SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
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SOUTHWEST BANCORP, INC.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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[SOUTHWEST BANCORP, INC.]
March 23, 2006
Dear Fellow Shareholder:
We invite you to attend our 2006 Annual Meeting of Shareholders to be
held in the Auditorium, Room 215, of the Stillwater Public Library, 1107 South
Duck Street, Stillwater, Oklahoma on Thursday, April 27, 2006 at 11:00 a.m.,
Central Time.
The 2005 results are presented in detail in the enclosed Annual Report.
The Annual Meeting has been called for the election of directors, and
to consider any other matters that properly come before the Annual Meeting or
any adjournments. Directors and officers of Southwest, as well as
representatives of Ernst & Young LLP, our independent registered public
accounting firm, will be present to respond to any questions the shareholders
may have.
YOUR VOTE IS IMPORTANT TO SOUTHWEST. Please complete the proxy card and
return it in the enclosed, postage-paid envelope.
Thank you for investing in Southwest.
Sincerely,
/s/ Rick Green
SOUTHWEST BANCORP, INC.
608 SOUTH MAIN STREET
STILLWATER, OKLAHOMA 74074
(405) 372-2230
NOTICE OF ANNUAL MEETING
APRIL 27, 2006
The Annual Meeting of Shareholders of Southwest Bancorp, Inc.
("Southwest") will be held in the Auditorium, Room 215, of the Stillwater Public
Library, 1107 South Duck Street, Stillwater, Oklahoma at 11:00 a.m., Central
Time, on Thursday, April 27, 2006.
The Annual Meeting is for the purpose of considering and acting upon:
1. The election of three directors of Southwest; and
2. The transaction of such other matters that properly come
before the Annual Meeting or any adjournments thereof.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF THE
PERSONS NOMINATED FOR ELECTION. The Board is not aware of any other business to
come before the Annual Meeting.
Only shareholders of record at the close of business on March 3, 2006,
will be entitled to vote at the Annual Meeting and any adjournments or
postponements. A Proxy Card and a Proxy Statement for the Annual Meeting are
enclosed. Whether or not you attend the meeting in person, it is important that
your Southwest shares be represented and voted. Please vote by completing,
signing and dating your proxy card, and returning it as soon as possible in the
enclosed, postage-paid envelope. This proxy is revocable. You may change your
proxy later or vote in person at the meeting, if you wish.
A complete list of shareholders entitled to vote at the Annual Meeting
will be open for examination by any shareholder for any purpose germane to the
Annual Meeting during ordinary business hours at Southwest's main office during
the ten days prior to the Annual Meeting.
The proxy statement, voting instruction card, and Southwest's 2005
Annual Report are being distributed on or about March 23, 2006.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Kerby E. Crowell
Stillwater, Oklahoma KERBY E. CROWELL
March 23, 2006 SECRETARY
P R O X Y S T A T E M E N T
Q U E S T I O N S AND A N S W E R S
Q: WHAT AM I VOTING ON?
A: You are voting on the re-election of the following three directors,
James E. Berry II, Joe Berry Cannon, and Robert B. Rodgers, each for a
three-year term (See page 2.).
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Q: WHO IS ENTITLED TO VOTE AT THE ANNUAL MEETING?
A: Shareholders of Southwest's common stock as of the close of business on
March 3, 2006 (the Record Date) are entitled to vote at the meeting.
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Q: HOW DO I VOTE?
A: You may vote by completing, signing, and dating the proxy card, and
returning it in the enclosed, postage-paid envelope. If you return your
signed proxy card but do not indicate your voting preference, your card
will be voted in favor of the re-election of all three directors. You
have the right to revoke your proxy any time before the Annual Meeting,
and shareholders who attend the meeting may withdraw their proxies and
vote in person if they wish.
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Q: IS MY VOTE CONFIDENTIAL?
A: Yes, only the inspectors of election and a limited number of employees
and transfer agent personnel associated with processing the votes will
know how you cast your vote.
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Q: WHO WILL COUNT THE VOTES?
A: Computershare Investor Services, LLC, Southwest's transfer agent, will
tabulate the votes.
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Q: WHAT SHOULD I DO IF I RECEIVE MORE THAN ONE PROXY CARD?
A: If you receive more than one proxy card, it indicates that you own
shares in more than one account or that your shares are registered in
various names. You should vote all proxy cards you receive by
completing, signing, dating, and returning each proxy card in the
enclosed, postage-paid envelope.
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1
Q: WHAT CONSTITUTES A QUORUM AT THE ANNUAL MEETING?
A: On the Record Date, there were 14,110,382 shares of Southwest common
stock issued and outstanding. Each share is entitled to one vote on all
matters voted on at the Annual Meeting. A majority of the outstanding
shares, present or represented by proxy, will be a quorum for the
Annual Meeting. If you submit a properly executed proxy card, you will
be considered part of the quorum. Abstentions and shares held for you
by your broker or nominee (broker shares) that are voted on any matter
are included in the quorum. Broker shares that are not voted on any
matter are not included in the quorum and will not be included in
determining the number of votes cast in the election of directors.
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Q: WHO MAY ATTEND THE ANNUAL MEETING?
A: All shareholders as of the Record Date may attend, although seating is
limited.
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Q: WHAT PERCENTAGE OF SOUTHWEST STOCK DID DIRECTORS AND EXECUTIVE OFFICERS
OF SOUTHWEST OWN ON THE RECORD DATE?
A: Together, they owned approximately 11% of Southwest issued and
outstanding common stock.
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Q: WHO PAYS FOR THIS PROXY SOLICITATION AND HOW WILL SOLICITATION OCCUR?
A: Southwest's Board of Directors is soliciting this proxy, and Southwest
will pay the cost of the solicitation. In addition to the use of the
mail, employees of Southwest may solicit proxies personally or by
telephone, fax, or electronic mail, without additional compensation.
Banks, brokerage houses, and other nominees and fiduciaries are
requested to forward the proxy material to beneficial owners of
Southwest stock and to obtain authorization to execute proxies on
behalf of the beneficial owners. Upon request, Southwest will reimburse
these parties for their reasonable expenses in forwarding proxy
material to beneficial owners.
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PROPOSAL I -- ELECTION OF DIRECTORS
Your Board of Directors is currently composed of ten members. Directors
of Southwest are divided into three classes and are elected for terms of three
years and until their successors are elected and qualified. At the Annual
Meeting, three directors will be elected for terms expiring at the 2009 Annual
Meeting.
The Board of Directors has nominated for re-election James E. Berry II,
Joe Berry Cannon, and Robert B. Rodgers, all of whom are currently directors,
each to serve for a term of three years and until his successor is elected and
qualified. Each nominee must be elected by a plurality of shares voted in this
election. The individuals named as proxies on your proxy card will vote for the
election of each nominee unless you withhold authorization.
2
Each shareholder voting in the election of directors is entitled to
cumulate his or her votes by multiplying the number of shares of common stock
owned of record by the shareholder on the Record Date by the number of directors
to be elected. Each shareholder is then entitled to cast his or her total
cumulated votes for one nominee or distribute his or her votes among any number
of the nominees being voted on at the Annual Meeting. Shareholders may not
cumulate their votes on the form of proxy solicited by the Board of Directors.
