SCHEDULE 14C INFORMATION
INFORMATION STATEMENT PURSUANT TO SECTION 14(C) OF THE SECURITIES EXCHANGE ACT
OF 1934
Check the appropriate box:
[ ] Preliminary Information Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14c-5(d)(2))
[ X ] Definitive Information Statement
PACIFIC SECURITY FINANCIAL, INC.
(Name of Registrant as Specified in Its Charter)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14c-5(g).
[ X ] Fee Computed on Table Below Per Exchange Act Rules 14c-5(g) and 0-11.
1) Title of Each Class of Securities to Which Transaction Applies: NONE
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2) Aggregate Number of Securities to Which Transaction Applies: NONE
----
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.): -$0- THE TRANSACTION IS NOT OF
THE TYPE REQUIRING A FILING FEE UNDER RULE 0-11
4) Proposed Maximum Aggregate Value of Transaction: $-0-
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5) Total fee paid: $-0-
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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: N/A
(2) Form, Schedule, or Registration Statement No: N/A
(3) Filing Party: N/A
(4) Date Filed: N/A
NOTICE OF 2000 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 10, 2001
NOTICE IS HEREBY GIVEN that the 2000 Annual Meeting of Shareholders of PACIFIC
SECURITY FINANCIAL, INC. [formerly Pacific Security Companies] (the "Company"),
will be held at 10:00 a.m. (PST), on Tuesday , April 10, 2001, at the Sixth
Floor Conference Room of the Peyton Building, 10 North Post Street, Spokane,
Washington 99201, to consider and act upon the following matters:
1. To elect four (4) members to the Board of Directors to serve for a
three-year term or until his or her successor is elected and qualified;
2. To approve the engagement of PricewaterhouseCoopers LLP as independent
certified public accountants for the Company for the fiscal year ending July 31,
2001;
3. To transact such other business as may properly come before the meeting
or any adjournment thereof.
Only Shareholders of record on the books of the Company at the close of business
on February 28, 2001 will be entitled to notice of and to vote at the meeting or
any adjournment thereof.
By Order of the Board of Directors
Wayne E. Guthrie, Chairman of the Board
PACIFIC SECURITY FINANCIAL, INC.
[FORMERLY PACIFIC SECURITY COMPANIES]
10 NORTH POST STREET
SPOKANE, WA 99201
_____________
INFORMATION STATEMENT
For the 2000 Annual Meeting of Shareholders
To be Held April 10, 2001
This Information Statement is furnished in connection with matters to be voted
at the Annual Meeting of Shareholders of PACIFIC SECURITY FINANCIAL, INC., (the
"Company") to be held at 10:00 a.m. (PST), on Tuesday, April 10, 2001 at the
Sixth Floor Conference Room of the Peyton Building, 10 North Post Street,
Spokane, Washington 99201, and at any and all adjournments thereof with respect
to the matters referred to in the accompanying notice. This Information
Statement is first being mailed to Shareholders on or about March 15, 2001.
Management of the Company is the record and beneficial owner, or has voting
authority for 953,121 shares (approximately 84.6%) of the outstanding common
stock and 3,000 shares (100%) of the outstanding preferred stock of the Company.
It is management's intention to vote all of its shares in favor of each matter
to be considered by the Shareholders, thereby assuring approval. Although,
approval of each matter to be considered by the Shareholders is assured, the
Company is required by applicable law to submit each of the matters to be
considered to the vote of all Shareholders. There are no dissenters' rights
applicable with respect to any matter to be considered by the Shareholders.
The Company has determined February 28, 2001 as the record date with respect to
the determination of Shareholders entitled to vote at the Annual Meeting of
Shareholders.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED
NOT TO SEND US A PROXY.
PURPOSES OF THE ANNUAL MEETING
ELECTION OF DIRECTORS.
At the Annual Meeting, Shareholders will be asked to consider and to take action
on the election of four (4) members to the Board of Directors to serve for a
three-year term or until his or her successor is elected and qualified (SEE "
ELECTION OF DIRECTORS").
