def14a
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 14A
(Rule 14a-101)
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant þ
Filed by a Party other than the Registrant o
Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only |
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Definitive Proxy Statement
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(as permitted by Rule 14a-6(e)(2)) |
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Definitive Additional Materials |
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Soliciting Material Under Rule 14a-12 |
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Western
Alliance Bancorporation
(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):
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
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Per unit price or other underlying value of transaction computed pursuant to
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Fee paid previously with preliminary materials: |
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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
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Form, Schedule or Registration Statement No.: |
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 18, 2007
To the Stockholders of
Western Alliance Bancorporation:
The Annual Meeting of Stockholders (the Annual Meeting) of Western Alliance Bancorporation (the
Company) will be held at the Embassy Terrace at 2800 W. Sahara Avenue, Las Vegas, Nevada 89102 on
Wednesday, April 18, 2007, at 8:00 a.m., local time, for the following purposes:
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To elect five Class II directors to the Board of Directors
whose terms will expire at the 2010 annual meeting; |
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To approve an amendment to the Companys 2005 Stock Incentive
Plan (the Plan) increasing the maximum number of shares of stock available
for issuance under the Plan by 1,246,156 shares to 4,500,000; and |
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To transact such other business as may properly come before the
stockholders at the Annual Meeting. |
Only stockholders of record at the close of business on February 28, 2007 will be entitled to
notice of and to vote at the Annual Meeting or any adjournments thereof. A list of stockholders
entitled to vote at the Annual Meeting will be available for inspection by any stockholder at the
offices of the Company for a period of ten days prior to the Annual Meeting until the close of such
meeting.
Even if you plan to attend the Annual Meeting in person, please vote your shares of the Companys
common stock by dating and signing the enclosed proxy and promptly mailing your proxy in the
postage-paid envelope enclosed for this purpose. Alternatively, you may vote your shares of common
stock by proxy by using the Internet or telephone as described in the proxy statement and on the
form of proxy. If you attend the Annual Meeting, you may revoke your proxy and vote your shares in
person.
By order of the Board of Directors,
Linda N. Mahan
Secretary
Las Vegas, Nevada
March 23, 2007
TABLE OF CONTENTS
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PROXY STATEMENT
WESTERN ALLIANCE BANCORPORATION
2700 West Sahara Avenue
Las Vegas, Nevada 89102
GENERAL INFORMATION
This proxy statement is being provided to stockholders of Western Alliance Bancorporation (the
Company) for solicitation of proxies on behalf of the Board of Directors of the Company for use
at the Annual Meeting of Stockholders (the Annual Meeting) to be held at the Embassy
Terrace at 2800 W. Sahara Avenue, Las Vegas, Nevada 89102, at 8:00 a.m., local time, on Wednesday,
April 18, 2007 and any and all adjournments thereof. This proxy statement, the Companys Annual
Report to Stockholders, our annual report on Form 10-K, and the proxy card (or the voting instruction card for shares held in the
Companys 401(k) plan) are being mailed to stockholders of the
Company on or about March 23, 2007.
The Company will pay all expenses incurred in this solicitation. In addition to the Company
soliciting proxies by mail, over the Internet and by telephone, the Companys directors, officers
and employees may solicit proxies on behalf of the Company without additional compensation. Banks,
brokerage houses and other institutions, nominees and fiduciaries will be requested to forward the
proxy materials to beneficial owners and to obtain authorization for the execution of proxies. The
Company will, upon request, reimburse such parties for their reasonable expenses in forwarding
proxy materials to beneficial owners.
Your proxy is being solicited by the Board of Directors of the Company. It will be voted as
you direct; however, if no instructions are given on an executed and returned proxy it will be
voted FOR the election of the five Class II director nominees whose terms will expire at the 2010
annual meeting and FOR the proposed amendment to the Companys 2005 Stock Incentive Plan (the
Plan) increasing the maximum number of shares of stock
available for issuance under the Plan by 1,246,156 to 4,500,000.
If any other matters are properly brought before the Annual Meeting, the persons named in the
proxy will vote the shares represented by such proxy on such matters as determined by a majority of
the Board of Directors. The Company is required to file an annual report on Form 10-K for its 2006
fiscal year with the Securities and Exchange Commission (SEC). Stockholders may obtain, free of
charge, a copy of our annual report on Form 10-K by writing to the Company at 2700 West Sahara
Avenue, Las Vegas, Nevada 89102, Attention: Corporate Secretary. Our annual report on Form 10-K
also is available on our website, westernalliancebancorp.com.
VOTING RIGHTS
Only stockholders of record at the close of business on February 28, 2007 (the Record Date),
are entitled to vote at the Annual Meeting and any adjournments thereof. On the Record Date, there
were 27,363,998 shares of common stock outstanding and eligible to be voted at the Annual Meeting.
A majority of the outstanding shares of common stock must be represented at the Annual Meeting in
person or by proxy in order to constitute a quorum for the transaction of business. Each holder of
common stock shall have one vote for each share of common stock of the Company in the holders name
on the Record Date.
The accompanying proxy is for use at the Annual Meeting if a stockholder either is unable to
attend in person or will attend but wishes to vote by proxy. Shares may be voted by completing the
enclosed proxy card and mailing it in the postage-paid envelope provided, voting over the Internet
or using a toll-free telephone number. Please refer to the proxy card or the information forwarded
by your
bank, broker or other holder of record to see which options are available. Stockholders who vote
over the Internet may incur costs, such as telephone and Internet access charges, for which the
stockholder is responsible. The Internet and telephone voting facilities for eligible stockholders
of record will close at 11:59 p.m. Eastern Time, on April 17, 2007. Specific instructions to be
followed by any stockholder interested in voting via the Internet or telephone are shown on the
enclosed proxy card. The Internet and telephone voting procedures are designed to authenticate the
stockholders identity and to allow stockholders to vote their shares and confirm that their
instructions have been properly recorded. If your shares are held in the name of a bank or broker,
the availability of telephone and Internet voting will depend on the voting processes of the
applicable bank or broker. Therefore, we recommend that you follow the voting instructions on the
form you receive.
A proxy may be revoked at any time before the shares represented by it are voted at the Annual
Meeting by delivering to the Corporate Secretary of the Company either a written revocation or a
duly executed proxy bearing a later date (including a proxy given over the Internet or by
telephone) or by voting in person at the Annual Meeting.
If your shares are held in a brokerage account or by another nominee, you are considered the
beneficial owner of shares held in street name, and these proxy materials are being forwarded
to you by your broker or nominee (the record holder) along with a voting instruction card. As the
beneficial owner, you have the right to direct your record holder how to vote your shares, and the
record holder is required to vote your shares in accordance with your instructions. If your shares
are held by a broker, the broker will ask you how you want your shares to be voted. If you give the
broker instructions, your shares will be voted as you direct. If you do not give instructions, one
of two things can happen, depending on the type of proposal. For the election of directors, the
broker may vote your shares in its discretion. For the proposed amendment to the Plan, the broker
may not vote your shares at all. When that happens, it is called a broker non-vote.
Assuming the presence of a quorum at the Annual Meeting, directors will be elected by a
plurality of the votes cast in person or by proxy (Item 1). There will be no cumulative voting in
the election of directors. The proposed Amendment to the 2005 Stock Incentive Plan (Item 2) will
be approved if the votes cast for the proposal exceed those cast against the proposal. Abstentions
and broker non-votes will be treated as shares that are present, or represented and entitled to
vote for purposes of determining the presence of a quorum at the Annual Meeting. Broker non-votes
will not be counted as a vote cast on any matter presented at the Annual Meeting. Abstentions will
not be counted in determining the number of votes cast in connection with any matter presented at
the Annual Meeting.
Shares in the Company 401(k) Plan
If you hold shares in the Western Alliance Bancorporation 401(k) Plan, referred to as the
401(k) Plan, you may instruct the plan trustee on how to vote your shares in the plan by mail, by
telephone or on the Internet as described above, except that, if you vote by mail, the card that
you use will be a voting instruction card rather than a proxy card. If you hold shares in the
401(k) Plan, a copy of the voting instruction card is enclosed with this proxy statement. You may
vote all the shares allocated to your account on the Record Date.
In addition, your vote will also apply pro rata, along with the votes of other participants in
the 401(k) Plan who return voting instructions to the trustee, to all shares held in the 401(k)
Plan for which voting directions are not received. These undirected shares may include shares
credited to the accounts of participants who do not return their voting instructions and shares
held in the plan that were not credited to individual participants accounts as of the Record Date.
The trustee will automatically apply your
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voting preference to the undirected shares proportionately with all other participants who provide
voting directions.
RECENT DEVELOPMENTS
Acquisition of First Independent Capital of Nevada and First Independent Bank of Nevada. On
December 20, 2006, the Company and First Independent Capital of Nevada (First Independent) signed
a definitive agreement under which First Independent will merge into Western Alliance
Bancorporation. Privately held First Independent owns First Independent Bank of Nevada
(headquartered in Reno, Nevada), which had assets of $428 million, deposits of $386 million, loans
of $288 million and equity capital of $32 million at December 31, 2006. Under the terms of the
agreement, First Independent stockholders may elect to receive either $93.60 in cash or Western
Alliance common stock of comparable value (subject to certain collar provisions) as determined by a
pricing period prior to close. The agreement contains proration and allocation procedures to ensure
that 80% of the First Independent shares are exchanged for shares of Western Alliance. First
Independent shareholders may be eligible for additional cash payments of up to $2.38 per share
depending upon the performance of certain credits in the First Independent Bank loan portfolio
during the two-year period after the merger has been completed. The transaction is valued at
approximately $115 million and is expected to close late in the first quarter of 2007.
Following the completion of the pending merger between the Company and First Independent, the
Companys Board of Directors will be expanded to include John P. Sande III, who now serves as
Chairman of First Independents Board of Directors. He will serve as a Class III director with a
term expiring in 2008. Mr. Sande is a senior partner with Jones Vargas, one of the largest full
service law firms in the State of Nevada. He practices primarily in the areas of administrative
law, government relations, and trusts and estates, and holds a juris doctorate, cum laude, from
Harvard University.
CORPORATE GOVERNANCE
The Board of Directors is responsible for ensuring effective governance over the Companys
affairs. The Company has adopted Corporate Governance Guidelines and a Code of Business Conduct and
Ethics. These documents are available on the Companys website at westernalliancebancorp.com or,
for print copies, by writing to the Company at 2700 West Sahara, Las Vegas, Nevada 89102,
Attention: Corporate Secretary.
Board Composition
The Companys bylaws provide that the Board of Directors will consist of not less than eight
nor more than 15 directors. The Board of Directors may, from time to time, fix the number of
directors. The Companys Board is currently comprised of 14 directors. In accordance with the
terms of the Companys Articles of Incorporation, the terms of office of the directors are divided
into three classes:
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Class I, whose current term will expire at the annual meeting of stockholders to
be held in 2009; |
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Class II, whose current term will expire at the annual meeting of stockholders
to be held in 2007; and |
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Class III whose current term will expire at the annual meeting of stockholders
to be held in 2008. |
At each annual meeting of stockholders, after the initial classification of the Board of
Directors, the successors to directors whose terms will then expire will be elected to serve from
the time of election
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and qualification until the third annual stockholders meeting following election. The number
of directors may be changed only by resolution of the Board of Directors. Any additional
directorships resulting from an increase in the number of directors will be distributed among the
three classes, such that each class shall be as nearly equal in number as possible.
The Board of Directors currently consists of 14 directors divided into three classes.
Information regarding each of the Companys directors is set forth below. All ages are provided as
of December 31, 2006.
Class I Directors with Terms Expiring in 2009
Paul Baker (age 65) has been a director of the Company and Alliance Bank of Arizona since
December 2002 and February 2003, respectively. Mr. Baker has been a prominent Tucson businessman
for the last 30 years. Mr. Baker has been the President and Chief Executive Officer of the
Enterprise Group, Inc. since 1998. Mr. Baker was also the founder of Arizona Mail Order Company, a
direct-marketer of womens clothing. Arizona Mail Order Company was later sold to Fingerhut. Mr.
Baker served as a director of Grossmont Bank from 1995 to 1998.
Bruce Beach (age 57) has been a director of the Company since April 2005. Mr. Beach has been a
director of Alliance Bank of Arizona since its formation. Mr. Beach has been Chairman and Chief
Executive Officer of Beach, Fleischman & Co., P.C., an accounting and business advisory firm in
Southern Arizona, since May 1991. Mr. Beach is a certified public accountant, received a BS in
business administration and an MBA from the University of Arizona, and has 33 years of experience
in public accounting. Mr. Beach also has been the Vice-Chairman of Carondelet Health Network, one
of the largest hospital systems in Southern Arizona, since July 2004 and has served as the chairman
of its audit committee since July 2003.
William S. Boyd (age 75) has been a director and principal stockholder of the Company since
inception and was a founder of its first bank subsidiary, Bank of Nevada (formerly, BankWest of
Nevada). Mr. Boyd has served as a director, as well as Chairman of the Board and Chief Executive
Officer, of Boyd Gaming Corporation since its inception in June 1988. He served as a director of
Nevada State Bank from 1965 to 1985. Mr. Boyd played a leading role in founding the William S. Boyd
School of Law at the University of Nevada, Las Vegas. Mr. Boyd is the father of director Marianne
Boyd Johnson.
Steven J. Hilton (age 45) has been a director of the Company and Alliance Bank of Arizona
since December 2002 and February 2003, respectively. Mr. Hilton was the co-founder, and is the
Chairman and Chief Executive Officer of Meritage Homes Corporation. Mr. Hilton founded
Arizona-based Monterey Homes in 1985. Under Mr. Hiltons leadership, Monterey became a publicly
traded company and combined with Legacy Homes in 1997, resulting in the creation of Meritage Homes
Corporation. Mr. Hilton received his Bachelor of Science degree in accounting from the University
of Arizona.
Marianne Boyd Johnson (age 48) has served as a founding director of the Company and Bank of
Nevada since their establishment in 1995 and 1994, respectively. Since 1992, Ms. Johnson has been
a member of the Board of Directors of Boyd Gaming Corporation and has served as its Vice Chairman
of the Board and Senior Vice President since February 2001 and December 2001, respectively. Ms.
Johnson has served Boyd Gaming since 1977 in a variety of capacities, including sales and
marketing. Ms. Johnson served as a Director of Nevada Community Bank until its sale to First
Security Bank (Wells Fargo) in 1993. Ms. Johnson is the daughter of director William S. Boyd.
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Class II Directors with Terms Expiring in 2007
The terms of Class II directors will expire at this years Annual Meeting. The Board has
nominated the five individuals listed below, all of whom are currently directors of the Company, to
be elected as Class II directors at the Annual Meeting. See Items of Business To Be Acted On At
The Meeting - Item 1. Election of Directors. If elected, the five director nominees new terms
of office will expire at the Annual Meeting in 2010.
Cary Mack (age 47) has been a director of the Company since April 2005. Mr. Mack has been a
director of Torrey Pines Bank since its formation in May 2003. Mr. Mack is licensed in the State
of California as a certified public accountant, attorney and real estate broker. He was formerly
employed with PricewaterhouseCoopers audit and dispute resolution practices until 1990, when he
became a founding stockholder, and the chief executive officer of Mack.Barclay Inc., a forensic
certified public accounting, economic and information technology consulting firm specializing in
the evaluation and resolution of complex economic and accounting issues in the business and
litigation environments. Mack.Barclay was acquired in May 2006 by LECG Corporation, a global
expert services firm that provides independent expert testimony and analysis, original
authoritative studies, and strategic consulting services. Mr. Mack is a managing director with
LECG.
Arthur Marshall (age 77) has been a director of the Company since 1995 and the Chairman of the
Board of Bank of Nevada since its establishment in 1994. He served as Chairman of the Board of
Directors of the Company until December 2002. He was a co-founder of Marshall Rousso, now Marshall
Retail Group, or MRG, a privately owned retail apparel chain in the Western United States and
served as its President from 1959 to 1988. He is a member of the Nevada Gaming Commission and the
national commission of the Anti-Defamation League and a former board member of the Public Employees
Retirement System of Nevada. He is a recipient of the Prime Ministers award from the State of
Israel and the Distinguished Nevadan Award from the University of Nevada Las Vegas. Mr. Marshall is
the father of director Todd Marshall.
Todd Marshall (age 50) was a founding director of Bank of Nevada and the Company and has
served as a director continuously since their establishment in 1994 and 1995, respectively. Mr.
Marshall has been a director of Marshall Retail Group since May 1976, is currently its Chairman and
was formerly its Chief Executive Officer until January 2005. The Marshall Retail Group owns and
operates stores in more than 70 locations, primarily in major casino-hotels in Nevada, Mississippi
and New Jersey. He is currently the owner and President of Marshall Management Co., a
real estate investment and property management company in Las Vegas. Mr. Marshall is the son of
director Arthur Marshall.
M. Nafees Nagy, M.D. (age 63) has served as a director of Bank of Nevada since its
establishment in 1994 and as a director of the Company since April 2004. Dr. Nagy has practiced
medicine in Las Vegas for more than 30 years and specializes in oncology, clinical hematology, and
cancer chemotherapy. He founded and is President and a director of the Nevada Cancer Centers. Dr.
Nagy served for eight years as a member of the Nevada State Board of Medical Examiners and also
served as its Secretary. Dr. Nagy is certified by the American Board of Internal Medicine and the
American Board of Utilization Review and Quality Assurance and has consulted for several healthcare
concerns. He was a member of the advisory board for Option Care. Dr. Nagy also has served as a
member and the chair of the Medical Carrier Advisory Committee for the Clark County Medical Society
and currently serves as a member of the Societys Nominating Committee. Dr. Nagy formerly served
as a director of Sun Bank for five years and Nevada Community Bank until its sale in 1993. He
retired from the U.S. Army as a Lt. Colonel and served in Operation Desert Storm in 1991.
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James E. Nave, D.V.M. (age 62) has served as a director of the Company and Bank of Nevada
since their establishment in 1995 and 1994, respectively. Dr. Nave, a former officer in the armed
forces, has owned the Tropicana Animal Hospital since 1974. He is a former President of the
American Veterinary Medical Association. Dr. Nave is also the Globalization Liaison Agent for
Education and Licensing for the American Veterinary Medical Association and Chairperson of the
National Commission for Veterinary Economics Issues. He is also a member of the Nevada Veterinary
Medical Association, the Clark County Veterinary Medical Association, the National Academy of
Practitioners, the Western Veterinary Conference, the American Animal Hospital Association, and the
Executive Board of the World Veterinary Association and was the chairman of the University of
Missouri, College of Veterinary Medicine Development Committee. He was also a member of the Nevada
State Athletic Commission from 1988 to 1999 and served as its chairman from 1989 to 1992 and from
1994 to 1996. Dr. Nave is also a director of Station Casinos, Inc., and is chairman of its audit
committee and a member of its governance and compensation committee.
Class III Directors with Terms Expiring in 2008
George J. Maloof, Jr. (age 42) has served as a director of the Company since April 2006. Mr.
Maloof is the President of The Palms Casino Resort and has been responsible for the development and
operation of hotels and casinos throughout the Southwest and in Las Vegas and North Las Vegas,
Nevada, including Palms Place, a luxury condominium project. He has served as a director of First
National Bank of New Mexico and First Security Bank of Nevada. Mr. Maloof received a bachelors
degree from the University of Nevada Las Vegas.
Robert G. Sarver (age 45) has been the President, Chairman and Chief Executive Officer of the
Company since December 2002. He has served as Chief Executive Officer of Bank of Nevada since July
2006 and as Chairman of the Companys Torrey Pines Bank subsidiary since May 2003. He also served
as the Chief Executive Officer of Torrey Pines Bank from May 2003 until June 2006. Mr. Sarver
organized and founded National Bank of Arizona in 1984 and served as President at the time of the
sale of that bank in 1994 to Zions Bancorporation. Mr. Sarver was the lead investor and Chief
Executive Officer of GB Bancorporation, the former parent company of Grossmont Bank, from 1995 to
1997. Mr. Sarver served as Chairman and Chief Executive Officer of California Bank and Trust and
as an Executive Vice President with Zions Bancorporation from June 1998 to March 2001 and had
oversight for Vectra Bank, Colorado during such time. He served as a director and credit committee
member of Zions Bancorporation from 1995 to 2001. Mr. Sarver is a director and audit committee
member of Skywest Airlines and a director of Meritage Homes Corporation. He is also the Managing
Partner of the Phoenix Suns NBA basketball team and a member of the board of directors of the
Sarver Heart Center at the University of Arizona.
Donald D. Snyder (age 59) has served as a director of the Company and of Bank of Nevada since
1997. He had earlier served as a founding director of the entity created to charter Bank of Nevada
and was one of its initial investors. Mr. Snyder is the Chairman of the Las Vegas Performing Arts
Center Foundation. He also is a director of Sierra Pacific Resources, Cash Systems, Inc., and
Switch Communications Group, LLC. Mr. Snyder was the President of Boyd Gaming Corporation from
January 1997 to March 2005, having joined the companys board of directors in April 1996, and its
management team in July 1996. Prior to that, he was president and chief executive officer of the
Fremont Street Experience LLC, a private/public partnership formed to develop and operate a major
redevelopment project in Downtown Las Vegas. Mr. Snyder was previously chairman of the board of
directors and chief executive officer of First Interstate Bank of Nevada, then Nevadas largest
full-service bank, from 1987 through 1991. During his 22 years with First Interstate Bank from
1969 to 1991, Mr. Snyder served in various management positions in retail and corporate banking, as
well as international and real estate
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banking. He has served and continues to serve on the boards of numerous industry and community
organizations.
Larry L. Woodrum (age 68) has been a director of the Company since 1995, and served as
President and Chief Executive Officer of Bank of Nevada from 1994 until July 2006. Mr. Woodrum has
over 40 years of banking experience. From 1979 until he joined Bank of Nevada, Mr. Woodrum served
Nevada State Bank in a variety of capacities, including Chief Credit Officer and Corporate
Secretary. Prior to joining Nevada State Bank, Mr. Woodrum was employed for 25 years by First
National Bank of Nevada, where he was engaged in a broad range of operational and consumer and
commercial lending activities. Mr. Woodrum is an active member of the Nevada Bankers Association,
and formerly served as a member of its board of directors.
Director Independence
The Companys common stock is traded on the New York Stock Exchange (NYSE). The NYSEs
rules include a requirement that a majority of directors of NYSE-listed companies be independent.
For a director to be independent under the NYSEs rules, the Board of Directors must
affirmatively determine that the director has no material relationship with the Company, including
its subsidiaries, either directly or as a partner, shareholder, or officer of an organization that
has a relationship with the Company. Subject to certain exceptions, the NYSE rules also expressly
provide that a person cannot be an independent director if:
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At any time in the last three years, the director is, or has been employed by
the Company, or has an immediate family member that serves or has served as one of
its executive officers; |
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The director or an immediate family member has received more than $100,000 in
direct compensation from the Company over a twelve-month period during the last
three years, other than for director or committee fees and pension or other forms
of deferred compensation for prior service (provided such compensation is not
contingent in any way on continued service); |
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The director is a partner or employee of a firm that is the Companys current
internal or external auditor, or the director has an immediate family member who is
currently a partner of such firm or who is currently employed by the firm in its
audit, assurance, or tax compliance practice, or within the last three years, the
director or an immediate family member was a partner or employee in such firm and
personally worked on the Companys audit in that time; |
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In the last three years, the director or an immediate family member is or was
employed as an executive officer by another company where, at the same time, any of
the Companys present executive officers serve or served on that companys
compensation committee; or |
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The director is currently employed by, or, in the case of an immediate family
member, is employed as an executive officer by, another company that has made
payments to the Company, or received payments from the Company for property or
services that, in any of the last three fiscal years, account for more than 2% of
such companys consolidated gross revenue or $1,000,000, whichever is greater. |
Of the 14 persons on the Board of Directors, including the Class II nominees, nine have been
determined by the Board to be independent for purposes of Section 303A of the Listed Company Manual
of the NYSE. The Board based these determinations primarily on a review of the responses of the
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directors to questions regarding employment and compensation history, affiliations and family and
other relationships, including those relationships described under Compensation Committee
Interlocks and Insider Participation and Certain Business Relationships on pages 16 and 33 of
this proxy statement, respectively, and on discussions with such directors.
Mr. Sarver and Mr. Woodrum are not considered independent because they have served as
executive officers of the Company and/or one of its banking subsidiaries (the Banks) within the
last three years. Mr. Hilton is not considered independent because Mr. Sarver was a member of the
compensation committee of Meritage Homes Corporation until February 2004 and Mr. Hilton is the
Chairman, Chief Executive Officer of Meritage. Mr. A. Marshall is not considered independent
because of his position as a salaried Chairman of the Companys subsidiary, Bank of Nevada, and Mr.
