SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] 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 Section 240.14a-11(c) or Section 240.14a-12
TRM CORPORATION
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(Name of Registrant as Specified in its Charter)
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(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:
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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.
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[ ] 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:
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TRM CORPORATION
Notice of Annual Meeting of Shareholders
November 16, 1998
To Our Shareholders:
The annual meeting of the shareholders of TRM Corporation, an Oregon
corporation (the "Company"), will be held on Monday, November 16, 1998 at 9 a.m.
at the Kingstad Meeting Centers, 5933 NE Win Sivers Drive, Portland, Oregon
97207, for the following purposes:
1. To elect three members of the Board of Directors for three-year terms.
2. To transact such other business as may properly come before the meeting
or any adjournment thereof.
All shareholders are invited to attend the meeting. Holders of record of
the Company's Common Stock at the close of business on September 8, 1998 are
entitled to notice of and to vote at the meeting.
By Order of the Board of Directors
PAUL M. BROWN
Paul M. Brown
Secretary
Portland, Oregon
October 9, 1998
YOUR VOTE IS IMPORTANT. Whether or not you plan to attend the annual
meeting, please promptly sign and date your enclosed proxy and return it in the
postage paid envelope.
A shareholder who completes and returns the proxy and subsequently attends
the meeting may elect to vote in person, since a proxy may be revoked at any
time before it is voted. Retention of the proxy is not necessary for admission
to the meeting.
PROXY STATEMENT
The enclosed proxy is solicited by the Board of Directors of TRM
Corporation (the "Company") for use at the 1998 Annual Meeting of Shareholders
("the Annual Meeting") to be held on Monday, November 16, 1998 at 9 a.m. at the
Kingstad Meeting Centers, 5933 NE Win Sivers Drive, Portland, Oregon 97207, and
at any adjournments thereof.
The cost of soliciting proxies will be borne by the Company, including
expenses in connection with the preparation and mailing of the proxy statement,
form of proxy and any other material furnished to the shareholders by the
Company in connection with the annual meeting. In addition to the solicitation
of proxies by mail, employees of the Company may also solicit proxies by
telephone and personal contact. The Company has retained Corporate Investor
Communications, Inc. to assist in the solicitation of proxies from brokers and
other nominees at an estimated cost of $3,500. The Company's Annual Report to
Shareholders covering its fiscal year ended June 30, 1998, which includes
financial statements, is being mailed to shareholders together with these proxy
materials on or about October 9, 1998.
Any person giving a proxy in the form accompanying this proxy statement has
the power to revoke it at any time before its exercise. The proxy may be revoked
by filing with the Secretary of the Company an instrument of revocation or a
duly executed proxy bearing a later date. The proxy may also be revoked by
affirmatively electing to vote in person while attending the meeting. However, a
shareholder who attends the meeting need not revoke the proxy and vote in person
unless he or she wishes to do so. All valid proxies will be voted at the meeting
in accordance with the instructions given. A shareholder may strike the names of
the persons designated as proxies on the enclosed proxy and insert names of his
or her own choosing. If no instructions are given, the proxies will be voted for
the election of the nominees for director. At the meeting, the presence in
person or by proxy of the holders of a majority of the shares issued and
outstanding will constitute a quorum for the transaction of business.
VOTING SECURITIES AND PRINCIPAL SHAREHOLDERS
The Company's outstanding voting securities consist of Common Stock
("Common Stock") and Series A Preferred Stock ("Series A Preferred"). The record
date for determining holders of Common Stock and Series A Preferred entitled to
vote at the Annual Meeting is September 8, 1998. On that date, there were
7,065,384 shares of Common Stock and 1,777,778 shares of Series A Preferred
outstanding, each entitled to one vote per share, voting together as one class.
Neither the Common Stock nor the Series A Preferred has cumulative voting
rights.
The following table sets forth certain information regarding the beneficial
ownership as of August 21, 1998 of the Common Stock by (i) each person known by
the Company to own beneficially more than five percent of the Common Stock, (ii)
each director or person nominated to become a director of the Company, (iii)
each executive officer of the Company named in the Summary Compensation Table,
and (iv) all executive officers and directors as a group. Except as otherwise
noted, the persons listed below have sole investment and voting power with
respect to the Common Stock owned by them.
Shares
Beneficial Owner Address Beneficially Owned (1) Percent (2)
---------------- ------- ---------------------- -----------
Laifer Capital 45 West 45th Street, 9th Floor 1,429,463 19.8%
Management, Inc. (3) New York, NY 10036
Safeco Corporation (4) 4333 Brooklyn Ave., NE 1,030,350 14.6%
Seattle, WA 98185
Frederick O. Paulsell (5) c/o 5208 N.E. 122nd Avenue 914,002 12.8%
Portland, OR 97230-1074
ReadyCash Investment 1521 Locust Street, 4th Floor 612,340 8.7%
Partners, L.P. (6) Philadelphia, PA 19102
Daniel G. Cohen (7) 1521 Locust Street, 4th Floor 612,340 8.7%
Philadelphia, PA 19102
Wellington Management 75 State Street 554,500 7.8%
Company, LLP (8) Boston, MA 02109
Edwin S. Chan (9) c/o 5208 N.E. 122nd Avenue 489,618 6.9%
Portland, OR 97230-1074
Marcia W. Zech (10) 3041 60th Avenue, S.E. 475,430 6.7%
Mercer Island, WA 98040
FBR Financial Fund II, 1001 Nineteenth Street North 421,035 6.0%
L.P. (11) Arlington, VA 22209
Dimensional Fund 1299 Ocean Avenue, 11th Floor 399,500 5.7%
Advisors, Inc. (12) Santa Monica, CA 90401
Michael D. Simon 1005 South West Myrtle Drive 365,289 4.9%
Portland, OR 97201
Frederic P. Stockton c/o 5208 N.E. 122nd Avenue 200,000 2.8%
Portland, OR 97230-1074
Paul M. Brown c/o 5208 N.E. 122nd Avenue 100,397 1.4%
Portland, OR 97230-1074
James W. Perris c/o 5208 N.E. 122nd Avenue 51,349 *
Portland, OR 97230-1074
Danial J. Tierney c/o 5208 N.E. 122nd Avenue 40,733 *
Portland, OR 97230-1074
Edward E. Cohen 1521 Locust Street, 4th Floor 0 *
Philadelphia, PA 19102
Joseph G. Denton Lincoln Plaza 0 *
500 North Akard, Suite 4170
Dallas, TX 75201
Kent A. Godfrey 545 Mission Street, 2nd Floor 0 *
San Francisco, CA 94105
Debbi Hurd Baptist 10744 Willow Oaks Drive 0 *
Mitchellville, MD 20721
Joel R. Mesznik 122 East 42nd Street 0 *
New York, NY 10168
Kenneth L. Tepper 1 Lincoln Plaza 0 *
1535 Locust Street
Philadelphia, PA 19102
Directors and executive 2,284,110 28.9%
officers as a group (13
persons)
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(footnotes on following page)
* Represents less than 1 percent.
