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
[x] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
KLAMATH FIRST BANCORP, INC.
------------------------------------------------
(Name of Registrant as Specified in Its Charter)
KLAMATH FIRST BANCORP, INC.
------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
N/A
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(2) Aggregate number of securities to which transactions applies:
N/A
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
N/A
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(4) Proposed maximum aggregate value of transaction:
N/A
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[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11 (a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
N/A
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(2) Form, schedule or registration statement no.:
N/A
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(3) Filing party:
N/A
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(4) Date filed:
N/A
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December 11, 1996
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders
of Klamath First Bancorp, Inc. ("Corporation"), the holding company for
Klamath First Federal Savings and Loan Association. The meeting will be held
at the Shilo Inn, 2500 Almond Street, Klamath Falls, Oregon, on Wednesday,
January 22, 1997, at 2:00 p.m., Pacific Time.
The attached Notice of Annual Meeting of Shareholders and the Proxy
Statement describe the formal business to be transacted at the meeting.
During the meeting, we will also report on the operations of the Corporation.
Directors and officers of the Corporation, as well as a representative of
Deloitte & Touche LLP, the Corporation's independent auditors, will be present
to respond to any questions our shareholders may have.
Please sign, date and return the enclosed proxy card. If you attend
the meeting, you may vote in person even if you have previously mailed a proxy
card.
We look forward to seeing you at the meeting.
Sincerely,
/s/ Gerald V. Brown
Gerald V. Brown
President and Chief Executive Officer
KLAMATH FIRST BANCORP, INC.
540 Main Street
Klamath Falls, Oregon 97601
(541) 882-3444
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held on January 22, 1997
NOTICE IS HEREBY GIVEN THAT, the Annual Meeting of Shareholders
("Meeting") of Klamath First Bancorp, Inc. ("Corporation") will be held at the
Shilo Inn, 2500 Almond Street, Klamath Falls, Oregon, on Wednesday, January
22, 1997, at 2:00 p.m., Pacific Time.
A Proxy Card and Proxy Statement for the Meeting are enclosed.
The Meeting is for the purpose of considering and acting upon:
1. The election of three directors of the Corporation; and
2. Such other matters as may properly come before the Meeting or
any adjournments thereof.
NOTE: The Board of Directors is not aware of any other business to
come before the Meeting.
Any action may be taken on the foregoing proposals at the Meeting on
the date specified above or on any date or dates to which, by original or
later adjournment, the Meeting may be adjourned. Shareholders of record at
the close of business on November 22, 1996 are the shareholders entitled to
receive notice of and to vote at the Meeting and any adjournments thereof.
You are requested to fill in and sign the enclosed form of proxy, which
is solicited by the Board of Directors, and to mail it promptly in the
enclosed envelope. The proxy will not be used if you attend the Meeting and
vote in person.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ George L. Hall
GEORGE L. HALL
SECRETARY
Klamath Falls, Oregon
December 11, 1996
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IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE CORPORATION THE
EXPENSE OF FURTHER REQUESTS FOR PROXIES IN ORDER TO ENSURE A QUORUM. A SELF-
ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED
IF MAILED IN THE UNITED STATES.
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PROXY STATEMENT
OF
KLAMATH FIRST BANCORP, INC.
540 Main Street
Klamath Falls, Oregon 97601
(541) 882-3444
ANNUAL MEETING OF SHAREHOLDERS
January 22, 1997
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Klamath First Bancorp, Inc.
("Corporation"), the holding company for Klamath First Federal Savings and
Loan Association ("Association"), to be used at the Annual Meeting of
Shareholders of the Corporation ("Meeting"). The Meeting will be held at the
Shilo Inn, 2500 Almond Street, Klamath Falls, Oregon, on Wednesday, January
22, 1997, at 2:00 p.m., Pacific Time. The accompanying Notice of Annual
Meeting of Shareholders, this Proxy Statement and the enclosed form of Proxy
are being first mailed to shareholders on or about December 11, 1996.
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REVOCATION OF PROXIES
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Shareholders who execute proxies retain the right to revoke them at any
time. Unless so revoked, the shares represented by such proxies will be voted
at the Meeting and at all adjournments thereof. Proxies may be revoked by
written notice to the Secretary of the Corporation or by the filing of a
later-dated proxy prior to a vote being taken on a particular proposal at the
Meeting. A proxy will not be voted if a shareholder attends the Meeting and
votes in person. Proxies solicited by the Board of Directors of the
Corporation will be voted in accordance with the directions given therein.
