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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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
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Fee paid previously with preliminary materials: |
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Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by
registration statement number, or the form or schedule and the date
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 22, 2008
To the Stockholders of Western Alliance Bancorporation:
The Annual Meeting of Stockholders (the Annual Meeting) of Western Alliance Bancorporation (the
Company) will be held at the Embassy Terrace at 2800 W. Sahara Avenue, Las Vegas, Nevada 89102 on
Tuesday, April 22, 2008, at 8:00 a.m., local time, for the following purposes:
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To elect four Class III directors to the Board of Directors whose terms will
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To ratify the appointment of McGladrey & Pullen, LLP as the Companys
independent auditor; and |
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To transact such other business as may properly come before the stockholders at
the Annual Meeting. |
Only stockholders of record at the close of business on February 28, 2008 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.
Your vote is important. Even if you plan to attend the Annual Meeting in person, please vote your
shares of the Companys common stock in one of these ways: (1) use the toll-free telephone number
shown on the proxy card; (2) visit the website listed on the proxy card; or (3) mark, sign, date
and promptly return the proxy card to the address provided. If you attend the Annual Meeting, you
may revoke your proxy and vote your shares in person.
By order of the Board of Directors,
Linda N. Mahan
Secretary
Las Vegas, Nevada
March 21, 2008
Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to be
Held on April 22, 2008: This proxy statement, along with our Annual Report on Form 10-K for the
fiscal year ended December 31, 2007 and our 2007 Annual Report are available free of charge on our
website www.westernalliancebancorp.com.
TABLE OF CONTENTS
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PROXY STATEMENT
WESTERN ALLIANCE BANCORPORATION
2700 West Sahara Avenue
Las Vegas, Nevada 89102
GENERAL INFORMATION
This proxy statement is being provided to stockholders of Western Alliance Bancorporation (the
Company) for solicitation of proxies on behalf of the Board of Directors of the Company for use
at the Annual Meeting of Stockholders (the Annual Meeting) to be held at the Embassy Terrace at
2800 W. Sahara Avenue, Las Vegas, Nevada 89102, at 8:00 a.m., local time, on Tuesday, April 22,
2008 and any and all adjournments thereof. This proxy statement, the Companys annual report on
Form 10-K, and the proxy card (or the voting instruction card for shares held in the Companys
401(k) plan) are being mailed to stockholders of the Company on or about March 21, 2008. The
Company will pay all expenses incurred in this solicitation. In addition to the Company soliciting
proxies by mail, over the Internet and by telephone, the Companys directors, officers and
employees may solicit proxies on behalf of the Company without additional compensation. Banks,
brokerage houses and other institutions, nominees and fiduciaries will be requested to forward the
proxy materials to beneficial owners and to obtain authorization for the execution of proxies. The
Company will, upon request, reimburse such parties for their reasonable expenses in forwarding
proxy materials to beneficial owners.
Your proxy is being solicited by the Board of Directors of the Company. It will be voted as
you direct; however, if no instructions are given on an executed and returned proxy it will be
voted FOR the election of the four Class III director nominees whose terms will expire at the 2011
annual meeting and FOR the ratification of the appointment of McGladrey & Pullen, LLP as the
Companys independent auditors.
If any other matters are properly brought before the Annual Meeting, the persons named in the
proxy will vote the shares represented by such proxy on such matters as determined by a majority of
the Board of Directors. The Company is required to file an annual report on Form 10-K for its 2007
fiscal year with the Securities and Exchange Commission (SEC). Stockholders may obtain, free of
charge, a copy of our annual report on Form 10-K by writing to the Company at 2700 West Sahara
Avenue, Las Vegas, Nevada 89102, Attention: Corporate Secretary. Our annual report on Form 10-K
also is available on our website,
www.westernalliancebancorp.com, by clicking on the Investor
Relations tab and then clicking on the link titled Documents.
VOTING RIGHTS
Only stockholders of record at the close of business on February 28, 2008 (the Record Date),
are entitled to vote at the Annual Meeting and any adjournments thereof. On the Record Date, there
were 30,219,153 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 voting over the
Internet, using a toll-free telephone number, or completing the proxy card and mailing it in the
postage-paid envelope provided. 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 21, 2008. Specific instructions to be followed by
any stockholder interested in voting via the Internet or telephone are shown on the proxy card. The
Internet and telephone voting procedures are designed to authenticate the stockholders identity
and to allow stockholders to vote their shares and confirm that their instructions have been
properly recorded. If your shares are held in the name of a bank or broker, the availability of
telephone and Internet voting will depend on the voting processes of the applicable bank or broker.
Therefore, we recommend that you follow the voting instructions on the form you receive.
A proxy may be revoked at any time before the shares represented by it are voted at the Annual
Meeting by delivering to the Corporate Secretary of the Company either a written revocation or a
duly executed proxy bearing a later date (including a proxy given over the Internet or by
telephone) or by voting in person at the Annual Meeting.
If your shares are held in a brokerage account or by another nominee, you are considered the
beneficial owner of shares held in street name, and these proxy materials are being forwarded
to you by your broker or nominee (the record holder) along with a voting instruction card. As the
beneficial owner, you have the right to direct your record holder how to vote your shares, and the
record holder is required to vote your shares in accordance with your instructions. If your shares
are held by a broker, the broker will ask you how you want your shares to be voted. If you give the
broker instructions, your shares will be voted as you direct. If you do not give instructions, the
broker may vote your shares in its discretion.
Assuming the presence of a quorum at the Annual Meeting, directors will be elected by a
plurality of the votes cast in person or by proxy (Item 1). There will be no cumulative voting in
the election of directors. The proposal to ratify the appointment of McGladrey & Pullen, LLP as
the Companys independent auditors (Item 2) will be approved if the votes cast for the proposal
exceed those cast against the proposal. Abstentions and broker non-votes will be treated as shares
that are present, or represented and entitled to vote for purposes of determining the presence of a
quorum at the Annual Meeting. Broker non-votes will not be counted as a vote cast on any matter
presented at the Annual Meeting. Abstentions will not be counted in determining the number of
votes cast in connection with any matter presented at the Annual Meeting.
Shares in the Company 401(k) Plan
If you hold shares in the Western Alliance Bancorporation 401(k) Plan, referred to as the
401(k) Plan, you may instruct the plan trustee on how to vote your shares in the plan by mail, by
telephone or on the Internet as described above, except that, if you vote by mail, the card that
you use will be a voting instruction card rather than a proxy card. If you hold shares in the
401(k) Plan, a copy of the voting instruction card is enclosed with this proxy statement. You may
vote all the shares allocated to your account on the Record Date.
In addition, your vote will also apply pro rata, along with the votes of other participants in
the 401(k) Plan who return voting instructions to the trustee, to all shares held in the 401(k)
Plan for which voting directions are not received. These undirected shares may include shares
credited to the accounts of participants who do not return their voting instructions and shares
held in the plan that were not credited to individual participants accounts as of the Record Date.
The trustee will automatically apply your voting preference to the undirected shares
proportionately with all other participants who provide voting directions.
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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 www.westernalliancebancorp.com
or, for print copies, by writing to the Company at 2700 West Sahara, Las Vegas, Nevada 89102,
Attention: Corporate Secretary.
Board Composition
The Companys bylaws provide that the Board of Directors will consist of not less than eight
nor more than 17 directors. The Board of Directors may, from time to time, fix the number of
directors within these limits. The Companys Board is currently fixed at 15 directors. In
accordance with the terms of the Companys Articles of Incorporation, the terms of office of the
directors are divided into three classes:
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Class I, whose current term will expire at the annual meeting of stockholders to
be held in 2009; |
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Class II, whose current term will expire at the annual meeting of stockholders
to be held in 2010; and |
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Class III whose current term will expire at the annual meeting of stockholders
to be held in 2008. |
At each annual meeting of stockholders 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, such that each class shall be as nearly
equal in number as possible.
The Board of Directors currently consists of 15 directors divided into three classes. Larry
L. Woodrum has informed the Company that he will not be standing for reelection at the Annual
Meeting. Effective upon the Annual Meeting, the Board of Directors will consist of 14 member
divided into three classes, with one vacancy in Class III. Information regarding each of the
Companys directors is set forth below. All ages are provided as of December 31, 2007.
Class I Directors with Terms Expiring in 2009
Bruce Beach (age 58) has been a director of the Company since April 2005. Mr. Beach has been a
director of Alliance Bank of Arizona since its formation. Mr. Beach has been Chairman and Chief
Executive Officer of Beach, Fleischman & Co., P.C., an accounting and business advisory firm in
Southern Arizona, since May 1991. Mr. Beach is a certified public accountant, received a BS in
business administration and an MBA from the University of Arizona, and has 33 years of experience
in public accounting. Mr. Beach was the Vice-Chairman of Carondelet Health Network, one of the
largest hospital systems in Southern Arizona, from July 2004 until December 2007, and served as the
chairman of its audit committee from July 2003 until December 2007. On January 1, 2008, Mr. Beach
assumed the position of Chairman of Carondelet Health Network and no longer serves on the audit
committee.
William S. Boyd (age 76) has been a director and principal stockholder of the Company since
inception and was a founder of its first bank subsidiary, Bank of Nevada (formerly, BankWest of
Nevada). Mr. Boyd has served as a director of Boyd Gaming Corporation since its inception in June
1988, and as Chairman of the Board of Directors since August 1998. Mr. Boyd also held the position
of CEO of Boyd
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Gaming Corporation from August 1988 through December 2007, when he was elected to the office of
Executive Chairman of that company, effective January 2008. Mr. Boyd has been a director of
California Hotel and Casino since its inception in 1973. For the past ten years, he has been on
the board of directors and the President of the National Center for Responsible Gaming. 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 46) has been a director of the Company and Alliance Bank of Arizona
since December 2002 and February 2003, respectively. Mr. Hilton was the co-founder, and is the
Chairman and Chief Executive Officer of Meritage Homes Corporation. Mr. Hilton founded
Arizona-based Monterey Homes in 1985. Under Mr. Hiltons leadership, Monterey became a publicly
traded company and combined with Legacy Homes in 1997, resulting in the creation of Meritage Homes
Corporation. Mr. Hilton received his Bachelor of Science degree in accounting from the University
of Arizona.
Marianne Boyd Johnson (age 49) has served as a founding director of the Company and Bank of
Nevada since their establishment in 1995 and 1994, respectively. Since 1992, Ms. Johnson has been
a member of the Board of Directors of Boyd Gaming Corporation and has served as its Vice Chairman
of the Board and Senior Vice President since February 2001 and December 2001, respectively. Ms.
Johnson has served Boyd Gaming since 1977 in a variety of capacities, including sales and
marketing. Ms. Johnson served as a Director of Nevada Community Bank until its sale to First
Security Bank (Wells Fargo) in 1993. Ms. Johnson is the daughter of director William S. Boyd.
Kenneth A. Vecchione (age 54) has been a director of the Company since October 2007. Mr.
Vecchione is the Chief Financial Officer of Apollo Global Management, L.P., one of the largest
private equity firms in the United States, and is the former Vice Chairman and Chief Financial
Officer of MBNA Corporation with prior work experience at AT&T Universal Card, First Data Corp and
Citicorp Credit Card Services. Mr. Vecchione serves as a Director of Affinion Group, and is the
Chairman of its Audit Committee, in addition to being a Director of International Securities
Exchange. Mr. Vecchione is a graduate of the State University of New York.
Class II Directors with Terms Expiring in 2010
Cary Mack (age 48) has been a director of the Company since April 2005. Mr. Mack has been a
director of Torrey Pines Bank since its formation in May 2003. Mr. Mack is licensed in the State
of California as a certified public accountant, attorney and real estate broker. He was formerly
employed with PricewaterhouseCoopers audit and dispute resolution practices until 1990, when he
became a founding stockholder, and the chief executive officer of Mack/Barclay Inc., a forensic
certified public accounting, economic and information technology consulting firm specializing in
the evaluation and resolution of complex economic and accounting issues in the business and
litigation environments. Mack/Barclay was acquired in May 2006 by LECG Corporation, a global
expert services firm that provides independent expert testimony and analysis, original
authoritative studies, and strategic consulting services. Mr. Mack is a managing director with
LECG.
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Arthur Marshall (age 78) has been a director of the Company since 1995 and the Chairman of the
Board of Bank of Nevada since its establishment in 1994. He served as Chairman of the Board of
Directors of the Company until December 2002. He was a co-founder of Marshall Rousso, now Marshall
Retail Group, or MRG, a privately owned retail apparel chain in the Western United States and
served as its President from 1959 to 1988. He is a member of the Nevada Gaming Commission and the
national commission of the Anti-Defamation League and a former board member of the Public Employees
Retirement System of Nevada. He is a recipient of the Prime Ministers award from the State of
Israel and the Distinguished Nevadan Award from the University of Nevada Las Vegas. Mr. Marshall is
the father of director Todd Marshall.
Todd Marshall (age 51) was a founding director of Bank of Nevada and the Company and has
served as a director continuously since their establishment in 1994 and 1995, respectively. Mr.
Marshall has been a director of Marshall Retail Group since May 1976, is currently its Chairman and
served as its Chief Executive Officer until January 2005. The Marshall Retail Group owns and
operates stores in more than 70 locations, primarily in major casino-hotels in Nevada, Mississippi
and New Jersey. He is currently the owner and President of Marshall Management Co., a real estate
investment and property management company in Las Vegas. In July 2007, Mr. Marshall joined the
board of directors of Consumer Health Services. Mr. Marshall is the son of director Arthur
Marshall.
M. Nafees Nagy, M.D. (age 64) has served as a director of Bank of Nevada since its
establishment in 1994 and as a director of the Company since April 2004. Dr. Nagy has practiced
medicine in Las Vegas for more than 30 years and specializes in oncology, clinical hematology, and
cancer chemotherapy. He founded and is President and a director of the Nevada Cancer Centers. Dr.
Nagy served for eight years as a member of the Nevada State Board of Medical Examiners and also
served as its Secretary. Dr. Nagy is certified by the American Board of Internal Medicine and the
American Board of Utilization Review and Quality Assurance and has consulted for several healthcare
concerns. He was a member of the advisory board for Option Care. Dr. Nagy also has served as a
member and the chair of the Medical Carrier Advisory Committee for the Clark County Medical Society
and currently serves as a member of the Societys Nominating Committee. Dr. Nagy formerly served
as a director of Sun Bank for five years and Nevada Community Bank until its sale in 1993. He
retired from the U.S. Army as a Lt. Colonel and served in Operation Desert Storm in 1991. In
January 2008, the Governor of Nevada appointed Dr. Nagy to the special healthcare issues advisory
board.
James E. Nave, D.V.M. (age 63) has served as a director of the Company and Bank of Nevada
since their establishment in 1995 and 1994, respectively. Dr. Nave, a former officer in the armed
forces, has owned the Tropicana Animal Hospital since 1974, and is the owner of multiple hospitals.
He is a former President of the American Veterinary Medical Association. Dr. Nave is also the
Globalization Liaison Agent for Education and Licensing for the American Veterinary Medical
Association. He is a member and past president of the Nevada Veterinary Medical Association and
the Western Veterinary Conference, as well as a member of the Clark County Veterinary Medical
Association, the National Academy of Practitioners, the American Animal Hospital Association, and
the Executive Board of the World Veterinary Association. Dr. Nave was also the chairman of the
University of Missouri, College of Veterinary Medicine Development Committee. He was 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 on the board of the privately-held company Station Casinos,
Inc.
