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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No fee required. |
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
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Title of each class of securities to which transaction applies: |
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Aggregate number of securities to which transaction applies: |
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Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and
state how it was determined): |
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Proposed maximum aggregate value of transaction: |
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Total fee paid: |
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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
of its filing. |
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Amount previously paid: |
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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, 2006
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 Ritz-Carlton,
2401 East Camelback Road, Phoenix, Arizona, on Tuesday,
April 18, 2006, at 8:00 a.m., local time, for the following
purposes:
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1. To elect five Class I directors to the Board of
Directors whose terms will expire at the 2009 annual meeting; and |
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2. 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
March 10, 2006 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.
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By order of the Board of Directors, |
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Linda N. Mahan |
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Secretary |
Las Vegas, Nevada
March 23, 2006
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 Ritz-Carlton, 2401
East Camelback Road, Phoenix, Arizona at 8:00 a.m., local
time, on Tuesday, April 18, 2006 and any and all
adjournments thereof. This proxy statement, together with the
enclosed proxy card, is being mailed to stockholders of the
Company on or about March 23, 2006. All expenses incurred
in this solicitation will be paid by the Company. 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 I director
nominees whose terms will expire at the 2009 annual meeting.
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.
VOTING RIGHTS
Only stockholders of record at the close of business on
March 10, 2006 (the Record Date), are entitled
to vote at the Annual Meeting and any adjournments thereof. On
the Record Date, there were 23,025,478 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, 2006. 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 you do not give instructions to your record
holder, the record holder will be entitled to vote the shares in
its discretion on Proposal 1 (Election of Directors).
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 (Proposal 1). There will be no
cumulative voting in the election of directors. Abstentions have
no effect on the outcome of the election of directors.
RECENT DEVELOPMENTS
Acquisition of Intermountain First Bancorp and Nevada First
Bank. On December 30, 2005, the Company and
Intermountain First Bancorp, a Nevada corporation and the
holding company for Nevada First Bank, entered into a definitive
merger agreement, pursuant to which Intermountain will merge
with and into the Company. Under the terms of the agreement,
Intermountain shareholders may elect to receive either
2.44 shares of the Companys common stock or $71.30 in
cash for each Intermountain share, subject to proration and
allocation procedures to ensure a tax-free merger. The
transaction is valued at approximately $110 million. The
transaction, which is subject to customary closing conditions,
including approval from the shareholders of Intermountain and
banking regulators, is expected to be completed in the second
quarter of 2006.
Acquisition of Bank of Nevada. On January 16, 2006,
the Company and Bank of Nevada, a Nevada-chartered bank, entered
into a definitive merger agreement, pursuant to which Bank of
Nevada will merge with and into BankWest of Nevada, a wholly
owned subsidiary of the Company. Under the terms of the
agreement, Bank of Nevada shareholders will receive $80.187 in
cash for each share of Bank of Nevada common stock. Following
completion of the merger, BankWest of Nevada will be renamed
Bank of Nevada. The transaction is valued at approximately
$74 million. The transaction, which is subject to customary
closing conditions, including approval from the shareholders of
Bank of Nevada and banking regulators, is expected to be
completed in the second quarter of 2006.
2
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, 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
Company s directors and executive officers as a group. The
information contained herein has been obtained from the
Companys records and from information furnished to the
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 Company s common stock,
except as set forth below.
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Number of | |
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Shares | |
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Percentage | |
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Beneficially | |
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of Common | |
Beneficial Owner(1) |
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Owned | |
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Stock(2) | |
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Paul Baker(3)
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256,055 |
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1.11 |
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Bruce Beach(4)
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77,168 |
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William S. Boyd(5)
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7,000 |
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* |
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Gary Cady(6)
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102,563 |
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* |
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Duane Froeschle(7)
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209,311 |
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* |
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Dale Gibbons(8)
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88,700 |
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* |
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Steve Hilton(9)
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246,055 |
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1.07 |
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Marianne Boyd Johnson(10)
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4,607,331 |
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20.01 |
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James Lundy(11)
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170,295 |
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Cary Mack(12)
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106,697 |
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Linda Mahan(13)
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61,484 |
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Arthur Marshall(14)
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232,996 |
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1.01 |
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Todd Marshall(15)
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616,839 |
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2.68 |
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M. Nafees Nagy(16)
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844,252 |
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3.67 |
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James Nave(17)
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513,244 |
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2.23 |
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Edward Nigro(18)
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264,660 |
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1.15 |
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Robert Sarver(19)
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3,552,021 |
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14.77 |
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Donald Snyder(20)
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210,371 |
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Merrill Wall(21)
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67,000 |
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Larry Woodrum(22)
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64,800 |
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All directors and executive officers as a group
(20 persons)
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12,298,842 |
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50.26 |
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(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 the Record Date. 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 the
Record Date (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. |
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(2) |
Percentage calculated on the basis of 23,025,478 shares
outstanding on the Record Date. |
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(3) |
Share ownership includes 3,800 shares subject to
exercisable stock options, and 10,000 shares held by a
family trust. |
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(4) |
Share ownership includes 2,600 shares subject to
exercisable stock options, and 72,325 shares held by a
limited liability company. |
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(5) |
Share ownership consists of 1,000 shares subject to
exercisable stock options and 6,000 shares held by a trust. |
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(6) |
Share ownership includes 31,300 shares subject to
exercisable stock options. |
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(7) |
Share ownership includes 31,500 shares subject to
exercisable stock options, 44,381 shares subject to
exercisable warrants, and 118,992 shares held by a family
trust. |
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(8) |
Share ownership includes 23,800 shares subject to
exercisable stock options. |
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(9) |
Share ownership includes 3,800 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. |
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(10) |
Share ownership includes 3,800 shares subject to
exercisable stock options, 3,988,847 shares held by certain
grantor annuity retained trusts, 300,350 shares held by two
other trusts, and 242,424 shares held by a limited
partnership. |
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Share ownership includes 46,500 shares subject to
exercisable stock options, and 34,137 shares subject to
exercisable warrants. |
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(12) |
Share ownership includes 3,200 shares subject to
exercisable stock options, 10,000 shares held by a family
trust, and 87,497 held by a limited liability company. |
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(13) |
Share ownership includes 29,250 shares subject to
exercisable stock options. |
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(14) |
Share ownership includes 3,800 shares subject to
exercisable stock options, and 224,196 shares held by a
family trust. |
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(15) |
Share ownership includes 3,800 shares subject to
exercisable stock options, and 533,248 shares held by
various trusts. |
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(16) |
Share ownership includes 1,000 shares subject to
exercisable stock options, 10,516 shares held by two
trusts, and 826,029 shares held by Sajan Grat, LLC (the
LLC). Robert E. Clark, a member of the board of
directors of BankWest of Nevada, a wholly owned subsidiary of
Western Alliance, is the manager of the LLC and has sole
investment control over the assets owned by the LLC. |
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(17) |
Share ownership includes 3,800 shares subject to
exercisable stock options, 176,110 shares held by a profit
sharing plan, and 125,818 held by his daughter. |
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(18) |
Share ownership includes 1,000 shares subject to
exercisable stock options, 74,868 held by a trust, and
4,269 shares held by two of his children. |
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(19) |
Share ownership includes 30,000 shares held by
Mr. Sarvers spouse over which he disclaims all
beneficial ownership, 15,000 shares subject to exercisable
stock options, 1,013,880 shares subject to exercisable
warrants, 103,429 shares held in two trusts,
166,022 shares held by a limited partnership, and
31,374 shares held by a corporation. |
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(20) |
Share ownership includes 3,800 shares subject to
exercisable stock options, and 95,182 shares held by two
trusts. |
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(21) |
Share ownership includes 15,000 shares subject to
exercisable stock options, and 21,600 shares of restricted
common stock over which Mr. Wall exercise voting power. |
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(22) |
Share ownership includes 54,800 shares subject to
exercisable stock options. |
4
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 by
writing to the Company at 2700 West Sahara, Las Vegas,
Nevada 89102.
Board Composition
The Companys bylaws provide that the Board of Directors
will consist of not less than eight nor more than
15 directors and 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 2006; |
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Class II, whose term will expire at the annual meeting of
stockholders to be held in 2007; and |
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Class III whose 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 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.