In order to cumulate votes, shareholders must attend the meeting and vote in
person or make arrangements with their own proxies. UNLESS OTHERWISE SPECIFIED
IN THE PROXY, HOWEVER, THE RIGHT IS RESERVED, IN THE SOLE DISCRETION OF THE
BOARD OF DIRECTORS, TO VOTE CUMULATIVELY, AND TO DISTRIBUTE VOTES AMONG SOME OR
ALL OF THE NOMINEES OF THE BOARD OF DIRECTORS IN A MANNER OTHER THAN EQUALLY SO
AS TO ELECT AS DIRECTORS THE MAXIMUM POSSIBLE NUMBER OF SUCH NOMINEES.
Each nominee has agreed to serve a three-year term, if elected. If any
nominee is unable to stand for re-election at this Annual Meeting, the Board may
reduce its size or nominate an alternate candidate, and the proxies will be
voted for the alternate candidate.
YOUR BOARD RECOMMENDS A VOTE FOR THESE DIRECTORS.
DIRECTOR NOMINEES
TERM EXPIRING IN 2009
JAMES E. BERRY II DIRECTOR SINCE 1998
Mr. Berry, age 60, has been the owner of Shading Concepts, which
manufactures and sells solarium draperies, since 1988. From 1973 to 1988, Mr.
Berry was a stockbroker in Oklahoma City with a major Wall Street firm. J. Berry
Harrison and Robert B. Rodgers are his cousins.
JOE BERRY CANNON DIRECTOR SINCE 1981
Mr. Cannon, age 69, is an Assistant Professor of Management at Oral
Roberts University School of Business in Tulsa, Oklahoma. Mr. Cannon served as
Chairman, President, Chief Executive Officer, and Senior Trust Officer of First
National Bank and Trust Co. in Blackwell, Oklahoma from 1968-1991. He has been a
member of the Kiwanis Club, a member of the First United Methodist Church Board
of Directors, and is a member of the American and Oklahoma Bar Associations.
ROBERT B. RODGERS DIRECTOR SINCE 1996
Mr. Rodgers, age 52, has been a director of Southwest since February
1996, and Chairman of the Board since December 31, 1999. He previously served as
Vice Chairman of the Board, beginning in May 1999. Mr. Rodgers is president of
Bob Rodgers Motor Company in Pauls Valley, Oklahoma, and is owner of Rapid
Enterprises. He is a former director and was the President and Chairman of the
Board of Directors of CDI II, a credit life insurance company headquartered in
Oklahoma City, Oklahoma. Mr. Rodgers also previously served on the Board of
Directors and was the Regional Vice President of the Oklahoma Auto Dealers
Association. Mr. Rodgers is past chairman of the Planning and Zoning Commission
for the City of Pauls Valley, Oklahoma. James E. Berry II and J. Berry Harrison
are his cousins.
3
DIRECTORS CONTINUING IN OFFICE
TERM EXPIRING IN 2007
THOMAS D. BERRY DIRECTOR SINCE 1981
Mr. Berry, age 62, is involved in oil and gas exploration in North
Central Oklahoma, and is an Auctioneer and Real Estate Broker in Stillwater,
Oklahoma.
RICK GREEN DIRECTOR SINCE 1998
Mr. Green, age 58, was appointed the Chief Executive Officer of
Southwest effective January 1, 1999. Mr. Green previously served as Chief
Operating Officer, President of the Central Oklahoma division, and Executive
Vice President of Stillwater National Bank & Trust Company ("Stillwater
National"), Southwest's national bank subsidiary. He is a member of the Oklahoma
City and Edmond Chambers of Commerce and has served as Chair/Ambassador of the
Stillwater Chamber of Commerce, on the Oklahoma State University Alumni
Association Homecoming and Honor Students Committees, as Chairman of Payne
County Youth Services, as Co-Chairman of the United Way of Stillwater Fund Drive
and as a member of the Advisory Board of the Oklahoma State University Technical
Institute. He is a member of the Commercial Real Estate Association of Oklahoma
City, the Oklahoma and Oklahoma City Homebuilders Associations, and past member
of the Stillwater Medical Center Committee on Physician Recruitment. Mr. Green
is also a member of Leadership Stillwater and Leadership Oklahoma City. Mr.
Green continues to be active as an alumnus of Oklahoma State University, serving
on various committees and boards, including the Board of Governors of the
Oklahoma State University Development Foundation, and is a member of the
Oklahoma State University College of Business Alumni Hall of Fame.
DAVID P. LAMBERT DIRECTOR SINCE 1981
Mr. Lambert, age 66, served as President and Chief Executive Officer of
the Lambert Construction Company from 1974 until 2005 and continues to serve as
Chairman of the Board. He is Chairman of the Trustees of the Oklahoma
Construction Advancement Foundation, a member and past chairman of the
Stillwater Chamber of Commerce and the Stillwater Industrial Foundation. Mr.
Lambert is a life director of the Associated General Contractors of America, and
serves on the President's Advisory Council and is Co-Chairman of the Product
Committee of Star Building Systems.
LINFORD R. PITTS DIRECTOR SINCE 1981
Mr. Pitts, age 68, is President of Stillwater Transfer & Storage, Inc.
in Stillwater, Oklahoma, and invests in real estate and in oil and gas
properties and other various small businesses. Mr. Pitts is a member of the Past
President's Council of the Stillwater Chamber of Commerce.
4
DIRECTORS CONTINUING IN OFFICE
TERM EXPIRING IN 2008
J. BERRY HARRISON DIRECTOR SINCE 1991
Mr. Harrison, age 67, is an Oklahoma State Senator, and has been a
rancher and farmer in Fairfax, Oklahoma since 1962. Mr. Harrison serves as
Conservation District Director of Osage County, President of the Oklahoma
Association of Conservation Districts, and is a member of many other civic
groups in his Senate District. James E. Berry II and Robert B. Rodgers are his
cousins.
ERD M. JOHNSON DIRECTOR SINCE 1988
Mr. Johnson, age 76, is Operating Partner of Johnson Oil Partnership,
Midland, Texas. Mr. Johnson is a retired Petroleum Engineer and was Operating
Partner of Johnson Ranch, Fairfax, Oklahoma before its liquidation in 1997. Mr.
Johnson served from 1984-87 as a director of Beefmaster Breeders Universal, and
from 1987-89 as its Treasurer. Mr. Johnson is a former Trustee and Treasurer of
Trinity School of Midland, Texas and a former director and president of The
Racquet Club, Midland, Texas.
RUSSELL W. TEUBNER DIRECTOR SINCE 2000
Mr. Teubner, age 49, is a board member of Esker S.A., a global
enterprise connectivity software vendor. His association with Esker began in
June 1998, when he announced the merger of Teubner & Associates, Inc. with
Esker. Mr. Teubner was founder and CEO of Teubner & Associates. The Stillwater
Chamber of Commerce honored him as Citizen of the Year in 1992, Small Business
Person of the Year in 1991-92, and Small Business Exporter of the Year in
1992-93. In 1993, he received the Outstanding Young Oklahoman award given
annually by the Oklahoma Jaycees. In 1997, Oklahoma State University named Mr.