Class III Directors with Terms Expiring in 2008
The terms of Class III directors will expire at this years Annual Meeting. Mr. Woodrum is an
outgoing director who will not stand for reelection this year. The Board has nominated the
individuals listed below, all of whom are currently directors of the Company, to be elected as
Class III directors at the
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Annual Meeting. See Items of Business To Be Acted On At The Meeting - Item 1. Election of
Directors. If elected, the new terms of office for the four continuing directors will expire at
the Annual Meeting in 2011.
George J. Maloof, Jr. (age 43) has served as a director of the Company since April 2006. Mr.
Maloof is the President of The Palms Casino Resort and has been responsible for the development and
operation of hotels and casinos throughout the Southwest and in Las Vegas and North Las Vegas,
Nevada, including Palms Place, a luxury condominium project. He has served as a director of First
National Bank of New Mexico and First Security Bank of Nevada. Mr. Maloof received a bachelors
degree from the University of Nevada Las Vegas.
John P. Sande, III (age 58) has been a director of the Company and Chairman of the Board of
Directors for First Independent Bank of Nevada since April 2007 and September 1999, respectively.
Mr. Sande is a partner at Jones Vargas, a prominent Nevada law firm specializing in administrative
law, government relations and trust and estates, and is admitted to the state and federal courts in
California and Nevada. He is a trustee of the William F. Harrah Trusts, serves as a director of
Employers Holdings, Inc., and is a former director of Bank of America Nevada. Mr. Sande graduated
with great distinction from Stanford University and has been named to its All Century Football
Team. He received his Juris Doctor degree from Harvard University where he graduated cum laude.
Robert G. Sarver (age 46) has been the President, Chairman and Chief Executive Officer of the
Company since December 2002. He has served as Chairman of the Companys Torrey Pines Bank
subsidiary since May 2003. He also served as the Chief Executive Officer of Torrey Pines Bank from
May 2003 until June 2006. Mr. Sarver organized and founded National Bank of Arizona in 1984 and
served as President at the time of the sale of that bank in 1994 to Zions Bancorporation. Mr.
Sarver was the lead investor and Chief Executive Officer of GB Bancorporation, the former parent
company of Grossmont Bank, from 1995 to 1997. Mr. Sarver served as Chairman and Chief Executive
Officer of California Bank and Trust and as an Executive Vice President with Zions Bancorporation
from June 1998 to March 2001. He served as a director and credit committee member of Zions
Bancorporation from 1995 to 2001. Mr. Sarver is a director and audit committee member of Skywest
Airlines and a director of Meritage Homes Corporation. He is also the Managing Partner of the
Phoenix Suns NBA basketball team and a member of the board of directors of the Sarver Heart Center
at the University of Arizona.
Donald D. Snyder (age 60) has served as a director of the Company and of Bank of Nevada since
1997. He had earlier served as a founding director of the entity created to charter Bank of Nevada
and was one of its initial investors. Mr. Snyder is the Chairman of the Las Vegas Performing Arts
Center Foundation. He also is a director of Sierra Pacific Resources, Cash Systems, Inc., and
Switch Communications Group, LLC. Mr. Snyder was the President of Boyd Gaming Corporation from
January 1997 to March 2005, having joined the companys board of directors in April 1996, and its
management team in July 1996. Prior to that, he was president and chief executive officer of the
Fremont Street Experience LLC, a private/public partnership formed to develop and operate a major
redevelopment project in Downtown Las Vegas. Mr. Snyder was previously chairman of the board of
directors and chief executive officer of First Interstate Bank of Nevada, then Nevadas largest
full-service bank, from 1987 through 1991. During his 22 years with First Interstate Bank from
1969 to 1991, Mr. Snyder served in various management positions in retail and corporate banking, as
well as international and real estate banking. He has served and continues to serve on the boards
of numerous industry and community organizations.
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Director Independence
The Companys common stock is traded on the New York Stock Exchange (NYSE). The NYSEs
rules require that a majority of directors of NYSE-listed companies be independent. For a
director to be independent under the NYSEs rules, the Board of Directors must affirmatively
determine that the director has no material relationship with the Company, including its
subsidiaries, either directly or as a partner, shareholder, or officer of an organization that has
a relationship with the Company. Subject to certain exceptions, the NYSE rules also expressly
provide that a person cannot be an independent director if:
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At any time in the last three years, the director is, or has been employed by
the Company, or has an immediate family member that serves or has served as one of
its executive officers; |
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The director or an immediate family member has received more than $100,000 in
direct compensation from the Company over a twelve-month period during the last
three years, other than for director or committee fees and pension or other forms
of deferred compensation for prior service (provided such compensation is not
contingent in any way on continued service); |
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The director is a partner or employee of a firm that is the Companys current
internal or external auditor, or the director has an immediate family member who is
currently a partner of such firm or who is currently employed by the firm in its
audit, assurance, or tax compliance practice, or within the last three years, the
director or an immediate family member was a partner or employee in such firm and
personally worked on the Companys audit in that time; |
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In the last three years, the director or an immediate family member is or was
employed as an executive officer by another company where, at the same time, any of
the Companys present executive officers serve or served on that companys
compensation committee; or |
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The director is currently employed by, or, in the case of an immediate family
member, is employed as an executive officer by, another company that has made
payments to the Company, or received payments from the Company for property or
services that, in any of the last three fiscal years, account for more than 2% of
such companys consolidated gross revenue or $1,000,000, whichever is greater. |
Of the 15 persons currently on the Board of Directors, including the Class III nominees, ten
have been determined by the Board to be independent for purposes of Section 303A of the Listed
Company Manual of the NYSE. The Board based these determinations primarily on a review of the
responses of the directors to questions regarding employment and compensation history, affiliations
and family and other relationships, including those relationships described under Compensation
Committee Interlocks and Insider Participation and Certain Business Relationships on pages 16
and 33 of this proxy statement, respectively, and on discussions with such directors.
Mr. Sarver and Mr. Woodrum are not considered independent because they have served as
executive officers of the Company and/or one of its banking subsidiaries (the Banks) within the
last three years. Mr. Hilton is not considered independent because Mr. Sarver was a member of the
compensation committee of Meritage Homes Corporation (Meritage) until February 2004 and continues
to serve as a Director for Meritage, and Mr. Hilton is the Chairman and Chief Executive Officer of
Meritage. Mr. A. Marshall is not considered independent because of his position as a salaried
Chairman of the Companys subsidiary, Bank of Nevada, and Mr. T. Marshall is not considered
independent because he is Mr. A. Marshalls son.
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Meetings of the Board of Directors
The Board of Directors held six meetings in 2007. With the exceptions of Messrs. Sande and
Vecchione, who became Directors in April and October 2007 respectively, each director attended at
least 75% of the Board meetings and meetings of Committees on which he or she served in 2007. All
of the directors attended the 2007 annual meeting of stockholders, with the exception of Messrs.
Sande and Vecchione, who had not yet been appointed as directors at that time.
The non-management directors held four meetings in 2007. The non-management directors have
selected Mr. Snyder as Presiding Director to lead their sessions.
Communication with the Board and its Committees
Any stockholder or other interested person may communicate with the Board, a specified
director, (including the Presiding Director), the non-management directors as a group, or a
committee of the Board by directing correspondence to their attention, in care of the Corporate
Secretary, Western Alliance Bancorporation, 2700 West Sahara Avenue, Las Vegas, Nevada 89102.
Anyone who wishes to communicate with a specific Board member, the non-management directors only or
a specific committee should send instructions asking that the material be forwarded to the
applicable director, group of directors or the appropriate committee chairman. All communications
so received from stockholders or other interested parties will be forwarded to the director or
directors designated.
Committees of the Board of Directors
As of December 31, 2007, the Companys Board of Directors had four standing 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. |
The Credit Committee was disbanded in January of 2008, with all of its functions and
responsibilities being assumed by the full Board of Directors. At the same time, the Board created
a new Investment Committee consisting of four non-management directors, Messrs. Hilton, Snyder,
Vecchione and Woodrum. Mr. Woodrum has since decided not to stand for reelection to the Board.
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 www.westernalliancebancorp.com
or, for print copies, by writing to the Company at 2700 West Sahara, Las Vegas, Nevada 89102,
Attention: Corporate Secretary.
Audit Committee
The Companys Audit Committee consists of five independent directors (Messrs. Beach, Mack, and
Sande and Drs. Nagy and Nave). The Audit Committee held 13 meetings in 2007.
Mr. Mack serves as the Committees chairman and the Board of Directors has determined that he
meets the NYSE standard of possessing accounting or related financial management expertise. Each
- 8 -
member of the Audit Committee is financially literate under NYSE listing standards and Mr. Mack
qualifies as an audit committee financial expert as defined by the SEC. The Audit Committees
primary duties include:
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Serving as an independent and objective body to monitor and assess the Companys
compliance with regulatory requirements, its financial reporting processes and
related internal control systems and the general performance of the Companys
internal audit function; |
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Overseeing the compliance of the Companys internal audit function with the
requirements of Section 404 of the Sarbanes-Oxley Act of 2002; |
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Overseeing the audit and other services of the Companys outside auditors and
being directly responsible for the appointment, independence, qualifications,
compensation and oversight of the outside auditors, who will report directly to the
Audit Committee; |
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Supporting an open means of communication among the Companys outside auditors,
accountants, financial and senior management, its internal auditors, its regulatory
audit department and the Board; |
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Resolving any disagreements between the Companys management and the outside
auditors regarding the Companys financial reporting; and |
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Preparing (or directing to be prepared and reviewing) the Audit Committee Report
for inclusion in the Companys proxy statement for its annual meeting. |
The Audit Committee charter also mandates that the Audit Committee pre-approve all audit,
audit-related, tax and other services conducted by the Companys independent accountants. A copy
of the Audit Committee charter, as amended in April 2007, is available on the Companys website at
www.westernalliancebancorp.com or, for print copies, by writing to the Company at 2700 West Sahara,
Las Vegas, Nevada 89102, Attention: Corporate Secretary.
Compensation Committee
As of December 31, 2007, the Companys Compensation Committee consisted of two independent
directors (Mr. Snyder and Dr. Nave). A third member, Paul Baker, resigned from the Board in August
2007. At its January 22, 2008 meeting, the Board appointed Mr. Vecchione, also an independent
director, to fill the vacancy on the Compensation Committee created by Mr. Bakers resignation.
The Committee meets a minimum of four times per year. The Compensation Committee held five
meetings in 2007, on January 22, February 27, April 17, October 16, and November 21.
The Compensation Committees primary duties include:
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Determining the compensation of the Companys executive officers; |
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Annually reviewing and approving corporate goals and objectives relevant to the
Chief Executive Officers compensation, and evaluating the CEOs performance in
light of those goals and objectives; |
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Reviewing the Companys executive compensation policies and plans; |
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Administering and implementing the Companys equity compensation plans; |
- 9 -
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Determining the number of shares underlying stock options and restricted common
stock awards to be granted to the Companys directors, executive officers and other
employees pursuant to these plans; and |
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Reviewing and discussing the Compensation Discussion and Analysis included in
this Proxy Statement with management. |
The Compensation Committee also has the authority to delegate its authority to subcommittees and
individual members of the Committee as the Committee deems appropriate; provided that any delegate
shall report any actions taken to the whole Committee at its next regularly scheduled meeting.
Further information regarding the Compensation Committee can be found beginning at page 14 of this
proxy statement, and the Compensation Committee report appears at page 24.
Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committee consists of three independent directors (Mr.
Boyd, Dr. Nagy and Ms. Johnson). Mr. Boyd serves as chairman of the Nominating and Corporate
Governance Committee. The Nominating and Corporate Governance Committee held four meetings in 2007.
The Committees duties include:
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Identifying individuals qualified to become members of the Companys Board of
Directors and recommending director candidates for election or re-election to the
Board; |
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Considering and making recommendations to the Board regarding Board size and
composition, committee composition and structure and procedures affecting
directors; and |
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Monitoring the Companys corporate governance principles and practices. |
Credit Committee
Prior to being disbanded in January of 2008, the Credit Committee consisted of seven directors
(Messrs. Hilton, Maloof, A. Marshall, T. Marshall, Snyder and Woodrum, and Ms. Johnson). Mr. A.
Marshall served as chairman of the Credit Committee. The Credit Committee reviewed the quality of
the Companys credit portfolio, oversaw the effectiveness and administration of the Companys
credit-related policies, reviewed the Companys loan portfolio composition and the adequacy of its
allowance for loan and lease losses, and monitors its internal credit examinations. The Credit
Committee held four meetings in 2007.
Compensation of Directors
The following table provides information concerning the compensation of the Companys
non-employee directors for 2007. The Company does not pay directors who are also employees of the
Company, or one or more of the subsidiary banks, additional compensation for their service as
directors and, accordingly, this table does not include Messrs. Sarver and Woodrum. Mr. Woodrum
resigned as President and CEO of Bank of Nevada in July 2006; however, he continues to be a
salaried officer and employee of the Bank. Non-employee directors receive annual retainers, fees
for meeting attendance, and bi-annual equity grants in the form of non-qualified stock options. In
accordance with SEC regulations, stock and option grants are valued at the grant date fair value
computed in accordance with Statement of Financial Accounting Standards No. 123 (Revised),
Share-Based Payment (FAS 123R). For stock options, the FAS 123R fair value per share is based
on certain assumptions that are explained in footnote 13 to our audited financial statements, which are included in our Annual Report on Form 10-K
for the
- 10 -
year ended December 31, 2007. The table below discloses this expense ratably over the
vesting period, but without reduction for assumed forfeitures (as is done for financial reporting
purposes). The table includes the ratable portion of grants made both in the current and in prior
years.
Non-employee directors are paid an annual retainer of $25,000, plus additional retainer
amounts as follows: (1) $5,000 for the Presiding Independent Director, (2) $10,000 for the Audit
Committee chair, and (3) $5,000 for all other Committee chairs. Annual retainers are paid in
increments on a quarterly basis. Non-employee directors also are paid the following meeting fees:
(1) $1,500 for Board meetings, (2) $1,500 for Audit Committee meetings, and (3) $750 for all other
Committee meetings. Finally, non-employee directors receive a bi-annual stock option grant of
5,000 shares. Directors did not receive a stock option grant during fiscal year 2007.
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Fees Earned or |
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Option |
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All Other |
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Name |
|
Paid in Cash ($) |
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Awards ($) (1) |
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Compensation ($) (2) |
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Total ($) |
|
Current |
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|
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|
|
|
|
|
|
|
|
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Bruce Beach |
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47,500 |
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19,294 |
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0 |
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66,794 |
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William S.
