<PAGE>
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:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
GREEN TREE 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):
[_] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 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.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
-------------------------------------------------------------------------
Notes:
<PAGE>
LOGO
GREEN TREE FINANCIAL CORPORATION
1100 LANDMARK TOWERS
345 ST. PETER STREET
SAINT PAUL, MINNESOTA 55102-1639
March 29, 1997
To Our Stockholders:
You are cordially invited to attend the 1997 Annual Meeting of Stockholders
of Green Tree Financial Corporation (the "Company") which will be held at 2:00
p.m. on Thursday, May 15, 1997, at The Saint Paul Hotel, Casino Ballroom, 350
Market Street, Saint Paul, Minnesota 55102.
At the meeting of stockholders you will be asked to: (1) elect two
Directors; (2) ratify the selection of the Company's independent auditors; and
(3) transact such other business as may properly come before the meeting or
any adjournment thereof. Following these matters, management will present a
current report on the business and current activities of the Company. You will
also have an opportunity to comment on or inquire about aspects of the
business of the Company that may be of interest to you.
Please read the enclosed Notice of Annual Meeting and Proxy Statement which
describes the business to come before the meeting. Please mark, sign and
return the accompanying Proxy Card promptly in the enclosed postage-paid
envelope. We hope you will be able to attend the meeting on May 15.
WHETHER OR NOT YOU PLAN TO ATTEND, PLEASE MARK, SIGN AND RETURN YOUR PROXY
CARD PROMPTLY IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN
THE UNITED STATES.
Sincerely,
LOGO
LAWRENCE M. COSS
Chairman and Chief
Executive Officer
<PAGE>
LOGO
GREEN TREE FINANCIAL CORPORATION
----------------
NOTICE OF 1997 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 15, 1997
To the Stockholders of
Green Tree Financial Corporation:
NOTICE IS HEREBY GIVEN that the 1997 Annual Meeting of Stockholders of Green
Tree Financial Corporation, a Delaware corporation (the "Company"), has been
called to be held at The Saint Paul Hotel, 350 Market Street, Saint Paul,
Minnesota 55102, on Thursday, May 15, 1997, at 2:00 p.m., for the following
purposes:
1. To elect two Directors of the Company to hold office until their term
shall expire and until their successors shall have been duly elected and
qualified.
2. To ratify the selection of KPMG Peat Marwick, LLP as independent
auditors of the Company for the fiscal year ending December 31, 1997.
3. To transact such other business as may properly come before the Annual
Meeting of Stockholders or at any adjournments thereof.
The Board of Directors has fixed the close of business on Friday, March 28,
1997, as the record date for determination of stockholders entitled to notice
of and to vote at the meeting and at any adjournments thereof.
Please date, sign and mail the Proxy Card in the enclosed self-addressed
return envelope. Stockholders attending the meeting may withdraw their Proxies
at any time prior to their exercise by filing written notice with any officer
of the Company.
Dated: March 29, 1997
Saint Paul, Minnesota
BY ORDER OF THE BOARD OF DIRECTORS
LOGO
JOEL H. GOTTESMAN, Secretary
<PAGE>
LOGO
GREEN TREE FINANCIAL CORPORATION
1100 LANDMARK TOWERS
345 ST. PETER STREET
SAINT PAUL, MINNESOTA 55102-1639
----------------
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 15, 1997
GENERAL MATTERS
SOLICITATION OF PROXIES
The Board of Directors of Green Tree Financial Corporation (the "Company")
is soliciting the accompanying Proxy in connection with the Annual Meeting of
Stockholders to be held on May 15, 1997, at 2:00 p.m., and any adjournments of
the meeting. The Annual Meeting will be held at The Saint Paul Hotel, 350
Market Street, Saint Paul, Minnesota 55102. This Proxy Statement and the
enclosed Proxy Card are being mailed to stockholders commencing on or about
March 29, 1997.
The enclosed proxy may be revoked at any time before it is voted by: (1)
delivering to any officer of the Company a written notice of termination of
the proxy's authority, (2) filing with an officer of the Company another proxy
bearing a later date, or (3) appearing and voting at the Annual Meeting of
Stockholders.
The Company will pay the costs of solicitation, including the cost of
preparing and mailing this Proxy Statement and Notice of Annual Meeting.