T. Marshall is not considered independent because he is Mr. A. Marshalls son.
Meetings of the Board of Directors
The Board of Directors held seven meetings in 2006. Each director attended at least 75% of the
Board meetings and meetings of Committees on which he or she served. All of the directors attended
the 2006 annual meeting of stockholders, with the exception of Messrs. Hilton and Maloof.
The independent directors met four times in 2006. The non-management directors held one
meeting in March 2006 to discuss management succession matters. The independent directors have
selected Mr. Snyder as Presiding Director to lead their sessions.
Communication with the Board and its Committees
Any stockholder or other interested person may communicate with the Board, a specified
director, (including the Presiding Director), the non-management directors as a group, or a
committee of the Board by directing correspondence to their attention, in care of the Corporate
Secretary, Western Alliance Bancorporation, 2700 West Sahara Avenue, Las Vegas, Nevada 89102.
Anyone who wishes to communicate with a specific Board member, the non-management directors only or
a specific committee should send instructions asking that the material be forwarded to the
applicable director, group of directors or the appropriate committee chairman. All communications
so received from stockholders or other interested parties will be forwarded to the director or
directors designated.
Committees of the Board of Directors
The Companys Board of Directors has established four (4) committees:
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The Audit Committee; |
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The Compensation Committee; |
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The Nominating and Corporate Governance Committee; and |
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The Credit Committee. |
Information with respect to these committees is listed below. The Company may appoint
additional committees of the Board of Directors in the future, including for purposes of complying
with all applicable corporate governance rules of the NYSE. The Companys committee structure and
each committees charter are available on the Companys website at westernalliancebancorp.com or,
for print copies, by writing to the Company at 2700 West Sahara, Las Vegas, Nevada 89102,
Attention: Corporate Secretary.
- 8 -
Audit Committee
The Companys Audit Committee consists of four independent directors (Messrs. Beach and Mack,
and Drs. Nagy and Nave). The Audit Committee held 14 meetings in 2006.
Mr. Mack serves as the chairman and the Board of Directors has determined that he meets the
NYSE standard of possessing accounting or related financial management expertise. Each member of
the Audit Committee is financially literate under NYSE listing standards and Mr. Mack qualifies
as an audit committee financial expert as defined by the SEC. The Audit Committees primary
duties include:
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Serving as an independent and objective body to monitor and assess the Companys
compliance with regulatory requirements, its financial reporting processes and
related internal control systems and the general performance of the Companys
internal audit function; |
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Overseeing the compliance of the Companys internal audit function with the
requirements of Section 404 of the Sarbanes-Oxley Act of 2002; |
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Overseeing the audit and other services of the Companys outside auditors and
being directly responsible for the appointment, independence, qualifications,
compensation and oversight of the outside auditors, who will report directly to the
Audit Committee; |
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Supporting an open means of communication among the Companys outside auditors,
accountants, financial and senior management, its internal auditors, its regulatory
audit department and the Board; |
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Resolving any disagreements between the Companys management and the outside
auditors regarding the Companys financial reporting; and |
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Preparing (or directing to be prepared and reviewing) the Audit Committee Report
for inclusion in the Companys proxy statement for its annual meeting. |
The Audit Committee charter also mandates that the Audit Committee pre-approve all audit,
audit-related, tax and other services conducted by the Companys independent accountants. A copy
of the Audit Committee charter is available on the Companys website at westernalliancebancorp.com
or, for print copies, by writing to the Company at 2700 West Sahara, Las Vegas, Nevada 89102,
Attention: Corporate Secretary.
Compensation Committee
The Companys Compensation Committee consists of three independent directors (Messrs. Baker
and Snyder and Dr. Nave). The Compensation Committee held six meetings in 2006.
The Compensation Committees primary duties include:
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Determining the compensation of the Companys executive officers; |
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Annually reviewing and approving corporate goals and objectives relevant to the
Chief Executive Officers compensation, and evaluating the CEOs performance in
light of those goals and objectives; |
- 9 -
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Reviewing the Companys executive compensation policies and plans; |
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Administering and implementing the Companys equity compensation plans; |
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Determining the number of shares underlying stock options and restricted common
stock awards to be granted to the Companys directors, executive officers and other
employees pursuant to these plans; and |
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Reviewing and discussing the Compensation Discussion and Analysis included in
this Proxy Statement with management. |
Further
information regarding the Compensation Committee is found beginning at page 15 of this proxy
statement, and the Compensation Committee report appears at page 23.
Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committee consists of three independent directors (Mr.
Boyd, Dr. Nagy and Ms. Johnson). Mr. Boyd serves as chairman of the Nominating and Corporate
Governance Committee. The Nominating and Corporate Governance Committee held four meetings in 2006.
The Committees duties include:
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Identifying individuals qualified to become members of the Companys Board of
Directors and recommending director candidates for election or re-election to the
Board; |
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Considering and making recommendations to the Board regarding Board size and
composition, committee composition and structure and procedures affecting
directors; and |
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Monitoring the Companys corporate governance principles and practices. |
Credit Committee
The Credit Committee consists of six directors (Messrs. Hilton, A. Marshall, T. Marshall,
Snyder and Woodrum, and Ms. Johnson). Mr. A. Marshall serves as chairman of the Credit Committee.
The Credit Committee reviews the quality of the Companys credit portfolio, oversees the
effectiveness and administration of the Companys credit-related policies, reviews the Companys
loan portfolio composition and the adequacy of its allowance for loan and lease losses, and
monitors its internal credit examinations. The Credit Committee held four meetings in 2006.
Compensation of Directors
The following table provides information concerning the compensation of the Companys
non-employee directors for 2006. The Company does not pay directors who are also employees of the
Company or the Banks additional compensation for their service as directors and, accordingly, this
table does not include Messrs. Sarver and Woodrum. Non-employee directors receive annual retainers,
fees for meeting attendance, and bi-annual equity grants in the form of non-qualified stock
options. In accordance with SEC regulations, stock and option grants are valued at the grant date
fair value computed in accordance with Statement of Financial Accounting Standards No. 123
(Revised), Share-Based Payment (FAS 123R). For stock options, the FAS 123R fair value per share
is based on certain assumptions that are explained in footnotes 1 and 12 to our financial
statements, which are included in our annual report on Form 10-K. The table below discloses this
expense ratably over the vesting period, but
without reduction for assumed forfeitures (as is done for financial reporting purposes). The
table includes the ratable portion of grants made both in the current and in prior years.
- 10 -
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Fees Earned or |
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Stock |
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Option |
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All Other |
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Name |
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Paid in Cash ($) |
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Awards ($) (1) |
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Awards ($) (2) |
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Compensation ($) (3) |
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Total ($) |
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Current |
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Paul Baker |
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28,500 |
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3,327 |
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14,776 |
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4,500 |
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51,103 |
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Bruce Beach |
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42,750 |
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3,327 |
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14,776 |
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4,500 |
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65,353 |
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William S. Boyd |
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30,750 |
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3,327 |
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13,810 |
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47,887 |
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Steven J. Hilton |
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27,000 |
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3,327 |
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14,776 |
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4,500 |
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49,603 |
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Marianne Boyd Johnson |
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29,250 |
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3,327 |
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14,776 |
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6,500 |
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53,853 |
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Cary Mack |
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47,750 |
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3,327 |
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14,986 |
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4,500 |
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70,563 |
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George J. Maloof, Jr. |
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24,750 |
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3,327 |
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14,776 |
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-0- |
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42,853 |
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Arthur Marshall |
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32,250 |
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3,327 |
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14,776 |
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58,500 |
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108,853 |
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Todd Marshall |
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28,500 |
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3,327 |
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14,776 |
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8,500 |
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55,103 |
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M. Nafees Nagy, M.D. |
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34,500 |
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3,327 |
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14,776 |
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8,500 |
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61,103 |
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James Nave, D.V.M. |
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45,000 |
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-0- |
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14,776 |
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8,500 |
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68,276 |
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Donald D. Snyder |
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38,250 |
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-0- |
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14,776 |
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8,500 |
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61,526 |
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Former |
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Edward Nigro (4) |
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17,250 |
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-0- |
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5,130 |
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8,500 |
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30,880 |
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(1) |
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This column discloses the grant date fair value of 100 shares of restricted stock awarded
to certain directors for their participation in a team building event during a director
retreat in July 2006. The award vested in full immediately upon grant. |
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(2) |
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This column reflects the dollar amount recognized for financial statement reporting purposes
for the fiscal year ended December 31, 2006 in accordance with
SFAS 123R. As of December
31, 2006, each director had the following number of options outstanding: Mr. Baker, 13,000;
Mr. Beach, 11,800; Mr. Boyd, 8,000; Mr. Hilton, 13,000; Ms. Johnson, 13,000; Mr. Mack, 13,000;
Mr. Maloof, 5,000; Mr. A. Marshall, 13,000; Mr. T. Marshall, 13,000; Dr. Nagy, 9,200; Dr.
Nave, 13,000; and Mr. Snyder, 13,000. Complete beneficial ownership information of Company
stock for each of our directors is provided in this proxy statement under the heading,
Security Ownership of Management and Certain Beneficial Owners. |
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(3) |
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This column reflects retainer and/or meeting fees earned in the first quarter of 2006 by
Company directors who also served as a director of the Companys Bank of Nevada subsidiary
(for Ms. Johnson and Messrs. A. Marshall, T. Marshall, Nagy, Nave, Snyder and Nigro), its
Alliance Bank of Arizona subsidiary (for Messrs. Baker, Beach and Hilton), or its Torrey Pines
Bank subsidiary (for Mr. Mack). (See the paragraph below for an explanation of a change in
compensation
practices for directors after the first quarter of 2006.) In addition, the amount shown
for Mr. A. |
- 11 -
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Marshall includes a $50,000 annual fee he received in 2006 for serving as
Chairman of the Board of Bank of Nevada. |
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(4) |
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Mr. Nigro resigned from the Board of Directors effective July 1, 2006. |
Prior 2006, the Company did not pay retainers or meeting fees to its non-employee directors
since most also served as directors for one or more of the Companys subsidiaries, for which
service they received retainers and meeting fees from the subsidiary in question. In February
2006, the Compensation Committee decided to reverse this practice so that, beginning with the
second quarter of 2006, directors are compensated directly by the Company for their service. With
the exception of Mr. A. Marshall, who receives a $50,000 annual fee for serving as Chairman of the
Board of Bank of Nevada, Company directors who also serve on the boards of one or more of the
Companys subsidiaries receive no additional compensation for that service.
At its February 2006 meeting, the Committee approved an annual retainer for all non-employee
directors of $25,000, plus additional retainer amounts as follows:
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$5,000 for the Presiding Independent Director, |
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$10,000 for the Audit Committee chair, and |
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$5,000 for all other Committee chairs. |
Annual retainers are paid in increments on a quarterly basis. The Compensation Committee also
approved the following meeting fees:
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$1,500 for Board meetings, |
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$1,500 for Audit Committee meetings, and |
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$750 for all other Committee meetings. |
Finally, at the same time, the Committee approved a bi-annual stock option grant of 5,000
shares for each non-employee director.
Director Selection Process
As noted above, one of the primary responsibilities of the Nominating and Corporate Governance
Committee (referred to in this section as the Committee) is to assist the Board of Directors in
identifying and reviewing qualifications of prospective directors of the Corporation. The Board
and the Committee periodically review the appropriate size of the Board. In considering candidates
for the Board, the Committee considers the entirety of each candidates credentials and does not
have any specific minimum qualifications that must be met by a Committee-recommended nominee. The
Committee is guided by the following basic selection criteria for all nominees: independence;
highest character and integrity; experience and understanding of strategy and policy-setting;
reputation for working constructively with others; and sufficient time to devote to Board matters.
The Committee also gives consideration to diversity, age and experience and specialized expertise
in the context of the needs of the Board as a whole.
The Committee will consider nominees for director recommended by stockholders. A stockholder
wishing to recommend a director candidate for consideration by the Committee should send such
recommendation to the Companys Corporate Secretary at the address shown on the cover page of
this
- 12 -
Proxy Statement, who will then forward it to the Committee. Any such recommendation should
include the following minimum information for each director nominee: full name, address and
telephone number, age, a description of the candidates qualifications for Board service (such as
principal occupation during the past five years and current directorships on publicly held
companies), the candidates written consent to be considered for nomination and to serve if
nominated and elected, and the number of shares of Company common stock owned, if any. A
stockholder, who wishes to nominate an individual as a director candidate at the annual meeting of
stockholders, rather than recommend the individual to the Committee as a nominee, must comply with
certain advance notice requirements. (See Stockholder Proposals for more information on these
procedures.)
If the Committee receives a director nomination from a stockholder or group of stockholders
who (individually or in the aggregate) beneficially own greater than 5% of the Companys
outstanding voting stock for at least one year as of the date of such recommendation, the Company,
as required by applicable securities law, will identify the candidate and stockholder or group of
stockholders recommending the candidate and will disclose in its proxy statement whether the
Committee chose to nominate the candidate, as well as certain other information.
In addition to potential director nominees submitted by stockholders, the Committee considers
candidates submitted by directors, as well as self-nominations by directors and, from time to time,
it may consider candidates submitted by a third-party search firm hired for the purpose of
identifying director candidates. The Committee conducts an extensive due diligence process to
review potential director candidates and their individual qualifications, and all such candidates,
including those submitted by stockholders, will be similarly evaluated by the Committee using the
Board membership criteria described above.
Each nominee to be elected to the Board at this years Annual Meeting is a director standing
for re-election. The Committee and the Board believe that all of such nominees satisfy the above
described director standards. Accordingly, all of such nominees were selected for re-election by
the Board. With respect to this years Annual Meeting, no nominations for director were received
from stockholders.
Audit Committee Report
The Board of Directors of Western Alliance Bancorporation approved the charter of the
Companys Audit Committee on April 27, 2005. The charter states that the primary purpose of the
Committee is to assist the Board of Directors in fulfilling its oversight responsibilities by
reviewing: (i) the Companys financial reports and other financial information provided by the
Company to governmental bodies (e.g., federal and state banking regulators, the Securities and
Exchange Commission, and the Internal Revenue Service) or the public; (ii) the Companys systems of
internal controls regarding finance, accounting, regulatory compliance and ethics that Management
and the Board of Directors have established; (iii) the Companys internal audit function; and (iv)
the Companys auditing, accounting and financial reporting processes. The Audit Committee
periodically reports on these and other pertinent matters that come before it to the Board of
Directors.
The following four Directors are currently members of the Audit Committee: Mr. Cary Mack
(Chairman), Mr. Bruce Beach, Dr. M. Nafees Nagy, and Dr. James Nave. The Board of Directors has
determined that each member of the Committee satisfies the requirements of the applicable laws and
regulations relative to the independence of Directors and Audit Committee members, including,
without limitation, the requirements of the SEC and the listing standards of the New York Stock
Exchange (NYSE). The Board of Directors has further determined, in its business judgment, that
each member of the Audit Committee is financially literate under NYSE listing standards and that
Cary Mack qualifies
- 13 -
as an audit committee financial expert as defined by the SEC. During 2006, the Audit
Committee met 14 times.
While the Audit Committee has the duties and responsibilities set for in the charter, it is
not the responsibility of the Audit Committee to plan or conduct audits, to implement internal
controls, or to determine or certify that the Companys financial statements are complete and
accurate or are in compliance with accounting principles generally accepted in the United States of
America (GAAP). Furthermore, it is not the duty of the Audit Committee to assure compliance with
applicable laws, rules, and regulations. These are the duties and responsibilities of Management,
the independent registered public accounting firm, and others as described more fully below.
Management is responsible for the Companys financial reporting process, which includes the
preparation of the Companys financial statements in conformity with GAAP, and the design and
operating effectiveness of a system of internal controls and procedures to provide compliance with
accounting standards and applicable laws, rules, and regulations. Management is also responsible
for bringing appropriate matters to the attention of the Audit Committee and for keeping the Audit
Committee informed of matters which Management believe require attention, guidance, resolution, or
other actions. McGladrey & Pullen, LLP, the Companys independent registered public accounting
firm, is responsible for performing an independent audit of the Companys consolidated financial
statements in accordance with auditing standards generally accepted in the United States of America
and for expressing an opinion on the conformity of the Companys audited financial statement with
GAAP.
During the year, the Audit Committee discussed with McGladrey & Pullen, LLP and the Companys
internal auditors, with and without Management present, the overall scope and plans for their
respective audits, the results of their examinations, and their evaluations of the effectiveness of
the Companys internal controls and of the overall quality of the Companys financial reporting.
The Audit Committee reviewed and discussed the consolidated financial statements for the year
ended December 31, 2006 with McGladrey & Pullen, LLP and Management. In addition, the Audit
Committee discussed with McGladrey & Pullen, LLP those matters required to be discussed under
generally accepted auditing standards, including Statement on Auditing Standards No. 61
(Communication with Audit Committees), as amended by Statement on Auditing Standards No. 90 and as
currently in effect.
McGladrey & Pullen, LLP has provided to the Audit Committee the written disclosures and the
letter required by Independence Standards Board Standard No. 1 (Independence Discussions with Audit
Committees), as currently in effect, and the Committee discussed with McGladrey & Pullen, LLP any
relationships that may impact on the firms objectivity and independence and satisfied itself as to
the auditors independence. In addition, the Audit Committee reviewed and approved the fees paid
to McGladrey & Pullen, LLP for audit and non-audit related services.
Based on the reviews and discussion referred to above, the Committee approved the inclusion of
the Companys audited financial statements in the Companys Annual Report on Form 10-K for the
fiscal year ended December 31, 2006 for filing with the SEC.
Submitted by the Audit Committee
Cary Mack (Chairman)
Bruce Beach
Dr. Nafees Nagy
Dr. James E. Nave
- 14 -
The foregoing Audit Committee Report does not constitute soliciting material and shall not be
deemed filed or incorporated by reference with any previous or future filings by the Company under
the Securities Act of 1933 or the Exchange Act, as amended, except to the extent that the Company
specifically incorporates this report therein by reference.
Compensation Committee Matters
Authority
The Board of Directors has delegated to its Compensation Committee (the Committee)
responsibility for establishing and monitoring the effectiveness of the Companys overall
compensation philosophy and policies. The Committees primary responsibilities include approving
the compensation of the Companys directors and senior executive officers. The Committee evaluates
the performance of the CEO based on specific pre-established performance criteria and goals for the
Company. In evaluating other senior executives, the Committee receives input from the CEO and
considers its own assessment of their performance as it has frequent exposure to these officers.
The Committee also approves and administers the Companys cash and equity incentive compensation
plans, and oversees all cash compensation, benefits and perquisites for the Companys entire
officer population. Under its charter, the Committee has discretion to retain consultants to
assist in fulfilling its responsibilities and to direct their work.
The Committees Processes and Procedures
The Compensation Committee consists of three independent directors (Messrs. Baker and Snyder
and Dr. Nave), as the term independent is defined in the Companys Corporate Governance
Guidelines and the Corporate Governance Rules of the NYSE. Mr. Snyder serves as chairman of the
Compensation Committee. No member of the Compensation Committee is a current or former employee of
the Company or any subsidiary. The Compensation Committees charter was adopted on April 27, 2005.
The charter provides the Committee with the authority to engage outside advisors to study and make
recommendations regarding director or executive compensation matters. The charter is reviewed
annually to ensure that the Committee is fulfilling its duties in aligning the Companys executive
compensation program with the creation of shareholder value.
The Committee approves a compensation philosophy for the Company, reviews compensation
strategies proposed by management, and assesses program design and recommendations for individual
executives against these strategies. The Committee determines the CEOs compensation, reviews
director compensation, and reviews managements recommendations for compensation of the Companys
Executive Management Committee (the EMC) and approves final pay packages. The EMC consists of the
CEO and most direct reports of the CEO. The Committee also reviews overall program design and
total costs compared to approved strategies as proposed by the CEO. Directors compensation is
established by the Board of Directors upon the recommendation of the Committee.
The Committee meets a minimum of four times per year. The Compensation Committee held six
meetings in 2006, on January 16, February 17, April 17, June 16, October 16, and November 21. At
its January meeting, the Committee took the following actions: (1) approved the recommended salary
increases along with the bonus payouts and stock option grants for EMC members (except for the
CEO), (2) approved increasing the CEOs stock option award to 35,000 shares, (3) recommended a full
100% bonus payout for the CEO, (4) approved restricted stock grants for eligible officers, and (5)
approved the 2006 WAL Bonus Plan features and set the formula for the CEOs bonus award. At its
February meeting, the Committee increased director compensation (see Corporate Governance
Compensation of Directors at page 10), reviewed competitive market data on CEO compensation,
approved the CEOs
- 15 -
performance review and adjusted his base salary to $550,000. At its April meeting, the
Committee did not address any issues relating to executive or director compensation. At its June
meeting, the Committee agreed to a transition plan for the retirement of the CEO & President of
Bank of Nevada, who also served as an executive officer of the Company and a member of the EMC. At
its October meeting, the Committee did not address any issues relating to executive compensation.
At its November meeting, the Committee reviewed the projected WAL Annual Bonus Plan projected
payouts for the parent and each of the Banks.
The Committee has selected and engaged The Hay Group as its independent consultant to advise
it on executive compensation matters (the Consultant). The Committee Chair works directly with
the Consultant to determine the scope of the work needed to assist the Committee in its decision
making processes. For example, the Consultant interacts with the members of the Committee, the CEO
and senior management to facilitate development of the Companys executive compensation strategy
and approach to determining compensation levels. The Consultant prepares director and officer
competitive pay analyses relative to the Companys peer group (as defined below) and the broader
market, provides information on Company performance compared to the peer group, and advises the
Committee on the level and design of compensation programs for directors and senior executive
officers. The Consultant attends Committee meetings and the Committees executive sessions to
present and discuss market data and program design alternatives, and to provide advice and counsel
regarding decisions facing the Committee.
The Chair of the Committee works with management to set individual meeting agenda for the
Committee following an overall annual calendar of regular activities. The Chief Executive Officer
and the Companys Chief Administrative Officer (CAO) are the primary representatives of
management who interact with the Committee and serve as liaisons between the Committee and Company
management. These officers regularly attend Committee meetings, and provide input and
recommendations on compensation matters. They work with other senior executives to develop and
recommend compensation strategies and practices to the Committee for its review and approval,
including the performance goals and weighting factors used in the Companys annual bonus plan and
base salary adjustments for specific officers. The CAO also works directly with the Consultant on
a variety of Committee matters and provides administrative support and assistance to the Committee.
Compensation Committee Interlocks and Insider Participation
Messrs. Baker and Snyder and Dr. Nave comprised the entire Compensation Committee during all
of 2006. Each of them is an independent, outside director. None of them is a current or former
officer or employee of the Company.
Mr. Sarver, the Companys President and Chief Executive Officer and a director, is a member of
the board of directors of Meritage Homes Corporation. Mr. Sarver served on the Compensation
Committee of Meritage until February 2004. Mr. Hilton, a director of the Company, is the Chairman
and Chief Executive Officer of Meritage.
During 2006, the Banks had, and expect to have in the future, banking transactions in the
ordinary course of business with the Companys directors, officers, and principal stockholders (and
their related interests) on the same terms, including interest rates and collateral on loans, as
those prevailing at the same time with other persons of similar creditworthiness. In the Companys
opinion, these loans present no more than the normal risk of collectibility or other unfavorable
features. These loans amounted to approximately 2.1% of total loans outstanding as of December 31,
2006.
- 16 -
EXECUTIVE
COMPENSATION
Executive Officers
Executive officers are appointed annually by the Board of Directors following the Annual
Meeting of Stockholders. Set forth below is the name and age (as of December 31, 2006) of each
executive officer, other than Mr. Sarver, and the principal position(s) he or she holds with the
Company. For information regarding Mr. Sarver, see Corporate Governance Board Composition
Class III Directors with Terms Expiring in 2008.
Gary Cady has been the Companys Executive Vice President of Southern California
Administration since May 2003. He has served as President of Torrey Pines Bank since May 2003 and
as its Chief Executive Officer since June 2006. Mr. Cady was also a director of the Company from
June 2003 to April 2005. Mr. Cady has 29 years of commercial banking experience, most recently as
Senior Vice President and Regional Manager for California Bank and Trust in San Diego from August
1987 to February 2003. Mr. Cady is Chairman of Grossmont Hospital Corporation and a board member of
Sharp HealthCare and the San Diego Symphony. Mr. Cady is 52.
Duane Froeschle has been the Chief Credit Officer and an Executive Vice President of the
Company and Vice Chairman and Chief Credit Officer of Alliance Bank of Arizona since February 2003.
Mr. Froeschle has 31 years of experience in commercial banking. Prior to joining the Company, Mr.