Boyd |
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38,250 |
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18,238 |
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0 |
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56,578 |
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Steven J. Hilton |
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31,000 |
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19,294 |
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|
|
0 |
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50,294 |
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|
|
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|
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Marianne
Boyd Johnson |
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36,250 |
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19,294 |
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|
|
0 |
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55,544 |
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|
|
|
|
|
|
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|
Cary Mack |
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56,000 |
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19,294 |
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|
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0 |
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75,294 |
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George J. Maloof, Jr. |
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28,750 |
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15,488 |
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0 |
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44,238 |
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|
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|
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Arthur Marshall |
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39,000 |
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19,294 |
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50,000 |
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108,294 |
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|
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|
|
|
|
|
|
|
|
|
|
|
|
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Todd Marshall |
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34,000 |
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19,294 |
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|
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0 |
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53,294 |
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|
|
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|
|
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|
|
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|
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M. Nafees
Nagy, M.D. |
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43,750 |
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|
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19,294 |
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|
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0 |
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63,044 |
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|
|
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|
|
|
|
|
|
|
|
|
|
|
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James Nave, D.V.M. |
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49,750 |
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|
|
19,294 |
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|
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0 |
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63,044 |
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|
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|
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|
|
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John Sande, III |
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32,250 |
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0 |
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0 |
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32,250 |
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|
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|
|
|
|
|
|
|
|
|
|
|
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Donald D. Snyder |
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46,250 |
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|
|
19,294 |
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|
|
0 |
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|
|
65,544 |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Kenneth A. Vecchione |
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0 |
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|
0 |
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|
|
0 |
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|
|
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Former |
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
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|
|
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|
Paul Baker (3) |
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|
17,000 |
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|
|
19,294 |
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|
|
0 |
|
|
|
36,294 |
|
|
|
|
(1) |
|
This column reflects the dollar amount recognized for financial statement reporting purposes
for the fiscal year ended December 31, 2007 in accordance with FAS 123R for stock or options
granted after the initial public offering and in accordance with FAS 123 for stock or options
granted prior to the initial public offering. Each director was awarded 5,000 options on
April 16, 2006, with a grand date fair value per option of $12.39, resulting in total
compensation per director of $61,950 which is recorded over the four year vesting period, or $15,488 per
year. As of December 31, 2007, each director had the following number of options
outstanding: Mr. Beach, |
- 11 -
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2,850 exercisable and 5,750 unexercisable; Mr. Boyd, 1,250
exercisable and 5,750 unexercisable; Mr. Hilton, 7,250 exercisable and 5,750 unexercisable;
Ms. Johnson, 7,250 exercisable and 5,750 unexercisable; Mr. Mack, 6,650 exercisable and
6,350 unexercisable; Mr. Maloof, 1,250 exercisable and 3,750 unexercisable; Mr. A. Marshall,
7,250 exercisable and 5,750 unexercisable; Mr. T. Marshall, 7,250 exercisable and 5,750
unexercisable; Dr. Nagy, 2,850 exercisable and 5,750 unexercisable; Dr. Nave, 7,250
exercisable and 5,750 unexercisable; Mr. Snyder, 7,250 exercisable and 5,750 unexercisable;
and Mr. Baker, 2,850 exercisable and 5,750 unexercisable. Complete beneficial ownership
information of Company stock for each of our directors is provided in this Proxy Statement
under the heading, Security Ownership of Management and Certain Beneficial Owners. |
|
(2) |
|
The amount shown for Mr. A. Marshall includes a $50,000 annual fee he received in 2007 for
serving as Chairman of the Board of Bank of Nevada. |
|
(3) |
|
Mr. Baker resigned from the Board of Directors effective as of August 23, 2007. |
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 the 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, 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, 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.
- 12 -
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 approved for re-election by
the Board. Although he was nominated for re-election by the Board, Mr. Woodrum subsequently
decided not to stand for reelection. With respect to this years Annual Meeting, no nominations
for director were received from stockholders.
Audit Committee Report
The Board of Directors of Western Alliance Bancorporation approved the charter of the
Companys Audit Committee on April 27, 2005, and approved amendments to the charter on April 18,
2007. The charter states that the primary purpose of the Committee is to assist the Board of
Directors in fulfilling its oversight responsibilities by reviewing: (i) the Companys financial
reports and other financial information provided by the Company to governmental bodies (e.g.,
federal and state banking regulators, the Securities and Exchange Commission, and the Internal
Revenue Service) or the public; (ii) the Companys systems of internal controls regarding finance,
accounting, regulatory compliance and ethics that management and the Board of Directors have
established; (iii) the Companys internal audit function; and (iv) the Companys auditing,
accounting and financial reporting processes. The Audit Committee periodically reports on these
and other pertinent matters that come before it to the Board of Directors.
The following five Directors are currently members of the Audit Committee: Mr. Cary Mack
(Chairman), Mr. Bruce Beach, Dr. M. Nafees Nagy, Dr. James Nave, and Mr. John Sande, III. The
Board of Directors has determined that each member of the Committee satisfies the requirements of
the applicable laws and regulations relative to the independence of Directors and Audit Committee
members, including, without limitation, the requirements of the SEC and the listing standards of
the New York Stock Exchange (NYSE). The Board of Directors has further determined, in its
business judgment, that each member of the Audit Committee is financially literate under NYSE
listing standards and that Cary Mack qualifies as an audit committee financial expert as defined
by the SEC. During 2007, 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 are the duties and responsibilities of management,
the Companys 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
- 13 -
bringing appropriate matters to the attention of the Audit Committee and for
keeping the Audit Committee informed of matters which management believes require attention,
guidance, resolution, or other actions. McGladrey & Pullen, LLP, the Companys independent
registered public accounting firm, is responsible for performing an independent audit of the
Companys consolidated financial statements in accordance with auditing standards generally
accepted in the United States of America and for expressing an opinion on the conformity of the
Companys audited financial statement with GAAP.
During the year, the Audit Committee discussed with McGladrey & Pullen, LLP and the Companys
internal auditors, with and without management present, the overall scope and plans for their
respective audits, the results of their examinations, and their evaluations of the effectiveness of
the Companys internal controls and of the overall quality of the Companys financial reporting.
The Audit Committee reviewed and discussed the consolidated financial statements for the year
ended December 31, 2007 with McGladrey & Pullen, LLP and management. In addition, the Audit
Committee discussed with McGladrey & Pullen, LLP those matters required to be discussed under
generally accepted auditing standards, including Statement on Auditing Standards No. 61
(Communication with Audit Committees), as amended by Statement on Auditing Standards No. 90 and as
currently in effect.
McGladrey & Pullen, LLP has provided to the Audit Committee the written disclosures and the
letter required by Independence Standards Board Standard No. 1 (Independence Discussions with Audit
Committees), as currently in effect, and the Committee discussed with McGladrey & Pullen, LLP any
relationships that may impact on the firms objectivity and independence and satisfied itself as to
the auditors independence. In addition, the Audit Committee reviewed and approved the fees paid
to McGladrey & Pullen, LLP for audit and non-audit related services.
Based on the reviews and discussion referred to above, the Committee approved the inclusion of
the Companys audited financial statements in the Companys Annual Report on Form 10-K for the
fiscal year ended December 31, 2007 for filing with the SEC.
Submitted by the Audit Committee
Cary Mack (Chairman)
Bruce Beach
Dr. Nafees Nagy
Dr. James E. Nave
John P. Sande, III
The foregoing Audit Committee Report does not constitute soliciting material and shall not be
deemed filed or incorporated by reference with any previous or future filings by the Company under
the Securities Act of 1933 or the Exchange Act, as amended, except to the extent that the Company
specifically incorporates this report therein by reference.
Compensation Committee Matters
The Committees Processes and Procedures
The Compensation Committee currently consists of three independent directors (Messrs. Snyder
and Vecchione, and Dr. Nave), as the term independent is defined in the Companys Corporate
Governance Guidelines and the Corporate Governance Rules of the NYSE. Mr. Snyder serves as
chairman of the Compensation Committee. No member of the Compensation Committee is a current
or
- 14 -
former employee of the Company or any subsidiary. The Compensation Committees charter is
reviewed annually to ensure that the Committee is fulfilling its duties in aligning the Companys
executive compensation program with the creation of shareholder value. The Board adopted the
Committees charter on April 27, 2005, and approved amendments to the charter on April 18, 2007.
The Committee reviews the compensation of the Companys Executive Management Committee (the
EMC) and approves final pay packages for all EMC members except for the CEO, whose compensation
is recommended by the Committee and approved by the Board. The EMC consists of the CEO and certain
senior executive officers of the Company and/or one of its operating subsidiaries. In evaluating
and approving the compensation of executive officers, other than the CEO, the Committee receives
input from the CEO and considers its own assessment of their performance as it has frequent
exposure to these officers. Additionally, the Committee annually reviews and makes recommendations
to the Board with respect to director compensation. Directors compensation is established by the
Board of Directors upon the recommendation of the Committee. The Committee also reviews and
approves the Companys overall compensation philosophy and strategies.
At its January 2007 meeting, the Committee took the following actions: (1) approved
recommended salary increases along with the bonus payouts and stock option grants for EMC members
(except for the CEO), (2) approved the 2007 Restricted Stock Award Grants, and (3) approved the
Companys 2007 Annual Bonus Plan. At its February meeting, the Committee took the following
actions: (1) approved the Companys financial performance targets and payout schedule for 2007; and
(2) approved the Companys executive compensation philosophy for 2007. At its April meeting, the
Committee took the following actions: (1) approved the 2007 Annual Bonus targets for each of the
Companys affiliate banks, and (2) approved a conversion rate of stock options to restricted shares
based on an analysis of the ratios adopted by others in the industry. At the October meeting, the
Committee reviewed projected payouts under the Annual Bonus Plan for the Company and each of the
Banks. The Committee also determined that a compensation consultant should be engaged by the
Company every two to three years for updates on total compensation and, otherwise, on an as needed
basis. At its November meeting, the Committee approved the 2008 restricted stock grants for
Company and Bank officers.
The Compensation Committees charter provides the Committee with the sole authority and
discretion to engage and terminate outside advisors to study and make recommendations regarding
director or executive compensation matters, and has the sole authority to approve their fees and
other retention terms. The Committee selected and engaged The Hay Group as its consultant during
2007 to advise it on executive compensation matters (the Consultant) as necessary. The Committee
Chair worked directly with the Consultant to determine the scope of the work needed to assist the
Committee in its decision making processes. The Consultant attended Committee meetings and the
Committees executive sessions to present and discuss market data and program design alternatives,
and to provide advice and counsel regarding decisions facing the Committee.
In 2007, the Committee engaged the Consultant to assist the Committee in making its 2007
compensation decisions. The Committee provided the Consultant with a Peer Group (as defined below)
for purposes of comparing the Companys executive compensation packages. The Consultant analyzed
executive compensation information from the Peer Group, along with other industry information
available to the Consultant; presented its compensation analysis to the Committee; and recommended
compensation increases for the Company NEOs. The Committee used the Consultants advice in
developing its recommendations to the Board for the CEOs 2007 compensation and, along with input
from the CEO, in approving the 2007 compensation for other EMC members.
The Chair of the Committee works with management to set individual meeting agenda for the
Committee following an overall annual calendar of regular activities. The CEO and the Companys
Chief Administrative Officer (CAO) are the primary representatives of management who interact with the
- 15 -
Committee and serve as liaisons between the Committee and Company management. These officers
regularly attend Committee meetings, and provide input and recommendations on compensation matters,
as discussed more fully in the Compensation Discussion and Analysis below. They work with other
senior executives to develop and recommend compensation strategies and practices to the Committee
for its review and approval, including the performance goals and weighting factors used in the
Companys annual bonus plan and base salary adjustments for specific officers. The CAO also works
directly with the Consultant on a variety of Committee matters and provides administrative support
and assistance to the Committee.
Compensation Committee Interlocks and Insider Participation
Mr. Snyder and Dr. Nave were on the Compensation Committee during all of 2007. Mr. Baker was
on the Compensation Committee until his resignation from the Board in August 2007. The Board of
Directors appointed Mr. Vecchione to the Compensation Committee in January 2008. Each member of
the Compensation Committee is an independent, outside director. None of them is a current or
former officer or employee of the Company.
Mr. Sarver, the Companys President and Chief Executive Officer and a director, is a member of
the board of directors of Meritage Homes Corporation. Mr. Sarver served on the Compensation
Committee of Meritage until February 2004. Mr. Hilton, a director of the Company, is the Chairman
and Chief Executive Officer of Meritage.
During 2007, the Banks had, and expect to have in the future, banking transactions in the
ordinary course of business with the Companys directors, officers, and principal stockholders (and
their related interests) on the same terms, including interest rates and collateral on loans, as
those prevailing at the same time with other persons of similar creditworthiness. In the Companys
opinion, these loans present no more than the normal risk of collectibility or other unfavorable
features. These loans amounted to approximately 2.5% of total loans outstanding as of December 31,
2007.
EXECUTIVE COMPENSATION
Executive Officers
Executive officers are appointed annually by the Board of Directors following the Annual
Meeting of Stockholders. Set forth below is the name and age (as of December 31, 2007) of each
executive officer, other than Mr. Sarver, and the principal position(s) he or she holds with the
Company. For information regarding Mr. Sarver, see Corporate Governance Board Composition
Class III Directors with Terms Expiring in 2008.
Gerald Gary Cady has been the Companys Executive Vice President of Southern California
Administration since May 2003. He has served as President of Torrey Pines Bank since May 2003 and
as its Chief Executive Officer since June 2006. Mr. Cady was also a director of the Company from
June 2003 to April 2005. Mr. Cady has 30 years of commercial banking experience, most recently as
Senior Vice President and Regional Manager for California Bank and Trust in San Diego from August
1987 to February 2003. Mr. Cady is Chairman of Grossmont Hospital Corporation and a board member of
Sharp HealthCare and the San Diego Symphony. Mr. Cady is 53.
Duane Froeschle has been the Chief Credit Officer and an Executive Vice President of the
Company and Vice Chairman of Alliance Bank of Arizona since 2002. Mr. Froeschle was the Chief
Credit Officer of Alliance Bank of Arizona from 2002 to 2007. He is also the Chairman of Western
Alliance Leasing. Mr. Froeschle has 32 years of experience in commercial banking. Prior to joining the Company,
- 16 -
Mr. Froeschle held various positions with National Bank of Arizona from June 1987 to June 2002,
including Chief Credit Officer from June 1997 to December 2001. Mr. Froeschle is 55.
Dale Gibbons has been the Chief Financial Officer and an Executive Vice President of the
Company since May 2003. He has been an Executive Vice President of Bank of Nevada since July 2004,
and served as Bank of Nevadas Chief Financial Officer from 2004 to 2007. He also has been a
director of Premier Trust, Inc. since December 2003, a director of Miller/Russell & Associates
since May 2004, and a director and treasurer of Western Alliance Leasing since 2006. Mr. Gibbons
has 26 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. Prior to joining the
Company, Mr. Gibbons undertook various consulting projects, including with the Company. From 1979
to 1996, Mr. Gibbons worked for First Interstate Bancorp in a variety of retail banking and
financial management positions. Mr. Gibbons is 47.
Arnold Grisham has been the Companys Executive Vice President of Northern California
Administration since December 2006 and has served as the President and Chief Executive Officer of
Alta Alliance Bank since its opening in October 2006. From 2002 until 2006, he was Managing Partner
of the Grisham Group LLC, an executive search firm he founded that specializes in serving the
financial institutions industry. From 2001 to 2002, Mr. Grisham was Managing Director of
Korn/Ferry International, an executive search business. From 1999 until 2001, he served as
President and a director of CivicBank of Commerce and as its Chief Lending Officer and Chief
Operating Officer. From 1981 until January 1999, Mr. Grisham served in various management
positions at Wells Fargo Bank and its affiliates, including Senior Vice President of the Oakland
Regional Commercial Banking Office, Executive Vice President of the East Bay Regional Commercial
Banking Office, and Executive Vice President for the National Financial Services Division. Mr.
Grisham is on the board of directors of the Childrens Hospital and Research Center in Oakland and
the Federal Reserve Bank of San Francisco. Mr. Grisham is 61.
