delivered to, or
received by, the Corporation at its principal executive office not later than
the close of business on the later of (a) seventy-five (75) days prior to the
date of such rescheduled Meeting or (b) the fifteenth 15th day following the day
on which public announcement of the date of such Annual Meeting is first made by
the Corporation.
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ANNUAL REPORT
A copy of the Corporation's Annual Report for 2000, including financial
statements, is enclosed. The Annual Report is not to be regarded as proxy
soliciting material.
By order of the Board of Directors
Robert J. Perlak
Clerk
Dated: March 16, 2001
NOTICE
A COPY OF THE CORPORATION'S ANNUAL REPORT ON FORM 10-K, FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION, MAY BE OBTAINED WITHOUT CHARGE BY ANY
SHAREHOLDER OF THE CORPORATION UPON WRITTEN REQUEST ADDRESSED TO JOHN M. LILLY,
TREASURER, 225 PARK AVENUE, WEST SPRINGFIELD, MASSACHUSETTS 01089-3310.
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APPENDIX
WESTBANK AUDIT COMMITTEE CHARTER
Organization
There shall be a committee of the Board of Directors to be known as the Audit
Committee. The Audit Committee shall be composed of a minimum of three (3)
directors who are independent of the management of the Corporation and are free
of any relationship that, in the opinion of the Board of Directors, would
interfere with their exercise of independent judgment as a Committee member.
Statement of Policy
The Audit Committee shall provide assistance to the corporate directors in
fulfilling their responsibility to the shareholders, potential shareholders, and
investment community relating to corporate accounting, reporting practices of
the Corporation, and the quality and integrity of the financial reports of the
Corporation. In so doing, it is the responsibility of the Audit Committee to
maintain free and open means of communication between the directors, the
independent auditors, the internal auditor and the financial management of the
Corporation.
Responsibilities
In carrying out its responsibilities, the Audit Committee believes its policies
and procedures should remain flexible, in order to best react to changing
conditions and to ensure to the directors and shareholders that the corporate
accounting and reporting practices of the Corporation are in accordance with all
requirements and are of the highest quality.
In carrying out these responsibilities, the Audit Committee will:
- review and recommend to the directors the independent auditors to be
selected to audit the financial statements of the Corporation and its
divisions and subsidiaries;
- meet with the independent auditors and financial management of the
Corporation to review the scope of the proposed audit for the current
year and the audit procedures to be utilized and, at the conclusion
thereof, review such audit, including any comments or recommendations
of the independent auditors. Particular emphasis should be given to the
adequacy of internal controls to expose any payments, transactions or
procedures that might be deemed illegal or otherwise improper;
- review with the independent auditors, the Corporation's internal
auditor, and financial and accounting personnel the adequacy and
effectiveness of the accounting and financial controls of the
Corporation, and elicit any recommendations for the improvement of such
internal control procedures or particular areas where new or more
detailed controls or procedures are desirable;
- review the internal audit function of the Corporation, including the
independence and authority of its reporting obligations, the proposed
audit plans for the coming year and the coordination of such plans with
the independent auditors;
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- review at each meeting findings from completed internal audits and the
progress on completing the proposed internal audit plan;
- review with management and the independent auditors the financial
statements contained in the annual report to shareholders, to determine
that the independent auditors are satisfied with the disclosure and
content of the financial statements to be presented to the
shareholders;
- review any changes in accounting principles;
- provide sufficient opportunity for the internal and independent
auditors to meet with members of the Committee without members of
management present;
- submit the Minutes of all meetings of the Audit Committee to, or
discuss the matters discussed at each Committee meeting with, the Board
of Directors; and
- investigate any matter brought to its attention within the scope of its
duties, with the power to retain outside counsel for this purpose if,
in its judgment, that is appropriate.
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WESTBANK CORPORATION
PROXY FOR 2001 ANNUAL SHAREHOLDERS MEETING - APRIL 18, 2001
I, the undersigned holder of common stock of Westbank Corporation, hereby
appoint Gary L. Briggs and Kathleen A. Jalbert, or either of them, with the
power of substitution, proxies of the undersigned to vote the shares of the
undersigned at the 2001 Annual Meeting of Shareholders of Westbank Corporation
to be held at 9:00 A.M., April 18, 2001, at the Carriage House at Storrowton
Tavern, 1305 Memorial Avenue, West Springfield, Massachusetts, and at any
adjournment thereof, with all the powers the undersigned would possess if
personally present. Said proxies are specifically authorized to vote as
indicated below.
THIS PROXY CONFERS AUTHORITY TO VOTE "FOR" EACH PROPOSITION LISTED BELOW
UNLESS AUTHORITY IS WITHHELD OR OTHERWISE INDICATED. ALL PROXIES EXECUTED
CORRECTLY WILL BE VOTED AS DIRECTED. IF ANY OTHER BUSINESS IS PRESENTED AT THE
MEETING, THIS PROXY SHALL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE
BOARD OF DIRECTORS.
1. ELECTION OF DIRECTORS: To elect the following Directors of the
Corporation for a three-year term until the 2004 Annual Meeting of
Shareholders.
Roland O. Archambault / / FOR / / AGAINST / / ABSTAIN
Donald R. Chase / / FOR / / AGAINST / / ABSTAIN
George R. Sullivan / / FOR / / AGAINST / / ABSTAIN
2. SELECTION OF CERTIFIED PUBLIC ACCOUNTANTS. To ratify the appointment,
by the Board of Directors, of Deloitte & Touche LLP as independent
public accountants for the fiscal year ending December 31, 2001.
/ / FOR / / AGAINST / / ABSTAIN
(over)
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3. OTHER BUSINESS. In their discretion, to act upon the transaction of
such other business as may properly come before the meeting and any
adjournment thereof.
Date:
------------------------------
-----------------------------------
(Signature of Shareholder)
-----------------------------------
(Signature, if jointly held)
When signing as Attorney, Executor,
Administrator, Trustee or Guardian,
please give full title. IF MORE THAN
ONE TRUSTEE, ALL SHOULD SIGN. ALL
JOINT OWNERS MUST SIGN.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.