Proxies, which are executed and returned but where no instructions are
indicated, will be voted for each of the proposals set forth below.
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VOTING SECURITIES AND SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
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Shareholders of record as of the close of business on November 22, 1996
("Record Date") are entitled to one vote for each share of common stock
("Common Stock") of the Corporation then held. As of the Record Date, the
Corporation had 11,612,400 shares of Common Stock issued and outstanding. The
presence, in person or by proxy, of at least a majority of the total number of
outstanding shares of Common Stock entitled to vote is necessary to constitute
a quorum at the Meeting.
Persons and groups who beneficially own in excess of 5% of the
outstanding shares of the Corporation's Common Stock are required to file with
the Securities and Exchange Commission ("SEC"), and provide a copy to the
Corporation, certain reports disclosing such ownership pursuant to the
Securities Exchange Act of 1934, as amended ("Exchange Act"). Based solely
upon the receipt of such reports, other than as set forth in the following
table, management knows of no person who owned more than 5% of the outstanding
shares of Common Stock as of the Record Date. In addition, the following
table sets forth, as of the Record Date, information as to the shares of the
Common Stock beneficially owned by each director and named executive officer
and by all executive officers and directors of the Corporation as a group.
Number of Shares Percent of Shares
Name Beneficially Owned (1) Outstanding
- ---- ---------------------- -----------------
Klamath First Federal Savings 880,785 7.59%
and Loan Association Employee
Stock Ownership Plan
540 Main Street
Klamath Falls, Oregon 97601
Janus Capital Corporation(2) 1,026,000 8.84
Janus Venture Fund
Thomas H. Bailey
100 Fillmore Street, Suite 300
Denver, Colorado 80206
Directors and Named Executive Officers (3)
Rodney N. Murray, Chairman of the Board 36,671 0.32
Gerald V. Brown, President and 105,685 0.91
Chief Executive Officer
Bernard Z. Agrons 28,471 0.25
J. Gillis Hannigan 31,171 0.27
Adolph Zamsky 26,971 0.23
Timothy A. Bailey 27,424 0.24
James D. Bocchi 41,334 0.36
William C. Dalton 21,871 0.19
All Executive Officers and 457,932 3.94
Directors as a Group (11 persons)
_______________
(1) In accordance with Rule 13d-3 under the Exchange Act, a person is deemed
to be the beneficial owner, for purposes of this table, of any shares of
Common Stock if he has voting and/or investment power with respect to
such security or has a right to acquire, through the exercise of
outstanding options or otherwise, beneficial ownership at any time within
60 days from the Record Date. The table includes shares owned by
spouses, other immediate family members in trust, shares held in
retirement accounts or funds for the benefit of the named individuals,
and other forms of ownership, over which shares the persons named in the
table possess voting and/or investment power.
(2) Based on a Schedule 13G dated February 13, 1996 filed with the SEC.
(3) Under SEC regulations, the term "named executive officer(s)" is defined
to include the chief executive officer, regardless of compensation level,
and the four most highly compensated executive officers, other than the
chief executive officer, whose total annual salary and bonus for the last
completed fiscal year exceeded $100,000. Gerald V. Brown was the
Corporation's only "named executive officer" for the fiscal year ended
September 30, 1996. He is also a director of the Corporation.
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PROPOSAL I - ELECTION OF DIRECTORS
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The Corporation's Board of Directors consists of eight directors. The
Corporation's Bylaws provide that directors will be elected for three-year
staggered terms with approximately one third of the directors elected each
year. The nominees for election this year are Timothy A. Bailey, James D.
Bocchi and William C. Dalton, all of whom are current members of the Board of
Directors.
Shareholders are not permitted to cumulate their votes for the election
of directors. Votes may be cast for or withheld from each nominee. Votes
that are withheld will have no effect on the outcome of the election because
2
directors will be elected by a plurality of votes cast by the holders of the
outstanding Common Stock present in person or by proxy and entitled to vote at
the Meeting. Broker non-votes will be counted for purposes of determining
the existence of a quorum, but will not be counted for determining the number
of votes cast with respect to the election of directors and, accordingly, will
have no effect on the outcome of the election.
