<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
/X/ Definitive Proxy Statement Only (as permitted by Rule 14a-6(e)(2))
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to
sec. 240.14a-11(c) or sec. 240.14a-12
</TABLE>
FRONTIER FINANCIAL CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $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:
---------------------------------------------------------------------
(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:
---------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
---------------------------------------------------------------------
(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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<PAGE> 2
FRONTIER FINANCIAL CORPORATION
332 S.W. EVERETT MALL WAY
P. O. BOX 2215
EVERETT, WASHINGTON 98203
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MARCH 15, 1996
TO THE SHAREHOLDERS OF FRONTIER FINANCIAL CORPORATION:
The 1996 annual meeting of shareholders of Frontier Financial Corporation will
be held at Everett Golf & Country Club, 1500 52nd Street, Everett, Washington on
Tuesday, April 16, 1996, at 7:30 p.m. for the following purpose:
(1) To elect thirteen (13) directors to serve until the next annual
meeting of shareholders, and until their successors have been elected and shall
have qualified.
(2) To act on such other matters as may properly come before the meeting.
Only shareholders of record at the close of business on March 12, 1996, and
certain beneficial owners, shall be entitled to notice of and to vote at the
meeting and/or any adjournment thereof.
Whether or not you plan to attend the meeting, you may vote by completing,
signing, dating, and promptly returning the accompanying proxy in the attached
postage-paid envelope. Your proxy may be revoked at any time prior to the time
it is voted.
By Order of the Board of Directors
/s/ JAMES F. FELICETTY
----------------------------------
James F. Felicetty,
Secretary
Everett, Washington
March 15, 1996
PLACE AND TIME OF
ANNUAL MEETING: Everett Golf & Country Club
1500 52nd Street
Everett, Washington
April 16, 1996, 7:30 p.m.
<PAGE> 3
FRONTIER FINANCIAL CORPORATION
332 S.W. EVERETT MALL WAY
P.O. BOX 2215
EVERETT, WASHINGTON 98203
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation by The
Board of Directors of Frontier Financial Corporation ("the Corporation"). The
proxy is to be voted at the annual meeting of the shareholders of the
Corporation on Tuesday, April 16, 1996, at 7:30 p.m. at the Everett Golf and
Country Club, 1500 52nd Street, Everett, Washington, and any adjournment
thereof. If the enclosed proxy is properly completed in the appropriate spaces,
signed, dated, and returned, it will be voted as specified in the proxy. If no
specification is made on the proxy, it will be voted at the discretion of the
proxy holders in accordance with the recommendations of management on all
matters as may properly come before the meeting or any adjournment thereof. A
shareholder granting the enclosed proxy may revoke it prior to its exercise by
voting at the meeting in person, or by giving written notice of their revocation
of the proxy to the Corporation's Secretary at the address shown on the Notice
of Meeting.
All costs of the solicitation of the proxies will be borne by the Corporation.
These proxy materials, together with the 1995 Annual Report to Shareholders,
were first mailed to shareholders of record on or about the 15th day of March
1996.
PURPOSE OF THE MEETING
At the annual meeting, shareholders will be asked:
(1) To elect thirteen (13) directors to serve until the next annual
meeting of shareholders, and until their successors have been elected and shall
have qualified.
(2) To act on such other matters as may properly come before the meeting.
1
<PAGE> 4
OUTSTANDING VOTING SECURITIES AND VOTING RIGHTS
As of March 1, 1996, the Corporation had 6,326,260 shares of Common Stock
("stock") outstanding, which represent the only class of stock of the
Corporation, and the only class of securities entitled to vote at the annual
meeting. However, as a result of a 7% the stock dividend payable March 18, 1996
to shareholders of record as of January 17, 1996, there will be approximately
6,769,098 shares entitled to vote at the meeting. Each share of stock is
entitled to one (1) vote. A majority of the outstanding stock of the Corporation
represented at the meeting in person or by proxy shall constitute the quorum of
shareholders necessary to transact business.
Only shareholders of record at the close of business on March 12, 1996, and
certain beneficial owners will be entitled to notice of and to vote in person or
by proxy at the meeting and/or any adjournment thereof.
ELECTION OF DIRECTORS
The Board of Directors of the Corporation, in accordance with the Corporation's
bylaws, has fixed the number of directors to be elected at the annual meeting at
thirteen (13). Management and the Board recommend the election of the nominees
listed below to serve until the next annual meeting and until their successors
shall have been elected and qualified.