Teubner as a recipient of their Distinguished Alumni award. During 1996 and 1997
he served on the Citizen's Commission on the Future of Oklahoma Higher
Education. Currently, he serves on the board of the OSU Education and Research
Foundation and the Global Commerce Network, a non-profit organization devoted to
helping business leaders extend their influence into the social sector. Mr.
Teubner is also a past director of the Oklahoma City branch of the Federal
Reserve Bank of Kansas City.
BOARD MEETINGS AND COMMITTEES
Southwest's Board conducts its business through meetings of the Board
and of its committees. The Board meets monthly and may have additional special
meetings. The Board met twelve times during 2005. Each director in office at the
record date attended more than 90% of the meetings of the Board held in 2005 and
more than 90% of the total number of meetings held in 2005 of the Board and the
committees on which he served.
5
AUDIT COMMITTEE
The Audit Committee of the Board oversees and reports to the Board of
Directors regarding accounting and financial reporting processes, the audits of
the financial statements, the qualifications and independence of registered
public accounting firms engaged to provide independent audits and related
services, and the performance of the internal audit function and independent
registered public accounting firm; and performs the other duties of the
committee specified by federal securities laws and regulations, the Federal
Deposit Insurance Act and related regulations, the listing standards of the
NASDAQ Stock Market, Inc (the "Listing Standards"), and its charter. In addition
the committee, as directed by the Board, investigates and reports to the Board
with respect to specific matters involving financial reporting, financial
accounting, conflicts of interest, internal controls, and compliance with laws
and regulations relating to such matters. The committee, in its capacity as a
committee of the Board, is directly responsible for the appointment,
compensation, retention, evaluation, termination, and oversight of the work of
any independent auditor employed by Southwest for the purpose of preparing or
issuing an audit report or related work. The independent registered public
accounting firm reports directly to the committee. The committee is responsible
for the resolution of any disagreements between management of Southwest and the
independent registered public accounting firm regarding financial reporting. All
members of the committee are "independent" as defined in applicable law,
regulations of the Securities and Exchange Commission ("SEC"), the Federal
Deposit Insurance Act and related regulations (the "FDIA"), and the Listing
Standards. Members of the committee also meet all other applicable requirements
of the SEC, FDIA, and the Listing Standards for financial, accounting or related
expertise. The Committee has adopted a written charter, which has been approved
by the Board of Directors. A copy of this charter is available on the governance
area of Southwest's website at www.oksb.com. The committee met twelve times in
2005. Current members are Joe Berry Cannon, Russell W. Teubner, and Linford R.
Pitts, Chairman. Robert B. Rodgers, Chairman of the Board of Directors, is an
ex-officio member of the Audit Committee. The Board has determined that Mr.
Cannon qualifies as an audit committee financial expert under the Listing
Standards and applicable securities regulations. Under SEC regulations and
Southwest policy, the identification of a person as an audit committee financial
expert does not impose on such person any duties, obligations, or liability
greater than those to which he or she otherwise is subject as a member of the
audit committee and board of directors.
COMPENSATION COMMITTEE
The Compensation Committee of the Board reviews Southwest's
compensation policies and employee benefit plans and programs and makes
recommendations to the Board based on such reviews; reviews and recommends CEO
compensation to the Board for its approval; determines management incentive
awards and stock option grants to eligible officers; reviews and recommends
employment agreements, including change-in-control agreements; recommends
changes in director compensation to the Board; performs the other duties of the
committee specified by federal securities laws and regulations, the FDIA, and
the Listing Standards; and as directed by the Board, investigates and reports to
the Board with respect to specific matters involving compensation and benefit
matters. Members of the committees are independent directors within the meaning
of the Listing Standards. The Committee is advised by an outside compensation
consulting firm and by legal counsel. The committee met two times in 2005.
Current members are James E. Berry II, Erd M. Johnson, David P. Lambert, Linford
R. Pitts, and Russell W. Teubner, Chairman. Robert B. Rodgers, Chairman of the
Board of Directors, is an ex-officio member of the Compensation Committee. In
2005, no Southwest executive officer served as a member of the compensation
committee of another entity that had an executive officer who served as a
Southwest director, and no Southwest executive officer served as a director of
another entity that had an executive officer serving on Southwest's Compensation
Committee.
6
NOMINATING AND DIRECTOR SEARCH COMMITTEES
Southwest has a Nominating Committee and a Director Search Committee
with responsibility for recommending persons to be nominated as directors. The
Chairman of the Board is the chairman of each committee. Members of the
committees are independent directors within the meaning of the Listing
Standards. The Nominating Committee has responsibility for recommending to the
Board of Directors whether or not to nominate each director whose term expires
at the next annual meeting of shareholders. Members of the Nominating Committee
are the independent directors who were elected at the previous annual meeting
and the Chairman of the Board. The Nominating Committee met one time in 2005.
Current members are J. Berry Harrison, Erd M. Johnson, Russell W. Teubner, and
Robert B. Rodgers, Chairman. In its determination of whether or not to recommend
a director for nomination, the Nominating Committee considers whether or not
such director meets the minimum criteria for board membership based upon the
director's honesty, integrity, reputation in his or her community, existence of
any actual or potential conflicts of interest, and past service as director, and
may consider additional factors it deems appropriate. The Director Search
Committee has responsibility for identifying and recommending to the Board of
directors persons to be nominated as new directors of Southwest. The Committee
also is responsible for interviewing and investigating potential new directors.
The Director Search Committee did not meet in 2005. Current members of the
Committee are James E. Berry II, J. Berry Harrison, David P. Lambert, Russell W.
Teubner, and Robert B. Rodgers, Chairman. In its determination of whether or not
to recommend a director for nomination, the Director Search Committee will
consider whether or not such director meets the minimum criteria for board
membership described above, and may consider additional factors it deems
appropriate.
The Director Search Committee also is responsible for considering
persons recommended for nomination as directors by shareholders, other
directors, and officers. Under the charter of the Director's Search Committee,
no shareholder nomination or recommendation need be considered unless the
Committee determines, in its good faith discretion, that (i) the manner and
substance of the recommendation or nomination and the related information and
materials provided in connection with the recommendation or nomination complies
with the procedural and substantive requirements of Southwest's Certificate of
Incorporation, relevant Bylaws, and state and federal law, and (ii) if elected,
the person recommended or nominated may lawfully serve on the board.
Shareholders may submit recommendations for director candidates for
consideration by the Director Search Committee to the Secretary by first class
mail. Please also see "Shareholder Proposals and Communications" on page 19 of
this Proxy Statement.
7
The Nominating Committee and the Director Search Committee have written
charters that have been approved by the Board of Directors. Copies of these
charters are available on the governance area of Southwest's website at
www.oksb.com.
INDEPENDENT DIRECTORS
The Board of Directors has determined that all Directors other than Mr.
Green are independent under the Listing Standards.