It is intended that the proxies solicited by the Board of Directors
will be voted for the election of the above named nominees for the terms
specified in the table below. If the nominees are unable to serve, the shares
represented by all valid proxies will be voted for the election of such
substitute as the Board of Directors may recommend. At this time the Board of
Directors knows of no reason why the nominees might be unavailable to serve.
The Board of Directors recommends a vote "FOR" the election of Messrs.
Bailey, Bocchi and Dalton.
The following table sets forth certain information regarding the
nominees for election at the Meeting and the directors continuing in office.
Year First Term
Principal Occupations Elected to
Name Age(1) During Last Five Years Director(2) Expire
- ---- ------ ---------------------- ----------- ------
BOARD NOMINEES
Timothy A. Bailey 50 President of Klamath Medical 1993 2000(3)
Services Bureau, Klamath
Falls, Oregon.
James D. Bocchi 72 Retired; President of the 1983 2000(3)
Association from 1984 to 1994.
William C. Dalton 65 Employed by Malin Potato; 1972 2000(3)
Merrill, Oregon since 1993;
Buyer with Klamath Potato
Distributors, Klamath Falls,
Oregon from 1988 to 1992.
DIRECTORS CONTINUING IN OFFICE
Rodney N. Murray 68 Owner and operator of Rod 1976 1998
Murray Ranch, Klamath Falls,
Oregon.
Bernard Z. Agrons 74 Weyerhaeuser Company Vice 1974 1998
President for the Eastern
Oregon Region until 1981.
Former State Representative
in the Oregon State Legisla-
ture from 1983 to 1991.
Gerald V. Brown 60 President of the Corporation; 1994 1999
President and Chief Executive
Officer of the Association
since June 1994; Senior Vice
President of the Association
from 1982 to 1994.
(table continued on following page)
3
Year First Term
Principal Occupations Elected to
Name Age(1) During Last Five Years Director(2) Expire
- ---- ------ ---------------------- ----------- ------
DIRECTORS CONTINUING IN OFFICE
J. Gillis
Hannigan 67 Retired; Former Executive 1987 1999
Vice President of Modoc
Lumber, Klamath Falls, Oregon.
Adolph Zamsky 81 Retired certified public 1969 1999
accountant.
_______________
(1) Age as of September 30, 1996.
(2) Includes service on the Board of Directors of the Association.
(3) Assuming the individual is elected at the Meeting.
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MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
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The Boards of Directors of the Corporation and the Association conduct
their business through meetings of the Boards and through their committees.
During the fiscal year ended September 30, 1996, the Board of Directors of the
Corporation held 12 regular meetings and two special meetings and the Board of
Directors of the Association held 12 regular meetings and one special meeting.
No director of the Corporation or the Association attended fewer than 75% of
the total meetings of the Boards and committees on which such person served
during this period.
The Boards of Directors of the Corporation and the Association have
established various committees, including Executive, Audit, Compensation and
Nominating Committees.
The Executive Committee consists of Messrs. Brown, Bocchi, Dalton,
Hannigan and Murray. The Executive Committee has the power and authority to
act on behalf of the Board of Directors on important matters between regularly
scheduled Board meetings unless specific Board of Directors' action is
otherwise required. The Executive Committee of the Corporation met two times
and the Executive Committee of the Association met four times during the year
ended September 30, 1996.
The Audit Committee consists of Messrs. Agrons, Dalton, Murray and
Zamsky. The Audit Committee reviews the internal auditors' reports and
results of their examination prior to review by and with the entire Board of
Directors and retains and establishes the scope of engagement of the
Corporation's independent auditors. The Audit Committee met five times during
the year ended September 30, 1996.
The Compensation Committee, consisting of Messrs. Hannigan, Agrons and
Bailey, review and recommend compensation arrangements for management and
other personnel. The Compensation Committee met two times during the year
ended September 30, 1996.