Solicitation will be primarily by mailing this Proxy Statement to all
stockholders entitled to vote at the meeting. Proxies may be solicited by
officers of the Company by telephone or in person, but at no compensation in
addition to their regular compensation as officers. The Company will reimburse
brokers, banks, and others holding shares for the cost of distributing proxy
materials to and obtaining proxies from third parties. The Company has
retained Georgeson & Company Inc. to assist in the solicitation of proxies,
and has agreed to pay such firm approximately $7,000 plus reasonable expenses
incurred on behalf of the Company for its services. In addition, the Company
has retained Firstar Trust Company to tabulate and report on the votes cast by
stockholders.
VOTING, EXECUTION AND REVOCATION OF PROXIES
Pursuant to Delaware law and the Company's Certificate of Incorporation and
Bylaws, Firstar Trust Company will treat abstentions as shares that are
present and entitled to vote for purposes of determining the presence of a
quorum, but as unvoted for purposes of determining the approval of any matter
submitted to the stockholders for a vote. If a broker indicates on the proxy
that it does not have discretionary authority as to certain shares to vote on
a particular matter, those shares will not be considered as present and
entitled to vote.
Only the holders of the Company's Common Stock whose names of record appear
on the Company's books at the close of business on March 28, 1997 (the "Record
Date") will be entitled to vote at the Annual Meeting. At the close of
business on the Record Date, a total of 138,050,784 shares of Company Common
Stock were outstanding, each share being entitled to one vote.
1
<PAGE>
ANNUAL REPORT
A copy of the Company's Annual Report for the year ended December 31, 1996,
was furnished to each stockholder on or about March 29, 1997.
ELECTION OF DIRECTORS
(ITEM 1)
NOMINEES FOR ELECTION AS DIRECTOR
Pursuant to the Bylaws of the Company, the Board of Directors has
established the number of Directors at five. The Bylaws provide that the
Directors are divided into three classes, as equal in number as possible. Each
class of Directors serves a three-year term.
Two Directors are to be elected at the 1997 Annual Meeting of Stockholders.
The Board of Directors has nominated W. Max McGee and Robert D. Potts for
three-year terms expiring at the Annual Meeting of Stockholders to be held in
the year 2000.
The following tables set forth information, as of February 28, 1997,
including business experience during the past five years, as to the nominees
for election and as to the other Directors of the Company whose terms of
office will continue after the 1997 Annual Meeting of Stockholders.
INFORMATION REGARDING NOMINEES
<TABLE>
<CAPTION>
BUSINESS EXPERIENCE DURING
TERM THE PAST
NAME, POSITIONS AND DIRECTOR EXPIRES FIVE YEARS AND OTHER
OFFICES WITH COMPANY SINCE IN AGE DIRECTORSHIPS
-------------------- -------- ------- --- --------------------------
<C> <C> <C> <C> <S>
W. Max McGee................ 1985 2000 64 President, Max McGee
Director Companies, a general
investment company, since
1981.
Robert D. Potts............. 1994 2000 54 President and Chief
President and Chief Operating Officer since
Operating Officer; Director April 1994; Executive Vice
President and Chief
Operating Officer (December
1993-April 1994); Executive
Vice President,
Administration (October
1993 to November 1993);
Managing Partner, Deloitte
& Touche and its
predecessor, Touche Ross &
Co., Minneapolis, Minnesota
(1988-1993).
</TABLE>
RECOMMENDATION OF BOARD OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
NOMINEES. THE AFFIRMATIVE VOTE OF A MAJORITY OF THE SHARES OF THE COMPANY'S
COMMON STOCK PRESENT AT THE MEETING, IN PERSON OR BY PROXY, IS REQUIRED TO
ELECT THE NOMINEES. PROXIES WILL BE VOTED IN FAVOR OF SUCH NOMINEES UNLESS
OTHERWISE SPECIFIED.
