Filed by the Registrant x
|
Filed by a Party other than the Registrant o
|
¨
|
Preliminary
Proxy Statement
|
¨
|
Confidential,
for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
|
x
|
Definitive
Proxy Statement
|
¨
|
Definitive
Additional Materials
|
¨
|
Soliciting
Material Pursuant to §240.14a-12
|
x
|
No
fee required.
|
¨
|
Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
|
|
(1)
|
Title
of each class of securities to which transaction applies:
|
|
|
|
(2)
|
Aggregate
number of securities to which transaction applies:
|
|
|
|
(3)
|
Per
unit price or other underlying value of transaction computed pursuant
to
Exchange Act Rule 0-11 (set forth the amount on which the filing
fee is
calculated and state how it was determined):
|
|
|
|
(4)
|
Proposed
maximum aggregate value of transaction:
|
|
|
|
(5)
|
Total
fee paid:
|
|
|
¨
|
Fee
paid previously with preliminary materials.
|
¨
|
Check
box if any part of the fee is offset as provided by Exchange Act
Rule
0-11(a)(2) and identify the filing for which the offsetting fee was
paid
previously. Identify the previous filing by registration statement
number,
or the Form or Schedule and the date of its filing.
|
|
(1)
|
Amount
Previously Paid:
|
|
|
|
(2)
|
Form,
Schedule or Registration Statement No.:
|
|
|
|
(3)
|
Filing
Party:
|
|
|
|
(4)
|
Date
Filed:
|
|
|
1. |
To
approve an amendment to the Company’s Restated Articles of Incorporation
to authorize a class of 50 million shares of preferred stock, par
value
$0.01 per share. A copy of the amendment is set forth in Exhibit
A to the
accompanying proxy statement.
|
2. |
Such
other business as may properly come before the Special Meeting or
any
adjournment thereof.
|
For
the Board of Directors,
|
|
/s/
Thomas E. Stanberry
|
|
Thomas
E. Stanberry
|
|
Chairman,
President and Chief Executive
Officer
|
GENERAL
INFORMATION
|
2
|
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
|
3
|
PROPOSAL
TO AMEND RESTATED ARTICLES OF INCORPORATION
|
3
|
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS, DIRECTORS, AND EXECUTIVE
OFFICERS
|
11
|
GENERAL
MATTERS
|
|
2009
Shareholder Proposals
|
12
|
Delivery
of Documents to Shareholders Sharing an Address
|
12
|
Where
You Can Find More Information
|
12
|
EXHIBITS
|
|
Exhibit
A: Amendment of the Restated Articles of Incorporation of West
Bancorporation, Inc.
|
14
|
Exhibit
B: TARP Capital Purchase Program, Senior Preferred Stock and
Warrants
|
15
|
·
|
The
issuance of $12.2 million (minimum estimated proceeds) or
$36 million (amount actually applied for) of Preferred Stock to
Treasury under the Capital Purchase
Program.
|
·
|
The
issuance of warrants to purchase 160,386 shares of Common Stock (estimated
warrants to be issued upon receipt of minimum proceeds of sale of
Preferred Stock) or warrants to purchase 473,269 shares of Common
Stock
(estimated warrants to be issued upon receipt of sale of actual amount
of
Preferred Stock applied for) assuming a purchase price of $11.41
per share
(trailing 20-day average share price of Common Stock as of November
7,
2008).
|
·
|
An
increase in interest income assuming the proceeds were invested in
AAA-rated five-year U.S. government agency
bonds.
|
September 30, 2008
(unaudited)
|
||||||||||
As Adjusted
|
As Adjusted
|
|||||||||
Historical
|
Minimum (1)
|
Applied for (2)
|
||||||||
Balance
Sheet:
|
||||||||||
Total
assets (3)
|
$
|
1,463,745
|
$
|
1,475,945
|
$
|
1,499,745
|
||||
Shareholders'
equity
|
||||||||||
Preferred
stock
|
$
|
-
|
$
|
11,600
|
$
|
34,230
|
||||
Common
stock
|
3,000
|
3,000
|
3,000
|
|||||||
Additional
paid-in capital
|
32,000
|
32,600
|
33,770
|
|||||||
Retained
earnings
|
83,470
|
83,470
|
83,470
|
|||||||
Accumulated
other comprehensive loss
|
(3,609
|
)
|
(3,609
|
)
|
(3,609
|
)
|
||||
Total
shareholders' equity
|
$
|
114,861
|
$
|
127,061
|
$
|
150,861
|
||||
Capital
Ratios:
|
||||||||||
Total
risk-based capital to risk-weighted assets ratio
|
10.4
|
%
|
11.4
|
%
|
13.3
|
%
|
||||
Tier
1 capital as % of risk-weighted assets ratio
|
9.2
|
%
|
10.2
|
%
|
12.1
|
%
|
||||
Tier
1 capital as % of average assets
|
8.2
|
%
|
9.0
|
%
|
10.5
|
%
|
||||
Equity
to assets ratio
|
7.8
|
%
|
8.6
|
%
|
10.1
|
%
|
||||
Tangible
equity to tangible assets ratio
|
6.1
|
%
|
6.9
|
%
|
8.4
|
%
|
1)
|
Pro
forma impact assuming minimum estimated proceeds from the issuance
of
Preferred Stock ($12.2 million).