Froeschle held various positions with National Bank of Arizona from June 1987 to June 2002,
including Chief Credit Officer from June 1997 to December 2001. Mr. Froeschle is 54.
Dale Gibbons has been the Chief Financial Officer and an Executive Vice President of the
Company and Bank of Nevada since May 2003 and July 2004, respectively. He also has been a director
of Premier Trust, Inc. since December 2003 and Miller/Russell & Associates since May 2004. Mr.
Gibbons has 25 years of experience in commercial banking, including serving as Chief Financial
Officer and Secretary of the Board of Zions Bancorporation from August 1996 to June 2001. From June
2001 until joining the Company, Mr. Gibbons was not employed on full time basis while attending to
personal matters, but did undertake various consulting projects, including with the Company. From
1979 to 1996, Mr. Gibbons worked for First Interstate Bancorp in a variety of retail banking and
financial management positions. Mr. Gibbons is 46.
Arnold Grisham has been the Companys Executive Vice President of Northern California
Administration since December 2006 and has served as the President and Chief Executive Officer of
Alta Alliance Bank since its opening in October 2006. From 2002 until 2006, he was Managing Partner
of the Grisham Group LLC, an executive search firm he founded that specializes in serving the
financial institutions industry. From 2001 to 2002, Mr. Grisham was Managing Director of
Korn/Ferry International, an executive search business. From 1999 until 2001, he served as
President and a director of CivicBank of Commerce and as its Chief Lending Officer and Chief
Operating Officer. From 1981 until January 1999, Mr. Grisham served in various management
positions at Wells Fargo Bank and its affiliates, including Senior Vice President of the Oakland
Regional Commercial Banking Office, Executive Vice President of the East Bay Regional Commercial
Banking Office, and Executive Vice President for the National Financial Services Division. Mr.
Grisham is 60.
James Lundy has been the Executive Vice President of Arizona Administration and the President
and Chief Executive Officer of Alliance Bank of Arizona since February 2003. Mr. Lundy was also a
director of the Company from February 2003 to March 2005. From June 1991 to June 2002, Mr. Lundy
served as Senior Vice President and Executive Vice President of National Bank of Arizona, and from
December 2000 to June 2002, as Vice Chairman of National Bank of Arizona. Most recently, Mr. Lundy
oversaw
- 17 -
National Bank of Arizonas commercial banking function on a statewide basis, with direct
responsibility for over $1 billion in commercial loan commitments, executive oversight of marketing
and overall supervision of approximately 100 employees involved in commercial banking and marketing
throughout Arizona. Mr. Lundy is 57.
Linda Mahan has been the Executive Vice President Operations for the Company since July
2004. In this capacity, Ms. Mahan oversees centralized operations and technology. From 1994 to July
2004, Ms. Mahan was Chief Financial Officer of Bank of Nevada. Ms. Mahan was controller of Sun
State Bank, Las Vegas, Nevada from 1982 until 1994. Her responsibilities at Sun State included
accounting, human resources, and bank operations for six branches. Ms. Mahan recently graduated
from the Pacific Coast Banking School. She has been in banking since 1974. Ms. Mahan is 49.
Merrill S. Wall has been the Chief Administrative Officer and Executive Vice President of the
Company since February 2005. Mr. Wall has 36 years of banking experience, most recently as
Executive Vice President and Director of Human Resources for Zions Bancorporation and its
subsidiary, California Bank & Trust, from October 1998 to February 2005. From 1987 to 1998, Mr.
Wall worked for H.F. Ahmanson/ Home Savings of America as a senior executive managing both human
resources and training corporate-wide. Mr. Wall also spent 17 years with First Interstate Bancorp
in a variety of commercial, retail and administrative positions. Mr. Wall is 59.
Compensation Discussion and Analysis
Named Executive Officers
As used in this proxy statement, the term named executive officers, or NEOs, includes: (i)
the Companys Chief Executive Officer and Chief Financial Officer, (ii) the Companys three other
most highly compensated executive officers who earned more than $100,000 in salary and bonus during
the Companys last fiscal year, and (iii) an additional individual who would have been considered
an NEO but for the fact that he was not serving as an executive officer of the Company at the end
of 2006.
Compensation Philosophy
The Companys compensation program is intended to provide the NEOs with total compensation
that is competitive with comparable employers in the financial services industry and to closely
align executive compensation with both the Companys short-term and long-term performance. To that
end, the compensation program for the NEOs focuses on annual and long-term strategic and
operational goals through the use of a highly-leveraged compensation strategy, with the majority of
compensation to be earned through incentive variable compensation. The program is designed so that
a substantial percentage of an executives compensation opportunity is directly related to the
Companys stock performance and other financial metrics that the Company believes ultimately
influence, and increase, long-term shareholder value. For example, in 2006, variable,
performance-based compensation represented approximately 66% of total compensation paid to the CEO
and 50% of total compensation paid to other NEOs.
The Companys compensation program also is designed to enable it to recruit and retain the
executive talent required to successfully manage the Company and achieve its short and long-term
business objectives. The program is structured to motivate executives to achieve the Companys
business objectives and secure their long-term commitment to the Companys success by providing
compensation elements that align executives interests with those of its shareholders and with its
long-term strategic goals.
- 18 -
Benchmarking of Compensation
In benchmarking the compensation paid to our NEOs, the Committee considers base salary, annual
incentive targets and actual awards, and the value of long-term incentive awards.
With the Consultants assistance, the Committee uses compensation information from proxy
statements of companies included within our peer group (discussed below) to benchmark the CEOs
cash and equity compensation levels, and to compare executive benefit and perquisite programs for
this position, because they provide reliable information based solely on a job title match. A
survey of several national executive databases using The Consultants job evaluation methodology,
which compares the scope and complexity of executive positions (the National Survey), serves as a
secondary basis of comparison for this position.
In 2006, the Committee used a peer group for compensation purposes composed largely of the
same companies we used for stock performance comparisons in 2006. This group consisted of 21
publicly traded financial institutions with asset sizes ranging from approximately $2.3 billion to
$7.5 billion, and with performance characteristics similar to the Company (the Peer Group), such
as their three year average growth rates for assets and earnings per share and their returns on
assets and equity. The Company believes the Peer Group is representative of those companies with
which the Company competes for executive talent. The members of the Peer Group used in 2006 are:
|
|
|
Alabama National
BanCorporation |
|
|
|
|
Commercial Capital Bancorp
Inc. |
|
|
|
|
East West Bancorp, Inc. |
|
|
|
|
Firstfed Financial Corp. |
|
|
|
|
Independent Bank Corp. (MA) |
|
|
|
|
Mid-State Bancshares |
|
|
|
|
Pacific Capital Bancorp |
|
|
|
|
Sterling Financial Corp. (PA) |
|
|
|
|
SVB Financial Group |
|
|
|
|
.UCBH Holdings, Inc |
|
|
|
|
WestAmerica Bancorporation |
|
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|
Cathay General Bancorp |
|
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|
CVB Financial Corp. |
|
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First Community Bancorp (CA) |
|
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|
Harleysville National Corp. |
|
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Independent Bank Corp. (MI) |
|
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|
National Penn Bancshares, Inc. |
|
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Provident Bankshares Corp. |
|
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|
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Sterling Financial Corp. (PA) |
|
|
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Texas Regional Bancshares, Inc. |
|
|
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|
Umpqua Holdings Corp. |
Although compensation information from proxy statements of Peer Group companies also is used
for the remaining NEOs, the National Survey serves as the primary benchmark for their compensation
levels (both cash and equity) because it allows compensation data to be compared based on job
content descriptions, rather than comparisons based solely on job title, which may not be available
for all positions or may not reflect adequately their actual responsibilities. The National Survey
also provides broader compensation data on the banking market place, and many of the organizations
represented in the National Survey are companies that the Company competes with for executive
talent.
For 2006, the Company established the amount and mix of base and variable compensation using
this benchmarking process, while taking into account its objective of having a performance-focused
total compensation program and the value it places on each position. In considering the total
package of compensation, the Company also took into account internal consistency of compensation
levels for comparable positions within the Company. The Company targeted base salary for NEOs at
- 19 -
approximately the median of the market and variable compensation at or above the median when
the Company meets its performance objectives. In 2006, the Committee established the CEOs target
annual incentive opportunity (both cash and equity) so that his target total direct compensation or
TDC (base salary, annual cash incentive (bonus), and annual equity grant) was approximately at
the median of the Peer Group.
Elements of Executive Compensation
The elements of the Companys compensation program for NEOs currently consists of annual base
salary, plus variable compensation in the form of both annual cash incentive payments (corporate
bonus plan) and long-term equity incentive compensation (grants of time-based nonqualified stock
options). The Company also provides the NEOs with standard benefits and very limited perquisites.
Annual Base Salary
The Company views a competitive annual base salary as an important factor in attracting and
retaining executive talent. Annual base salaries also serve as the foundation for the annual cash
incentive plan, which expresses an NEOs bonus opportunity as a percentage of his or her annual
base salary. (Long-term equity incentive compensation is not directly linked to annual base
salary.) While annual base salary levels and potential increases are directly linked to executive
performance, the Committee historically has considered the Companys financial performance as the
principal factor in evaluating proposed salary budgets and increases, and it expects to continue
doing so in the immediate future.
The Board of Directors determines the base salary for the CEO after reviewing the Committees
recommendations and analyses. The Committee determines the base salary for other members of the
EMC (including the NEOs) after considering input from the CEO regarding the performance of each
member and making its own assessments regarding their individual performance, experience and other
factors. In establishing 2006 base salary levels for EMC members, the Committee also considered
both internal equity and external competitiveness, as discussed above.
In 2006, the CEO received a base salary increase of 10% and other members of the EMC received
increases averaging 6.7%. Because the Companys executive compensation program is focused
primarily on variable incentive compensation, the Committee targeted the CEOs base salary for 2006
at the median of the Peer Group, representing less than 40% of his target TDC. The base salaries
of the remaining NEOs were targeted in 2006 at the market median for comparable jobs based on the
benchmarking process described above. Base salaries for the NEOs (other than the CEO) generally
were targeted to represent less than 50% of his or her TDC.
Annual Cash Incentive Compensation (Annual Bonus Plan)
The annual cash incentive compensation element for the NEOs and other EMC members is their
participation in the Western Alliance Bancorporation Annual Bonus Plan (the Plan). The Plan is
designed and intended to motivate and retain qualified employees.
The Plan calls for a cash bonus to be paid to all eligible employees based on the Companys
annual financial performance relative to pre-established targets for key financial metrics, and on
a subjective quality control assessment by the senior management, subject to Compensation Committee
approval. The Company sets the incentive plan targets to be stretch goals, which most of the
Companys business units performing to plan should be able to achieve. The threshold is set to
reward achieving the majority of expectations and the upside opportunity requires superior results.
The aggregate bonus opportunity for NEOs under the Plan is subject to an overall limit of 10% of
the Companys net income, after taxes. For 2006, this limit was approximately $3.99 million.
For the CEO and any NEO who is not the chief executive officer of one of the Companys bank
subsidiaries, the 2006 bonus was determined based on the following criteria and weighting factors:
- 20 -
|
|
|
Earnings Per Share |
40% |
|
|
|
|
|
|
|
|
Organic Loan Growth |
20% |
|
|
|
|
|
|
|
|
Organic Deposit Growth |
20% |
|
|
|
|
|
|
|
|
Quality Control |
20% |
At the beginning of each year, for each of the first three criteria above, the Compensation
Committee approves a quantitative goal and a range of bonus payout percentages that apply depending
on the whether the Company meets, exceeds or falls short of the approved goal. With respect to the
quality control criterion, the Companys performance is assigned pass or fail grade, based on an
overall assessment of such considerations as internal and regulatory examination results. For
2007, the Committee has approved an adjustment to the above weighting factors, increasing earnings
per share to 50% and decreasing quality control to 10%.
For any NEO who serves as the chief executive officer of one of the Companys bank
subsidiaries, the bonus payout is based primarily on the performance that subsidiary. For 2006,
the following criteria and weighting factors applied:
|
|
|
Earnings Per Share (Company) |
20% |
|
|
|
|
|
|
|
|
Net Income (Subsidiary) |
20% |
|
|
|
|
|
|
|
|
Organic Loan Growth (Subsidiary) |
20% |
|
|
|
|
|
|
|
|
Organic Deposit Growth (Subsidiary) |
20% |
|
|
|
|
|
|
|
|
Quality Control (Subsidiary) |
20% |
For 2007, the Committee has approved an adjustment to the above weighting factors, increasing net
income to 40% and decreasing earnings per share and quality control to 10% each.
At the beginning of each fiscal year, the Committee approves an incentive matrix that details
the relationship between performance on the financial metrics and bonus payout as a percent of
target. The incentive matrix establishes both thresholds (minimum acceptable performance levels to
generate a payout) and target performance levels for each metric based on the degree of difficulty
in achieving the Companys goals. As noted above, the Plan is capped in terms of total bonus
payments at 10% of net income. The incentive matrix outlines a minimum level of performance below
which no bonus will be paid and the relationship among the metrics that will generate payouts at or
above target.
Annual incentive compensation targets under the Plan are expressed as a percentage of annual
base salary. Targets increase with job scope and complexity, increasing variable pay opportunity
for jobs that have a greater impact on the Companys annual results. The 2006 target bonus for the
CEO was 100% of his annual salary. For other EMC members (including the NEOs), the target bonus is
50% of their annual salary.
At its January 2007 meeting, the Committee reviewed the Companys final financial results for
2006 and determined whether any special consideration or exceptions, positive or negative, should
be exercised in connection with the bonus payments under the Plan. No special considerations or
exceptions were exercised, and the Committee reported the results to the Board of Directors.
Bonuses for 2006 were paid in February of 2007, as set forth in the Summary Compensation Table and
Grants of Plan Based Awards below.
Long-Term Equity Incentive Compensation
The Company considers long-term equity incentive compensation critical to the alignment of
executive compensation with shareholder value creation and an integral part of the Companys
overall executive compensation program. In 2006, the Company changed its approach to providing
long-term
- 21 -
equity incentive compensation by offering stock options only to the EMC members, which
includes all of the NEOs, and instead granting shares of restricted stock to all other eligible
officers. Prior to 2006, the Companys long-term equity incentive plan included stock options for
all eligible officers. Stock options provide a greater opportunity for a senior executive to grow
his or her net worth in line with corporate performance, while restricted shares support the
Companys goal of providing less senior officers with an ownership position in the Company and
encouraging their long-term retention. These changes were made both to align long-term equity
incentive compensation levels with the Companys overall compensation philosophy and to provide
participants with programs that are more consistent with their level of impact on the Companys
business. Grants of both stock options and restricted stock are made pursuant to the Companys
2005 Stock Incentive Plan (the Plan).
Because the value that may be earned through stock options is dependent upon an increase in
the value of the Companys stock price, the Committee views nonqualified stock option grants as a
critical link between management wealth accumulation and shareholder value creation. In addition,
because options vest in equal increments over four years, the Company believes that these grants
promote retention of our EMC members. The Plan provides that stock options may not be granted at
less than 100% of fair market value on the date of grant. Fair market value currently is
determined as the closing price of the Companys common stock on the grant date.
The Committee approves annual option grants at its January meeting, except with respect to the
CEO, whose annual grant generally is approved by the Board of Directors at its January meeting.
The grant date for the annual stock option grant generally is set as the day after the date of the
January Board meeting. The day of the Boards January meeting also typically is the date that the
Companys issues its earnings release for the prior fiscal year. Setting the grant date as the day
after the earnings release ensures that the pricing of options does not take advantage of nonpublic
information by allowing a full day for the market to react to the information contained in the
release.
In view of recent revelations regarding stock option backdating and related practices at other
companies, in January 2007, the Company conducted an internal investigation into its historical
stock option granting practices and procedures. This investigation found no evidence that the
Company ever backdated options, or that options were ever re-priced, modified or otherwise
manipulated, with the purpose or effect of establishing a lower exercise price than the market
price on the date the option grants were approved by the Committee or the Board (as the case may
be).
As noted above, the Company generally does not grant shares of restricted stock to its NEOs.
However, as a negotiated inducement to join the Company, the Committee approved a one-time grant of
27,000 restricted shares to its Chief Administrative Officer (Merrill Wall) in 2005. These shares
will vest at a rate of 20% per year over five years, so long as Mr. Wall remains employed at the
Company. Additional information regarding this grant is provided in the compensation tables and
accompanying footnotes beginning at page 24.
Benefits and Perquisites
The Company offers executives the same basic benefit plans that are available to all full time
employees (e.g., 401(k) plans, group insurance plans for medical, dental, vision care and
prescription drug coverage, basic life insurance, long term disability coverage, holidays,
vacation, etc.), plus voluntary benefits that an executive may select (e.g., supplemental life
insurance). The overall benefits philosophy is to focus on the provision of core benefits, with
executives able to use their cash compensation to obtain such other benefits as they individually
determine to be appropriate for their situations.
In 2006, benefits and perquisites for NEOs were minimal and generally were limited to business
related programs. In particular, the CEO received no special benefits or perquisites, and did not
charge any of his business-related expenses to the Company. The Company believes in a compensation
- 22 -
philosophy that deemphasizes benefits and perquisites for NEOs in favor of a highly-leveraged
compensation philosophy described above.
Non-Qualified Deferred Compensation Plan
NEOs may voluntarily defer cash compensation as part of the Companys Restoration Plan. The
plan was adopted in order to allow the EMC members to defer a portion of their compensation because
they face statutory limits under the Companys 401(k) plan. This is a cost-effective method of
providing a market-competitive benefit to the named executive officers. For more information on the
Restoration Plan, including amounts deferred by the NEOs in 2006, see Retirement Benefits 401(k)
Restoration Plan below and the Deferred Compensation Plan table and accompanying narrative below.
Executive Agreements and Potential Payments on Termination or Change of Control
The Company does not have employment, change of control, severance or similar agreements with
any of its NEOs. The 2005 Stock Incentive Plan provides for the accelerated vesting of all
outstanding options and shares of restricted stock upon the occurrence of certain events. For more
information on these events, including a quantification of the estimated value of such
acceleration, see Potential Payments on Termination or Change in Control.
Impact of Regulatory Requirements on 2006 Compensation
Section 162(m) of the Internal Revenue Code (Code) generally disallows a tax deduction to
public companies for compensation in excess of $1 million paid to any of the Companys NEOs.
Certain compensation is specifically exempt from the deduction limit to the extent that it does not
exceed $1 million during any fiscal year or is performance based, as defined in Section 162(m).
The Committee believes that it is generally in the Companys interest to structure compensation to
come within the Section 162(m) deductibility limits. The Committee also believes, however, that it
must maintain the flexibility to take actions that it deems to be in the best interests of the
Company, but which may not qualify for tax deductibility under Section 162(m). As previously
noted, the Committee considered the impact of the $1 million cap on the deductibility of
non-performance based compensation imposed by Code Section 162(m) in its design of executive
compensation programs.
In addition, the Committee considered other tax and accounting provisions in developing the
pay programs for the Companys NEOs. These included special rules applicable to nonqualified
deferred compensation arrangements under Code Section 409A and the accounting treatment of various
types of equity-based compensation under FAS 123R, as well as the overall income tax rules
applicable to various forms of compensation. While the Company attempted to compensate executives
in a manner that produced favorable tax and accounting treatment, its main objective was to develop
fair and equitable compensation arrangements that appropriately reward executives for the
achievement of short- and long-term performance goals.
Report of the Compensation Committee on the Compensation Discussion and Analysis
The Compensation Committee reviewed and discussed the Compensation Discussion and Analysis
included in this Proxy Statement with management. Based on such review and discussion, the
Compensation Committee recommended to the Board of Directors that the Compensation Discussion and
Analysis be included in this Proxy Statement for filing with the Securities and Exchange
Commission.
Submitted by the Compensation Committee
Donald D. Snyder (Chairman)
Paul Baker
James E. Nave
- 23 -
Retirement Benefits
401(k) Plan
The Company sponsors the Western Alliance Bancorporation 401(k) Plan, referred to as the
401(k) Plan, which is a defined contribution plan intended to qualify under Section 401 of the
Internal Revenue Code. All employees who are at least 18 years old are eligible to participate.
Participants may make pre-tax contributions to the 401(k) Plan of up to 60% of their compensation
per payroll period, subject to a statutorily prescribed annual limit. Each participant is fully
vested in his or her contributions. Contributions by the participants or by the Company to the
401(k) Plan, and the income earned on such contributions, are generally not taxable to the
participants until withdrawn. Contributions by the Company, if any, are generally deductible when
made. All contributions are held in trust as required by law. Individual participants may direct
the trustee to invest their accounts in authorized investment alternatives. The Company matches
50% of the first 6% of compensation contributed to the plan. The Company contributed approximately
$906,000, $596,000, $385,000 and $230,000 in 2006, 2005, 2004 and 2003, respectively.
401(k) Restoration Plan
The Company sponsors the Western Alliance Bancorporation Nonqualified 401(k) Restoration Plan
(the Restoration Plan), a deferred compensation plan under which participation is available to
members of the EMC. The Restoration Plan became effective in 2006. Under the 401(k) Plan, there
is a statutory limit on the amount of compensation that can be taken into consideration in
determining participant contributions and the Companys matching contributions. The Restoration
Plan allows participants to contribute 6% of base and bonus compensation, without regard to the
statutory compensation limit, but offset by participant contributions actually made under the
401(k) Plan. The Company makes matching contributions of fifty percent (50%) of the deferred
amount up to 3% of all compensation as offset by the amount of matching contribution made on the
participants behalf under the 401(k) Plan.
Compensation Tables
Summary Compensation Table
The following table provides information concerning the compensation of the named executive
officers for 2006. The column entitled salary discloses the amount of base salary paid to each
named executive officer during 2006, including amounts paid by the Companys subsidiaries. The
columns entitled Stock Awards and Option Awards disclose the fair value of an award of stock or
options measured in dollars and calculated in accordance with FAS 123R. For restricted stock, the
FAS 123R fair value per share is equal to the closing price of the Companys stock on the date of
grant. For stock options, the FAS 123R fair value per share is based on certain assumptions that
are explained in footnotes 1 and 12 to our financial statements, which are included in our annual
report on Form 10-K. The value is disclosed ratably over the vesting period but without reduction
for assumed forfeitures (as is done for financial reporting purposes). The amounts shown in this
table also include a ratable portion of each grant made in prior years to the extent the vesting
period fell in 2006, except where generally accepted accounting principles (GAAP) required the
Company to recognize the full amount in a prior year. The Company made no grants of restricted
stock to the named executive officers in 2006. For Mr. Wall, this column includes a pro rata
portion of the expense attributable to restricted stock grants made in 2005.
- 24 -
Stock options granted to NEOs have seven-year terms and vest in equal increments on each of
the first, second, third and fourth anniversaries of the date of the grant, providing the
participant remains employed. Unvested stock options are forfeited immediately upon termination of
employment for any reason. If a recipient dies or his or her employment is terminated due to
disability, all vested options must be exercised within 12 months after the date of death or
termination. If a recipients employment is terminated for any other reason (except termination
for cause), he or she has 90 days from the date of termination to exercise all vested stock
options.
The column entitled Non-Equity Incentive Plan Compensation discloses payments made under the
Western Alliance Bancorporation Annual Bonus Plan. No bonus was paid to a named executive officer
except as part of this plan.