The Nominating Committee, consisting of the Corporation's full Board of
Directors, selects the management nominees for election as directors. The
Nominating Committee is required to deliver written nominations to the
Secretary of the Corporation at least 20 days before the annual meeting of
shareholders. Shareholders will have the opportunity to nominate directors of
the Corporation if such nominations are made in writing and are delivered to
the Secretary of the Corporation not less than 30 days nor more than 60 days
before the annual meeting of shareholders; provided, however, if less than 31
days notice is given, such notice shall be delivered to the Secretary of the
Corporation no later than the close of the tenth day following the date on
which notice of the meeting was
4
mailed to shareholders. The notice must set forth (i) the name, age, business
address and, if known, residence address of each nominee for election as a
director, (ii) the principal occupation or employment of each nominee, (iii)
the number of shares of stock of the corporation which are beneficially owned
by each such nominee, (iv) such other information as would be required to be
included in a proxy statement soliciting proxies for the election of the
proposed nominee pursuant to the Exchange Act, including, without limitation,
such person's written consent to being named in the proxy statement as a
nominee and to serving as a director, if elected, and (v) as to the
shareholder giving such notice (a) his or her name and address as they appear
on the Corporation's books and (b) the class and number of shares of the
Corporation which are beneficially owned by such shareholder. The Nominating
Committee met once to nominate the nominees for directors at the Meeting.
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DIRECTORS' COMPENSATION
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Since each director of the Corporation is also a director of the
Association, all compensation is paid by the Association. Directors other
than the Chairman of the Board receive an annual retainer of $10,900 and a fee
of $1,400 per month for attendance at regular Board meetings. The Chairman of
the Board receives the same annual retainer as other directors but a fee of
$1,800 per month for attendance at regular Board meetings. The Corporation
and the Association paid total fees to directors of $210,000 for the fiscal
year ended September 30, 1996, and $19,000 was paid to two directors emeritus.
The Association also maintains an unfunded supplemental benefit plan to
provide members of the Board of Directors with retirement benefits. Payments
are based on directors' fees paid by the Association and continue for a period
of five years following a director's retirement, except for directors who
served at January 1, 1992, who receive this fee for life.
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EXECUTIVE COMPENSATION
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Summary Compensation Table. The following information is provided for
the named executive officer.
SUMMARY COMPENSATION TABLE(1)
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Long-Term Compensation
-----------------------------
Annual Compensation(1) Awards
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Other All
Name and Annual Restricted Other
Principal Compen- Stock Options Compen-
Position Year Salary(2) Bonus sation Awards(3) (#) sation
- ------------------------------------------------------------------------------
Gerald V. 1996 $141,624 $ 21,241 $-- $1,220,258 244,662 $34,900
Brown 1995 127,920 109,550 -- -- -- 29,400
President 1994 99,400 10,600 -- -- -- 19,300
and Chief
Executive
Officer and
Director
(footnotes on following page)
5
- ----------------
(1) All compensation is paid by the Association. Excludes certain
additional benefits which did not exceed the lesser of $50,000 or 10%
of salary and bonus.
(2) Salary for Mr. Brown includes directors' fees of $27,700 for fiscal
1996.
(3) Represents the value of restricted stock awards at April 9, 1996, the
date of grant, pursuant to the Management Recognition Plan ("MRDP").
Dividends are paid on such awards if and when dividends are declared
and paid by the Corporation on the Common Stock. At September 30,
1996, the value of the unvested awards (which vest pro rata over a
five-year period) was $1,324,850 (92,972 shares at $14.25 per share).
Option Grants Table. The following information is provided for the
named executive officer.
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OPTION GRANTS IN LAST FISCAL YEAR
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Individual Grants
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Percent of
Total
Number Options
of Granted to Price
Options In Fiscal Per Expiration
Name Granted Year Share Date
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Gerald V. Brown 244,662 38% $13.125 04/09/06
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Option Exercise/Value Table. The following information is provided for
the named executive officer.
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AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
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Number of Dollar Value
Unexercised of In-the-Money
Number of Options at Options at
Shares Fiscal Year End Fiscal Year End
Acquired Dollar
on Value Exercisable/ Exercisable/
Name Exercise Realized Unexercisable Unexercisable
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Gerald V. Brown -- $-- -- / 244,662 $-0- / $275,245
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Employment Agreement. Effective October 4, 1995, the Corporation and
the Association (collectively, "Employers") entered into a three-year
employment agreement with Mr. Brown. The salary level for Mr. Brown was
$141,624, which amount will be paid by the Association and which may be
increased at the discretion of the Board of Directors or an authorized
committee of the Board. On each anniversary of the commencement date of the
agreement, the term of the agreement may be extended for an additional year.