|
2)
|
Pro
forma impact assuming proceeds from the issuance of Preferred Stock
in the
amount actually applied for ($36
million).
|
3)
|
Assumes
that proceeds are initially invested in AAA-rated five-year U.S.
government agency bonds.
|
Historical 12
|
Pro forma 12
|
|||||||||
Months Ended
|
Months Ended
|
|||||||||
December 31,
2007
|
(unaudited)
Adjustments
|
December 31,
2007
|
||||||||
Net
interest income
|
$
|
38,204
|
|
$
492
|
(1)
|
$
|
38,696
|
|||
Provision
for loan losses
|
2,350
|
2,350
|
||||||||
Net
interest income after provision for loan losses
|
35,854
|
492
|
36,346
|
|||||||
Noninterest
income
|
16,052
|
-
|
16,052
|
|||||||
Noninterest
expense
|
24,510
|
-
|
24,510
|
|||||||
Income
before income taxes
|
27,396
|
492
|
27,888
|
|||||||
Income
taxes
|
8,476
|
187
|
(2)
|
8,663
|
||||||
Net
income
|
18,920
|
305
|
19,225
|
|||||||
Less:
Preferred dividends
|
-
|
610
|
(3)
|
610
|
||||||
Less:
Discount accretion
|
118
|
(3)
|
118
|
|||||||
Income
available to common shareholders
|
$
|
18,920
|
$
|
(423
|
)
|
$
|
18,497
|
|||
Earnings
per common share, basic
|
$
|
1.08
|
$
|
(0.03
|
)
|
$
|
1.05
|
|||
Earnings
per common share, diluted
|
n/a
|
$
|
1.05
|
|||||||
Weighted
average shares outstanding
|
||||||||||
Basic
|
17,536
|
|
17,536
|
|||||||
Diluted
|
n/a
|
40
|
(4)
|
17,576
|
1)
|
Assumes
that the minimum estimated Capital Purchase Program proceeds are
used to
invest in AAA-rated five-year U.S. government agency bonds with a
yield of
4.03% per annum. The actual impact to net interest income may be
different
depending on the actual use of any proceeds
received.
|
2)
|
Additional
income tax expense is attributable to additional net interest income
as
described in Note 1.
|
3)
|
Consists
of dividends on Preferred Stock at a 5% annual rate as well as accretion
of discount on Preferred Stock upon issuance. The discount is determined
based on the value that is allocated to the warrants upon issuance.
The
discount is accreted back to par value using the effective interest
method
over a five-year term, which is the expected life of the Preferred
Stock
upon issuance. The estimated accretion is based on a number of assumptions
which are subject to change. These assumptions include the discount
(market rate at issuance) rate on the Preferred Stock, and assumptions
underlying the value of the warrants. The estimated proceeds are
allocated
based on the relative fair value of the warrants as compared to the
fair
value of the Preferred Stock. The fair value of the warrants is determined
under a Black-Scholes model. The model includes assumptions regarding
the
Common Stock price, dividend yield, and stock price volatility, as
well as
assumptions regarding the risk-free interest rate. The lower the
value of
the warrants, the less negative impact on net income and earnings
per
share available to common shareholders. The fair value of the Preferred
Stock is determined based on assumptions regarding the discount rate
(market rate) on the Preferred Stock (currently estimated at 12%). The
lower the discount rate, the less negative impact on net income and
earnings per share available to common
shareholders.
|
4)
|
As
described above, if the Company issues Preferred Stock under the
Capital
Purchase Program, the Treasury would receive warrants to purchase
a number
of shares of Common Stock having an aggregate market price equal
to 15% of
the proceeds on the date of issuance with an exercise price equal
to the
trailing 20-day trading average of Common Stock prior to the closing
date.
These statements assume that the warrants would give the Treasury
the
option to purchase 160,386 shares of Common Stock. The pro forma
adjustment shows the increase in diluted shares outstanding assuming
that
the warrants had been issued on January 1, 2007 at an exercise price
of
$11.41 per share (based on the trailing 20-day average share price
of
Common Stock as of November 7, 2008) and remained outstanding for the
entire period presented.
|
Historical 12
|
Pro forma 12
|
|||||||||
Months Ended
|
(unaudited)
|
Months Ended
|
||||||||
December 31, 2007
|
Adjustments
|
December 31, 2007
|
||||||||
Net
interest income
|
$
|
38,204
|
|
$1,451
|
(1)
|
$
|
39,655
|
|||
Provision
for loan losses
|
2,350
|
2,350
|
||||||||
Net
interest income after provision for loan losses
|
35,854
|
1,451
|
37,305
|
|||||||
Noninterest
income
|
16,052
|
-
|
16,052
|
|||||||
Noninterest
expense
|
24,510
|
-
|
24,510
|
|||||||
Income
before income taxes
|
27,396
|
1,451
|
28,847
|
|||||||
Income
taxes
|
8,476
|
551
|
(2)
|
9,027
|
||||||
Net
income
|
18,920
|
900
|
19,820
|
|||||||
Less:
Preferred dividends
|
-
|
1,800
|
(3)
|
1,800
|
||||||
Less:
Discount accretion
|
347
|
(3)
|
347
|
|||||||
Income
available to common shareholders
|
$
|
18,920
|
$
|
(1,247
|
)
|
$
|
17,673
|
|||
Earnings
per common share, basic
|
$
|
1.08
|
$
|
(0.07
|
)
|
$
|
1.01
|
|||
Earnings
per common share, diluted
|
n/a
|
$
|
1.00
|
|||||||
Weighted
average shares outstanding
|
||||||||||
Basic
|
17,536
|
|
17,536
|
|||||||
Diluted
|
n/a
|
118
|
(4)
|
17,654
|
1)
|
Assumes
that the estimated Capital Purchase Program proceeds of the amount
applied
for are used to invest in AAA-rated five-year U.S. government agency
bonds
with a yield of 4.03% per annum. The actual impact to net interest
income
may be different depending on the actual use of any proceeds
received.
