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
OREGON TRAIL FINANCIAL CORP.
- ------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
OREGON TRAIL FINANCIAL CORP.
- ------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[x] No fee required.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] 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
- ------------------------------------------------------------------------------
(2) Aggregate number of securities to which transactions applies:
N/A
- ------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
N/A
- ------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
N/A
- -----------------------------------------------------------------------------
[ ] 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
- ------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
N/A
- ------------------------------------------------------------------------------
(3) Filing party:
N/A
- ------------------------------------------------------------------------------
(4) Date filed:
N/A
- ------------------------------------------------------------------------------
June 25, 1999
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
Oregon Trail Financial Corp. The meeting will be held at the Sunridge Inn, One
Sunridge Lane, Baker City, Oregon on Tuesday, July 27, 1999 at 10:00 a.m.,
local time.
The Notice of Annual Meeting of Stockholders and Proxy Statement
appearing on the following pages describe the formal business to be transacted
at the meeting. During the meeting, we will also report on the operations of
the Company. Directors and officers of the Company, as well as a
representative of Deloitte & Touche LLP, the Company's independent auditors,
will be present to respond to appropriate questions of shareholders.
It is important that your shares are represented at this meeting, whether
or not you attend the meeting in person and regardless of the number of shares
you own. To make sure your shares are represented, we urge you to complete
and mail 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/ Jerry F. Aldape
Jerry F. Aldape
President and Chief Executive Officer
OREGON TRAIL FINANCIAL CORP.
2055 FIRST STREET
BAKER CITY, OREGON 97814
(541) 523-6327
- ------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held On July 27, 1999
- ------------------------------------------------------------------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Oregon
Trail Financial Corp. ("Company") will be held at the Sunridge Inn, One
Sunridge Lane, Baker City, Oregon, on Tuesday, July 27, 1999, at 10:00 a.m.,
local time, for the following purposes:
(1) To elect three directors of the Company; and
(2) To consider and act upon 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. Stockholders of record at the
close of business on June 11, 1999 are entitled to notice of and to vote at
the meeting and any adjournments or postponements thereof.
You are requested to complete 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/ Zane F. Lockwood
ZANE F. LOCKWOOD
CORPORATE SECRETARY
Baker City, Oregon
June 25, 1999
- ------------------------------------------------------------------------------
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY 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.
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
PROXY STATEMENT
OF
OREGON TRAIL FINANCIAL CORP.
2055 FIRST STREET
BAKER CITY, OREGON 97814
(541) 523-6327
- ------------------------------------------------------------------------------
ANNUAL MEETING OF STOCKHOLDERS
JULY 27, 1999
- ------------------------------------------------------------------------------
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Oregon Trail Financial Corp. ("Company")
to be used at the Annual Meeting of Stockholders of the Company ("Meeting").
The Company is the holding company for Pioneer Bank, A Federal Savings Bank
("Savings Bank"). The Meeting will be held at the Sunridge Inn, One Sunridge
Lane, Baker City, Oregon on Tuesday, July 27, 1999, at 10:00 a.m., local time.
This Proxy Statement and the enclosed proxy card are being first mailed to
shareholders on or about June 25, 1999.
- ------------------------------------------------------------------------------
VOTING AND PROXY PROCEDURE
- ------------------------------------------------------------------------------
Shareholders Entitled to Vote. Stockholders of record as of the close of
business on June 11, 1999 ("Voting Record Date") are entitled to one vote for
each share of common stock ("Common Stock") of the Company then held. At the
close of the Voting Record Date the Company had 3,690,964 shares of Common
Stock issued and outstanding.
Quorum. 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. Abstentions and broker
non-votes will be counted as shares present and entitled to vote at the
Meeting for purposes of determining the existence of a quorum.
Voting. The Board of Directors solicits proxies so that each shareholder
has the opportunity to vote on the proposal to be considered at the Meeting.