2
(1) Beneficial ownership is determined in accordance with rules of the
Securities and Exchange Commission (the "SEC"), and includes voting power
and dispositive power with respect to shares. Shares are held with sole
voting and dispositive power unless otherwise indicated. Shares of Common
Stock subject to options currently exercisable or exercisable within 60
days are deemed outstanding for computing the percentage for the person
holding such options, but are not deemed outstanding for computing the
percentage for any other person. The numbers of shares that may be obtained
upon exercise of options that are currently exercisable or exercisable
within 60 days of August 21, 1998 are as follows: Mr. Paulsell, 92,500
shares; Mr. Stockton, 200,000 shares; Mr. Brown, 100,000 shares; Mr. Simon,
357,500 shares; Mr. Perris, 49,000 shares; Mr. Tierney, 39,000 shares; and
all executive officers and directors as a group, 838,000 shares.
(2) Assumes the exercise of solely that individual's options or warrants, or
conversion of solely that party's Series A Preferred, and issuance by the
Company of the related number of shares of Common Stock.
(3) This information is based upon a Schedule 13D filed with the SEC on July 6,
1998, reporting that Laifer Capital Management, Inc. ("Laifer") had (i)
sole voting power with respect to 912,471 shares and shared voting power
with respect to no shares and (ii) sole dispositive power with respect to
912,471 shares and shared dispositive power with respect to an additional
516,992 shares. The shares beneficially owned by Laifer include 709,063
shares beneficially owned by Laifer in its capacity as general partner of
and investment adviser to Hilltop Partners, L.P. and 720,400 shares
beneficially owned by Laifer in its capacity as investment adviser to
various other clients. Laifer's holding is comprised of 1,052,900 shares of
Common Stock, 313,228 shares of Series A Preferred which are convertible
into 234,921 shares of Common Stock, and warrants to purchase 141,642
shares of Common Stock. Laifer has granted an irrevocable proxy to
ReadyCash (as defined below) to vote its 1,052,900 shares of Common Stock.
The proxy expires on the earlier of June 24, 2001 or conversion of the
Series A Preferred into Common Stock.
(4) This information is based upon a Schedule 13G dated March 3, 1998 and filed
with the SEC, disclaiming beneficial ownership of these shares. The shares
are beneficially owned by registered investment companies for which a
subsidiary of Safeco Corporation serves as an adviser. Because of its
ownership or control of one or more investment companies which directly own
shares, Safeco Corporation may be considered an indirect beneficial owner.
(5) The information excludes shares owned by Mr. Paulsell's children, all of
whom are adults. The information also excludes 475,430 shares owned by Mr.
Paulsell's former wife, Marcia W. Zech. Mr. Paulsell disclaims beneficial
ownership of all such shares.
(6) Represents the number of shares that may be acquired within 60 days
pursuant to the holder's (i) right to convert its Series A Preferred into
shares of Common Stock and (ii) right to exercise its warrant to purchase
shares of Common Stock. This information is based upon a Schedule 13D dated
July 10, 1998 and filed with the SEC, reporting that ReadyCash Investment
Partners, L.P. ("ReadyCash") had (i) sole voting power with respect to
2,465,200 shares and (ii) sole dispositive power with respect to 1,412,300
shares. ReadyCash's holdings consist of 1,354,498 shares of Series A
Preferred which are convertible into 1,015,872 shares of Common Stock, and
warrants to purchase 396,428 shares of Common Stock. In addition, ReadyCash
holds an irrevocable proxy to vote 1,052,900 shares of Common Stock held by
Laifer Capital Management. This proxy terminates on the earlier of June 24,
2001 or the conversion of the Series A Preferred to Common Stock. ReadyCash
also holds a three-year irrevocable proxy from FBR Financial Fund II, L.P.
to vote its 423,280 shares of Series A Preferred. The shares are excluded,
however, from ReadyCash's beneficial ownership since the proxy
automatically terminates upon conversion of the Series A Preferred Stock.
The Company has been informed that ReadyCash transferred to other entities
804,232 shares of Series A Preferred Stock, convertible into 603,174 shares
of Common Stock, and warrants to purchase 196,787 shares Common Stock
subsequent to its initial Schedule 13D filing on July 10, 1998.
(7) Consists entirely of shares that are beneficially owned by ReadyCash. Mr.
Daniel Cohen is the majority shareholder and an officer and director of the
general partner of ReadyCash. Under current SEC rules, Mr. Cohen may be
deemed to be the beneficial owner of shares owned by ReadyCash.
(8) This information is based upon a Schedule 13G dated February 11, 1998 and
filed with the SEC, reporting that Wellington Management Company, LLP had
(i) sole voting power with respect to no shares and shared voting power
with respect to 513,500 shares and (ii) sole dispositive power with respect
to no shares and shared dispositive power with respect to all 554,500
shares.
(9) The information provided includes 30,641 shares owned by Mr. Chan's wife
and minor children.
(10) This information is based in part upon a Schedule 13G dated February 17,
1998 and filed with the SEC, reporting that Marcia W. Zech had (i) sole
voting power with respect to 480,430 shares and shared voting power with
respect to no shares and (ii) sole dispositive power with respect to
480,430 shares and shared dispositive power with respect to no shares. Mrs.
Zech has informed the Company that she subsequently sold 5,000 shares. The
information provided excludes shares owned by Mrs. Zech's children and
other relatives, all of whom are adults. The information also excludes
917,242 shares beneficially owned by her former husband, Frederick O.