|
2)
|
Additional
income tax expense is attributable to additional net interest income
as
described in Note 1.
|
3)
|
Consists
of dividends on Preferred Stock at a 5% annual rate as well as accretion
of discount on Preferred Stock upon issuance. The discount is determined
based on the value that is allocated to the warrants upon issuance.
The
discount is accreted back to par value using the effective interest
method
over a five-year term, which is the expected life of the Preferred
Stock
upon issuance. The estimated accretion is based on a number of assumptions
which are subject to change. These assumptions include the discount
(market rate at issuance) rate on the Preferred Stock, and assumptions
underlying the value of the warrants. The estimated proceeds are
allocated
based on the relative fair value of the warrants as compared to the
fair
value of the Preferred Stock. The fair value of the warrants is determined
under a Black-Scholes model. The model includes assumptions regarding
the
Common Stock price, dividend yield, and stock price volatility, as
well as
assumptions regarding the risk-free interest rate. The lower the
value of
the warrants, the less negative impact on net income and earnings
per
share available to common shareholders. The fair value of the Preferred
Stock is determined based on assumptions regarding the discount rate
(market rate) on the Preferred Stock (currently estimated at 12%).
The
lower the discount rate, the less negative impact on net income and
earnings per share available to common
shareholders.
|
4)
|
As
described above, if the Company issues Preferred Stock under the
Capital
Purchase Program, the Treasury would receive warrants to purchase
a number
of shares of Common Stock having an aggregate market price equal
to 15% of
the proceeds on the date of issuance with an exercise price equal
to the
trailing 20-day trading average of Common Stock prior to the closing
date.
These statements assume that the warrants would give the Treasury
the
option to purchase 473,269 shares of Common Stock. The pro forma
adjustment shows the increase in diluted shares outstanding assuming
that
the warrants had been issued on January 1, 2007 at an exercise price
of
$11.41 per share (based on the trailing 20-day average share price
of
Common Stock as of November 7, 2008) and remained outstanding for
the
entire period presented.
|
Historical 9
|
Pro forma 9
|
|||||||||
Months Ended
|
(unaudited)
|
Months Ended
|
||||||||
September 30, 2008
|
Adjustments
|
September 30, 2008
|
||||||||
Net
interest income
|
$
|
30,497
|
$
|
369
|
(1)
|
$
|
30,866
|
|||
Provision
for loan losses
|
13,600
|
13,600
|
||||||||
Net
interest income after provision for loan losses
|
16,897
|
369
|
17,266
|
|||||||
Noninterest
income
|
10,784
|
-
|
10,784
|
|||||||
Noninterest
expense
|
21,281
|
-
|
21,281
|
|||||||
Income
before income taxes
|
6,400
|
369
|
6,769
|
|||||||
Income
taxes
|
872
|
140
|
(2)
|
1,012
|
||||||
Net
income
|
5,528
|
229
|
5,757
|
|||||||
Less:
Preferred dividends
|
-
|
458
|
(3)
|
458
|
||||||
Less:
Discount accretion
|
-
|
88
|
(3)
|
88
|
||||||
Income
available to common shareholders
|
$
|
5,528
|
$
|
(317
|
)
|
$
|
5,211
|
|||
Earnings
per common share, basic
|
$
|
0.32
|
$
|
(0.02
|
)
|
$
|
0.30
|
|||
Earnings
per common share, diluted
|
n/a
|
$
|
0.30
|
|||||||
Weighted
average shares outstanding
|
||||||||||
Basic
|
17,406
|
|
17,406
|
|||||||
Diluted
|
n/a
|
12
|
(4)
|
17,418
|
1) |
Assumes
that the minimum estimated Capital Purchase Program proceeds
are used to
invest in AAA-rated five-year U.S. government agency bonds with
a yield of
4.03% per annum. The actual impact to net interest income may
be different
depending on the actual use of any proceeds
received.
|
2)
|
Additional
income tax expense is attributable to additional net interest
income as
described in Note 1.
|
3)
|
Consists
of dividends on Preferred Stock at a 5% annual rate as well as
accretion
of discount on Preferred Stock upon issuance. The discount is
determined
based on the value that is allocated to the warrants upon issuance.
