Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
Filed by the registrant
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.
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(Name of Registrant as Specified in Its Charter)
OREGON TRAIL FINANCIAL CORP
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(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
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(2) Aggregate number of securities to which transactions applies:
N/A
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(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11:
N/A
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(4) Proposed maximum aggregate value of transaction:
N/A
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[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11 (a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
N/A
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(2) Form, schedule or registration statement no.:
N/A
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(3) Filing party:
N/A
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(4) Date filed:
N/A
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<PAGE>
July 6, 2000
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 Quality Inn, 810
Campbell Street, Baker City, Oregon, on Tuesday, August 8, 2000 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.
For the reasons set forth in the proxy statement, the Board unanimously
recommends a vote "FOR" each of the nominees as directors specified under
Proposal I and "FOR" the ratification of auditors under Proposal II.
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/Berniel L. Maughan
Berniel L. Maughan
President and Chief Executive Officer
<PAGE>
OREGON TRAIL FINANCIAL CORP.
2055 FIRST STREET
BAKER CITY, OREGON 97814
(541) 523-6327
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held On August 8, 2000
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NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Oregon
Trail Financial Corp. ("Company") will be held at the Quality Inn, 810
Campbell Street, Baker City, Oregon, on Tuesday, August 8, 2000, at 10:00
a.m., local time, for the following purposes:
(1) To elect two directors of the Company;
(2) To approve the appointment of Deloitte & Touche LLP as the Company's
independent auditors for the fiscal year ending March 31, 2001; and
(3) 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 21, 2000 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
July 6, 2000
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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.
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<PAGE>
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PROXY STATEMENT
OF
OREGON TRAIL FINANCIAL CORP.
2055 FIRST STREET
BAKER CITY, OREGON 97814
(541) 523-6327
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ANNUAL MEETING OF STOCKHOLDERS
AUGUST 8, 2000
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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 Quality Inn, 810 Campbell
Street, Baker City, Oregon, on Tuesday, August 8, 2000, at 10:00 a.m., local
time. This Proxy Statement and the enclosed proxy card are being first mailed
to shareholders on or about July 6, 2000.
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VOTING AND PROXY PROCEDURE
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Shareholders Entitled to Vote. Stockholders of record as of the close of
business on June 21, 2000 ("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 business on the Voting Record Date, the Company had 3,641,243 shares
of Common Stock entitled to vote.
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 and FOR the approval of the
appointment of Deloitte & Touche LLP as independent auditors. If a
shareholder attends the Meeting, he or she may vote by ballot.
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. Votes may be cast for or withheld from each nominee for election as
director. 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. The Company's Articles of Incorporation prohibits
stockholders from cumulating their votes for the election of directors.
Approval of the appointment of independent auditors requires the
affirmative vote of a majority of the outstanding shares of Common Stock
present in person or by proxy and entitled to vote at the Meeting. In
determining whether such proposal has received the requisite number of
affirmative votes, abstentions will be counted and will have the same effect
as a vote against the proposal; broker non-votes will be disregarded and will
have no effect on the outcome of the vote.
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
<PAGE>
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.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
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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, "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 370,021 10.16%
Employee Stock Ownership Plan Trust
Westport Asset Management, Inc.(2) 269,500 7.40
253 Riverside Avenue
Westport, Connecticut 06880
Brandes Investment Partners, L.P.(3) 199,285 5.47
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) 4,737 0.13
Zane F. Lockwood 17,728 0.49
All Executive Officers and
Directors as a Group (8 persons) 183,438 5.04
-----------------
* 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
2
<PAGE>
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 16, 2000, that discloses
shared voting and dispositive power as to 269,500 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. Messrs. Aldape and Lockwood
were the Company's only "named executive officers" during the fiscal year
ended March 31, 2000.
(6) Mr. Aldape served as President and Chief Executive Officer of the Savings
Bank and the Company, and as a director of the Company, until his
resignation on January 24, 2000. Mr. Lockwood was appointed as Acting
President and Chief Executive Officer of the Company and the Savings Bank
until May 25, 2000, when Berniel L. Maughan was named as the successor
to Mr. Aldape.
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PROPOSAL I -- ELECTION OF DIRECTORS
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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. Effective January 24, 2000,
Jerry F. Aldape resigned his position as President and Chief Executive Officer
of the Company and the Savings Bank and as a director of the Company. In
connection with the resignation of Mr. Aldape, the Board of Directors voted to
reduce the size of the Board of Directors from seven to six members.
The Board of Directors has nominated Stephen R. Whittemore and Charles H.
Rouse for election as directors to each serve for a three-year period, or
until their respective successors have been duly elected and qualified.
Messrs. Whittemore and Rouse are both current members of the Board of
Directors of the Company.
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.
3
<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 Expire
---- ------ -------- -------
NOMINEES
--------
Stephen R. Whittemore 50 1983 2003(2)
Charles H. Rouse 54 1991 2003(2)
CONTINUING DIRECTORS
--------------------
John Gentry 52 1992 2001
John A. Lienkaemper 63 1979 2001
Albert H. Durgan 69 1985 2002
Edward H. Elms 52 1986 2002
------------------
(1) As of March 31, 2000.