When a proxy card is returned properly signed and dated, the shares
represented thereby will be voted in accordance with the instructions on the
proxy card. Where no instructions are indicated, proxies will be voted FOR
the nominees for directors set forth below. If a shareholder attends the
Meeting, he or she may vote by ballot.
If a stockholder is a participant in the Pioneer Bank, A Federal Savings
Bank Employee Stock Ownership Plan ("ESOP"), the proxy card represents a
voting instruction to the trustees of the ESOP as to the number of shares in
the participant's plan account. Each participant may direct the trustees as
to the manner in which shares of Common Stock allocated to the participant's
plan account are to be voted. Unallocated shares of Common Stock held by the
ESOP, and allocated shares for which no voting instructions are received from
participants, will be voted by the trustees in the same proportion as shares
for which the trustees have received voting instructions.
The directors to be elected at the Meeting will be elected by a plurality
of the votes cast by shareholders present in person or by proxy and entitled
to vote. Pursuant to the Company's Articles of Incorporation, stockholders
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
and broker non-votes will have no effect on the outcome of the election
because directors will be elected by a plurality of the votes cast.
Revocation of a Proxy. Stockholders who execute proxies retain the right
to revoke them at any time. Proxies may be revoked by written notice
delivered in person or mailed to the Secretary of the Company or by filing a
later
proxy prior to a vote being taken on a particular proposal at the Meeting.
Attendance at the Meeting will not automatically revoke a proxy, but a
shareholder in attendance may request a ballot and vote in person, thereby
revoking a prior granted proxy.
- ------------------------------------------------------------------------------
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
- ------------------------------------------------------------------------------
Persons and groups who beneficially own in excess of 5% of the Company's
Common Stock are required to file certain reports with the Securities and
Exchange Commission ("SEC"), and provide a copy to the Company, disclosing
such ownership pursuant to the Securities Exchange Act of 1934, as amended
("Exchange Act"). Based on such reports, the following table sets forth, at
the close of business on the Voting Record Date, certain information as to
those persons who were beneficial owners of more than 5% of the outstanding
shares of Common Stock. Management knows of no persons other than those set
forth below who beneficially owned more than 5% of the outstanding shares of
Common Stock at the close of business on the Voting Record Date. The table
also sets forth, as of the close of business on the Voting Record Date,
certain information as to shares of Common Stock beneficially owned by the
Company's directors and "named executive officers" and all directors and
executive officers as a group.
Number of Shares Percent of Shares
Name Beneficially Owned (1) Outstanding
- ---- ---------------------- -----------------
Beneficial Owners of More Than 5%
Pioneer Bank, A Federal Savings Bank 375,029 10.16%
Employee Stock Ownership Plan Trust
Westport Asset Management, Inc.(2) 274,500 7.44
253 Riverside Avenue
Westport, Connecticut 06880
Brandes Investment Partners, L.P.(3) 199,285 5.40
12750 High Bluff Drive
San Diego, California 92130
Directors(4)
John Gentry 24,389 *
John A. Lienkaemper 24,614 *
Albert H. Durgan 19,734 *
Edward H. Elms 33,458 *
Stephen R. Whittemore 29,389 *
Charles H. Rouse 29,389 *
Named Executive Officers(4)(5)
Jerry F.Aldape(6) 42,633 1.16
All Executive Officers and
Directors as a Group (7 persons) 203,606 5.52
(footnotes on following page)
2
- -----------------------
* Less than 1 percent of shares outstanding.
(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 or she has voting and/or investment power with respect
to such security. 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 may possess
voting and/or investment power.
(2) Based on a SEC Schedule 13G dated February 10, 1999, that discloses sole
voting and dispositive power as to 3,000 shares and shared voting and
dispositive power as to the remaining 271,500 shares.
(3) Based on a SEC Schedule 13G dated February 11, 1999, that discloses
shared voting and dispositive power as to 199,285 shares.
(4) Includes unvested shares in the Company's Management Recognition and
Development Plan ("MRDP"). Participants in the MRDP exercise all rights
incidental to ownership, including voting rights.