The
discount is accreted back to par value using the effective interest
method
over a five-year term, which is the expected life of the Preferred
Stock
upon issuance. The estimated accretion is based on a number of
assumptions
which are subject to change. These assumptions include the discount
(market rate at issuance) rate on the Preferred Stock, and assumptions
underlying the value of the warrants. The estimated proceeds
are allocated
based on the relative fair value of the warrants as compared
to the fair
value of the Preferred Stock. The fair value of the warrants
is determined
under a Black-Scholes model. The model includes assumptions regarding
the
Common Stock price, dividend yield, and stock price volatility,
as well as
assumptions regarding the risk-free interest rate. The lower
the value of
the warrants, the less negative impact on net income and earnings
per
share available to common shareholders. The fair value of the
Preferred
Stock is determined based on assumptions regarding the discount
rate
(market rate) on the Preferred Stock (currently estimated at
12%). The
lower the discount rate, the less negative impact on net income
and
earnings per share available to common
shareholders.
|
4)
|
As
described above, if the Company issues Preferred Stock under
the Capital
Purchase Program, the Treasury would receive warrants to purchase
a number
of shares of Common Stock having an aggregate market price equal
to 15% of
the proceeds on the date of issuance with an exercise price equal
to the
trailing 20-day trading average of Common Stock prior to the
closing date.
These statements assume that the warrants would give the Treasury
the
option to purchase 160,386 shares of Common Stock. The pro forma
adjustment shows the increase in diluted shares outstanding assuming
that
the warrants had been issued on January 1, 2007 at an exercise
price of
$11.41 per share (based on the trailing 20-day average share
price of
Common Stock as of November 7, 2008) and remained outstanding
for the
entire period
presented.
|
Historical 9
|
Pro forma 9
|
|||||||||
Months Ended
|
(unaudited)
|
Months Ended
|
||||||||
September 30, 2008
|
Adjustments
|
September 30, 2008
|
||||||||
Net
interest income
|
$
|
30,497
|
$
|
1,088
|
(1)
|
$
|
31,585
|
|||
Provision
for loan losses
|
13,600
|
13,600
|
||||||||
Net
interest income after provision for loan losses
|
16,897
|
1,088
|
17,985
|
|||||||
Noninterest
income
|
10,784
|
-
|
10,784
|
|||||||
Noninterest
expense
|
21,281
|
-
|
21,281
|
|||||||
Income
before income taxes
|
6,400
|
1,088
|
7,488
|
|||||||
Income
taxes
|
872
|
413
|
(2)
|
1,285
|
||||||
Net
income
|
5,528
|
675
|
6,203
|
|||||||
Less:
Preferred dividends
|
-
|
1,350
|
(3)
|
1,350
|
||||||
Less:
Discount accretion
|
260
|
(3)
|
260
|
|||||||
Income
available to common shareholders
|
$
|
5,528
|
$
|
(935
|
)
|
$
|
4,593
|
|||
Earnings
per common share, basic
|
$
|
0.32
|
$
|
(0.06
|
)
|
$
|
0.26
|
|||
Earnings
per common share, diluted
|
n/a
|
$
|
0.26
|
|||||||
Weighted
average shares outstanding
|
||||||||||
Basic
|
17,406
|
|
17,406
|
|||||||
Diluted
|
n/a
|
35
|
(4)
|
17,441
|
1)
|
Assumes
that the estimated Capital Purchase Program proceeds of the amount
applied
for are used to invest in AAA-rated five-year U.S. government agency
bonds
with a yield of 4.03% per annum. The actual impact to net interest
income
may be different depending on the actual use of any proceeds
received.
|
2)
|
Additional
income tax expense is attributable to additional net interest income
as
described in Note 1.
|
3)
|
Consists
of dividends on Preferred Stock at a 5% annual rate as well as accretion
of discount on Preferred Stock upon issuance. The discount is determined
based on the value that is allocated to the warrants upon issuance.
The
discount is accreted back to par value using the effective interest
method
over a five-year term, which is the expected life of the Preferred
Stock
upon issuance. The estimated accretion is based on a number of assumptions
which are subject to change. These assumptions include the discount
(market rate at issuance) rate on the Preferred Stock, and assumptions
underlying the value of the warrants. The estimated proceeds are
allocated
based on the relative fair value of the warrants as compared to the
fair
value of the Preferred Stock. The fair value of the warrants is determined
under a Black-Scholes model. The model includes assumptions regarding
the
Common Stock price, dividend yield, and stock price volatility, as
well as
assumptions regarding the risk-free interest rate. The lower the
value of
the warrants, the less negative impact on net income and earnings
per
share available to common shareholders. The fair value of the Preferred
Stock is determined based on assumptions regarding the discount rate
(market rate) on the Preferred Stock (currently estimated at 12%).
The
lower the discount rate, the less negative impact on net income and
earnings per share available to common
shareholders.
|
4)
|
As
described above, if the Company issues Preferred Stock under the
Capital
Purchase Program, the Treasury would receive warrants to purchase
a number
of shares of Common Stock having an aggregate market price equal
to 15% of
the proceeds on the date of issuance with an exercise price equal
to the
trailing 20-day trading average of Common Stock prior to the closing
date.