Bruce Hendricks is President and CEO of Bank of Nevada and Executive Vice President of
Southern Nevada Administration for Western Alliance. Mr. Hendricks was named President of Bank of
Nevada in 2007 and served as EVP/Regional President of the banks Sahara Regional Office since
joining the bank in 2000. He began his career in 1969 in Las Vegas, and served as President/COO of
American Bank of Commerce in Las Vegas and EVP/COO of First Security Bank of Nevada before joining
Bank of Nevada. A graduate of University of Nevada Las Vegas, Mr Hendricks is a past President of
the UNLV Alumni Association and is active in local community organizations. Mr. Hendricks is 57.
James Lundy has been the Executive Vice President of Arizona Administration and the President
and Chief Executive Officer of Alliance Bank of Arizona since February 2003. Mr. Lundy was also a
director of the Company from February 2003 to March 2005. From June 1991 to June 2002, Mr. Lundy
served as Senior Vice President and Executive Vice President of National Bank of Arizona, and from
December 2000 to June 2002, as Vice Chairman of National Bank of Arizona. Prior to that, 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. Mr. Lundy is 58.
Linda Mahan has been the Executive Vice President of Operations for the Company since July
2004. In this capacity, Ms. Mahan oversees centralized operations and technology. From 1994 to July
2004, Ms. Mahan was Chief Financial Officer of Bank of Nevada. Ms. Mahan was controller of Sun
State Bank, Las Vegas, Nevada from 1982 until 1994. Her responsibilities at Sun State included
accounting, human
- 17 -
resources, and bank operations for six branches. Ms. Mahan graduated from the Pacific Coast Banking
School in 2003. She has been in banking since 1974. Ms. Mahan is 50.
Grant Markham was a co-founder and has been the Chief Executive Officer of First Independent
Bank of Nevada since the Banks inception in 1999. A northern Nevada resident for the past 48
years, and a graduate of the University of Nevada, Mr. Markham has more than 38 years in the Nevada
banking industry. Professional and community involvement presently includes serving as a member of
the Banks Board of Directors, past Board member and Chairman of the Nevada Bankers Association,
and past Board member and President of the Northern Nevada Branch of the Juvenile Diabetes Research
Foundation. Mr. Markham is 60.
Merrill S. Wall has been the Chief Administrative Officer and Executive Vice President of the
Company since February 2005. Mr. Wall has 37 years of banking experience. He previously served as
Executive Vice President and Director of Human Resources for Zions Bancorporation and its
subsidiary, California Bank & Trust, from October 1998 to February 2005. From 1987 to 1998, Mr.
Wall worked for H.F. Ahmanson/Home Savings of America as a senior executive managing both human
resources and training corporate-wide. Mr. Wall also spent 17 years with First Interstate Bancorp
in a variety of commercial, retail and administrative positions. Mr. Wall is 60.
Compensation Discussion and Analysis
Named Executive Officers
As used in this proxy statement, the term named executive officers, or NEOs, includes: (i)
the Companys Chief Executive Officer and Chief Financial Officer (CFO), and (ii) the Companys
three other most highly compensated executive officers who earned more than $100,000 in salary and
bonus during the Companys last fiscal year. In 2007, the other three NEOs were the CAO, the
Companys Chief Credit Officer (CCO) and its Executive Vice President of Arizona Administration
(EVP-AZ).
Compensation Philosophy
The Companys compensation program is intended to provide the NEOs with total compensation
that is competitive with comparable employers in the financial services industry and to closely
align executive compensation with both the Companys short-term and long-term performance. To that
end, the compensation program for the NEOs focuses on annual and long-term strategic and
operational goals through the use of a highly-leveraged compensation strategy, with the potential
for a majority of each officers annual compensation to be earned through incentive variable
compensation. The program is designed so that a substantial percentage of an executives total
compensation opportunity is directly related to the Companys stock performance and other financial
metrics that the Company believes ultimately influence, and increase, long-term shareholder value.
The Companys compensation program also is designed to enable it to recruit and retain the
executive talent required to successfully manage the Company.
Benchmarking of Compensation
In benchmarking the compensation paid to our NEOs, the Committee considers base salary, annual
incentive targets and actual awards, and the value of long-term incentive awards. In 2007, with the
Consultants assistance, the Committee relied primarily on compensation information from the latest
available SEC filings of companies included within our Peer Group (defined below) to benchmark the
cash and equity compensation levels, and to compare executive benefit and perquisite programs. To
supplement this information, particularly for the CAO, CCO and EVP-AZ positions for which there
were fewer direct Peer Group comparisons based on job title and responsibilities, the Consultant
also used two secondary sources of market compensation data: (1) the Consultants 2006 Executive
Compensation
- 18 -
Report, representing 496 parent organizations and 626 independent operating units of U.S.
based companies; and (2) Watson Wyatts executive survey, consisting of data collected from 195
unique organizations and comprised of data on 1,692 incumbents in the financial services industry.
The Companys executives were matched to the data by title and a point system reflecting job
content.
In February 2007, the Consultant used the Companys comparator group of 14 comparable banking
organizations with total market capitalizations between $1 billion and $1.8 billion and with total
assets between $3.7 billion and $12.8 billion (the Peer Group) to analyze the EMCs compensation
as compared to market practices. The Company believes the Peer Group is representative of those
companies with which the Company competes for executive talent. The members of the Peer Group used
in 2007 were:
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|
|
Cathay General Bancorp |
|
|
|
|
Greater Bay Bancorp |
|
|
|
|
Fremont General Corp. |
|
|
|
|
First Republic Bank |
|
|
|
|
Hammi Financial Corp |
|
|
|
|
Boston Private Financial Holdings, Inc. |
|
|
|
|
Pacific Capital Bancorp |
|
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|
|
UMB Financial Corp. |
|
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|
|
CVB Financial Corp. |
|
|
|
|
First Community Bancorp (CA) |
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|
|
Umpqua Holdings Corp. |
|
|
|
|
SVB Financial Group |
|
|
|
|
UCBH Holdings, Inc. |
|
|
|
|
WestAmerica Bancorporation |
For 2007, the Company established the amount and mix of base and variable compensation using
this benchmarking process, while taking into account its objective of having a performance-focused
total compensation program and the subjective value it places on each position. The Company
targeted base salary for NEOs at approximately the median of the market and variable compensation
at or above the median when the Company meets its performance objectives. In 2007, the Committee
established the CEOs target annual incentive opportunity (both cash and equity) so that his target
total direct compensation or TDC (base salary, annual cash incentive (bonus), and annual equity
grant) was approximately at the median of the Peer Group.
Elements of Executive Compensation
The elements of the Companys compensation program for NEOs during 2007 consisted of annual
base salary, plus variable compensation in the form of both annual cash incentive payments
(corporate bonus plan) and long-term equity incentive compensation (grants of time-based
nonqualified stock options). The Company also provides the NEOs with standard benefits and very
limited perquisites.
Annual Base Salary
The Company views a competitive annual base salary as an important factor in attracting and
retaining executive talent. Annual base salaries also serve as the foundation for the annual cash
incentive plan, which expresses an NEOs bonus opportunity as a percentage of his or her annual
base salary. (Long-term equity incentive compensation is not directly linked to annual base
salary.) While annual base salary levels and potential increases are typically directly linked to
executive performance, the Committee historically has considered the Companys financial
performance as the principal factor in evaluating proposed salary budgets and increases, and this
was the same in 2007.
The Board of Directors determines the base salary for the CEO after reviewing the Committees
recommendations and analyses. The Committee determines the base salary for other members of the
EMC (including the NEOs) after considering input from the CEO regarding the performance of each
- 19 -
member and making its own assessments regarding their individual performance, experience and other
factors. In establishing 2007 base salary levels for EMC members, the Committee also considered
both internal equity and external competitiveness, as discussed above.
Because the Companys executive compensation program is focused primarily on variable
incentive compensation, the Committee targeted the CEOs base salary for 2007 at the median of the
Peer Group, representing approximately one-third of his target TDC. The Consultant initially
recommended a 9% base salary increase for the CEO in 2007, which would have placed the CEO in the
3rd quartile of the Peer Group for base salary and total cash compensation, and just
above the median for TDC. At the CEOs request, however, the Committee recommended, and the Board
approved, a base salary increase for the CEO of only approximately 4.5%. This increase places the
CEOs base salary at or around the median of the Peer Group. At the CEOs request, he did not
receive a base salary increase in 2008.
For NEOs other than the CEO, the CEO recommends base salary increases to the Committee based
upon individual and Company performance. The Committee reviews the CEOs recommendations along
with Peer Group data and supplemental information provided by the Consultant. The Company targeted
the 2007 base salaries of the remaining NEOs at the market median for comparable jobs based on the
benchmarking process described above. The base salary for each NEO (other than the CEO) generally
represents less than 50% of his or her target TDC.
In 2007, the CEO recommended, and the Committee approved, a base salary increase of 15% for
the CFO, which placed his base salary in the 70th percentile of the Peer Group. The CEO
recommended, and the Committee approved, a base salary increase of 5.8% for the CAO, which placed
his base salary slightly above the median for comparable positions based on the Consultants market
data. The CEO recommended, and the Committee approved, a base salary increase of 3% for the
EVP-AZ, which placed his base salary slightly below the median for comparable positions based on
the Consultants market data. Finally, the CEO recommended, and the Committee approved, a base
salary increase of 12.5% for the CCO, which placed his base salary significantly below the median
for comparable positions based on the Consultants market data. At the CEOs recommendation, and
with the Committees approval, the NEOs did not receive a base salary increase for 2008.
Annual Cash Incentive Compensation (Annual Bonus Plan)
The annual cash incentive compensation element for the NEOs and other EMC members is their
participation in the Western Alliance Bancorporation Annual Bonus Plan (the Plan). The Plan is
designed and intended to motivate and retain qualified employees.
The Plan calls for a cash bonus to be paid to all eligible employees based on the Companys
annual financial performance relative to pre-established targets for key financial metrics, and on
a subjective quality control assessment by the CEO, which is subject to Compensation Committee
review and approval. The Company sets the incentive plan targets to be stretch goals, which most
of the Companys business units performing to plan should be able to achieve. The threshold is set
to reward achieving the majority of expectations and the upside opportunity requires superior
results. The aggregate bonus opportunity for NEOs under the Plan is subject to an overall limit of
10% of the Companys net income, after taxes. For 2007, this limit was approximately $3.33
million.
For the CEO, CFO and CAO, the 2007 bonus was determined based on the following Company-wide
criteria and weighting factors:
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|
|
Earnings Per Share
|
|
|
50 |
% |
|
|
|
|
|
|
|
|
|
Organic Loan Growth
|
|
|
20 |
% |
|
|
|
|
|
|
|
|
|
Organic Deposit Growth
|
|
|
20 |
% |
|
|
|
|
|
|
|
|
|
Quality Control
|
|
|
10 |
% |
- 20 -
These metrics, and the weight placed on each of them, reflect the Companys overarching goal
of creating shareholder value based on banking fundamentals, i.e. high quality loans and deposits,
which are the principle measures of success for financial institutions. The Committee reviews the
weighting of each component of the Companys bonus plan on an annual basis to ensure the bonus plan properly
reflects the Companys current goals and priorities. For 2008, the Committee has approved
adjustments to the above weighting factors, reducing loan growth to 10%, increasing deposit growth
to 25%, and increasing quality control to 15%. The 2008 percentages place greater emphasis on
liquidity and loan quality, while still encouraging quality loan growth.
In 2007, the Companys 2007 earnings per share target was $1.80. The Companys 2007 targets
for loan and deposit growth were $523 million and $510 million, respectively. With respect to the
quality control criterion, the Companys performance is assigned a pass or fail grade, based on the
CEOs and Committees overall assessment of such considerations as internal and regulatory
examination results.
Because they serve as senior executive officers of the Companys Alliance Bank of Arizona
subsidiary, the 2007 bonus payout for the CCO and EVP-AZ was based primarily on the performance of
that operating unit. For 2007, the following criteria and weighting factors applied to these
officers:
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|
|
|
|
|
|
|
|
Earnings Per Share (Company)
|
|
|
10 |
% |
|
|
|
|
|
|
|
|
|
Net Income (Subsidiary)
|
|
|
40 |
% |
|
|
|
|
|
|
|
|
|
Organic Loan Growth (Subsidiary)
|
|
|
20 |
% |
|
|
|
|
|
|
|
|
|
Organic Deposit Growth (Subsidiary)
|
|
|
20 |
% |
|
|
|
|
|
|
|
|
|
Quality Control (Subsidiary)
|
|
|
10 |
% |
The 2007 earnings per share target for Alliance Bank was identical to that of the Company. The
Company includes Net Income as a component of its subsidiary banks bonus plans because net income
is a direct measure of each units financial performance over which executive officers of the unit
have significant control on a year-to-year basis. Alliance Banks 2007 target for net income was
$6.6 million, and its targets for loan and deposit growth were $100 million and $110 million,
respectively. For 2008, the Committee approved adjustments to the above weighting factors,
reducing loan growth to 10%, increasing deposit growth to 25%, and increasing quality control to
15%, again reflecting the Companys current priorities and objectives.
Each fiscal year the Committee approves an incentive matrix that details the relationship
between performance on the financial metrics and bonus payout as a percent of target. The
Committee approves a range of bonus payout percentages that apply depending on the whether the
Company meets, exceeds or falls short of the approved goal. The incentive matrix establishes both
thresholds (minimum acceptable performance levels to generate a payout) and target performance
levels for each metric based on the degree of difficulty in achieving the Companys goals. As
noted above, the Plan is capped in terms of total bonus payments at 10% of net income. The
incentive matrix outlines a minimum level of performance below which no bonus will be paid and the
relationship among the metrics that will generate payouts at or above target.
Annual incentive compensation targets under the Plan are expressed as a percentage of annual
base salary. The 2007 target bonus for the CEO was 100% of his annual salary. For all other the
NEOs the target bonus was 50% of their annual salary. NEO bonuses for 2007 were paid in February
of 2008 and are set forth in the Summary Compensation Table and Grants of Plan Based Awards Table
appearing at pages 25 and 27 below. Due primarily to challenging industry and economic conditions,
the Company failed to achieve any of its bonus goals (other than quality control) in 2007 and, as a
consequence, bonus payouts for the CEO, CFO and CAO were substantially below target. While Alliance
Bank also did not fully achieve all of its goals, its performance produced somewhat higher bonus
payouts for the CCO and EVP-AZ, though still below target.
- 21 -
Long-Term Equity Incentive Compensation
The Company considers long-term equity incentive compensation critical to the alignment of
executive compensation with shareholder value creation and an integral part of the Companys
overall executive compensation program. In 2006, the Company changed its approach to providing
long-term equity incentive compensation by offering stock options only to the EMC members, which
includes all of the NEOs, and instead granting shares of restricted stock to all other eligible
officers. Prior to 2006, the Companys long-term equity incentive plan included stock options for
all eligible officers. We believe stock options provide a greater opportunity for a senior
executive to grow his or her net worth in line with corporate performance, while restricted shares
support the Companys goal of providing less senior officers with an ownership position in the
Company and encouraging their long-term retention. These changes were made both to align long-term
equity incentive compensation levels with the Companys overall compensation philosophy and to
provide participants with programs that are more consistent with their level of impact on the
Companys business.
Because the value that may be earned through stock options is dependent upon an increase in
the value of the Companys stock price, the Committee views nonqualified stock option grants as a
critical link between management wealth accumulation and shareholder value creation. In addition,
because options vest in equal increments over four years, the Company believes that these grants
also promote retention of our EMC members. Pursuant to our equity plan, stock options may not be
granted at less than 100% of fair market value on the date of grant. Fair market value is
determined as the closing price of the Companys common stock on the grant date.