(5) SEC regulations define the term "named executive officers" to include all
individuals serving as chief executive officer during the most recently
completed fiscal year, 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. Mr. Aldape was the Company's
only "named executive officer" for the fiscal year ended March 31, 1999.
(6) Mr. Aldape is also a director of the Company.
- ------------------------------------------------------------------------------
PROPOSAL I -- ELECTION OF DIRECTORS
- ------------------------------------------------------------------------------
The Company's Board of Directors consists of seven members. In
accordance with the Company's Articles of Incorporation, the Board is divided
into three classes with three-year staggered terms, with approximately
one-third of the directors elected each year. Three directors will be elected
at the Meeting to serve for a three-year period, or until their respective
successors have been duly elected and qualified. The Board of Directors has
nominated for election as directors Albert H. Durgan, Edward H. Elms and Jerry
F. Aldape, each for three-year terms. Messrs. Durgan, Elms and Aldape are
each current members of the Board of Directors of the Company. Mr. Durgan and
Mr. Elms are current members of the Board of Directors of the Savings Bank.
It is intended that the proxies solicited by the Board of Directors will
be voted for the election of the above named nominees. If any nominee is
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 or the
Board of Directors may adopt a resolution to amend the Bylaws and reduce the
size of the Board. At this time the Board of Directors knows of no reason why
any nominee might be unavailable to serve.
The Board of Directors recommends a vote "FOR" the election of all
nominees named in the table on the following page.
The following table sets forth certain information regarding the nominees
for election at the Meeting.
Year First
Elected or
Appointed Term to
Name Age(1) Director(2) Expire
- ---- ------ ----------- ------
NOMINEES
--------
Albert H. Durgan 68 1985 2002(3)
Edward H. Elms 51 1986 2002(3)
Jerry F. Aldape 50 1998 2002(3)
(table continued on following page)
3
Year First
Elected or
Appointed Term to
Name Age(1) Director(2) Expire
- ---- ------ ----------- ------
CONTINUING DIRECTORS
--------------------
Stephen R. Whittemore 49 1983 2000
Charles H. Rouse 53 1991 2000
John Gentry 51 1992 2001
John A. Lienkaemper 62 1979 2001
- ---------------
(1) As of March 31, 1999.
(2) Other than for Mr. Aldape, includes prior service on the Board of
Directors of the Savings Bank.
(3) Assuming the individual is elected.
The present principal occupation and other business experience during the
last five years of each nominee for election and each director continuing in
office is set forth below:
Albert H. Durgan is retired from the Savings Bank after 34 years of
service. He served as President of the Savings Bank from 1986 to 1992.
Edward H. Elms has been the owner of P&E Distributing Company, a beverage
distributor, located in Baker City, Oregon, for 29 years. Mr. Elms was the
co-owner of Heritage Chevrolet, a car dealership located in Baker City, Oregon
from 1996 to 1999.
Jerry F. Aldape has served as President and Chief Executive Officer of
the Company and the Savings Bank since March 1998. He served as the Savings
Bank's Senior Vice President from 1994 to 1998 and Corporate Secretary from
1997 to 1998. Mr. Aldape served as Controller with Insight Distributing,
Inc., Sandpoint, Idaho, from 1993 to 1994. Before 1993 he served as the
Senior Vice President/Chief Financial Officer for United First Federal Bank, a
Federal Savings Bank, located in Boise, Idaho, for seven years. Mr. Aldape
has over 26 years of business and banking experience.
Stephen R. Whittemore has been the owner of BesTruss, an engineered roof
systems company, since 1996 and has been a partner in Wallowa Lake Tram, Inc.
since 1983. He was the owner of La Grande Lumber Company, a distributor of
building materials, from 1971 to 1996.
Charles H. Rouse is a Sears authorized dealer in Baker City, Oregon and
he has also been self-employed as a property developer and manager since 1995.
He was the owner of Rouse's Home Furnishings, Baker City, Oregon, from 1985 to
1995.