These statements assume that the warrants would give the Treasury
the
option to purchase 473,269 shares of Common Stock. The pro forma
adjustment shows the increase in diluted shares outstanding assuming
that
the warrants had been issued on January 1, 2007 at an exercise price
of
$11.41 per share (based on the trailing 20-day average share price
of
Common Stock as of November 7, 2008) and remained outstanding for
the
entire period presented.
|
Shares Beneficially
|
Percent of Total
|
||||||
Name
|
Owned (1) (2)
|
Shares Outstanding
|
|||||
American
Equity Investment Life Holding Company (3)
|
1,652,196
|
9.49
|
%
|
||||
The
Jay Newlin Trust (4)
|
1,041,952
|
5.99
|
%
|
||||
Frank
W. Berlin
|
46,856
|
|
*
|
||||
Wendy
L. Carlson (5)
|
500
|
|
* | ||||
Orville
E. Crowley (6)
|
133,258
|
|
* | ||||
George
D. Milligan
|
1,500
|
|
* | ||||
Robert
G. Pulver (7)
(8)
|
72,845
|
|
*
|
||||
Thomas
E. Stanberry (9)
|
22,082
|
|
*
|
||||
Jack
G. Wahlig
|
-
|
|
*
|
||||
Connie
Wimer
|
28,848
|
|
*
|
||||
Scott
D. Eltjes
|
8,647
|
|
*
|
||||
Douglas
R. Gulling
|
13,733
|
|
*
|
||||
Jeffrey
D. Lorenzen
|
2,368
|
|
*
|
||||
Brad
L. Winterbottom
|
9,512
|
|
*
|
||||
Executive
officers and directors as a group (13 persons)
|
372,205
|
2.14
|
%
|
(1) |
Shares
“beneficially owned” include shares owned by or for, among others, the
spouse and/or minor children of the named individual and any other
relative who has the same home address as such individual, as well
as
other shares with respect to which the named individual has or shares
voting or investment power. Beneficial ownership may be disclaimed
as to
certain of the shares.
|
(2)
|
Except
as otherwise indicated in the following notes, each named individual
owns
his or her shares directly, or indirectly through a self-directed
IRA or
the Company’s Employee Savings and Stock Ownership Plan, and has sole
investment and voting power with respect to such
shares.
|
(3)
|
The
address for American Equity Investment Life Holding Company is 5000
Westown Parkway, Suite 440, West Des Moines, Iowa 50266. The number
of
shares held by American Equity Investment Life Holding Company was
obtained from its Schedule 13D filled with the SEC on September 18,
2008,
which reports beneficial ownership as of September 18,
2008.
|
(4)
|
The
address for The Jay Newlin Trust is 6165 NW 86th
St., #114, Johnston, Iowa, 50131. The number of shares held by The
Jay
Newlin Trust was obtained from its Schedule 13G filed with the SEC
on
February 11, 2008, which reports beneficial ownership as of December
31,
2007.
|
(5)
|
Ms.
Carlson is a director and Chief Financial Officer and General Counsel
of
American
Equity Investment Life Holding Company.
Ms. Carlson disclaims beneficial ownership of the 1,652,196 shares
of
Common Stock beneficially owned by American Equity Investment Life
Holding
Company.
|
(6)
|
Mr.
Crowley disclaims any beneficial ownership of 297,675 shares held
in his
spouse’s name.
|
(7)
|
Mr.
Pulver disclaims any beneficial ownership of 6,614 shares held in
his
spouse’s name.
|
(8) |
59,875
of Mr. Pulver’s shares are pledged as
security.
|
(9)
|
Mr.
Stanberry disclaims any beneficial ownership of 495 shares held in
his
spouse’s name.
|
1.
|
Contact
the Secretary of the Company to obtain the Board Membership Criteria
established by the Board.
|
2.
|
Make
typewritten submission to the Secretary of the Company naming the
proposed
candidate and specifically noting how the candidate meets the criteria
set
forth by the Board.
|
3.
|
Submit
the recommendation to the Company by 120 days prior to the expected
mailing date of the proxy.
|
4.
|
Prove
the person making the recommendation is a Shareholder who owns shares
with
a market value of at least $2,000 and who has held those shares for
at
least one year at the time the submission is made.
|
5.
|
If
the person being recommended is aware of the submission, he or she
must
sign a statement so indicating.
|
6.
|
If
the person being recommended is not aware of the submission, the
submitter
must explain why.
|
1)
|
the
Company’s audited consolidated financial statements and the notes thereto
included in the Company’s Annual Report on Form 10-K for the year ended
December 31, 2007 (which incorporates by reference the Appendix to
the
Proxy Statement for the year ended December 31, 2007), together with
the
supplemental financial information, management’s discussion and analysis
of financial condition and results of operations and quantitative
and
qualitative disclosures about market risk contained in such Annual
Report
on Form 10-K;
|
2)
|
the
Company’s unaudited consolidated financial statements and the notes
thereto included in the Company’s Quarterly Reports on Form 10-Q for the
three months ended March 31, 2008, June 30, 2008 and September 30,
2008,
together with the management’s discussion and analysis of financial
condition and results of operations and quantitative and qualitative
disclosures about market risk contained in such Quarterly Reports
on Form
10-Q.
|
By
Order of the Board of Directors,
|
/s/
Alice A. Jensen
|
Alice
A. Jensen, Secretary
|
Issuer:
|
Qualifying
Financial Institution (“QFI”) means (i) any U.S. bank or U.S. savings
association not controlled by a Bank Holding Company (“BHC”) or Savings
and Loan Holding Company (“SLHC”); (ii) any top-tier U.S. BHC, (iii) any
top-tier U.S. SLHC which engages solely or predominantly in activities
that are permitted for financial holdings companies under relevant
law,
and (iv) any U.S. bank or U.S. savings association controlled by
a U.S.