The Committee approves annual option grants at its January meeting, except with respect to the
CEO, whose annual grant generally is approved by the Board of Directors at its January meeting.
The grant date for the annual stock option grant generally is set as the day after the date of the
January Board meeting. The Company typically issues its earnings release for the prior fiscal year
at the close of business on the day of the Boards January meeting. Setting the grant date as the
day after the earnings release ensures that the pricing of options does not take advantage of
nonpublic information by allowing a full day for the market to react to the information contained
in the release.
In view of recent revelations regarding stock option backdating and related practices at other
companies, in January 2007, the Company conducted an internal investigation into its historical
stock option granting practices and procedures. This investigation found no evidence that the
Company ever backdated options, or that options were ever re-priced, modified or otherwise
manipulated, with the purpose or effect of establishing a lower exercise price than the market
price on the date the option grants were approved by the Committee or the Board (as the case may
be).
In 2007, the CEO recommended to the Committee that each NEO receive a stock option grant of
10,000 shares. After considering this recommendation, the advice of the Consultant and its Peer
Group analysis, the Committee ultimately approved a stock option grant for each NEO of 12,500
shares, based on.
At its January 2008 meeting, the Committee considered whether additional long-term equity
incentives were appropriate for the Companys EMC members, including each of the NEOs, given the
overall state of the banking industry and the impact these conditions could have on the executives
TDC. The Committee approved a one-time grant of restricted shares as a retention tool for EMC
members other than the CEO, who requested that he be excluded from this special grant. The
Committee determined the number of restricted shares granted to each EMC member based on the amount
each officer received under the Companys Annual Bonus Plan for fiscal year 2006. Each executive
was awarded restricted stock with an approximate market value on the grant date of 50% of the
executives 2006 bonus payout. Consistent with the special grants purpose as a retention vehicle,
none of the restricted shares vest until three years from the date of the grant and vesting is
contingent upon continued employment with the Company on the vesting date.
- 22 -
As noted above, the Company generally does not grant shares of restricted stock to its NEOs.
However, as a negotiated inducement to join the Company, the Committee approved a one-time grant of
27,000 shares of restricted stock to its Chief Administrative Officer (Merrill Wall) in 2005. These
shares will vest at a rate of 20% per year over five years, so long as Mr. Wall remains employed at
the Company. Additional information regarding this grant is provided in the compensation tables
and accompanying footnotes beginning at page 25.
Benefits and Perquisites
The Company offers executives the same basic benefit plans that are available to all full time
employees (e.g., 401(k) plans, group insurance plans for medical, dental, vision care and
prescription drug coverage, basic life insurance, long term disability coverage, holidays,
vacation, etc.), plus voluntary benefits that an executive may select (e.g., supplemental life
insurance). The overall benefits philosophy is to focus on the provision of core benefits, with
executives able to use their cash compensation to obtain such other benefits as they individually
determine to be appropriate for their situations.
In 2007, benefits and perquisites for NEOs were minimal and generally were limited to business
related programs. The Company believes in a compensation philosophy that deemphasizes benefits and
perquisites for NEOs in favor of a highly-leveraged compensation philosophy described above.
Non-Qualified Deferred Compensation Plan
NEOs may voluntarily defer cash compensation as part of the Companys Restoration Plan (defined at
page 28 below). The plan was adopted in order to allow the EMC members to defer a portion of their
compensation because they face statutory limits under the Companys 401(k) plan. We believe the
plan is a cost-effective method of providing a market-competitive benefit to the NEOs. For more
information on the Restoration Plan, including amounts deferred by the NEOs in 2007, see the
Deferred Compensation Plan table and accompanying narrative below.
Equity Compensation Plan Information
The following table provides information as of December 31, 2007, regarding outstanding
options and shares reserved for issuance under the Companys equity compensation plans.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average |
|
|
|
|
Number of shares to be |
|
exercise price of |
|
Number of shares |
|
|
issued upon exercise of |
|
outstanding |
|
remaining available for |
|
|
outstanding options, |
|
options, warrants |
|
future issuance under |
Plan Category |
|
warrants and rights |
|
and rights ($) |
|
equity compensation plans |
Equity compensation
plans approved by
security holders |
|
|
2,291,887 |
|
|
|
15.42 |
|
|
|
1,148,800 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity compensation
plans not approved
by security holders |
|
|
N/A |
|
|
|
N/A |
|
|
|
N/A |
|
|
Total |
|
|
2,291,887 |
|
|
|
15.42 |
|
|
|
1,148,800 |
|
Impact of Regulatory Requirements on 2007 Compensation
Section 162(m) of the Internal Revenue Code (Code) generally disallows a tax deduction to
public companies for compensation in excess of $1 million paid to the Companys CEO and three
highest paid executive officers, other than the CFO. Certain compensation is specifically exempt
from the deduction limit to the extent that it does not exceed $1 million during any fiscal year or
is performance based, as defined in Section 162(m). The Committee believes that it is generally
in the Companys interest to structure compensation to come within the Section 162(m) deductibility
limits. The Committee
- 23 -
also believes, however, that it must maintain the flexibility to take
actions that it deems to be in the best interests of the Company, but which may not qualify for tax deductibility under Section
162(m). The Committee considered the impact of the $1 million cap on the deductibility of
non-performance based compensation imposed by Code Section 162(m) in its design of executive
compensation programs.
In addition, the Committee considered other tax and accounting provisions in developing the
pay programs for the Companys NEOs. These included special rules applicable to nonqualified
deferred compensation arrangements under Code Section 409A and the accounting treatment of various
types of equity-based compensation under FAS 123R, as well as the overall income tax rules
applicable to various forms of compensation. While the Company attempted to compensate executives
in a manner that produced favorable tax and accounting treatment, its main objective was to develop
fair and equitable compensation arrangements that appropriately reward executives for the
achievement of short- and long-term performance goals.
Compensation Committee Report
The Compensation Committee reviewed and discussed the Compensation Discussion and Analysis
included in this Proxy Statement with management. Based on such review and discussion, the
Compensation Committee recommended to the Board of Directors that the Compensation Discussion and
Analysis be included in this Proxy Statement for filing with the Securities and Exchange
Commission, and incorporated by reference into our Annual Report on Form 10-K.
Submitted by the Compensation Committee
Donald D. Snyder (Chairman)
Dr. James E. Nave
Kenneth A. Vecchione
Compensation Tables
Summary Compensation Table
The following table provides information concerning the compensation of the NEOs in 2006 and
2007. The column entitled salary discloses the amount of base salary paid to each named
executive officer during the year, including amounts paid by the Companys subsidiaries. The
columns entitled Stock Awards and Option Awards disclose the fair value of an award of stock or
options measured in dollars and calculated in accordance with FAS 123R for stock or options granted
after the initial public offering and in accordance with FAS 123 for stock or options granted prior
to the initial public offering. For restricted stock, the FAS 123R fair value per share is equal
to the closing price of the Companys stock on the date of grant. For stock options, the FAS 123R
fair value per share is based on certain assumptions that are explained in footnotes 1 and 13 to
our financial statements, which are included in our Annual Report on Form 10-K. The value is
disclosed ratably over the vesting period but without reduction for assumed forfeitures (as is done
for financial reporting purposes). The amounts shown in this table also include a ratable portion
of each grant made in prior years to the extent the vesting period fell during the year indicated,
except where generally accepted accounting principles (GAAP) required the Company to recognize
the full amount in a prior year. The Company made no grants of restricted stock to the NEOs in 2006
or 2007. For Mr. Wall, this column includes a pro rata portion of the expense attributable to
restricted stock grants made in 2005.
- 24 -
The column entitled Non-Equity Incentive Plan Compensation discloses payments made under the
Western Alliance Bancorporation Annual Bonus Plan. No bonus was paid to a named executive officer
except as part of this plan.
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity |
|
|
|
|
|
|
|
Name and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive Plan |
|
|
All Other |
|
|
|
|
Principal Position |
|
Year |
|
|
Salary ($) (1) |
|
|
Stock Awards ($) |
|
|
Option Awards ($) |
|
|
Compensation ($)(2) |
|
|
Compensation ($) (3) |
|
|
Total ($) |
|
Robert Sarver |
|
|
2007 |
|
|
|
572,307 |
|
|
|
0 |
|
|
|
257,219 |
|
|
|
57,500 |
|
|
|
27,984 |
|
|
|
915,010 |
|
President and Chief |
|
|
2006 |
|
|
|
536,539 |
|
|
|
0 |
|
|
|
119,279 |
|
|
|
431,117 |
|
|
|
31,996 |
|
|
|
1,118,931 |
|
Executive Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dale Gibbons |
|
|
2007 |
|
|
|
295,692 |
|
|
|
0 |
|
|
|
123,190 |
|
|
|
15,000 |
|
|
|
13,819 |
|
|
|
447,701 |
|
Executive Vice |
|
|
2006 |
|
|
|
260,000 |
|
|
|
0 |
|
|
|
67,815 |
|
|
|
110,000 |
|
|
|
11,228 |
|
|
|
449,543 |
|
President and Chief
Financial Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Merrill Wall |
|
|
2007 |
|
|
|
273,385 |
|
|
|
89,100 |
|
|
|
117,242 |
|
|
|
13,750 |
|
|
|
8,748 |
|
|
|
502,225 |
|
Executive Vice |
|
|
2006 |
|
|
|
257,308 |
|
|
|
89,100 |
|
|
|
82,508 |
|
|
|
110,500 |
|
|
|
11,8840 |
|
|
|
551,300 |
|
President and Chief
Administrative
Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James Lundy |
|
|
2007 |
|
|
|
231,246 |
|
|
|
0 |
|
|
|
129,452 |
|
|
|
24,360 |
|
|
|
19,421 |
|
|
|
404,479 |
|
Executive Vice |
|
|
2006 |
|
|
|
225,000 |
|
|
|
0 |
|
|
|
94,508 |
|
|
|
67,500 |
|
|
|
35,621 |
|
|
|
422,629 |
|
President, Arizona
Administration |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Duane Froeschle |
|
|
2007 |
|
|
|
222,307 |
|
|
|
0 |
|
|
|
84,840 |
|
|
|
23,625 |
|
|
|
5,353 |
|
|
|
336,125 |
|
Executive Vice |
|
|
2006 |
|
|
|
200,000 |
|
|
|
0 |
|
|
|
52,118 |
|
|
|
60,000 |
|
|
|
5,177 |
|
|
|
317,295 |
|
President and Chief
Credit Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
The amounts shown in the Salary column reflect the following adjustments to base salary: |
|
(i) |
|
Mr. Sarvers base salary was increased from $550,000 per year to $575,000 per
year effective February 1, 2007. Mr. Sarver received no increase in base salary in
2008. |
|
|
(ii) |
|
Mr. Gibbons base salary was increased from $260,000 per year to $300,000 per
year effective February 1, 2007. Mr. Gibbons received no increase in base salary in
2008. |
|
|
(iii) |
|
Mr. Walls base salary was increased from $260,000 per year to $275,000 per
year effective February 1, 2007. Mr. Wall received no increase in base salary in 2008. |
|
|
(iv) |
|
Mr. Lundys base salary was increased from $225,000 per year to $232,000 per
year effective February 1, 2007. Mr. Lundy received no increase in base salary in
2008. |
|
|
(v) |
|
Mr. Froeschles base salary was increased from $200,000 per year to $225,000
per year effective February 1, 2007. Mr. Froeschle received no increase in base salary
in 2008. |
|
|
|
(2) |
|
The Non-Equity Incentive Plan Compensation is fully payable in 2008, and may not be deferred
at the election of the NEO. |
|
(3) |
|
The table below shows the components of this column, which include the premiums paid by the
Company in 2007 with respect to life insurance for the benefit of an NEO and matching |
- 25 -
|
|
|
|
|
contributions made by the Company in 2007 on behalf of the NEO under the Western Alliance
Bancorporation 401(k) Plan and/or to the Companys Restoration Plan, and perquisites. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Insurance |
|
|
Matching |
|
|
|
|
|
|
|
Name |
|
Premiums ($) |
|
|
Contributions ($) (a) |
|
|
Perquisites ($) |
|
|
Total ($) |
|
Mr. Sarver |
|
|
1,037 |
|
|
|
26,947 |
|
|
|
|
|
|
|
27,984 |
|
Mr. Gibbons |
|
|
1,037 |
|
|
|
12,782 |
|
|
|
|
|
|
|
13,819 |
|
Mr. Wall |
|
|
1,037 |
|
|
|
7,711 |
|
|
|
|
|
|
|
8,748 |
|
Mr. Lundy |
|
|
1,037 |
|
|
|
10,516 |
|
|
|
7,868 |
(b) |
|
|
19,421 |
|
Mr. Froeschle |
|
|
1,037 |
|
|
|
4,316 |
|
|
|
|
|
|
|
5,353 |
|
|
|
|
(a) |
|
Pursuant to our 401(k) plan, the Company matches 50% of the executives first
6% of compensation contributed to the plan. Each executive is fully vested in his
contributions. Earnings are calculated based on employees election of investments,
and distributions are made at the normal retirement date, termination of employment,
disability or death. For information on the Companys contributions to the Restoration
Plan, see the Nonqualified Deferred Compensation Table and accompanying narrative
below. |
|
(b) |
|
Represents amounts paid by Alliance Bank of Arizona on behalf of Mr. Lundy for
country club membership fees and dues. |
Grants of Plan-Based Awards During 2007
The following table contains information about estimated payouts under non-equity incentive
plans and option awards made to each named executive officer during 2007. The threshold, target
and maximum columns reflect the range of estimated payouts under the Western Alliance
Bancorporation Annual Bonus Plan. These columns show the range of payouts targeted for 2007
performance under the Annual Bonus Plan, as described in the section titled Annual Cash Incentive
Compensation in the Compensation Discussion and Analysis. The actual 2008 bonus payment for 2007
performance is shown in the Summary Compensation Table in the column entitled Non-equity Incentive
Plan Compensation.
The 5th and 6th columns report the number of shares of common stock
underlying options granted in the fiscal year and corresponding per-share exercise prices. In all
cases, the exercise price was equal to the closing market price of the Companys common stock on
the date of grant. Finally, the 8th column, reports the aggregate FAS 123R value of all
awards made in 2007. Unlike the Summary Compensation Table above, the values reported here are not
apportioned over the service or vesting period. The stock options granted to the NEOs in 2007 have
seven-year terms and vest in equal increments on each of the first, second, third and fourth
anniversaries of the date of the grant. Stock options have no express performance criteria other
than continued employment. However, options have an implicit performance criterion because they
have no value to the executive unless and until the Companys stock price exceeds the exercise
price.