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. |
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Of the 14 persons on the Board of Directors, including the
Class I nominees, nine have been determined by the Company
to be independent for purposes of Section 303A of the
Listed Company Manual of the NYSE. The Board of Directors based
these determinations primarily on a review of the responses of
the directors to questions regarding employment and compensation
history, affiliations and family and other relationships and on
discussions with such directors.
Mr. Sarver and Mr. Woodrum are not considered
independent because they are executive officers of the Company
and/or one of its banking subsidiaries (the Banks).
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 Co-Chairman, Chief Executive Officer of
Meritage. Mr. A. Marshall is not considered independent
because of his position as Chairman of BankWest of Nevada, and
Mr. T. Marshall is not considered independent since he is
Mr. A. Marshalls son.
Meetings of the Board of Directors
The Board of Directors held eight meetings in 2005. 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 2005 annual meeting of stockholders.
The non-employee directors met six times in 2005 and the
independent directors met once. The independent directors have
selected Mr. Snyder as Presiding Independent Director to
lead their sessions.
Communication with the Board and its Committees
Any stockholder may communicate with the Board by directing
correspondence to the Board, any of its committees, or one or
more individual members, in care of the Corporate Secretary,
Western Alliance Bancorporation, 2700 West Sahara Avenue,
Las Vegas, Nevada 89102.
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.
The Companys Audit Committee consists of four independent
directors (Messrs. Beach, Mack, Nigro and Dr. Nave).
Mr. Nigro 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. The Board
of Directors also has determined that each member of the Audit
Committee qualifies as an audit committee financial
expert, as such term is defined in applicable SEC
regulations 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 legal and regulatory
requirements, its financial reporting processes and related
internal control systems and the general creation and
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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Providing an open means of communication among the
Companys outside auditors, accountants, financial and
senior management, its internal auditors, its corporate
compliance 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 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 attached
as Appendix A. The Audit Committee held 13 meetings in 2005.
Compensation Committee
The Compensation Committee consists of three independent
directors (Messrs. Baker, Snyder and Dr. Nave).
Mr. Snyder serves as chairman of the Compensation
Committee. The Compensation Committee held three meetings in
2005. The Compensation Committees primary duties include:
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Determining the compensation of the Companys executive
officers; |
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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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Preparing a report on executive compensation for inclusion in
the Companys proxy statement for its annual meeting. |
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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 one meeting in 2005. 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. |
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 and monitors its internal credit
examinations. The Credit Committee held three meetings in 2005.
7
Compensation Committee Interlocks and Insider
Participation
During fiscal year 2005, Messrs. Baker, A. Marshall and T.
Marshall served as members of the Companys Compensation
Committee. Mr. T. Marshall, a director, is CEO of Marshall
Management Co. Marshall Management sub-leased office space from
BankWest of Nevada during 2004 and 2005. The annual lease
payments for 2005 totaled approximately $126,000. This sub-lease
was terminated effective January 1, 2006.
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 Co-Chairman
and Chief Executive Officer of Meritage.
During 2005, 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 associates) 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 1.5% of total loans
outstanding as of December 31, 2005.
No director who served on the Compensation Committee in 2005, or
who currently serves on the Committee, has ever been employed by
or been an officer of the Company.
Compensation of Directors
During 2005, all non-employee directors of the Banks received
compensation as set forth below. During 2005, the Banks held the
following board of directors meetings: BankWest of
Nevada 11 in-person meetings and 2 telephonic
meetings; Alliance Bank of Arizona 11 in-person
meetings and no telephonic meetings; and Torrey Pines
Bank 12 in-person meetings and one telephonic
meeting. No separate fees were paid to directors in their role
as directors of the Company.
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Annual | |
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Per In-person | |
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Per Telephonic | |
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Retainer | |
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Meeting | |
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Meeting | |
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BankWest of Nevada
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$ |
5,000 |
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$ |
2,000 |
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$ |
2,000 |
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Alliance Bank of Arizona
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1,500 |
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1,500 |
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Torrey Pines Bank
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1,500 |
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1,500 |
|
In fiscal year 2005, the chairman of the Audit Committee
received an annual retainer of $10,000, and the annual retainer
for 2006 is $10,000. In addition, Mr. A. Marshall received
$50,000 in his role as chairman of BankWest of Nevada.
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 Proxy Statement,
8
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.
Committee Reports
The Board of Directors 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 any governmental body or the public;
(ii) the Companys systems of internal controls
regarding finance, accounting, legal 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. Edward Nigro (Chairman), Mr. Bruce
Beach, Mr. Cary Mack, 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 Securities and Exchange Commission
(SEC) and the listing standards of the 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 each member qualifies as an audit committee
financial expert as defined by the SEC. During 2005, the
Audit Committee met 13 times.
While the Audit Committee has the duties and responsibilities
set forth 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
9
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 (McGladrey &
Pullen) the Companys independent registered public
accounting firm, is responsible for performing an independent
audit of the Companys consolidated financial statements in
accordance with standards of the Public Company Accounting
Oversight Board (United States) 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 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, 2005
with McGladrey & Pullen and Management. In addition,
the Audit Committee discussed with McGladrey & Pullen
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 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 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
pre-approved the fees paid to McGladrey & Pullen for
audit and non-audit related services.
Based on the reviews and discussion referred to above, the
Committee recommended to the Board of Directors that the
Companys audited financial statements be included in the
Companys Annual Report on
Form 10-K for the
fiscal year ended December 31, 2005 for filing with the SEC.
Submitted by the Audit Committee
Edward Nigro (Chairman)
Bruce Beach
Cary Mack
Dr. James E. Nave
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.
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Compensation Committee Report |
The Companys executive compensation program is
administered by the Compensation Committee. The Compensation
Committee is composed of Messrs. Snyder, Baker and Nave. No
member of the Compensation Committee is a current or former
employee of the Company or any subsidiary.
Compensation Philosophy and Policies. The Companys
executive compensation policies, plans and programs are designed
to enhance the profitability of the Company, and thus
stockholder value, by aligning closely the financial interests
of the Companys senior managers with those of its
stockholders. The key
10
components of executive officer compensation are a base salary,
an annual bonus and long-term incentive compensation.
The Compensation Committee determines base salaries and annual
bonuses after an evaluation of various factors, including
salaries paid to senior managers with comparable qualifications,
experience and responsibilities at other institutions,
individual job performance, market conditions and the
Committees assessment of the overall financial performance
(particularly operating results) of the Company and its
operating units. As to executive officers other than the chief
executive officer, the Compensation Committee also considers the
recommendations made by the chief executive officer.
The Compensation Committee reviews executive base salaries
annually in January. Base salary considers the internal value of
the position and tracks with the external marketplace. In
establishing the 2005 base salary for each executive officer,
the Compensation Committee considered the officers
responsibilities, qualifications and experience, the
Companys size, the complexity of its operations, the
Companys financial condition (based on levels of income,
asset quality and capital), and the compensation paid to persons
having similar duties and responsibilities at comparable
financial institutions.
In the future, information regarding salaries paid by other
financial institutions will be provided by an independent
consultant retained in December 2005 (The Hay Group). The
consultant will compare the Companys compensation levels
with a peer group of financial institutions having similar asset
size and performance characteristics.
The Companys annual bonus plan was adopted by the Board of
Directors on January 25, 2005. Annual bonuses paid to
officers of BankWest of Nevada were based on the banks
Return on Equity performance relative to its local and national
peer banks (assuming the bank met its predetermined net income
target). Annual bonuses at other affiliates were paid from an
incentive pool not exceeding 10% of the affiliates net
income. In 2006, a new annual bonus plan will be introduced that
will be common among all banking affiliates and measure five
critical areas of performance:
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Earnings per Share |
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Net Income |
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Organic Loan Growth |
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Organic Deposit Growth |
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Quality Control. |
The long-term incentive component of executive compensation
consists primarily of stock option grants, which directly link
executive officers incentives to stockholder returns. The
Company periodically grants stock options to executives, most
recently in January, 2005. Such grants are discretionary by the
Compensation Committee, reflecting the position of each
executive officer in the Company and that persons
proportionate responsibility for overall corporate performance.
