- --------------------------------------------------------------------------------
CUSIP No. 685932105 SCHEDULE 14A Page 1 of 10
- --------------------------------------------------------------------------------
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the registrant [ ]
Filed by a party other than the registrant [X]
Check the appropriate box:
[ ] Preliminary proxy statement.
[ ] Confidential, for use of the Commission only (as permitted by Rule
14a-6(e)(2).
[ ] Definitive proxy statement.
[X] Definitive additional materials.
[ ] Soliciting material under Rule 14a-12.
OREGON TRAIL FINANCIAL CORP.
--------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
STILWELL VALUE PARTNERS II, L.P.
STILWELL ASSOCIATES, L.P.
STILWELL VALUE LLC
JOSEPH STILWELL
------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)
Payment of filing fee (check the appropriate box):
[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:
- --------------------------------------------------------------------------------
CUSIP No. 685932105 SCHEDULE 14A Page 2 of 10
- --------------------------------------------------------------------------------
(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:
- --------------------------------------------------------------------------------
CUSIP No. 685932105 SCHEDULE 14A Page 3 of 10
- --------------------------------------------------------------------------------
The Stilwell Group
26 Broadway, 23rd Floor
New York, New York 10004
Phone: (212) 269-5800
Facsimile: (212) 269-2675
Email: Max OTFC@aol.com
Dear Fellow Oregon Trail Financial Corp. Shareholder:
NOTE: IMPORTANT INFORMATION ABOUT THE GROUP'S WHITE AND BLUE PROXY CARD APPEARS
IN THE ENCLOSED INSERT. IF YOU PREVIOUSLY RETURNED A WHITE PROXY CARD AND WANT
TO VOTE FOR THE GROUP'S NOMINEE, YOU MUST RETURN A WHITE AND BLUE PROXY CARD
INSTEAD.
In our Company's fiscal year 2000 annual report, Chairman of the Board Stephen
R. Whittemore stated, "we continue to assess everything we do or do not do by a
major test of measurement: Is it in the best interests of our shareholders?" For
the entire 2001 fiscal year, the market price of the Company's shares remained
below the Company's book value. In fact, the shares fell from above $18 per
share in February 1998 to below $10 per share in January 2000 -- the price at
which they were offered for sale in our Company's initial public offering in
1997. I ask: How did the Board respond to the bargain value stock price? Were
MORE shares repurchased than were being issued under the Company's compensation
plans? OOPS! THE COMPANY ACTUALLY ISSUED MORE SHARES FOR THE BENEFIT OF
EMPLOYEES AND DIRECTORS THAN IT REPURCHASED DURING FISCAL YEAR 2001. This, in my
estimation, was a major capital allocation blunder on our Board's part.
Two months after my Group filed a statement of the Group's desire that the
Company maximize shareholder value, the Company announced its January 2001
"Strategic Direction and New Share Repurchase Plan". In management's own words,
"OTFC remains committed to increase earnings per share through stock repurchases
while shares trade at significant discounts to book value and purchases are
anticipated to be accretive. To this end, the Company's Board of Directors
approved a new share repurchase plan to purchase of (sic) up to ten percent of
shares outstanding at its December meeting."
Since the January 2001 announcement, the Company's shares have continued to
trade at a significant discount to book value, and repurchasing more shares than
were being issued under the Company's compensation plans would have been
accretive to book value. What did the Company do? OOPS! DURING THE LAST
REPORTING PERIOD, THE COMPANY ACTUALLY ISSUED MORE SHARES FOR THE BENEFIT OF
EMPLOYEES AND DIRECTORS THAN IT REPURCHASED. In my opinion, when those entrusted
to run our Company are unwilling -- or unable -- to fulfill their promises, it
is time for new blood on the Board.
I think it is important for you to know that I believe that the Board's attempt
to blame me for all of the Company's legal fees is unfounded. The Company could
have avoided a significant portion of these fees had it not tried to keep me
from communicating with you on an equal
- --------------------------------------------------------------------------------
CUSIP No. 685932105 SCHEDULE 14A Page 4 of 10
- --------------------------------------------------------------------------------
footing. They refused to comply with my request under state law for the complete
shareholder list.