Paulsell. Mrs. Zech disclaims beneficial ownership of all such shares.
(11) This information is based upon a Schedule 13D dated August 3, 1998 and
filed with the SEC, reporting that FBR Financial Fund II, L.P. (the "Fund")
has sole voting power and sole dispositive power with respect to all
421,035 shares, including warrants to purchase 103,574 shares. The Fund
owns 423,281 shares of the Company's Series A Preferred which are
convertible into 317,461 shares of Common Stock, and warrants to purchase
103,574 shares of Common Stock.
(12) This information is based upon a Schedule 13G dated February 10, 1998 and
filed with the SEC, reporting that Dimensional Fund Advisors, Inc. had (i)
sole voting power with respect to 261,600 shares and shared voting power
with respect to no shares and (ii) sole dispositive power with respect to
all 399,500 shares.
3
PROPOSAL 1
ELECTION OF DIRECTORS
The Board of Directors is divided into three classes serving staggered
three-year terms. The terms of office of Messrs. E. Cohen, Paulsell and Stockton
expire in 2000. The terms of office of Messrs. D. Cohen, Mesznik and Tepper
expire in 1999. The terms of office of Messrs. Denton, and Godfrey and Simon
expire in 1998.
Messrs. Denton, Godfrey, and Ms. Hurd Baptist are nominated for three-year
terms. Descriptions of the three nominees for election follow. For a description
of the continuing directors, see "Background Information About Continuing
Directors and Executive Officers."
Joseph G. Denton, 62, was elected a director in June 1998. He has been a
principal with A.T. Kearney, Inc., an international financial services
consulting firm, where he has consulted with banks internationally since 1994.
From 1987 to 1994, Mr. Denton was a self-employed management consultant in
Dallas, Texas. From 1984 to 1987, Mr. Denton was a partner with the accounting
firm of Deloitte, Haskins and Sells where he was responsible for financial
institutions consulting. Mr. Denton has held executive and senior officer
positions in regional banks and served at the board and policy making levels.
Mr. Denton is also a former member of the Board of Directors of Bankwire, a
consortium of banks that ran an administrative wire service between the members.
Mr. Denton served as Vice President and Chairman of the North Texas Regional
Clearinghouse Operations Committee from 1976 to 1978, and as Vice President and
Chairman of the Southwestern Automated Clearinghouse Association Marketing
Committee from 1975 to 1977. Mr. Denton was a Faculty member at Texas Tech
University School of Banking from 1978 to 1979. Mr. Denton has a B.B.A. degree
with a major in finance from Texas Tech University.
Kent B. Godfrey, 40, was elected a director in June 1998. He was elected
President and Chief Executive Officer of Andromedia, Inc., a supplier of web
activity analysis solutions, in 1996. Before joining Andromedia, from 1994 to
1995, Mr. Godfrey served as Vice President of Marketing/Strategic Planning for
IA Corp., a computer systems integrator, and in 1992 he served in a similar role
at Epoch Systems, a hierarchical data storage management company. From 1986 to
1991, Mr. Godfrey acted as a consultant on various projects for Sequent Computer
Systems, Inc. From 1983 to 1986, Mr. Godfrey worked at Pyramid Technology, a
manufacturer of UNIX-based computers, in the marketing organization. Mr. Godfrey
holds a Master of Science degree in Economics from the London School of
Economics, and is a graduate of Babson College, where he received a B.S. in
Operations Research.
Debbi Hurd Baptist, 49, has been a Director of Community Development
Investment Group at the Federal Home Loan Mortgage Corporation, a private
secondary market, financial services company, since 1992. She was Vice President
and Regional Manager of National Cooperative Bank from 1987 to 1992, and Vice
President for Development of CMS, Inc., a mortgage servicing company, from 1985
until 1987. Ms. Hurd Baptist currently serves on the Board of several housing
associations and banks. She holds a Master of Business Administration from
George Washington University, and a Masters from Harvard University in urban
design.
It is the intention of the persons named in the accompanying form of proxy
to vote for the three nominees, unless other instructions are given. Proxies
cannot be voted for more than three nominees. Directors are elected by the vote
of a plurality of the shares cast in person or by proxy at the meeting.
Accordingly, the three nominees receiving the most votes at the meeting will be
elected director to serve for three-year terms. Abstentions and broker non-votes
will have no effect on the results of the vote. If any nominee is unable to
stand for election for any reason, proxies will be voted for the election of a
substitute proposed by the Board of Directors.
4
BACKGROUND INFORMATION ABOUT
CONTINUING DIRECTORS AND EXECUTIVE OFFICERS
Edward E. Cohen, 59, was elected Chairman of the Board in June 1998. Mr.
Cohen is a Class 3 director whose term expires at the 2000 Annual Meeting. He
has been the Chairman of the Board of Directors of Resource America, Inc., since
1990, its Chief Executive and a director since 1988, and its President from July
1995 to May 1998. He is Chairman of the Board of Directors and a director of
Brandywine Construction & Management, Inc., a real estate construction and
management company. Since 1981, Mr. Cohen has been Chairman of the Executive
Committee and a director of JeffBanks, Inc., a bank holding company. From 1969
through 1989, Mr. Cohen was Chairman of the Board or Chairman of the Executive
Committee of State National Bank of Maryland (now First Union Bank of Maryland).
Mr. Cohen is the father of Daniel G. Cohen.
Daniel G. Cohen, 29, was elected a director in June 1998. Mr. Cohen is a
Class 2 director whose term expires at the 1999 Annual Meeting. He has served as
President and Director of ReadyCash GP, Inc. the General Partner of ReadyCash
Investment Partners, L.P. He is also the President and Chief Operating Officer
of Resource America, Inc., a specialty finance company, since May 1998, and a
Director since July 1997. Prior thereto and since 1995, Mr. Cohen had been an
Executive Vice President of Resource America. Since January 1997, Mr. Cohen is
also Chairman, Chief Executive Officer and director of Fidelity Mortgage
Funding, Inc., the residential mortgage loan origination subsidiary of Resource
America, and a director of Jefferson Bank, of Philadelphia, Pennsylvania. Prior
to joining Resource America, Inc., Mr. Cohen was principally engaged in graduate
studies at the University of Pennsylvania. Mr. Cohen is the son of Edward E.