(2) 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:
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.
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. He also manages
commercial and residential rental properties in the Baker City area. Mr. Elms
was the co-owner of Heritage Chevrolet, a car dealership located in Baker
City, Oregon, from 1996 to 1999.
4
<PAGE>
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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, 2000, the Board of Directors of the Company
held four meetings, and the Board of Directors of the Savings Bank held 12
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 seven times during the fiscal year
ended March 31, 2000.
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, 2000.
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 11 times during the year ended March 31, 2000.
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
seven times during the year ended March 31, 2000.
The full Board of Directors acts as a Nominating Committee for the annual
selection of its nominees for election as directors. The full Board of
Directors met once in its capacity as Nominating Committee during the year
ended March 31, 2000.
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DIRECTORS' COMPENSATION
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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 $170,000 for the fiscal year ended March 31,
2000.
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
<PAGE>
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 would receive a payment
equal to the present value of seven times the annual fees payable to the
director at the effective time of the change in control. The present value
calculation is based on the applicable federal rate as published by the
Internal Revenue Service. Assuming a change in control had occurred at March
31, 2000, the aggregate amount payable under the Director's Plan to all
current directors would be approximately $306,000.
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EXECUTIVE COMPENSATION
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Summary Compensation Table
The following information is provided for Messrs. Lockwood and Aldape.
Notwithstanding that Mr. Aldape resigned as President and Chief Executive
Officer in January 2000, his information is presented in accordance with SEC
regulations.
<TABLE>
Long-term Compensation
Annual Compensation(1) Awards
---------------------- -----------------------
Restricted Number All
Name and Stock of Other Annual
Position Year Salary($) Bonus Awards($)(2) Options(3) Compensation(4)
-------- ---- --------- ----- ------------ ---------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Zane F. Lockwood 2000 $ 84,224 $ -- $ -- -- $19,661
Executive Vice 1999 76,324 20,000 209,386 46,948 4,654
President and 1998 24,382 -- -- -- --
Corporate Secretary(5)
Jerry F. Aldape(6) 2000 132,300 -- -- -- 26,495
Former President and 1999 103,962 34,000 418,783 75,118 35,739
Chief Executive Officer 1998 68,340 4,031 -- -- 4,278
</TABLE>
------------------
(1) Does not include certain benefits, the aggregate amounts of which do not
exceed 10% of total annual salary and bonus.
(2) 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. At March
31, 2000, the value of the unvested awards (which vest pro rata over the
remaining four year period) for Mr. Lockwood was approximately $132,398
(15,023 shares at $8.813 and Mr. Aldape's unvested awards were forfeited
upon his resignation.
(3) Represents the number of options granted on October 8, 1998, which vest
at a rate of 20% per year over a five year period.
(4) Consists of employer 401(k) plan contributions and ESOP shares allocated
but not necessarily vested. ESOP shares allocated are valued at share
price on the close of business on March 31, 2000 ($8.813).
(5) Upon Mr. Aldape's resignation, Mr. Lockwood, Executive Vice President and
Corporate Secretary of the Company and the Savings Bank, was appointed by
the Boards of Directors of the Company and the Savings Bank as Acting
President and Chief Executive Officer.
(6) On May 25, 2000, Berniel L. Maughan was selected by the Board of
Directors to become the President and Chief Executive Officer of the
Company and the Savings Bank.
6
<PAGE>
Option Grants in Last Fiscal Year. There were no grants made during the
fiscal year ended March 31, 2000.
Option Exercise/Value Table. The following information is provided for
Messrs. Lockwood and Aldape. Mr. Aldape resigned as President and Chief
Executive Officer in January 2000.
<TABLE>
Number of
Securities Underlying Value of Unexercised
Shares Unexercised Options In-the-Money Options
Acquired on Value at Fiscal Year End(#) at Fiscal Year End($)
-------------------------- ---------------------------
Name Exercise (#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
---- ------------ ----------- ------------ ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Zane F. Lockwood -- -- 9,390 37,558 -- --
Jerry F. Aldape -- -- 15,024 -- -- --
</TABLE>
Employment Agreements. The Company and the Savings Bank (collectively,
the "Employers") have entered into an employment agreement ("Employment
Agreement") with Mr. Lockwood ("Executive") for a term of 20 months. Under
the Employment Agreement, the current salary level for Mr. Lockwood is
$96,000, 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 Employers 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.
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, 2000 and that the Executive elected to receive a lump
sum cash payment, Mr. Lockwood would have been entitled to a payment of
approximately $246,000. Section 280G of the Internal Revenue Code of 1986, as
amended, 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
7
<PAGE>
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.
The Employers had entered into an employment with Mr. Aldape on
substantially similar terms. Mr. Aldape's employment agreement was terminated
upon his resignation. In connection with his resignation, the Boards of
Directors of the Employers authorized severance compensation payable to Mr.
Aldape in installments of $30,000 on February 25, 2000, April 28, 2000, July
28, 2000 and October 31, 2000. Each payment is subject to all applicable
federal and state withholding obligations. As a condition of payment, Mr.