The current term of the agreement runs through September 30, 1999. The
agreement is terminable by the Employers for just cause at any time or upon
the occurrence of certain events specified by federal regulations.
6
The agreement provides for severance payments and other benefits in the
event of involuntary termination of employment in connection with any change
in control of the Employers. Severance payments also will be provided on a
similar basis in connection with a voluntary termination of employment where,
subsequent to a change in control, Mr. Brown is assigned duties inconsistent
with his positions, duties, responsibilities and status immediately prior to
such change in control. The term "change in control" is defined in the
agreement as, among other things, any time during the period of employment
when (a) a person other than the Corporation purchases shares of Common Stock
pursuant to a tender or exchange offer for such shares, (b) any person (as
such term is used in Sections 13(d) and 14(d)(2) of the Exchange Act) is or
becomes the beneficial owner, directly or indirectly, of securities of the
Corporation representing 25% or more of the combined voting power of the
Corporation's then outstanding securities, (c) the membership of the Board of
Directors changes as the result of a contested election, or (d) shareholders
of the Corporation approve a merger, consolidation, sale or disposition of all
or substantially all of the Corporation's assets, or a plan of partial or
complete liquidation.
The severance payments from the Employers will equal 2.99 times Mr.
Brown's base salary at the time of the change in control. Such amounts will
be paid in a lump sum within ten business days following the termination of
employment. Had a change in control of the Employers occurred in 1996, Mr.
Brown would have been entitled to a severance payment of approximately
$423,000. Section 280G of the Internal Revenue Code of 1986, as amended
("Code"), provides that certain severance payments which equal or exceed three
times the base compensation of the individual are deemed to be "excess
parachute payments" if they are contingent upon a change in control.
Individuals receiving excess parachute payments are subject to a 20% excise
tax on the amount of such excess payments, and the Employers would not be
entitled to deduct the amount of such excess payments.
The agreement restricts Mr. Brown's right to compete against the
Employers for a period of one year from the date of termination of the
agreement if Mr. Brown voluntarily terminates his employment, except in the
event of a change in control.
Retirement Plan. The Association participates in the Financial
Institutions Retirement Fund ("FIRF"), a defined benefit retirement plan. All
full-time employees are eligible to participate in the FIRF after completion
of one year of service to the Association. Benefits are based upon years of
service and salary excluding bonuses, fees, commissions, etc. Participants
are fully vested in their accrued benefit after five years of service. At
September 30, 1996, Mr. Brown had 38 years of credited service under the FIRF.
The normal retirement age is 65 and the early retirement age is before
age 65, but at least age 45. Normal retirement benefits are equal to 1.5%
multiplied by the years of benefit service to the Association and by the
employee's average base salary for the five highest consecutive years
preceding retirement up to the covered compensation level. An employee may
also elect early retirement in which case the retirement benefit payable at
age 65 will equal the vested amount of the employee's normal retirement
benefit accrued through the employee's last day of employment. However, if
payments commence prior to age 65, the benefit is reduced proportionately
based on the employee's age. Payment may also be deferred to any time up to
age 70, in which case the retirement allowance payable at age 65 will be
increased by .8% for each month of deferment after age 65 (to a maximum
increase of 48%). The Association's contributions are determined actuarially
in an amount necessary to fund the accrued and anticipated benefits. Upon
retirement, the regular form of benefit under the FIRF is an annuity payable
in equal monthly installments for the life of the employee. Optional annuity
benefit forms or a lump sum distribution may also be elected by the employee.
Benefits are not reduced by a participant's social security benefits.
The following table indicates the annual retirement benefits that would
be payable under the FIRF upon retirement at age 65 to a participant electing
to receive his or her retirement benefits in the standard form of benefits,
assuming various specified levels of the FIRF compensation and various
specified years of credited service. Under the Code, maximum annual benefits
under the FIRF are limited to $150,000 per year for the 1996 calendar year.
