<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted
[X] Definitive Proxy Statement by Rule 14a-6(e)(2))
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
PELICAN FINANCIAL, INC.
------------------------------------------------
(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
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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
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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[LETTERHEAD]
March 28, 2000
Dear Stockholder:
We invite you to attend our first annual meeting of the stockholders
of Pelican Financial, Inc., which will be held on Tuesday, April 25, 2000, at
9:30 a.m. local time at The Crowne Plaza Hotel, 610 Hilton Boulevard, Ann Arbor,
Michigan.
The enclosed Notice of Annual Meeting and Proxy Statement describe the
formal business to be transacted at the meeting. During the meeting, members of
management will also report on our operations and other matters affecting the
Pelican Financial. Our directors and officers, as well as a representative of
our independent auditors, Crowe Chizek and Company LLP, are expected to be
present to respond to any questions that stockholders may have.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, SIGN,
AND DATE THE ENCLOSED PROXY CARD AND RETURN IT IN THE ACCOMPANYING POSTAGE-PAID
ENVELOPE AS PROMPTLY AS POSSIBLE. This will not prevent you from attending the
meeting and voting in person, but will assure that your vote is counted if you
are unable to attend the meeting. YOUR VOTE IS VERY IMPORTANT.
Refreshments will be available prior to the Meeting, during which time
the members of the Board of Directors hope to visit with you personally.
Sincerely,
/s/ Charles C. Huffman
-------------------------------------
Charles C. Huffman
President and Chief Executive Officer
<PAGE>
- --------------------------------------------------------------------------------
PELICAN FINANCIAL, INC.
315 EAST EISENHOWER
ANN ARBOR, MICHIGAN 48108
(800) 765-5562
- --------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 25, 2000
- --------------------------------------------------------------------------------
To our shareholders:
The Annual Meeting of Shareholders of Pelican Financial, Inc. will be
held on Tuesday, April 25, 2000, at 9:30 a.m. local time at The Crowne Plaza
Hotel, 610 Hilton Boulevard, Ann Arbor, Michigan.
At our meeting, we will ask you to act on the following matters:
1. ELECTION OF DIRECTORS. Elect three persons to the Board of Directors
to serve for a term of three years. Charles C. Huffman, Brenda L. Jones, and
Michael D. Surgen have been selected as the nominees.
2. RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS.
Ratify the appointment of Crowe Chizek & Company, LLP as independent public
accountants the year ending December 31, 2000.
If you sign the proxy card enclosed, you also permit the proxy holder
to vote, in their discretion, upon other matters that may come before the annual
meeting. As of the date of mailing, the Board of Directors is not aware of any
other matters that may come before the annual meeting.
If you were a shareholder of record at the close of business on
March 10, 2000, you may vote at the meeting or at any postponement or
adjournment of the meeting.
IT IS IMPORTANT THAT ALL SHAREHOLDERS VOTE. WE URGE YOU TO SIGN AND
RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE, REGARDLESS OF WHETHER OR NOT
YOU PLAN TO ATTEND THE MEETING IN PERSON. IF YOU DO ATTEND THE MEETING, YOU MAY
THEN WITHDRAW YOUR PROXY AND VOTE IN PERSON.
By Order of the Board of Directors
/s/ Koula M. Kovach
-------------------------------------
Koula M. Kovach
Secretary
Dated: March 28, 2000
Ann Arbor, Michigan
<PAGE>
- --------------------------------------------------------------------------------
PROXY STATEMENT
FOR
PELICAN FINANCIAL, INC.
315 EAST EISENHOWER
ANN ARBOR, MICHIGAN 48108
(800) 765-5562
- --------------------------------------------------------------------------------
This proxy statement contains information about the annual meeting of
shareholders of Pelican Financial, Inc. to be on Tuesday, April 25, 2000, at
9:30 a.m. local time at The Crowne Plaza Hotel, 610 Hilton Boulevard, Ann Arbor,
Michigan, and at any postponements or adjournments of the meeting.
INFORMATION ABOUT THE ANNUAL MEETING AND VOTING
WHY DID YOU SEND ME THIS PROXY STATEMENT?
We sent you this Proxy Statement and the enclosed proxy card because
you were a shareholder of Pelican Financial on March 10, 2000. Our Board of
Directors chose this day as the record date for shareholders entitled to vote at
the Annual Meeting of Shareholders. The Board of Directors is soliciting your
vote at the Annual Meeting of Shareholders.
This Proxy Statement summarizes the information you need to know to
cast an informed vote at the meeting. However, you do not need to attend the
meeting to vote your shares. Instead, you may simply complete, sign and return
the enclosed proxy card.
We began sending this Proxy Statement, Notice of Annual Meeting and the
enclosed proxy card on or about March 28, 2000 to all shareholders entitled to
vote. On the record date, there were 3,992,836 shares of our common stock issued
and outstanding. The common stock is our only class of stock outstanding. We are
also sending our Annual Report/Form 10-K for the fiscal year ended December 31,
1999 along with this Proxy Statement. The Annual Report/Form 10-K is not to be
deemed a part of the material for the solicitation of proxies.
HOW DO I VOTE BY PROXY?
You vote your proxy by completing the proxy card enclosed in accordance
with its instructions, signing and dating the proxy and returning it in the
postage-paid envelope. You may also just sign and date your proxy card and
return it. Whether you plan to attend the meeting or not, we urge you to
complete, sign and date the enclosed proxy card and to return it promptly in the
envelope provided. Returning the proxy card will not affect your right to attend
the meeting and vote.
If you properly fill in your proxy card and send it to us in time to
vote, your "proxy" (one of the individuals named on your proxy card) will vote
your shares as you have directed. If you sign the proxy card but do not make
specific choices, your proxy will vote your shares as recommended by the Board
of Directors as follows:
-- "FOR" the election of all three nominees for director, and
-- "FOR" ratification of the appointment of Crowe Chizek and
Company, LLP as independent accountants for the year ending
December 31, 2000.