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Non-Equity |
|
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|
Name and |
|
|
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|
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|
Stock |
|
|
Option |
|
|
Incentive Plan |
|
|
All Other |
|
|
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|
Principal Position |
|
Year |
|
|
Salary ($) |
|
|
Awards ($) |
|
|
Awards ($) |
|
|
Compensation ($) |
|
|
Compensation ($) (2) |
|
|
Total ($) |
|
Current |
|
|
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|
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|
|
|
|
|
|
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|
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|
|
|
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|
|
Robert Sarver |
|
|
2006 |
|
|
|
536,539 |
|
|
|
0 |
|
|
|
119,279 |
|
|
|
431,117 |
|
|
|
31,996 |
|
|
|
1,118,931 |
|
President and Chief |
|
|
|
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|
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|
|
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|
Executive Officer |
|
|
|
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|
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|
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|
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|
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|
|
|
|
|
|
|
|
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|
|
|
|
|
|
Dale Gibbons |
|
|
2006 |
|
|
|
260,000 |
|
|
|
0 |
|
|
|
67,815 |
|
|
|
110,500 |
|
|
|
11,228 |
|
|
|
449,543 |
|
Executive Vice |
|
|
|
|
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|
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|
|
|
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|
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|
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|
|
|
|
|
|
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|
President and Chief |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Financial Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Merrill Wall |
|
|
2006 |
|
|
|
257,308 |
|
|
|
89,100 |
|
|
|
82,508 |
|
|
|
110,500 |
|
|
|
11,884 |
|
|
|
551,300 |
|
Executive Vice |
|
|
|
|
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|
President and Chief |
|
|
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|
Administrative |
|
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|
|
|
|
|
|
|
|
|
Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James Lundy |
|
|
2006 |
|
|
|
225,000 |
|
|
|
0 |
|
|
|
94,508 |
|
|
|
67,500 |
|
|
|
35,621 |
|
|
|
422,629 |
|
Executive Vice |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
President, Arizona |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Administration |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Duane Froeschle |
|
|
2006 |
|
|
|
200,000 |
|
|
|
0 |
|
|
|
52,118 |
|
|
|
60,000 |
|
|
|
5,177 |
|
|
|
317,295 |
|
Executive Vice |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
President and Chief |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Former |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Larry L. Woodrum |
|
|
2006 |
|
|
|
330,000 |
|
|
|
0 |
|
|
|
39,502 |
|
|
|
103,950 |
|
|
|
20,226 |
|
|
|
493,678 |
|
Executive Vice |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
President, Nevada |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Administration (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Mr. Woodrum resigned as an executive officer of the Company effective July 1, 2006. He
continues to serve as a director of the Company. He also serves as an officer (Vice Chairman)
of Bank of Nevada, for which he is compensated by the bank. In connection with his
resignation, Mr. |
- 25 -
|
|
|
|
|
Woodrum forfeited his January 2006 stock option grant. If this award had not been
forfeited, the amount shown in the option awards column for Mr. Woodrum would have been
$72,365. |
|
(2) |
|
The table below shows the components of this column, which include the premiums paid by the
Company in 2006 with respect to life insurance for the benefit of an NEO and matching
contributions made by the Company in 2006 on behalf of the NEO under the Western Alliance
Bancorporation 401(k) Plan and/or to the Companys Restoration Plan, and perquisites. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Insurance |
|
|
Matching |
|
|
|
|
|
|
|
Name |
|
Premiums ($) |
|
|
Contributions ($) |
|
|
Perquisites ($) |
|
|
Total ($) |
|
Mr. Sarver |
|
|
1,015 |
|
|
|
30,981 |
|
|
|
|
|
|
|
31,996 |
|
Mr. Gibbons |
|
|
1,015 |
|
|
|
10,213 |
|
|
|
|
|
|
|
11,228 |
|
Mr. Wall |
|
|
1,015 |
|
|
|
10,869 |
|
|
|
|
|
|
|
11,884 |
|
Mr. Lundy |
|
|
1,015 |
|
|
|
7,798 |
|
|
|
26,808 |
(a) |
|
|
35,621 |
|
Mr. Froeschle |
|
|
1,015 |
|
|
|
4,162 |
|
|
|
|
|
|
|
5,177 |
|
Mr. Woodrum |
|
|
1,015 |
|
|
|
13,110 |
|
|
|
6,101 |
(b) |
|
|
20,226 |
|
|
|
|
(a) |
|
Represents amounts paid by Alliance Bank of Arizona on behalf of Mr. Lundy for
country club membership fees and dues. |
|
(b) |
|
Represents amounts paid by Bank of Nevada to Mr. Woodrum for a car allowance. |
Grants of Plan-Based Awards During 2006
The following table contains information about estimated payouts under non-equity incentive
plans and option awards made to each named executive officer during 2006. The compensation plans
under which the grants in the following table were made are generally described in the Compensation
Discussion and Analysis.
The threshold, target and maximum columns reflect the range of estimated payouts under the
Western Alliance Bancorporation Annual Bonus Plan. These columns show the range of payouts
targeted for 2006 performance under the Annual Bonus Plan, as described in the section titled
Annual Cash Incentive Compensation in the Compensation Discussion and Analysis. The actual 2007
bonus payment for 2006 performance is shown in the Summary Compensation Table in the column
entitled Non-equity Incentive Plan Compensation.
The 5th and 6th columns report the number of shares of common stock
underlying options granted in the fiscal year and corresponding per-share exercise prices. In all
cases, the exercise price was equal to the closing market price of the Companys common stock on
the date of grant. Finally, the 8th column, reports the aggregate FAS 123R value of all
awards made in 2006. Unlike the Summary Compensation Table above, the values reported here are not
apportioned over the service or vesting period. The stock options granted to the named executive
officers in 2006 have seven-year terms and vest in equal increments on each of the first, second,
third and fourth anniversaries of the date of the grant. Stock options have no express performance
criteria other than continued employment. However, options have an implicit performance criterion
because they have no value to the executive unless and until the Companys stock price exceeds the
exercise price.
- 26 -
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options |
|
|
Exercise |
|
|
|
|
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards: |
|
|
or Base |
|
|
|
|
|
|
Grant Date |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of |
|
|
Price of |
|
|
|
|
|
|
Fair |
|
|
|
Estimated Possible Payouts Under |
|
|
Securities |
|
|
Option |
|
|
|
|
|
|
Value of |
|
|
|
Non-Equity Incentive Plan Awards ($) |
|
|
Underlying |
|
|
Awards |
|
|
Grant |
|
|
Option |
|
Name |
|
Threshold |
|
|
Target |
|
|
Maximum |
|
|
Options (#) |
|
|
($/Share) |
|
|
Date |
|
|
Awards ($) |
|
Current |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert Sarver |
|
|
88,000 |
|
|
|
550,000 |
|
|
|
660,000 |
|
|
|
35,000 |
|
|
|
29.00 |
|
|
|
1/17/06 |
|
|
|
334,600 |
|
Dale Gibbons |
|
|
20,800 |
|
|
|
130,000 |
|
|
|
156,000 |
|
|
|
15,000 |
|
|
|
29.00 |
|
|
|
1/17/06 |
|
|
|
143,400 |
|
Merrill Wall |
|
|
20,800 |
|
|
|
130,000 |
|
|
|
156,000 |
|
|
|
10,000 |
|
|
|
29.00 |
|
|
|
1/17/06 |
|
|
|
95,600 |
|
James Lundy |
|
|
16,875 |
|
|
|
112,500 |
|
|
|
135,000 |
|
|
|
10,000 |
|
|
|
29.00 |
|
|
|
1/17/06 |
|
|
|
95,600 |
|
Duane Froeschle |
|
|
15,000 |
|
|
|
100,000 |
|
|
|
120,000 |
|
|
|
10,000 |
|
|
|
29.00 |
|
|
|
1/17/06 |
|
|
|
95,600 |
|
Former |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Larry L. Woodrum |
|
|
24,750 |
|
|
|
165,000 |
|
|
|
198,000 |
|
|
|
-0- |
(1) |
|
|
N/A |
|
|
|
N/A |
|
|
|
-0- |
|
(1) |
|
Mr. Woodrum was granted options to purchase 15,000 shares in January 2006. However, he
agreed to forfeit this grant when he resigned as an executive officer of the Company effective
July 1, 2006. |
Outstanding Equity Awards at December 31, 2006
The following table provides information concerning unexercised options and stock awards that
have not vested as of December 31, 2006. Each outstanding award is represented by a separate row
which indicates the number of securities underlying the award. For option awards, the table
discloses the exercise price and the expiration date. For stock awards, the table provides the
total number of shares of stock that have not vested and the aggregate market value of shares of
stock that have not vested. We computed the market value of stock awards by multiplying the
closing market price of our stock at December 31, 2006 by the number of shares or units of stock or
the amount of equity incentive plan awards, respectively. Beginning in January 2006, options
granted to NEOs have seven-year terms. Options granted prior to that time had ten-year terms.
- 27 -
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards |
|
|
|
|
|
|
Number of |
|
|
Number of |
|
|
|
|
|
|
|
|
|
|
Stock Awards |
|
|
|
Securities |
|
|
Securities |
|
|
|
|
|
|
|
|
|
|
Number of |
|
|
Market Value |
|
|
|
Underlying |
|
|
Underlying |
|
|
|
|
|
|
|
|
|
|
Shares or |
|
|
of Shares or |
|
|
|
Unexercised |
|
|
Unexercised |
|
|
Option |
|
|
Option |
|
|
Units of Stock |
|
|
Units of Stock |
|
|
|
Options (#) |
|
|
Options (#) |
|
|
Exercise |
|
|
Expiration |
|
|
that Have Not |
|
|
that Have Not |
|
Name |
|
Exercisable |
|
|
Unexercisable (1) |
|
|
Price ($) |
|
|
Date |
|
|
Vested (#) |
|
|
Vested ($) |
|
|
Current |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert |
|
|
30,000 |
|
|
|
35,000 |
|
|
|
12.00 |
|
|
|
10/27/14 |
|
|
|
|
|
|
|
|
|
Sarver |
|
|
0 |
|
|
|
35,000 |
|
|
|
29.00 |
|
|
|
1/17/13 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,000 |
|
|
|
20,000 |
|
|
|
7.03 |
|
|
|
5/29/13 |
|
|
|
|
|
|
|
|
|
Dale |
|
|
3,800 |
|
|
|
15,200 |
|
|
|
16.50 |
|
|
|
1/25/15 |
|
|
|
|
|
|
|
|
|
Gibbons |
|
|
0 |
|
|
|
15,000 |
|
|
|
29.00 |
|
|
|
1/17/13 |
|
|
|
|
|
|
|
|
|
|
|
Merrill |
|
|
15,000 |
|
|
|
60,000 |
|
|
|
16.50 |
|
|
|
1/25/15 |
|
|
|
|
|
|
|
|
|
Wall (3) |
|
|
0 |
|
|
|
10,000 |
|
|
|
29.00 |
|
|
|
1/17/13 |
|
|
|
21,600 |
|
|
|
751,032 |
|
|
|
|
|
|
60,000 |
|
|
|
15,000 |
|
|
|
7.03 |
|
|
|
12/18/12 |
|
|
|
|
|
|
|
|
|
James |
|
|
1,500 |
|
|
|
6,000 |
|
|
|
16.50 |
|
|
|
1/25/15 |
|
|
|
|
|
|
|
|
|
Lundy |
|
|
0 |
|
|
|
10,000 |
|
|
|
29.00 |
|
|
|
1/17/13 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
45,000 |
|
|
|
15,000 |
|
|
|
7.03 |
|
|
|
12/18/12 |
|
|
|
|
|
|
|
|
|
Duane |
|
|
1,500 |
|
|
|
6,000 |
|
|
|
16.50 |
|
|
|
1/25/15 |
|
|
|
|
|
|
|
|
|
Froeschle |
|
|
0 |
|
|
|
10,000 |
|
|
|
29.00 |
|
|
|
1/17/13 |
|
|
|
|
|
|
|
|
|
|
|
Former |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,000 |
|
|
|
0 |
|
|
|
6.33 |
|
|
|
9/26/11 |
|
|
|
|
|
|
|
|
|
Larry L. |
|
|
60,000 |
|
|
|
15,000 |
|
|
|
7.03 |
|
|
|
12/18/12 |
|
|
|
|
|
|
|
|
|
Woodrum (3) |
|
|
3,800 |
|
|
|
15,200 |
|
|
|
16.50 |
|
|
|
1/25/15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
The options shown with an expiration date of January 17, 2013 were granted on January 17,
2006, have a seven-year term, and vest in equal 25% increments on the first, second, third and
fourth anniversaries of the grant date. All other options have ten-year terms and vest in
equal 20% increments on the first, second, third, fourth and fifth anniversaries of the grant
date. |
|
(2) |
|
On December 31, 2006, Mr. Wall held a total of 27,000 shares of restricted common stock, with
an aggregate fair market value on that date of $938,790. All of these shares were awarded in
2005. They will vest at a rate of 20% per year over five years, so long as Mr. Wall remains
employed at the Company. Dividends, if any, will be paid on both vested and unvested shares. |
|
(3) |
|
Mr. Woodrum resigned as an executive officer of the Company effective July 1, 2006. His
options continue to vest based on his service as an officer of Bank of Nevada. |
Options Exercised and Stock Vested in 2006
The following table provides information concerning exercises of stock options and similar
instruments, and vesting of stock, including restricted stock and similar instruments, during 2006
for each of the named executive officers on an aggregated basis. The table reports the number of
securities for
-28-
which the options were exercised; the aggregate dollar value realized upon exercise of
options; the number of shares of stock that have vested; and the aggregate dollar value realized
upon vesting of stock. For stock that vested in 2006, the aggregate dollar amount realized upon
vesting was computed by multiplying the number of shares of stock by the market value of the
underlying shares on the vesting date.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards |
|
|
Stock Awards |
|
|
|
Number of Shares |
|
|
|
|
|
|
|
|
|
|
|
|
Acquired on |
|
|
Value Realized on |
|
|
Number of Shares |
|
|
Value Realized on |
|
Name |
|
Exercise (#) |
|
|
Exercises ($) |
|
|
Acquired on Vesting (#) |
|
|
Vesting ($) (1) |
|
Current |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert Sarver |
|
|
-0- |
|
|
|
N/A |
|
|
|
-0- |
|
|
|
N/A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dale Gibbons |
|
|
-0- |
|
|
|
N/A |
|
|
|
-0- |
|
|
|
N/A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Merrill Wall |
|
|
-0- |
|
|
|
N/A |
|
|
|
5,400 |
|
|
|
178,416 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James Lundy |
|
|
-0- |
|
|
|
N/A |
|
|
|
-0- |
|
|
|
N/A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Duane Froeschle |
|
|
-0- |
|
|
|
N/A |
|
|
|
-0- |
|
|
|
N/A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Former |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Larry L. Woodrum |
|
|
-0- |
|
|
|
N/A |
|
|
|
-0- |
|
|
|
N/A |
|
|
|
|
(1) |
|
Amounts reflect the closing market value of the stock on the day the stock vested. |
Nonqualified Deferred Compensation in 2006
The following table provides information with respect to the Restoration Plan. The amounts
shown include compensation earned and deferred in prior years, and earnings on, or distributions
of, such amounts. The column Executive Contributions in 2006 indicates the aggregate amount
contributed to such plans by each named executive officer during 2006. In 2006, no named executive
officer received preferential or above-market earnings on deferred compensation, and no withdrawals
or distributions were made.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive |
|
|
Registrant |
|
|
Aggregate |
|
|
Aggregate |
|
|
|
Contributions |
|
|
Contributions |
|
|
Earnings |
|
|
Balance |
|
Name |
|
in 2006 ($) |
|
|
in 2006 ($)(1) |
|
|
in 2006 ($) |
|
|
at 12/31/06 ($) |
|
Current |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert Sarver |
|
|
46,961 |
|
|
|
23,481 |
|
|
|
526 |
|
|
|
70,968 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dale Gibbons |
|
|
5,427 |
|
|
|
2,714 |
|
|
|
61 |
|
|
|
8,202 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Merrill Wall |
|
|
6,738 |
|
|
|
3,369 |
|
|
|
75 |
|
|
|
10,182 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James Lundy |
|
|
4,238 |
|
|
|
2,119 |
|
|
|
47 |
|
|
|
6,404 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Duane Froeschle |
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Former |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Larry L. Woodrum |
|
|
11,220 |
|
|
|
5,610 |
|
|
|
126 |
|
|
|
16,956 |
|
-29-
|
|
|
(1) |
|
Amounts in this column are also included in the Summary Compensation Table, in the All
Other Compensation column, and as a portion of the Matching Contributions column in footnote
(2) to that table. |
Potential Payments Upon Termination or Change in Control
The Company does not have employment, change of control, severance or similar agreements or
arrangements with any of its NEOs. The 2005 Stock Incentive Plan provides for the accelerated
vesting of all outstanding options and shares of restricted stock upon the occurrence of a
Corporate Transaction, which is defined as:
|
|
|
the dissolution or liquidation of the Company or a merger,
consolidation, or reorganization of the Company with one or more other
entities in which the Company is not the surviving entity, |
|
|
|
|
a sale of all or substantially all of the assets of the Company to
another person or entity, or |
|
|
|
|
any transaction, including a merger or reorganization in which the
Company is the surviving entity, which results in any person or entity
other than persons who are stockholders or affiliates immediately prior to
the transaction owning 50% or more of the combined voting power of all
classes of stock of the Company. |
In the event of a Corporate Transaction, the Board of Directors may elect, in its sole
discretion, to cancel any outstanding options and restricted stock and pay, or cause to be paid, to
the holder an amount in cash or securities having a value:
|
|
|
In the case of restricted stock, equal to the formula or fixed price per
share paid to holders of shares of the Companys common stock in connection
with the Corporate Transaction, or |
|
|
|
|
In the case of options, equal to the product of the number of shares of
common stock subject to the option multiplied by the amount, if any, by
which the formula or fixed price per share paid to holders pursuant to the
Corporate Transaction exceeds the exercise price of the option. |
Assuming a December 31, 2006 Corporate Transaction, the value of all equity awards that would
vest and become exercisable for each named executive officer would be as follows:
-30-
|
|
|
|
|
|
|
|
|
|
|
|
|
Name |
|
Value of Stock Options ($) |
|
|
Value of Restricted Shares ($) |
|
|
Total ($) |
|
Current |
|
|
|
|
|
|
-0- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert Sarver |
|
|
998,900 |
|
|
|
-0- |
|
|
|
998,900 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dale Gibbons |
|
|
919,054 |
|
|
|
-0- |
|
|
|
919,054 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Merrill Wall |
|
|
1,153,900 |
|
|
|
751,032 |
|
|
|
1,904,932 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James Lundy |
|
|
583,420 |
|
|
|
-0- |
|
|
|
583,420 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Duane Froeschle |
|
|
583,420 |
|
|
|
-0- |
|
|
|
583,420 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Former |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Larry L. Woodrum |
|
|
693,804 |
|
|
|
-0- |
|
|
|
693,804 |
|
In addition, pursuant to indemnification agreements entered into by the Company
with each of its directors and executive officers, in the event of a change of control of
the Company, an independent party will be appointed to determine the rights and obligations
of the indemnitee and the Company with regard to a particular proceeding, and the Company
has agreed to pay the reasonable fees for such party. If there is a potential change in
control, the agreement provides that, upon the request of an indemnitee, the Company will
establish and fund a trust for payment of reasonably anticipated expenses, and that the
trust cannot be revoked upon a change of control without the indemnitees consent. For
more information regarding the indemnification agreements, see Employment, Noncompetition
and Indemnification Agreements.
Under the Companys Restoration Plan, the Companys matching contribution in a
participants account (and all earnings thereon) will become 100% vested immediately (if
not already vested): (1) upon a change in control of the Company, or (2) on the date the
participant reaches age 65, the date of his or her disability, or the date he or she dies,
if the participant is employed by the Company on any such date. Assuming a change in
control or other vesting event occurred on December 31, 2006, the vesting benefit to each
named executive officer would be $23,655 for Mr. Sarver, $2,734 for Mr. Gibbons, $3,394 for
Mr. Wall, $2,135 for Mr. Lundy, $0 for Mr. Froeschle and $5,652 for Mr. Woodrum.
Employment, Noncompetition and Indemnification Agreements
Employment Agreements
The Company has not entered into employment agreements with any of its named executive
officers. Its subsidiary, the Bank of Nevada, entered into a letter agreement with Larry L.
Woodrum in connection with his resignation as President and Chief Executive Officer of the bank
effective July 1, 2006. Pursuant to this agreement, the Company agreed to continue to pay Mr.
Woodrum his 2006 base salary through December 31, 2006, to pay Mr. Woodrum any bonus earned for
2006 (in accordance with the Annual Bonus Plan) and, for his services as Vice Chairman of the Bank,
to pay Mr. Woodrum an annual salary of $120,000 beginning January 1, 2007 through December 31,
2009. Mr. Woodrum agreed, during the period he is employed by the Bank and for two years
thereafter, not to directly or indirectly, own, manage, operate, control, or participate in the
ownership, management, operation or control of, or be connected with as an officer, employee,
partner, director, consultant or otherwise, or have any financial
-31-
interest in any business that provides products and services similar to and competitive with any
products or services offered by the Bank or any of its affiliates (other than passive stock
ownership of no more than 5% of the outstanding stock of such a corporation that is listed or
traded on the NYSE, American Stock Exchange or NASDAQ). Mr. Woodrum also agreed that during the
same period he would not, directly or indirectly, employ or solicit for employment any employee of
the Bank or any of its affiliates or to solicit or communicate with any customers of the Bank or
any of its affiliates for the purpose of selling or providing any products or services similar to
or competitive with the products or services offered by the Bank or any of its affiliates. The
noncompetition and nonsolicitation provisions of the letter agreement are in addition to, and do
not supercede, Mr. Woodrums obligations under the Noncompetition Agreement described below.
Noncompetition Agreement
On July 31, 2002, the Company entered into Noncompetition Agreements with Messrs. Lundy,
Sarver, Snyder and Woodrum. The agreements are enforceable while each such person is employed by
the Company as a senior executive or is a member of its Board of Directors and for two years
following the conclusion of such service. Each agreement provides that, other than with the
Company, the individual will refrain from (a) engaging in the business of banking, either directly
or indirectly, or from having an interest in the business of banking, in any state in which the
Company engages in the business of banking; (b) soliciting any person then employed by the Company
for employment with another entity engaged in the business of banking; or (c) diverting or
attempting to divert from the Company any business of any kind in which the Company is engaged. The
agreement does not prohibit passive ownership in a company engaged in banking that is listed or
traded on the NYSE, American Stock Exchange or NASDAQ, so long as such ownership does not exceed
5%. In the event of a breach or threatened breach, the Company is entitled to obtain injunctive
relief against the breaching party in addition to any other relief (including money damages)
available to the Company under applicable law.
Indemnification Agreement
The Company entered into Indemnification Agreements with each of its directors and executive
officers (the indemnitees). These agreements provide contractual assurance of the indemnification
authorized and provided for by the Companys articles of incorporation and bylaws and the manner of
such indemnification, regardless of whether the Companys articles or bylaws are amended or
revoked, or whether the composition of the Board of Directors is changed or the Company is
acquired. However, such limitation on liability would not apply to violations of the federal
securities laws, nor does it limit the availability of non-monetary relief in any action or
proceeding against a director. The Companys by-laws include provisions for indemnification of its
directors and officers to the fullest extent permitted by Nevada law. Insofar as indemnification
for liabilities arising under the federal securities laws may be permitted to directors, officers
and persons controlling the Company pursuant to the foregoing provisions, the Company has been
informed that in the opinion of the SEC such indemnification is against public policy as expressed
in such laws and is unenforceable.
The agreement provides for the payment, in whole or part, of expenses, judgments, fines,
penalties, or amounts paid in settlement related to a proceeding implicating an indemnitee if that
person acted in good faith and in a manner he or she reasonably believed to be in or not opposed to
the Companys best interests. With respect to criminal proceedings, the person must have had no
reason to believe the relevant conduct was unlawful in order to obtain indemnification. Each
agreement also provides for instances in which the Company will advance funds to the indemnitee and
a related mechanism by which the Company may be reimbursed for such advances if it is ultimately
found not obligated to indemnify the indemnitee in whole or in part. Further, the Company has
agreed to pay for all expenses incurred by an indemnitee in his or her attempt to enforce the
indemnification terms of his or her
-32-
agreement, any other agreement or law, the Companys bylaws or its articles of incorporation.
The Company has also agreed to pay for all expenses incurred by an indemnitee in his or her attempt
to seek recovery under any officers or directors liability insurance policies, without regard to
the indemnitees ultimate entitlement to any such benefits.
Each agreement to indemnify is subject to a number of qualifications. For example, it does not
apply to any proceeding instituted by a bank regulatory agency that results in an order assessing
civil monetary penalties or requiring payments to the Company or instituted by an indemnitee
against the Company or its directors or officers without the Companys consent. Further, the
Companys obligations are relieved should it be determined by a judge or other reviewing party that
applicable law would not permit indemnification. The Company is entitled to assert that the
indemnitee has not met the standards of conduct that make it permissible under the Nevada General
Corporation Law for the Company to indemnify its directors and officers.
In the event of a change of control of the Company, each agreement provides for the appointing
of an independent party to determine the rights and obligations of an indemnitee and the Company
with regard to a particular proceeding, and the Company has agreed to pay the reasonable fees for
such party. If there is a potential change in control, the agreement provides that, upon the
request of an indemnitee, the Company will establish and fund a trust for payment of reasonably
anticipated expenses, and that the trust cannot be revoked upon a change of control without the
indemnitees consent.
Certain Transactions
The Company and the Banks have engaged in, and in the future expect to engage in, banking
transactions in the ordinary course of business with directors, officers, and principal
stockholders of the Company and the Banks (and their associates), including corporations,
partnerships and other organizations in which such persons have an interest. These loans were made
on substantially the same terms (including interest rates, collateral and repayment terms) as those
prevailing at the time for comparable transactions with others and, in the opinion of management,
do not involve more than the normal risk of collectibility or present other unfavorable features.