DIRECTOR COMPENSATION
During 2005, the Chairman of the Board of Directors of Southwest
received an annual retainer of $18,000, the Chairman of the Audit Committee
received an annual retainer of $14,000, the Chairman of the Compensation
Committee received an annual retainer of $12,500, the Chairman of the Loan
Committee received an annual retainer of $11,000, and other non-officer
Directors of Southwest each received an annual retainer of $8,000. In addition,
non-officer Directors received fees of $750 per board meeting attended and a
committee meeting fee of $300 per meeting if the meeting was held the same day
as the board meeting, or $600 if the committee meeting was held on another day.
The Financial expert on the Audit Committee receives $1,000 per meeting in
addition to the regular committee meeting fee Directors who also serve as
Southwest officers did not receive these fees. Southwest directors are also
eligible to receive non-incentive stock options and other stock based awards
under Southwest's 1999 Stock Option Plan. Awards of 9,900 shares of restricted
stock with a market value on the date of grant of $19.75 per share were granted
in 2005 to directors who were not employees of Southwest or any of its
subsidiaries.
8
COMMON STOCK OWNED BY DIRECTORS AND EXECUTIVE OFFICERS
The shares of Southwest's common stock and trust preferred securities
that were beneficially owned on the Record Date by each person who was a
director or officer on that date or is a Named Executive Officer are shown
below.
COMMON STOCK
---------------------------------
AMOUNT AND
NATURE OF PERCENTAGE
BENEFICIAL OF SHARES
NAME OWNERSHIP (1) OUTSTANDING (2)
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James E. Berry II 254,595 (3) 1.80%
Thomas D. Berry 64,465 (4) *
Joe Berry Cannon 75,885 (5) *
Rick Green 123,597 (6) *
J. Berry Harrison 118,501 (7) *
Erd M. Johnson 203,526 (8) 1.44
David P. Lambert 41,100 (9) *
Linford R. Pitts 39,231 (10) *
Robert B. Rodgers 329,675 (11) 2.33
Russell W. Tuebner 57,133 (12) *
Kerby E. Crowell 106,150 (13) *
Jerry L. Lanier 56,035 (14) *
Kimberly G. Sinclair 65,070 (15) *
Charles H. Westerheide 72,044 (16) *
All Directors and Executive
Officers as a Group
(20 persons) 1,634,964 (17) 11.17%
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* Less than one percent of shares outstanding.
(1) Beneficial ownership is defined by rules of the Securities and Exchange
Commission, and includes shares that the person has or shares voting or
investment power over and shares that the person has a right to acquire
within 60 days from March 3, 2006. Unless otherwise indicated,
ownership is direct and the named individual exercises sole voting and
investment power over the shares listed as beneficially owned by such
person. A decision to disclaim beneficial ownership is made by the
individual, not Southwest.
(2) In calculating the percentage ownership of each named individual and
the group, the number of shares outstanding includes any shares that
the person or the group has the right to acquire within 60 days of
March 3, 2006.
(3) Excludes 30,900 shares held by his spouse and children and includes
12,525 shares that Mr. Berry has the right to acquire within 60 days of
March 3, 2006, pursuant to the exercise of stock options.
(4) Excludes 4,704 shares held by the Tom D. Berry Profit Sharing Plan.
Includes 12,525 shares that Mr. Berry has the right to acquire within
60 days of March 3, 2006, pursuant to the exercise of stock options.
(5) Excludes 2,984 shares held by his spouse. Excludes 54,810 shares owned
by a trust of which his spouse is trustee. Includes 12,525 shares that
Mr. Cannon has the right to acquire within 60 days of March 3, 2006,
pursuant to the exercise of stock options.
(6) Excludes 7,220 shares held by his spouse. Includes 123,503 shares that
Mr. Green has the right to acquire within 60 days of March 3, 2006,
pursuant to the exercise of stock options.
(7) Includes 12,525 shares that Mr. Harrison has the right to acquire
within 60 days of March 3, 2006, pursuant to the exercise of stock
options.
(8) Excludes 1,047 shares held by his spouse. Includes 9,319 shares held by
Johnson Oil Partnership of which Mr. Johnson is a general partner.
Includes 8,874 shares that Mr. Johnson has the right to acquire within
60 days of March 3, 2006, pursuant to the exercise of stock options.
(continued)
9
(9) Excludes 21,000 shares held by his spouse and 3,000 shares held by a
trust of which he is co-trustee. Includes 12,525 shares that Mr.
Lambert has the right to acquire within 60 days of March 3, 2006,
pursuant to the exercise of stock options.
(10) Includes 24,900 shares held in LRP Family LLC. Includes 12,525 shares
that Mr. Pitts has the right to acquire within 60 days of March 3,
2006, pursuant to the exercise of stock options.
(11) Excludes 2,310 shares held by his children. Includes 255,154 shares
held in 4B Investments, LLC Includes 12,525 shares that Mr. Rodgers has
the right to acquire with 60 days of March 3, 2006, pursuant to the
exercise of stock options.
(12) Excludes 1,500 shares held by a trust of which he is trustee. Includes
12,525 shares that Mr. Teubner has the right to acquire within 60 days
of March 3, 2006, pursuant to the exercise of stock options.
(13) Includes 89,276 shares that Mr. Crowell has the right to acquire within
60 days of March 3, 2006, pursuant to the exercise of stock options.
(14) Includes 55,662 shares that Mr. Lanier has the right to acquire within
60 days of March 3, 2006, pursuant to the exercise of stock options.
(15) Includes 53,050 shares that Ms. Sinclair has the right to acquire
within 60 days of March 3, 2006, pursuant to the exercise of stock
options.
(16) Includes 72,044 shares that Mr. Westerheide has the right to acquire
within 60 days of March 3, 2006, pursuant to the exercise of stock
options.
(17) Includes shares held by certain directors and executive officers as
custodians under Uniform Transfers to Minors Acts, by their spouses and
children, and for the benefit of certain directors and executive
officers as custodians under individual retirement accounts ("IRAs")
and living trusts Includes 527,622 shares that executive officers and
directors have the right to acquire within 60 days of March 3, 2006,
pursuant to the exercise of stock options. Does not include shares
beneficially owned by Directors of Stillwater National Bank and Trust
Company or SNB Bank of Wichita who are not also directors of Southwest.
OWNERS OF MORE THAN 5% OF SOUTHWEST'S COMMON STOCK
Beneficial owners of more than 5% of the common stock are required to
file certain ownership reports under the federal securities laws. The following
table shows the common stock beneficially owned by persons who have filed these
reports reporting beneficial ownership that exceeds 5% of Southwest's
outstanding common stock at March 3, 2006.
AMOUNT AND NATURE PERCENTAGE
OF BENEFICIAL OF SHARES
NAME OWNERSHIP (1) OUTSTANDING (2)
- ---- ------------- ---------------
FMR Corp. 1,136,056 (3) 8.05%
Barclays Global Investors, NA 716,517 (4) 5.08
- --------------------
(1) Beneficial ownership is defined by rules of the Securities and Exchange
Commission, and includes shares that the person has or shares voting or
investment power. A decision to disclaim beneficial ownership or to
include shares held by others is made by the shareholder, not by
Southwest.