APPROVAL OF ENGAGEMENT OF AUDITORS.
At the Annual Meeting, Shareholders will be asked to consider and vote upon the
selection of PricewaterhouseCoopers LLP as the Company's independent auditors
for the fiscal year ending July 31, 2001 (SEE "SELECTION OF AUDITORS").
DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
The following information as of July 31, 2000 is provided with respect to each
director and executive officer of the Company:
YEAR FIRST TERM AS
ELECTED AS DIRECTOR
NAME AGE DIRECTOR EXPIRES POSITION (Date elected and
position)
- ------------------- --- ---------- --------- -----------------------------
Wayne E. Guthrie 80 1970 2003 Chairman of the Board
(January 17, 1970); Director
David L. Guthrie 36 1987 2001 President (February 18, 1999);
Director
Kevin M. Guthrie 45 1980 2001 Vice President (May 2, 1985);
Director
Donald J. Migliuri 53 1992 2002 Secretary/Treasurer
(May 29, 1990); Director
Constance Guthrie 66 1981 2003 Director
Robert N. Codd 70 1994 2001 Director
Julian Guthrie 35 1998 2001 Director
FAMILY RELATIONSHIPS
Kevin M. Guthrie, David L. Guthrie and Julian Guthrie are the children of Wayne
E. Guthrie. Constance M. Guthrie is the wife of Wayne E. Guthrie.
BUSINESS EXPERIENCE
Wayne E. Guthrie, Chairman of the Board of Pacific Security Financial, Inc. Mr.
Guthrie has over 50 years of experience in areas of construction, financing of
real estate and personal property, and real estate investments.
David L. Guthrie, President of Pacific Security Financial, Inc. since 1999 and
Vice President since 1989. Mr. Guthrie was formerly a financial consultant with
Merrill Lynch in Spokane, Washington. Mr. Guthrie is the Chief Executive Officer
and a director of Cornerstone Realty Advisors, Inc. Mr. Guthrie is a NASD
licensed securities sales person (registered representative) and broker-dealer
(general securities principal). He is a licensed real estate broker in the state
of Washington and has obtained the CCIM designation (certified commercial
investment member) awarded by the commercial real estate investment institute.
Kevin M. Guthrie, Vice President of Pacific Security Financial, Inc. since 1985.
Mr. Guthrie has served as property manager for the Company since 1976. Mr.
Guthrie is also an officer and director of Pacific Realty Management.
Donald J. Migliuri, Treasurer of Pacific Security Financial, Inc. since 1990 and
Secretary since 1991. Mr. Migliuri is a Certified Public Accountant and has
served as an accounting officer with various diversified financial services
companies for over 19 years. He also is a certified management accountant (CMA)
and has a Masters Degree in Business Administration.
Constance M. Guthrie. Mrs. Guthrie is a housewife and has not been employed
outside the home during the past ten years.
Robert N. Codd. Mr. Codd is employed by Pacific Security Financial, Inc. in its
leasing and real estate activities. He was employed by the Company from 1970 to
1979 and was rehired in November 1992. Prior to being rehired, he was a
commercial realtor and property manager.
Julian Guthrie. Ms. Guthrie is a reporter for the San Francisco Examiner. She
covered general news for the paper for two years and in 1998 was named education
reporter, responsible for covering all education issues in the Bay Area. Before
that, she was senior editor of a lifestyle magazine in San Francisco and also
worked as a freelance writer for the Examiner, covering breaking business,
political and lifestyle stories. She currently lives in San Francisco.
COMMITTEES OF THE BOARD
The Company has no standing audit, nominating or compensation committees, or
committees performing similar functions.
BOARD MEETINGS
During the fiscal year ended July 31, 2000, there was one special meeting of the
Board and one regular meeting. All the incumbent directors except Julian
Guthrie were present at the regular meeting of the Board of Directors. The
special meeting was accomplished with the unanimous consent of all directors.