At December 31, 2006, the Companys officers, directors and principal stockholders (and their
related interests) were indebted to the Banks in the aggregate amount of approximately $63.1
million in connection with these loans. This amount was approximately 2.1% of total loans
outstanding as of such date. All such loans are currently in good standing and are being paid in
accordance with their terms.
Certain Business Relationships
Robert Sarver, the Companys President, Chairman and Chief Executive Officer, controls several
limited partnerships which invest in commercial real estate. Directors Baker, Hilton, Mack, A.
Marshall, T. Marshall have invested in one or more of these partnerships as limited partners. None
of these investments are related in any way to the Companys operating or financial performance or
the value of the Companys shares. Mr. Sarver also is the managing partner of the entity which owns
the Phoenix Suns NBA basketball team. Director Hilton is a limited partner in the Phoenix Suns
ownership group. Other than Mr. Sarver, none of these directors is a managing or general partner
in any of these entities, nor do they have any other role that would have a policy making function
for such entities.
Mr. Sarver also serves as a director of Meritage Homes Corporation. He served on the
Compensation Committee of Meritage until February 2004. Mr. Hilton is the chairman of the board
and chief executive officer of Meritage. William S. Boyd, a director of the Company, is the chief
executive officer of Boyd Gaming Corporation. Marianne Boyd Johnson, Mr. Boyds daughter, is a
director of the Company and Boyd Gaming Corporation. Robert L. Bougher, a director of Bank of
Nevada and Boyd
-33-
Gaming Corporation, is the chief executive officer and president of the Echelon Resort, a new Las
Vegas casino and resort project that is owned by Boyd Gaming Corporation. Director Snyder was the
president of Boyd Gaming Corporation from January 1997 until March 2005.
Policies and Procedures Regarding Transactions with Related Persons
The Company has a number of policies, procedures and practices that relate to the
identification, review and approval of related party transactions. In accordance with the
Companys Corporate Governance Guidelines, each director is required to satisfy the independence
standards prescribed under the listing requirements of the New York Stock Exchange or under
applicable law. As part of the annual review process, the Company distributes and collects
questionnaires that solicit information about any direct or indirect transactions with the Company
from each of its directors and officers, reviews the responses to these questionnaires and reports
the results to the Nominating and Corporate Governance Committee. The Companys Code of Business
Conduct and Ethics requires all employees to avoid any situation in which a persons private
interest interferes in any way (or even appears to interfere) with the interests of the Company,
including transactions in which an employee, officer or director, or a member of his or her family,
receives improper personal benefits as a result of his or her position at the Company, such as
loans to, or guarantees of obligations of, employees or directors or their family members, other
than those made in the ordinary course of business.
In accordance with Federal Reserve Board Regulation O, each of the Companys bank subsidiaries
has adopted a formal policy governing any extensions of credit to any officer, director or
significant shareholder of the bank or any affiliate. These policies require, among other things,
that any such loan (1) be made on substantially the same terms (including interest rates,
collateral and repayment terms) as those prevailing at the time for comparable transactions with
unrelated persons, (2) not involve more than the normal risk of collectibility or present other
unfavorable features for the bank, and (3) be approved by a majority of the banks full board of
directors, without the direct or indirect participation of the interested person. Any transactions
between the Company and an officer or director of the Company (or any of its affiliates), or an
immediate family member of such an officer or director, falling outside the scope of these formal
policies must be conducted at arms length. Any consideration paid or received by the Company in
such a transaction must be on terms no less favorable than terms available to an unaffiliated third
party under similar circumstances.
INDEPENDENT
AUDITORS
Pursuant to the recommendation of the Audit Committee, the Board of Directors has appointed
McGladrey & Pullen LLP, to audit the financial statements of the Corporation and certain of its
subsidiaries for the fiscal year ending December 31, 2006, and to report on the consolidated
balance sheets, statements of income and other related statements of the Company and its
subsidiaries. McGladrey & Pullen LLP has served as the independent auditor for the Company since
1994. Representatives of McGladrey & Pullen LLP will be present at the Annual Meeting, will have
an opportunity to make a statement if they so desire and will be available to respond to questions
posed by the stockholders.
Fees and Services
The following table shows the aggregate fees billed to the Company for professional
services by McGladrey & Pullen, LLP and RSM McGladrey, Inc. (an affiliate of McGladrey & Pullen)
for fiscal years 2006 and 2005:
-34-
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year 2006 ($) |
|
|
Fiscal Year 2005 ($) |
|
Audit Fees |
|
|
1,288,000 |
|
|
|
595,000 |
|
|
|
|
|
|
|
|
|
|
Audit-Related Fees |
|
|
19,000 |
|
|
|
22,000 |
|
|
|
|
|
|
|
|
|
|
Tax Fees |
|
|
68,000 |
|
|
|
28,000 |
|
|
|
|
|
|
|
|
|
|
All Other Fees |
|
|
118,000 |
|
|
|
-0- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
1,493,000 |
|
|
|
645,000 |
|
Audit Fees. Audit fees for 2006 include professional fees and costs associated with review of
Form S-4 and related consents. Audit fees for 2006 also include professional fees and costs
associated with review of documents for the private placement of securities. Fees for both years
also include review of Forms 10-Q and related SAS 100 reviews. Audit fees for 2005 include
professional fees and costs associated with the initial public offering on Form S-1 including
related consents and comfort letters. Fees for 2005 also include review of Form S-8 and issuance of
related consent.
Audit-Related Fees. Audit related fees include audits of an employee benefit plan and services
relating to various accounting and reporting matters.
Tax Fees. Tax fees include review of tax estimates and various tax consulting services. In
addition, tax fees include preparation of final tax returns for acquired entities.
All Other Fees. All other fees include regulatory compliance services.
The Audit Committee considered the compatibility of the non-audit-related services performed
by and fees paid to McGladrey & Pullen, LLP and RSM McGladrey, Inc. in 2006 and the proposed
non-audit-related services and fees for 2007 and determined that such services and fees are
compatible with the independence of McGladrey & Pullen, LLP.
Audit Committee Pre-Approval Policy
The Audit Committee is required to pre-approve all audit and non-audit services provided by
the Companys independent auditors in order to assure that the provision of such services does not
impair the auditors independence. The Audit Committee has established a policy regarding
pre-approval of permissible audit, audit-related, tax and other services provided by the
independent auditors, which services are periodically reviewed and revised by the Committee. Unless
a type of service has received general pre-approval under the policy or involves de minimus fees,
the service will require specific approval by the Audit Committee. The Audit Committee may delegate
to its Chairman the authority to pre-approve services of the independent auditors, provided that
the Chairman must report any such approvals to the full Audit Committee at its next scheduled
meeting.
SECURITY
OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information with respect to the beneficial ownership of
common stock, as of the Record Date, February 28, 2007, by (a) persons known to the Company to own
more than 5% of the outstanding shares of its common stock, (b) each director and executive officer
of the Company, and (c) the Companys directors and executive officers as a group. The information
contained herein has been obtained from the Companys records and from information furnished to the
-35-
Company by each individual. The Company knows of no person who owns, beneficially or of
record, either individually or with associates, more than 5% of the Companys common stock, except
as set forth below.
|
|
|
|
|
|
|
|
|
|
|
Number of Shares |
|
Percentage of |
Beneficial Owner (1) |
|
Beneficially Owned |
|
Common Stock (2) |
Paul Baker (3) |
|
|
308,005 |
|
|
|
1.14 |
|
Bruce Beach (4) |
|
|
18,847 |
|
|
|
* |
|
William S. Boyd (5) |
|
|
760,671 |
|
|
|
2.81 |
|
Gary Cady (6) |
|
|
75,738 |
|
|
|
* |
|
Duane Froeschle (7) |
|
|
224,902 |
|
|
|
* |
|
Dale Gibbons (8) |
|
|
106,450 |
|
|
|
* |
|
Arnold Grisham (9) |
|
|
22,500 |
|
|
|
* |
|
Steven J. Hilton (10) |
|
|
248,005 |
|
|
|
* |
|
Marianne Boyd Johnson (11) |
|
|
4,091,326 |
|
|
|
15.10 |
|
James Lundy (12) |
|
|
181,710 |
|
|
|
* |
|
Cary Mack (13) |
|
|
109,247 |
|
|
|
* |
|
Linda Mahan (14) |
|
|
72,359 |
|
|
|
* |
|
George J. Maloof, Jr. |
|
|
87,103 |
|
|
|
* |
|
Arthur Marshall (15) |
|
|
248,346 |
|
|
|
* |
|
Todd Marshall (16) |
|
|
669,789 |
|
|
|
2.47 |
|
M. Nafees Nagy, M.D. (17) |
|
|
868,159 |
|
|
|
3.21 |
|
James Nave, D.V.M. (18) |
|
|
515,094 |
|
|
|
1.90 |
|
Robert G. Sarver (19) |
|
|
3,568,943 |
|
|
|
12.69 |
|
Donald D. Snyder (20) |
|
|
212,221 |
|
|
|
* |
|
Merrill Wall (21) |
|
|
84,500 |
|
|
|
* |
|
Larry L. Woodrum (22) |
|
|
76,000 |
|
|
|
* |
|
|
|
|
All directors and executive
officers as a group (21 persons) |
|
|
12,440,312 |
|
|
|
43.52 |
|
|
|
|
* |
|
Less than one percent |
|
(1) |
|
In accordance with Rule 13d-3 under the Securities Exchange Act of 1934 (the Exchange
Act), as amended, a person is deemed to be the beneficial owner of any shares of common
stock if such person has or shares voting power and/or investment power with respect to the
shares, or has a right to acquire beneficial ownership at any time within 60 days from
February 28, 2007. As used herein, voting power includes the power to vote or direct the
voting of shares and investment power includes the power to dispose or direct the
disposition of shares. Shares subject to outstanding stock options and warrants, which an
individual has the right to acquire within 60 days of February 28, 2007 (exercisable stock
options and exercisable warrants, respectively), are deemed to be outstanding for the
purpose of computing the percentage of outstanding securities of the class of stock owned
by such individual or any group including such individual only. Beneficial ownership may be
disclaimed as to certain of the securities. The business address of each of the executive
officers and directors is 2700 West Sahara Avenue, Las Vegas, Nevada 89102, Telephone:
(702) 248-4200. |
|
(2) |
|
Percentage calculated on the basis of 27,363,998 shares outstanding on February 28,
2007. |
-36-
|
|
|
(3) |
|
Share ownership includes 1,250 shares subject to exercisable stock options and 50,000
shares held by a family trust. |
|
(4) |
|
Share ownership includes 1,250 shares subject to exercisable stock options. |
|
(5) |
|
Share ownership includes 1,250 shares subject to exercisable stock options and 759,421
shares held by a trust. |
|
(6) |
|
Share ownership includes 24,475 shares subject to exercisable stock options. |
|
(7) |
|
Share ownership includes 50,500 shares subject to exercisable stock options, and 44,381
shares subject to exercisable warrants. Includes 5,000 shares which are pledged or held in
a margin account |
|
(8) |
|
Share ownership includes 41,350 shares subject to exercisable stock options. Includes
106,450 shares which are pledged or held in a margin account. |
|
(9) |
|
Share ownership includes 7,500 shares subject to exercisable warrants. |
|
(10) |
|
Share ownership includes 5,650 shares subject to exercisable stock options, 68,274
shares subject to exercisable warrants, 32,433 shares held by a family trust, and 136,548
shares held by a limited liability company. |
|
(11) |
|
Share ownership includes 5,650 shares subject to exercisable stock options, 3,471,526
shares held by certain grantor retained annuity trusts, 301,422 shares held by two other
trusts, and 240,718 shares held by a limited partnership. |
|
(12) |
|
Share ownership includes 65,500 shares subject to exercisable stock options. |
|
(13) |
|
Share ownership includes 5,650 shares subject to exercisable stock options, 10,000
shares held by a family trust, and 87,497 held by a limited liability company. |
|
(14) |
|
Share ownership includes 32,359 shares subject to exercisable stock options. |
|
(15) |
|
Share ownership includes 5,650 shares subject to exercisable stock options, and 235,196
shares held by a family trust. |
|
(16) |
|
Share ownership includes 5,650 shares subject to exercisable stock options, and 558,248
shares held by various trusts. |
|
(17) |
|
Share ownership includes 1,250 shares subject to exercisable stock options, 10,516
shares held by two trusts, and 826,029 shares held by a limited liability company (the
LLC). |
|
(18) |
|
Share ownership includes 5,650 shares subject to exercisable stock options held by a
grantor retained annuity trust, 176,110 shares held by a profit sharing plan, and 125,818
held by his daughter. |
|
(19) |
|
Share ownership includes: (i) 30,000 shares held by Mr. Sarvers spouse over which he
disclaims all beneficial ownership, (ii) 38,750 shares subject to exercisable stock
options, (iii) 959,259 shares subject to exercisable warrants, (iv) 178,429 shares and
34,137 exercisable warrants held in a trust, (v) 166,022 shares held by a limited
partnership, and (vi) 31,374 shares and 13,656 exercisable warrants held by a corporation.
Includes 2,112,316 shares which are pledged or held in a margin account. |
|
(20) |
|
Share ownership includes 5,650 shares subject to exercisable stock options, and 95,182
shares held by two trusts. Includes 96,082 shares which are pledged or held in a margin
account |
-37-
|
|
|
(21) |
|
Share ownership includes 32,500 shares subject to exercisable stock options. |
|
(22) |
|
Share ownership includes 42,600 shares subject to exercisable stock options. |
ITEMS
OF BUSINESS TO BE ACTED ON AT THE MEETING
Item 1. Election of Directors
Under the Companys Articles of Incorporation, the Board is divided into three classes with
approximately one-third of the directors standing for election each year. The terms of Class II
directors will expire at this years Annual Meeting. The Board has nominated the five individuals
listed below, all of whom are currently directors of the Company, to be elected as Class II
directors at the Annual Meeting.
The term for directors elected this year will expire at the annual meeting of stockholders
held in 2010. Each of the nominees listed below has agreed to serve that term. If any director is
unable to stand for election, the Board may, by resolution, provide for a lesser number of
directors or designate a substitute. In the latter event, shares represented by proxies may be
voted for a substitute director.
The Board of Directors unanimously recommends that the stockholders vote FOR all of the following
nominees:
|
|
|
Cary Mack |
|
|
|
|
Arthur Marshall |
|
|
|
|
Todd Marshall |
|
|
|
|
M. Nafees Nagy, M.D. |
|
|
|
|
James E. Nave, D.V.M. |
Biographical
information about these nominees may be found beginning at page 5 of this proxy statement.
Item 2. Amendment to 2005 Stock Incentive Plan
Amendment
On January, 23, 2007, the Companys Board of Directors adopted an amendment (the Amendment)
to the Western Alliance Bancorporation 2005 Stock Incentive Plan (the Plan), subject to approval
by the Companys stockholders. The following summary of the Plan is subject to the specific
provisions contained in the complete text of the Plan and in the Amendment. A copy of the Plan, as
amended, is attached to this proxy statement as Appendix A.
The Amendment increases the maximum number of shares available for issuance under the Plan
by 1,246,156, from 3,255,500 to 4,500,000 shares of the Companys common stock, including shares available under
the prior plans (as defined below).
The Board of Directors believes that using long-term incentives under the Plan will be
beneficial to the Company as a means to promote the success and enhance the value of the Company by
linking the personal interests of its directors and employees to those of its shareholders and by
providing such individuals with an incentive for outstanding performance. These incentives also
provide the Company flexibility in its ability to attract and retain the services of individuals
upon whose judgment, interest and special effort the successful conduct of the Companys operation
is largely dependent.
-38-
2005 Stock Incentive Plan
The Companys Board of Directors and stockholders previously approved the BankWest of Nevada
1997 Incentive Stock Option Plan, the BankWest of Nevada 1997 Nonqualified Stock Option Plan, the
Western Alliance Bancorporation 2000 Stock Appreciation Rights Plan and the Western Alliance
Bancorporation 2002 Stock Option Plan (together, referred to as the prior plans). Stockholders
approved the Plan at the Companys 2005 Annual Meeting. The Plan is an amendment and restatement
of the prior plans and, therefore supersedes the prior plans, while preserving the material terms
of the outstanding prior plan awards. Awards made under any of the prior plans are subject to the
terms and conditions of the Plan, which has been structured so as not to impair the rights of award
holders under the prior plans.
The purpose of the Plan is to attract and retain highly qualified officers, directors, key
employees, and other persons, and to motivate such officers, directors, key employees, and other
persons to serve the Company and to expend maximum effort to improve the Companys business results
and earnings.
As of December 31, 2006 the number of shares still available for issuance under the Plan was
2,530,875. Of these 2,530,875 shares, 2,196,342 shares represent option awards outstanding as of
December 31, 2006.
The Plan contains certain individual limits on the maximum amount that can be paid in cash
under the Plan and on the maximum number of shares of common stock that may be issued under the
Plan in a calendar year. The limits on the number of shares issuable under the Plan, which are
described in the following paragraph, become effective at the expiration of a grace period which
expires on the earlier to occur of: (1) the first stockholders meeting at which directors are to
be elected held after 2008, or (2) the time at which the Plan is materially amended.
The maximum number of shares subject to options or stock appreciation rights that can be
issued under the Plan to any person is 150,000 shares in any calendar year. The maximum number of
shares that can be issued under the Plan to any person, other than pursuant to an option or stock
appreciation right, is 150,000 shares in any calendar year. The maximum amount that may be earned
as an annual incentive award or other cash award in any fiscal year by any one person is $5.0
million and the maximum amount that may be earned as a performance award or other cash award by any
one person is $15.0 million.
Administration. The Plan is administered by the Compensation Committee. Subject to the terms
of the Plan, the Compensation Committee may select participants to receive awards; determine the
types of awards, terms and conditions of awards; and interpret provisions of the Plan.
Source of Shares. The common stock issued or to be issued under the Plan consists of
authorized but unissued shares and treasury shares. If any shares covered by an award are not
purchased or are forfeited, or if an award otherwise terminates without delivery of any common
stock, then the number of shares of common stock counted against the aggregate number of shares
available under the 2005 Stock Incentive Plan with respect to the award will, to the extent of any
such forfeiture or termination, again be available for making awards under the Plan.
If the option price, a withholding obligation or any other payment is satisfied by tendering
shares or by withholding shares, only the number of shares issued net of the shares tendered or
withheld will be deemed delivered for the purpose of determining the maximum number of shares
available for delivery under the Plan.
-39-
Eligibility. Awards may be made under the Plan to employees, officers, directors, consultants
and any other individual providing services to the Company or an affiliate whose participation in
the Plan is determined to be in the Companys best interests by the Board of Directors.
Amendment or Termination of the Plan. While the Companys Board of Directors may suspend,
terminate or amend the Plan at any time, no amendment may adversely impair the rights of grantees
with respect to outstanding awards. In addition, an amendment will be contingent on approval of
the Companys stockholders to the extent required by law. Unless terminated earlier, the Plan will
automatically terminate 10 years after its adoption by the Board of Directors.
Options. The Plan permits the granting of options to purchase shares of common stock intended
to qualify as incentive stock options under the Internal Revenue Code, referred to as incentive
stock options, and stock options that do not qualify as incentive stock options, referred to as
non-qualified stock options. The exercise price of each stock option may not be less than 100% of
the fair market value of the Companys common stock on the date of grant. If the Company were to
grant incentive stock options to any 10% stockholder, the exercise price may not be less than 110%
of the fair market value of the Companys common stock on the date of grant. The Company may grant
options in substitution for options held by employees of companies that it may acquire.
The term of each stock option will be fixed by the Compensation Committee and may not exceed
10 years from the date of grant. The Compensation Committee determines at what time or times each
option may be exercised and the period of time, if any, after retirement, death, disability or
termination of employment during which options may be exercised. The exercisability of options may
be accelerated by the Compensation Committee. In general, an optionee may pay the exercise price
of an option by cash or cash equivalent, by tendering shares of the Companys common stock (which
if acquired from the Company have been held by the optionee for at least six months) or, provided
that the Company is a publicly traded company at the time, by means of a broker-assisted cashless
exercise.
Stock options granted under the Plan may not be sold, transferred, pledged, or assigned other
than by will or under applicable laws of descent and distribution or pursuant to a domestic
relations order. However, the Company may permit limited transfers of non-qualified options for
the benefit of immediate family members of grantees to help with estate planning concerns.
Other Awards. The Compensation Committee may also award under the Plan:
|
|
|
Restricted shares of common stock, which are shares of common stock subject to
restrictions; |
|
|
|
|
Stock units, which are common stock units subject to restrictions; |
|
|
|
|
Unrestricted shares of common stock, which are shares of common stock issued at
no cost or for a purchase price determined by the compensation committee which are
free from any restrictions under the equity incentive plan; |
|
|
|
|
Dividend equivalent rights, which are rights entitling the recipient to receive
credits for dividends that would be paid if the recipient had held a specified
number of shares of common stock; |
|
|
|
|
Stock appreciation rights, which are a right to receive a number of shares or,
in the discretion of the committee, an amount in cash or a combination of shares
and cash, based on the increase in the fair market value of the shares underlying
the right during a stated period specified by the compensation committee; and |
-40-
|
|
|
Performance and annual incentive awards, ultimately payable in common stock or
cash, as determined by the compensation committee. The compensation committee may
grant multi-year and annual incentive awards subject to achievement of specified
goals tied to business criteria (described below). The committee may specify the
amount of the incentive award as a percentage of these business criteria, a
percentage in excess of a threshold amount or as another amount which need not bear
a strictly mathematical relationship to these business criteria. The compensation
committee may modify, amend or adjust the terms of each award and performance goal. |
Section 162(m) of the Internal Revenue Code limits publicly held companies to an annual
deduction for federal income tax purposes of $1.0 million for compensation paid to their chief
executive officer and the four highest compensated executive officers (other than the chief
executive officer) determined at the end of each year (referred to as covered employees). However,
performance-based compensation is excluded from this limitation. The Plan is designed to permit
the committee to grant awards that qualify as performance-based compensation for purposes of
satisfying the conditions of Section 162(m) at such time as the Plan becomes subject to Section
162(m).
Business Criteria. The Compensation Committee will use one or more of the following business
criteria, on a consolidated basis, and/or with respect to specified subsidiaries or lending groups
(except with respect to the total stockholder return and earnings per share criteria), in
establishing performance goals for awards intended to comply with Section 162(m) of the Internal
Revenue Code granted to covered employees:
|
|
|
Total stockholder return; |
|
|
|
|
Total stockholder return as compared to total return of a known index; |
|
|
|
|
Net income; |
|
|
|
|
Pretax earnings; |
|
|
|
|
Earnings before interest expense, taxes, depreciation and amortization; |
|
|
|
|
Pretax operating earnings after interest expense and before bonuses, service
fees and extraordinary or special items; |
|
|
|
|
Operating margin; |
|
|
|
|
Earnings per share; |
|
|
|
|
Return on equity; |
|
|
|
|
Return on capital; |
|
|
|
|
Return on investment |
|
|
|
|
Operating earnings; |
|
|
|
|
Working capital; |
|
|
|
|
Ratio of debt to stockholders equity; and |
|
|
|
|
Revenue. |
Effect of Extraordinary Corporate Transactions. The occurrence of a corporate transaction may
cause awards granted under the Plan to vest, unless the awards are continued or substituted for in
connection with the corporate transaction. A corporate transaction means the Companys dissolution
or
-41-
liquidation; a merger, consolidation, or reorganization in which the Company is not the surviving
entity; a sale of substantially all of the Companys assets or any transaction which results in any
person or entity owning 50% or more of the combined voting power of the Companys stock.
Adjustments for Stock Dividends and Similar Events. The committee will make appropriate
adjustments in outstanding awards and the number of shares available for issuance under the Plan,
including the individual limitations on awards, to reflect common stock dividends, stock splits,
spin-offs and other similar events.
Change in Control Accelerated Vesting. With respect to the awards outstanding under the prior
plans as of the effective date of the Plan, all such awards become fully vested, and, in the case
of options, exercisable in connection with the consummation of a change in control as defined in
the applicable prior plan, provided the award remains outstanding upon the change in control and
relates to a continuing employee or other service provider and except to the extent retaining the
unvested status of certain outstanding options eliminates any excise tax under section 4999 of the
Internal Revenue Code that, if applied, would produce an unfavorable net after-tax result for the
option holder. With respect to awards made on or after the effective date of the Plan, the
committee may provide in the award agreement that, in connection with the consummation of a change
in control as defined under the applicable award agreement, the award shall become fully vested,
and, in the case of Options or SARs, exercisable.