(2) Calculated by Southwest based upon shares reported as beneficially
owned by the listed persons and shares of Southwest common stock
outstanding at March 3, 2006.
(3) The address of FMR Corp is 82 Devonshire Street, Boston, Massachusetts
02109.J
(4) The address of Barclays Global Investors, NA is 45 Fremont Street, San
Francisco, California 94105.
10
EXECUTIVE COMPENSATION AND OTHER BENEFITS
The following table summarizes compensation earned by or awarded to
Southwest's Chief Executive Officer and Southwest's four most highly compensated
other executive officers for 2005 (the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
LONG-TERM COMPENSATION
-------------------------------
AWARDS PAYOUTS
------ -------
NAME AND ANNUAL COMPENSATION (1) SECURITIES
-------------------------- UNDERLYING LTIP ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS/SARS (2) PAYOUTS COMPENSATION (3)
- ------------------ ---- ------ ----- ---------------- ------- ----------------
Rick Green 2005 $401,821 $264,600 27,893 $91,474
President and 2004 379,033 282,000 21,822 77,872
Chief Executive Officer 2003 368,015 90,180 28,580 -- 51,813
Kerby E. Crowell 2005 225,100 118,178 11,680 48,937
Executive Vice President, 2004 200,100 105,525 6,425 36,663
Chief Financial Officer, 2003 175,000 25,069 8,670 -- 23,891
and Secretary
Jerry L. Lanier 2005 227,500 89,578 11,767 41,722
Executive Vice President 2004 202,500 81,920 6,755 32,612
and Chief Lending Officer 2003 184,000 21,436 8,670 -- 23,208
Kimberly G. Sinclair 2005 194,000 94,082 10,373 28,526
Executive Vice President 2004 178,500 80,168 5,727 28,942
and Chief Administrative 2003 156,000 21,294 7,856 20,952
Officer
Charles H. Westerheide 2005 160,000 79,800 8,542 28,556
Executive Vice President 2004 147,000 62,475 4,809 23,796
and Treasurer 2003 131,000 12,314 6,340 -- 17,956
(1) The value of other annual compensation did not exceed the lesser of
$50,000 or 10% of salary and bonus for any Named Executive Officer.
(2) In each case, represents stock options granted under Southwest's Stock
Option Plan. Shares adjusted for 2:1 stock split effected August 29,
2003.
(3) Other compensation consists of profit sharing credits and contributions
and insurance premiums paid by Southwest. Amounts for 2005 included
Profit Sharing Plan and Supplemental Profit Sharing Plan credits and
contributions of $87,367 for Mr. Green, $44,097 for Mr. Crowell, and
$40,690 for Mr. Lanier; Profit Sharing Plan contributions of $27,524
for Ms. Sinclair and Mr. Westerheide; and insurance premiums paid of
$4,107 for Mr. Green, $4,840 for Mr. Crowell, $1,032 for Mr. Lanier,
$1,002 for Ms. Sinclair, and $1,032 for Mr. Westerheide. Southwest
accrues expense to the Supplemental Profit Sharing Plan in amounts
sufficient to ensure that Mr. Green, Mr. Crowell, and Mr. Lanier obtain
the same profit sharing contributions as a percentage of compensation
as other officers and employees of Southwest without regard to
limitations of the qualified profit sharing plan. The Supplemental
Profit Sharing Plan is unfunded.
STOCK OPTION PLANS. Southwest maintains stock option plans to attract,
retain, and motivate key officers of Southwest and its subsidiaries by providing
them with a stake in the success of Southwest as measured by the value of its
shares.
11
The 1999 Stock Option Plan (the "1999 Option Plan"), which was approved
by the shareholders at the 1999 Annual Meeting of Shareholders, as amended at
the 2004 Annual Meeting, authorizes the issuance of up to 1,760,000 shares of
Common Stock, subject to certain adjustments for changes in Southwest's capital
structure. The 1999 Option Plan has a term of 10 years from its effective date
January 1, 1999 after which date no stock options may be granted As of December
31, 2005, options for 778,023 shares were outstanding under the 1999 Option
Plan. The 1999 Option Plan replaced a plan adopted in 1994 (the "1994 Option
Plan"), which was terminated except with respect to options that were
outstanding on the plan's termination date. As of December 31, 2005, options for
153,750 shares were outstanding under the 1994 Option Plan. The 1999 Option Plan
and the 1994 Option Plan are referred to below as the "Option Plans."
The Option Plans provide for the grant of "incentive options" as
defined in Section 422 of the Code. The 1999 Option Plan also provides for the
grant of "non-incentive options", restricted stock, and stock appreciation
rights to directors, officers, and non-officer employees on terms and conditions
established by the Stock Option Committee, which administers the Option Plans.
The Compensation Committee acts as the Stock Option Committee. As of December
31, 2005, only stock option and restricted stock awards have been made under the
Option Plans.
Under the Option Plans, the maximum option term is 10 years from the
date of grant. Options are granted with various vesting schedules and terms. The
exercise price of a stock option may not be less than 100% of the fair market
value of the Common Stock on the date of grant. The exercise price of stock
options must be paid in full in cash or shares of Common Stock, or a combination
of both. The Stock Option Committee has the discretion when making a grant of
stock options under the 1999 Plan to impose restrictions on the shares to be
purchased upon exercise of such options.
The following table presents disclosure regarding equity compensation
plans in existence at December 31, 2005, consisting only of the 1994 stock
option plan (expired but having outstanding options that may still be exercised)
and the 1999 stock option plan, both of which were approved by the shareholders.
EQUITY COMPENSATION PLAN INFORMATION
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Plan category Number of securities to be Weighted average exercise Number of securities
issued upon exercise of price of outstanding remaining available for
outstanding options, options, warrants and future issuance under
warrants and rights rights equity compensation plans
(a) (b) excluding securities
reflected in column (a)
(c)
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Equity compensation plans
approved by security holders 921,873 $11.12 501,940
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Equity compensation plans not
approved by security holders 0 0 0
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Total 921,873 $11.12 501,940
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
12
OPTION GRANTS IN 2005
VALUES AT ASSUMED
NUMBER OF % OF TOTAL ANNUAL RATES OF
SECURITIES OPTIONS STOCK PRICE APPRECIATION
UNDERLYING GRANTED TO FOR OPTION TERM (3)
OPTIONS EMPLOYEES EXERCISE EXPIRATION ------------------------
NAME GRANTED (1) IN YEAR PRICE (2) DATE 5% 10%
- ---- ----------- ------------- --------- ------------- -------- --------
Rick Green 27,893 18.82% $19.75 03-03-2010 $152,199 $336,322
Kerby E. Crowell 11,680 7.88% $19.75 03-03-2010 $63,732 $140,832
Jerry L. Lanier 11,767 7.94% $19.75 03-03-2010 $64,208 $141,881
Kimberly G. Sinclair 10,373 7.00% $19.75 03-03-2010 $56,601 $125,073
Charles H. Westerheide 8,542 5.76% $19.75 03-03-2010 $46,610 $102,996
(1) Options granted vested one-third upon the date of grant and an
additional one-third upon each of the next two anniversaries of the
date of grant.