The allocation of stock options among executive officers is not
based on any measure of Company performance, but is based on a
subjective evaluation of individual performance and the scope of
the individuals responsibilities. Information regarding
the quantity and terms of stock options granted by other
financial institutions has been provided by the Companys
independent survey results with respect to the peer group
selected on asset size.
Compensation of Chief Executive Officer. The Compensation
Committee reviews the salary of the chief executive officer and
compares it to those in peer positions in companies of similar
size and performance levels, using information obtained through
independent compensation surveys. In 2005, the chief executive
officers base salary and annual bonus was based on the
Compensation Committees subjective assessment of the
Companys and the chief executive officers
performance during the fiscal year, its expectation as to his
future contributions in leading the Company, and information
provided by the independent compensation surveys. A similar
process was used by the Compensation Committee to determine the
number of stock options granted to the chief executive officer.
In 2006, the Companys and the chief executive
officers
11
performance will be measured by objective measurements of
Earnings per Share, Net Income, Organic Loan Growth,
Organic Deposit Growth and Quality Control.
Tax Deductibility Considerations. Certain provisions of
the federal tax laws limit the deductibility of certain
compensation for the chief executive officer and other
executives to $1.0 million in applicable remuneration in
any year. This provision has had no effect on the Company since
its enactment because no officer of the Company has received
$1.0 million in applicable remuneration in any year. It
appears that this threshold may be exceeded in 2006 with respect
to the Companys chief executive officer. The Company has
taken the necessary steps to conform his compensation to qualify
for deductibility. Further, the Compensation Committee intends
to give strong consideration to the deductibility of
compensation in making its compensation decisions for executive
officers in the future, balancing the goal of maintaining a
compensation program which will enable the Company to attract
and retain qualified executives while maximizing the creation of
long-term stockholder value.
Submitted by the Compensation Committee
Donald D. Snyder (Chairman)
Paul Baker
James E. Nave
The foregoing Report of the Compensation Committee does not
constitute soliciting material and should not be deemed filed or
incorporated by reference into any other Company filing under
the Securities Act of 1933 or the Exchange Act, except to the
extent the Company specifically incorporates this Report or the
performance graph by reference therein.
12
PERFORMANCE GRAPH
Below is a graph which summarizes the cumulative return earned
by the Companys stockholders since its shares of common
stock were registered under Section 12 of the Exchange Act
in June of 2005, compared with the cumulative total return on
the S&P 500 Index and NYSE Financial Index. The
Companys common stock is a component of the NYSE Financial
Index. This presentation assumes that the value of the
investment in the Companys common stock and each index was
$100.00 on June 30, 2005 and that subsequent cash dividends
were reinvested.
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Measurement Point | |
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6/30/05 |
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7/29/05 |
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8/31/05 |
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9/30/05 |
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10/31/05 |
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11/30/05 |
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12/30/05 | |
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Western Alliance Bancorporation
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$ |
100.00 |
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$ |
121.65 |
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$ |
116.14 |
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$ |
110.63 |
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$ |
109.65 |
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$ |
115.59 |
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$ |
117.60 |
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S&P 500 Index
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$ |
100.00 |
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$ |
103.72 |
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$ |
102.77 |
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$ |
103.60 |
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$ |
101.87 |
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$ |
105.72 |
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$ |
105.76 |
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NYSE Financial Index
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$ |
100.00 |
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$ |
102.76 |
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$ |
102.07 |
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$ |
104.48 |
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$ |
105.38 |
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$ |
110.36 |
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$ |
112.14 |
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ELECTION OF DIRECTORS
(Proposal 1)
The Board of Directors currently consists of 14 directors
divided into three classes. The Board has nominated the five
individuals listed below to be elected as Class I directors
at the Annual Meeting. The five director nominees terms
will expire at the annual meeting in 2009.
The following sets forth certain information, as of the Record
Date, for all Class I nominees:
Paul Baker (age 64) 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 56) 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
13
MBA from the University of Arizona, and has 31 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 74) has been a director and
principal stockholder of the Company since inception and was a
founder of its first bank, BankWest of Nevada. Mr. Boyd has
served as a director of Boyd Gaming Corporation since its
inception in June 1988 and as Chairman of the Board and Chief
Executive Officer since August 1998. 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 44) 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 Co-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 47) has served as a
founding director of the Company and BankWest 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.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE
STOCKHOLDERS VOTE FOR ALL NOMINEES.
The following sets forth certain information, as of the Record
Date, for all other directors of the Company, including those
whose terms of office will continue after the Annual Meeting:
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Class II Directors with Terms Expiring in 2007 |
Cary Mack (age 46) 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.
Arthur Marshall (age 76) has been a director of the
Company since 1995 and the Chairman of the Board of BankWest 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. Mr. Marshall is the father of director Todd
Marshall.
Todd Marshall (age 49) was a founding director of
BankWest of Nevada and the Company and has served as a director
continuously since their establishment in 1994 and 1995,
respectively. Mr. Marshall has been the Chief Executive
Officer of MRG since May 1976. Mr. Marshall is the son of
director Arthur Marshall.
14
M. Nafees Nagy, M.D. (age 62) has served
as a director of BankWest 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 Center. Dr. Nagy served for
eight years as a member of the Nevada State Board of Medical
Examiners. 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 currently is a member of the advisory board for
Option Care. 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.
James E. Nave, D.V.M. (age 61) has served as a
director of the Company and BankWest 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 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, 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 |
Edward M. Nigro (age 63) has served as a director of
the Company and BankWest of Nevada since their establishment in
1995 and 1994, respectively. Mr. Nigro is actively engaged
in the development, ownership and operation of commercial and
residential real estate projects in the Las Vegas area. From
1971 to 1979, Mr. Nigro held numerous senior management
positions with Del E. Webb Corporation, including chief
operations officer and director, Nevada operations. From 1993
until its sale in 1996, he was principal shareholder, chief
executive officer and director of Prime Holdings, Inc., a health
delivery concern located in Nevada. Mr. Nigro has also been
active in numerous philanthropic organizations and is a graduate
of Holy Cross College. Mr. Nigro served as a Commissioned
Officer with the U.S. Air Force, where he was awarded the
Air Medal for Combat Missions in Vietnam, two commendation
medals for Meritorious Service, the Vietnam Campaign Medal, and
other medals and awards.
Robert G. Sarver (age 44) has been the President,
Chairman and Chief Executive Officer of the Company since
December 2002. Mr. Sarver has also served as the Chairman
and Chief Executive Officer of Torrey Pines Bank since May 2003.
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 Japanese American National Museum and the
Sarver Heart Center at the University of Arizona.
Donald D. Snyder (age 58) has served as a director
of the Company and of BankWest of Nevada since 1997. He had
earlier served as a founding director of the entity created to
charter BankWest Corporation 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 two
other publicly traded companies, Sierra Pacific Resources
(NYSE) and Cash Systems, Inc. (NASDAQ). 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
15
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, and he currently
serves as chairman of the board of Fremont. 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 banking.
Larry L. Woodrum (age 67) has been a director of the
Company, and President and Chief Executive Officer of BankWest
of Nevada, since their establishment in 1995 and 1994,
respectively. Mr. Woodrum has over 40 years of banking
experience. From 1979 until he joined BankWest 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.
In addition, following the completion of the pending merger
between the Company and Intermountain First Bancorp
(Intermountain), the Companys Board of
Directors will be expanded to include a representative of
Intermountain who was, immediately prior to the merger, either a
member of Intermountains board of directors or a holder of
at least 5% of its capital stock. He or she will serve as a
Class III director with a term expiring in 2008. The
Intermountain merger is expected to be completed in the second
quarter of 2006.