SLHC that does not engage solely or predominantly in activities
that are
permitted for financial holding companies under relevant law. QFI
shall
not mean any BHC, SLHC, bank or savings association that is controlled
by
a foreign bank or company. For purposes of this program, “U.S. bank”,
“U.S. savings association”, “U.S. BHC” and “U.S. SLHC” means a bank,
savings association, BHC or SLHC organized under the laws of the
United
States or any State of the United States, the District of Columbia,
any
territory or possession of the United States, Puerto Rico, Northern
Mariana Islands, Guam, American Samoa, or the Virgin Islands. The
United States Department of the Treasury will determine eligibility
and
allocation for QFIs after consultation with the appropriate Federal
banking agency.
|
Initial
Holder:
|
United
States Department of the Treasury (the “UST”).
|
Size:
|
QFI’s
may sell preferred to the UST subject to the limits and terms described
below.
|
Each
QFI may issue an amount of Senior Preferred equal to not less than
1% of
its risk-weighted assets and not more than the lesser of (i) $25
billion
and (ii) 3% of its risk-weighted assets.
|
|
Security:
|
Senior
Preferred, liquidation preference $1,000 per share. (Depending
upon the
QFI’s available authorized preferred shares, the UST may agree to purchase
Senior Preferred with a higher liquidation preference per share,
in which
case the UST may require the QFI to appoint a depositary to hold
the
Senior Preferred and issue depositary receipts.)
|
Ranking:
|
Senior
to common stock and pari passu with existing preferred shares other
than
preferred shares which by their terms rank junior to any existing
preferred shares.
|
Regulatory
|
|
Capital
|
|
Status:
|
Tier
1.
|
Term:
|
Perpetual
life.
|
Dividend:
|
The
Senior Preferred will pay cumulative dividends at a rate of 5%
per annum
until the fifth anniversary of the date of this investment and
thereafter
at a rate of 9% per annum. For Senior Preferred issued by banks
which are
not subsidiaries of holding companies, the Senior Preferred will
pay
non-cumulative dividends at a rate of 5% per annum until the fifth
anniversary of the date of this investment and thereafter at a
rate of 9%
per annum. Dividends will be payable quarterly in arrears on February
15,
May 15, August 15 and November 15 of each year.
|
Redemption:
|
Senior
Preferred may not be redeemed for a period of three years from
the date of
this investment, except with the proceeds from a Qualified Equity
Offering
(as defined below) which results in aggregate gross proceeds to
the QFI of
not less than 25% of the issue price of the Senior Preferred. After
the
third anniversary of the date of this investment, the Senior Preferred
may
be redeemed, in whole or in part, at any time and from time to
time, at
the option of the QFI. All redemptions of the Senior Preferred
shall be at
100% of its issue price, plus (i) in the case of cumulative Senior
Preferred, any accrued and unpaid dividends and (ii) in the case
of
noncumulative Senior Preferred, accrued and unpaid dividends for
the then
current dividend period (regardless of whether any dividends are
actually
declared for such dividend period), and shall be subject to the
approval
of the QFI’s primary federal bank regulator.
|
“Qualified
Equity Offering” shall mean the sale by the QFI after the date of this
investment of Tier 1 qualifying perpetual preferred stock or common
stock
for cash.
|
|
Following
the redemption in whole of the Senior Preferred held by the UST,
the QFI
shall have the right to repurchase any other equity security of
the QFI
held by the UST at fair market
value.
|
Restrictions
|
|
on
Dividends:
|
For
as long as any Senior Preferred is outstanding, no dividends may
be
declared or paid on junior preferred shares, preferred shares ranking
pari
passu with the Senior Preferred, or common shares (other than in
the case
of pari passu preferred shares, dividends on a pro rata basis with
the
Senior Preferred), nor may the QFI repurchase or redeem any junior
preferred shares, preferred shares ranking pari passu with the
Senior
Preferred or common shares, unless (i) in the case of cumulative
Senior
Preferred all accrued and unpaid dividends for all past dividend
periods
on the Senior Preferred are fully paid or (ii) in the case of
non-cumulative Senior Preferred the full dividend for the latest
completed
dividend period has been declared and paid in full.
|
Common
|
|
Dividends:
|
The
UST’s consent shall be required for any increase in common dividends
per
share until the third anniversary of the date of this investment
unless
prior to such third anniversary the Senior Preferred is redeemed
in whole
or the UST has transferred all of the Senior Preferred to third
parties.
|
Repurchases:
|
The
UST’s consent shall be required for any share repurchases (other than
(i)
repurchases of the Senior Preferred and (ii) repurchases of junior
preferred shares or common shares in connection with any benefit
plan in
the ordinary course of business consistent with past practice)
until the
third anniversary of the date of this investment unless prior to
such
third anniversary the Senior Preferred is redeemed in whole or
the UST has
transferred all of the Senior Preferred to third parties. In addition,
there shall be no share repurchases of junior preferred shares,
preferred
shares ranking pari passu with the Senior Preferred, or common
shares if
prohibited as described above under “Restrictions on
Dividends”.