John Gentry has been President and General Manager of Gentry Ford Sales,
Inc., an automobile dealership located in Ontario, Oregon, since 1985. He
served as Vice President of that company between 1972 and 1985.
John A. Lienkaemper has been a consultant and U.S. Safety Coordinator for
The Loewen Group, which owns and operates funeral homes, cemeteries, and
crematories, since 1993. Mr. Lienkaemper was a consultant for Malletta-
Verton Partnership, a funeral home operator, from 1989 to 1993. Before 1989,
he owned and operated Lienkaemper Chapels located in Nyssa, Ontario and Vale,
Oregon.
4
- ------------------------------------------------------------------------------
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
- ------------------------------------------------------------------------------
The Boards of Directors of the Company and the Savings Bank conduct their
business through meetings of the Boards and through their committees. During
the fiscal year ended March 31, 1999, the Board of Directors of the Company
held 11 meetings, and the Board of Directors of the Savings Bank held 13
meetings. No director of the Company or the Savings Bank attended fewer than
75% of the total meetings of the Boards and committees on which such person
served during this period.
Committees of the Company's Board. The Company's Board of Directors has
established Audit and Nominating Committees.
The Audit Committee consists of Directors Elms (Chairman), Gentry and
Durgan. It receives and reviews all reports prepared by the Company's
external and internal auditor. The internal auditor reports monthly to the
Audit Committee. The Audit Committee met six times during the fiscal year
ended March 31, 1999.
The full Board of Directors acts as a Nominating Committee for the annual
selection of management's nominees for election as directors of the Company.
The full Board of Directors met once in its capacity as Nominating Committee
during the fiscal year ended March 31, 1999.
Committees of the Savings Bank's Board. The Savings Bank's Board of
Directors has established Personnel and Compensation, Audit and Nominating
Committees, among others.
The Personnel Committee, consisting of Directors Rouse (Chairman), Elms
and Lienkaemper, is responsible for all personnel issues, including
recommending compensation levels for all employees and senior management to
the Board of Directors. The Personnel Committee meets at least twice a year
and met six times during the year ended March 31, 1999.
The Audit Committee, consisting of Directors Elms (Chairman), Gentry and
Durgan, receives and reviews all reports prepared by the Savings Bank's
external auditor and the internal audit function. The Audit Committee met six
times during the year ended March 31, 1999.
The full Board of Directors acts as a Nominating Committee for the annual
selection of management's nominees for election as directors. The full Board
of Directors met once in its capacity as Nominating Committee during the year
ended March 31, 1999.
- ------------------------------------------------------------------------------
DIRECTORS' COMPENSATION
- ------------------------------------------------------------------------------
Fees
The Company and the Savings Bank each pay fees to its directors. Each
director of the Company receives a quarterly fee of $1,000, except that the
Chairman of the Board receives a quarterly fee of $1,250. Each director of
the Savings Bank, other than the Chairman of the Board, receives a monthly fee
of $1,075. The Chairman of the Board of the Savings Bank receives a monthly
fee of $1,125. Each director receives an additional $125 per month for
service on the Board of Directors of Pioneer Development Corporation, a
wholly-owned subsidiary of the Savings Bank. The Company and the Savings Bank
paid total fees to directors of $163,000 for the fiscal year ended March 31,
1999.
Directors Emeritus Plan
The Savings Bank maintains the Pioneer Bank Director's Plan which confers
director emeritus status on a director who retires at or after attaining age
70 with 10 or more years of service. Under the Director's Plan, a director
5
emeritus receives a fee equal to the greater of $800 or 65% of the fee payable
to regular Board members for attendance at monthly Board meetings. The fee is
payable for the life of the director emeritus. As a condition of receipt of
benefits under the Director's Plan, a director emeritus is expected to be
available to advise and consult with management of the Savings Bank, represent
and promote the interests of the Savings Bank in its primary market area, and
refrain from business activities that are competitive with or contrary to the
interests of the Savings Bank. An additional feature of the Director's Plan
provides that, in the event of a change in control of the Company or the
Savings Bank (as defined in the Director's Plan), each active director would
be treated as a director emeritus on the effective date of the change of
control. Within 30 days of such date, each director emeritus would receive a
payment equal to seven times the annual fees payable to the director at the
effective time of the change in control. Assuming a change in control had
occurred at March 31, 1999, the aggregate amount payable under the Director's
Plan to all directors would be approximately $313,000.