Vote Required and Board Recommendation
The proposed Amendment to the 2005 Stock Incentive Plan (Item 2) will be approved if the votes
cast for the proposal exceed those cast against the proposal. Abstentions will not be counted
either for or against the proposal. Broker non-votes will not be counted as a vote cast on this
proposal.
The Board of Directors unanimously recommends that the stockholders vote FOR the approval of the
Amendment to the Western Alliance Bancorporation 2005 Stock Incentive Plan.
Equity Compensation Plan Information
The following table provides information as of December 31, 2006, regarding outstanding
options and shares reserved for issuance under the Companys equity compensation plans.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average |
|
|
|
|
Number of shares to be |
|
exercise price of |
|
Number of shares |
|
|
issued upon exercise of |
|
outstanding |
|
remaining available for |
|
|
outstanding options, |
|
options, warrants |
|
future issuance under |
Plan Category |
|
warrants and rights |
|
and rights ($) |
|
equity compensation plans |
Equity compensation
plans approved by
security holders |
|
|
2,196,342 |
|
|
|
13.94 |
|
|
|
334,533 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
compensation plans
not approved by
security holders |
|
|
N/A |
|
|
|
N/A |
|
|
|
N/A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
2,196,342 |
|
|
|
13.94 |
|
|
|
334,533 |
|
-42-
SECTION
16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Companys directors, executive officers and
persons who own more than 10% of the Common Stock to file with the SEC initial reports of ownership
and reports of changes in ownership of the Common Stock. They are also required to furnish the
Company with copies of all Section 16(a) forms they file with the SEC.
To the Companys knowledge, based solely on its review of the copies of such reports furnished
to it and written representations that no other reports were required, during the fiscal year ended
December 31, 2006, all of the Companys officers, directors and greater than 10% stockholders
complied with all applicable Section 16(a) filing requirements.
ADDITIONAL
INFORMATION
Stockholder Proposals for 2008 Annual Meeting
Any proposal which a stockholder wishes to have included in the Companys proxy statement and
form of proxy relating to its 2008 annual meeting of stockholders must be received by the Company,
directed to the attention of the Corporate Secretary, at its principal executive offices at 2700
West Sahara Avenue, Las Vegas, Nevada 89102, no later than December 19, 2007. If a stockholder
wishes to present a matter at the Companys 2008 annual meeting that is outside the process for
inclusion in the proxy statement, notice must be given to the Secretary not later than February 5,
2008. All stockholder proposals will be subject to and must comply with Nevada law and the rules
and regulations of the SEC, including Rule 14a-8 under the Exchange Act, as amended.
Annual Report
A copy of the Companys Annual Report to Stockholders is enclosed with this Proxy Statement.
The Company is required has filed its Annual Report on Form 10-K for its 2006 fiscal year with the
SEC. Shareholders may obtain, free of charge, a copy of the Form 10-K by writing to the Company at
2700 West Sahara Avenue, Las Vegas, Nevada 89102, Attention: Corporate Secretary, or from our
website, westernalliancebancorp.com.
Legal Proceedings
No director or executive officer of the Company is a party to any material pending legal
proceedings or has a material interest in any such proceedings that is adverse to the Company or
any of its subsidiaries.
Householding of Proxy Materials
The SEC has adopted rules that permit companies and intermediaries such as brokers to satisfy
delivery requirements for proxy statements with respect to two or more shareholders sharing the
same address by delivering a single proxy statement addressed to those shareholders. This process,
which is commonly referred to as householding, potentially provides extra convenience for
shareholders and cost savings for companies. Brokers with account holders who are stockholders of
the Company may be householding the Companys proxy materials. Once you have received notice from
your broker that it will be householding materials to your address, householding will continue
until you are notified otherwise or until you revoke your consent. If, at any time, you no longer
wish to participate in householding and would prefer to receive a separate proxy statement, or if
you are receiving multiple copies of the proxy statement and wish to receive only one, please
notify your broker or notify the Company by sending a
-43-
written request to Western Alliance Bancorporation, 2700 West Sahara Avenue, Las Vegas, Nevada
89102, Attn: Corporate Secretary, or by calling (702) 248-4200.
Other Business
Except as described above, the Company knows of no business to come before the Annual Meeting.
However, if other matters should properly come before the Annual Meeting or any adjournment
thereof, it is the intention of the persons named in the Proxy to vote in accordance with the
determination of a majority of the Board of Directors on such matters.
BY ORDER OF THE
BOARD OF DIRECTORS
ROBERT G. SARVER
CHAIRMAN OF THE BOARD
Dated:
March 23, 2007
-44-
SUPPLEMENT TO WESTERN ALLIANCE BANCORPORATION
2007 PROXY STATEMENT
SUPPLEMENT
TO
ITEM 2. AMENDMENT TO 2005 STOCK INCENTIVE PLAN
To clarify, the proposal to amend the Plan to increase the shares under the Plan as described
in the Proxy Statement and Proxy Card includes the approval of the award limitations and
performance criteria under the Plan as applied to such shares and shares that continue to be, or
again become, available for award under the Plan and to cash awards. Thus, the Company wishes to
make clear that by submitting the amendment for shareholder approval at the Annual Meeting, the
Company intends to have the Plan permit the award of performance-based grants that are exempt
from the deduction limitation under Section 162(m) of the Internal Revenue Code of 1986, as amended
(the Code).
The maximum number of shares subject to options or stock appreciation rights that can be
issued under the Plan to any person is 150,000 shares in any calendar year. The maximum number of
shares that can be issued under the Plan to any person, other than pursuant to an option or stock
appreciation right, is 150,000 shares in any calendar year.
Performance Objectives for Performance-Based Awards. The performance objectives for a
performance-based stock award or an annual incentive or other cash award under the Plan may be
based on one or more of the following criteria of the Company: (1) total stockholder return; (2)
total stockholder return as compared to total return (on a comparable basis) of a publicly
available index such as, but not limited to, the Standard & Poors 500 Stock Index; (3) net income;
(4) pretax earnings; (5) earnings before interest expense, taxes, depreciation and amortization;
(6) pretax operating earnings after interest expense and before bonuses, service fees, and
extraordinary or special items; (7) operating margin; (8) earnings per share; (9) return on equity;
(10) return on capital; (11) return on investment; (12) operating earnings; (13) working capital;
(14) ratio of debt to stockholders equity; and (15) revenue.
In the case of an annual incentive award or other cash award, the maximum amount that may be
earned in any fiscal year by any one person is $5 million, and the maximum amount that may be
earned by any one person as a performance award or other cash award for a multiple year performance
period is $15 million.
The proposed Amendment to the 2005 Stock Incentive Plan (Item 2) will be approved if the votes
cast for the proposal exceed those cast against the proposal. Abstentions will not be counted
either for or against the proposal. Broker non-votes will not be counted as a vote cast on this
proposal.
A vote FOR the approval of the Amendment to the Western Alliance Bancorporation 2005 Stock
Incentive Plan is a vote FOR the limitations and performance criteria set forth above as applied
to any award under the Plan.
The Board of Directors unanimously recommends that the stockholders vote FOR the approval of
the Amendment to the Western Alliance Bancorporation 2005 Stock Incentive Plan.
March 23, 2007
APPENDIX
A
WESTERN ALLIANCE BANCORPORATION
2005 STOCK INCENTIVE PLAN
(as amended on January 23, 2007)
Western Alliance Bancorporation, a Nevada corporation (the Company), sets forth herein the
terms of its 2005 Stock Incentive Plan (the Plan), as follows:
1. PURPOSE
The Plan is intended to enhance the Companys and its Affiliates (as defined herein)
ability to attract and retain highly qualified officers, directors, key employees, and other
persons, and to motivate such officers, directors, key employees, and other persons to serve the
Company and its Affiliates and to expend maximum effort to improve the business results and
earnings of the Company, by providing to such persons an opportunity to acquire or increase a
direct proprietary interest in the operations and future success of the Company. To this end, the
Plan provides for the grant of stock options, stock appreciation rights (on and after the IPO
Date), restricted stock, stock units, unrestricted stock, dividend equivalent rights and cash
awards. Any of these awards may, but need not, be made as performance incentives to reward
attainment of annual or long-term performance goals in accordance with the terms hereof. Stock
options granted under the Plan may be non-qualified stock options or incentive stock options, as
provided herein.
Furthermore, this Plan is an amendment and restatement of the Bankwest of Nevada 1997
Incentive Stock Option Plan and the Bankwest of Nevada 1997 Nonqualified Stock Option Plan
(together, the 1997 Plans), the Western Alliance Bancorporation 2000 Stock Appreciation Rights
Plan (the 2000 SAR Plan), the Western Alliance Bancorporation 2002 Stock Option Plan (the 2002
Plan) and any other prior plan of the Company or a predecessor in effect prior to the Effective
Date of this Plan under which stock options or other equity awards covering the Companys Stock
remain outstanding to a service provider (the Prior Plans). This Plan document therefore is
intended to preserve material rights and features of the Prior Plans, and should any material
provision of this Plan be determined to impair the rights of a Grantee under an Award granted prior
to the Effective Date of this restated Plan, the Award Agreement covering the Award shall instead
be treated as including the material provision as an explicit term. In this regard, as of the
Effective Date and notwithstanding the absence of an automatic change in control vesting provision
under this restated Plan, any change in control vesting provision of a Prior Plan hereby is
incorporated into the Awards outstanding as of the Effective Date and made under the applicable
Prior Plan.
2. DEFINITIONS
For purposes of interpreting the Plan and related documents (including Award Agreements),
the following definitions shall apply:
2.1 Affiliate means, with respect to the Company, any company or other trade or
business that directly or indirectly controls, is controlled by or is under common control with the
Company within the meaning of Rule 405 of Regulation C under the Securities Act, including, without
limitation, any Subsidiary.
2.2 Annual Incentive Award means an Award made subject to attainment of performance goals
(as described in Section 14) over a performance period of up to one year (the fiscal year, unless
otherwise specified by the Committee).
2.3 Award means a grant of an Option, Stock Appreciation Right, Restricted Stock,
Unrestricted Stock, Stock Unit, Dividend Equivalent Right, or cash award under the Plan.
2.4 Award Agreement means the written agreement between the Company and a Grantee that
evidences and sets out the terms and conditions of an Award.
2.5 Benefit Arrangement shall have the meaning set forth in Section 15 hereof.
2.6 Board means the Board of Directors of the Company.
2.7 Cause means, as determined by the Board and unless otherwise provided in an applicable
agreement with the Company or an Affiliate, (i) performance of any act or failure to perform any
act in bad faith and to the detriment of the Company or an Affiliate; (ii) dishonesty, intentional
misconduct or material breach of any agreement with the Company or an Affiliate; or (iii)
commission of a crime involving dishonesty, breach of trust, or physical or emotional harm to any
person.
2.8 Code means the Internal Revenue Code of 1986, as now in effect or as hereafter amended.
2.9 Committee means a committee of, and designated from time to time by resolution of, the
Board, which shall be constituted as provided in Section 3.2.
2.10 Company means Western Alliance Bancorporation.
2.11 Corporate Transaction means (i) the dissolution or liquidation of the Company or a
merger, consolidation, or reorganization of the Company with one or more other entities in which
the Company is not the surviving entity, (ii) a sale of all or substantially all of the assets of
the Company to another person or entity, or (iii) any transaction (including without limitation a
merger or reorganization in which the Company is the surviving entity) which results in any person
or entity (other than persons who are stockholders or Affiliates immediately prior to the
transaction) owning 50% or more of the combined voting power of all classes of stock of the
Company.
2.12 Covered Employee means a Grantee who is a Covered Employee within the meaning of
Section 162(m)(3) of the Code.
2.13 Disability means the Grantee is unable to perform each of the essential duties of such
Grantees position by reason of a medically determinable physical or mental impairment which is
potentially permanent in character or which can be expected to last for a continuous period of not
less than 12 months; provided, however, that, with respect to rules regarding expiration of an
Incentive Stock Option following termination of the Grantees Service, Disability shall mean the
Grantee is unable to engage in any substantial gainful activity by reason of a medically
determinable physical or mental impairment which can be expected to result in death or which has
lasted or can be expected to last for a continuous period of not less than 12 months.
2.14 Dividend Equivalent Right means a right, granted to a Grantee under Section 13 hereof,
to receive cash, Stock, other Awards or other property equal in value to dividends paid with
respect to a specified number of shares of Stock, or other periodic payments.
2.15 Effective Date means April 7, 2005, the date the Plan is approved by the Board.
2.16 Exchange Act means the Securities Exchange Act of 1934, as now in effect or as
hereafter amended.
2.17 Fair Market Value means the value of a share of Stock, determined as follows: if on
the Grant Date or other determination date the Stock is listed on an established national or
regional stock exchange, is admitted for quotation on The Nasdaq Stock Market, Inc. or is publicly
traded on an established securities market, the Fair Market Value of a share of Stock shall be the
closing price of the Stock on such exchange or in such market (if there is more than one such
exchange or market the Board shall determine the appropriate exchange or market) on the Grant Date
or such other determination date (or if there is no such reported closing price, the Fair Market
Value shall be the mean between the highest bid and lowest asked prices or between the high and low
sale prices on such trading day, as determined by the Board) or, if no sale of Stock is reported
for such trading day, on the next preceding day on which any sale shall have been reported. If the
Stock is not listed on such an exchange, quoted on
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such system or traded on such a market, Fair Market Value shall be the value of the Stock as
determined by the Board in good faith.
2.18 Family Member means a person who is a spouse, former spouse, child, stepchild,
grandchild, parent, stepparent, grandparent, niece, nephew, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother, sister, brother-in-law, or sister-in-law, including adoptive
relationships, of the Grantee, any person sharing the Grantees household (other than a tenant or
employee), a trust in which any one or more of these persons have more than fifty percent of the
beneficial interest, a foundation in which any one or more of these persons (or the Grantee)
control the management of assets, and any other entity in which one or more of these persons (or
the Grantee) own more than fifty percent of the voting interests.
2.19 Grant Date means, as determined by the Board, the latest to occur of (i) the date as of
which the Board approves an Award, (ii) the date on which the recipient of an Award first becomes
eligible to receive an Award under Section 6 hereof, or (iii) such other date as may be specified
by the Board.
2.20 Grantee means a person who receives or holds an Award under the Plan.
2.21 Incentive Stock Option means an incentive stock option within the meaning of Section
422 of the Code, or the corresponding provision of any subsequently enacted tax statute, as amended
from time to time.
2.22 IPO Date means the closing date of the first sale of Stock to the general public
pursuant to a registration statement filed with and declared effective by the Securities and
Exchange Commission under the Securities Act.
2.23 Non-qualified Stock Option means an Option that is not an Incentive Stock Option.
2.24 Option means an option to purchase one or more shares of Stock pursuant to the Plan.
2.25 Option Price means the exercise price for each share of Stock subject to an Option.
2.26 Option Proceeds means, with respect to an Option, the sum of (i) the Option Price paid
in cash, if any, to purchase shares of Stock under such Option, plus (ii) the value of all federal,
state, and local deductions to which the Company is entitled with respect to the exercise of such
Option determined using the highest Federal tax rate applicable to corporations and a blended tax
rate for state and local taxes based on the jurisdictions in which the Company does business and
giving effect to the deduction of state and local taxes for Federal tax purposes.
2.27 Other Agreement shall have the meaning set forth in Section 15 hereof.
2.28 Outside Director means a member of the Board who is not an officer or employee of the
Company.
2.29 Performance Award means an Award made subject to the attainment of performance goals
(as described in Section 14) over a performance period of up to ten (10) years.
2.30 Plan means this Western Alliance Bancorporation 2005 Stock Incentive Plan.
2.31 Purchase Price means the purchase price for each share of Stock pursuant to a grant of
Restricted Stock or Unrestricted Stock.
2.32 Reporting Person means a person who is required to file reports under Section 16(a) of
the Exchange Act.
2.33 Restricted Stock means shares of Stock, awarded to a Grantee pursuant to Section 10
hereof.
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2.34 SAR Exercise Price means the per share exercise price of an SAR granted to a Grantee
under Section 9 hereof.
2.35 Securities Act means the Securities Act of 1933, as now in effect or as hereafter
amended.
2.36 Service means service as a Service Provider to the Company or an Affiliate. Unless
otherwise stated in the applicable Award Agreement, a Grantees change in position or duties shall
not result in interrupted or terminated Service, so long as such Grantee continues to be a Service
Provider to the Company or an Affiliate. Subject to the preceding sentence, whether a termination
of Service shall have occurred for purposes of the Plan shall be determined by the Board, which
determination shall be final, binding and conclusive.
2.37 Service Provider means an employee, officer or director of the Company or an Affiliate,
or a consultant or adviser currently providing services to the Company or an Affiliate.
2.38 Stock means the common stock, par value $.0001 per share, of the Company.
2.39 Stock Appreciation Right or SAR means a right granted to a Grantee under Section 9
hereof. SARs may only be awarded under this Plan on and after the IPO Date, and during a period
that the Company remains publicly traded. Notwithstanding the preceding sentence, SARs awarded
under a Prior Plan on or before October 3, 2004 shall continue in effect under this Plan under the
term then in effect under the Award Agreement for the respective SAR.
2.40 Stock Unit means a bookkeeping entry representing the equivalent of shares of Stock
awarded to a Grantee pursuant to Section 10 hereof.
2.41 Subsidiary means any subsidiary corporation of the Company within the meaning of
Section 424(f) of the Code.
2.42 Termination Date means the date upon which an Option shall terminate or expire, as set
forth in Section 8.3 hereof.
2.43 Ten Percent Stockholder means an individual who owns more than ten percent (10%) of the
total combined voting power of all classes of outstanding stock of the Company, its parent or any
of its Subsidiaries. In determining stock ownership, the attribution rules of Section 424(d) of
the Code shall be applied.
2.44 Transition Period means the reliance period described in Treas. Reg. Section
1.162-27(f) or a successor provision.
2.45 Unrestricted Stock means an Award pursuant to Section 11 hereof.
3. ADMINISTRATION OF THE PLAN
3.1 Board.
The Board shall have such powers and authorities related to the administration of the Plan as
are consistent with the Companys articles of incorporation and by-laws and applicable law. The
Board shall have full power and authority to take all actions and to make all determinations
required or provided for under the Plan, any Award or any Award Agreement, and shall have full
power and authority to take all such other actions and make all such other determinations not
inconsistent with the specific terms and provisions of the Plan that the Board deems to be
necessary or appropriate for the administration of the Plan, any Award or any Award Agreement. All
such actions and determinations shall be by the affirmative vote of a majority of the members of
the Board present at a meeting or by unanimous consent of the Board executed in writing in
accordance with the Companys articles of incorporation and by-laws and applicable law. The
interpretation and construction by the Board of any provision of the Plan, any Award or any Award
Agreement shall be final, binding and conclusive.
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3.2 Committee.
The Board from time to time may delegate to the Committee such powers and authorities related
to the administration and implementation of the Plan, as set forth in Section 3.1 above and other
applicable provisions, as the Board shall determine, consistent with the articles of incorporation
and by-laws of the Company and applicable law.
(i) On and after the IPO Date, except as provided in subsection (ii) hereof and except
as the Board may otherwise determine, the Committee, if any, appointed by the Board to
administer the Plan shall consist of two or more Outside Directors of the Company who: (a)
following the Transition Period qualify as outside directors within the meaning of Section
162(m) of the Code, and (b) meet such other requirements as may be established from time to
time by the Securities and Exchange Commission for plans intended to qualify for exemption
under Rule 16b-3 (or its successor) under the Exchange Act, and (c) comply with the
independence requirements, if any, of the stock exchange on which the Stock is listed.
(ii) The Board may also appoint one or more separate committees of the Board, each
composed of one or more directors of the Company who need not be Outside Directors, who may
administer the Plan with respect to employees or other Service Providers who are not
officers or directors of the Company, may grant Awards under the Plan to such employees or
other Service Providers, and may determine all terms of such Awards.
In the event that the Plan, any Award or any Award Agreement entered into hereunder provides
for any action to be taken by or determination to be made by the Board, such action may be taken or
such determination may be made by the Committee if the power and authority to do so has been
delegated to the Committee by the Board as provided for in this Section. Unless otherwise
expressly determined by the Board, any such action or determination by the Committee shall be
final, binding and conclusive.
3.3
Terms of Awards.
Subject to the other terms and conditions of the Plan, the Board shall have full and final authority to:
(i) designate Grantees,
(ii) determine the type or types of Awards to be made to a Grantee,
(iii) determine the number of shares of Stock to be subject to an Award,
(iv) establish the terms and conditions of each Award (including, but not limited to,
the exercise price of any Option, the nature and duration of any restriction or condition
(or provision for lapse thereof) relating to the vesting, exercise, transfer, or forfeiture
of an Award or the shares of Stock subject thereto, and any terms or conditions that may be
necessary to qualify Options as Incentive Stock Options),
(v) prescribe the form of each Award Agreement evidencing an Award, and
(vi) amend, modify, or supplement the terms of any outstanding Award. Such authority
specifically includes the authority, in order to effectuate the purposes of the Plan but
without amending the Plan, to modify Awards to eligible individuals who are foreign
nationals or are individuals who are employed outside the United States to recognize
differences in local law, tax policy, or custom. Notwithstanding the foregoing, no
amendment, modification or supplement of any Award shall, without the consent of the
Grantee, impair the Grantees rights under such Award.
The Company may retain the right in an Award Agreement to cause a forfeiture of the gain
realized by a Grantee on account of actions taken by the Grantee in violation or breach of or in
conflict with any employment agreement, non-competition agreement, any agreement prohibiting
solicitation of employees or clients of the Company or any Affiliate thereof or any confidentiality
obligation with respect to the Company or any Affiliate thereof or otherwise in competition with
the Company or any Affiliate thereof, to the extent specified in such Award
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Agreement applicable to the Grantee. Furthermore, the Company may annul an Award if the
Grantee is an employee of the Company or an Affiliate thereof and is terminated for Cause as
defined in the applicable Award Agreement or the Plan, as applicable. The grant of any Award shall
be contingent upon the Grantee executing the appropriate Award Agreement.
3.4 Deferral Arrangement.
The Board may permit or require the deferral of any award payment into a deferred compensation
arrangement, subject to such rules and procedures as it may establish in writing that is intended
to satisfy Section 409A of the Code, which may include provisions for the payment or crediting of
interest or dividend equivalents, including converting such credits into deferred Stock equivalents
and restricting deferrals to comply with hardship distribution rules affecting 401(k) plans.
3.5 No Liability.
No member of the Board or of the Committee shall be liable for any action or determination
made in good faith with respect to the Plan or any Award or Award Agreement.
3.6 Book Entry.
Notwithstanding any other provision of this Plan to the contrary, the Company may elect to
satisfy any requirement under this Plan for the delivery of stock certificates through the use of
book-entry.
4. STOCK SUBJECT TO THE PLAN
Subject to adjustment as provided in Section 17 hereof, the number of shares of Stock
available for issuance under the Plan taking into account shares originally available under the
1997 Plans, the 2000 SAR Plan, the 2002 Plan and any Prior Plan shall be 4,500,000. Of the shares
of Stock so designated for issuance under the Plan, 2,248,550 shares represent Awards outstanding
as of the Effective Date. Stock issued or to be issued under the Plan shall be authorized but
unissued shares or, to the extent permitted by applicable law, issued shares that have been
reacquired by the Company. If any shares covered by an Award are not purchased or are forfeited,
or if an Award otherwise terminates without delivery of any Stock subject thereto, then the number
of shares of Stock counted against the aggregate number of shares available under the Plan with
respect to such Award shall, to the extent of any such forfeiture or termination, again be
available for making Awards under the Plan.
If the Option Price of any Option granted under the Plan, or if pursuant to Section 18.3 the
withholding obligation of any Grantee with respect to an Option or other Award, is satisfied by
tendering shares of Stock to the Company (by either actual delivery or by attestation) or by
withholding shares of Stock, the number of shares of Stock issued net of the shares of Stock
tendered or withheld shall be deemed delivered for purposes of determining the maximum number of
shares of Stock available for delivery under the Plan.
The Board shall have the right to substitute or assume Awards in connection with mergers,
reorganizations, separations, or other transactions to which Section 424(a) of the Code applies,
provided such substitutions and assumptions are permitted by Section 424 of the Code and the
regulations promulgated thereunder. The number of shares of Stock reserved pursuant to Section 4
may be increased by the corresponding number of Awards assumed and, in the case of a substitution,
by the net increase in the number of shares of Stock subject to Awards before and after the
substitution.