The proxy card confers authority on the proxy named in the proxy card
to vote with respect to:
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1. The election of any person as a director should the nominee be
unable to serve, or for good cause, will not serve, matters
incident to the conduct of the meeting, and
2. Other proposals for which management did not have notice at least
45 days prior to the date on which we mailed our notice of annual
meeting for the prior year's annual meeting of stockholders.
On these other matters, your proxy will vote in accordance with the
recommendation of the Board of Directors, or, if no recommendation is given, in
their own discretion. At the time this Proxy Statement was mailed, we knew of no
matters that needed to be acted upon at the meeting, other than those discussed
in this Proxy Statement.
HOW MANY VOTES DO I HAVE?
The number of votes you have is dependent on the number of shares of
common stock you own. Each share of common stock entitles you to one vote. The
proxy card indicates the number of shares of common stock that you own.
CAN I CHANGE MY VOTE AFTER I RETURN MY PROXY CARD?
Yes. Even after you have submitted your proxy, you may change your vote
at any time before the proxy is exercised if you file with the Secretary of the
Company either a notice of revocation or a duly executed proxy bearing a later
date. The powers of the proxy holders will be suspended if you attend the
meeting in person and so request. Attendance at the meeting will not by itself
revoke a previously granted proxy.
HOW DO I VOTE IN PERSON?
If you plan to attend the meeting and vote in person, we will give you
a ballot form when you arrive. However, if your shares are held in the name of
your broker, bank, or other nominee, you must bring a proxy card and letter from
the nominee authorizing you to vote the shares and indicating that you are the
beneficial owner of the shares on March 10, 2000, the record date for voting.
WHAT CONSTITUTES A QUORUM?
The presence at the meeting, in person or by proxy, of the holders of a
majority of the shares of common stock outstanding on the record date will
constitute a quorum, permitting the conduct of business at the meeting. Proxies
that are marked as abstentions will be included in the calculation of the number
of shares considered to be present at the meeting.
WHAT VOTE IS REQUIRED FOR EACH PROPOSAL?
The three nominees for director who receive the most votes will be
elected. So, if you do not vote for a particular nominee or you indicate
"withhold authority to vote" for a particular nominee on your proxy card, your
vote will not count either "for" or "against" the nominee.
In order to ratify the selection of independent accountants, the
accountants must receive the affirmative vote of a majority of the votes
represented and voting at the meeting. So, if you "abstain" from voting, it has
the same effect as if you voted "against" this proposal.
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In order to approve any other matters that may properly come before the
meeting, generally, a majority of those votes cast by stockholders shall be
sufficient to pass on the matter. However, there may be occasions where a
greater vote is required by law, or by our Certificate of Incorporation or
Bylaws.
WHAT ARE THE COSTS OF SOLICITATION OF PROXIES?
We will bear the costs of this solicitation, including the expense of
preparing, assembling, printing and mailing this Proxy Statement and the
material used in this solicitation of proxies. The proxies will be solicited
principally through the mails, but directors, officers and regular employees of
the Company may solicit proxies personally or by telephone. Although there is no
formal agreement to do so, we may reimburse banks, brokerage houses and other
custodians, nominees and fiduciaries for their reasonable expense in forwarding
these proxy materials to their principals. In addition, we may pay for and
utilize the services of individuals or companies we do not regularly employ in
connection with the solicitation of proxies.
STOCK OWNERSHIP
WHO ARE THE LARGEST OWNERS OF PELICAN FINANCIAL'S COMMON STOCK?
Persons and groups owning in excess of 5% of the common stock are
required to file reports with the Securities and Exchange Commission regarding
their ownership pursuant to the Securities Exchange Act of 1934. We know of no
person or entity, including any group of persons, who or which is the beneficial
owner of more than 5% of the outstanding shares of common stock on the record
date. "Beneficial ownership" is a technical term broadly defined by the
Securities and Exchange Commission to mean more than ownership in the usual
sense. So, for example, you beneficially own common stock not only if you hold
it directly, but also if you indirectly, through a relationship, contract, or
understanding, have, or share, the power to vote the stock, to sell it, or you
have the right to acquire it within 60 days of the record date:
HOW MUCH STOCK DO PELICAN FINANCIAL'S DIRECTORS AND OFFICERS OWN?
The following table shows the beneficial ownership of the Company's
common stock as of March 10, 1999 by (i) our President and Chief Executive
Officer; (ii) our four most highly compensated executive officers in 1998; (iii)
each director and nominee for director and (iv) by all directors and executive
officers as a group.
BENEFICIAL
OWNERSHIP OF PERCENT OF
NAME OF INDIVIDUAL PELICAN FINANCIAL (1) TOTAL
- ------------------ -------------------- ----------
Nominees for Director:
Charles C. Huffman...................... 1,821,850(2) 45.63%
Brenda L. Jones......................... 228(3) 0.01
Michael D. Surgen....................... 0(4) 0.00
Directors Continuing in Office:
Michael L. Hogan........................ 5,400(5) 0.14
Koula M. Kovach......................... 13,336(6) 0.33
Raleigh E. Allen, Jr.................... 625(3) 0.02
Ernest G. Merlanti...................... 8,000(3) 0.20
S. Lynn Stokes.......................... 0(3) 0.00
All directors and executive officers as
a group (8 persons)........................ 1,849,439(7) 46.33
(FOOTNOTES ON NEXT PAGE)
3
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(FOOTNOTES FROM PREVIOUS PAGE)
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(1) Unless otherwise indicated, includes all shares held directly by the
named individuals as well as by spouses, minor children in trust, and
other forms of indirect ownership, over which shares the named
individual effectively exercises sole voting and investment power with
respect to the indicated shares.