(2) In each case, the exercise price was equal to the market price of the
Common Stock on the date of Grant.
(3) The rates of appreciation are used for illustration only. No assurance
can be given that actual experience will correspond to the assumed
rates.
AGGREGATE OPTION EXERCISES IN 2005 AND YEAR-END OPTION VALUES
The following table presents information concerning the exercise of
options by the Named Executive Officers during 2005 and the value of options
held by these individuals at December 31, 2005.
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT YEAR-END AT YEAR-END (1)
SHARES ACQUIRED VALUE -------------------------------------------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- -------- ----------- ------------- ----------- -------------
Rick Green 94 $ 761 172,808 63,669 $1,753,121 $546,738
Kerby E. Crowell 6,000 98,220 83,241 25,528 879,338 212,707
Jerry L. Lanier 9,000 148,860 46,488 25,396 432,947 205,021
Kimberly G. Sinclair 16,000 262,830 47,684 23,824 488,986 213,762
Charles H. Westerheide 12,484 182,393 64,594 27,097 718,758 258,068
- ------------------
(1) Calculated based on the product of: (a) the number of shares subject to
options and (b) the difference between the fair market value of the
underlying common stock at December 31, 2005, based on the average of
the high and low sale prices of the common stock on December 31, 2005,
as reported on the Nasdaq National Market of $20.06 per share, and the
exercise price of the options of $5.26 to $19.75 per share.
No stock appreciation rights ("SARs") were exercised by the Named
Executive Officers during 2005. No SARs were held by any Named Executive Officer
at year-end. No options or SARs held by any Named Executive Officer repriced
during Southwest's last ten full years.
13
OTHER COMPENSATION PLANS
Southwest has established a deferred compensation plan for the benefit
of Mr. Green and a Supplemental Profit Sharing Plan for the benefit of the Mr.
Green, Mr. Crowell, and Mr. Lanier. Both plans are unfunded. The deferred
compensation plan allows Mr. Green to make annual elections to defer all or part
of annual cash compensation for the following year. Amounts deferred increase or
decrease in each calendar quarter as though they were invested in a nondeposit
account with an annualized return equal to one percentage point less than the
annualized average interest rate earned by Stillwater National on average
interest earning assets for the previous calendar quarter, or in a fund invested
in Southwest common stock, as elected by Mr. Green. Under the 2005 Plan, accrued
amounts are payable following separation of service from Stillwater National;
the year in which Mr. Green reaches 72 years of age; or the year following the
year in which Mr. Green reaches 72 years of age. The deferred compensation plan
for 2005 also provides for payout following Mr. Green's death or disability; the
occurrence of an unforeseen financial emergency; or a change in control of
Southwest or Stillwater National, subject to certain requirements and
restrictions, including those imposed by the American Jobs Creation Act of 2004.
Mr. Green elected not to defer compensation for 2005. Mr. Green's total earnings
on the deferred balances were $23,821 in 2005. Mr. Green has elected not to
defer compensation for 2006. Southwest accrues expense to the Supplemental
Profit Sharing Plan in amounts sufficient to ensure that the participants obtain
the same profit sharing contribution as a percentage of compensation as do other
officers and employees of Southwest without regard to limitations of Southwest's
qualified Profit Sharing Plan. During 2005, the following amounts were accrued
under the Supplemental Profit Sharing Plan: Mr. Green-$59,843; Mr.
Crowell-$16,573; and Mr. Lanier-$13,166.
SEVERANCE ARRANGEMENTS
Under Southwest's Severance Compensation Plan, executive officers are
entitled to lump-sum severance compensation upon a qualifying termination of
service equal to a percentage of their respective total annual base compensation
in effect at the date of termination. For purposes of the Severance Compensation
Plan, a qualifying termination of service is defined as either an involuntary
termination of service or a voluntary termination of service for good reason, in
either case within two years following a change-in-control occurring after the
effective date of the Severance Compensation Plan. Good reason would include:
(i) a reduction in their base salary; (ii) their assignment without their
consent to a distant location; (iii) the failure to maintain them in a position
of comparable authority or responsibility; or (iv) a material reduction in their
level of incentive compensation or benefits. A change-in-control is deemed to
occur whenever: (i) any entity or person becomes the beneficial owner of or
obtains voting control over 50% or more of the outstanding shares of common
stock of either Southwest or Stillwater National; (ii) the shareholders of
either Southwest or Stillwater National approve (a) a merger or consolidation in
which Southwest or Stillwater National is not the survivor or pursuant to which
the outstanding shares of either would be converted into cash, securities or
other property of another corporation other than a transaction in which
shareholders maintain the same proportionate ownership interests, or (b) a sale
or other disposition of all or substantially all of the assets of either
Southwest or Stillwater National; or (iii) there shall have been a change in a
majority of the Boards of Directors of either Southwest or Stillwater National
within a twelve-month period unless each new director was approved by the vote
of two-thirds of the directors still in office who were in office at the
beginning of the twelve-month period. Mr. Green, Mr. Crowell, Mr. Lanier, Ms.
Sinclair, and Mr. Westerheide would have received lump-sum severance payments of
$1,134,000, $450,200, $455,000, $193,500, and $160,000, respectively, upon a
qualifying termination of service if such termination had occurred on December
31, 2005.
14
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
As members of the Compensation Committee, it is our duty to review
compensation policies applicable to senior officers and to review and recommend
the Chief Executive Officer's compensation to the Boards of Directors of
Southwest and Stillwater National.
Southwest seeks to establish market-competitive compensation for its
senior officers that rewards achievement of Southwest goals. Under the
compensation policies of Southwest, compensation is paid based both on the
senior officer's knowledge, skills, and performance and the performance of
Southwest. The base compensation of the officers is reviewed annually based upon
assessments of comparable base salaries and the officer's proficiency and
performance. The Committee conducted a review of the Chief Executive Officer's
base compensation in December 2004. As a result of this review, Mr. Green's
salary was increased to $378,000 per year for 2005.
Regular annual bonuses are based upon Southwest's performance or a
combination of Southwest's performance and the achievement of individual officer
or business unit performance goals. In the accompanying tables, the bonuses
shown for 2005 were paid in 2006 based upon 2005 performance.
The 2005 bonus awarded to the Chief Executive Officer was based
entirely on the 2005 performance of Southwest in terms of the actual versus
targeted (i) increase in annual earnings per share (60% weight), (ii) annual
return on average shareholders' equity (30% weight), and (iii) annual return on
average assets (10% weight). Southwest's 2005 performance in these measures
exceeded the levels required for the maximum 2005 bonus of 70% of the Chief
Executive Officer's base compensation, or $264,600. The threshold, targeted, and
maximum levels for each of these performance levels and the threshold, targeted,
and maximum percentage bonuses of base compensation are determined each year in
connection with the annual financial plan. Southwest does not provide earnings
forecasts or guidance, and its targeted performance levels are confidential
because their disclosure could have adverse effects on Southwest.