The Company continues to retaliate against me. On Friday, September 7, 2001, the
Company threatened to sue Mr. Padrick, my nominee for election as a director,
unless he dropped out of the election. On Wednesday, September 12, 2001, while
my and my lead counsel's offices in New York were closed, the Company filed suit
against my Group and Mr. Padrick in federal court in Oregon. (Additional
information concerning the litigation between my Group and the Company is
included in the enclosed insert.)
To be clear: I am not trying to "force" or "control" anything. ALL I WANT IS FOR
ALL OF THE SHAREHOLDERS, NOT JUST THE BOARD AND ITS THIRD MANAGEMENT TEAM IN
THREE YEARS, TO HAVE A VOICE IN THE IMPORTANT DECISIONS ABOUT OUR COMPANY. Your
vote for the Stilwell Group's nominee, Kevin Padrick, is a vote to elect a new
director to the Board who is "beholden" to ALL shareholders, and not a part of a
group of directors who renominate each other for reelection as their terms
expire and who "grandfathered" a director who moved out of the market area
specified in the Company's original bylaws by amending the bylaws retroactively.
I believe Mr. Padrick will do what's best for ALL shareholders by voting to:
- sell the Company's employee vacation condo and stop the monthly fees to
the directors for "overseeing" the condo;
- strengthen the Board's oversight of management;
- repurchase significant amounts of shares at prices below book value; and
- commence the process of exploring a sale of the Company at a price
greater than book value.
I urge you to sign and return the WHITE AND BLUE PROXY CARD promptly in the
envelope provided. If you receive a proxy card from the Company, please throw it
away. I look forward to meeting with you if you attend the annual meeting.
Sincerely,
Joseph Stilwell
On behalf of the Stilwell Group:
STILWELL VALUE PARTNERS II, L.P.
STILWELL ASSOCIATES, L.P.
STILWELL VALUE LLC
On August 16, 2001, the Stilwell Value Group (the "Group") filed with the
Securities and Exchange Commission (the "Commission") a definitive proxy
statement in connection with the election of its nominee to the board of
directors of Oregon Trail Financial Corp. ("Oregon Trail") at Oregon Trail's
2001 annual meeting of stockholders. Copies of the definitive proxy statement
were mailed to stockholders on or about August 16, 2001. Investors and security
holders are
- --------------------------------------------------------------------------------
CUSIP No. 685932105 SCHEDULE 14A Page 5 of 10
- --------------------------------------------------------------------------------
urged to read the definitive proxy statement and additional definitive
soliciting material because they contain important information. Investors and
security holders may obtain a free copy of the definitive proxy statement and
other documents filed by the Group with the Commission at the Commission's
website at www.sec.gov. The definitive proxy statement and these other documents
may also be obtained for free by writing to Mr. Joseph Stilwell at 26 Broadway,
23rd Floor, New York, New York 10004, or by contacting D.F. King & Co. at (212)
269-5550.
- --------------------------------------------------------------------------------
CUSIP No. 685932105 SCHEDULE 14A Page 6 of 10
- --------------------------------------------------------------------------------
IMPORTANT INFORMATION CONCERNING THE
GROUP'S WHITE AND BLUE PROXY CARD AND THE PARTIES LITIGATION
On August 16, 2001, the Stilwell Value Group (the "Group") filed with the
Securities and Exchange Commission (the "Commission") a definitive proxy
statement in connection with the election of its nominee to the board of
directors of Oregon Trail Financial Corp. (the "Company") at its 2001 annual
meeting of stockholders. Copies of the definitive proxy statement were mailed to
stockholders on or about August 16, 2001. This information supplements the
definitive proxy statement. Investors and security holders are urged to read the
definitive proxy statement and additional definitive soliciting material because
they contain important information. Investors and security holders may obtain a
free copy of the definitive proxy statement and other documents filed by the
Group with the Commission at the Commission's website at www.sec.gov. The
definitive proxy statement and these other documents may also be obtained for
free by writing to Mr. Joseph Stilwell at 26 Broadway, 23rd Floor, New York, New
York 10004, or by contacting D.F. King & Co. at (212) 269-5550.