Cohen.
Joel R. Mesznik, 52, was elected a director in June 1998. Mr. Mesznik is a
Class 2 director whose term expires at the 1999 Annual Meeting. He has been
President of Mesco Ltd. since its inception in 1990. Mesco Ltd. is a financial
advisory firm providing advisory services related to international financial
transactions in a variety of industries. Mr. Mesznik was previously a managing
director of Drexel Burnham Lambert from 1976 to 1986. Mr. Mesznik serves on the
Board of Directors of Resource Asset Investment Trust, a real estate investment
trust, as well as on the Board of Directors of several non-public companies. He
holds a Master of Business Administration from Columbia University.
Frederick O. Paulsell, 58, has served as a director since 1984 and as
Chairman of the Board from 1985 to 1998. Mr. Paulsell now serves as Vice
Chairman of the Board. Mr. Paulsell is a Class 3 director whose term expires at
the 2000 Annual Meeting. Since January 1995, Mr. Paulsell has been a partner at
Olympic Capital Partners, L.L.C., a Seattle-based investment banking firm. From
1992 to 1994, he served as President of Paulsell & Reed, a Seattle investment
firm. From 1987 to 1991, Mr. Paulsell served as President of Foster, Paulsell &
Baker, Inc., also a Seattle investment firm. Mr. Paulsell serves on the Board of
Directors of Costco Companies, Inc. and several privately held companies. He was
Chairman of the Board of Ballard Computer, Inc., a Seattle-based computer
hardware and software retailer that filed for bankruptcy in March 1995. Ballard
is not affiliated in any way with the Company.
Frederic P. Stockton, 46, was appointed President, Chief Executive Officer
and a director in August 1997. Mr. Stockton is a Class 3 director whose term
expires at the 2000 Annual Meeting. Prior to joining TRM and since 1985, Mr.
Stockton was employed by The Estey Corporation, a privatelyheld company with six
business groups including vending, equipment distribution, food distribution,
mobile catering, recreational properties and food service. Most recently and
since 1994, he served as President and Chief Executive Officer. From 1985 to
1994, Mr. Stockton served as President of The Estey Corporation's Equipment
Distribution Group. From 1978 to 1985, he was employed by Omark Industries (now
the Oregon Cutting Systems Division of Blount, Inc.) in positions of increasing
responsibility. Mr. Stockton holds a B.A. degree from the University of
Washington.
Kenneth L. Tepper, 36, was elected a director in June 1998. Mr. Tepper is a
Class 2 director whose term expires at the 1999 Annual Meeting. He has been
President, Chief Executive Officer and a Director of USABancShares, Inc., a
federal bank holding company, since March 1995, and since
5
December 1995, has also been President and Chief Executive Officer of
BankPhiladelphia, USABancShares' operating subsidiary. From January 1994 to
November 1995, Mr. Tepper was Managing Director of Merchant BancShares, Inc., an
investment banking firm specializing in community bank mergers and loan
portfolio acquisitions. Mr. Tepper was previously a Director, Merchant Banking
Division, for Tucker Federal Savings & Loan, a savings institution from November
1991 to December 1993. Mr. Tepper holds a Bachelor of Arts Degree from Emory
University and a Juris Doctor Degree from the Villanova University School of
Law.
Paul M. Brown, 44, was named Chief Financial Officer and Vice President of
Finance of the Company in September 1997. Prior to joining the Company and since
1993, Mr. Brown was Senior Vice President and Chief Financial Officer for SMC
Corporation, a manufacturer of motorized recreational vehicles. Before joining
SMC Corporation, Mr. Brown served as Chief Financial Officer for several
privately-held manufacturing companies and also worked as a consultant with
Arthur Andersen & Co. Mr. Brown attended Harvard University and holds a B.S.
degree from Portland State University.
James W. Perris, 41, was elected Chief Operating Officer and Vice President
of Operations of the Company in April 1995. Prior to joining TRM and since 1991,
Mr. Perris was General Manager of Calbag Metals Co., a privately-held
manufacturer and broker of nonferrous metals. From 1984 through 1991, he was
employed at First Interstate Bank of Oregon in positions of growing
responsibility. Mr. Perris holds a B.A. degree from Stanford University and an
M.B.A. from the University of Oregon.
Danial J. Tierney, 42, was named Vice President of Corporate Sales of the
Company in July 1996. Prior to that and since January 1995, Mr. Tierney served
the Company as Vice President of Sales and Marketing. For 16 years prior to
joining TRM, Mr. Tierney was employed by Spectra Physics Scanning Systems, Inc.
and its affiliates in various locations and in positions of increasing
responsibility, most recently in Eugene, Oregon, as Director of Marketing. He
holds a B.S. degree from the University of California, Berkeley, and an M.B.A.
from the University of Santa Clara.
6
CORPORATE GOVERNANCE
The Board of Directors has an Executive Committee, an Audit Committee, and
a Nominating and Compensation Committee. Messrs. Paulsell, Simon and Stockton
served on the Executive Committee until June 24, 1998. Mr. Shaw served on the
Executive Committee until his resignation as a director of the Company in March
1998. Messrs. Edward E. Cohen, Daniel G. Cohen and Frederic P. Stockton
currently serve on the Executive Committee. The function of the Executive
Committee is to act on an interim basis for the full Board. Messrs. Coe, as
Chairman, and Van Maren served on the Audit Committee until June 24, 1998. The
Audit Committee has the responsibility of recommending the Company's independent
auditors, reviewing the scope and results of audits, and overseeing such other
matters relating to the integrity of the Company's finances and financial
statements, as the Committee may consider appropriate. Messrs. Paulsell, as
Chairman, Godfrey and Denton currently serve on the Audit Committee. Messrs.
Chan, as Chairman, Paulsell and Simon served on the Nominating Committee until
June 24, 1998. The Nominating Committee was established during fiscal 1996 to
assist, as needed, with finding qualified candidates to serve on the Company's
Board of Directors. The Nominating Committee also considered nominations
submitted by shareholders, if any. The Nominating Committee has been merged with
the Compensation Committee, and all of the functions pertaining to the
nomination of Directors are undertaken by the joint Nominating and Compensation
Committee. Nominations should be submitted to the Corporate Secretary. Mr.