- ------------------------------------------------------------------------------
EXECUTIVE COMPENSATION
- ------------------------------------------------------------------------------
Summary Compensation Table
The following information is provided for Mr. Aldape.
Long-term Compensation
Annual Compensation(1) Awards
-------------------------- -------------------
All
Other
Restricted Annual
Stock Number Com-
Name and Awards of pensa-
Position Year(2) Salary($) Bonus ($)(3) Options(4) tion(5)
- -------- ------ --------- ----- ------ ---------- -------
Jerry F. Aldape 1999 103,962 34,000 418,783 75,118 35,739
President and Chief 1998 68,340 4,031 -- - 4,278
Executive Officer 1997 51,282 4,875 -- -- 2,963
- --------------
(1) Does not include certain benefits, the aggregate amounts of which do not
exceed 10% of total annual salary and bonus.
(2) Information for 1997 includes the nine months ended March 31, 1997
because of a change in the Company's fiscal year end from June 30 to
March 31.
(6) Represents the value of restricted stock awards at October 8, 1998, the
date of grant, pursuant to the MRDP. Dividends are paid on such awards
if and when declared and paid by the Company on the Common Stock. The
awards vest pro rata over a five-year period with the first 20%
installment vesting on October 8, 1999.
(4) Subject to pro rata vesting over a five year period with the first 20%
installment vesting on October 8, 1999.
(5) Consists of employer 401(k) plan contributions and ESOP shares allocated
but not necessarily vested. ESOP shares allocated are valued at share
price on close of business on March 31, 1999 ($12.875).
6
Option Grants in Last Fiscal Year. The following table sets forth
information concerning the grant of stock options to Mr. Aldape during the
fiscal year ended March 31, 1999.
Percent of
Total Options
Number of Granted to
Securities Employees and
Underlying Directors in Exercise Expiration
Name Options Granted(1) Fiscal Year Price Date
---- ------------------ -------------- -------- ----------
Jerry F. Aldape 75,118 21.07% $11.15 10/08/08
- -------------
(1) Subject to pro rata vesting over a five year period with the first 20%
installment vesting on October 8, 1999.
Option Exercise/Value Table. The following information is provided for
Mr. Aldape.
Number of
Securities Underlying Value of Unexercised
Unexercised Options In-the-Money Options
at Fiscal Year End(#) at Fiscal Year End($)
Acquired on Value -------------------------- ---------------------------
Name Exercise (#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
---- ------------ ----------- ----------- ------------- ----------- -------------
Jerry F. Aldape 0 0 0 75,118 0 129,579
Employment Agreements. The Company and the Savings Bank (collectively,
the "Employers") have entered into an employment agreement ("Employment
Agreement") with Mr. Aldape ("Executive") for a term of 30 months. Under
the Employment Agreement, the current salary level for Mr. Aldape is $115,000,
which amount is paid by the Savings Bank and 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 Employment Agreement, the
term of the agreement may be extended for an additional year at the discretion
of the Board. The agreement is terminable by the Employers at any time, by
the Executive if the Executive is assigned duties inconsistent with his
initial position, duties, responsibilities and status, or upon the occurrence
of certain events specified by federal regulations. In the event that the
Executive's employment is terminated without cause or upon the Executive's
voluntary termination following the occurrence of an event described in the
preceding sentence, the Savings Bank would be required to honor the terms of
the agreement through the expiration of the current terms, including payment
of current cash compensation and continuation of employee benefits.