Aldape has agreed not to compete with the Employers for a period of one year.
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 Savings
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 Executive Vice President (and at March 31, 2000, the Acting
President and Chief Executive Officer), Mr. Lockwood, is determined in the
same manner as other executive officers as described above. Therefore, Mr.
Lockwood'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.
The Company has implemented a Stock Option Plan and MRDP as part of its
overall compensation to executive officers.
8
<PAGE>
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. Lockwood
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. Lockwood, 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 2000 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
<PAGE>
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.
Period Ended
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10-03-97 03-31-98 09-30-98 03-31-99 09-30-99 03/31/00
Oregon Trail -------- -------- -------- -------- -------- --------
Financial Corp. $100.00 $106.26 $ 68.75 $ 78.26 $ 68.75 $ 54.99
NASDAQ U.S.
Companies Index 100.00 107.19 162.27 144.82 162.27 268.86
SNL $250,000 to
$500,000 Asset
Thrift Index 100.00 116.82 115.26 99.50 115.26 104.63
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COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
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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.
10
<PAGE>
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, 2000
all filing requirements applicable to its reporting officers, directors and
greater than 10% shareholders were properly and timely complied with.
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TRANSACTIONS WITH MANAGEMENT
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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, 2000, loans to directors and executive officers
totalled approximately $1.2 million.
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PROPOSAL II -- APPROVAL OF APPOINTMENT OF INDEPENDENT AUDITORS
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Deloitte & Touche LLP served as the Company's independent auditors for
the calendar year ended March 31, 2000. The Board of Directors has appointed
Deloitte & Touche LLP as independent auditors for the fiscal year ending March
31, 2001, subject to approval by stockholders. A representative of Deloitte &
Touche LLP will be present at the Meeting to respond to stockholders'
questions and will have the opportunity to make a statement if he or she so
desires.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
APPROVAL OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS INDEPENDENT AUDITORS
OF THE COMPANY FOR THE FISCAL YEAR ENDING MARCH 31, 2001.
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OTHER MATTERS
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The Board of Directors is not aware of any business to come before the
Meeting other than those matters described above in this Proxy Statement.
However, if any other matters should properly come before the Meeting, it is
intended that proxies in the accompanying form will be voted in respect
thereof in accordance with the judgment of the person or persons voting the
proxies.
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MISCELLANEOUS
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The Company will pay the costs of soliciting proxies. Proxies may be
solicited personally, by telephone or by other means, as well as by mail, by
directors, officers and other employees of the Company. Those persons will
receive no additional compensation. Allen Nelson & Co. have been retained by
the Company to assist in the solicitation of proxies as needed. Allen Nelson
& Co. may solicit proxies by telephone, e-mail, regular mail, or other means.
The Company has paid a retainer of $7,400 to Allen Nelson & Co. and agreed to
pay out-of-pocket and administrative expenses. Additional fees and costs may
be incurred depending on the extent of the activities of Allen Nelson & Co.
11
<PAGE>
Based upon the information available to the Company at this time, no such
additional costs are anticipated. The Company will also reimburse brokerage
firms and other nominees, custodians and other fiduciaries for the reasonable
expense of forwarding proxy materials to beneficial owners.
The Company's Annual Report to Stockholders has been mailed to
stockholders as of the close of business on the Voting 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.
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STOCKHOLDER PROPOSALS
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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 March 23, 2001. 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
July 6, 2000
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FORM 10-K
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A copy of the Company's Form 10-K for the fiscal year ended March 31, 2000, as
filed with the SEC will be furnished without charge to stockholders as of the
close of business on the Voting Record Date upon written request to Zane F.
Lockwood, Corporate Secretary, Oregon Trail Financial Corp., 2055 First
Street, Baker City, Oregon 97814.
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12
<PAGE>
REVOCABLE PROXY
OREGON TRAIL FINANCIAL CORP.
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ANNUAL MEETING OF STOCKHOLDERS
AUGUST 8, 2000
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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 Quality Inn, 810 Campbell Street, Baker City, Oregon, on Tuesday,
August 8, 2000, 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).
Stephen R. Whittemore
Charles H. Rouse
INSTRUCTIONS: To withhold your vote
for any individual nominee, write the
nominee's name on the line below.
-------------------------------------
FOR AGAINST ABSTAIN
--- ------- -------
2. The approval of the appointment of [ ] [ ] [ ]
Deloitte & Touche LLP as independent
auditors for the fiscal year ending
March 31, 2001.
3. In their discretion, upon such other matters
as may properly come before the meeting.
The Board of Directors recommends a vote "FOR" the above proposals.
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THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED,
THIS PROXY WILL BE VOTED "FOR" THE PROPOSITIONS STATED. IF ANY OTHER BUSINESS
IS PRESENTED AT SUCH MEETING, THIS PROXY WILL BE VOTED BY THOSE NAMED IN THIS
PROXY IN THEIR BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD OF DIRECTORS
KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE MEETING.
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<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 2000 Annual
Report to Stockholders.
Dated: , 2000
-----------------------
------------------------------- ---------------------------------
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.
<PAGE>