THE WHITE AND BLUE PROXY CARD
The Company's Board currently consists of six members. Two seats on the Board
are up for election at the Annual Meeting. As we previously advised you, the
Group is seeking to elect Mr. Kevin D. Padrick to fill one of the open director
seats, in opposition to one of the Company's nominees. We previously also
advised you that we would vote for the election of one of the Company's two
nominees, using the White Proxy Card previously sent to you. On August 29, 2001,
we sent you a new WHITE AND BLUE PROXY CARD which authorizes a vote ONLY for the
Group nominee and NOT for either Company nominee. When we mailed you the WHITE
AND BLUE PROXY CARD, we informed you that we still would vote WHITE PROXY CARDS
up to 24.9% of the outstanding shares of the Company for the election of our
nominee and one of the Company nominees.
In accordance with Office of Thrift Supervision rules, we have now determined
that the WHITE PROXY CARD will not be used at all. Therefore, if you previously
returned a WHITE PROXY CARD and want to vote for the Group's nominee, you must
return the WHITE AND BLUE PROXY CARD. If you return the WHITE AND BLUE PROXY
CARD, your vote will only count for our nominee, Kevin D. Padrick. In that
event, your vote will NOT count towards the election of any Company nominee and
you will not be able to vote for either Company nominee. To vote for either or
both of the Company's nominees, you must return the Company's GREEN PROXY CARD,
which would preclude you from voting for the Group's nominee, unless you attend
the meeting in person. If you have already returned a WHITE AND BLUE PROXY CARD
and have not subsequently revoked it or sent a GREEN PROXY CARD to the Company,
you do not need to do anything further to vote for the Group's nominee.
UPDATE ON THE PARTIES' LITIGATION
On September 12, 2001, the Multnomah County Circuit Court for the State of
Oregon orally granted Charles Rouse's motion for summary judgment. The Group is
disappointed by the decision and presently intends to file an appeal at the
appropriate time.
- --------------------------------------------------------------------------------
CUSIP No. 685932105 SCHEDULE 14A Page 7 of 10
- --------------------------------------------------------------------------------
Also on September 12, 2001, the Company filed a lawsuit against the Group and
Kevin Padrick in the United States District Court for the District of Oregon
alleging that the Group and Mr. Padrick violated the federal securities laws by
making materially misleading statements in our proxy materials. The suit seeks
injunctive relief. The Group intends to defend the action and to file
counterclaims against the Company for making allegedly false statements in its
proxy materials.
The suit alleges that several statements in the Group's previous letters to you
were materially misleading. For example, the suit alleges that the following
statement is false and materially misleading:
"We also learned through discovery that Director Charles H. Rouse, having
found it `hard to make a viable business work in rural Oregon,' liquidated
his business `Rouse Home Furnishing' in November 1995. (Mr. Rouse recently
started a new career as a real estate salesman in Portland.)"
The Company alleges that the Group's statement "juxtaposes and inaccurately
paraphrases selected excerpts from Mr. Rouse's testimony" and "suggests that Mr.
Rouse is not a successful business operator" and that he "liquidated his
business at a loss and moved to Portland for a more lucrative opportunity." For
purposes of completeness, we quote below the testimony from which the quotation
was taken:
"Q. And then what happened in November of '95 with that business [Rouse
Home Furnishing]?
A. It's when I closed it out.
Q. What does that mean, closed it out?
A. I just sold out, had a big QB sale.
Q. A what sale?
A. Quitting business sale.
Q. And why did you quit business in November of '95?
A. I had toyed with the idea of selling it. I talked to a couple people
and I seen it's hard to make a viable business work in rural Oregon. And I
thought if anybody's going to lose my money it will be me. You have to
sell them on contract. You've seen that many times. It was easier to take
my money and run, so I did."
The Company also takes issue with the statement that "the Board members
automatically re-elect THEMSELVES every year." The statement was not meant to
suggest that shareholders have been disenfranchised -- obviously the Company has
annual meetings where shareholders, not directors, vote on the election of the
directors. However, the Board's nominating committee consists of the entire
Board and does not include any independent members. The nominating committee has
re-nominated directors as their terms expire each year since the Company became
public.