7
Years of Service
Highest Five Year ------------------------------------------------------
Annual Compensation 15 20 25 30 35
- ------------------- ------------------------------------------------------
$ 10,000 $ 2,250 $ 3,000 $ 3,750 $ 4,500 $ 5,250
$ 20,000 4,500 6,000 7,500 9,000 10,500
$ 30,000 6,750 9,000 11,250 13,500 15,750
$ 40,000 9,000 12,000 15,000 18,000 21,000
$ 50,000 11,250 15,000 18,750 22,500 26,250
$ 60,000 13,500 18,000 22,000 27,000 31,500
$ 70,000 15,750 21,000 26,250 31,500 36,750
$ 80,000 18,000 24,000 30,000 36,000 42,000
$ 90,000 20,250 27,000 33,750 40,500 47,250
$100,000 22,500 30,000 37,500 45,000 52,500
$110,000 24,750 33,000 41,250 49,500 57,750
Notwithstanding anything to the contrary set forth in any of the
Corporation's previous filings under the Securities Act of 1933, as amended,
or the Exchange Act that might incorporate future filings, including this
Proxy Statement, in whole or in part, the following Report of the Compensation
Committee and Performance Graph shall not be incorporated by reference into
any such filings.
Report of the Compensation Committee. The Compensation Committee's
duties are to recommend and administer policies that govern executive
compensation for the Corporation and the Association. The Compensation
Committee evaluates executive performances, compensation policies and salaries
and makes recommendations to the Board of Directors concerning the
compensation of each named executive officer and other executive officers.
The Board of Directors reviews the Compensation Committee's recommendations
and establishes compensation levels for the coming year.
The executive compensation policy of the Corporation and the
Association is designed to establish an appropriate relationship between
executive pay and the Corporation's and the Association's annual and long-term
performance, long-term growth objectives, and their ability to attract and
retain qualified executive officers. The principles underlying the program
are:
-- To attract and retain key executives who are vital to the
long-term success of the Corporation and the Association and are
of the highest caliber;
-- To provide levels of compensation competitive with those offered
throughout the financial industry; and
-- To motivate executives to enhance long-term stockholder value by
building their own ownership in the Corporation.
The Compensation Committee also considers a variety of subjective and
objective factors in determining the compensation package for individual
executives including (1) the performance of the Corporation and the
Association as a whole with emphasis on annual and long-term performance, (2)
the responsibilities assigned to each executive, and (3) the performance of
each executive of assigned responsibilities as measured by the progress of the
Corporation and the Association during the year.
Independent compensation consultants, such as Martech Associates,
Inc., Portland, Oregon, are periodically engaged to review the compensation
levels of management as compared with peers with comparable responsibilities
in other financial institutions. The Compensation Committee also considers
compensation surveys prepared by The Bank Administration Institute and
America's Community Bankers, as well as the Ben S. Cole Financial Survey of
Executive Salaries and Benefits.
8
Although the Compensation Committee did not establish executive
compensation levels on the basis of whether specific financial goals had been
achieved by the Corporation and the Association, the Compensation Committee
(and the Board of Directors) considered the overall profitability of the
Corporation and the Association when making their decisions. The Compensation
Committee believes that management compensation levels, as a whole,
appropriately reflect the application of the Corporation's and Association's
executive compensation policy and the progress of the Corporation and the
Association.
During the fiscal year ended September 30, 1996, the base compensation
for Gerald V. Brown was $125,312, which represented a 10% increase from the
previous fiscal year. The Compensation Committee believes the increase is
appropriate based on competitive salary surveys.
Compensation Committee consisting of:
J. Gillis Hannigan, Chairman
Timothy A. Bailey
Bernard Z. Agrons
Compensation Committee Interlocks and Insider Participation. No
executive officer of the Corporation or the Association has served as a member
of the compensation committee of another entity, one of whose executive
officers served on the Compensation Committee. No executive officer of the
Corporation or the Association has served as a director of another entity, one
of whose executive officers served on the Compensation Committee. No
executive officer of the Corporation or the Association has served as a member
of the compensation committee of another entity, one of whose executive
officers served as a director of the Corporation or the Association.
9
Performance Graph. The following graph plots the cumulative total
stockholder return on the Corporation's Common Stock against the cumulative
total return of The Nasdaq Stock Market Index (U.S. Companies) and the peer
group represented by the SNL $500 Million to $1 Billion Asset Thrift Index,
assuming the value of an investment in the Corporation's Common Stock and each
index was $100 on October 5, 1995 (the initial offering date of the
Corporation's Common Stock) and the reinvestment of all dividends.