LEGAL PROCEEDINGS
As of the date hereof, it is the opinion of management that there is no material
proceeding to which any director, officer or affiliate of the registrant, any
owner of record or beneficially of more than five percent of any class of voting
securities of the registrant, or any associate of any such director, officer,
affiliate of the registrant, or security holder is a party adverse to the
registrant or any of its subsidiaries or has a material interest adverse to the
registrant or any of its subsidiaries
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
LITIGATION SETTLEMENT
On January 5, 1998, in connection with pending litigation between the company
and all of the
Company's officers and directors and certain minority stockholders of the
Company ("the Minority Stockholders"), who are children of Wayne E. Guthrie, the
Company's Chief Executive Officer and largest individual Company common
stockholder, the Company agreed to settle all claims of the Minority
Stockholders and redeem all Company common shares held by the Minority
Stockholders by paying approximately $317,000 in cash, distributing Company real
property with an estimated fair value of $643,500 and the issuance of notes
payable, bearing interest at 7% per annum, aggregating approximately $729,000.
The Company acquired 408,419 of its common shares pursuant to this agreement,
which were retired. In addition, the Company obtained a covenant not-to-compete
for five years from one of the Minority Stockholders in return for the issuance
of a $125,000 note payable bearing interest at 7% per annum. Concurrently,
certain Company officers and directors issued notes payable aggregating
approximately $236,000 to one of the Minority Stockholders. In connection with
the settlement, the company also agreed to reimburse the Minority Stockholders
for legal costs aggregating $150,000. Total expenses incurred by the Company
during the year ended July 31,1998 related to this settlement were approximately
$300,000.
YELLOWFRONT BUILDING
On July 31,1998, the Company transferred its ownership of the Yellowfront
Building, a commercial property located in Coeur d'Alene, Idaho, to a family
partnership formed by Wayne E. Guthrie in exchange for 200,000 shares of Class A
common stock. The transfer was recorded at fair value of the property and
resulted in a net gain to the company of approximately $420,000 during the year
ended July 31, 1998.
NOTE RECEIVABLE
A certain former stockholder is indebted to the Company by a note secured by
real estate bearing interest at 12.5% (prime plus 4% adjusted annually) in the
outstanding amounts (including interest) of $203,550 and $217,002 at July 31,
2000 and 1999, respectively.
INSTALLMENT CONTRACTS, MORTGAGE NOTES AND NOTES PAYABLE
At July 31, 2000 and 1999, the following related-party notes payable were
outstanding:
INTEREST MONTHLY
2000 1999 RATE PAYMENT
------------ ------------ ---------- ----------
Wayne E. Guthrie $ 135,457 $ 181,675 7.00% $ 4,789
Wayne/Constance
Guthrie 16,829 156,020 6.75% $ 2,000
------------ ------------ ---------- ----------
$ 152,286 $ 377,695
============ ============
The scheduled future maturities of these notes are as follows:
YEAR ENDING
JULY 31,
---------------
2001 $ 64,420
2002 $ 60,110
2003 $ 27,756
---------
$ 152,286
=========
DEBENTURE BONDS
Included in debenture bonds at July 31, 2000 and 1999 is approximately $163,000
and $193,000, respectively, that is payable to related parties. These bonds bear
interest at the prevailing market rate on the date of issuance.
ACCRUED EXPENSES AND OTHER LIABILITIES
At July 31, 2000 and 1999, the following demand notes were payable to related
parties:
2000 1999
--------------------- ----------------------
INTEREST INTEREST
AMOUNT RATE AMOUNT RATE
--------- ---------- ---------- ----------
Wayne E. Guthrie $ 73,579 8.50% $ 115,746 6.75%
Constance Guthrie - - 91,692 6.75%
Other stockholders 32,518 8.50% 47,152 6.75%
--------- ---------- ---------- ----------
$ 106,097 $ 254,590
========= ==========
INTEREST INCOME AND EXPENSE
The approximate amount of related-party interest income and expense included in
the accompanying consolidated statements of operations during the years ended
July 31, 2000, 1999 and 1998 is as follows:
2000 1999 1998
--------- --------- ---------
Interest income $ 27,000 $ 36,000 $ 53,000
Interest expense 32,000 53,000 64,000
PARTICIPATIONS
The President of Cornerstone Realty Advisors, Inc., a subsidiary of the Company,
has directly invested in certain loans through participation agreements. The
total amount of such participation was $100,000 at July 31, 2000.