In the event any nominee should not continue to be available for election, the
discretionary authority provided in the proxy will be exercised to vote for the
remainder of those nominated or for such other person or persons as may be
designated by the Board. The Board is not presently aware of any circumstances
that would render any nominee unavailable for election to serve as a director.
All of the nominees named below are members of the present Board of Directors of
the Corporation. All nominees have been engaged in the described principal
occupation during the past five (5) years.
It is the intention of the person named in the proxy to vote FOR the election of
the following nominees:
2
<PAGE> 5
<TABLE>
<CAPTION>
YEAR FIRST PRINCIPAL OCCUPATION AND
BECAME A CERTAIN OTHER
NAME AGE DIRECTOR DIRECTORSHIPS
- ---- --- ---------- ------------------------
<S> <C> <C> <C>
Robert J. Dickson 62 1978 President and Chief
Executive Officer, the
Corporation and Frontier
Bank
David A. Dujardin 64 1978 President, Dujardin
Custom Homes
Edward D. Hansen 56 1978 Mayor of Everett,
President, Golf N.W.
William H. Lucas 67 1978 Chiropractor
James H. Mulligan 64 1989 Owner, Emerald
Development Co.
Alwyn L. Nelson 63 1992 Retired vice-chairman
Seafirst Bank
Edward J. Novack 68 1978 Partner, Novack &
Novack, Law Firm
J. Donald Regan 70 1983 Chairman, Arlington
Advisory Committee
Roger L. Rice 73 1978 Dentist
Roy A. Robinson 68 1978 President, Roy Robinson
Chevrolet
William J. Robinson 52 1978 Partner, Robinson
Properties and Investments
Edward C. Rubatino 65 1978 President, Rubatino Refuse
Removal, Inc.
Arthur W. Skotdal 53 1978 President, Skotdal
Enterprises, Inc.
</TABLE>
3
<PAGE> 6
The affirmative vote of the majority of the shares of the Corporation's
outstanding stock shall be necessary in order for a nominee to be elected a
director of the Corporation. The vote is counted as one vote for each
outstanding share. Cumulative voting for directors is not permitted. Abstentions
from voting have the same effect as a no vote.
The Corporation's Board of Directors, once elected by the shareholders, will
appoint members of the Board of Directors of Frontier Bank and FFP, Inc. The
present Board of Directors of the Corporation has recommended that the above
individuals be appointed Directors of Frontier Bank and FFP, Inc.
DIRECTOR'S MEETINGS AND COMMITTEES
The Board of Directors of the Corporation held seven formal meetings in 1995.
However, since the Boards of the Bank and the Corporation are the same, the
directors at each Board meeting of the Bank, of which 12 were held in 1995,
review the financial records of the Corporation. The Bank's Board of Directors
have established certain standing committees, including the Audit Committee, and
Personnel Committee.
Audit Committee: The main function performed by the Audit Committee included
making or causing to be made suitable audits of the Corporation and its
subsidiaries; review with the independent public accountants, the plan, scope,
and results of the audit engagement; review of the Federal Deposit Insurance
Corporation and State examination reports, and reviewing the adequacy of
internal accounting systems and controls. The results of the audits and
recommendations are reported to the full Boards of Directors of the Corporation
and the Bank. The membership of the Audit Committee during 1995 was Edward
Rubatino, Dave Dujardin, Don Regan, Roger Rice, Al Nelson, and Edward Novack.
The Committee held seven meetings in 1995.
Personnel Committee: The functions of the Personnel Committee include
establishment of policies with respect to the compensation of officers and
employees of the Corporation and its subsidiaries. During 1995, the members of
the Personnel Committee were Robert Dickson, Edward Hansen, William Lucas, Roy
Robinson, Edward Novack and Jim Mulligan. The Committee held one meeting in
1995.
No Nominating Committee has been established.
4
<PAGE> 7
STOCK OWNERSHIP OF OFFICERS AND DIRECTORS
The beneficial ownership by officers and directors of the Corporation's Stock,
and the percentage of such ownership to the total amount of the Corporation's
Stock outstanding as of December 31, 1995, is set forth in the following table.