Paulsell served on the Compensation Committee until June 24, 1998, and until his
resignation as a director of the Company, Mr. Shaw served as Chairman of the
Compensation Committee. Messrs. Joel R. Mesznik, as Chairman, Edward E. Cohen
and Kenneth L. Tepper currently serve on the Nominating and Compensation
Committee. The functions of the Nominating and Compensation Committee are to
serve as the Nominating Committee and to approve the executive officers'
compensation and to administer the Company's 1996 Stock Option Plan, when the
full Board is not administering such Plan, and its Employee Stock Purchase Plan.
The Board of Directors held six meetings during fiscal 1998. The Executive
Committee met four times during fiscal 1998. The Nominating Committee did not
meet. The Audit Committee met twice and the Compensation Committee met four
times. During fiscal 1998, each incumbent director attended at least 75 percent
of all meetings of the Board and Committees on which the director served.
Directors who are not employees of the Company are paid fees of $2,000 per
year plus $500 for each Board or Committee meeting attended. Members of the
Executive Committee who are not employees receive an additional annual fee of
$2,000. If Board and Committee meetings are held on the same day, only one
attendance fee is paid. Pursuant to the Company's 1996 Stock Option Plan, each
nonemployee director is automatically granted a nonstatutory stock option for
5,000 shares of the Company's Common Stock on the date of each annual
shareholders meeting held during the time he or she serves as a nonemployee
director. Each nonemployee director who is serving on the Executive Committee of
the Board automatically is granted an additional nonstatutory stock option for
2,500 shares on the date of each annual shareholder meeting held during the time
the director serves as a member of the Executive Committee. The exercise price
for all options granted to nonemployee directors under the Plan is the fair
market value of the Company's Common Stock on the date of grant. Each such
option has a 10-year term and becomes fully exercisable on the first anniversary
of the option grant, provided the director is then serving on the Board and, if
applicable, on the Executive Committee. Effective March 29, 1998, each such
option then outstanding was amended to provide that upon the resignation of a
Director after three or more years of service as a Director of the Company the
exercise period for the option will be extended to the date that is ten years
after the date of resignation.
During fiscal 1998, nonemployee directors received the fees and automatic
stock option grants described in the preceding paragraph. For serving as
Chairman of the Board and as a member of the Executive Committee, Mr. Paulsell
also received $3,000 a month during fiscal 1998. Mr. Shaw also received $2,500 a
month for serving as a member of the Executive Committee until his resignation
as a director of the Company in March 1998.
7
EXECUTIVE COMPENSATION
Summary Compensation Table
- --------------------------
The following table sets forth compensation earned during fiscal 1998 by
the Chief Executive Officer and certain other executive officers of the Company.
Annual Long-Term
Compensation Compensation
-------------------- ---------------------
Name and Securities Underlying Other
Principal Position Year Salary Bonus Options (#) Compensation (1)
------------------ ---- -------- -------- --------------------- ----------------
Frederic P. Stockton 1998 $178,062 $100,000 200,000 $ 3,276
President and Chief
Executive Officer (2)
James W. Perris 1998 $130,008 $ 25,400 10,000 $ 4,604
Chief Operating Officer 1997 $118,983 $ 35,000 20,000 $ 4,576
And Vice President of 1996 $110,000 $ 22,500 -- $ 1,456
Operations
Danial J. Tierney 1998 $118,008 $ 34,780 10,000 $ 4,007
Vice President of 1997 $108,167 $ 30,000 -- $ 4,064
Sales and Marketing 1996 $110,000 $ 12,000 -- $ 2,438
Michael D. Simon 1998 $ 89,860 -- 7,500 $ 4,649
Former President and 1997 $290,000 -- 59,000 $ 5,184
Chief Executive 1996 $300,000 $138,258 116,000 $ 3,640
Officer (3)
Paul M. Brown 1998 $ 93,182 $ 30,000 100,000 --
Chief Financial Officer
and Vice President of
Finance (4)
(1) Reflects contributions by the Company to the Company's Profit Sharing
Retirement Plan.
(2) Mr. Stockton commenced employment with the Company on August 18, 1997.
(3) Mr. Simon retired as an officer effective August 25, 1997.
(4) Mr. Brown commenced employment with the Company on September 22, 1997.
8
Stock Option Grants in Last Fiscal Year
- ---------------------------------------
The following table provides information regarding stock options granted to
certain executive officers in 1998.
Individual Grants
- -------------------------------------------------------------------------------------
Percent of Potential Realizable
Total Value at Assumed Annual
Numbers of Options Rates of Stock Price
Shares Granted to Appreciation for Option
Underlying Employees in Exercise Term (1)
Options Fiscal Price per Expiration -----------------------
Name Granted Year Share Date 5% 10%
-------- -------- -------- -------- -------- -------- --------
Frederic P. Stockton 200,000 (2) 45.7 9.75 10/28/07 1,226,345 3,107,798
Paul M. Brown 100,000 (2) 22.9 9.75 10/28/07 613,172 1,553,899
James W. Perris 10,000 (3) 2.3 9.75 10/28/07 61,317 155,390
Danial J. Tierney 10,000 (3) 2.3 9.75 10/28/07 61,317 155,390
Michael D. Simon 7,500 (4) 1.7 9.75 10/28/07 45,988 116,542
(1) In accordance with rules of the Securities and Exchange Commission, these
amounts are the hypothetical gains or "option spreads" that would exist for
the respective options based on assumed rates of annual compound stock
price appreciation of 5% and 10% from the date the options were granted
over the full option term.
(2) Under terms of the option agreements, the options are subject to
accelerated vesting in the event of a change in control of the Company. The
investment by ReadyCash of $20 million pursuant to a Preferred Stock and
Warrants Purchase Agreement dated March 29, 1998 between the Company and
ReadyCash was deemed to be a "change in control" under the terms of Mr.
Stockton's and Mr. Brown's option agreements. Accordingly, their options
became fully exercisable upon the Company's completion of the transaction
with ReadyCash on June 24, 1998.