(2) Excludes 51,600 shares of common stock underlying options that are not
exercisable within 60 days of the record date. Includes 9,000 shares
of common stock owned by the spouse of Mr. Huffman for which Mr.
Huffman disclaims beneficial ownership. Excludes 588,350 shares of
common stock that are held in two trusts for the benefit of his two
adult children for which Mr. Huffman disclaims beneficial ownership.
(3) Excludes 2,500 shares of stock underlying options that are not
exercisable within 60 days of the record date.
(4) Excludes 61,000 shares of common stock underlying options not
exercisable within 60 days of the record date.
(5) Includes 400 shares of common stock underlying options exercisable
within 60 days of the record date.
(6) Includes 8,000 shares of common stock underlying options exercisable
within 60 days of the record date.
(7) Includes 9,800 shares of common stock underlying options exercisable
within 60 days of the record date. Excludes 588,350 shares of common
stock that are held in two trusts for the benefit of Mr. Huffman's two
adult children.
DISCUSSION OF PROPOSALS RECOMMENDED BY THE BOARD
PROPOSAL 1: ELECTION OF DIRECTORS
GENERAL. We have nominated three directors for election at the annual
meeting, which is the number of directorships fixed for the election of
directors.
We will nominate the persons named below, all of whom are present
members of the Board of Directors of the Company, for election to serve until
the annual meeting of shareholders for the year ended December 31, 2002. The
Board will cast its votes to effect the election of these nominees. If any
nominee is unable to serve, your proxy may vote for another nominee proposed by
the Board.
THE NOMINEES. The directors standing for reelection are:
NAME OF INDIVIDUAL AGE (1) PRINCIPAL OCCUPATION FOR LAST FIVE YEARS
- ------------------ ------- ----------------------------------------
Charles C. Huffman 56 Chief Executive Officer and Chairman of the
Board of Pelican Financial and Pelican
National Bank since March 1997. Chairman of
the Board of Washtenaw Mortgage Company
sincefounding in 1981.
Brenda L. Jones 36 Director of Pelican Financial since November
1999. Ms. Jones has been employed by NSF
International, Ann Arbor, MI, as Vice
President and Chief Information Officer
since 1998. From 1991 to 1998, Ms. Jones
was employed by Coopers & Lybrand, Detroit,
Michigan, most recently as the Director of
Entrepreneurial Consulting.
Michael D. Surgen 44 Director of Pelican Financial since October
1998. President and a director of Pelican
National since 1998. From 1996 to 1998,
self-employed managing own investments. From
1981 to 1996, employed by Eastern Savings
Bank, FSB, Hunt Valley, Maryland, serving as
President from 1992 to 1996 and as an
Executive Vice President from 1981 to 1992.
----------------
(1) As of December 31, 1999
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DIRECTORS CONTINUING IN OFFICE. The directors continuing in office are:
NAME OF INDIVIDUAL AGE (1) PRINCIPAL OCCUPATION FOR LAST FIVE YEARS
- ------------------ ------- ----------------------------------------
Michael L. Hogan 47 Director, Vice President, and Chief Financial
Officer of Pelican Financial since January
1999. Employed in 1998 as the Regional
Financial Officer for Regions Financial
Corp. and as a Senior Vice President and
Chief Financial Officer of Regions Bank,
N.A., Regions Financial Corp.'s national
bank subsidiary. From 1996 to 1998, served
as Vice President, Treasurer, and SEC
Compliance Officer for Key Florida Bancorp,
Inc. From 1989 to 1996, practiced with
Purvis, Gray and Company, an independent
public accounting firm headquartered in
Florida, as a certified public accountant.
Koula M. Kovach 40 Director and Vice President of Pelican
Financial since March 1997. Employed by
Washtenaw Mortgage since 1981 and has served
as its President since June 1998
Raleigh E. Allen, Jr. 57 Director of Pelican Financial
since March 1999. Mr. Allen has been
employed by the Mortgage Guaranty Insurance
Corporation since 1973, most recently
serving as an Account Manager for Eastern
Michigan
Ernest G. Merlanti 69 Director of Pelican Financial since March
1999. Employed as a Vice President--
Consulting Services for Personnel Systems,
Inc., Ann Arbor, Michigan since 1970
S. Lynn Stokes 53 Director of Pelican Financial since July 1999.
Consultant to the financial institution
industry since 1986 from his office in Sun
Center City, Florida
- ----------------
(1) As of December 31, 1999.
THE BOARD OF DIRECTORS AND COMMITTEES. Our Board of Directors generally
meets on a quarterly basis, as needed. During the year ended December 31, 1999,
our Board of Directors met five times. No director attended fewer than 75% in
the aggregate of (a) the total number of board meetings held while the director
was a member during the year ended December 31, 1999 and (b) the total number of
meetings held by committees on which the director served during the year.
Our full Board of Directors acts as a nominating committee for the
annual selection of nominees for election as directors. While the Board of
Directors will consider nominees recommended by stockholders, it has not
actively solicited recommendations from stockholders for nominees nor,
conditioned on compliance with the procedural requirements contained in our
Certificate of Incorporation, established any procedures for this purpose. Our
Board of Directors met once in its capacity as the nominating committee during
1999.
We do not have a compensation committee at the holding company level
because Pelican Financial has no employees. Pelican National's and Washtenaw's
full Boards of Directors act as compensation committees for both Washtenaw and
Pelican National, respectively. Washtenaw's Board met one time in this capacity
during 1999 and Pelican National's Board met one time in this capacity during
1999 to examine the performance and approve the compensation of the officers.
Employee members of the Boards of Directors do not participate in the
consideration of their own compensation.