|
Voting
rights:
|
The
Senior Preferred shall be non-voting, other than class voting rights
on
(i) any authorization or issuance of shares ranking senior to the
Senior
Preferred, (ii) any amendment to the rights of Senior Preferred,
or (iii)
any merger, exchange or similar transaction which would adversely
affect
the rights of the Senior Preferred.
|
If
dividends on the Senior Preferred are not paid in full for six
dividend
periods, whether or not consecutive, the Senior Preferred will
have the
right to elect 2 directors. The right to elect directors will end
when
full dividends have been paid for four consecutive dividend
periods.
|
|
Transferability:
|
The
Senior Preferred will not be subject to any contractual restrictions
on
transfer. The QFI will file a shelf registration statement covering
the
Senior Preferred as promptly as practicable after the date of this
investment and, if necessary, shall take all action required to
cause such
shelf registration statement to be declared effective as soon as
possible.
The QFI will also grant to the UST piggyback registration rights
for the
Senior Preferred and will take such other steps as may be reasonably
requested to facilitate the transfer of the Senior Preferred including,
if
requested by the UST, using reasonable efforts to list the Senior
Preferred on a national securities exchange. If requested by the
UST, the
QFI will appoint a depositary to hold the Senior Preferred and
issue
depositary receipts.
|
Executive
|
|
Compensation:
|
As
a condition to the closing of this investment, the QFI and its
senior
executive officers covered by the EESA shall modify or terminate
all
benefit plans, arrangements and agreements (including golden parachute
agreements) to the extent necessary to be in compliance with, and
following the closing and for so long as UST holds any equity or
debt
securities of the QFI, the QFI shall agree to be bound by, the
executive
compensation and corporate governance requirements of Section 111
of the
EESA and any guidance or regulations issued by the Secretary of
the
Treasury on or prior to the date of this investment to carry out
the
provisions of such subsection. As an additional condition to closing,
the
QFI and its senior executive officers covered by the EESA shall
grant to
the UST a waiver releasing the UST from any claims that the QFI
and such
senior executive officers may otherwise have as a result of the
issuance
of any regulations which modify the terms of benefits plans, arrangements
and agreements to eliminate any provisions that would not be in
compliance
with the executive compensation and corporate governance requirements
of
Section 111 of the EESA and any guidance or regulations issued
by the
Secretary of the Treasury on or prior to the date of this investment
to
carry out the provisions of such
subsection.
|
Summary
of Warrant Terms
|
|
Warrant:
|
The
UST will receive warrants to purchase a number of shares of common
stock
of the QFI having an aggregate market price equal to 15% of the
Senior
Preferred amount on the date of investment, subject to reduction
as set
forth below under “Reduction”. The initial exercise price for the
warrants, and the market price for determining the number of shares
of
common stock subject to the warrants, shall be the market price
for the
common stock on the date of the Senior Preferred investment (calculated
on
a 20-trading day trailing average), subject to customary anti-dilution
adjustments. The exercise price shall be reduced by 15% of the
original
exercise price on each six-month anniversary of the issue date
of the
warrants if the consent of the QFI stockholders described below
has not
been received, subject to a maximum reduction of 45% of the original
exercise price.
|
Term:
|
10
years
|
Exercisability:
|
Immediately
exercisable, in whole or in part
|
Transferability:
|
The
warrants will not be subject to any contractual restrictions on
transfer;
provided that the UST may only transfer or exercise an aggregate
of one
half of the warrants prior to the earlier of (i) the date on which
the QFI
has received aggregate gross proceeds of not less than 100% of
the issue
price of the Senior Preferred from one or more Qualified Equity
Offerings
and (ii) December 31, 2009. The QFI will file a shelf registration
statement covering the warrants and the common stock underlying
the
warrants as promptly as practicable after the date of this investment
and,
if necessary, shall take all action required to cause such shelf
registration statement to be declared effective as soon as possible.
The
QFI will also grant to the UST piggyback registration rights for
the
warrants and the common stock underlying the warrants and will
take such
other steps as may be reasonably requested to facilitate the transfer
of
the warrants and the common stock underlying the warrants. The
QFI will
apply for the listing on the national exchange on which the QFI’s common
stock is traded of the common stock underlying the warrants and
will take
such other steps as may be reasonably requested to facilitate the
transfer
of the warrants or the common stock.
|
Voting:
|
The
UST will agree not to exercise voting power with respect to any
shares of
common stock of the QFI issued to it upon exercise of the
warrants.
|
Reduction:
|
In
the event that the QFI has received aggregate gross proceeds of
not less
than 100% of the issue price of the Senior Preferred from one or
more
Qualified Equity Offerings on or prior to December 31, 2009, the
number of
shares of common stock underlying the warrants then held by the
UST shall
be reduced by a number of shares equal to the product of (i) the
number of
shares originally underlying the warrants (taking into account
all
adjustments) and (ii) 0.5.