10/05/95 12/15/95 2/28/96 5/10/96 7/19/96 9/30/96
-------- -------- ------- ------- ------- -------
Klamath First Bancorp,
Inc. $100.00 $133.75 $130.49 $133.65 $141.84 $144.37
The Nasdaq Index
(U.S. Companies) 100.00 101.95 109.42 119.35 109.07 122.11
SNL $500 Million to
$1 Billion Thrift
Index 100.00 104.07 105.91 104.95 106.16 118.46
- ------------------------------------------------------------------------------
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
- ------------------------------------------------------------------------------
Section 16(a) of the Exchange Act requires certain officers of the
Corporation and its directors, and persons who beneficially own more than 10%
of any registered class of the Corporation's equity securities, to file
reports of ownership and changes in ownership with the Securities and Exchange
Commission. During the fiscal year ended September 30, 1996, the directors
and named executive officer of the Corporation inadvertently failed to file
Forms 5 on a timely basis to report awards under the MRDP and Stock Option
Plan. Forms 5 were subsequently filed on November 20, 1996.
10
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CERTAIN TRANSACTIONS WITH THE ASSOCIATION
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The Association, like many financial institutions, has followed the
policy of granting loans to its officers, directors and employees on the
security of their primary residences and also makes consumer loans to such
persons. Loans to such persons are made in the ordinary course of business on
substantially the same terms, including interest rate and collateral, as those
prevailing at the time for comparable transactions with other persons.
Formerly, the Association waived application and origination fees and offered
interest rates that are one-half point lower than the prevailing interest rate
to unaffiliated borrowers on mortgage loans to staff members, directors and
officers. Currently, the Association offers such terms only on mortgage loans
to full-time employees (with a position lower than Vice President) that are
secured by such employee's primary residence. Management believes that these
loans neither involve more than the normal risk of collectability nor present
other unfavorable features. In accordance with the requirements of applicable
law, loans to executive officers and directors of the Association are made on
substantially the same terms, including interest rates, fees and collateral,
as those prevailing at the time for comparable transactions with other
persons, and in the opinion of management do not involve more than the normal
risk of collectability or present other unfavorable features. At September
30, 1996, loans to directors and executive officers totalled $695,500.
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AUDITORS
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The Board of Directors has appointed Deloitte & Touche LLP, independent
public accountants, to serve as the Corporation's auditors for the fiscal year
ending September 30, 1997. A representative of Deloitte & Touche LLP is
expected to be present at the Meeting to respond to appropriate questions from
shareholders and will have the opportunity to make a statement if he or she so
desires.
On May 21, 1996, the Corporation's Board of Directors, at the
recommendation of the Audit Committee, terminated the engagement of KPMG Peat
Marwick LLP and engaged Deloitte & Touche LLP, as the Corporation's auditors.
The report of KPMG Peat Marwick LLP on the Corporation's financial
statements for either of the last two fiscal years did not contain an adverse
opinion or a disclaimer of opinion and was not qualified or modified as to
uncertainty, audit scope, or accounting principles, except that the report of
KPMG Peat Marwick LLP dated November 3, 1995 with respect to the Corporation's
financial statements at September 30, 1994 and 1995 and for the three years in
the period ended September 30, 1995 disclosed that the Corporation changed its
method of accounting for certain investments in debt and equity securities and
its method of accounting for income taxes in fiscal 1994 to adopt the
provisions of Statement of Financial Accounting Standard ("SFAS") No. 115,
Accounting for Certain Investments in Debt and Equity Securities, and SFAS No.
109, Accounting for Income Taxes, respectively.
During the Corporation's two most recent fiscal years and subsequent
interim periods preceding the date of termination of the engagement of KPMG
Peat Marwick LLP, the Corporation was not in disagreement with KPMG Peat
Marwick LLP on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure, which disagreement, if
not resolved to the satisfaction of KPMG Peat Marwick LLP, would have caused
KPMG Peat Marwick LLP to make reference to the subject matter of the
disagreement in connection with its report.
The Corporation had not consulted with Deloitte & Touche LLP during its
two most recent fiscal years nor during any subsequent interim period prior to
its engagement regarding the application of accounting principles to a
specified transaction, either completed or proposed, or the type of audit
opinion that might be rendered on the Corporation's financial statements.