Our Audit Committee consists of directors Raleigh E. Allen, Jr., Ernest
G. Merlanti, and S. Lynn Stokes. The purpose of the Audit Committee is to direct
the activities of the external auditors to fulfill the legal and technical
requirements necessary to adequately protect the directors, shareholders, and
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employees. The Audit Committee is responsible for reviewing our auditing
programs, overseeing the quarterly regulatory reporting process, overseeing
internal compliance audits as necessary, receiving and reviewing the results of
each external audit, and reviewing management's response to auditors'
recommendations. The Audit Committee did not meet in 1999.
RECOMMENDATION. The Board recommends a vote "FOR" all three nominees
for director.
PROPOSAL 2: RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS.
We have appointed Crowe Chizek and Company LLP as independent public
accountants for the year ending December 31, 2000. The Board of Directors
recommended the appointment of Crowe Chizek to the Board. Crowe Chizek, who
performed audit services for us in 1999, including an examination of the
consolidated financial statements and services related to filings with the
Securities and Exchange Commission, has served as our accountants since 1998.
Crowe Chizek performed all of its services in 1999 at customary rates and terms.
Representatives of Crowe Chizek will be present at the meeting, will be
available to respond to your appropriate questions and will be able to make such
statements as they desire.
If you do not ratify the selection of independent accountants, the
Audit Committee and the Board will reconsider the appointment. However, even if
you ratify the selection, the Board may still appoint new independent
accountants at any time during the year if it believes that a change would be in
our best interests and the best interest of our shareholders.
RECOMMENDATION. The Board of Directors recommends a vote "FOR" the
ratification of the selection of Crow Chizek and Company LLP as Pelican
Financial's independent accountants for the year ending December 31, 2000.
DIRECTOR AND EXECUTIVE OFFICER COMPENSATION
HOW DO WE COMPENSATE DIRECTORS?
Non-employee directors of Pelican Financial receive $400 per meeting of
the Board of Directors attended. Each member of the Board of Directors of
Pelican National receives a fee of $400 per month. Additionally, each
non-employee member of a committee of the Board of Directors of Pelican National
receives a fee of $100 per committee meetings. Members of the Board of Directors
of Washtenaw Mortgage do not receive a fee for service on the Board of Washtenaw
Mortgage. We paid a total of $2,800 in the year ended December 31, 1999 as
directors' fees. Directors are also eligible to receive stock options and stock
appreciation rights pursuant to Pelican Financial's stock option and incentive
plan. See "- Stock Option and Incentive Plan."
HOW DO WE COMPENSATE EXECUTIVE OFFICERS?
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION. We have no full time
employees, but rely on the employees of Washtenaw Mortgage and Pelican National
for the limited services that we require. All compensation paid to our officers
and employees is paid by Washtenaw Mortgage or Pelican National, as appropriate.
The following table contains information on the cash and non-cash
compensation awarded to or earned by our Chief Executive Officer and each
executive officer of Pelican Financial that earned a salary and bonus in excess
of $100,000 during the fiscal years ended December 31, 1999 and 1998 and the
eleven months ended December 31, 1997. No other executive officer of Pelican
Financial or person
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performing a similar policy making function for us had a salary and bonus in
excess of $100,000 during these same periods for services rendered in all
capacities to Pelican Financial.
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION
---------------------------------------- ------------
OTHER SECURITIES
PERIOD ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION ENDED SALARY BONUS COMPENSATION(1) OPTIONS (#) COMPENSATION
- --------------------------- ----- ------ ----- --------------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Charles C. Huffman 12/31/99 $225,750 $449,117 $ 0 50,000 $2,400 (2)
Chief Executive Officer and 12/31/98 225,543 645,303 0 2,000 2,400 (2)
Chairman of the Board of 12/31/97 198,462 64,692 0 0 4,476 (2)
Pelican Financial; Chairman of
the Board of Pelican National
and Washtenaw Mortgage
Koula M. Kovach 12/31/99 166,365 382,655 0 25,000 $4,087 (3)
Director of Pelican Financial; 12/31/98 110,000 307,995 0 0 2,400 (4)
President of Washtenaw 12/31/97 89,108 73,626 0 4,000 2,166 (4)
Michael L. Hogan(5) 12/31/99 112,346 15,000 0 7,000 159 (6)
12/31/98 n/a n/a n/a n/a n/a
12/31/97 n/a n/a n/a n/a n/a
</TABLE>
- -----------------------
(1) For the years December 31, 1999 and 1998 and the eleven months ended
December 31, 1997, there were no:
a. perquisites over the lesser of $50,000 or 10% of any of the above
named executive officers' total salary and bonus;
b. payments of above-market preferential earnings on deferred
compensation;
c. tax payment reimbursements; or
d. preferential discounts on stock.
(2) Represents amounts contributed to Pelican Financial's 401(k) plan for the
account of Mr. Huffman.
(3) Represents $2,400 contributed to Pelican Financial's 401(k) plan for the
account of Ms. Kovach, payment of automobile insurance in the amount of
$596, and cellular telephone expenses of $1,091.
(4) Represents amounts contributed to Pelican Financial's 401(k) plan for the
account of Ms. Kovach.
(5) Mr. Hogan was not employed by Pelican Financial during the year end
December 31, 1998 or the eleven months ended December 31, 1997.
(6) Represents reimbursement for business use of automobile.
WHAT OTHER BENEFITS DO DIRECTORS AND EXECUTIVE OFFICERS RECEIVE?
401(K) SAVINGS PLAN. We sponsor a tax-qualified defined contribution
savings plan (commonly known as a 401(k) Plan) for the benefit of its employees
and the employees of Washtenaw Mortgage and Pelican National. Employees become
eligible to participate in the 401(k) Plan after reaching age 21 and completing
one year (including 1,000 hours) of service. Pursuant to the 401(k) Plan,
employees may voluntarily elect to defer compensation, not to exceed applicable
limits under the Code (I.E., $10,000 in calendar year 1999). We match 50% of the
employee contributions up to 1.5% of the participant's contribution. Matching
contributions vest over a six year period beginning after the second year at a
rate of 20% per year, or become 100% vested upon termination of employment due
to death, disability, or retirement. We may make additional contributions but
are not obligated to do so. Employee contributions are immediately vested.