Bank Directors
The following table lists the persons currently serving as
directors of each Bank.
|
|
|
|
|
BankWest of Nevada |
|
Alliance Bank of Arizona |
|
Torrey Pines Bank |
|
|
|
|
|
Arthur Marshall, Chairman
|
|
Rick Krivel, Chairman |
|
Robert Sarver, Chairman |
Robert Boughner
|
|
Paul Baker |
|
Gary Cady |
Robert E. Clark
|
|
Bruce Beach |
|
Peter Davis |
Sherry Colquitt
|
|
Duane Froeschle |
|
Richard Doan |
Marianne Boyd Johnson
|
|
Sharon Harper |
|
Jason Hughes |
Bruno Mark
|
|
Steven Hilton |
|
Mark Johnson |
Todd Marshall
|
|
James Lundy |
|
Cary Mack |
M. Nafees Nagy, M.D.
|
|
Dennis H. Miller |
|
Tom Murray |
James Nave, D.V.M
|
|
Francis Najafi |
|
Mark Schlossberg |
Edward Nigro
|
|
R. Luther Olson |
|
Sheryl White |
Robert Sarver
|
|
Thomas Rogers |
|
|
Donald Snyder
|
|
Robert Sarver |
|
|
Jack R. Wallis
|
|
Thomas Sullivan, Jr. |
|
|
Larry L. Woodrum
|
|
Paul Weitman |
|
|
Following the completion of the pending merger between the
Company and Intermountain, the Company may merge Nevada First
Bank (Intermountains sole bank subsidiary) into BankWest
of Nevada. Upon completion of this merger, BankWest of Nevada
will invite all of the members of Nevada Firsts board of
directors to join the board of directors of BankWest of Nevada.
In addition, upon completion of the pending merger between Bank
of Nevada and BankWest of Nevada, BankWest of Nevada will invite
John S. Gaynor and Peter Becker, currently members of Bank of
Nevadas board of directors, to join the board of directors
of BankWest of Nevada and cause Mr. Gaynor to be appointed
to serve as Vice Chairman of BankWest.
16
EXECUTIVE COMPENSATION
Executive Officers
Executive officers are appointed annually by the Board of
Directors following the Annual Meeting of Stockholders. The
following table sets forth the name of each executive officer as
of the Record Date and the principal position(s) he or she holds
with the Company:
|
|
|
|
|
|
|
Name |
|
Age | |
|
Position with Company |
|
|
| |
|
|
Robert Sarver
|
|
|
44 |
|
|
Chairman of the Board, President and Chief Executive Officer |
Gary Cady
|
|
|
51 |
|
|
Executive Vice President, California Administration |
Duane Froeschle
|
|
|
53 |
|
|
Executive Vice President and Chief Credit Officer |
Dale Gibbons
|
|
|
45 |
|
|
Executive Vice President and Chief Financial Officer |
James Lundy
|
|
|
56 |
|
|
Executive Vice President, Arizona Administration |
Linda Mahan
|
|
|
48 |
|
|
Executive Vice President, Operations |
Merrill Wall
|
|
|
58 |
|
|
Executive Vice President and Chief Administrative Officer |
Larry L. Woodrum
|
|
|
67 |
|
|
Executive Vice President, Nevada Administration and Director |
Robert G. Sarver has been the President, Chairman and
Chief Executive Officer of the Company since December 2002.
Mr. Sarver has also served as the Chairman and Chief
Executive Officer of Torrey Pines Bank since May 2003.
Gary Cady has been the Executive Vice President of
California Administration and President of Torrey Pines Bank
since May 2003. 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 a director of Grossmont Hospital Corporation and a board
member of the San Diego East County Regional Chamber of
Commerce.
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.
Dale Gibbons has been the Chief Financial Officer and an
Executive Vice President of the Company and BankWest 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. In June
2001, Mr. Gibbons resigned from Zions following his arrest
related to certain criminal charges. From June 2001 until his
acquittal in June 2002, Mr. Gibbons was actively involved
in his defense, and from June 2002 to May 2003, Mr. Gibbons
was actively seeking suitable employment and engaged in 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.
James Lundy has been the Executive Vice President of
Arizona Administration and President and Chief Executive Officer
of Alliance Bank of Arizona since February 2003. Mr. Lundy
was also a director of the
17
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 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.
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 BankWest 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.
Merrill S. Wall has been the Chief Administrative Officer
and Executive Vice President of the Company since February 2005.
Mr. Wall has 35 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.
Summary Compensation Table
The following table is a summary of certain information
concerning the compensation during the last three fiscal years
earned by the Companys Chairman, President and Chief
Executive Officer and the four other most highly compensated
executive officers who earned more than $100,000 in salary and
bonus during the Companys last fiscal year (referred to as
named executive officers).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long Term Compensation Awards | |
|
|
|
|
Annual Compensation | |
|
| |
|
|
|
|
| |
|
Restricted | |
|
Securities | |
|
|
|
|
|
|
Other Annual | |
|
Stock | |
|
Underlying | |
|
All Other | |
Name and Principal Position |
|
Year | |
|
Salary ($) | |
|
Bonus ($) | |
|
Compensation ($) | |
|
Awards(s) ($) | |
|
Options/SARs (#) | |
|
Compensation ($)(1) | |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
Robert Sarver
|
|
|
2005 |
|
|
|
500,000 |
|
|
|
500,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,300 |
|
|
Chairman, President and
|
|
|
2004 |
|
|
|
|
|
|
|
|
|
|
|
60,000 |
(2) |
|
|
|
|
|
|
65,000 |
|
|
|
|
|
|
Chief Executive Officer
|
|
|
2003 |
|
|
|
|
|
|
|
|
|
|
|
60,000 |
(2) |
|
|
|
|
|
|
|
|
|
|
|
|
Merrill Wall
|
|
|
2005 |
|
|
|
216,346 |
|
|
|
126,000 |
|
|
|
|
|
|
|
445,500 |
(4) |
|
|
75,000 |
|
|
|
112,000 |
|
|
Executive Vice President and
|
|
|
2004 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chief Administrative
|
|
|
2003 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Officer(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Larry Woodrum
|
|
|
2005 |
|
|
|
310,000 |
|
|
|
90,000 |
|
|
|
13,773 |
(5) |
|
|
|
|
|
|
19,000 |
|
|
|
8,430 |
|
|
President and Chief Executive
|
|
|
2004 |
|
|
|
294,840 |
|
|
|
94,666 |
|
|
|
14,661 |
(5) |
|
|
|
|
|
|
|
|
|
|
8,000 |
|
|
Officer BankWest of Nevada
|
|
|
2003 |
|
|
|
284,048 |
|
|
|
67,775 |
|
|
|
11,690 |
(5) |
|
|
|
|
|
|
|
|
|
|
7,000 |
|
Dale Gibbons
|
|
|
2005 |
|
|
|
231,000 |
|
|
|
81,000 |
|
|
|
|
|
|
|
|
|
|
|
19,000 |
|
|
|
6,500 |
|
|
Executive Vice President and
|
|
|
2004 |
|
|
|
206,000 |
|
|
|
72,100 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,500 |
|
|
Chief Financial Officer
|
|
|
2003 |
|
|
|
145,654 |
(6) |
|
|
58,333 |
|
|
|
|
|
|
|
|
|
|
|
50,000 |
|
|
|
|
|
James Lundy
|
|
|
2005 |
|
|
|
212,000 |
|
|
|
33,000 |
|
|
|
3,828 |
(7) |
|
|
|
|
|
|
7,500 |
|
|
|
6,013 |
|
|
President and Chief Executive
|
|
|
2004 |
|
|
|
206,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,915 |
|
|
Officer Alliance
|
|
|
2003 |
|
|
|
198,454 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,000 |
|
|
Bank of Arizona
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
Represents amounts contributed to the Western Alliance
Bancorporation 401(k) Plan on behalf of the executive officer.