<TABLE>
<CAPTION>
Percentage of
Name of Number of Common Shares Outstanding
Beneficial Owner Beneficially Owned (1) Stock
- -------------------- ----------------------- -------------
<S> <C> <C>
Incumbent Directors:
Robert J. Dickson 293,530(2) 4.61%
David A. Dujardin 17,210 0.27%
Edward D. Hansen 104,166 1.64%
William H. Lucas 49,280 0.77%
James H. Mulligan 67,325 1.06%
Alwyn L. Nelson 3,750 0.06%
Edward J. Novack 104,863 1.65%
J. Donald Regan 85,710 1.35%
Roger L. Rice 83,544 1.31%
Roy A. Robinson 94,969 1.49%
William J. Robinson 115,378 1.81%
Edward C. Rubatino 102,588 1.61%
Arthur W. Skotdal 111,076 1.74%
All directors and officers
as a group (20 in number)(3) 1,305,217 20.5%
</TABLE>
As of March 1, 1996, there was no individual or entity known to the Corporation
to be the beneficial owner of more than 5% of the outstanding shares of its
stock.
EXECUTIVE OFFICERS
The following table shows the name of each executive officer of the Corporation,
his age, and the offices he holds with the Corporation, and Frontier Bank. All
offices are held at the pleasure of the Board of Directors.
- --------------------
(1) Includes shares, if any, held by spouse, held by or for the benefit
of the director or one or more members of the immediate family.
(2) Includes 15,503 shares to which Mr. Dickson has the right to acquire
by virtue of options granted pursuant to the Corporation's Stock Option Plan.
(3) Includes 27,644 shares to which persons in the group (corporate
officers, Chief Operating Officer, and Functional Managers of the Bank) have the
right to acquire by virtue of options granted pursuant to the Corporation's
Stock Option Plan.
5
<PAGE> 8
Name and Age Office and Year Assumed Office
- ------------ ------------------------------
Robert J. Dickson, 62 President and Chief Executive Officer of the
Corporation (1983) and of Frontier Bank (1978).
F. Earl Carey, 62 Vice President of the Corporation (1985) and
Senior Vice President of Frontier Bank (1986).
James F. Felicetty, 52 Secretary/Treasurer of the Corporation (1983).
COMPENSATION OF EXECUTIVE OFFICERS
The following tables and related notes set forth the cash and noncash
compensation paid during the fiscal year ended December 31, 1995 by the
Corporation to the most highly compensated executive officers of the Corporation
whose cash compensation exceeded $100,000.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
- --------------------------------------------------------------------------------------------------------------
Annual Compensation Long-Term Compensation
-----------------------------------------------------------------
Awards Payouts
-------------------------------
Other
Name and Principal Annual Restricted
Position Compen- Stock Options/ LTIP All Other
Year Salary Bonus sation(1) Award SARs Payouts Compen-
(a) ($) ($) ($) ($) (#) ($) sation
(b) (c) (d) (e) (f) (g) (h) (i)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Robert J. Dickson 1995 200,000 83,118 72,963 3,500
- --------------------------------------------------------------------------------------------------------------
President and CEO 1994 205,284 55,632 55,065 2,000
- --------------------------------------------------------------------------------------------------------------
1993 170,000 35,100 45,391 2,000
- --------------------------------------------------------------------------------------------------------------
</TABLE>
- ---------------------
(1) Does not include earnings on prior years contributions to retirement
plans.
6
<PAGE> 9
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
- ----------------------------------------------------------------------------------------------------------------------------------
Individual Grants
- -----------------------------------------------------------------------------
Potential Realizable Value Alternative to
at Assumed Annual Rates (f) and (g):
of Stock Price Appreciation Grant Date
for Option Term(1) Value
-----------------------------------------------
Percent of
Total
Options/
SARs
Options/ Granted to
SARs Employees Exercise or
Granted in Fiscal Base Price Expiration Grant Date
Name (#) Year ($/Sh) Date 5% ($) 10% ($) Present Value $
(a) (b) (c) (d) (e) (f) (g) (h)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Robert J. Dickson 3,500 27.2 29.00 2005 44,688 113,239 N/A
President & CEO
==================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END
OPTION/SAR VALUES
- -----------------------------------------------------------------------------------------------------------------------------------
Value of
Number of Unexercised
Unexercised in-the-Money
Options/SARs Options/SARs
at Fiscal Year-End at Fiscal Year-
(#) End ($)
----------------------------------------------------
Name Shares Value
(a) Acquired on Realized(2) Exercisable/ Exercisable/
Exercise (#) ($) Unexercisable Unexercisable
(b) (c) (d) (e)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Robert J. Dickson 2,029 31,739 15,503/3,500 172,611/0
President and CEO
===================================================================================================================================
</TABLE>
In the table above, the shares exercised were granted in 1988 and 1989 at the
price of the stock at that time. Any shareholder who purchased stock at that
time would have the same value realized in his/her holdings, depending on
his/her tax bracket.