Benefits are payable upon termination of employment, retirement, death,
disability, or plan termination. Normal retirement age pursuant to the 401(k)
Plan is age 65. Additionally, funds in the 401(k) Plan may be distributed upon
application to the plan administrator upon severe financial hardship in
accordance with uniform guidelines which comply with those specified by the
Internal Revenue Code. It is intended that the 401(k) Plan operate in compliance
with the provisions of the Employee Retirement Income Security Act of 1974
(otherwise known as "ERISA"), and the requirements of Section 401(a) of the
Internal Revenue Code. For the years ended December 31, 1999 and 1998
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and the eleven months ended December 31, 1997, we incurred expenses of
approximately $66,240, $77,000, and $33,000, respectively relating to the plan.
STOCK OPTION AND INCENTIVE PLAN. Our Board of Directors and the Boards
of Directors of Pelican National and Washtenaw Mortgage adopted the 1997 Stock
Option and Incentive Plan upon completion of the organization of Pelican
National. 400,000 shares of common stock were reserved for issuance by us to be
issued upon the exercise of stock options to be granted to our officers,
directors, and employees and the officers, directors, and employees of Pelican
National and Washtenaw Mortgage from time to time pursuant to the option plan.
The purpose of the option plan is to provide additional performance and
retention incentives to officers, directors, and employees by facilitating their
purchase of a stock interest in us. The option plan provides for a term of 10
years, after which no awards could be made, unless earlier terminated by the
Board of Directors of Pelican Financial pursuant to the option plan. Directors
and executive officers of Pelican Financial, Pelican National, and Washtenaw
Mortgage received an initial grant of options upon the consummation of the
organization of Pelican National. The options vest over a period determined by
the option plan committee. Options are granted based upon several factors,
including seniority, job duties and responsibilities, job performance, and our
overall performance.
We receive no monetary consideration for the granting of stock options
pursuant to the option plan, however, we receive the option price for each share
issued to optionees upon the exercise of the options. Shares issued as a result
of the exercise of options will be either authorized but unissued shares or
shares we purchase in the open market, however, no purchases in the open market
will be made that would violate applicable regulations restricting purchases by
Pelican Financial. The exercise of options and payment for the shares received
would contribute to our equity.
During the year ended December 31, 1999, we granted 221,400 options
pursuant to the option plan, including options for 50,000 shares granted to
Charles C. Huffman and options for 25,000 shares granted to Koula M. Kovach. At
December 31, 1999, there were options covering 321,400 shares of common stock
outstanding pursuant to the option plan. As of December 31, 1999, no options
granted pursuant to the option plan have been exercised.
The following table shows for the year ended December 31, 1999 (a) the
number of shares underlying options granted to each of the named persons, (b)
the percentage of all grants to employees which the grant to the named person
represents, (c) the exercise price of the option, and (d) the expiration date of
the option.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE AT
NUMBER OF ASSUMED ANNUAL RATE OF
SECURITIES PERCENT OF TOTAL STOCK PRICE APPRECIATION
UNDERLYING OPTIONS/SARS EXERCISE OR FOR
OPTIONS/SARS GRANTED TO BASE EXPIRATION OPTION TERM
NAME GRANTED (#) EMPLOYEES PRICE ($/SH) DATE 5% ($) 10% ($)
- ---- ------------ ---------------- ----------- ---------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
Charles C. Huffman...... 50,000 22.58% $7.70 11/10/99 $185,000 $523,000
Koula M. Kovach......... 25,000 11.29 7.00 11/10/09 110,000 279,000
Michael L. Hogan........ 7,000 3.16 6.00 11/10/09 37,800 85,120
</TABLE>
The following table contains information on (a) the number of shares
acquired by any of the named persons upon exercise of stock options during the
year ended December 31, 1999, (b) the value realized through the exercise of any
options, and (c) the number of unexercised options held by the person, including
both those which are presently exercisable and those which are not presently
exercisable.
8
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
SHARES NUMBER OF VALUE OF UNEXERCISED
ACQUIRED VALUE UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
NAME ON EXERCISE REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ---- ----------- -------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Charles C. Huffman............ 0 $ 0 400 / 51,600 $ 0 / $ 0
Koula M. Kovach............... 0 0 8,000 / 25,000 6,000 / 0
Michael L. Hogan 0 0 400 / 6,600 200 / 0
</TABLE>
EMPLOYMENT AGREEMENT WITH THE PRESIDENT AND CHIEF EXECUTIVE OFFICER OF
PELICAN NATIONAL BANK. Pelican National entered into an employment agreement in
March 31, 1998 with Michael D. Surgen, President and Chief Executive Officer of
Pelican National and a director of Pelican Financial and Pelican National. The
employment agreement provides for a term of five years, with an annual base
salary payable by Pelican National in the amount of $120,000. The employment
agreement will terminate upon Mr. Surgen's death or medical or legal disability
and is terminable by Pelican National for "just cause" as defined in the
Employment Agreement. If there is a termination for just cause, no severance
benefits are available. If Pelican National terminates Mr. Surgen without just
cause, Mr. Surgen will be entitled to a severance payment in the amount of 25%
of his base salary then in effect and Pelican National must repurchase or
arrange for the sale of any common stock owned by Mr. Surgen at the book value
thereof.
The employment agreement also provides that Mr. Surgen will be granted incentive
stock options to purchase 80,000 shares of common stock pursuant to Pelican
Financial's stock option and incentive plan upon the achievement of certain
performance goals in the first five years of Pelican National's operation. Mr.