The Employment Agreement also 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, the Executive is assigned
duties inconsistent with his position, duties, responsibilities and status
immediately prior to such change in control. The term "change in control" is
defined in the agreement as having occurred when, among other things, (a) a
person other than the Company 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 Company
representing 25% or more of the combined voting power of the Company'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 Company
approve a merger, consolidation, sale or disposition of all or substantially
all of the Company's assets, or a plan of partial or complete liquidation.
7
The maximum value of the severance benefits under the Employment Agreement
is 2.99 times the Executive's average annual compensation during the five-year
period preceding the effective date of the change in control (the "base
amount"). The Employment Agreement provides that the value of the maximum
benefit may be distributed, at the Executive's election, (i) in the form of a
lump sum cash payment equal to 2.99 times the Executive's base amount or (ii)
a combination of a cash payment and continued coverage under the Employers'
health, life and disability programs for a 30-month period following the
change in control, the total value of which does not exceed 2.99 times the
Executive's base amount. Assuming that a change in control had occurred at
March 31, 1999 and that the Executive elected to receive a lump sum cash
payment, Mr. Aldape would have been entitled to a payment of approximately
$200,000. Section 280G of the Internal Revenue Code of 1986, as amended
("Code"), provides that severance payments that equal or exceed three times
the individual's base amount 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 Employment Agreement restricts the Executive's right to compete
against the Employers for a period of one year from the date of termination of
the agreement if the Executive voluntarily terminates employment, except in
the event of a change in control.
Notwithstanding anything to the contrary set forth in any of the Company'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. Under rules established by the SEC,
the Company is required to provide certain data and information in regard to
the compensation and benefits provided to the Company's Chief Executive
Officer and other executive officers. The disclosure requirements for the
Chief Executive Officer and other executive officers include the use of tables
and a report explaining the rationale and considerations that led to the
fundamental executive compensation decisions affecting those individuals.
The Personnel and Compensation Committee ("Committee") of the Bank's Board
of Directors sets and administers all policies, as defined by the SEC, that
govern the total compensation, including long-term compensation of the
Company's Chief Executive Officer and other executive officers. None of the
members of the Committee is an employee of the Company. The Committee's
policy is in keeping with the Company's philosophy to offer executive officers
competitive compensation and benefits that will permit the Company to attract
and retain highly qualified individuals and to motivate such individuals by
rewarding them based on the Company's performance.
Currently, the Company's executive compensation package consists primarily
of base salary and bonus awards. Individual executive salaries are
established based on the individual's subjective performance evaluation, the
Company's performance, and market parity. The Committee uses compensation and
bonus survey data from the Oregon Banker's Association, America's Community
Bankers, and the Washington Financial Industry for its market comparison. The
data compares the Company's executive officers to those similarly situated in
other similarly sized financial institutions in the region. The compensation
of the Company's Chief Executive Officer, Jerry F. Aldape, is determined in
the same manner as other executive officers as described above. Therefore,
Mr. Aldape's compensation is largely dependent upon his individual
performance, the Company's overall performance, and market comparison.
Bonuses may be awarded to executive and other officers of the Company
based on their performance and that of the Company. The Committee determines
the appropriate level of bonuses using the Committee's assessment of each
executive officer's contributions to the Company's success. More
specifically, the Company's return on average assets, return on equity,
corporate management, and staffing controls all are used in this assessment.
8
The Company has implemented a Stock Option Plan and Management Recognition
and Development plan as part of its overall compensation to executive
officers.
The Company provides benefits to its executive officers that are generally
available to other Company officers and employees. This includes a 401(k)
profit sharing plan, an employee stock ownership plan, and a non-qualified
deferred compensation plan for key executives. A committee appointed by the
Board of Directors administers the plans. Mr. Aldape participates in the
401(k) profit sharing plan and the employee stock ownership plan.
The Committee has recognized that the efforts of key Company executives
is, and will continue to be, paramount to its success. Therefore, the Board
of Directors approved, based upon Committee recommendation, the adoption of an
employment agreement with Mr. Aldape, which is designed to retain him and
allow him a concerted focus on Company operations.