The number of shares of Stock reserved under this Section 4 shall be increased by the number
of any shares of Stock that are repurchased by the Company with Option Proceeds (as defined herein)
in respect of the exercise of an Option; provided, however, that the number of shares of Stock
contributed to number of shares of Stock reserved under this Section 4 in respect of the use of
Option Proceeds for repurchase shall not be greater than: (A) the amount of such Option Proceeds,
divided by (B) the Fair Market Value on the date of exercise of the applicable Option.
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5. EFFECTIVE DATE, DURATION AND AMENDMENTS
5.1 Effective Date.
The Plan shall be effective as of the Effective Date, subject to approval of the Plan by the
Companys stockholders within one year of the Effective Date. Upon approval of the Plan by the
stockholders of the Company as set forth above, all Awards made under the Plan on or after the
Effective Date shall be fully effective as if the stockholders of the Company had approved the Plan
on the Effective Date. If the stockholders fail to approve the Plan within one year after the
Effective Date, any Awards made hereunder relating to the period on or after the Effective Date
shall be null and void and of no effect.
5.2 Term.
The Plan shall terminate automatically ten (10) years after its adoption by the Board and may
be terminated on any earlier date as provided in Section 5.3.
5.3 Amendment and Termination of the Plan.
The Board may, at any time and from time to time, amend, suspend, or terminate the Plan as to
any shares of Stock as to which Awards have not been made. An amendment shall be contingent on
approval of the Companys stockholders to the extent stated by the Board, required by applicable
law or required by applicable stock exchange listing requirements. No Awards shall be made after
termination of the Plan. No amendment, suspension, or termination of the Plan shall, without the
consent of the Grantee, impair rights or obligations under any Award theretofore awarded under the
Plan.
6. AWARD ELIGIBILITY AND LIMITATIONS
6.1 Service Providers and Other Persons.
Subject to this Section 6, Awards may be made under the Plan to: (i) any Service Provider to
the Company or of any Affiliate, including any Service Provider who is an officer or director of
the Company, or of any Affiliate, as the Board shall determine and designate from time to time,
(ii) any Outside Director, and (iii) any other individual whose participation in the Plan is
determined to be in the best interests of the Company by the Board.
6.2 Successive Awards.
An eligible person may receive more than one Award, subject to such restrictions as are provided herein.
6.3 Limitation on Shares of Stock Subject to Awards and Cash Awards.
During any time when the Company has a class of equity securities registered under Section 12
of the Exchange Act, but only after the Transition Period has expired:
(i) the maximum number of shares of Stock subject to Options or SARs that can be
awarded under the Plan to any person eligible for an Award under Section 6 hereof is one
hundred fifty thousand (150,000) per calendar year;
(ii) the maximum number of shares of Stock that can be awarded under the Plan, other
than pursuant to an Option or SARs, to any person eligible for an Award under Section 6
hereof is one hundred fifty thousand (150,000) per calendar year; and
(iii) the maximum amount that may be earned as an Annual Incentive Award or other cash
Award in any calendar year by any one Grantee shall be $5,000,000 and the maximum amount
that may be earned as a Performance Award or other cash Award in respect of a performance
period by any one Grantee shall be $15,000,000.
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The preceding limitations in this Section 6.3, subsections (i) and (ii), are subject to
adjustment as provided in Section 17 hereof.
6.4 Substitute or Exchange Awards.
Awards granted under the Plan may, in the discretion of the Board, be granted in substitution
or exchange for, any other Award or any award granted under another plan of the Company, any
Affiliate, or any business entity to be acquired by the Company or an Affiliate, or any other right
of a Grantee to receive payment from the Company or any Affiliate. Such substitute or exchange
Awards may be granted at any time. If an Award is granted in substitution or exchange for another
award, the Board shall require the surrender of such other Award in consideration for the grant of
the new Award. Notwithstanding anything in Section 8.1 or 9.1 below to the contrary, any Awards
granted under this Section 6.4 that are in substitution or exchange for, any other Award or any
award granted under another plan of the Company, any Affiliate, or any business entity to be
acquired by the Company or an Affiliate may be granted at an Option Price or grant price, as the
case may be, as the Board of the Committee may reasonably determine even if such price is less than
Fair Market Value of the Stock.
7. AWARD AGREEMENT
Each Award granted pursuant to the Plan shall be evidenced by an Award Agreement, in such form
or forms as the Board shall from time to time determine. Award Agreements granted from time to
time or at the same time need not contain similar provisions but shall be consistent with the terms
of the Plan. Each Award Agreement evidencing an Award of Options shall specify whether such
Options are intended to be Non-qualified Stock Options or Incentive Stock Options, and in the
absence of such specification such options shall be deemed Non-qualified Stock Options.
8. TERMS AND CONDITIONS OF OPTIONS
8.1 Option Price.
The Option Price of each Option shall be fixed by the Board and stated in the Award Agreement
evidencing such Option. The Option Price of each Option shall be at least the Fair Market Value on
the Grant Date of a share of Stock; provided, however, that in the event that a
Grantee is a Ten Percent Stockholder, the Option Price of an Option granted to such Grantee that is
intended to be an Incentive Stock Option shall be not less than 110 percent of the Fair Market
Value of a share of Stock on the Grant Date. In no case shall the Option Price of any Option be
less than the par value of a share of Stock.
8.2 Vesting.
Subject to Sections 8.3 and 17.3 hereof, each Option granted under the Plan shall become
exercisable at such times and under such conditions as shall be determined by the Board and stated
in the Award Agreement. For purposes of this Section 8.2, fractional numbers of shares of Stock
subject to an Option shall be rounded down to the next nearest whole number. No Option shall be
exercisable in whole or in part prior to the date the Plan is approved by the Stockholders of the
Company as provided in Section 5.1 hereof.
8.3 Term.
Each Option granted under the Plan shall terminate, and all rights to purchase shares of Stock
thereunder shall cease, upon the expiration of ten years from the date such Option is granted, or
under such circumstances and on such date prior thereto as is set forth in the Plan or as may be
fixed by the Board and stated in the Award Agreement relating to such Option (the Termination
Date); provided, however, that in the event that the Grantee is a Ten Percent
Stockholder, an Option granted to such Grantee that is intended to be an Incentive Stock Option
shall not be exercisable after the expiration of five years from its Grant Date.
8.4 Termination of Service.
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Each Award Agreement shall set forth the extent to which the Grantee shall have the right to
exercise the Option following termination of the Grantees Service. Such provisions shall be
determined in the sole discretion of the Board, need not be uniform among all Options issued
pursuant to the Plan, and may reflect distinctions based on the reasons for termination of Service.
8.5 Limitations on Exercise of Option.
Notwithstanding any other provision of the Plan to the contrary, in no event may any Option be
exercised, in whole or in part, prior to the date the Plan is approved by the stockholders of the
Company as provided herein or after the occurrence of an event referred to in Section 17 hereof
which results in termination of the Option.
8.6 Method of Exercise.
An Option that is exercisable may be exercised by the Grantees delivery to the Company of
written notice of exercise on any business day, at the Companys principal office, on the form
specified by the Company. Such notice shall specify the number of whole shares of Stock with
respect to which the Option is being exercised and shall be accompanied by payment in full of the
Option Price of the shares for which the Option is being exercised plus the amount (if any) of
federal and/or other taxes which the Company may, in its judgment, be required to withhold with
respect to an Award. The minimum number of shares of Stock with respect to which an Option may be
exercised, in whole or in part, at any time shall be the lesser of (i) 100 shares or such lesser
number as is set forth in the applicable Award Agreement and (ii) the maximum number of shares
available for purchase under the Option at the time of exercise.
8.7 Rights of Holders of Options.
Unless otherwise stated in the applicable Award Agreement, an individual holding or exercising
an Option shall have none of the rights of a stockholder (for example, the right to receive cash or
dividend payments or distributions attributable to the subject shares of Stock or to direct the
voting of the subject shares of Stock) until the shares of Stock covered thereby are fully paid and
issued to him. Except as provided in Section 17 hereof, no adjustment shall be made for dividends,
distributions or other rights for which the record date is prior to the date of such issuance.
8.8 Delivery of Stock Certificates.
Promptly after the exercise of an Option by a Grantee and the payment in full of the Option
Price, such Grantee shall be entitled to the issuance of a stock certificate or certificates
evidencing his or her ownership of the shares of Stock subject to the Option.
8.9 Transferability of Options.
Except as provided in Section 8.10, during the lifetime of a Grantee, only the Grantee (or, in
the event of legal incapacity or incompetency, the Grantees guardian or legal representative) may
exercise an Option. Except as provided in Section 8.10, no Option shall be assignable or
transferable by the Grantee to whom it is granted, other than by will or the laws of descent and
distribution or pursuant to a domestic relations order as referred to in the Code or Title I of the
Employment Retirement Income Security Act or the rules thereunder.
8.10 Family Transfers.
If authorized in the applicable Award Agreement, a Grantee may transfer, not for value, all or
part of an Option which is not an Incentive Stock Option to any Family Member. For the purpose of
this Section 8.10, a not for value transfer is a transfer which is (i) a gift; (ii) a transfer
under a domestic relations order in settlement of marital property rights; or (iii) a transfer to
an entity in which more than fifty percent of the voting interests are owned by Family Members (or
the Grantee) in exchange for an interest in that entity. Following a transfer under this Section
8.10, any such Option shall continue to be subject to the same terms and conditions as were
applicable immediately prior to transfer. Subsequent transfers of transferred Options are
prohibited except to Family Members
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of the original Grantee in accordance with this Section 8.10 or by will or the laws of descent
and distribution. The events of termination of Service of Section 8.4 hereof shall continue to be
applied with respect to the original Grantee, following which the Option shall be exercisable by
the transferee only to the extent, and for the periods specified, in Section 8.4.
8.11 Limitations on Incentive Stock Options.
An Option shall constitute an Incentive Stock Option only (i) if the Grantee of such Option is
an employee of the Company or any Subsidiary of the Company; (ii) to the extent specifically
provided in the related Award Agreement; and (iii) to the extent that the aggregate Fair Market
Value (determined at the time the Option is granted) of the shares of Stock with respect to which
all Incentive Stock Options held by such Grantee become exercisable for the first time during any
calendar year (under the Plan and all other plans of the Grantees employer and its Affiliates)
does not exceed $100,000. This limitation shall be applied by taking Options into account in the
order in which they were granted.
9. TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS
9.1 Right to Payment.
An SAR shall confer on the Grantee to whom it is granted a right to receive, upon exercise
thereof, the excess of (A) the Fair Market Value of one share of Stock on the date of exercise over
(B) the grant price of the SAR as determined by the Board. The Award Agreement for an SAR shall
specify the grant price of the SAR, which shall be no less than the Fair Market Value of a share of
Stock on the date of grant. SARs may be granted in conjunction with all or part of an Option
granted under the Plan or at any subsequent time during the term of such Option, in conjunction
with all or part of any other Award or without regard to any Option or other Award. All SARs
granted under the Plan shall have such terms and conditions as are necessary to avoid the
imposition of the 20% excise tax under Code Section 409A.
9.2 Other Terms.
The Board shall determine at the date of grant or thereafter, the time or times at which and
the circumstances under which a SAR may be exercised in whole or in part (including based on
achievement of performance goals and/or future service requirements), the time or times at which
SARs shall cease to be or become exercisable following termination of Service or upon other
conditions, the method of exercise, method of settlement, form of consideration payable in
settlement, method by or forms in which Stock will be delivered or deemed to be delivered to
Grantees, whether or not a SAR shall be in tandem or in combination with any other Award, and any
other terms and conditions of any SAR.
10. TERMS AND CONDITIONS OF RESTRICTED STOCK AND STOCK UNITS
10.1 Grant of Restricted Stock or Stock Units.
Awards of Restricted Stock or Stock Units may be made for no consideration (other than par
value of the shares which is deemed paid by Services already rendered).
10.2 Restrictions.
At the time a grant of Restricted Stock or Stock Units is made, the Board may, in its sole
discretion, establish a period of time (a restricted period) applicable to such Restricted Stock
or Stock Units. Each Award of Restricted Stock or Stock Units may be subject to a different
restricted period. The Board may, in its sole discretion, at the time a grant of Restricted Stock
or Stock Units is made, prescribe restrictions in addition to or other than the expiration of the
restricted period, including the satisfaction of corporate or individual performance objectives,
which may be applicable to all or any portion of the Restricted Stock or Stock Units in accordance
with Section 14.1 and 14.2. Neither Restricted Stock nor Stock Units may be sold, transferred,
assigned, pledged or otherwise encumbered or disposed of
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during the restricted period or prior to the satisfaction of any other restrictions prescribed
by the Board with respect to such Restricted Stock or Stock Units.
10.3 Restricted Stock Certificates.
The Company shall issue, in the name of each Grantee to whom Restricted Stock has been
granted, stock certificates representing the total number of shares of Restricted Stock granted to
the Grantee, as soon as reasonably practicable after the Grant Date. The Board may provide in an
Award Agreement that either (i) the Secretary of the Company shall hold such certificates for the
Grantees benefit until such time as the Restricted Stock is forfeited to the Company or the
restrictions lapse, or (ii) such certificates shall be delivered to the Grantee, provided,
however, that such certificates shall bear a legend (or legends) that complies with the
applicable securities laws and regulations and makes appropriate reference to the restrictions
imposed under the Plan and the Award Agreement.
10.4 Rights of Holders of Restricted Stock.
Unless the Board otherwise provides in an Award Agreement, holders of Restricted Stock shall
have the right to vote such Stock and the right to receive any dividends declared or paid with
respect to such Stock. The Board may provide that any dividends paid on Restricted Stock must be
reinvested in shares of Stock, which may or may not be subject to the same vesting conditions and
restrictions applicable to such Restricted Stock. All distributions, if any, received by a Grantee
with respect to Restricted Stock as a result of any stock split, stock dividend, combination of
shares, or other similar transaction shall be subject to the restrictions applicable to the
original Grant.
10.5 Rights of Holders of Stock Units.
10.5.1. Voting and Dividend Rights.
Holders of Stock Units shall have no right to vote any Stock promised upon settlement of the
Stock Unit or to vote the Stock Unit. The Board may provide in an Award Agreement evidencing a
grant of Stock Units that the holder of such Stock Units shall be entitled to receive, upon the
Companys payment of a cash dividend on its outstanding Stock, a cash payment for each Stock Unit
held equal to the per-share dividend paid on the Stock. Such Award Agreement may also provide that
such cash payment will be deemed reinvested in additional Stock Units at a price per unit equal to
the Fair Market Value of a share of Stock on the date that such dividend is paid.
10.5.2 Creditors Rights.
A holder of Stock Units shall have no rights other than those of a general creditor of the
Company. Stock Units represent an unfunded and unsecured obligation of the Company, subject to the
terms and conditions of the applicable Award Agreement.
10.6 Termination of Service.
Unless the Board otherwise provides in an Award Agreement or in writing after the Award
Agreement is issued, upon the termination of a Grantees Service, any Restricted Stock or Stock
Units held by such Grantee that have not vested, or with respect to which all applicable
restrictions and conditions have not lapsed, shall immediately be deemed forfeited. Upon
forfeiture of Restricted Stock or Stock Units, the Grantee shall have no further rights with
respect to such Award, including but not limited to any right to vote Restricted Stock or any right
to receive dividends with respect to shares of Restricted Stock or Stock Units.
10.7 Purchase of Restricted Stock.
The Grantee shall be required, to the extent required by applicable law, to purchase the
Restricted Stock from the Company at a Purchase Price equal to the greater of (i) the aggregate par
value of the shares of Stock represented by such Restricted Stock or (ii) the Purchase Price, if
any, specified in the Award Agreement relating to such Restricted Stock. The Purchase Price shall
be payable in a form described in Section 12 or, in the discretion of the Board, in consideration
for past Services rendered to the Company or an Affiliate.
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10.8 Delivery of Stock.
Upon the expiration or termination of any restricted period and the satisfaction of any other
conditions prescribed by the Board, the restrictions applicable to shares of Restricted Stock or
Stock Units settled in Stock shall lapse, and, unless otherwise provided in the Award Agreement, a
stock certificate for such shares shall be delivered, free of all such restrictions, to the Grantee
or the Grantees beneficiary or estate, as the case may be.
11. TERMS AND CONDITIONS OF UNRESTRICTED STOCK AWARDS
The Board may, in its sole discretion, grant (or sell at par value or such other higher
purchase price determined by the Board) an Unrestricted Stock Award to any Grantee pursuant to
which such Grantee may receive shares of Stock free of any restrictions (Unrestricted Stock)
under the Plan. Unrestricted Stock Awards may be granted or sold as described in the preceding
sentence in respect of past services and other valid consideration, or in lieu of, or in addition
to, any cash compensation due to such Grantee.
12. FORM OF PAYMENT FOR OPTIONS AND RESTRICTED STOCK
12.1 General Rule.
Payment of the Option Price for the shares purchased pursuant to the exercise of an Option or
the Purchase Price for Restricted Stock shall be made in cash or in cash equivalents acceptable to
the Company.
12.2 Surrender of Stock.
To the extent the Award Agreement so provides, payment of the Option Price for shares
purchased pursuant to the exercise of an Option or the Purchase Price for Restricted Stock may be
made all or in part through the tender to the Company of shares of Stock, which shares, if acquired
from the Company and if so required by the Company, shall have been held for at least six months at
the time of tender and which shall be valued, for purposes of determining the extent to which the
Option Price or Purchase Price has been paid thereby, at their Fair Market Value on the date of
exercise or surrender.
12.3 Cashless Exercise.
With respect to an Option only (and not with respect to Restricted Stock) for any period that
the Company is publicly traded, to the extent permitted by law and to the extent the Award
Agreement so provides, payment of the Option Price for shares purchased pursuant to the exercise of
an Option may be made all or in part by delivery (on a form acceptable to the Board) of an
irrevocable direction to a licensed securities broker acceptable to the Company to sell shares of
Stock and to deliver all or part of the sales proceeds to the Company in payment of the Option
Price and any withholding taxes described in Section 18.3.
12.4 Other Forms of Payment.
To the extent the Award Agreement so provides, payment of the Option Price for shares
purchased pursuant to exercise of an Option or the Purchase Price for Restricted Stock may be made
in any other form that is consistent with applicable laws, regulations and rules.
13. TERMS AND CONDITIONS OF DIVIDEND EQUIVALENT RIGHTS
13.1 Dividend Equivalent Rights.
A Dividend Equivalent Right is an Award entitling the recipient to receive credits based on
cash distributions that would have been paid on the shares of Stock specified in the Dividend
Equivalent Right (or other award to which it relates) if such shares had been issued to and held by
the recipient. A Dividend Equivalent Right may be granted hereunder to any Grantee as a component
of another Award or as a freestanding award. The terms and conditions of Dividend Equivalent
Rights shall be specified in the grant. Dividend equivalents credited to the
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holder of a Dividend Equivalent Right may be paid currently or may be deemed to be reinvested in
additional shares of Stock, which may thereafter accrue additional equivalents. Any such
reinvestment shall be at Fair Market Value on the date of reinvestment. Dividend Equivalent Rights
may be settled in cash or Stock or a combination thereof, in a single installment or installments,
all determined in the sole discretion of the Board. A Dividend Equivalent Right granted as a
component of another Award may provide that such Dividend Equivalent Right shall be settled upon
exercise, settlement, or payment of, or lapse of restrictions on, such other award, and that such
Dividend Equivalent Right shall expire or be forfeited or annulled under the same conditions as
such other award. A Dividend Equivalent Right granted as a component of another Award may also
contain terms and conditions different from such other award.
13.2 Termination of Service.
Except as may otherwise be provided by the Board either in the Award Agreement or in
writing after the Award Agreement is issued, a Grantees rights in all Dividend Equivalent Rights
or interest equivalents shall automatically terminate upon the Grantees termination of Service for
any reason.
14. TERMS AND CONDITIONS OF PERFORMANCE AND ANNUAL INCENTIVE AWARDS
14.1 Performance Conditions.
The right of a Grantee to exercise or receive a grant or settlement of any Award, and the
timing thereof, may be subject to such performance conditions as may be specified by the Board.
The Board may use such business criteria and other measures of performance as it may deem
appropriate in establishing any performance conditions, and may exercise its discretion to reduce
the amounts payable under any Award subject to performance conditions, except as limited under
Sections 14.2 hereof in the case of a Performance Award or Annual Incentive Award intended to
qualify under Code Section 162(m). If and to the extent required under Code Section 162(m), any
power or authority relating to a Performance Award or Annual Incentive Award intended to qualify
under Code Section 162(m), shall be exercised by the Committee and not the Board.
14.2 Performance or Annual Incentive Awards Granted to Designated Covered Employees.
If and to the extent that the Committee determines that a Performance or Annual Incentive
Award to be granted to a Grantee who is designated by the Committee as likely to be a Covered
Employee should qualify as performance-based compensation for purposes of Code Section 162(m),
the grant, exercise and/or settlement of such Performance or Annual Incentive Award shall be
contingent upon achievement of pre-established performance goals and other terms set forth in this
Section 14.2.
14.2.1 Performance Goals Generally.
The performance goals for such Performance or Annual Incentive Awards shall consist of one or
more business criteria and a targeted level or levels of performance with respect to each of such
criteria, as specified by the Committee consistent with this Section 14.2. Performance goals shall
be objective and shall otherwise meet the requirements of Code Section 162(m) and regulations
thereunder including the requirement that the level or levels of performance targeted by the
Committee result in the achievement of performance goals being substantially uncertain. The
Committee may determine that such Performance or Annual Incentive Awards shall be granted,
exercised and/or settled upon achievement of any one performance goal or that two or more of the
performance goals must be achieved as a condition to grant, exercise and/or settlement of such
Performance or Annual Incentive Awards. Performance goals may differ for Performance or Annual
Incentive Awards granted to any one Grantee or to different Grantees.
14.2.2 Business Criteria.
One or more of the following business criteria for the Company, on a consolidated basis,
and/or specified subsidiaries or business units of the Company (except with respect to the total
stockholder return and earnings per share criteria), shall be used exclusively by the Committee in
establishing performance goals for such Performance
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or Annual Incentive Awards: (1) total stockholder return; (2) total stockholder return as compared
to total return (on a comparable basis) of a publicly available index such as, but not limited to,
the Standard & Poors 500 Stock Index; (3) net income; (4) pretax earnings; (5) earnings before
interest expense, taxes, depreciation and amortization; (6) pretax operating earnings after
interest expense and before bonuses, service fees, and extraordinary or special items; (7)
operating margin; (8) earnings per share; (9) return on equity; (10) return on capital; (11) return
on investment; (12) operating earnings; (13) working capital; (14) ratio of debt to stockholders
equity; and (15) revenue. Business criteria may be measured on an absolute basis or on a relative
basis (i.e., performance relative to peer companies) and on a GAAP or non-GAAP basis.
14.2.3 Timing For Establishing Performance Goals.
Performance goals shall be established not later than 90 days after the beginning of any
performance period applicable to such Performance or Annual Incentive Awards, or at such other date
as may be required or permitted for performance-based compensation under Code Section 162(m).
14.2.4 Settlement of Performance or Annual Incentive Awards; Other Terms.
Settlement of such Performance or Annual Incentive Awards shall be in cash, Stock, other
Awards or other property, in the discretion of the Committee. The Committee may, in its
discretion, reduce the amount of a settlement otherwise to be made in connection with such
Performance or Annual Incentive Awards. The Committee shall specify the circumstances in which
such Performance or Annual Incentive Awards shall be paid or forfeited in the event of termination
of Service by the Grantee prior to the end of a performance period or settlement of Performance
Awards.
14.3 Written Determinations.
All determinations by the Committee as to the establishment of performance goals, the amount
of any Performance Award pool or potential individual Performance Awards and as to the achievement
of performance goals relating to Performance Awards, and the amount of any Annual Incentive Award
pool or potential individual Annual Incentive Awards and the amount of final Annual Incentive
Awards, shall be made in writing in the case of any Award intended to qualify under Code Section
162(m). To the extent required to comply with Code Section 162(m), the Committee may delegate any
responsibility relating to such Performance Awards or Annual Incentive Awards.
14.4 Status of Section 14.2 Awards Under Code Section 162(m).
It is the intent of the Company that Performance Awards and Annual Incentive Awards under
Section 14.2 hereof granted to persons who are designated by the Committee as likely to be Covered
Employees within the meaning of Code Section 162(m) and regulations thereunder shall, if so
designated by the Committee, constitute qualified performance-based compensation within the
meaning of Code Section 162(m) and regulations thereunder. Accordingly, the terms of Section 14.2,
including the definitions of Covered Employee and other terms used therein, shall be interpreted in
a manner consistent with Code Section 162(m) and regulations thereunder. The foregoing
notwithstanding, because the Committee cannot determine with certainty whether a given Grantee will
be a Covered Employee with respect to a fiscal year that has not yet been completed, the term
Covered Employee as used herein shall mean only a person designated by the Committee, at the time
of grant of Performance Awards or an Annual Incentive Award, as likely to be a Covered Employee
with respect to that fiscal year. If any provision of the Plan or any agreement relating to such
Performance Awards or Annual Incentive Awards does not comply or is inconsistent with the
requirements of Code Section 162(m) or regulations thereunder, such provision shall be construed or
deemed amended to the extent necessary to conform to such requirements.