Surgen will forfeit options related to 20,000 shares per year in which the
performance goals are not met. In addition, Mr. Surgen is also entitled to be
granted options to purchase an additional 20,000 shares per year through the
sixth year of Pelican National's operations for superior performance, which is
defined in the employment agreement as a return on equity in excess of 13.5% and
a return on assets in excess of 1.10%.
REPORT OF THE BOARDS OF DIRECTORS
ON EXECUTIVE COMPENSATION
WHAT IS OUR PHILOSOPHY ON EXECUTIVE COMPENSATION?
Because we do not have any employees, compensation decisions are made
by the Pelican National and Washtenaw Mortgage boards of directors applicable to
employees of the respective companies. For Washtenaw Mortgage this included
Charles C. Huffman, Koula M. Kovach, and Michael L. Hogan. For Pelican National
this included Michael D. Surgen. Executive officers that also sit on the Board
of Directors with responsibility for determining their salaries do not
participate in their own compensation decisions.
As an organization, we have adopted a basic philosophy and practice of
offering a compensation program designed to attract and retain highly qualified
employees. Our compensation practices encourage and motivate these individuals
to achieve superior performance. This underlying philosophy pertains
specifically to executive compensation, as well as employee compensation at all
other levels throughout the organization.
9
<PAGE>
There are three principal components of the executive compensation
program. These components are base salary compensation, bonus compensation
(performance compensation), and incentive compensation.
BASE SALARY. For 1999, we determined the base salary compensation for
each of the executive officers. We first established a range of base salary
compensation for each executive. The salary range is based on compensation
committee recommendations and other salary information and considerations for
people in comparable positions with comparable sized companies within the
wholesale banking sector for Washtenaw Mortgage and the retail banking sector
for Pelican National. Washtenaw Mortgage and Pelican National attempt to
compensate its executive by paying base salary equivalent to the average of the
peer group. This reflects our desire to pay a base salary that is competitive
with our peers while at the same time aligning the compensation structure of
Pelican Financial with shareholders by providing the executive officers with a
bonus tied to performance.
We predicate the base salary on the executive's ability, experience and
past and potential performance and contribution Pelican Financial, Washtenaw
Mortgage, and Pelican National, as appropriate. Furthermore, we seek to
establish the base salary so that we will have the ability to increase these
base salaries within the salary ranges in future years based on the executive's
performance. The full Boards of Directors approved the actual base salary for
each executive officer.
We will evaluate and adjust the range of each executive's base salary,
if appropriate, in subsequent years, based on future salary surveys, comparable
salary information and other considerations. Base salary adjustments for each
executive will be predicated primarily on performance and the executive's
position in the base salary range. We conduct performance evaluations at least
annually. We base the evaluations on results achieved. These results are
measured against specific performance standards established at the beginning or
during the course of the year. For example, Michael D. Surgen's compensation is
heavily dependent on performance objectives and standards based on, among other
things, deposit growth, loan growth, fee income, expense control, and net
earnings.
BONUS. We base bonus compensation on various financial indicators. For
Pelican National, these indicators are such things as return on equity, return
on assets, and other specific performance criteria. Pelican National must
achieve a minimum return on equity and return on average assets for Michael D.
Surgen to receive a bonus. This criterion provided for a minimum return on
average equity of 2.0% and a minimum return on average assets of 0.35% for 1999.
Pelican National's actual return on average equity for 1999 was 10.6% and return
on average assets for 1999 was 1.07%.
Washtenaw Mortgage has adopted a bonus program whereby a bonus pool is
created for the benefit of executive officers, managers, and directors of
Washtenaw Mortgage. The bonus pool consists of 25% of Washtenaw Mortgage's net
income before taxes and bonus. Based on a formula for the distribution of the
bonus pool, Koula M. Kovach, president of Washtenaw Mortgage, is entitled to
receive 25% of the total bonus pool and Charles C. Huffman, chairman of the
Board of Washtenaw Mortgage, is entitled to receive 35% of the total bonus pool.
The individual performance objectives and standards relate to specific
results where the executive has substantial influence and accountability. The
full Boards of Directors approved all executive officers' bonuses for service
during 1999.
INCENTIVE COMPENSATION. We have two compensation plans that provide
long-term incentives for our executive officers. They are the stock option and
incentive plan and the 401(k) plan.
10
<PAGE>
The stock option plan aligns the interests of key employees, including
the executive officers, with those of our shareholders. We provide these
employees with an incentive to achieve superior performance by granting them
long-term options to purchase our common stock at a fixed exercise price that
equals the fair market value of the underlying stock on the date of the grant.
The Stock Option Committee administers the stock option plan. This committee has
the authority to select the key employees eligible for the stock options and the
number of options they will receive. The members of the Stock Option Committee
do not utilize any performance goals in determining the number of options to be
granted, nor do they consider the number of options previously granted to an
executive officer. Rather, the members base the award of stock options on their
own analysis of that employee's contribution to Pelican Financial, including an
assessment of the employee's responsibilities, as well as the employee's
commitment to our future. In 1999, the Stock Option Committee awarded stock
options to the executive officers and in the amounts set forth above under
"Director and Executive Officer Compensation."
The 401(k) plan primarily provides retirement benefits to all eligible
employees, including the executive officers. A summary description of the 401(k)
plan is set forth above under "Director and Executive Officer Compensation."
HOW DO WE COMPENSATE OUR PRESIDENT AND CHIEF EXECUTIVE OFFICER?
Mr. Huffman, the President and Chief Executive Officer of Pelican Financial and
Chairman of the Boards of Washtenaw Mortgage and Pelican National, received
compensation for his services during 1999 based primarily on review of
compensation paid for similarly sized companies within the Mortgage Banking
Industry.
Pelican Financial uses the average base salary and average bonus amounts paid to
Chief Executive Officers of Independent Mortgage Companies for similarly sized
mortgage banking companies as published in the 1998 Mortgage Bankers
Association's Mortgage Banking Compensation survey as its guide in setting the
compensation of Mr. Huffman.