The Company also objects to the statement that "the Company's Directors award
themselves free shares and free options on shares every year." To clarify, the
directors have not "paid" for the
- --------------------------------------------------------------------------------
CUSIP No. 685932105 SCHEDULE 14A Page 8 of 10
- --------------------------------------------------------------------------------
options and restricted shares granted to them in October 1998 other than by
continuing to serve on the Board. Each director also receives at least $18,400
per year in cash fees as compensation for their services as directors. The
options granted to directors (for 23,474 shares per person at an exercise price
of $11.15 per share) vest in four equal annual installments beginning in October
1999 and the restricted shares (9,389 shares per person) vest in four equal
annual installments also beginning in October 1999. I note that the only mention
of these awards to directors in the Company's proxy statements since 1998 are
general references in the beneficial stock ownership table each year and in
Appendix A to the proxy statement for this year's annual meeting, not in the
discussion under "Director's Compensation" as required by the SEC's proxy
disclosure rules. Also, although the shareholders approved the compensation
plans under which these awards were made at the annual meeting held in August
1998, they did not specifically approve the proposed grants to directors. The
plans expressly reserve the power to grant awards thereunder to the Board and
the Board has the authority to make additional awards to officers, employees,
and non-employee directors in its sole discretion at any time.
*****
Again, to vote for Kevin Padrick, the Group's nominee, you MUST return the WHITE
AND BLUE PROXY CARD. If you have not already done so, we urge you to sign the
enclosed card and send it back today in the enclosed postage-paid envelope.
- --------------------------------------------------------------------------------
CUSIP No. 685932105 SCHEDULE 14A Page 9 of 10
- --------------------------------------------------------------------------------
P R O X Y
THIS PROXY IS SOLICITED BY THE STILWELL GROUP IN OPPOSITION TO
THE BOARD OF DIRECTORS OF OREGON TRAIL FINANCIAL CORP.
OREGON TRAIL FINANCIAL CORP.
2001 ANNUAL MEETING OF SHAREHOLDERS
The undersigned hereby appoints Joseph Stilwell and Spencer L. Schneider, or
either of them, as proxies with full power of substitution, to vote in the name
of and as proxies for the undersigned at the 2001 Annual Meeting of Oregon Trail
Financial Corp. (the "Company"), and at any adjournment(s) or postponement(s)
thereof, according to the number of votes that the undersigned would be entitled
to cast if personally present on the following matters:
1. ELECTION OF DIRECTORS - To elect KEVIN D. PADRICK as a director of the
Company
-- FOR -- WITHHOLD
To withhold authority to vote for the election of Kevin D. Padrick, place an X
next to Withhold or strike out Mr. Padrick's name above.
2. APPOINTMENT OF DELOITTE & TOUCHE LLP AS INDEPENDENT ACCOUNTANTS FOR THE
FISCAL YEAR ENDING MARCH 31, 2002:
For Against Abstain
---- ---- ----
IMPORTANT: PLEASE SIGN AND DATE ON THE REVERSE SIDE.
This proxy, when properly executed, will be voted in the manner directed herein
by the undersigned Shareholder. UNLESS OTHERWISE SPECIFIED, THIS PROXY WILL BE
VOTED "FOR" THE ELECTION OF THE GROUP NOMINEE AS DIRECTOR AND "FOR" THE
APPOINTMENT OF DELOITTE & TOUCHE LLP THE INDEPENDENT ACOUNTANTS. This proxy
revokes all prior proxies given by the undersigned.
In their discretion, the proxies are authorized to vote upon such other business
as may properly come before the meeting, or any adjournments or postponements
thereof, as provided in the proxy statement provided herewith. The proxies may
exercise discretionary authority only as to matters unknown to the Group a
reasonable time before their proxy solicitation.
Please sign exactly as your name appears hereon or on your proxy cards
previously sent to you. When shares are held by joint tenants, both should sign.
When signing as an attorney, executor, administrator, trustee, or guardian,
please give full title as such. If a corporation, please sign in full
corporation name by the President or other duly authorized officer. If a
partnership, please sign
- --------------------------------------------------------------------------------
CUSIP No. 685932105 SCHEDULE 14A Page 10 of 10
- --------------------------------------------------------------------------------
in partnership name by authorized person. This proxy card votes all shares held
in all capacities.
Dated:
-----------------------------
-----------------------------
(Signature)
-----------------------------
(Signature, if jointly held)
Title:
-----------------------------
PLEASE SIGN, DATE, AND MAIL THIS PROXY CARD TODAY.