- -------------------------
(1) After taxes using a 30% rate.
(2) After tax using a 30% rate.
7
<PAGE> 10
BOARD COMPENSATION (PERSONNEL) COMMITTEE REPORT
In setting the compensation of the CEO, the Compensation Committee considers
the performance of the Corporation versus peer group, the return to shareholders
and a comparison level of compensation paid by other similar size financial
Corporations. In setting Mr. Dickson's compensation, the compensation committee
adhered to the above policies and in particular they took into consideration the
Corporations increased profits and the increase in stock price.
COMPENSATION (PERSONNEL) COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
The following directors were members of the Personnel Committee (Compensation
Committee) during 1995, some of which had loan transactions with the Bank during
1995, and had outstanding balances at year-end 1995 as follows:
<TABLE>
<S> <C>
Robert Dickson, Director, President & CEO $ 51
Edward D. Hansen, Director 48,762
William H. Lucas, Director 670,784
James H. Mulligan, Director 2,556,266
Edward J. Novack, Director 231,572
Roy A. Robinson, Director -0-
</TABLE>
The only director who is an officer of the Bank is Mr. Dickson. The above
directors are not compensated for Personnel Committee meetings.
COMPENSATION OF DIRECTORS
Directors of the Corporation and Bank, except the President, are not salaried,
but receive a fee of $1500.00 for each Bank Board Meeting attended and $12,500
annually for all Corporation Board Meetings. Directors do not receive a fee for
Committee meetings. The Chairman of the Board receives an additional fee of
$100.00 for each Bank Board meeting attended.
FIVE YEAR PERFORMANCE COMPARISON
TOTAL CUMULATIVE RETURN TO STOCKHOLDERS
The graph below provides an indicator of cumulative shareholders returns for the
Corporation as compared with the S&P 500, and the Major Regional Banks (MRB)
Index.(1)
- ---------------------------
(1) This peer group comprises the largest regional banks in the United
States, and all but three of the banks do not compete with Frontier, and the
three banks that do compete with Frontier are much larger. Those banks that are
members of the group are as follows: Banc One Corp, Bank of N.Y., Barnett Banks,
Boatmen's Bancshares, Comerica Inc., Corestates Financial, First Bank Systems,
First Interstate Bancorp, First Union Corp, Fleet Financial Group, Nationsbank
Corp, Norwest Corp, PNC Bank Corp, Republic National, Suntrust Banks, U.S.
Bankcorp, Bank of Boston, Keycorp, Mellon Bank Corp, National City Corp, and
Wachovia Corp.
8
<PAGE> 11
<TABLE>
<CAPTION>
Base year 1989 = 100 1991 1992 1993 1994 1995
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
S&P 500 30.47% 7.62% 10.01% -1.54% 37.58%
Index 126.43 136.06 149.68 147.37 202.75
MAJOR REGIONAL BANKS 78.89% 27.34% 5.37% -8.83% 57.53%
Index 127.60 162.49 171.21 156.10 245.90
FFC 10.00% 19.09% 37.50% 58.40% 20.80%
Index 183.85 218.95 301.06 476.88 576.07
</TABLE>
Assumes $100 invested on December 31, 1989 in FFC common stock, the S&P 500
index, and in the S&P Major Regional Banks Index((MRB).
MISCELLANEOUS TRANSACTIONS
WITH DIRECTORS AND OFFICERS
The Corporation's subsidiary has as banking customers many of the Corporation's
directors and officers, as well as the businesses with which they are
associated. All loans made to such persons
9
<PAGE> 12
and entities during the past year were made in the Bank's ordinary course of
business and on substantially the same terms, including interest rates and
collateral, as those prevailing at the time of comparable transactions with
other persons. These loans do not involve more than a normal risk of
collectability, nor do they present any other unfavorable feature.