REMUNERATION AND OTHER COMPENSATION OF MANAGEMENT
The following table lists, on an accrual basis, for each of the three years
ended July 31, 2000, the remuneration paid by the Company to any officers or
directors in excess of $100,000 and to all officers and directors as a group who
were officers or directors of the Company at any time during the year ended July
31, 2000:
Name of
Individual Capacities Annual Compensation
or Number of in Which Fiscal ----------------------
Persons in Group Served Year Salary Bonus
- ---------------------- --------------------------- ----------- ---------- ----------
David L. Guthrie President and Director 2000 $ 105,086 $ 50,500
Vice President and Director 1999 101,045 7,500
Vice President and Director 1998 98,580 10,000
Kevin M. Guthrie Vice President and Director 2000 $ 105,515 $ 50,500
Vice President and Director 1999 101,396 7,500
Vice President and Director 1998 98,862 10,000
Officers and Directors 2000 $ 400,659 $ 121,600
as a group (5)
The Company has no qualified or nonqualified stock option plans as of July 31,
2000.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The Company has two classes of voting securities entitled to vote at the Annual
Meeting. At the date hereof, there are 1,126,103 shares of Common Stock
outstanding and 3,000 shares of Class A Preferred Stock outstanding. Each share
of Common Stock and Class A Preferred Stock is entitled to one vote on each
matter to be considered. The presence in person of the holders of a majority of
the outstanding voting shares is necessary to constitute a quorum at the Annual
Meeting. Approval of the proposals to be presented at the Annual Meeting will
require the affirmative vote of the holders of a majority of the shares present
at the meeting. There is no cumulative voting for directors
The Company has determined February 28, 2001, as the record date with respect to
the determination of Shareholders entitled to vote at the 2000 Annual Meeting of
Shareholders.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
(a) SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Set forth below is certain information concerning parties, excluding management,
who are known by the Company to directly own more than 5% of any class of the
Company's voting shares on July 31, 2000: none.
(b) SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth as of July 31, 2000 information concerning the
direct ownership of each class of equity securities by all directors and all
directors and officers of the Company as a group:
AMOUNT OF
SHARES AND
NATURE OF
TITLE BENEFICIAL PERCENT
OF CLASS NAME OF BENEFICIAL OWNER OWNERSHIP OF CLASS
- ---------------- --------------------------- ------------- -------------
Common stock Wayne E. Guthrie 142,541.5 12.52
Common stock Constance Guthrie 142,541.5 12.52
Common stock Kevin Guthrie 222,718 (1) 19.56
Common stock David Guthrie 222,718 (1) 19.56
Common stock Julian Guthrie 196,838.4 17.28
------------- -------------
Common stock All directors and
officers as a group 927,357.4 81.44
============= =============
Preferred stock Wayne E. or
Constance Guthrie 2,000 66.70
Preferred stock Constance Guthrie 1,000 33.30
------------- -------------
Preferred stock All directors and
officers as a group 3,000 100.00
============= =============
1. At July 31, 2000 Kevin and David Guthrie each exercised voting rights
over an additional 18,706 (1.64%) shares of this class through the holdings of
their minor children. Subsequent to July 31, 2000 Kevin and David Guthrie each
sold 5,804 shares of the holdings of their minor children.
MATTERS TO BE CONSIDERED AND VOTED UPON AT
THE ANNUAL MEETING OF SHAREHOLDERS
1. ELECTION OF DIRECTORS.
At the Annual Meeting, Shareholders will be asked to consider and to take
action on the election of four (4) members to the Board of Directors to serve
for a three-year term or until his or her respective successor is elected and
qualified.