In addition, Mr. Wall received a signing bonus in 2005 of
$105,000. |
|
(2) |
Mr. Sarver did not receive a salary for years 2002 through
2004. Beginning in 2003, and pursuant to a Consulting Agreement
dated as of January 1, 2003, by and between the Company and
SWVP Management Co., Inc., an entity owned and operated by
Mr. Sarver, the Company made payments of $60,000 per
year to SWVP. The Consulting Agreement was terminated in 2005. |
|
(3) |
Mr. Wall joined the Company in February 2005. |
18
|
|
(4) |
On December 31, 2005, Mr. Wall held a total of
27,000 shares of restricted common stock, with an aggregate
fair market value on that date of $806,490. 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 will be paid on both vested and
unvested shares. |
|
(5) |
Represents a car allowance paid to Mr. Woodrum by BankWest
of Nevada. |
|
(6) |
Mr. Gibbons joined the Company in May 2003. His salary for
2003 includes $29,500 of consulting payments paid to
Mr. Gibbons prior to joining the Company. |
|
(7) |
Represents country club dues paid for Mr. Lundy by Alliance
Bank of Arizona. |
Stock Option Grants in Fiscal Year 2005
The following table contains information about option awards
made to each named executive officer during the fiscal year
ended December 31, 2005.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% of Total | |
|
|
|
|
|
|
|
|
Number of Securities | |
|
Options/SARs | |
|
|
|
|
|
|
|
|
Underlying | |
|
Granted to | |
|
|
|
|
|
|
|
|
Option/SARs | |
|
Employees in | |
|
Exercise or Base | |
|
Expiration | |
|
Grant Date | |
Name |
|
Granted(1) | |
|
Fiscal Year | |
|
Price ($/Share) | |
|
Date | |
|
Present Value(2) | |
|
|
| |
|
| |
|
| |
|
| |
|
| |
Robert Sarver
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
Merrill Wall
|
|
|
75,000 |
|
|
|
18.45 |
% |
|
|
16.50 |
|
|
|
2/14/15 |
|
|
|
303,000 |
|
Larry Woodrum
|
|
|
19,000 |
|
|
|
4.67 |
% |
|
|
16.50 |
|
|
|
1/25/15 |
|
|
|
76,760 |
|
Dale Gibbons
|
|
|
19,000 |
|
|
|
4.67 |
% |
|
|
16.50 |
|
|
|
1/25/15 |
|
|
|
76,760 |
|
James Lundy
|
|
|
7,500 |
|
|
|
1.85 |
% |
|
|
16.50 |
|
|
|
1/25/15 |
|
|
|
30,300 |
|
|
|
(1) |
Options were granted on January 25, 2005, except for
Mr. Wall whose options were granted on February 14,
2005. Options vest annually beginning on January 25, 2006
in five equal installments. |
|
(2) |
The Company used the minimum value method to estimate the grant
date present value of the options. The Company is not endorsing
the accuracy of this model. All stock option valuation models,
including the minimum value method, require a prediction about
future stock prices. The assumptions used in calculating the
values shown above were a risk-free rate of return of 4.09%,
weighted average life of seven years and no cash dividends. The
real value of the options will depend upon the actual
performance of the Companys common stock during the
applicable period. |
Aggregated Option/ SAR Exercises in Fiscal Year 2005 and Year
End Option/ SAR Values
The following table sets forth certain information concerning
the number and value of unexercised options to purchase shares
of the Companys common stock held at the end of fiscal
year 2005 by the named executive officers. The Company had no
SARs outstanding as of December 31, 2005.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Securities | |
|
Value of Unexercised In-the- | |
|
|
|
|
|
|
Underlying Unexercised | |
|
Money Options/ | |
|
|
Shares | |
|
|
|
Options/SARs at Year End | |
|
SARs at Year End(2) | |
|
|
Acquired on | |
|
Value |
|
| |
|
| |
Name |
|
Exercise | |
|
Realized(1) |
|
Exercisable | |
|
Unexercisable | |
|
Exercisable | |
|
Unexercisable | |
|
|
| |
|
|
|
| |
|
| |
|
| |
|
| |
Robert Sarver
|
|
|
|
|
|
$ |
|
|
|
|
15,000 |
|
|
|
50,000 |
|
|
$ |
268,050 |
|
|
$ |
893,500 |
|
Merrill Wall
|
|
|
|
|
|
|
|
|
|
|
-0- |
|
|
|
75,000 |
|
|
|
-0- |
|
|
|
1,002,750 |
|
Larry Woodrum
|
|
|
|
|
|
|
|
|
|
|
51,000 |
|
|
|
49,000 |
|
|
|
1,169,020 |
|
|
|
939,230 |
|
Dale Gibbons
|
|
|
|
|
|
|
|
|
|
|
20,000 |
|
|
|
49,000 |
|
|
|
456,800 |
|
|
|
1,396,030 |
|
James Lundy
|
|
|
|
|
|
|
|
|
|
|
45,000 |
|
|
|
37,500 |
|
|
|
1,027,800 |
|
|
|
785,475 |
|
|
|
(1) |
Represents the difference between the fair market value of the
Companys common stock on the date of exercise less the
exercise price. |
|
(2) |
The dollar values were calculated by determining the difference
between the fair market value of the Companys common stock
on December 31, 2005 of $29.87 and the exercise price of
the option. |
19
Equity and Benefit Plans
The following table provides information about common stock that
may be issued upon the exercise of options, warrants and rights
under all of the Companys existing equity compensation
plans as of December 31, 2005:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Securities | |
|
|
Number of | |
|
Weighted- | |
|
Remaining Available | |
|
|
Securities to be | |
|
Average Exercise | |
|
for Future Issuance | |
|
|
Issued Upon | |
|
Price of | |
|
Under Equity | |
|
|
Exercise of | |
|
Outstanding | |
|
Compensation Plans | |
|
|
Outstanding | |
|
Options, | |
|
(Excluding | |
|
|
Options, Warrants | |
|
Warrants and | |
|
Securities Reflected | |
|
|
and Rights | |
|
Rights | |
|
in Column (a)) | |
Plan Category |
|
(a) | |
|
(b) | |
|
(c) | |
|
|
| |
|
| |
|
| |
Equity compensation plans approved by security holders
|
|
|
2,124,794 |
|
|
$ |
10.10 |
|
|
|
960,700 |
|
Equity compensation plans not approved by security holders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
2,124,794 |
|
|
$ |
10.10 |
|
|
|
960,700 |
|
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). The Western Alliance Bancorporation 2005 Stock Incentive
Plan (referred to as the 2005 Stock Incentive Plan) was approved
by stockholders at the Companys 2005 Annual Meeting of
stockholders. The 2005 Stock Incentive 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 will be subject to the terms and conditions of the
2005 Stock Incentive Plan, which has been structured so as not
to impair the rights of award holders under the prior plans.
The purpose of the 2005 Stock Incentive 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, 2005 the number of shares available for
issuance under the 2005 Stock Incentive Plan was 3,085,494. Of
the 3,085,494 shares available for issuance under the 2005
Stock Incentive Plan, 2,124,794 shares represent awards
outstanding as of December 31, 2005.
The 2005 Stock Incentive 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 2005 Stock Incentive 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 equity incentive plan is materially amended.
The maximum number of shares subject to options or stock
appreciation rights that can be issued under the 2005 Stock
Incentive Plan to any person is 150,000 shares in any
calendar year. The maximum number of shares that can be issued
under the 2005 Stock Incentive 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 in respect of a performance period by any
one person is $15.0 million.
Administration. The 2005 Stock Incentive Plan is
administered by the Compensation Committee. Subject to the terms
of the 2005 Stock Incentive Plan, the Compensation Committee may
select participants
20
to receive awards; determine the types of awards, terms and
conditions of awards; and interpret provisions of the 2005 Stock
Incentive Plan.
Source of Shares. The common stock issued or to be issued
under the 2005 Stock Incentive 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 2005 Stock Incentive 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 2005 Stock Incentive Plan.
Eligibility. Awards may be made under the 2005 Stock
Incentive Plan to employees, officers, directors, consultants
and any other individual providing services to the Company or an
affiliate whose participation in the 2005 Stock Incentive 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 2005 Stock Incentive 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 2005 Stock
Incentive Plan will automatically terminate 10 years after
its adoption by the Board of Directors.