(3) The option vests 20% a year over five years from the date of grant.
(4) The option fully vests one year from the date of grant.
Option Exercises and Holdings
- -----------------------------
The following table indicates (i) stock options exercised by the executive
officers during the last fiscal year, (ii) the number of shares subject to
exercisable (vested) and unexercisable (unvested) stock options as of June 30,
1998 and (iii) the fiscal year-end value of "in-the-money" unexercised options.
Number of Unexercised Value of Unexercised
Shares Options at Fiscal In-The-Money Options
Acquired Year End (#) at Fiscal Year End (2)
on Value ---------------------------- ----------------------------
Name Exercise (#) Realized (1) Exercisable Unexercisable Exercisable Unexercisable
---- ------------ ------------ ----------- ------------- ----------- -------------
Frederic P. Stockton -- -- 200,000 -- $ 900,000 --
Michael D. Simon 25,000 $231,875 344,375 73,125 $ 2,826,016 $ 288,047
Paul M. Brown -- -- 100,000 -- $ 450,000 --
9
James W. Perris -- -- 49,000 56,000 $ 371,875 $ 351,250
Danial J. Tierney -- -- 37,000 40,000 $ 374,625 $ 348,750
(1) Aggregate market value of the shares covered by the option, less the
aggregate price paid by the executive.
(2) Based on the fair market value of the Company's stock as of June 30, 1998.
Values are stated on a pretax basis.
Employment Agreements
- ---------------------
Mr. Paul M. Brown entered into an employment letter agreement with the
Company in September of 1997. Under the terms of the employment agreement, Mr.
Brown is to be paid an initial annual salary of $120,000, to be reviewed
annually, and is eligible for incentive compensation of up to $30,000 in fiscal
year 1998 and at similar or enhanced levels in subsequent years, based on
performance criteria to be determined between Mr. Brown and the Company. Upon
commencement of employment with the Company, Mr. Brown also received options to
purchase 100,000 shares of the Company's stock that vest ratably at 20% per year
and expire ten years from the date of grant. In the event Mr. Brown is
terminated by the Company other than "for cause," Mr. Brown will receive a
severance payment equal to six months' salary, plus one months' salary for each
year of employment, up to a total of 12 months, and all outstanding stock
options held by Mr. Brown will immediately vest. In the event the Company
experiences a "change in control" as defined in the agreement, all of Mr.
Brown's options will become fully vested. All of Mr. Brown's options became
fully vested on the closing of the investment in the Company by ReadyCash.
The Company and Mr. Frederic P. Stockton entered into an employment letter
agreement in August of 1997. Pursuant to the agreement, Mr. Stockton is to be
paid an annual salary of $210,000 that will be reviewed annually by the
Company's Board of Directors. The Company also agreed to pay Mr. Stockton a
$60,000 bonus if the Company achieves earnings targets set by the Board of
Directors, and an additional $60,000 bonus if Mr. Stockton meets certain
performance criteria established by the Board of Directors. Mr. Stockton is also
provided with the use of a Company car. Mr. Stockton received options to
purchase 200,000 shares of the Company's stock that vest at a rate of 25% per
year and expire 10 years after the date of the employment agreement. In the
event of a "change of control" of the Company, the agreement provides that Mr.
Stockton's options vest immediately. All of Mr. Stockton's options became fully
vested on the closing of the investment in the Company by ReadyCash. If Mr.
Stockton is terminated by the Company, the terms of the employment agreement
provide for a severance payment to Mr. Stockton equal to twelve months' salary.
10
Compensation Committee Report on Executive Compensation
- -------------------------------------------------------
Compensation Committee
- ----------------------
All of the actions regarding compensation of executive officers of the
Company in fiscal 1998 were taken by the Compensation Committee of the Board of
Directors (the "Committee"), which was composed of two outside directors until
March 1998, when one of those individuals resigned from the Board. Pursuant to
authority delegated by the Board, the Committee makes determinations concerning
compensation to be paid to the Chief Executive Officer and each of the other
executive officers of the Company and is responsible for developing and making
recommendations to the Board of Directors with respect to the Company's
executive compensation policies. During fiscal 1998, the Committee also
administered the Company's 1996 Stock Option Plan and the Company's Restated
1986 Stock Incentive Plan.
Chief Executive Officer Compensation
- ------------------------------------
In August 1997, Michael D. Simon resigned as President and Chief Executive
Officer of the Company, but remains an employee of the Company. Mr. Simon's
letter agreement with the Company provides that Mr. Simon's base compensation
continue at the rate of $36,000 per year.
In August 1997, the Company entered into an employment letter agreement
with Frederic P. Stockton whereby he was appointed President and Chief Executive
Officer of the Company. The letter agreement provides that Mr. Stockton's base
compensation would be $210,000 a year and that he will be entitled to a cash
bonus of $60,000 if the Company achieves certain earnings targets established by
the Board for fiscal year 1998, and will be entitled to an additional cash bonus
of $60,000 upon his achievement of certain performance criteria established by
the Board. The terms of the employment letter agreement reflected negotiations
between the Company and Mr. Stockton and the Committee's evaluation of Mr.
Stockton's potential value to the Company as its President and Chief Executive
Officer. The number of option shares granted to Mr. Stockton upon his hiring was
likewise based on negotiations between the Company and Mr. Stockton and the
directors' subjective determination of the number of shares needed to compensate
Mr. Stockton adequately and to provide a significant incentive for him to exert
his best efforts on the Company's behalf and to continue with the Company on a
long-term basis. Stock option grants to Mr. Stockton during fiscal 1998 are
reflected in the Summary Compensation Table and the stock option tables.
Executive Officer Compensation
- ------------------------------
The Company's executive compensation program consists of base salary,
annual cash incentive compensation in the form of discretionary bonuses and
discretionary longterm incentive compensation in the form of stock options. This
program is designed to reflect pay for performance that is tied to the
Company's, as well as individual performance.
The fiscal 1998 salaries established for executive officers other than the
Chief Executive Officer were determined by the Committee after considering the
Company's size and complexities relative to other public companies. In
determining salaries, the Committee took into account job responsibilities,
individual experience and individual performance.