FINANCIAL INFORMATION
The Corporation's 1995 Annual Report, which contains the Corporation's financial
statements, is being sent to the shareholders with this Proxy Statement, and is
hereby incorporated by reference in its entirety.
RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS
The independent public accounting firm of Moss Adams audited the Corporation's
consolidated financial statements for the year 1995, and has been similarly
engaged in 1996.
Representatives of Moss Adams are expected to be present at the Annual Meeting
of Shareholders, and given the opportunity to make a statement if they desire to
do so. They will be available to respond to appropriate questions.
OTHER BUSINESS
The Board of Directors of the Corporation is not presently aware of any other
business to come before the Annual Meeting, and as of the date of the
preparation of this Proxy Statement, no shareholder has submitted to the Board
any proposal to be acted on at the meeting. If any matters come before the
meeting, not referred to in the enclosed Proxy, including matters incident to
the conduct of the meeting, the proxy holders will vote the shares represented
by the proxies in accordance with their best judgement.
SHAREHOLDER PROPOSALS FOR
1997 ANNUAL MEETING
In order for shareholder proposals to be included in the 1997 proxy materials,
and considered at the 1997 Annual Meeting of Shareholders, proposals must be
received by the Secretary of the Corporation at the address shown on the Notice
of Meeting no later than November 15, 1996.
10
<PAGE> 13
IT IS EXTREMELY IMPORTANT THAT YOUR VOTE BE COUNTED AT THIS MEETING.
THE ENCLOSED PROXY SHOULD BE COMPLETED, DATED, SIGNED, AND RETURNED IN THE
ENCLOSED ENVELOPE, FOR WHICH POSTAGE HAS BEEN PAID. PROMPT MAILING OF THE PROXY
WILL BE APPRECIATED.
By Order of the Board of Directors,
/S/ JAMES F. FELICETTY
-------------------------------
James F. Felicetty, Secretary
The Corporation will furnish without charge to any shareholder submitting a
written request, a copy of the Corporation's Form 10-K Annual Report for 1995 to
the Securities and Exchange Commission, including the financial statements and
schedules thereto. Such written request should be addressed to James F.
Felicetty, Secretary, Frontier Financial Corporation, 332 S.W. Everett Mall
Way/PO Box 2215, Everett, Washington 98203.
11
<PAGE> 14
PROXY
This proxy is solicited by the Board of Directors
FRONTIER FINANCIAL CORPORATION
PROXY FOR 1996 ANNUAL MEETING OF SHAREHOLDERS
The undersigned, having received the Notice of Meeting and Proxy Statement dated
March 15, 1996, hereby appoint Robert J. Dickson and Edward C. Rubatino, and
each of them, proxies of the undersigned, with full power of substitution, to
attend the 1996 annual meeting of the shareholders of the Corporation to be held
at Everett Golf & Country Club, Everett, Washington, on Tuesday, April 16, 1996,
at 7:30 p.m., and any adjournment or adjournments thereof, and thereat to vote
as designated below, all of the shares of stock of the undersigned in the
Corporation which the undersigned would be entitled to vote if personally
present, as follows:
(1) To elect Directors to serve until the next annual meeting.
[ ] FOR ALL nominees listed below.
[ ] WITHHOLD AUTHORITY to vote for ALL nominees
listed below.
[ ] WITHHOLD AUTHORITY to vote for ANY INDIVIDUAL
nominee(s). To withhold authority to vote for any
individual nominee(s), strike a line through the
nominee's name in the list below.
Robert J. Dickson J. Donald Regan
David A. Dujardin Roger L. Rice
Edward D. Hansen Roy A. Robinson
William H. Lucas William J. Robinson
James H. Mulligan Edward C. Rubatino
Alwyn L. Nelson Arthur W. Skotdal
Edward J. Novack
(2) In their discretion on any other matters properly coming
before the meeting or any adjournments thereof.
This proxy will be voted as directed, or if no such direction is indicated, it
will be voted in favor thereof.
Dated: ____________________, 1996
__________________________
__________________________
Note: Please date, sign exactly as name or names appear hereon, and return in
the enclosed pre-paid envelope. When signing as Attorney, Executor, Trustee,
Guardian, or Officer of a corporation, please give title as such.