Options. The 2005 Stock Incentive 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 2005 Stock Incentive 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 2005 Stock Incentive Plan:
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Restricted shares of common stock, which are shares of common
stock subject to restrictions; |
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Stock units, which are common stock units subject to
restrictions; |
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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; |
21
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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; |
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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 |
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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 2005 Stock Incentive 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 2005 Stock
Incentive 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:
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Total stockholder return; |
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Total stockholder return as compared to total return of a known
index; |
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Net income; |
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Pretax earnings; |
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Earnings before interest expense, taxes, depreciation and
amortization; |
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Pretax operating earnings after interest expense and before
bonuses, service fees and extraordinary or special items; |
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Operating margin; |
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Earnings per share; |
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Return on equity; |
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Return on capital; |
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Return on investment |
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Operating earnings; |
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Working capital; |
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Ratio of debt to stockholders equity; and |
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Revenue. |
Effect of Extraordinary Corporate Transactions. The
occurrence of a corporate transaction may cause awards granted
under the 2005 Stock Incentive 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
22
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
2005 Stock Incentive 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.
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 $596,000, $385,000, $230,000 and $180,000 in 2005,
2004, 2003 and 2002, 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 Executive
Management Committee. 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. A participant
who elects to make contributions then would receive a Western
Alliance matching contribution under the Restoration Plan equal
to 3% of all compensation as offset by the amount of matching
contribution made on the participants behalf under the
401(k) Plan.
Noncompetition and Indemnification Agreements
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
23
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.
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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 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.
24
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, 2005,
the Companys officers, directors and principal
stockholders (and their associates) were indebted to the Banks
in the aggregate amount of approximately
$27.6 million in connection with these loans. This
amount was approximately 1.5% 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.
SWVP Management Co. Inc. and the Company were parties to a
Consulting Agreement dated as of January 1, 2003, pursuant
to which consulting fees were paid to SWVP. Robert Sarver, the
Companys Chairman of the Board, President and Chief
Executive Officer owns SWVP. The Company paid SWVP $60,000 in
fiscal years 2003 and 2004. The agreement was terminated in 2005.
Todd Marshall, a director of the Company and BankWest of Nevada,
is CEO Marshall Management Co. Marshall Management sub-leased
office space from BankWest of Nevada during 2004 and 2005. The
annual lease payments for 2005 totaled approximately $126,000.
This sub-lease was terminated effective January 1, 2006.
Todd Marshall is the son of director Arthur Marshall.
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 and Richard Doan (director
Torrey Pines Bank), R. Luther Olson (director
Alliance Bank of Arizona), Thomas Rogers (director
Alliance Bank of Arizona) and Mark Schlossberg
(director Torrey Pines Bank) 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 and Francis Najafi (director
Alliance Bank of Arizona) are limited partners in the Phoenix
Suns ownership group.
Mr. Sarver also serves as a director of Meritage Homes
Corporation. Mr. Hilton is the co-chairman of the board and
chief executive officer of Meritage. 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. 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,
BankWest of Nevada and Boyd Gaming Corporation. Robert L.
Bougher, a director of BankWest of Nevada and Boyd Gaming
Corporation, is the chief executive officer and president of the
Borgata Hotel Casino & Spa, which is co-owned by Boyd
Gaming Corporation. Donald Snyder, a director of the Company and
BankWest of Nevada, was the president of Boyd Gaming Corporation
from January 1997 until March 2005.
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.
25
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 2005 and 2004:
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Fiscal Year | |
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Fiscal Year | |
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2005 ($) | |
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2004 ($) | |
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Audit Fees
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595,000 |
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212,000 |
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Audit-Related Fees
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22,000 |
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29,000 |
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Tax Fees
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28,000 |
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33,000 |
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All Other Fees
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-0- |
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-0- |
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Total
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645,000 |
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274,000 |
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Audit Fees. This category includes the aggregate fees and
costs billed for professional services rendered for the audits
of the Companys consolidated financial statements for
fiscal years 2005 and 2004. Audit fees for 2005 include
professional fees and costs associated with the Companys
initial public offering on
Form S-1,
including related consents and comfort letters. The 2005 fees
also include review of the Companys filing on
Form 10-Q, related
SAS 100 reviews, and review of
Form S-8 and
issuance of the related consent
Audit-Related Fees. This category includes the aggregate
fees and costs billed in each of the last two fiscal years for
audits of the Companys employee benefit plan. In addition,
2005 includes Sarbanes Oxley 404 consulting services and
2004 includes services relating to various accounting and
reporting matters.
Tax Fees. This category includes the aggregate fees and
costs billed in each of the last two fiscal years for
professional services relating to income tax preparation
services, review of tax estimates and various tax consulting
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 2005
and the proposed non-audit-related services and fees for 2006
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 policy
also includes pre-approved fee levels for specified services,
and any proposed service exceeding the established fee level
must be specifically approved by the Committee. The Audit
Committee may delegate to its Chairman or another member of the
Audit Committee the authority to pre-approve services of the
independent auditors, provided that any delegate must report any
such approvals to the full Audit Committee at its next scheduled
meeting.
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, 2005,
26
all of the Companys officers, directors and greater than
10% stockholders complied with all applicable Section 16(a)
filing requirements, except that in connection with the
Companys initial public offering, each of the
Companys officers, directors and greater than 10%
stockholders filed their Form 3 late.
ADDITIONAL INFORMATION
Stockholder Proposals for 2007 Annual Meeting
Any proposal which a stockholder wishes to have included in the
Companys proxy statement and form of proxy relating to its
2007 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
November 17, 2006. If a stockholder wishes to present a
matter at the Companys 2007 annual meeting that is outside
the process for inclusion in the proxy statement, notice must be
given to the Secretary of not later than February 5, 2007.
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 Annual Report is not
deemed a part of the proxy soliciting material. The
Companys Annual Report to the SEC on
Form 10-K for the
fiscal year ended December 31, 2005, will be filed with the
SEC prior to the Annual Meeting. Upon receipt of a written
request, the Company will, without charge, furnish any owner of
its common stock a copy of its Annual Report to the SEC on
Form 10-K for the
fiscal year ended December 31, 2005, including financial
statements and the footnotes thereto. Copies of exhibits to the
Annual Report on
Form 10-K are also
available upon specific request and payment of a reasonable
charge for reproduction. Such request should be directed to the
Corporate Secretary of the Company at the address indicated on
the first page of this Proxy Statement.
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
written request to Western Alliance Bancorporation,
2700 West Sahara Avenue, Las Vegas, Nevada 89102, Attn:
Corporate Secretary, or by calling (702) 248-4200.
27
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.
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BY ORDER OF THE BOARD OF DIRECTORS |
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ROBERT G. SARVER |
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CHAIRMAN OF THE BOARD |
Dated: March 23, 2006
28
APPENDIX A
WESTERN ALLIANCE BANCORPORATION
AUDIT COMMITTEE CHARTER
The Audit Committee (the Audit Committee) of the
Board of Directors (the Board) of Western Alliance
Bancorporation serves as the audit committee of Western Alliance
Bancorporation and its subsidiaries and affiliates
(collectively, the Corporation). The primary purpose
of the Committee is to assist the Board in fulfilling its
oversight responsibilities by, among other things, reviewing the
Corporations financial reports and other financial
information provided by the Corporation to any governmental body
or the public, the Corporations systems of internal
controls regarding finance, accounting, legal compliance and
ethics that management and the Board have established, the
Corporations internal audit function and the
Corporations auditing, accounting and financial reporting
processes. Consistent with the Audit Committees primary
purpose, the Audit Committee should encourage continuous
improvement of, and should foster adherence to, the
Corporations policies, procedures and practices at all
levels.