Dated: November 2, 2000
<TABLE>
<S> <C> <C>
FOR WASHTENAW MORTGAGE FOR PELICAN NATIONAL FOR THE STOCK OPTION COMMITTEE
- ---------------------- -------------------- ------------------------------
Charles C. Huffman, Chairman Charles C. Huffman, Chairman Charles C. Huffman, Chairman
Koula M. Kovach Michael Carr Raleigh E. Allen, Jr.
Jay Crandall Michael L. Hogan
Robert DeMattia Brenda L. Jones
Robert Fenton Koula M. Kovach
Michael Surgen Ernest G. Merlanti
Jeffrey Zimm S. Lynn Stokes
Michael D. Surgen
</TABLE>
REPORT OF THE BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION NOT TO BE
INCORPORATED BY REFERENCE.
This report of the Boards of Directors on executive compensation should
not be deemed incorporated by reference into any filing under the Securities Act
of 1933 or under the Securities Exchange Act of 1934, except to the extent that
we specifically incorporate the information contained in the report by
reference.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Charles C. Huffman, Director, President, and Chief Executive Officer of
Pelican Financial, and Michael D. Surgen, Director of Pelican Financial and
President of Pelican National, serve on the Board of
11
<PAGE>
Directors of Pelican National. Michael L. Hogan, Vice President of Pelican
Financial, also serves on the Board of Directors of Pelican Financial. Koula M.
Kovach, President of Washtenaw Mortgage also sits on the Board of Directors of
Washtenaw Mortgage and Pelican Financial. Executive officers that also sit on
the Board of Directors with responsibility for determining their salaries do not
participate in deliberations with regard to their own compensation. None of the
members of the Stock Option Committee during 1999 has ever been an officer or
employee of Pelican Financial, Washtenaw Mortgage, or Pelican National.
PERFORMANCE GRAPH
The following graph compares the yearly percentage change in our
cumulative total shareholder return (stock price appreciation plus reinvested
dividends) on our common stock with (i) American Stock Exchange Index of US
listed companies, and (ii) the Nasdaq Financial Institution Index, a published
line of business index. The graph assumes an initial investment of $100 on
November 11, 1999, the date our common stock began to be traded on the American
Stock Exchange following the completion of our initial public offering and
reinvestment of dividends. The point on the graph represents the performance as
of the last business day of the year. The graph is not necessarily indicative of
future price performance.
[graph omitted]
<TABLE>
<CAPTION>
AT NOVEMBER 11, 1999 AT DECEMBER 31, 1999
-------------------- --------------------
<S> <C> <C>
Pelican Financial.................... $100.00 $ 53.57
Amex US Market....................... 100.00 96.37
Nasdaq Financial Institution......... 100.00 110.47
</TABLE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
We have adopted a policy that all transactions between Pelican
Financial and our officers, directors, and shareholders owning 5% or more of the
common stock will be made on terms no less favorable than could be obtained from
third parties.
Pelican National, like many financial institutions, has adopted a
policy regarding the making of loans to officers and directors. The policy
provides that these loans:
12
<PAGE>
-- Will be made in the ordinary course of business,
-- Will be made on substantially the same terms and conditions,
including interest rates and collateral, as those prevailing at
the time for comparable transactions with Pelican National's
other customers, and
-- Will not involve more than the normal risk of collectibility or
present other unfavorable features.
All loans by Pelican National to its directors and executive officers
are required to comply with regulations restricting loans and other transactions
with affiliated persons of Pelican National.
Washtenaw Mortgage has adopted a policy giving all employees, including
officers and directors, discounts on mortgage loans. Washtenaw Mortgage makes
these loans on terms that yield no profit or loss to Washtenaw Mortgage upon the
sale of the loan to the secondary market. The following table contains
information regarding the indebtedness of executive officers, directors, and
members of the immediate family of an executive officer or director of Pelican
Financial who are or were indebted to Washtenaw Mortgage at any time since
January 1, 1998 in an amounts in excess of $60,000.
The information below includes amounts originated before December 31,
1999.
<TABLE>
<CAPTION>
LARGEST AMOUNT
DATE OF TYPE OF OUTSTANDING SINCE BALANCE AT INTEREST
NAME AND POSITION LOAN LOAN JANUARY 1, 1998 DECEMBER 31, 1999 RATE
- --------------------------- ----------- --------- ----------------- -------------------- --------
<S> <C> <C> <C> <C> <C>
Charles C. Huffman 3-17-98 Mortgage $141,800 $ 0 6.125%
President, CEO, and 3-19-99 Mortgage $192,600 0 6.375%
Chairman of Pelican
Financial; Chairman of
Washtenaw and Pelican
National
Adam and Jennifer Goldstein 3-19-99 Mortgage $ 75,000 $74,298 5.875%
Relation to Charles C.
Huffman, President, CEO,
and Chairman of Pelican
Financial; Chairman of
Washtenaw and Pelican
National
Koula M. Kovach 9-11-98 Mortgage $147,500 $ 0 6.250%
Director of Pelican
Financial; President of
Washtenaw
Anthony Batianis 8-4-99 Mortgage $109,600 $56,942 6.375%
Relation to Koula M.
Kovach, Director of
Pelican Financial,
President of Washtenaw
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
LARGEST AMOUNT
DATE OF TYPE OF OUTSTANDING SINCE BALANCE AT INTEREST
NAME AND POSITION LOAN LOAN JANUARY 1, 1998 DECEMBER 31, 1999 RATE
- --------------------------- ----------- --------- ----------------- -------------------- --------
<S> <C> <C> <C> <C> <C>
Michael D. Surgen 7-22-98 Mortgage $150,000 $ 0 7.125%
Director of Pelican 7-24-98 Home Equity 34,652 34,400 7.750%
Financial; President of
Pelican National
R. Charles Huffman 8-25-98 Mortgage 227,150 0 6.000%
Relation to Charles C.