The Committee has reviewed the total compensation of all executive
officers during fiscal year 1999 and has concluded that their compensation is
reasonable and consistent with the Company's compensation philosophy and
industry practice.
PERSONNEL AND COMPENSATION COMMITTEE
/s/Charles H. Rouse (Chairman)
/s/John A. Lienkaemper
/s/Edward H. Elms
Compensation Committee Interlocks and Insider Participation. No
executive officer of the Company or the Savings Bank has served as a member of
the compensation committee of another entity, one of whose executive officers
served on the Personnel Committee. No executive officer of the Company or the
Savings Bank has served as a director of another entity, one of whose
executive officers served on the Personnel Committee. No executive officer of
the Company or the Savings Bank has served as a member of the compensation
committee of another entity, one of whose executive officers served as a
director of the Company or the Savings Bank.
9
Performance Graph. The following graph compares the cumulative total
shareholder return on the Company's Common Stock with the cumulative total
return on the Nasdaq U.S. Companies Index and a peer group of the SNL
Securities, Inc. $250,000 to $500,000 Asset Thrift Index. Total return
assumes (i) the reinvestment of all dividends and (ii) the value of the
investment in the Company's Common Stock and each index was $100 at the close
of trading on October 3, 1997, the date on which the Company's Common Stock
began trading on the Nasdaq National Market.
[LINE GRAPH APPEARS HERE]
Period Ended
-----------------------------------------
10-03-97 03-31-98 09-30-98 03-31-99
-------- -------- -------- --------
Oregon Trail Financial Corp. $100.00 $106.26 $78.31 $78.26
NASDAQ U.S. Companies Index 100.00 107.19 99.47 144.26
SNL $250,000 to $500,00 Asset
Thrift Index 100.00 116.82 92.65 99.50
- ------------------------------------------------------------------------------
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
- ------------------------------------------------------------------------------
Section 16(a) of the Exchange Act requires the Company's executive
officers and directors, and persons who own more than 10% of any registered
class of the Company's equity securities, to file reports of ownership and
changes in ownership with the SEC. Executive officers, directors and greater
than 10% shareholders are required by regulation to furnish the Company with
copies of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms it has received
and written representations provided to the Company by the above referenced
persons, the Company believes that during the fiscal year ended March 31, 1999
10
all filing requirements applicable to its reporting officers, directors and
greater than 10% shareholders were properly and timely complied with.
- ------------------------------------------------------------------------------
TRANSACTIONS WITH MANAGEMENT
- ------------------------------------------------------------------------------
Federal regulations require that all loans or extensions of credit to
executive officers and directors of insured financial institutions must be
made on substantially the same terms, including interest rates and collateral,
as those prevailing at the time for comparable transactions with other
persons, except for loans made pursuant to programs generally available to all
employees, and must not involve more than the normal risk of repayment or
present other unfavorable features. The Company's subsidiary financial
institution is therefore prohibited from making any new loans or extensions of
credit to executive officers and directors at different rates or terms than
those offered to the general public, except for loans made pursuant to
programs generally available to all employees, and has adopted a policy to
this effect. In addition, loans made to a director or executive officer in an
amount that, when aggregated with the amount of all other loans to such person
and his or her related interests, are in excess of the greater of $25,000 or
5% of the institution's capital and surplus (up to a maximum of $500,000) must
be approved in advance by a majority of the disinterested members of the Board
of Directors. At March 31, 1999, loans to directors and executive officers
totalled approximately $1.4 million.
- ------------------------------------------------------------------------------
AUDITORS
- ------------------------------------------------------------------------------
The Board of Directors has appointed Deloitte & Touche LLP, independent
public accountants, to serve as the Company's auditors for the fiscal year
ending March 31, 2000. A representative of Deloitte & Touche LLP will 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.
- ------------------------------------------------------------------------------
OTHER MATTERS
- ------------------------------------------------------------------------------
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.