- 26 -
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options |
|
|
Exercise |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards: |
|
|
or Base |
|
|
|
|
|
|
Grant Date |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of |
|
|
Price of |
|
|
|
|
|
|
Fair |
|
|
|
Estimated Possible Payouts Under |
|
|
Securities |
|
|
Option |
|
|
|
|
|
|
Value of |
|
|
|
Non-Equity Incentive Plan Awards ($) |
|
|
Underlying |
|
|
Awards |
|
|
Grant |
|
|
Option |
|
Name |
|
Threshold |
|
|
Target |
|
|
Maximum |
|
|
Options(#) |
|
|
($/Share) |
|
|
Date |
|
|
Awards ($) |
|
Robert Sarver |
|
|
57,500 |
|
|
|
575,000 |
|
|
|
690,000 |
|
|
|
50,000 |
|
|
|
34.80 |
|
|
|
1/23/07 |
|
|
|
571,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dale Gibbons |
|
|
15,000 |
|
|
|
150,000 |
|
|
|
180,000 |
|
|
|
20,000 |
|
|
|
34.80 |
|
|
|
1/23/07 |
|
|
|
228,600 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Merrill Wall |
|
|
13,750 |
|
|
|
138,000 |
|
|
|
166,000 |
|
|
|
12,500 |
|
|
|
34.80 |
|
|
|
1/23/07 |
|
|
|
142,875 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James Lundy |
|
|
11,600 |
|
|
|
116,000 |
|
|
|
139,000 |
|
|
|
12,500 |
|
|
|
34.80 |
|
|
|
1/23/07 |
|
|
|
142,875 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Duane Froeschle |
|
|
11,300 |
|
|
|
113,000 |
|
|
|
135,000 |
|
|
|
12,500 |
|
|
|
34.80 |
|
|
|
1/23/07 |
|
|
|
142,875 |
|
Outstanding Equity Awards at Fiscal Year End
The following table provides information concerning unexercised options and restricted stock
awards that have not vested as of December 31, 2007. Each outstanding award is represented by a
separate row which indicates the number of securities underlying the award. For option awards, the
table discloses the exercise price and the expiration date. For stock awards, the table provides
the total number of shares of stock that have not vested and the aggregate market value of shares
of stock that have not vested. We computed the market value of stock awards by multiplying the
closing market price of our stock at December 31, 2007 ($18.77), by the number of shares of
unvested stock. Beginning in January 2006, options granted to NEOs have seven-year terms. Options
granted prior to that time had ten-year terms.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards |
|
|
Stock Awards |
|
|
|
Number of |
|
|
Number of |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities |
|
|
Securities |
|
|
|
|
|
|
|
|
|
|
Number of |
|
|
Market Value |
|
|
|
Underlying |
|
|
Underlying |
|
|
|
|
|
|
|
|
|
|
Shares or |
|
|
of Shares or |
|
|
|
Unexercised |
|
|
Unexercised |
|
|
Option |
|
|
Option |
|
|
Units of Stock |
|
|
Units of Stock |
|
|
|
Options (#) |
|
|
Options (#) |
|
|
Exercise |
|
|
Expiration |
|
|
that Have Not |
|
|
that Have Not |
|
Name |
|
Exercisable |
|
|
Unexercisable (1) |
|
|
Price ($) |
|
|
Date |
|
|
Vested (#) |
|
|
Vested ($) |
|
|
|
|
45,000 |
|
|
|
20,000 |
|
|
|
12.00 |
|
|
|
10/27/14 |
|
|
|
|
|
|
|
|
|
Robert |
|
|
8,750 |
|
|
|
26,250 |
|
|
|
29.00 |
|
|
|
1/17/13 |
|
|
|
|
|
|
|
|
|
Sarver |
|
|
0 |
|
|
|
50,000 |
|
|
|
34.80 |
|
|
|
1/23/14 |
|
|
|
|
|
|
|
|
|
|
|
|
35,000 |
|
|
|
10,000 |
|
|
|
7.03 |
|
|
|
5/29/13 |
|
|
|
|
|
|
|
|
|
|
|
|
7,600 |
|
|
|
11,400 |
|
|
|
16.50 |
|
|
|
1/25/15 |
|
|
|
|
|
|
|
|
|
Dale |
|
|
3,750 |
|
|
|
11,250 |
|
|
|
29.00 |
|
|
|
1/17/13 |
|
|
|
|
|
|
|
|
|
Gibbons |
|
|
0 |
|
|
|
20,000 |
|
|
|
34.80 |
|
|
|
1/23/14 |
|
|
|
|
|
|
|
|
|
|
|
|
30,000 |
|
|
|
45,000 |
|
|
|
16.50 |
|
|
|
1/25/15 |
|
|
|
16,200 |
|
|
|
304,074 |
|
Merrill |
|
|
2,500 |
|
|
|
7,500 |
|
|
|
29.00 |
|
|
|
1/17/13 |
|
|
|
|
|
|
|
|
|
Wall (2) |
|
|
0 |
|
|
|
12,500 |
|
|
|
34.80 |
|
|
|
1/23/14 |
|
|
|
|
|
|
|
|
|
|
|
|
75,000 |
|
|
|
0 |
|
|
|
7.03 |
|
|
|
10/24/12 |
|
|
|
|
|
|
|
|
|
|
|
|
3,000 |
|
|
|
4,500 |
|
|
|
16.50 |
|
|
|
1/25/15 |
|
|
|
|
|
|
|
|
|
James |
|
|
2,500 |
|
|
|
7,500 |
|
|
|
29.00 |
|
|
|
1/17/13 |
|
|
|
|
|
|
|
|
|
Lundy |
|
|
0 |
|
|
|
12,500 |
|
|
|
34.80 |
|
|
|
1/23/14 |
|
|
|
|
|
|
|
|
|
|
|
|
60,000 |
|
|
|
0 |
|
|
|
7.03 |
|
|
|
10/24/12 |
|
|
|
|
|
|
|
|
|
|
|
|
3,000 |
|
|
|
4,500 |
|
|
|
16.50 |
|
|
|
1/25/15 |
|
|
|
|
|
|
|
|
|
Duane |
|
|
2,500 |
|
|
|
7,500 |
|
|
|
29.00 |
|
|
|
1/17/13 |
|
|
|
|
|
|
|
|
|
Froeschle |
|
|
0 |
|
|
|
12,500 |
|
|
|
34.80 |
|
|
|
1/23/14 |
|
|
|
|
|
|
|
|
|
- 27 -
|
|
|
(1) |
|
The options shown with an expiration date of January 17, 2013 and January 23, 2014 were
granted on January 17, 2006 and January 23, 2007, respectively, and have a seven-year term
vesting in equal 25% increments on the first, second, third and fourth anniversaries of the
grant date. All other options have ten-year terms and vest in equal 20% increments on the
first, second, third, fourth and fifth anniversaries of the grant date. |
|
(2) |
|
On December 31, 2007, Mr. Wall held a total of 27,000 shares of restricted common stock, with
an aggregate fair market value on that date of $506,790. These shares were granted to Mr.
Wall as a one-time inducement grant upon his hire. All of these shares were awarded in 2005.
They will vest at a rate of 20% per year over five years, so long as Mr. Wall remains employed
at the Company. Dividends, if any, will be paid on both vested and unvested shares at the
same rate as those declared on our outstanding common stock. |
Options Exercised and Stock Vested in 2007
The following table provides information concerning exercises of stock options and the vesting
of restricted stock during 2007 for each of the NEOs on an aggregated basis. The table reports the
number of securities for which the options were exercised; the aggregate dollar value realized upon
exercise of options (i.e., the market price on the exercise date, less the exercise price); the
number of shares of stock that have vested; and the aggregate dollar value realized upon vesting of
stock. For stock that vested in 2007, the aggregate dollar amount realized upon vesting was
computed by multiplying the number of shares of stock by the market value of our common shares on
the vesting date.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards |
|
|
Stock Awards |
|
|
|
Number of Shares |
|
|
|
|
|
|
|
|
|
|
|
|
Acquired on |
|
|
Value Realized on |
|
|
Number of Shares |
|
|
Value Realized on |
|
Name |
|
Exercise (#) |
|
|
Exercises ($) |
|
|
Acquired on Vesting (#) |
|
|
Vesting ($) (1) |
|
Robert Sarver |
|
|
-0- |
|
|
|
N/A |
|
|
|
-0- |
|
|
|
N/A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dale Gibbons |
|
|
5,000 |
|
|
|
115,550 |
|
|
|
-0- |
|
|
|
N/A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Merrill Wall |
|
|
-0- |
|
|
|
N/A |
|
|
|
5,400 |
|
|
|
182,790 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James Lundy |
|
|
-0- |
|
|
|
N/A |
|
|
|
-0- |
|
|
|
N/A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Duane Froeschle |
|
|
-0- |
|
|
|
N/A |
|
|
|
-0- |
|
|
|
N/A |
|
|
|
|
(1) |
|
Amounts reflect the closing market value of the stock on the day the stock vested. |
Nonqualified Deferred Compensation in 2007
The Company sponsors the Western Alliance Bancorporation Nonqualified 401(k) Restoration Plan
(the Restoration Plan), a deferred compensation plan available only to members of the EMC. The
Restoration Plan became effective in 2006. Under the 401(k) Plan, there is a statutory limit on
the amount of compensation that can be taken into consideration in determining participant
contributions and the Companys matching contributions. The Restoration Plan allows participants
to contribute 6% of
- 28 -
base and bonus compensation, without regard to the statutory compensation limit, but offset by
participant contributions actually made under the 401(k) Plan. The Company makes matching
contributions of fifty percent (50%) of the deferred amount up to 3% of all compensation as offset
by the amount of matching contribution made on the participants behalf under the 401(k) Plan.
The following table provides information with respect to the Restoration Plan. The amounts
shown include compensation earned and deferred in prior years, and earnings on, or distributions
of, such amounts. The column Executive Contributions in 2007 indicates the aggregate amount
contributed to such plans by each NEO during 2007. In 2007, no NEO received preferential or
above-market earnings on deferred compensation, and no withdrawals or distributions were made.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive |
|
|
Registrant |
|
|
Aggregate |
|
|
Aggregate |
|
|
|
Contributions |
|
|
Contributions |
|
|
Earnings |
|
|
Balance |
|
Name |
|
in 2007 ($)(1) |
|
|
in 2007 ($)(2) |
|
|
in 2007 ($) |
|
|
at 12/31/07 ($) |
|
Robert Sarver |
|
|
29,192 |
|
|
|
14,596 |
|
|
|
4,601 |
|
|
|
119,741 |
(3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dale Gibbons |
|
|
8,872 |
|
|
|
4,436 |
|
|
|
596 |
|
|
|
22,148 |
(4) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Merrill Wall |
|
|
2,903 |
|
|
|
1,452 |
|
|
|
547 |
|
|
|
15,139 |
(5) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James Lundy |
|
|
8,400 |
|
|
|
4,200 |
|
|
|
483 |
|
|
|
19,522 |
(6) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Duane Froeschle |
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
|
(1) |
|
Amounts in this column are included in the Summary Compensation Table in the Salary
column. |
|
(2) |
|
Amounts in this column are included in the Summary Compensation Table, in the All Other
Compensation column, and as a portion of the Matching Contributions column in footnote (2) to
that table. |
|
(3) |
|
$43,788 of this amount was included in Mr. Sarvers total compensation for 2007 shown in the
Summary Compensation Table on page 25 above. |
|
(4) |
|
$13,308 of this amount was included in Mr. Gibbons total compensation for 2007 shown in the
Summary Compensation Table on page 25 above. |
|
(5) |
|
$4,355 of this amount was included in Mr. Walls total compensation for 2007 shown in the
Summary Compensation Table on page 25 above. |
|
(6) |
|
$12,600 of this amount was included in Mr. Lundys total compensation for 2007 shown in the
Summary Compensation Table on page 25 above. |
Potential Payments Upon Termination or Change in Control
The Company does not have employment, change of control, severance or similar agreements or
arrangements with any of its NEOs. Unvested stock options and restricted stock grants are
forfeited immediately upon termination of employment for any reason. If a recipient dies or his or
her employment is terminated due to disability, all vested options must be exercised within 12
months after the date of death or termination. If a recipients employment is terminated for any
other reason (except termination for cause), he or she has 90 days from the date of termination to
exercise all vested stock options.
The 2005 Stock Incentive Plan provides for the accelerated vesting of all outstanding options
and shares of restricted stock upon the occurrence of a Corporate Transaction, which is defined
as:
- 29 -
|
|
|
the dissolution or liquidation of the Company or a merger,
consolidation, or reorganization of the Company with one or more other
entities in which the Company is not the surviving entity; |
|
|
|
|
a sale of all or substantially all of the assets of the Company to
another person or entity; or |
|
|
|
|
any transaction, including a merger or reorganization, in which the
Company is the surviving entity, which results in any person or entity
other than persons who are stockholders or affiliates immediately prior to
the transaction owning 50% or more of the combined voting power of all
classes of stock of the Company. |
In the event of a Corporate Transaction, the Board of Directors may elect, in its sole
discretion, to cancel any outstanding options and restricted stock and pay, or cause to be paid, to
the holder an amount in cash or securities having a value:
|
|
|
in the case of restricted stock, equal to the formula or fixed price per
share paid to holders of shares of the Companys common stock in connection
with the Corporate Transaction, or |
|
|
|
|
in the case of options, equal to the product of the number of shares of
common stock subject to the option multiplied by the amount, if any, by
which the formula or fixed price per share paid to holders pursuant to the
Corporate Transaction exceeds the exercise price of the option. |
Assuming a December 31, 2007 Corporate Transaction, and assuming acceleration of all
outstanding unvested equity awards per the terms of the plan, the value of all equity awards that
would vest and become exercisable for each NEO would be as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
Name |
|
Value of Stock Options ($) (1) |
|
|
Value of Restricted Shares ($) |
|
|
Total ($) |
Robert Sarver |
|
|
135,400 |
|
|
|
0 |
|
|
|
135,400 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dale Gibbons |
|
|
143,278 |
|
|
|
0 |
|
|
|
143,278 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Merrill Wall |
|
|
102,150 |
|
|
|
304,074 |
|
|
|
406,224 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James Lundy |
|
|
10,215 |
|
|
|
0 |
|
|
|
10,215 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Duane Froeschle |
|
|
10,215 |
|
|
|
0 |
|
|
|
10,215 |
|
|
|
|
(1) |
|
The value of stock options reflects the fact that a substantial number of unvested stock
options held by NEOs had an exercise price per share greater than the market price per share as of
December 31, 2007. |
In addition, pursuant to indemnification agreements entered into by the Company with each of
its directors and executive officers, in the event of a change of control of the Company, an
independent party will be appointed to determine the rights and obligations of the indemnitee and
the Company with regard to a particular proceeding, and the Company has agreed to pay the
reasonable fees for such party. If there is a potential change in control, the agreement provides
that, upon the request of an indemnitee, the Company will establish and fund a trust for payment of
reasonably anticipated expenses, and that the trust cannot be revoked upon a change of control
without the indemnitees consent. For more information
- 30 -
regarding the indemnification agreements, see Employment, Noncompetition and Indemnification
Agreements.
Under the Companys Restoration Plan, the Companys matching contribution in the executives
account (and all earnings thereon) will become 100% vested immediately (if not already vested): (1)
upon a change in control of the Company, or (2) on the date the executive reaches age 65, the date
of his disability, or the date he dies, if the executive is employed by the Company on any such
date.
Assuming a change in control or other vesting event occurred on December 31, 2007, the vesting
benefit to each NEO would be $32,689 for Mr. Sarver, $5,887 for Mr. Gibbons, $4,123.34 for Mr.
Wall, $6,884 for Mr. Lundy, and $0 for Mr. Froeschle.