Huffman, President, CEO,
and Chairman of Pelican
Financial; Chairman of
Washtenaw and Pelican
National
</TABLE>
Ernest Merlanti, a director of Pelican Financial, and his spouse own
Personnel Systems, Inc., a personnel consulting company which provides
consulting services to Washtenaw. Arbor Temporaries, Inc., a wholly-owned
subsidiary of Personnel Systems, Inc., provides temporary staffing for
Washtenaw. During the year ended December 31, 1998, Washtenaw paid fees for
consulting to Personnel Systems, Inc. of $8,860 and for temporary services to
Arbor Temporaries, Inc. of $232,000. During the year ended December 31, 1998,
Washtenaw paid fees for consulting to Personnel Systems, Inc. of $27,240 and for
temporary services to Arbor Temporaries, Inc. of $176,110.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires our
executive officers and directors, and persons who own more than ten percent of
our equity securities, to file reports of ownership and changes in ownership
with the Securities and Exchange Commission and the American Stock Exchange. The
Securities and Exchange Commission requires executive officers, directors and
greater than ten-percent shareholders to furnish to us copies of all forms they
file pursuant to this requirement.
Based solely on our review of these reports and of certifications
furnished to us, we believe that during the fiscal year ended December 31, 1998
all executive officers, directors and greater than ten-percent beneficial owners
complied with all applicable Section 16(a) filing requirements, except for
Brenda L. Jones, who filed a Form 3 late relating to her initial appointment to
the Board.
ANNUAL REPORT AND FORM 10-K
We distribute our Annual Report, which includes our Form 10-K for the
year ended December 31, 1999, to our shareholders with this Proxy Statement. The
Annual Report to Stockholders is not treated as a part of the proxy solicitation
material or as having been incorporated in this Proxy Statement by reference.
Our Form 10-K contains our consolidated financial statements and the report
thereon of Crowe Chizek and Company LLP, our independent public accountants.
Upon written request of any person entitled to vote at the meeting,
addressed to the Secretary of Pelican Financial, at 315 East Eisenhower, Ann
Arbor, Michigan 48108, we will provide, without charge, an individual copy of
the our Annual Report, which includes our Form 10-K, without exhibits, including
the financial statements and the schedules filed with the Securities and
Exchange Commission pursuant to the Securities Exchange Act of 1934.
14
<PAGE>
PROPOSALS BY SHAREHOLDERS
If you wish to submit a proposal for consideration at the Annual
Meeting of Shareholders to be held in 2001, you may do so by following the
procedures prescribed in the Securities Exchange Act of 1934. To be eligible for
inclusion in our proxy statement and proxy material, our Secretary must receive
your proposals no later than November 23, 2000.
PELICAN FINANCIAL, INC.
/s/ Charles C. Huffman
-------------------------------------
Charles C. Huffman
President and Chief Executive Officer
Dated: March 28, 2000
Ann Arbor, Michigan
15
<PAGE>
REVOCABLE PROXY
PELICAN FINANCIAL, INC.
This Proxy is solicited on behalf of the Board of Directors for the Annual
Meeting of Stockholders to be held on April 25, 2000 (the "Meeting").
The undersigned hereby appoints the Board of Directors of Pelican
Financial, Inc. (the "Company"), or its designee, with the power of
substitution, to act as attorneys and proxies for the undersigned, to represent
and to vote, as designated below, all shares of Common Stock of the Company,
which the undersigned is entitled to vote at the Meeting and at any adjournment
thereof. THE DIRECTORS RECOMMEND A VOTE "FOR" PROPOSALS 1 AND 2.
1. The election as directors the nominees listed below:
/ / FOR / / WITHHELD
Charles C. Huffman Brenda L. Jones Michael D. Surgen
INSTRUCTIONS: TO WITHHOLD YOUR VOTE FOR ANY INDIVIDUAL NOMINEE, INSERT THE
NOMINEE'S NAME ON THE LINE PROVIDED BELOW.
______________________________________________________________________________
2. The ratification of the appointment of Crowe Chizek and Company LLP as
independent auditors of Pelican Financial, Inc. for the fiscal year ending
December 31, 2000.
FOR / / AGAINST / / ABSTAIN / /
This proxy, when properly executed, will be voted in the manner directed
herein by the undersigned stockholder. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR PROPOSALS 1 AND 2. IN ADDITION, THIS PROXY WILL BE VOTED AT THE
DISCRETION OF THE PROXY HOLDER(S) UPON ANY OTHER MATTER THAT MAY PROPERLY COME
BEFORE THE MEETING.
<PAGE>
Should the signatory(ies) be present and elects to vote at the Meeting, or
at any adjournments thereof, and after notification to the Secretary of the
Company at the Meeting of such person's decision to terminate this proxy, the
power of said attorneys and proxies shall be deemed terminated and of no further
force and effect. The signatory(ies) may also revoke this proxy by filing a
subsequently dated proxy or by written notification to the Secretary of the
Company of his or her decision to terminate this proxy.
The signatory(ies) acknowledge(s) receipt from the Company prior to the
execution of this proxy of Notice of the Meeting, a Proxy Statement dated March
28, 2000, and a Form 10-K/Annual Report to Stockholders.
/ / Please check here if you
plan to attend the Meeting.
Dated: ____________________________ , 2000
__________________________________________
SIGNATURE OF STOCKHOLDER
__________________________________________
SIGNATURE OF STOCKHOLDER
Please sign exactly as your name appears
on this Proxy card. When signing as
attorney, executor, administrator,
trustee, or guardian, please give your
full title. If shares are held jointly,
each holder should sign.
PLEASE COMPLETE, DATE, SIGN, AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.