In September of 1997, Mr. Paul M. Brown and the Company entered into an
employment letter agreement whereby Mr. Brown was named the Company's Chief
Financial Officer. The letter agreement provides that Mr. Brown's base
compensation would be $120,000 per year (subject to annual review) and that he
would be eligible for incentive compensation in the amount of up to $30,000 for
fiscal year 1998 upon achievement of performance goals mutually agreed to by Mr.
Brown and the Board of Directors. The terms of the employment letter agreement
reflect negotiations between Mr. Brown and the Board, as well as the Committee's
evaluation of Mr. Brown's potential for performance as the Company's Chief
Financial Officer and his future contributions to the Company. The number of
option shares granted to Mr. Brown
11
upon commencement of employment was also based on negotiations between the
Company and Mr. Brown, as well as the directors' subjective assessment of the
number of shares needed to compensate Mr. Brown at a competitive rate and to
provide significant short-term incentives for him to exert his best efforts on
the Company's behalf for a long-term period. Stock option grants to Mr. Brown
during fiscal 1998 are reflected in the Summary Compensation Table and the stock
option tables.
Discretionary bonuses were paid to each executive officer for fiscal 1998
based on Company and individual performance.
The Company has a stock option plan in which key employees of the Company,
including executive officers, are eligible to participate. The Board of
Directors believes that the availability of stock incentives is an important
factor in the Company's ability to attract and retain key employees, to provide
an incentive for them to exert their best efforts on behalf of the Company and
to further align their interests with shareholders. Stock option grants to
certain executive officers during fiscal 1998 are reflected in the Summary
Compensation Table and the stock option tables.
Section 162(m) of the Code limits to $1,000,000 per person the amount that
the Company may deduct for compensation paid to any of its most highly
compensated officers in any year after 1993. It is anticipated that the levels
of salary and bonus to be paid by the Company will not exceed that limit.
Compensation Committee Report Submitted By:
Joel R. Mesznik
Edward E. Cohen
Kenneth L. Tepper
12
Stock Performance Graph
- -----------------------
The following graph provides a comparison of the cumulative total
shareholder return for the period June 30, 1993 through June 30, 1998 for (i)
the Company's Common Stock, (ii) the Nasdaq Stock Market (US) and (iii) the
Nasdaq Retail Trade Index, in each case assuming the investment of $100 on June
30, 1993 and the reinvestment of any dividends.
[graphic line chart depicting performance omitted.
6/30/93 12/31/93 6/30/94 12/31/94 6/30/95 12/31/95 6/30/96 12/31/96 6/30/97 12/31/97 6/30/98
-------- -------- -------- -------- -------- -------- -------- -------- -------- -------- --------
TRM 100.00 93.750 47.917 43.750 54.167 87.500 92.708 81.250 88.542 73.958 118.75
Nasdaq (US) 100.00 110.560 100.959 108.071 134.765 152.840 173.026 187.987 210.381 230.65 277.823
Nasdaq Retail 100.00 112.920 99.549 102.878 112.097 113.334 136.241 135.111 145.225 158.721 194.528]
13
COMPLETION OF READYCASH TRANSACTION
On June 24, 1998 (the "Closing Date"), the Company issued and sold to
ReadyCash 1,777,778 shares of a new series of Preferred Stock of the Company,
designated the "Series A Preferred Stock", and warrants (the "Warrants") to
purchase 500,000 shares of the Company's Common Stock at an exercise price of
$15.00 a share, for an aggregate purchase price of $20,000,000 in cash (the
"Transaction"). The Company has been informed by ReadyCash that ReadyCash
obtained the funds used to purchase the Series A Preferred Stock and Warrants
from its individual limited partners in the form of capital contributions.
Each share of Series A Preferred Stock has one vote per share and votes
together with the Common Stock on any and all matters submitted to the Company's
shareholders for a vote, except to the extent Oregon law requires otherwise. In
addition, each share of the Series A Preferred Stock is convertible at any time
at the option of the holder into .7499997 fully paid and non assessable shares
of Common Stock and shall be automatically converted into shares of the
Company's Common Stock on the same basis if the last bid price quoted in the
Nasdaq System as of 4:00 p.m. for a share of the Company's Common Stock is at
least $20.00 for a period of 90 consecutive calendar days commencing after June
30, 1999. The conversion ratio and the price at which the Series A Preferred
Stock shall be automatically converted shall be appropriately adjusted for any
combination or subdivision of shares, stock dividend, stock split or
recapitalization.
In connection with the Transaction, Messrs. Edwin S. Chan, Sherman M. Coe
and Donald L. Van Maren resigned from the Company's Board of Directors (the
"Board") effective as of the Closing Date, the Company's Board of Directors was
increased to nine members, and Messrs. Daniel G. Cohen, Edward E. Cohen, Joseph
G. Denton, Kent B. Godfrey, Joel R. Mesznik and Kenneth L. Tepper were elected
to the Board. Pursuant to the terms of the Transaction, Messrs. Daniel G. Cohen
and Edward E. Cohen were designated by ReadyCash to be nominated for election to
the Board, and the nominations of Messrs. Denton, Godfrey, Mesznik and Tepper
were approved by ReadyCash. Daniel G. Cohen is the majority shareholder and an
officer and director of the general partner of ReadyCash and Edward E. Cohen is
the father of Daniel G. Cohen. Messrs. Denton, Godfrey, Mesznik and Tepper are
not affiliated with ReadyCash.
On the Closing Date, ReadyCash held approximately 20 percent of the
outstanding voting power of the Company's capital stock. Upon conversion of the
Series A Preferred Stock and exercise of the Warrants, ReadyCash will hold
approximately 21 percent of the outstanding shares of the Company's Common
Stock.
The Company has been informed by ReadyCash that effective as of the Closing
Date, Laifer Capital Management, Inc., which according to a Schedule 13D filed
on October 16, 1997 owns 1,052,900 shares of the Company's Common Stock, or
approximately 14.9 percent of the outstanding shares of Common Stock of the
Company, signed an irrevocable proxy to ReadyCash to vote its shares on all
matters submitted to the Company's shareholders for a vote. The irrevocable
proxy terminates on the earlier of the third anniversary of the Closing Date or
the conversion of the Series A Preferred Stock to Common Stock.