The Audit Committees primary duties and responsibilities
are to:
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serve as an independent and objective party and to otherwise
assist Board oversight of (a) the integrity of the
Corporations financial statements and (b) the
performance of the Corporations internal audit function,
which may include oversight of outside firms that are contracted
to provide internal audit and risk management services; |
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be directly responsible for the appointment, compensation and
oversight of the work of any registered public accounting firm
employed by the Corporation (the independent
auditor) for the purpose of preparing or issuing an audit
report or related work; |
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be directly responsible for the appointment, compensation and
oversight of the work of any internal audit personnel, including
any outside firms or persons that are contracted to provide
internal audit and risk management services; |
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pre-approve all auditing services (which may entail providing
comfort letters in connection with securities underwritings) and
non-audit services provided to the Corporation by the
independent auditor; |
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prepare the report required by the proxy rules of the Securities
and Exchange Commission (the SEC) to be included in
the Corporations annual proxy statement; |
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provide an open avenue of communication among the independent
auditor, financial and senior management, outside firms that are
contracted to provide internal audit and risk management
services, any employees of the Corporation who are involved in
the Corporations internal audit function, and the Board; |
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assist Board oversight and review the independent auditors
qualifications and independence; |
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assist Board oversight and review of outside firms that are
contracted to provide internal audit and risk management
services; |
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assist Board oversight of and review the Corporations
compliance with legal and regulatory requirements; and |
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make regular reports to the Board. |
The Audit Committee shall be comprised of three or more
directors who are independent. To be considered
independent, the director must satisfy, as
determined by the Board, the requirements of all
A-1
applicable laws and regulations relative to the independence of
directors and audit committee members, including without
limitation the requirements of the SEC and the NYSE. In
addition, the Corporation, the Board and the Committee shall
comply with all applicable laws, rules, regulations and
guidelines, including without limitation those contained in
12 U.S.C. § 1831m and 12 C.F.R.
Part 363 of the rules and regulations of the Federal
Deposit Insurance Corporation, that establish criteria for an
independent audit committee. Each member of the Audit Committee
must be financially literate, as such qualification is
interpreted by the Board in its business judgment. In addition,
at least one member of the Audit Committee must have accounting
or related financial management expertise, as the Board
interprets such qualification in its business judgment.
The members of the Audit Committee shall be appointed annually
by the Board and shall serve until their successors are duly
elected and qualified. Unless a Chair is elected by the full
Board, the members of the Audit Committee shall appoint one of
their members as the Chair. Any responsibilities of the Audit
Committee may be delegated by the Audit Committee to the
Chairman or any other member; provided that any delegate shall
report any actions taken by him or her to the whole Audit
Committee at its next regularly scheduled meeting. If an Audit
Committee member simultaneously serves or, upon appointment,
would serve on the audit committee of more than three public
companies, continued service or appointment is contingent on a
Board determination that such simultaneous service would not
impair the ability of such member to effectively serve on the
Audit Committee. The Chair shall have banking or related
financial management expertise.
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COMPENSATION OF MEMBERS |
Compensation for service on the Audit Committee shall be limited
to fees and compensation permitted under the Securities Exchange
Act of 1934, as amended, the rules and regulations of the SEC
promulgated thereunder, and the rules and regulations of the
NYSE.
The Committee shall meet at least four times annually, or more
frequently as circumstances dictate. The Chair shall be
responsible for leadership of the Audit Committee, including
preparing the agenda, presiding over the meetings, making
committee assignments and reporting for the Audit Committee to
the Board. As part of its job to foster open communications, the
Committee should meet at least annually with management and the
independent auditor in separate executive sessions to discuss
any matters that the Committee or each of these groups believes
should be discussed privately. In addition, the Audit Committee
may request any officer or employee of the Corporation or the
Corporations internal and outside legal counsel or
independent auditor to attend a meeting of the Audit Committee
or to meet with any members of, or consultants to, the Audit
Committee. The Audit Committee shall have direct access to
management, internal staff, the independent auditor, outside
firms that are contracted to provide internal audit and risk
management services, the corporate compliance staff and the
Corporations legal counsel, both at meetings and otherwise.
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V. |
RESPONSIBILITIES AND DUTIES |
In furtherance of its responsibilities, the Audit Committee
believes its policies and procedures should remain flexible in
order to best react to changing conditions and to ensure to the
Board and the stockholders that the corporate accounting and
reporting practice of the Corporation are in accordance with all
applicable legal and regulatory requirements.
In carrying out these responsibilities and duties, the Audit
Committee shall:
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DOCUMENTS/ REPORTS REVIEW |
1. Review this Charter periodically (at least annually) and
update this Charter to the extent the Audit Committee determines
it to be necessary or advisable. The Audit Committee shall
annually review the Committees own performance.
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2. Review and discuss, as appropriate, with management and
the independent auditors and the internal audit function
(including outside firms that are contracted to provide internal
audit and risk management services):
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(a) the Corporations annual audited financial
statements and quarterly financial statements, including the
Corporations disclosures made under
Managements Discussion and Analysis of Financial
Condition and Results of Operations, and, in the case of
quarterly financial statements, the results of the independent
auditors reviews of the quarterly financial statements; |
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(b) analyses prepared by management and/or the independent
auditor setting forth the significant financial reporting issues
and judgments made in connection with the preparation of the
financial statements, including analyses of the effects of
alternative GAAP methods on the financial statements; |
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(c) the effect of regulatory and accounting initiatives on
the financial statements of the Corporation; |
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(d) any significant changes required in the independent
auditors audit plan; |
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(e) any material correcting adjustments that have been
identified by the independent auditor in accordance with GAAP
and applicable laws, rules and regulations; |
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(f) any material off-balance sheet transactions; |
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(g) their assessments of the adequacy of the
Corporations internal control structure and procedures of
the Corporation for financial reporting and the resolution of
any identified material weaknesses in such internal control
structure and procedures; and |
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(h) other matters related to the conduct of the audit which
are to be communicated to the Audit Committee under generally
accepted auditing standards, including under Statement on
Auditing Standards No. 61, Communications with Audit
Committees. |
3. Make a recommendation to the Board as to whether the
financial statements should be included in the
Corporations Annual Report on
Form 10-K.
4. Be directly responsible for (a) the appointment,
compensation and oversight of the work of the independent
auditor, who shall report directly to the Audit Committee and
(b) approve all audit engagement fees and terms of any
audit, audit-related, tax or other services (to the extent
permitted under applicable law) with the independent auditor.
The Audit Committee shall approve in advance the provision by
the independent auditor of all services to be performed by the
independent auditor. Select the independent auditor, considering
independence and effectiveness and approve the audit fees. In
addition, all significant non-audit services should be approved
by the Audit Committee. The independent auditor shall not be
engaged to perform any services prohibited by banking
regulations. The Corporation shall provide for appropriate
funding, as determined by the Audit Committee, for compensating
the independent auditor retained by the Corporation to provide
any approved services. The Audit Committee must receive
appropriate levels of funding, as determined by the Audit
Committee, from the Corporation.
5. Review the performance of the independent auditor.
6. Periodically consult with the independent auditor out of
the presence of management about internal controls and the
completeness and accuracy of the Corporations financial
statements.
7. Take appropriate action to oversee the independence of
the independent auditor, including:
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(a) periodically review management consulting services and
non-audit services not prohibited by applicable law, and the
respective related fees, provided by and to the independent
auditor, which shall have been pre-approved by the Audit
Committee, and any transactional or other relationships between
the Corporation and the independent auditor; and considering
whether, under criteria the Audit Committee determines to be
appropriate, the independent auditors provision of
non-audit services to the Corporation is compatible with
maintaining the independence of the independent auditor; |
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(b) ensuring its receipt from the independent auditor, and
reviewing, a formal written report from the independent auditor
at least annually delineating (i) the independent
auditors internal quality control procedures;
(ii) any material issues raised by the most recent
quality-control reviews, by peer reviews of the firm, or by any
inquiry or investigation by governmental or professional
authorities relating to any audit carried out by the firm and
any steps taken to deal with any such issues, and (iii) (to
assess the independent auditors independence) all
relationships between the independent auditor and the
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(c) reviewing and evaluating the experience and
qualifications of the senior members of the independent auditor
team; evaluating the qualifications, performance and
independence of the independent auditor, including the review
and evaluation of the lead partner of the independent auditor
and whether the auditors quality controls are adequate and
the provision of non-audit services is compatible with
applicable law and compatible with maintaining the
auditors independence, taking into account the opinions of
management and the outside firms that are contracted to provide
internal audit and risk management services; and presenting its
conclusions to the full Board and, if so determined by the Audit
Committee, recommend that the Board take additional action to
satisfy itself of the qualifications, performance and
independence of the independent auditor; |
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(d) actively engaging in a dialogue with the independent
auditor with respect to any disclosed relationships or services
that may impact the objectivity and independence of the
independent auditor and taking appropriate action or
recommending to the Board such appropriate action, as necessary,
on any disclosed relationships to satisfy itself of the
independent auditors independence; |
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(e) complying with all relevant laws and regulations
relative to the independence of the independent auditor,
including but not limited to rotation of independent auditor or
outside audit personnel and the lead audit partner as required
by law; |
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(f) establishing clear hiring policies relating to the
employment or retention by the Corporation of employees or
former employees of the independent auditor. |
8. Meet and review with the independent auditor prior to
the audit to discuss the planning, scope of services and
staffing of the audit, as well as the audit procedures to be
utilized.