11
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OTHER MATTERS
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The Board of Directors is not aware of any business to come before the
Meeting other than those matters described above in this Proxy Statement.
However, if any other matters should properly come before the Meeting, it is
intended that proxies in the accompanying form will be voted in respect
thereof in accordance with the judgment of the person or persons voting the
proxies.
The cost of solicitation of proxies will be borne by the Corporation.
Directors, officers and regular employees of the Corporation and the
Association may solicit proxies personally or by telecopier or telephone at
their regular salary or hourly compensation.
The Corporation's Annual Report to Shareholders has been mailed to all
shareholders of record as of the close of business on the Record Date. Any
shareholder who has not received a copy of such annual report may obtain a
copy by writing to the Corporation. Such annual report is not to be treated
as part of the proxy solicitation material or as having been incorporated
herein by reference.
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SHAREHOLDER PROPOSALS
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In order to be eligible for inclusion in the proxy materials of the
Corporation for next year's Annual Meeting of Shareholders, any shareholder
proposal to take action at such meeting must be received at the Corporation's
main office at 540 Main Street, Klamath Falls, Oregon no later than August 13,
1997. Any such proposals shall be subject to the requirements of the proxy
solicitation rules adopted under the Exchange Act.
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FORM 10-K
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A copy of the Annual Report Form 10-K as filed with the Securities and
Exchange Commission will be furnished without charge to shareholders as of the
close of business on the Record Date upon written request to George L. Hall,
Secretary, Klamath First Bancorp, Inc., 540 Main Street, Klamath Falls, Oregon
97601.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ George L. Hall
GEORGE L. HALL
SECRETARY
Klamath Falls, Oregon
December 11, 1996
12
REVOCABLE PROXY
KLAMATH FIRST BANCORP, INC.
ANNUAL MEETING OF SHAREHOLDERS
January 22, 1997
The undersigned hereby appoints the official Proxy Committee of the
Board of Directors of Klamath First Bancorp, Inc. ("Corporation") with full
powers of substitution to act as attorneys and proxies for the undersigned, to
vote all shares of Common Stock of the Corporation which the undersigned is
entitled to vote at the Annual Meeting of Shareholders ("Meeting"), to be held
at the Shilo Inn, 2500 Almond Street, Klamath Falls, Oregon, on Wednesday,
January 22, 1997, at 2:00 p.m., Pacific Time, and at any and all adjournments
thereof, as follows:
VOTE
FOR WITHHELD
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1. The election as directors of
all nominees listed below
except as marked to the
contrary below). [ ] [ ]
Timothy A. Bailey
James D. Bocchi
William C. Dalton
INSTRUCTION: To withhold your vote
for any individual nominee, write
that nominee's name on the line below.
----------------------------------------
----------------------------------------
2. Such other matters that may properly
come before the Meeting or any
adjournments thereof.
The Board of Directors recommends a vote "FOR" the above proposal.
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THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED,
THIS PROXY WILL BE VOTED FOR EACH OF THE PROPOSITIONS STATED. IF ANY OTHER
BUSINESS IS PRESENTED AT SUCH MEETING, THIS PROXY WILL BE VOTED BY THOSE NAMED
IN THIS PROXY IN THEIR BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD OF
DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE MEETING.
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THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
Should the undersigned be present and elect to vote at the Meeting or
at any adjournment thereof and after notification to the Secretary of the
Corporation at the Meeting of the shareholder's decision to terminate this
proxy, then the power of said attorneys and proxies shall be deemed terminated
and of no further force and effect.
The undersigned acknowledges receipt from the Corporation prior to the
execution of this proxy of Notice of Annual Meeting of Shareholders, a proxy
statement for the Annual Meeting of Shareholders, and an Annual Report to
Shareholders.
Dated: , 199__
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PRINT NAME OF SHAREHOLDER PRINT NAME OF SHAREHOLDER
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SIGNATURE OF SHAREHOLDER SIGNATURE OF SHAREHOLDER
Please sign exactly as your name appears on the enclosed card. When signing
as attorney, executor, administrator, trustee or guardian, please give your
full title. If shares are held jointly, each holder should sign.
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PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE
ENCLOSED POSTAGE-PREPAID ENVELOPE.
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