Option grants to the Chief Executive Officer and Named Executive
Officers made in 2005 were based upon the cumulative performance of Southwest in
the above three measures over the years 2002, 2003, and 2004. Options for 27,893
shares were granted to the Chief Executive Officer in 2005. All options were
granted with an exercise price equal to the market price of common stock at the
date of grant.
Additional performance bonuses and option and other stock based awards
also may be made within the discretion of the Compensation Committee and the
Board of Directors. All of the 2005 bonuses and stock option awards for Named
Executive Officers were based upon Company or Company and business unit
financial performance. The Compensation Committee also may consider other
factors, and may change the basis of assessing Southwest's performance in the
future, based upon Southwest's annual or longer-term goals. Southwest's policy
is not a plan or contract that conveys rights to base compensation, bonuses, or
grants of options, all of which are discretionary.
15
All members of the Compensation Committee are independent directors as
defined in the Listing Standards. No member of the Compensation Committee is a
former or current officer or employee of Southwest or any of its subsidiaries.
March 8, 2006
Russell W. Teubner, Chairman
James E. Berry II
Erd M. Johnson
David P. Lambert
Linford R. Pitts
Robert B. Rodgers
16
STOCK PERFORMANCE COMPARISONS
The following table compares the cumulative total return on a
hypothetical investment of $100 in Southwest's common stock at the closing price
on December 31, 2000, through December 31, 2005, with the hypothetical
cumulative total return on the Nasdaq Stock Market Index (U.S. Companies) and
the Nasdaq Bank Index for the comparable period.
[CHART]
----------- ----------- ----------- ------------ ------------ -----------
12/31/00 12/31/01 12/31/02 12/31/03 12/31/04 12/31/05
----------- ----------- ----------- ------------ ------------ -----------
Southwest $100 $163 $243 $343 $480 $396
----------- ----------- ----------- ------------ ------------ -----------
NASDAQ Stock Market Index (U.S.). 100 79 55 82 89 91
----------- ----------- ----------- ------------ ------------ -----------
NASDAQ Bank Index 100 108 111 143 163 159
----------- ----------- ----------- ------------ ------------ -----------
CERTAIN TRANSACTIONS
Southwest's banking subsidiaries have and expect to have in the future,
banking and other transactions with certain officers and directors of Southwest
and its subsidiaries and with greater than 5% shareholders of Southwest and
their immediate families and associates. These transactions are in the ordinary
course of business, and loans have been and will be made on substantially the
same terms, including interest rates and collateral, as those prevailing at the
time for comparable transactions with other persons. In the opinion of
Southwest's management, these loans did not involve more than normal risk of
collectibility or present other unfavorable features.
17
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely on Southwest's review of the copies of initial statements
of beneficial ownership on Form 3 and reports of changes in beneficial ownership
on Form 4 that it has received in the past year, annual statements of changes in
beneficial ownership on Form 5 with respect to the last fiscal year, and written
representations that no such annual statement of change in beneficial ownership
was required, all directors, executive officers, and beneficial owners of more
than 10% of its common stock have timely filed those reports with respect to
2005. Southwest makes no representation regarding persons who have not
identified themselves as being subject to the reporting requirements of Section
16(a) of the Securities Exchange Act of 1934, or as to the appropriateness of
disclaimers of beneficial ownership.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
A representative of Ernst & Young LLP, Southwest's independent
certified public accounting firm, is expected to be present at the Annual
Meeting to respond to shareholders' questions and will have the opportunity to
make a statement.
FEES
The following table presents fees for professional audit services
rendered by Ernst & Young, LLP for the audit of the annual financial statements
of Southwest Bancorp, Inc. and subsidiaries for the year ended December 31,
2005, and fees billed for other services rendered by Ernst & Young.
2005 2004
---------- -----------
Audit Fees (1) $529,300 $269,000
Audit-Related Fees (2)(3) 5,400 35,946
Tax Services (3)(4) 51,289 73,367
All Other Fees (3)(5) - 2,500
---------- -----------
Total $585,989 $380,813
========== ========
(1) Audit fees consist of fees and expenses for professional services
rendered for the audit of Southwest's consolidated financial statements
and SNB Wichita's financial statements, for review of financial
statements included in Southwest's quarterly reports on Form 10-Q, and
for other services normally provided by the independent registered
public accounting firm in connection with statutory and regulatory
filings or engagements. Amounts shown are for the audits for, and the
review of Forms 10-Q filed within, the indicated years, regardless of
when the fees and expenses were billed or the services were rendered.
(2) Audit-related fees are fees for assurance and related services provided
by Ernst & Young that are related to the performance of audits or
reviews of financial statements but are not reported in the preceding
Audit fees category. The fees shown above were for services related to
Southwest's profit sharing plan and Federal Home Loan Bank collateral
requirements.
(3) Includes fees and expenses for services rendered for the years shown
regardless of when the fees and expenses were billed.
(4) Tax services fees consist of fees for compliance tax services including
tax planning and advice and preparation of tax returns.
(5) Other fees were for accounting research services.
18
PREAPPROVAL OF SERVICES
The Audit Committee is required to preapprove all auditing services and
permitted non-audit services provided by Southwest's independent registered
public accounting firm, under Securities and Exchange Commission regulations
that became effective in May 2004. There is an exception for preapproval of
nonaudit services if the aggregate amount of all such non-audit services
provided to Southwest constitutes not more than 5 percent of the total amount of
revenues paid by it to its independent registered public accounting firm during
the fiscal year in which the non-audit services are provided; such services were
not recognized by Southwest at the time of the engagement to be non-audit
services; and the non-audit services are promptly brought to the attention of
the committee and approved prior to the completion of the audit by the committee
or by one or more members of the committee to whom authority to grant such
approval has been delegated by the committee. All audit services and permitted
non-audit services to be performed by Southwest's independent auditor have been
preapproved by the Audit Committee as required by Securities and Exchange
Commission regulations and the Audit Committee's charter without exception.
REPORT OF THE AUDIT COMMITTEE
The Southwest Audit Committee oversees and reports to the Board of
Directors regarding accounting and financial reporting processes, the audits of
the financial statements, the qualifications and independence of the independent
registered public accounting firm engaged to provide independent audits and
related services, and the performance of the internal audit function and
independent registered public accounting firm; and also performs the other
duties of the committee specified by federal securities laws and regulations,
the Federal Deposit Insurance Act and related regulations, the Listing Standards
and its charter. The Committee (1) has reviewed and discussed the audited
financial statements included in Southwest's 2005 Annual Report on Form 10-K
with management; (2) has discussed with independent registered public accounting
firm the matters required to be discussed by Statement of Auditing Standards 61;
and (3) has received the written disclosures and the letter from the independent
registered public accounting firm required by Independence Standards Board
Standard No. 1, and has discussed independence with the independent registered
public accounting firm. Based upon this review, discussion, disclosures, and
materials described in (1) through (3), the Committee recommended to the Board
of Directors that the audited financial statements be included in the 2005
Annual Report and Form 10-K. The Committee also has considered whether the
amount and nature of non-audit services rendered by the independent accountant
are consistent with its independence.