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FINANCIAL REPORTING PROCESSES AND INTERNAL AUDIT |
9. Discuss with management and the independent auditor and
otherwise review (a) major issues regarding accounting
principles and financial statement presentations, including any
significant changes in the Corporations selection or
application of accounting principles, and any major issues as to
the adequacy of the Corporations internal controls, and
any special audit steps adopted in light of material control
deficiencies, (b) analyses prepared by management and/or
the independent auditor setting forth significant financial
reporting issues and judgments made in connection with the
preparation of the financial statements, including analyses of
the effect of alternative assumptions, estimates or GAAP methods
on the Corporations financial statements, and (c) the
type and presentation of information to be included in earnings
press releases (paying particular attention to any use of
pro forma or adjusted non-GAAP
information).
10. Discuss with management and the independent auditor the
effect of regulatory and accounting initiatives, as well as
off-balance sheet structures, on the Corporations
financial statements.
11. Inquire of management, internal staff, outside firms
that are contracted to provide internal audit and risk
management services and/or the independent auditor about the
Corporations major financial risk exposures and the steps
management has taken to monitor and control such exposures,
including the Corporations risk assessment and risk
management policies. Also, review and assess the
Corporations guidelines and policies that govern the
processes for identifying and assessing significant risks or
exposures and for formulating and implementing steps to minimize
such risks and exposures to the Corporation.
12. Discuss the Corporations earnings press releases,
as well as financial information and earnings guidance provided
to analysts and rating agencies, although this may be done
generally (i.e., discussion of the
A-4
types of information to be disclosed and the type of
presentation to be made), and the Audit Committee need not
discuss in advance each earnings release or each instances in
which the Corporation may provide earnings guidance.
13. Meet with internal audit personnel and the outside
firms that are contracted to provide internal audit and risk
management services on a periodic basis to discuss the scope of
services. Review all internal audit reports and related
dispositions with management and outside firms that are
contracted to provide internal audit and risk management
services as deemed necessary.
14. Following completion of the annual audit, review
separately with each of management and the independent auditor
any significant difficulties encountered during the course of
the audit, including any restrictions on the scope of work or
access to required information.
15. Review any significant disagreements between management
and the independent auditor. The Audit Committee shall have sole
authority to resolve any disagreements between the independent
auditor and management.
16. Review with the independent auditor and management the
extent to which changes or improvements in financial or
accounting practices, as approved by the Audit Committee, have
been implemented. (This review should be conducted at an
appropriate time subsequent to implementation of changes or
improvements, as decided by the Audit Committee.)
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ETHICAL AND LEGAL COMPLIANCE |
17. Review and update periodically the Corporations
employee handbook and Code of Ethics for directors, the chief
executive officer, senior financial officers, other officers,
and employees and ensure that management has established a
system to enforce these policies.
18. Review managements monitoring of the
Corporations compliance with the organizations
conduct policies, and ensure that management has the proper
review system in place to ensure that the Corporations
financial statements, reports and other financial information
disseminated to governmental organizations, and the public,
satisfy legal requirements.
19. Review, with the Corporations counsel and
regulatory compliance specialist any legal and regulatory
matters that could reasonably have a significant impact on the
Corporations financial matters or business activities.
20. Perform any other activities and functions as may be
required by the Corporations articles of incorporation and
by-laws and by applicable laws, rules and regulations, or by the
Board. or as the Audit Committee or the Board deems necessary or
appropriate.
21. Establish a confidential process for receipt, retention
and treatment of complaints regarding accounting, internal
accounting controls or auditing matters, as well as for
confidential, anonymous submissions by the Corporations
employees of concerns regarding questionable accounting or
auditing matters.
22. Prepare the report required by the SECs proxy
rules to be included in the Corporations annual proxy
statement.
23. Report regularly to the full Board and review any
issues that arise with respect to the quality or integrity of
the Corporations financial statements, the
Corporations compliance with legal or regulatory
requirements, the performance and independence of the
independent auditor or the performance of the internal audit
function.
24. Obtain advice and assistance from outside legal,
accounting or other advisors as the Audit Committee deems
necessary to carry out its duties and receive appropriate
funding, as determined by the Audit Committee, from the
Corporation for payment of compensation to the outside legal,
accounting or other advisors employed by the Audit Committee.
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25. Review and reassess the adequacy of the Audit Committee
Charter and the Committees own performance annually and
recommend any proposed changes to the Board annually.
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VI. |
LIMITATION OF AUDIT COMMITTEES ROLE |
The independent auditor, internal audit personnel and outside
firms that are contracted to provide internal audit and risk
management services are or shall be ultimately accountable to
the Audit Committee, in its capacity as a committee of the
Board, and to the full Board. While the Audit Committee has the
oversight, supervisory and other powers and responsibilities set
forth in this 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 Corporations
financial statements are complete and accurate or are in
compliance with GAAP. These matters and tasks are the
responsibility of the Corporations management, the
independent auditor, internal audit personnel and outside firms
that are contracted to provide internal audit and risk
management services. Likewise, it is the responsibility of the
Corporations management and/or the independent auditor to
bring appropriate matters to the attention of the Audit
Committee and to keep the Audit Committee informed of matters
which the Corporations management or the independent
auditor believe require attention, guidance, resolution or other
actions, the bases therefor and other relevant considerations.
While it is not the duty of the Audit Committee to conduct
investigations or to assure compliance with applicable laws,
rules and regulations, the Audit Committee may take such actions
with respect to such matters as it deems necessary or advisable
in fulfilling its duties identified above.
* * * * *
It is acknowledged that all of the above-listed tasks and focus
areas may not be relevant to all the matters and tasks that the
Audit Committee may consider and act upon from time to time, and
the members of the Audit Committee in their judgment may
determine the relevance thereof and the attention such items
shall receive in any particular context.
Adopted by the Board of Directors on April 27, 2005.
A-6
WESTERN ALLIANCE BANCORPORATION
ANNUAL
MEETING OF STOCKHOLDERS TO BE HELD ON APRIL 18, 2006
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
March 10, 2006, at the Annual Meeting of Stockholders to be held at The Ritz-Carlton, 2401 East
Camelback Road, Phoenix, Arizona, on April 18, 2006, or any adjournment or postponement thereof.
(Continued and to be signed on the reverse side.)
ANNUAL MEETING OF STOCKHOLDERS OF
WESTERN ALLIANCE BANCORPORATION
April 18, 2006
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 cut-off or meeting date.
6Please
detach along perforated line and mail in the envelope provided
IF you are not voting via telephone or the Internet.6
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF DIRECTORS.
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. Election of Directors: |
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NOMINEES: |
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FOR ALL NOMINEES
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Paul Baker |
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Bruce Beach |
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WITHHOLD AUTHORITY
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William S. Boyd |
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FOR ALL NOMINEES
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Steven J. Hilton |
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Marianne Boyd Johnson |
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FOR ALL EXCEPT |
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(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: n
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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. 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. 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, 2006
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
March 10, 2006, at the Annual Meeting of Stockholders to be held at The Ritz-Carlton, 2401 East
Camelback Road, Phoenix, Arizona, on April 18, 2006, or any adjournment or postponement thereof.
(Continued and to be signed on the reverse side.)
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.
6 Please detach along perforated line and mail in the envelope provided. 6
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF DIRECTORS.
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. Election of Directors: |
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NOMINEES: |
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FOR ALL NOMINEES
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Paul Baker |
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Bruce Beach |
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WITHHOLD AUTHORITY |
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William S. Boyd |
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FOR ALL NOMINEES |
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Steven J. Hilton |
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Marianne Boyd Johnson |
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FOR ALL EXCEPT |
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(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
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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. 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. 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. |