The Company believes that the completion of the Transaction, and the
execution and delivery of the foregoing irrevocable proxy, may have resulted in
a change of control of the Company within the meaning of the federal securities
laws and the rules thereunder.
APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has selected KPMG Peat Marwick LLP as independent
auditors for the Company for the fiscal year ending June 30, 1999. This firm has
served as the Company's auditors since 1987. The decision of the Board of
Directors is based on the recommendation of the Audit Committee.
14
Representatives of KPMG Peat Marwick LLP are expected to be present at the
annual meeting, will have the opportunity to make a statement if they desire to
do so and will be available to respond to appropriate questions.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Reports of all transactions in the Company's Common Stock by insiders are
required to be filed with the SEC pursuant to Section 16(a) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). Based solely on its
review of copies of these reports and presentations of such reporting persons,
the Company believes that during fiscal 1998 such SEC filing requirements were
satisfied.
SHAREHOLDER PROPOSALS
Shareholder Proposals to be Included in the Company's Proxy Statement
- ---------------------------------------------------------------------
A shareholder proposal to be considered for inclusion in proxy materials
for the Company's 1999 annual meeting must be received by the Company not later
than June 11, 1999.
Shareholder Proposals Not in the Company's Proxy Statement
- ----------------------------------------------------------
Shareholders wishing to present proposals for action at an annual meeting
must do so in accordance with the Company's Bylaws. A shareholder must give
timely notice of the proposed business to the Secretary. To be timely, a
shareholder's notice must be in writing, delivered to or mailed and received at
the principal executive offices of the Company not less than 30 days nor more
than 60 days prior to that year's annual meeting; provided, however, that in the
event less than 30 days' notice of the meeting is given or made to shareholders,
notice by the shareholder, to be timely, must be received no later than the
close of business on the tenth day following the date on which such notice of
the annual meeting was mailed. For each matter the shareholder proposes to bring
before the meeting, the notice to the Secretary must include (i) a brief
description of the matter proposed to be brought before the meeting, (ii) the
name and address, as they appear in the Company's books, of the shareholder
proposing such business, (iii) the class and number of shares of the Company
that are beneficially owned by the shareholder and (iv) any material interest of
the shareholder in such matter. The presiding officer at the annual meeting may,
if in the officer's opinion the facts warrant, determine that business was not
properly brought before the meeting in accordance with the Company's Bylaws. If
such officer does so, such officer shall so declare to the meeting and any such
matter shall not be considered or acted upon. For purposes of the Company's 1999
annual meeting, such notice, to be timely, must be received by the Company
between September 17, 1999 and November 17, 1999. In addition, (assuming the
Company gives shareholders 30 days notice of the annual meeting and the date of
the 1999 Annual Meeting is on a corresponding date to the 1998 Annual Meeting),
if notice of any shareholder proposal to be raised at next year's annual meeting
of shareholders is received by the Company at its principal executive offices
before September 17, 1999 or after November 17, 1999 proxy voting on that
proposal when and if raised at the 1999 annual meeting will be subject to the
discretionary voting authority of the designated proxy holders.
Shareholders wishing to nominate directly candidates for election to the
Board of Directors at an annual meeting must do so in accordance with the
Company's Bylaws by giving timely notice in writing to the Secretary as
described above. The notice shall set forth (i) the information described by
Items 401(a), (e) and (f) and Item 403(b) of Regulation S-K under the Securities
Act of 1933, as amended, (ii) the class and number of shares of the Company
which are beneficially owned by the nominating shareholder, and (iii) any
material interest of the shareholder or of the nominee in the Company. The
presiding officer at the annual meeting shall determine whether any nomination
was properly brought before the annual meeting in accordance with the Company's
Bylaws. If such officer determines that any person has not been properly
nominated, such officer shall so declare at the meeting and any such nominee
shall note be considered in the election.
15
OTHER MATTERS
The notice of annual meeting of shareholders provides for transaction of
such other business as may properly come before the meeting. As of the date of
this proxy statement, the Board of Directors has been advised of no matters to
be presented for discussion at the meeting. However, the enclosed proxy gives
discretionary authority to the persons named in the proxy in the event that any
other matters should be properly presented to the shareholders.
Portland, Oregon
October 9, 1998
16
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
REVOCABLE PROXY
TRM CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS FOR
THE 1998 ANNUAL MEETING OF SHAREHOLDERS --
NOVEMBER 16, 1998
The undersigned hereby appoints Frederic P. Stockton and Paul M. Brown, and
each of them, as proxies with full power of substitution, and authorizes them to
represent and to vote on behalf of the undersigned all shares which the
undersigned would be entitled to vote if personally present at the 1998 Annual
Meeting of Shareholders of TRM CORPORATION to be held on November 16, 1998, and
any adjournments thereof, with respect to the following:
With- For All
1. ELECTION OF DIRECTORS to For hold Except
serve for three-year terms (except
as marked to the contrary below): [ ] [ ] [ ]
Joseph G. Denton, Kent B. Godfrey and Debbi Hurd Baptist
INSTRUCTIONS: To withhold authority to vote for any individual nominee,
mark "For All Except" and write that nominee's name in the space provided
below.
---------------------------------------------------------------------------
Either or both of the proxies (or substitutes) present at the meeting may
exercise all powers granted hereby.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR THE ELECTION OF DIRECTORS. IN ADDITION, THE PROXIES MAY
VOTE AT THEIR DISCRETION ON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE
THE MEETING.
Please date and sign above exactly as your name or names appear
hereon. If more than one name appears, all should sign. Joint owners should
each sign personally. Corporate proxies should be signed in full corporate
name by an authorized officer and attested. Persons signing in a fiduciary
capacity should indicate their full title and authority.
-------------------------------------------
Please be sure to sign and date | Date |
this Proxy in the box below. | |
- --------------------------------------------------------------------------------
| |
| |
- ------- Shareholder sign above ----------- Co-holder (if any) sign above -------
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Detach above card, sign, date and mail in postage paid envelope provided.
[Logo] 5208 N.E. 122nd Avenue
Portland, Oregon 97230-1074
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| PLEASE ACT PROMPTLY |
| SIGN, DATE & MAIL YOUR PROXY CARD TODAY |
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