The nominees for director, together with certain information with respect to him
or her, is as follows:
Shares Owned Beneficially directly
or indirectly, as of 2/28/01
----------------------------------
Name Age Director Since Common Preferred
- ----------------- --- --------------- ---------------- ----------------
David L. Guthrie 36 1987 222,718 -0-
Kevin M. Guthrie 45 1980 222.718 -0-
Julian Guthrie 35 1998 196,838.4 -0-
Robert N. Codd 70 1994 -0- -0-
DAVID L. GUTHRIE. President of Pacific Security Financial, Inc. since 1999 and
Vice President since 1989. Mr. Guthrie was formerly a financial consultant with
Merrill Lynch in Spokane, Washington. Mr. Guthrie is the Chief Executive Officer
and a director of Cornerstone Realty Advisors, Inc. Mr. Guthrie is a NASD
licensed securities sales person (registered representative) and broker-dealer
(general securities principal). He is a licensed real estate broker in the state
of Washington and has obtained the CCIM designation (certified commercial
investment member) awarded by the commercial real estate investment institute.
KEVIN M. GUTHRIE. Vice President of Pacific Security Financial, Inc. since 1985.
Mr. Guthrie has served as property manager for the Company since 1976. Mr.
Guthrie is also an officer and director of Pacific Realty Management.
JULIAN GUTHRIE. Ms. Guthrie is a reporter for the San Francisco Examiner. She
covered general news for the paper for two years and in 1998 was named education
reporter, responsible for covering all education issues in the Bay Area. Before
that, she was senior editor of a lifestyle magazine in San Francisco and also
worked as a freelance writer for the Examiner, covering breaking business,
political and lifestyle stories. She currently lives in San Francisco.
ROBERT N. CODD. Mr. Codd is employed by Pacific Security Financial, Inc. in its
leasing and real estate activities. He was employed by the Company from 1970 to
1979 and was rehired in November 1992. Prior to being rehired, he was a
commercial realtor and property manager.
2. SELECTION OF AUDITORS
For the fiscal year ended July 31, 2000, the Company retained Price Waterhouse
Coopers LLP as its independent auditors. It shall be the Company's practice to
Refer to the Shareholders the selection of the firm to audit its annual
financial statements.
The Board of Directors recommends a vote for the appointment of Price Waterhouse
Coopers LLP as the independent auditors for the Company for the fiscal year
Ending July 31, 2001. It is not expected that a representative of Price
Waterhouse Coopers LLP will be present at the Annual Meeting.
3. OTHER MATTERS
Management does not know of any other matters likely to be brought before the
2000 Annual Meeting of Shareholders. However, in the event any other matters
properly come before the 2000 Annual Meeting of Shareholders, such matters will
be acted upon accordingly.
FINANCIAL AND OTHER INFORMATION
This information is incorporated by reference to the consolidated balance sheets
and the related consolidated statements of operations, stockholders' equity and
cash flows appearing in the Company's 2000 Annual Report, the Form 10K for the
fiscal year ended July 31, 2000 and the Form 10Q for the quarterly period ended
October 31, 2000.
SHAREHOLDER PROPOSALS
Proposals by shareholders intended to be presented at the next Annual Meeting of
Shareholders to be held in 2002, must be received by the Secretary of the
Company on or before October 1, 2001, in order to be included in the information
statement for that meeting. Proposals should be directed to Mr. Donald J.
Migliuri, Secretary.
a copy of the company's annual report for the period ended july 31, 2000 (form
10-K) as filed with the securities and exchange commission, including the
financial statements and schedules thereto, may be obtained by shareholders on
EDGAR at the Securities and Exchange Commission's website at www.sec.gov, or
without charge by writing to:
PACIFIC SECURITY FINANCIAL, INC.
325 PEYTON BUILDING, 10 NORTH POST STREET
SPOKANE, WASHINGTON 99201
WAYNE E. GUTHRIE, CHAIRMAN OF THE BOARD MARCH 12, 2001