|
Consent:
|
In
the event that the QFI does not have sufficient available authorized
shares of common stock to reserve for issuance upon exercise of
the
warrants and/or stockholder approval is required for such issuance
under
applicable stock exchange rules, the QFI will call a meeting of
its
stockholders as soon as practicable after the date of this investment
to
increase the number of authorized shares of common stock and/or
comply
with such exchange rules, and to take any other measures deemed
by the UST
to be necessary to allow the exercise of warrants into common
stock.
|
Substitution:
|
In
the event the QFI is no longer listed or traded on a national securities
exchange or securities association, or the consent of the QFI stockholders
described above has not been received within 18 months after the
issuance
date of the warrants, the warrants will be exchangeable, at the
option of
the UST, for senior term debt or another economic instrument or
security
of the QFI such that the UST is appropriately compensated for the
value of
the warrant, as determined by the
UST.
|
You
can vote in one of two ways: 1) By Mail, 2) By
Internet
See
the reverse side of this sheet for instructions.
IF
YOU ARE NOT VOTING BY INTERNET, COMPLETE BOTH SIDES OF PROXY
CARD,
DETACH
AND RETURN IN THE ENCLOSED ENVELOPE TO:
Illinois
Stock Transfer Co.
209
West Jackson Boulevard, Suite 903
Chicago,
Illinois 60606
|
DETACH
PROXY CARD HERE
|
DETACH ATTENDANCE CARD HERE AND
MAIL
WITH PROXY CARD
|
||
This
Proxy, when properly executed, will be voted in the manner directed
herein
by the undersigned shareholder. IF NO DIRECTION IS GIVEN, THIS PROXY
WILL
BE VOTED (1) FOR THE APPROVAL OF AN AMENDMENT TO THE COMPANY’S RESTATED
ARTICLES OF INCORPORATION TO AUTHORIZE A CLASS OF 50 MILLION SHARES
OF
PREFERRED STOCK, PAR VALUE $0.01 PER SHARE; AND (2) IN THE DISCRETION
OF
THE NAMED PROXIES UPON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE
THE
MEETING.
|
|||
Dated
___________________, 2008
_________________________
_________________________
(PLEASE
SIGN HERE)
|
West
Bancorporation, Inc.
If
you plan to personally attend the Special
Shareholders’ Meeting, please check the box below and list names of
attendees on reverse side.
Return
this stub in the enclosed envelope with
your completed proxy card.
|
||
Please
sign exactly as name appears above. When shares are held by joint
tenants,
both should sign. When signing as administrator, attorney, executor,
guardian or trustee, please give full title as such. If a corporation,
authorized officer please sign full corporate name and indicate office
held.
|
I
do plan to attend
the Special meeting o
|
TO
VOTE BY MAIL
To
vote by mail, complete both sides, sign and date the proxy card
below.
Detach the card below and return it in the envelope provided.
TO
VOTE BY INTERNET
Your
Internet vote is quick, confidential and your vote is immediately
submitted. Just follow these easy steps:
1.
Read the accompanying Proxy Statement.
2.
Visit our Internet voting site at www.illinoisstocktransfer.com,
click on the "Internet Voting" tab and enter your Voter Control
Number in
the designated field. Your Voter Control Number is printed on
the front of
this proxy card.
Please
note that all votes cast by Internet must be completed
and
submitted
prior
to Sunday, December 21, 2008 at 11:59 p.m. Central Time.
Your
Internet vote authorizes the named proxies to vote your shares
to the same
extent as if you marked, signed, dated and returned the proxy
card.
This
is a “secured” web page site. Your software and/or Internet provider must
be “enabled” to access this site. Please call your software or Internet
provider for further information if needed.
|
If
You Vote By INTERNET, Please Do Not Return Your Proxy Card By
Mail
|
PLEASE
LIST
|
|||
NAMES
OF PERSONS ATTENDING
|
WEST
BANCORPORATION, INC. WEST DES MOINES, IOWA
|
PROXY
|
|
PROXY
FOR SPECIAL SHAREHOLDERS’ MEETING ON DECEMBER 23, 2008
The
undersigned hereby appoints Thomas E. Stanberry and Jack G. Wahlig,
or
either of them, the undersigned's attorneys and proxies, with full
power
of substitution, to vote all shares of Common Stock of West
Bancorporation, Inc. which the undersigned is entitled to vote
as of the
record date, November 7, 2008, as fully as the undersigned could
do if
personally present, at the Special Shareholders’ Meeting of said
corporation to be held in the David L. Miller Conference Center
at the
headquarters of the Company, located at 1601 22nd Street, West
Des Moines,
Iowa, on Tuesday, December 23, 2008 at 9:00 a.m., Central Time,
and at any
and all adjournments thereof.
|
|||
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL
1.
|
|||
1.
|
To
approve the amendment to the Company’s Restated Articles of Incorporation
to authorize a class of 50 million shares of preferred stock, par
value
$0.01 per share.
|
||
¨ Vote
FOR Amendment ¨ Vote
AGAINST Amendment ¨ ABSTAIN
|
|||
2.
|
In
accordance with their discretion, upon all other matters that may
properly
come before said meeting and any adjournments or postponements
thereof.
|
||
(Continued
and to be signed and dated, on other
side)
|