Employment, Noncompetition and Indemnification Agreements
Employment Agreements
The Company has not entered into employment agreements with any of its NEOs. Its subsidiary,
the Bank of Nevada, entered into a letter agreement with Larry L. Woodrum in connection with his
resignation as President and Chief Executive Officer of the bank effective July 1, 2006. Pursuant
to this agreement, the Company agreed to continue to pay Mr. Woodrum his 2006 base salary through
December 31, 2006, to pay Mr. Woodrum any bonus earned for 2006 (in accordance with the Annual
Bonus Plan) and, for his services as Vice Chairman of the Bank, to pay Mr. Woodrum an annual salary
of $120,000 beginning January 1, 2007 through December 31, 2009. Mr. Woodrum agreed, during the
period he is employed by the Bank and for two years thereafter, not to directly or indirectly, own,
manage, operate, control, or participate in the ownership, management, operation or control of, or
be connected with as an officer, employee, partner, director, consultant or otherwise, or have any
financial interest in any business that provides products and services similar to and competitive
with any products or services offered by the Bank or any of its affiliates (other than passive
stock ownership of no more than 5% of the outstanding stock of such a corporation that is listed or
traded on the NYSE, American Stock Exchange or NASDAQ). Mr. Woodrum also agreed that during the
same period he would not, directly or indirectly, employ or solicit for employment any employee of
the Bank or any of its affiliates or to solicit or communicate with any customers of the Bank or
any of its affiliates for the purpose of selling or providing any products or services similar to
or competitive with the products or services offered by the Bank or any of its affiliates. The
noncompetition and nonsolicitation provisions of the letter agreement are in addition to, and do
not supercede, Mr. Woodrums obligations under the Noncompetition Agreement described below.
Noncompetition Agreement
On July 31, 2002, the Company entered into Noncompetition Agreements with Messrs. Lundy,
Sarver, Snyder and Woodrum. The agreements are enforceable while each such person is employed by
the Company as a senior executive or is a member of its Board of Directors and for two years
following the conclusion of such service. Each agreement provides that, other than with the
Company, the individual will refrain from (a) engaging in the business of banking, either directly
or indirectly, or from having an interest in the business of banking, in any state in which the
Company engages in the business of banking; (b) soliciting any person then employed by the Company
for employment with another entity engaged in the business of banking; or (c) diverting or
attempting to divert from the Company any business of any kind in which the Company is engaged. The
agreement does not prohibit passive ownership in a company engaged in banking that is listed or
traded on the NYSE, American Stock Exchange or NASDAQ, so long as such ownership does not exceed
5%. In the event of a breach or
- 31 -
threatened breach, the Company is entitled to obtain injunctive relief against the breaching party
in addition to any other relief (including money damages) available to the Company under applicable
law.
Indemnification Agreement
The Company entered into Indemnification Agreements with each of its directors and executive
officers (the indemnitees). These agreements provide contractual assurance of the indemnification
authorized and provided for by the Companys articles of incorporation and bylaws and the manner of
such indemnification, regardless of whether the Companys articles or bylaws are amended or
revoked, or whether the composition of the Board of Directors is changed or the Company is
acquired. However, such limitation on liability would not apply to violations of the federal
securities laws, nor does it limit the availability of non-monetary relief in any action or
proceeding against a director. The Companys by-laws include provisions for indemnification of its
directors and officers to the fullest extent permitted by Nevada law. Insofar as indemnification
for liabilities arising under the federal securities laws may be permitted to directors, officers
and persons controlling the Company pursuant to the foregoing provisions, the Company has been
informed that in the opinion of the SEC such indemnification is against public policy as expressed
in such laws and is unenforceable.
The agreement provides for the payment, in whole or in 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.
- 32 -
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, 2007, the Companys officers, directors and principal stockholders (and their
related interests) were indebted to the Banks in the aggregate amount of approximately $90.4
million in connection with these loans. This amount was approximately 2.5% 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.
Certain Business Relationships
Robert Sarver, the Companys President, Chairman and Chief Executive Officer, controls several
limited partnerships which invest in commercial real estate. Directors Hilton, A. Marshall, T.
Marshall and former Director Baker are currently 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. Other than Mr. Sarver, none of these
directors is a managing or general partner in any of these entities, nor do they have any other
role that would have a policy making function for such entities. Mr. Sarver also is the managing
partner of the entity which owns the Phoenix Suns NBA basketball team. Director Hilton is a limited
partner in the Phoenix Suns ownership group.
Mr. Sarver also serves as a director of Meritage Homes Corporation. He served on the
Compensation Committee of Meritage until February 2004. Mr. Hilton is the chairman of the board
and chief executive officer of Meritage. William S. Boyd, a director of the Company, was the chief
executive officer of Boyd Gaming Corporation in 2007. Marianne Boyd Johnson, Mr. Boyds daughter,
is a director of the Company and Boyd Gaming Corporation. Robert L. Bougher, a director of Bank of
Nevada and Boyd Gaming Corporation, is the chief executive officer and president of the Echelon
Resort, a new Las Vegas casino and resort project that is owned by Boyd Gaming Corporation.
Director Snyder was the president of Boyd Gaming Corporation from January 1997 until March 2005.
Policies and Procedures Regarding Transactions with Related Persons
The Companys Audit Committee and Nominating and Corporate Governance Committee have approved
a written Related Party Transactions Policy, which will be submitted to the full Board of Directors
for adoption at its regular meeting in April 2008. This Policy requires Company Directors and
executive officers to promptly report any transaction greater than $10,000 in which the Company or
a subsidiary will be a participant, and a Director, executive officer or any of their immediate
family members will have a direct or indirect economic interest. Unless the transaction is a
pre-approved transaction, each Related Party Transaction must be approved or ratified by the
appropriate governing body, director or officer.
In addition, the Company has a number of policies, procedures and practices that relate to the
identification, review and approval of related party transactions. In accordance with the
Companys Corporate Governance Guidelines, each director is required to satisfy the independence
standards prescribed under the listing requirements of the New York Stock Exchange or under
applicable law. As part of the annual review process, the Company distributes and collects
questionnaires that solicit information about any direct or indirect transactions with the Company
from each of its directors and
- 33 -
officers, reviews the responses to these questionnaires and reports the results to the
Nominating and Corporate Governance Committee. The Companys Code of Business Conduct and Ethics
requires all employees to avoid any situation in which a persons private interest interferes in
any way (or even appears to interfere) with the interests of the Company, including transactions in
which an employee, officer or director, or a member of his or her family, receives improper
personal benefits as a result of his or her position at the Company, such as loans to, or
guarantees of obligations of, employees or directors or their family members, other than those made
in the ordinary course of business.
In accordance with Federal Reserve Board Regulation O, each of the Companys bank subsidiaries
has adopted a formal policy governing any extensions of credit to any officer, director or
significant shareholder of the bank or any affiliate. These policies require, among other things,
that any such loan (1) be made on substantially the same terms (including interest rates,
collateral and repayment terms) as those prevailing at the time for comparable transactions with
unrelated persons, (2) not involve more than the normal risk of collectibility or present other
unfavorable features for the bank, and (3) be approved by a majority of the banks full board of
directors, without the direct or indirect participation of the interested person. Any transactions
between the Company and an officer or director of the Company (or any of its affiliates), or an
immediate family member of such an officer or director, falling outside the scope of these formal
policies must be conducted at arms length. Any consideration paid or received by the Company in
such a transaction must be on terms no less favorable than terms available to an unaffiliated third
party under similar circumstances.
INDEPENDENT AUDITORS
Pursuant to the recommendation of the Audit Committee, the Board of Directors has appointed
McGladrey & Pullen, LLP to audit the financial statements of the Corporation and certain of its
subsidiaries for the fiscal year ending December 31, 2007, and to report on the consolidated
balance sheets, statements of income and other related statements of the Company and its
subsidiaries. McGladrey & Pullen LLP has served as the independent auditor for the Company since
1994. Representatives of McGladrey & Pullen LLP will be present at the Annual Meeting, will have
an opportunity to make a statement if they so desire and will be available to respond to questions
posed by the stockholders.
Fees and Services
The following table shows the aggregate fees billed to the Company for professional services
by McGladrey & Pullen, LLP and RSM McGladrey, Inc. (an affiliate of McGladrey & Pullen, LLP) for
fiscal years 2007 and 2006:
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year 2007 ($) |
|
|
Fiscal Year 2006 ($) |
|
Audit Fees |
|
|
898,000 |
|
|
|
1,288,000 |
|
|
|
|
|
|
|
|
|
|
Audit-Related Fees |
|
|
49,000 |
|
|
|
19,000 |
|
|
|
|
|
|
|
|
|
|
Tax Fees |
|
|
95,000 |
|
|
|
68,000 |
|
|
|
|
|
|
|
|
|
|
All Other Fees |
|
|
24,000 |
|
|
|
118,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
1,066,000 |
|
|
|
1,493,000 |
|
Audit Fees. Audit fees for 2007 include professional fees and costs associated with review of Forms
S-4, S-3 and S-8 and related consents. Audit fees for 2006 include professional fees and costs
associated with review of Form S-4 and related consents. Audit fees for 2006 also include
professional fees and costs
- 34 -
associated with review of documents for the private placement of securities. Fees for both years
also include review of Forms 10-Q and related SAS 100 reviews.
Audit-Related Fees. Audit related fees include audits of an employee benefit plan and services
relating to various accounting and reporting matters.
Tax Fees. Tax fees include review of tax estimates and various tax consulting services. In
addition, tax fees include preparation of final tax returns for acquired entities.
All Other Fees. All other fees include regulatory compliance services.
The Audit Committee considered the compatibility of the non-audit-related services performed
by and fees paid to McGladrey & Pullen, LLP and RSM McGladrey, Inc. in 2007 and the proposed
non-audit-related services and fees for 2008 and determined that such services and fees are
compatible with the independence of McGladrey & Pullen, LLP.
Audit Committee Pre-Approval Policy
The Audit Committee is required to pre-approve all audit and non-audit services provided by
the Companys independent auditors in order to assure that the provision of such services does not
impair the auditors independence. The Audit Committee has established a policy regarding
pre-approval of permissible audit, audit-related, tax and other services provided by the
independent auditors, which services are periodically reviewed and revised by the Committee. Unless
a type of service has received general pre-approval under the policy or involves de minimus fees,
the service will require specific approval by the Audit Committee. The Audit Committee may delegate
to its Chairman the authority to pre-approve services of the independent auditors, provided that
the Chairman must report any such approvals to the full Audit Committee at its next scheduled
meeting.
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information with respect to the beneficial ownership of
common stock, as of the Record Date, February 28, 2008, by (a) persons known to the Company to own
more than 5% of the outstanding shares of its common stock, (b) each director and executive officer
of the Company, and (c) the Companys directors and executive officers as a group. The information
contained herein has been obtained from the Companys records and from information furnished to the
Company by each individual. The Company knows of no person who owns, beneficially or of record,
either individually or with associates, more than 5% of the Companys common stock, except as set
forth below.
|
|
|
|
|
|
|
|
|
|
|
Number of Shares |
|
Percentage of |
Beneficial Owner (1) |
|
Beneficially Owned |
|
Common Stock (2) |
Bruce Beach (3) |
|
|
21,697 |
|
|
|
* |
|
William S. Boyd (4) |
|
|
1,758,230 |
|
|
|
5.82 |
|
Gary Cady (5) |
|
|
95,731 |
|
|
|
* |
|
Duane Froeschle (6) |
|
|
250,720 |
|
|
|
* |
|
Dale Gibbons (7) |
|
|
136,674 |
|
|
|
* |
|
Arnold Grisham (8) |
|
|
32,881 |
|
|
|
* |
|
Bruce Hendricks (9) |
|
|
88,293 |
|
|
|
* |
|
- 35 -
|
|
|
|
|
|
|
|
|
|
|
Number of Shares |
|
Percentage of |
Beneficial Owner (1) |
|
Beneficially Owned |
|
Common Stock (2) |
Steven J. Hilton (10) |
|
|
278,855 |
|
|
|
* |
|
Marianne Boyd Johnson (11) |
|
|
3,466,028 |
|
|
|
11.47 |
|
James Lundy (12) |
|
|
206,807 |
|
|
|
* |
|
Cary Mack (13) |
|
|
142,097 |
|
|
|
* |
|
Linda Mahan (14) |
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87,559 |
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* |
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George J. Maloof, Jr. (15) |
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93,353 |
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* |
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Grant Markham (16) |
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118,240 |
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* |
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Arthur Marshall (17) |
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255,096 |
|
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* |
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Todd Marshall (18) |
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692,639 |
|
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2.29 |
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M. Nafees Nagy, M.D. (19) |
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879,800 |
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2.91 |
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James Nave, D.V.M. (20) |
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517,944 |
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1.71 |
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John P. Sande, III |
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76,648 |
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* |
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Robert G. Sarver (21) |
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3,655,807 |
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11.68 |
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Donald D. Snyder (22) |
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215,071 |
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* |
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Kenneth A. Vecchione |
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0 |
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* |
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Merrill Wall (23) |
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114,753 |
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* |
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Larry L. Woodrum (24) |
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102,687 |
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* |
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All
directors and executive officers as a
group (24 persons) |
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13,287,610 |
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41.48 |
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* |
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Less than one percent |
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(1) |
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In accordance with Rule 13d-3 under the Securities Exchange Act of 1934 (the Exchange
Act), as amended, a person is deemed to be the beneficial owner of any shares of common
stock if such person has or shares voting power and/or investment power with respect to the
shares, or has a right to acquire beneficial ownership at any time within 60 days from
February 28, 2008. As used herein, voting power includes the power to vote or direct the
voting of shares and investment power includes the power to dispose or direct the
disposition of shares. Shares subject to outstanding stock options and warrants, which an
individual has the right to acquire within 60 days of February 28, 2008 (exercisable stock
options and exercisable warrants, respectively), are deemed to be outstanding for the
purpose of computing the percentage of outstanding securities of the class of stock owned
by such individual or any group including such individual only. Beneficial ownership may be
disclaimed as to certain of the securities. The business address of each of the executive
officers and directors is 2700 West Sahara Avenue, Las Vegas, Nevada 89102, Telephone:
(702) 248-4200. |
|
(2) |
|
Percentage calculated on the basis of 30,219,153 shares outstanding on February 28,
2008. |
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(3) |
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Share ownership includes 4,100 shares subject to exercisable stock options. |
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(4) |
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Share ownership includes 2,500 shares subject to exercisable stock options and
1,755,730 shares held by a trust. |
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(5) |
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Share ownership includes 40,775 shares subject to exercisable stock options, and 493
shares held in his Company 401(k) account. |
- 36 -
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(6) |
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Share ownership includes 72,625 shares subject to exercisable stock options, 44,381
shares subject to exercisable warrants, and 284 shares held in his Company 401(k) account.