March 8, 2006 Linford R. Pitts, Chairman
Joe Berry Cannon
Robert B. Rodgers
Russell W. Teubner
19
CODE OF ETHICS
The Board of Directors of Southwest has adopted a code of ethics that
applies to all directors, officers, and employees of Southwest and its
consolidated subsidiaries. This code, which fulfills the requirements of the
Listing Standards and the criteria established by applicable SEC regulations, is
available through the governance area of Southwest's website at www.oksb.com.
OTHER MATTERS
The Board is not aware of any business to come before the Annual
Meeting other than those matters described above in this Proxy Statement and
matters incident to the conduct of the Annual Meeting. However, if any other
matters should properly come before the Annual Meeting, it is intended that
proxies in the accompanying form will be voted as determined by a majority of
the Board of Directors.
SHAREHOLDER PROPOSALS AND COMMUNICATIONS
Any shareholder proposal to take action at the year 2007 Annual Meeting
of Shareholders must be received at Southwest's executive office at 608 South
Main Street, Stillwater, Oklahoma 74074 no later than November 23, 2006, in
order to be eligible for inclusion in Southwest's proxy materials for that
meeting, unless the date of the 2007 annual meeting is more than 30 days from
April 28, 2007, in which case the deadline is a reasonable time before Southwest
begins to print and mail proxy materials. Any such proposals shall be subject to
the requirements of the proxy rules adopted under the Securities Exchange Act of
1934. Under Southwest's Certificate of Incorporation, a shareholder proposal or
nomination for director may be eligible for consideration at an annual or
special meeting if written notice is delivered or mailed to the Secretary not
less than thirty days nor more than sixty days before the meeting, provided
that, if less than forty days notice of the meeting has been given, such written
notice may be delivered or mailed by the close of the tenth day after the date
notice of the meeting was mailed. Such notices also must include information
required by and comply with procedures established by the Certificate of
Incorporation.
Southwest's shareholders may communicate with the board of directors or
any individual director by addressing correspondence to the board or such
director in care of the Secretary at Southwest's main office by mail, courier,
or facsimile or by e-mail through Southwest's "contact us" button on the
Investor Relations area of its website at www.banksnb.com.
The board of directors believes it is important for all directors to
attend the annual meeting of shareholders in order to show their support for
Southwest and to provide an opportunity for shareholders to express any concerns
to them. Southwest has adopted a policy that all directors should attend each
annual meeting of shareholders unless they are unable to attend by reason of
personal or family illness or pressing matters.
20
2005 ANNUAL REPORT TO SHAREHOLDERS
Southwest's 2005 Annual Report on Form 10-K and Annual Report to
Shareholders, including consolidated financial statements, has been mailed to
all shareholders of record as of the close of business on the Record Date. Any
shareholder who has not received a copy of the Annual Report may obtain a copy
by writing to the Secretary. The Annual Report is not to be treated as a part of
the proxy solicitation material or as having been incorporated herein by
reference.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Kerby E. Crowell
KERBY E. CROWELL
SECRETARY
Stillwater, Oklahoma
March 23, 2006
ANNUAL REPORT ON FORM 10-K
A COPY OF SOUTHWEST'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED
DECEMBER 31, 2005, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION WILL BE
FURNISHED WITHOUT CHARGE TO SHAREHOLDERS AS OF THE RECORD DATE UPON WRITTEN
REQUEST TO: KERBY E. CROWELL, SOUTHWEST BANCORP, INC., P.O. BOX 1988,
STILLWATER, OKLAHOMA 74076.
21
PROXY - SOUTHWEST BANCORP, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
ANNUAL MEETING OF SHAREHOLDERS
April 27, 2006
The undersigned hereby appoints Thomas D. Berry, David P. Lambert, and Robert L.
Hert, with full powers of substitution to act, as attorneys and proxies for the
undersigned, to vote all shares of Common Stock of Southwest which the
undersigned is entitled to vote at the Annual Meeting of Shareholders (the
"Annual Meeting"), to be held in the Auditorium, Room 215, of the Stillwater
Public Library, 1107 South Duck Street, Stillwater, Oklahoma on Thursday, April
27, 2006, at 11:00 a.m., Central Time, and at any and all adjournments thereof,
as indicated below and in accordance with the determination of a majority of the
Board of Directors with respect to other matters which come before the Annual
Meeting.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS
PROXY WILL BE VOTED FOR EACH OF THE NOMINEES. IF ANY OTHER BUSINESS IS PRESENTED
AT THE ANNUAL MEETING, THIS PROXY WILL BE VOTED BY THOSE NAMED IN THIS PROXY IN
ACCORDANCE WITH THE DETERMINATION OF A MAJORITY OF THE BOARD OF DIRECTORS. AT
THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE
PRESENTED AT THE ANNUAL MEETING. THIS PROXY CONFERS DISCRETIONARY AUTHORITY ON
THE HOLDERS THEREOF TO VOTE WITH RESPECT TO THE ELECTION OF ANY PERSON AS
DIRECTOR WHERE THE NOMINEE IS UNABLE TO SERVE OR FOR GOOD CAUSE WILL NOT SERVE
AND MATTERS INCIDENT TO THE CONDUCT OF THE ANNUAL MEETING.
Should the undersigned be present and elect to vote at the Annual Meeting or at
any adjournment thereof and after notification to the Secretary of Southwest at
the Annual Meeting of the shareholder's decision to terminate this proxy, then
the power of said attorneys and proxies shall be deemed terminated and of no
further force and effect. The undersigned hereby revokes any and all proxies
heretofore given with respect to the shares of Common Stock held of record by
the undersigned.
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED
POSTAGE-PREPAID ENVELOPE.
A. ELECTION OF DIRECTORS
The Board of Directors recommends a vote "FOR" each of the listed nominees.
FOR WITHHOLD -----
James E. Berry II [ ] [ ] | |
Joe Berry Cannon [ ] [ ] | |
Robert B. Rodgers [ ] [ ] -----
INSTRUCTION: To withhold your vote for any individual nominee, insert that
nominee's name on the line provided below.
Unless contrary direction is given, the right is reserved in the sole discretion
of the Board of Directors to distribute votes among some or all of the above
nominees in a manner other than equally so as to elect as directors the maximum
possible number of such nominees.
B. AUTHORIZED SIGNATURES - SIGN HERE - THIS SECTION MUST BE COMPLETED FOR YOUR
INSTRUCTIONS TO BE EXECUTED.
The undersigned acknowledges receipt from Southwest prior to the execution of
this proxy of a Notice of Annual Meeting, Southwest's Proxy Statement for the
Annual Meeting and the 2005 Annual Report to Shareholders. Please sign exactly
as your name appears on the envelope in which this card was mailed. When signing
as attorney, executor, administrator, trustee or guardian, please give your full
title. If shares are held jointly, each holder should sign.
Signature 1-Please keep signature within the box Signature 2- Please keep signature within the box Date (dd/mm/yyyy)
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