15. PARACHUTE LIMITATIONS
Notwithstanding any other provision of this Plan or of any other agreement, contract, or
understanding heretofore or hereafter entered into by a Grantee with the Company or any Affiliate,
except an agreement, contract, or understanding hereafter entered into that expressly modifies or
excludes application of this paragraph (an Other Agreement), and notwithstanding any formal or
informal plan or other arrangement for the direct or indirect provision
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of compensation to the Grantee (including groups or classes of Grantees or beneficiaries of which
the Grantee is a member), whether or not such compensation is deferred, is in cash, or is in the
form of a benefit to or for the Grantee (a Benefit Arrangement), if the Grantee is a
disqualified individual, as defined in Section 280G(c) of the Code, any Option, Restricted Stock
or Stock Unit held by that Grantee and any right to receive any payment or other benefit under this
Plan shall not become exercisable or vested (i) to the extent that such right to exercise, vesting,
payment, or benefit, taking into account all other rights, payments, or benefits to or for the
Grantee under this Plan, all Other Agreements, and all Benefit Arrangements, would cause any
payment or benefit to the Grantee under this Plan to be considered a parachute payment within the
meaning of Section 280G(b)(2) of the Code as then in effect (a Parachute Payment) and
(ii) if, as a result of receiving a Parachute Payment, the aggregate after-tax amounts received by
the Grantee from the Company under this Plan, all Other Agreements, and all Benefit Arrangements
would be less than the maximum after-tax amount that could be received by the Grantee without
causing any such payment or benefit to be considered a Parachute Payment. In the event that the
receipt of any such right to exercise, vesting, payment, or benefit under this Plan, in conjunction
with all other rights, payments, or benefits to or for the Grantee under any Other Agreement or any
Benefit Arrangement would cause the Grantee to be considered to have received a Parachute Payment
under this Plan that would have the effect of decreasing the after-tax amount received by the
Grantee as described in clause (ii) of the preceding sentence, then the Grantee shall have the
right, in the Grantees sole discretion, to designate those rights, payments, or benefits under
this Plan, any Other Agreements, and any Benefit Arrangements that should be reduced or eliminated
so as to avoid having the payment or benefit to the Grantee under this Plan be deemed to be a
Parachute Payment.
16. REQUIREMENTS OF LAW
16.1 General.
The Company shall not be required to sell or issue any shares of Stock under any Award if the
sale or issuance of such shares would constitute a violation by the Grantee, any other individual
exercising an Option, or the Company of any provision of any law or regulation of any governmental
authority, including without limitation any federal or state securities laws or regulations. If at
any time the Company shall determine, in its discretion, that the listing, registration or
qualification of any shares subject to an Award upon any securities exchange or under any
governmental regulatory body is necessary or desirable as a condition of, or in connection with,
the issuance or purchase of shares hereunder, no shares of Stock may be issued or sold to the
Grantee or any other individual exercising an Option pursuant to such Award unless such listing,
registration, qualification, consent or approval shall have been effected or obtained free of any
conditions not acceptable to the Company, and any delay caused thereby shall in no way affect the
date of termination of the Award. Specifically, in connection with the Securities Act, upon the
exercise of any Option or the delivery of any shares of Stock underlying an Award, unless a
registration statement under such Act is in effect with respect to the shares of Stock covered by
such Award, the Company shall not be required to sell or issue such shares unless the Board has
received evidence satisfactory to it that the Grantee or any other individual exercising an Option
may acquire such shares pursuant to an exemption from registration under the Securities Act. Any
determination in this connection by the Board shall be final, binding, and conclusive. The Company
may, but shall in no event be obligated to, register any securities covered hereby pursuant to the
Securities Act. The Company shall not be obligated to take any affirmative action in order to
cause the exercise of an Option or the issuance of shares of Stock pursuant to the Plan to comply
with any law or regulation of any governmental authority. As to any jurisdiction that expressly
imposes the requirement that an Option shall not be exercisable until the shares of Stock covered
by such Option are registered or are exempt from registration, the exercise of such Option (under
circumstances in which the laws of such jurisdiction apply) shall be deemed conditioned upon the
effectiveness of such registration or the availability of such an exemption.
16.2 Rule 16b-3.
During any time when the Company has a class of equity security registered under Section 12 of
the Exchange Act, it is the intent of the Company that Awards pursuant to the Plan and the exercise
of Options granted hereunder will qualify for the exemption provided by Rule 16b-3 under the
Exchange Act. To the extent that any provision of the Plan or action by the Board does not comply
with the requirements of Rule 16b-3, it shall be deemed inoperative to the extent permitted by law
and deemed advisable by the Board, and shall not affect the validity of the Plan. In the event
that Rule 16b-3 is revised or replaced, the Board may exercise its discretion to modify this Plan
in any respect
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necessary to satisfy the requirements of, or to take advantage of any features of, the revised
exemption or its replacement.
17. EFFECT OF CHANGES IN CAPITALIZATION
17.1 Changes in Stock.
If the number of outstanding shares of Stock is increased or decreased or the shares of Stock
are changed into or exchanged for a different number or kind of shares or other securities of the
Company on account of any recapitalization, reclassification, stock split, reverse split,
combination of shares, exchange of shares, stock dividend or other distribution payable in capital
stock, or other increase or decrease in such shares effected without receipt of consideration by
the Company occurring after the Effective Date, the number and kinds of shares for which grants of
Options and other Awards may be made under the Plan shall be adjusted proportionately and
accordingly by the Company. In addition, the number and kind of shares for which Awards are
outstanding shall be adjusted proportionately and accordingly so that the proportionate interest of
the Grantee immediately following such event shall, to the extent practicable, be the same as
immediately before such event. Any such adjustment in outstanding Options or SARs shall not change
the aggregate Option Price or SAR Exercise Price payable with respect to shares that are subject to
the unexercised portion of an outstanding Option or SAR, as applicable, but shall include a
corresponding proportionate adjustment in the Option Price or SAR Exercise Price per share. The
conversion of any convertible securities of the Company shall not be treated as an increase in
shares effected without receipt of consideration. Furthermore, in the event of any distribution to
the Companys stockholders of securities of any other entity or other assets (including an
extraordinary cash dividend but excluding a non-extraordinary dividend payable in cash or in stock
of the Company) without receipt of consideration by the Company, the Company may, in such manner as
the Company deems appropriate, adjust (i) the number and kind of shares for which grants of Option
and other Awards may be made under the Plan, (ii) the number and kind of shares subject to
outstanding Awards, and/or (iii) the exercise price of outstanding Options and Stock Appreciation
Rights to reflect such distribution.
17.2 Reorganization in Which the Company Is the Surviving Entity Which does not
Constitute a Corporate Transaction.
Subject to Section 17.3 hereof, if the Company shall be the surviving entity in any
reorganization, merger, or consolidation of the Company with one or more other entities which does
not constitute a Corporate Transaction, any Option or SAR theretofore granted pursuant to the Plan
shall pertain to and apply to the securities to which a holder of the number of shares of Stock
subject to such Option or SAR would have been entitled immediately following such reorganization,
merger, or consolidation, with a corresponding proportionate adjustment of the Option Price or SAR
Exercise Price per share so that the aggregate Option Price or SAR Exercise Price thereafter shall
be the same as the aggregate Option Price or SAR Exercise Price of the shares remaining subject to
the Option or SAR immediately prior to such reorganization, merger, or consolidation. Subject to
any contrary language in an Award Agreement evidencing an Award, any restrictions applicable to
such Award shall apply as well to any replacement shares received by the Grantee as a result of the
reorganization, merger or consolidation. In the event of a transaction described in this Section
17.2, Stock Units shall be adjusted so as to apply to the securities that a holder of the number of
shares of Stock subject to the Stock Units would have been entitled to receive immediately
following such transaction.
17.3 Corporate Transaction.
Subject to the exceptions set forth in the last sentence of this Section 17.3 and the last
sentence of Section 17.4:
(i) upon the occurrence of a Corporate Transaction, all outstanding shares of
Restricted Stock shall be deemed to have vested, and all Stock Units shall be deemed to have
vested and the shares of Stock subject thereto shall be delivered, immediately prior to the
occurrence of such Corporate Transaction, and
(ii) either of the following two actions shall be taken:
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(A) fifteen days prior to the scheduled consummation of a Corporate Transaction, all
Options and SARs outstanding hereunder shall become immediately exercisable and shall remain
exercisable for a period of fifteen days, or
(B) the Board may elect, in its sole discretion, to cancel any outstanding Awards of
Options, Restricted Stock, Stock Units, and/or SARs and pay or deliver, or cause to be paid
or delivered, to the holder thereof an amount in cash or securities having a value (as
determined by the Board acting in good faith), in the case of Restricted Stock or Stock
Units, equal to the formula or fixed price per share paid to holders of shares of Stock and,
in the case of Options or SARs, equal to the product of the number of shares of Stock
subject to the Option or SAR (the Award Shares) multiplied by the amount, if any, by which
(I) the formula or fixed price per share paid to holders of shares of Stock pursuant to such
transaction exceeds (II) the Option Price or SAR Exercise Price applicable to such Award
Shares.
With respect to the Companys establishment of an exercise window, (i) any exercise of an
Option or SAR during such fifteen-day period shall be conditioned upon the consummation of the
event and shall be effective only immediately before the consummation of the event, and (ii) upon
consummation of any Corporate Transaction the Plan, and all outstanding but unexercised Options and
SARs shall terminate. The Board shall send written notice of an event that will result in such a
termination to all individuals who hold Options and SARs not later than the time at which the
Company gives notice thereof to its stockholders. This Section 17.3 shall not apply to any
Corporate Transaction to the extent that provision is made in writing in connection with such
Corporate Transaction for the assumption or continuation of the Options, SARs, Stock Units and
Restricted Stock theretofore granted, or for the substitution for such Options, SARs, Stock Units
and Restricted Stock for new common stock options and stock appreciation rights and new common
stock stock units and restricted stock relating to the stock of a successor entity, or a parent or
subsidiary thereof, with appropriate adjustments as to the number of shares (disregarding any
consideration that is not common stock) and option and stock appreciation right exercise prices, in
which event the Plan, Options, SARs, Stock Units and Restricted Stock theretofore granted shall
continue in the manner and under the terms so provided.
17.4 Adjustments.
Adjustments under this Section 17 related to shares of Stock or securities of the Company
shall be made by the Board, whose determination in that respect shall be final, binding and
conclusive. No fractional shares or other securities shall be issued pursuant to any such
adjustment, and any fractions resulting from any such adjustment shall be eliminated in each case
by rounding downward to the nearest whole share. The Board shall determine the effect of a
Corporate Transaction upon Awards other than Options, SARs, Stock Units and Restricted Stock, and
such effect shall be set forth in the appropriate Award Agreement. The Board may provide in the
Award Agreements at the time of grant, or any time thereafter with the consent of the Grantee, for
different provisions to apply to an Award in place of those described in Sections 17.1, 17.2 and
17.3.
17.5 No Limitations on Company.
The making of Awards pursuant to the Plan shall not affect or limit in any way the right or
power of the Company to make adjustments, reclassifications, reorganizations, or changes of its
capital or business structure or to merge, consolidate, dissolve, or liquidate, or to sell or
transfer all or any part of its business or assets.
18. GENERAL PROVISIONS
18.1 Disclaimer of Rights.
No provision in the Plan or in any Award or Award Agreement shall be construed to confer upon
any individual the right to remain in the employ or service of the Company or any Affiliate, or to
interfere in any way with any contractual or other right or authority of the Company either to
increase or decrease the compensation or other payments to any individual at any time, or to
terminate any employment or other relationship between any individual and the Company. In
addition, notwithstanding anything contained in the Plan to the contrary, unless otherwise stated
in the applicable Award Agreement, no Award granted under the Plan shall be affected by any change
of duties or position of the Grantee, so long as such Grantee continues to be a Service Provider.
The
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obligation of the Company to pay any benefits pursuant to this Plan shall be interpreted as a
contractual obligation to pay only those amounts described herein, in the manner and under the
conditions prescribed herein. The Plan shall in no way be interpreted to require the Company to
transfer any amounts to a third party trustee or otherwise hold any amounts in trust or escrow for
payment to any Grantee or beneficiary under the terms of the Plan.
18.2 Nonexclusivity of the Plan.
Neither the adoption of the Plan nor the submission of the Plan to the stockholders of the
Company for approval shall be construed as creating any limitations upon the right and authority of
the Board to adopt such other incentive compensation arrangements (which arrangements may be
applicable either generally to a class or classes of individuals or specifically to a particular
individual or particular individuals) as the Board in its discretion determines desirable,
including, without limitation, the granting of stock options otherwise than under the Plan.
18.3 Withholding Taxes.
The Company or an Affiliate, as the case may be, shall have the right to deduct from payments
of any kind otherwise due to a Grantee any federal, state, or local taxes of any kind required by
law to be withheld with respect to the vesting of or other lapse of restrictions applicable to an
Award or upon the issuance of any shares of Stock upon the exercise of an Option or pursuant to an
Award. At the time of such vesting, lapse, or exercise, the Grantee shall pay to the Company or
the Affiliate, as the case may be, any amount that the Company or the Affiliate may reasonably
determine to be necessary to satisfy such withholding obligation. Subject to the prior approval of
the Company or the Affiliate, which may be withheld by the Company or the Affiliate, as the case
may be, in its sole discretion, the Grantee may elect to satisfy such obligations, in whole or in
part, (i) by causing the Company or the Affiliate to withhold shares of Stock otherwise issuable to
the Grantee or (ii) by delivering to the Company or the Affiliate shares of Stock already owned by
the Grantee. The shares of Stock so delivered or withheld shall have an aggregate Fair Market
Value equal to such withholding obligations. The Fair Market Value of the shares of Stock used to
satisfy such withholding obligation shall be determined by the Company or the Affiliate as of the
date that the amount of tax to be withheld is to be determined. A Grantee who has made an election
pursuant to this Section 18.3 may satisfy his or her withholding obligation only with shares of
Stock that are not subject to any repurchase, forfeiture, unfulfilled vesting, or other similar
requirements.
18.4 Captions.
The use of captions in this Plan or any Award Agreement is for the convenience of reference
only and shall not affect the meaning of any provision of the Plan or such Award Agreement.
18.5 Other Provisions.
Each Award granted under the Plan may contain such other terms and conditions not inconsistent
with the Plan as may be determined by the Board, in its sole discretion.
18.6 Number and Gender.
With respect to words used in this Plan, the singular form shall include the plural form, the
masculine gender shall include the feminine gender, etc., as the context requires.
18.7 Severability.
If any provision of the Plan or any Award Agreement shall be determined to be illegal or
unenforceable by any court of law in any jurisdiction, the remaining provisions hereof and thereof
shall be severable and enforceable in accordance with their terms, and all provisions shall remain
enforceable in any other jurisdiction.
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18.8 Governing Law.
The validity and construction of this Plan and the instruments evidencing the Award hereunder
shall be governed by the laws of the State of Nevada, other than any conflicts or choice of law
rule or principle that might otherwise refer construction or interpretation of this Plan and the
instruments evidencing the Awards granted hereunder to the substantive laws of any other
jurisdiction.
* * *
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ANNUAL MEETING OF STOCKHOLDERS OF
WESTERN ALLIANCE BANCORPORATION
April 18, 2006
Please date, sign
and mail
your proxy card in the
envelope provided as soon
as
possible.
êPlease detach along perforated line and mail in
the envelope provided. ê
THE BOARD OF DIRECTORS RECOMMENDS A
VOTE FOR THE ELECTION OF DIRECTORS AND FOR PROPOSAL 2.
PLEASE SIGN, DATE
AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR
BLACK INK AS SHOWN HEREx
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Election of Directors: |
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NOMINEES: |
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Cary Mack Ross
Ireland |
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WITHHOLD AUTHORITY FOR ALL
NOMINEES |
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Arthur Marshall Todd Marshall |
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FOR ALL EXCEPT (See instructions
below) |
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M. Nafees Nagy James E. Nave |
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INSTRUCTIONS:
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withhold authority to vote for any individual nominee(s), mark
FOR ALL
EXCEPT and fill in the circle next to each nominee you wish to
withhold, as shown here: l |
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To change the address on
your account, please check the box at right and indicate your new address
in the address space above. Please note that changes to the registered
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Approve Amendment to the Companys 2005 Stock Incentive Plan increasing maximum
number of shares of stock available for issuance by
1,246,156 shares to 4,500,000 shares. |
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This proxy, when properly executed, will be voted in accordance with the
directions of the undersigned. If no instruction to the contrary is given, this
proxy will be voted FOR the election of the nominees for Directors listed in
Proposal 1 and FOR Proposal 2. If any other business is presented at the
Annual Meeting, this proxy will be voted in accordance with the determination
of a majority of the Board of Directors.
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Please sign exactly as your name or names
appear on this Proxy. When shares are held jointly, each holder should
sign. When signing as executor, administrator, attorney, trustee or
guardian, please give full title as such. If the signer is a corporation,
please sign full corporate name by duly authorized officer, giving full
title as such. If signer is a partnership, please sign in partnership name
by authorized person. |
WESTERN ALLIANCE BANCORPORATION
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON APRIL 18, 2007
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Dale Gibbons and Linda N. Mahan as proxies, each with
full power of substitution, to represent and vote as designated on the reverse side, all the
shares of Common Stock of Western Alliance Bancorporation held of record by the undersigned on
February 28, 2007, at the Annual Meeting of Stockholders to be held at the Embassy Terrace, 2800
West Sahara Avenue, Las Vegas, Nevada 89102, on April 18, 2007, or any adjournment or
postponement thereof.
(Continued and to
be signed on the reverse side.)
14475
ANNUAL MEETING OF STOCKHOLDERS OF
WESTERN ALLIANCE BANCORPORATION
April 18, 2007
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PROXY VOTING
INSTRUCTIONS |
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MAIL Date sign and mail your proxy card in the envelope provided as soon as possible.
-OR-
TELEPHONE Call toll-free 1-800-PROXIES (1-800-776-9437) from any touch-tone telephone and follow
the instructions. Have your proxy card available when you call.
-OR-
INTERNET Access www.voteproxy.com and follow the on-screen instructions. Have your proxy card
available when you access the web page.
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COMPANY NUMBER
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ACCOUNT NUMBER
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You may enter your voting instructions at 1-800-PROXIES or www.voteproxy.com up until 11:59 PM
Eastern Time the day before the cut-off or meeting date.
ê Please detach along perforated
line and mail in the envelope provided IF you are not voting via telephone or the Internet. ê
THE BOARD OF DIRECTORS RECOMMENDS A
VOTE FOR THE ELECTION OF DIRECTORS AND FOR PROPOSAL 2.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE. x
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1. |
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ELECTION OF DIRECTORS: |
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NOMINEES: |
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FOR ALL NOMINEES |
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Cary Mack
Arthur Marshall |
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WITHHOLD AUTHORITY
FOR ALL NOMINEES
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m
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Todd Marshall M. Nafees Nagy James E. Nave |
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FOR ALL EXCEPT
(See instructions below) |
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INSTRUCTION:
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To withhold authority to vote for any individual nominee(s), mark FOR ALL
EXCEPT and fill in the circle next to each nominee you wish to withhold, as shown here: l |
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To change the address on your account, please check the box at right and indicate your new address
in the address space above. Please note that changes to the registered name(s) on the account may
not be submitted via this method.
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FOR
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AGAINST
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ABSTAIN |
2.
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Approve Amendment to the
Companys 2005 Stock Incentive Plan increasing maximum number of
shares of stock available for issuance by 1,246,156 shares to
4,500,000 shares.
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This proxy, when properly executed, will be voted in accordance with the
directions of the undersigned. If no instruction to the contrary is given, this proxy will be voted FOR the
election of the nominees for Directors listed in Proposal 1 and FOR Proposal 2. If any other business is
presented at the Annual Meeting, this proxy will be voted in accordance with the determination of a majority of the Board
of Directors. |
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Signature of Stockholder
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Date: |
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Signature of Stockholder |
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Date: |
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Note:
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Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each
holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please
give full title as such. If the signer is a corporation, please sign full corporate name by duly
authorized officer, giving full title as such. If signer is a partnership, please sign in
partnership name by authorized person. |
ANNUAL MEETING OF STOCKHOLDERS OF
WESTERN ALLIANCE BANCORPORATION
April 18, 2007
401(k) Plan Participants
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PROXY VOTING
INSTRUCTIONS |
|
|
MAIL
Date, sign and mail your proxy card in the envelope provided as soon as possible.
-OR-
TELEPHONE Call toll-free 1-800-PROXIES (1-800-776-9437) from any touch-tone telephone and follow
the instructions. Have your proxy card available when you call.
-OR-
INTERNET Access www.voteproxy.com and follow the on-screen instructions. Have your proxy card
available when you access the web page.
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COMPANY NUMBER
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ACCOUNT NUMBER
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You may enter your voting instructions at 1-800-PROXIES or www.voteproxy.com up until 11:59 PM
Eastern Time the day before the meeting date.
ê Please detach along perforated
line and mail in the envelope provided IF you are not voting via telephone or the Internet. ê
THE BOARD OF DIRECTORS RECOMMENDS A
VOTE FOR THE ELECTION OF DIRECTORS AND FOR PROOPOSAL 2.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE. x
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1. |
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Election of Directors: |
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|
|
|
|
|
|
|
|
|
|
NOMINEES: |
|
o |
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FOR ALL NOMINEES |
|
m
m
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Cary Mack
Arthur Marshall |
|
o
|
|
WITHHOLD AUTHORITY
FOR ALL NOMINEES
|
|
m
m
m
|
|
Todd Marshall M. Nafees Nagy James E. Nave |
|
o
|
|
FOR ALL EXCEPT
(See instructions below) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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INSTRUCTION:
|
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To withhold authority to vote for any individual nominee(s), mark FOR ALL
EXCEPT and fill in the circle next to each nominee you wish to withhold, as shown here: l |
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To change the address on your account, please check the box at right and indicate your new address
in the address space above. Please note that changes to the registered name(s) on the account may
not be submitted via this method.
|
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o |
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|
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|
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|
|
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|
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FOR
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AGAINST
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ABSTAIN |
2.
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Approve Amendment to the
Companys 2005 Stock Incentive Plan increasing maximum number of
shares of stock available for issuance by 1,246,156 shares to
4,500,000 shares.
|
|
o
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o
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o |
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This proxy, when properly executed, will be voted in accordance with the
directions of the undersigned. If no instruction to the contrary is given, this proxy will be voted FOR the
election of the nominees for Directors listed in Proposal 1 and FOR Proposal 2. If any other business is
presented at the Annual Meeting, this proxy will be voted in
accordance with the determination of a majority of the Board
of Directors. |
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Signature of Stockholder
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Date: |
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Signature of Stockholder |
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Date: |
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Note:
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Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each
holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please
give full title as such. If the signer is a corporation, please sign full corporate name by duly
authorized officer, giving full title as such. If signer is a partnership, please sign in
partnership name by authorized person. |
WESTERN ALLIANCE BANCORPORATION
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON APRIL 18, 2007
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Dale Gibbons and Linda N. Mahan as proxies, each with
full power of substitution, to represent and vote as designated on the reverse side, all the
shares of Common Stock of Western Alliance Bancorporation held of record by the undersigned on
February 28, 2007, at the Annual Meeting of Stockholders to be held at the Embassy Terrace, 2800
West Sahara Avenue, Las Vegas, Nevada 89102, on April 18, 2007, or any adjournment or
postponement thereof.
Western Alliance Bancorporation 401(k) Plan
Confidential Voting Instructions
To Charles Schwab Trust Co., Trustee
By signing on the reverse side or by voting by phone or Internet, you direct the above named Trustee
to vote (in person or by proxy) as indicated on the front of this card, the number of shares of
Western Alliance Bancorporation Common Stock credited to your account under Western Alliance
Bancorporation 401(k) Plan at the Annual Meeting of Stockholders to be held on April 18, 2007 at
8:00 a.m. PDT, and at any adjournment thereof. In accordance with the applicable plan provisions, the
Trustee will apply this voting instruction pro rata (along with the voting instructions of all other
participants) to all shares of Common Stock held in the Plan for which the Trustee receives no
voting instructions. These confidential voting instructions will be seen only by the authorized
representatives of the Trustee.
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(Continued and to be signed on the reverse side.)
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14475 |