- ------------------------------------------------------------------------------
MISCELLANEOUS
- ------------------------------------------------------------------------------
The cost of solicitation of proxies will be borne by the Company. In
addition to solicitations by mail, directors, officers and regular employees
of the Company may solicit proxies personally or by telephone without
additional compensation.
The Company's Annual Report to Stockholders has been mailed to
stockholders as of the close of business on the Record Date. Any stockholder
who has not received a copy of such Annual Report may obtain a copy by writing
to the Secretary of the Company. The Annual Report is not to be treated as
part of the proxy solicitation material or as having been incorporated herein
by reference.
11
- ------------------------------------------------------------------------------
STOCKHOLDER PROPOSALS
- ------------------------------------------------------------------------------
In order to be eligible for inclusion in the Company's proxy solicitation
materials for next year's Meeting of Stockholders, any stockholder proposal to
take action at such meeting must be received at the Company's main office at
2055 First Street, Baker City, Oregon, no later than April 1, 2000. Any such
proposals shall be subject to the requirements of the proxy solicitation rules
adopted under the Exchange Act.
The Company's Articles of Incorporation generally provide that
shareholders will have the opportunity to nominate directors of the Company if
such nominations are made in writing and are delivered to the Secretary of the
Company 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 Company no later than the
close of the tenth day following the date on which notice of the meeting was
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 Company 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 Company's books and (b) the class and number of shares of the Company
which are beneficially owned by such shareholder.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Zane F. Lockwood
ZANE F. LOCKWOOD
CORPORATE SECRETARY
Baker City, Oregon
June 25, 1999
- ------------------------------------------------------------------------------
FORM 10-K
- ------------------------------------------------------------------------------
A copy of the Company's Form 10-K for the fiscal year ended March 31, 1999, as
filed with the SEC will be furnished without charge to stockholders as of the
close of business on the Record Date upon written request to Zane F. Lockwood,
Corporate Secretary, Oregon Trail Financial Corp., 2055 First Street, Baker
City, Oregon 97814.
- ------------------------------------------------------------------------------
12
REVOCABLE PROXY
OREGON TRAIL FINANCIAL CORP.
- ------------------------------------------------------------------------------
ANNUAL MEETING OF STOCKHOLDERS
JULY 27, 1999
- ------------------------------------------------------------------------------
The undersigned hereby appoints the official Proxy Committee of the Board
of Directors of Oregon Trail Financial Corp. with full powers of substitution,
as attorneys and proxies for the undersigned, to vote all shares of common
stock of Oregon Trail Financial Corp. ("Company") which the undersigned is
entitled to vote at the Annual Meeting of Stockholders ("Meeting"), to be held
at the Sunridge Inn, One Sunridge Lane, Baker City, Oregon, on Tuesday, July
27, 1999, at 10:00 a .m., local time, and at any and all adjournments thereof,
as indicated.
VOTE
FOR WITHHELD
1. The election as director of the nominees [ ] [ ]
listed below (except as marked to the
contrary below).
Albert H. Durgan
Edward H. Elms
Jerry F. Aldape
INSTRUCTIONS: To withhold your vote
for any individual nominee, write the
nominee's name on the line below.
-------------------------------------
2. In their discretion, upon such other
matters as may properly come before
the meeting.
The Board of Directors recommends a vote "FOR" the above proposal.
- ------------------------------------------------------------------------------
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED,
THIS PROXY WILL BE VOTED FOR THE PROPOSITION 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.
- ------------------------------------------------------------------------------
<PAGE
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 Company
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 Company prior to the
execution of this proxy of the Notice of Annual Meeting of Stockholders, a
Proxy Statement for the Annual Meeting of Stockholders, and the 1999 Annual
Report to Stockholders.
Dated: , 1999
----------------------
- ---------------------------- -----------------------------
PRINT NAME OF SHAREHOLDER PRINT NAME OF SHAREHOLDER
- ---------------------------- -----------------------------
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, only one signature is required, but
each holder should sign, if possible.
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED
POSTAGE-PREPAID ENVELOPE.