Includes 5,000 shares which are pledged or held in a margin account. |
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(7) |
|
Share ownership includes 58,900 shares subject to exercisable stock options, and 424
shares held in his Company 401(k) account. Includes 69,900 shares which are pledged or
held in a margin account. |
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(8) |
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Share ownership includes 10,045 shares subject to exercisable stock options, 7,500
shares subject to exercisable warrants, and 336 shares held in his Company 401(k) account. |
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(9) |
|
Share ownership includes 65,375 shares subject to exercisable stock options, 12,500
held by a trust, and 361 shares held in his Company 401(k) account. |
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(10) |
|
Share ownership includes 8,500 shares subject to exercisable stock options, 68,274
shares subject to exercisable warrants, 52,433 shares held by a family trust, 136,548
shares held by a limited liability company, and 8,000 shares held in his childrens trust
accounts. |
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(11) |
|
Share ownership includes 8,500 shares subject to exercisable stock options, 2,844,134
shares held by certain grantor retained annuity trusts, 302,703 shares held by two other
trusts, and 238,861 shares held by a limited partnership. |
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(12) |
|
Share ownership includes 87,625 shares subject to exercisable stock options, and 372
shares held in his Company 401(k) account. |
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(13) |
|
Share ownership includes 8,500 shares subject to exercisable stock options, 40,000
shares held by a family trust, and 87,497 held by a limited liability company. |
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(14) |
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Share ownership includes 45,359 shares subject to exercisable stock options. |
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(15) |
|
Share ownership includes 2,500 shares subject to exercisable stock options. |
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(16) |
|
Share ownership includes 55,725 shares subject to exercisable stock options, and 334
shares held in his Company 401(k) account. |
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(17) |
|
Share ownership includes 2,500 shares subject to exercisable stock options, and 235,196
shares held by a family trust. |
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(18) |
|
Share ownership includes 2,500 shares subject to exercisable stock options, and 604,248
shares held by various trusts. |
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(19) |
|
Share ownership includes 2,500 shares subject to exercisable stock options, 170,864
shares held by a trust, 24,000 shares held by a partnership, and 680,836 shares held by
four limited liability companies. |
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(20) |
|
Share ownership includes 8,500 shares subject to exercisable stock options held by a
grantor retained annuity trust, 176,110 shares held by a profit sharing plan, and 125,818
held by his daughter. |
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(21) |
|
Share ownership includes: (i) 30,000 shares held by Mr. Sarvers spouse over which he
disclaims all beneficial ownership, (ii) 5,000 shares held by Mr. Sarvers children over
which he disclaims all beneficial ownership, (iii) 75,000 shares subject to exercisable
stock options, (iv) 959,259 shares subject to exercisable warrants, (v) 228,429 shares and
34,137 exercisable warrants held in a trust, (vi) 166,022 shares held by a limited
partnership, (vii) 31,374 shares and 13,656 exercisable warrants held by a corporation, and
(viii) 614 shares held in his Company 401(k) account. Includes 2,363,141 shares which are
pledged or held in a margin account. |
- 37 -
|
|
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(22) |
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Share ownership includes 8,500 shares subject to exercisable stock options, and 95,182
shares held by two trusts. Includes 96,082 shares which are pledged or held in a margin
account. |
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(23) |
|
Share ownership includes 53,125 shares subject to exercisable stock options, and 378
shares held in his Company 401(k) account. |
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(24) |
|
Share ownership includes 61,400 shares subject to exercisable stock options, and 287
shares held in his Company 401(k) account. |
ITEMS OF BUSINESS TO BE ACTED ON AT THE MEETING
Item 1. Election of Directors
Under the Companys Articles of Incorporation, the Board is divided into three classes with
approximately one-third of the directors standing for election each year. The terms of five Class
III directors will expire at this years Annual Meeting. The Board nominated five individuals to be
elected as Class III directors at the Annual Meeting, but Mr. Woodrum declined to stand for
election. The four individuals listed below, all of whom are currently directors of the Company,
are the nominees to be elected as Class III directors at the Annual Meeting. Mr. Woodrums seat on
the board will remain vacant at this time. Proxies may not be voted for a greater number of
persons than the number of nominees named.
The term for directors elected this year will expire at the annual meeting of stockholders
held in 2011. Each of the nominees listed below has agreed to serve that term. If any director is
unable to stand for election, the Board may, by resolution, provide for a lesser number of
directors or designate a substitute. In the latter event, shares represented by proxies may be
voted for a substitute director.
The Board of Directors unanimously recommends that the stockholders vote FOR all of the following
nominees:
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George J. Maloof, Jr. |
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John P. Sande, III |
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Robert G. Sarver |
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Donald D. Snyder |
Biographical information about these nominees may be found beginning at page 6 of this proxy
statement.
Item 2. Ratification of Appointment of the Independent Auditor
The Audit Committee has appointed the firm of McGladrey & Pullen, LLP as the independent
auditor to audit the consolidated financial statements of the Company and its subsidiaries for the
fiscal year ending December 31, 2008 and the Companys internal control over financial reporting as
of December 31, 2008. Representatives of McGladrey & Pullen will be present at the Annual Meeting
with the opportunity to make a statement if they desire to do so and will be available to respond
to appropriate questions from shareholders present at the meeting. Although shareholder
ratification of the appointment of the Companys independent auditor is not required by our bylaws
or otherwise, we are submitting the selection of McGladrey & Pullen to our shareholders for
ratification to permit shareholders to participate in this important corporate decision. If not
ratified, the Audit Committee will reconsider the selection, although the Audit Committee will not
be required to select a different independent auditor for the Company.
- 38 -
The Board of Directors unanimously recommends that the stockholders vote FOR the ratification of
the appointment of McGladrey & Pullen, LLP as the Companys independent auditor.
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 from certain reporting persons that no forms were required for
those persons, the Company believes that during the fiscal year ended December 31, 2007 all Section
16(a) filing requirements applicable to its officers, directors and greater than ten percent
beneficial owners were complied with, except that Mr. Boyd reported one transaction late on one
report, and Mr. Sarver reported one transaction late on one report.
ADDITIONAL INFORMATION
Stockholder Proposals for 2009 Annual Meeting
Any proposal which a stockholder wishes to have included in the Companys proxy statement and
form of proxy relating to its 2009 Annual Meeting of stockholders must be received by the Company,
directed to the attention of the Corporate Secretary, at its principal executive offices at 2700
West Sahara Avenue, Las Vegas, Nevada 89102, no later than December 22, 2008. If a stockholder
wishes to present a matter at the Companys 2009 Annual Meeting that is outside the process for
inclusion in the proxy statement, notice must be given to the Secretary not later than February 6,
2009. 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 on Form 10-K
As required, the Company has filed its Annual Report on Form 10-K for its 2007 fiscal year
with the SEC. Shareholders may obtain, free of charge, a copy of the Form 10-K by writing to the
Company at 2700 West Sahara Avenue, Las Vegas, Nevada 89102, Attention: Corporate Secretary, or
from our website, www.westernalliancebancorp.com.
Legal Proceedings
No director or executive officer of the Company is a party to any material pending legal
proceedings or has a material interest in any such proceedings that is adverse to the Company or
any of its subsidiaries.
Householding of Proxy Materials
The SEC has adopted rules that permit companies and intermediaries such as brokers to satisfy
delivery requirements for proxy statements with respect to two or more stockholders sharing the
same address by delivering a single proxy statement addressed to those stockholders. This process,
which is commonly referred to as householding, potentially provides extra convenience for
stockholders and cost savings for companies. Brokers with account holders who are stockholders of
the Company may be
- 39 -
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.
Other Business
Except as described above, the Company knows of no business to come before the Annual Meeting.
However, if other matters should properly come before the Annual Meeting or any adjournment
thereof, it is the intention of the persons named in the Proxy to vote in accordance with the
determination of a majority of the Board of Directors on such matters.
BY ORDER OF THE
BOARD OF DIRECTORS
ROBERT G. SARVER
CHAIRMAN OF THE BOARD
Dated: March 21, 2008
- 40 -
ANNUAL MEETING OF STOCKHOLDERS OF
WESTERN ALLIANCE BANCORPORATION
April 22, 2008
Please date, sign and mail
your proxy card in the
envelope provided as soon
as possible.
ê Please
detach along perforated line and mail in the envelope
provided. ê
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20430000000000000000 8 |
042208 |
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE
ELECTION OF DIRECTORS AND FOR PROPOSAL 2.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE
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FOR
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AGAINST
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ABSTAIN |
1. |
Election of Directors:
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2. |
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Ratify the appointment of McGladrey & Pullen, LLP as the Companys independent auditors.
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o |
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o |
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o |
o |
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NOMINEES: |
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FOR ALL NOMINEES |
¡ |
George J. Maloof, Jr. |
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¡ |
John P. Sande, III |
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This proxy, when properly executed, will be voted in accordance with the directions of the undersigned. If no instruction to the contrary is given, this proxy will be voted FOR the election of the nominees for Directors listed in Proposal 1 and FOR Proposal 2. If any other business is presented at the Annual Meeting, this proxy will be voted in accordance with the determination of a majority of the Board of Directors. |
o |
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WITHHOLD AUTHORITY |
¡ |
Robert G. Sarver |
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FOR ALL NOMINEES
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¡ |
Donald D. Snyder |
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o
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FOR ALL EXCEPT
(See Instructions below) |
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INSTRUCTION:
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:
=
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To change the address on your account, please check the box
at right and indicate your new address in the address space
above. Please note that changes to the registered name(s)
on the account may not be submitted
via this method.
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o |
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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.
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WESTERN ALLIANCE BANCORPORATION
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON APRIL 22, 2008
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Dale Gibbons and Linda N. Mahan as proxies, each with full
power of substitution, to represent and vote as designated on the reverse side, all the shares of
Common Stock of Western Alliance Bancorporation held of record by the undersigned on February 28,
2008, at the Annual Meeting of Stockholders to be held at the Embassy Terrace, 2800 West Sahara
Avenue, Las Vegas, Nevada 89102, on April 22, 2008, or any adjournment or postponement thereof.
(Continued and to be signed on the reverse side.)
ANNUAL
MEETING OF STOCKHOLDERS OF
WESTERN ALLIANCE BANCORPORATION
April 22,
2008
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PROXY VOTING INSTRUCTIONS
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MAIL
-
Date, sign and mail your proxy card in the
envelope provided as soon as possible.
- or -
TELEPHONE
- Call toll-free 1-800-PROXIES (1-800-776-9437) in the United States or 1-718-921-8500 from foreign countries 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.
- OR -
IN
PERSON - You may vote your shares in person by attending the Annual Meeting.
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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 in the United States or 1-718-921-8500 from foreign countries or www.voteproxy.com up until 11:59 PM Eastern Time the day before the cut-off or meeting date.
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â Please
detach along perforated line and mail in the envelope provided
IF you are not voting via telephone or the Internet. â
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20430000000000000000 8 |
042208 |
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF DIRECTORS AND FOR PROPOSAL 2.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE
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FOR
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AGAINST
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ABSTAIN |
1. |
Election of Directors:
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2. |
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Ratify the appointment of McGladrey & Pullen, LLP as the Companys independent auditors.
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o |
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o |
o |
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NOMINEES: |
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FOR ALL NOMINEES |
¡ |
George J. Maloof, Jr. |
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¡ |
John P. Sande, III |
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This proxy, when properly executed, will be voted in accordance with the directions of the undersigned. If no instruction to the contrary is given, this proxy will be voted FOR the election of the nominees for Directors listed in Proposal 1 and FOR Proposal 2. If any other business is presented at the Annual Meeting, this proxy will be voted in accordance with the determination of a majority of the Board of Directors. |
o |
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WITHHOLD AUTHORITY |
¡ |
Robert G. Sarver |
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FOR ALL NOMINEES
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¡ |
Donald D. Snyder |
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o
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FOR ALL EXCEPT
(See Instructions below) |
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INSTRUCTION:
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:
=
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To change the address on your account, please check the box
at right and indicate your new address in the address space
above. Please note that changes to the registered name(s)
on the account may not be submitted
via this method.
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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.
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ANNUAL
MEETING OF STOCKHOLDERS OF
WESTERN ALLIANCE BANCORPORATION
April 22,
2008
401(k) Plan Participants
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PROXY VOTING INSTRUCTIONS
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MAIL -
Date, sign and mail your proxy card in the
envelope provided as soon as possible.
- OR -
TELEPHONE - Call toll-free 1-800-PROXIES (1-800-776-9437) in the United States or 1-718-921-8500 from foreign countries 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.
- OR -
IN PERSON - You may vote your shares in person by attending the Annual Meeting.
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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 in the United States or 1-718-921-8500 from foreign countries or www.voteproxy.com up until 11:59 PM Eastern Time the day before the cut-off or meeting date.
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â Please
detach along perforated line and mail in the envelope provided
IF you are not voting via telephone or the Internet. â
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20430000000000000000 8 |
042208 |
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF DIRECTORS AND FOR PROPOSAL 2.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE
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FOR
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AGAINST
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ABSTAIN |
1. |
Election of Directors:
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2. |
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Ratify the appointment of McGladrey & Pullen, LLP as the Companys independent auditors.
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o |
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o |
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o |
o |
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NOMINEES: |
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FOR ALL NOMINEES |
¡ |
George J. Maloof, Jr. |
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¡ |
John P. Sande, III |
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This proxy, when properly executed, will be voted in accordance with the directions of the undersigned. If no instruction to the contrary is given, this proxy will be voted FOR the election of the nominees for Directors listed in Proposal 1 and FOR Proposal 2. If any other business is presented at the Annual Meeting, this proxy will be voted in accordance with the determination of a majority of the Board of Directors. |
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WITHHOLD AUTHORITY |
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Robert G. Sarver |
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FOR ALL NOMINEES
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Donald D. Snyder |
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FOR ALL EXCEPT
(See Instructions below) |
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INSTRUCTION:
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:
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To change the address on your account, please check the box
at right and indicate your new address in the address space
above. Please note that changes to the registered name(s)
on the account may not be submitted
via this method.
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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.
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WESTERN ALLIANCE BANCORPORATION
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON APRIL 22, 2008
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Dale Gibbons and Linda N. Mahan as proxies, each with full
power of substitution, to represent and vote as designated on the reverse side, all the shares of
Common Stock of Western Alliance Bancorporation held of record by the undersigned on February 28,
2008, at the Annual Meeting of Stockholders to be held at the Embassy Terrace, 2800 West Sahara
Avenue, Las Vegas, Nevada 89102, on April 22, 2008, or any adjournment or postponement thereof.
Western Alliance Bancorporation 401(k) Plan
Confidential Voting Instructions
To Charles Schwab Trust Co., Trustee
By signing on the reverse side or by voting by phone or Internet, you direct the above named
Trustee to vote (in person or by proxy) as indicated on the front of this card, the number of
shares of Western Alliance Bancorporation Common Stock credited to your account under Western
Alliance Bancorporation 401(k) Plan at the Annual Meeting of Stockholders to be held on April 22,
2008 at 8:00 a.m. PDT, and at any adjournment thereof. In accordance with the applicable plan
provisions, the Trustee will apply this voting instruction pro rata (along with the voting
instructions of all other participants) to all shares of Common Stock held in the Plan for which
the Trustee receives no voting instructions. These confidential voting instructions will be seen
only by the authorized representatives of the Trustee.
(Continued and to be signed on the reverse side.)
ANNUAL MEETING OF STOCKHOLDER OF
WESTERN ALLIANCE BANCORPORATION
April 22, 2008
401(k) Plan Participants
Please date, sign and mail
your proxy card in the
envelope provided as soon
as possible.
ê Please
detach along perforated line and mail in the envelope
provided. ê
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20430000000000000000 8 |
042208 |
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE
ELECTION OF DIRECTORS AND FOR PROPOSAL 2.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE
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FOR
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AGAINST
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ABSTAIN |
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Election of Directors:
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Ratify the appointment of McGladrey & Pullen, LLP as the Companys independent auditors.
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NOMINEES: |
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FOR ALL NOMINEES |
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George J. Maloof, Jr. |
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John P. Sande, III |
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This proxy, when properly executed, will be voted in accordance with the directions of the undersigned. If no instruction to the contrary is given, this proxy will be voted FOR the election of the nominees for Directors listed in Proposal 1 and FOR Proposal 2. If any other business is presented at the Annual Meeting, this proxy will be voted in accordance with the determination of a majority of the Board of Directors. |
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WITHHOLD AUTHORITY |
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Robert G. Sarver |
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FOR ALL NOMINEES
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Donald D. Snyder |
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FOR ALL EXCEPT
(See Instructions below) |
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INSTRUCTION:
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:
=
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To change the address on your account, please check the box
at right and indicate your new address in the address space
above. Please note that changes to the registered name(s)
on the account may not be submitted
via this method.
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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.
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