2
<PAGE>
INFORMATION REGARDING CONTINUING DIRECTORS
<TABLE>
<CAPTION>
BUSINESS EXPERIENCE DURING
TERM THE PAST
NAME, POSITIONS AND DIRECTOR EXPIRES FIVE YEARS AND OTHER
OFFICES WITH COMPANY SINCE IN AGE DIRECTORSHIPS
-------------------- -------- ------- --- --------------------------
<C> <C> <C> <C> <S>
Lawrence M. Coss............ 1975 1999 58 Chairman and Chief
Chief Executive Officer; Executive Officer since
Chairman of the Board April 1994; Chairman,
President and Chief
Executive Officer (1987-
1994); President and Chief
Executive Officer (1975-
1987); Company founder.
Richard G. Evans............ 1991 1998 48 Executive Vice President
Executive Vice President; since May 1996; Executive
Director Vice President and
Secretary (December 1993-
May 1996); Senior Vice
President, General Counsel
and Secretary (1988-1993);
Vice President, General
Counsel and Secretary
(1985-1988).
Robert S. Nickoloff......... 1978 1998 67 Chairman of the Board,
Director Medical Innovation Capital,
Inc.; Director of Minnesota
Power and Light since 1986;
Director of Integ
Incorporated since 1991.
</TABLE>
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The Company's Board of Directors has an Executive Committee which consisted
of Lawrence M. Coss, Robert S. Nickoloff and Robert D. Potts during 1996. The
Executive Committee meets as necessary between meetings of the Board of
Directors to act on behalf of the Board or take any other action that may be
delegated to it. The Executive Committee conducted all its business between
meetings of the Board of Directors by written action during 1996. Following the
1997 Annual Meeting, it is anticipated that Lawrence M. Coss, Robert S.
Nickoloff and Robert D. Potts will be elected to the Executive Committee.
The Board of Directors has an Audit Committee which consisted of W. Max McGee
and Robert S. Nickoloff during 1996. Among its duties, the Audit Committee
reviews and makes recommendations to the Board of Directors with respect to
designated financial and accounting matters. The Audit Committee held one
meeting during the year ended December 31, 1996. Following the 1997 Annual
Meeting, it is anticipated that W. Max McGee and Robert S. Nickoloff will be
elected to the Audit Committee.
The Board of Directors has a Compensation Committee which consisted of W. Max
McGee and Robert S. Nickoloff during 1996. Among its duties, the Compensation
Committee administers the provisions of the Company's Key Employee Bonus Plan,
1987 Employee Stock Option Plan, 1995 Employee Stock Option Plan, Key Executive
Stock Bonus Plan and 1997 Chief Executive Officer Cash and Stock Option Plan.
The Compensation Committee held five meetings during the year ended December
31, 1996. After the 1997 Annual Meeting, it is anticipated that W. Max McGee
and Robert S. Nickoloff will be elected to the Compensation Committee.
The Board of Directors has a Nomination Committee which consisted of Lawrence
M. Coss, W. Max McGee and Robert S. Nickoloff during 1996. The Committee makes
recommendations to the Board of Directors with respect to nominees to serve on
the Board. The Nomination Committee did not meet during 1996. In connection
with its nominating responsibilities, the Nomination Committee will consider
qualified nominees recommended by a stockholder of the Company if the
recommendation is submitted in writing to the Secretary of the Company no later
than the December 31 preceding the annual meeting. Any such recommendation must
include information which will enable the Committee to evaluate the
qualifications of the proposed nominee.
3
<PAGE>
During the year ended December 31, 1996, the Board of Directors held four
meetings. All incumbent Directors attended at least 75 percent of those
meetings of the Board and committees of which they were members that were held
while they were serving on the Board or on such committees.
COMPENSATION OF DIRECTORS
During the year ended December 31, 1996, Directors received a fee of $2,000
per month plus travel expenses. In addition, members of the Audit Committee
received a fee of $1,250 per quarter. Outside Directors also received
compensation in the form of stock options. During 1996, a total of 36,000
stock options were granted to three outside Directors. The option price was
the closing price of the Company's Common Stock on the New York Stock Exchange
on the date of grant.
COMPARATIVE STOCK PERFORMANCE
The Performance Graph below compares the cumulative total stockholder return
on the Company's Common Stock against the S&P Composite-500 Stock Index and
the S&P Financial Index for the period of five fiscal years commencing
December 31, 1991, and ending December 31, 1996. The graph presentation
assumes $100 invested on December 31, 1991, in Company Common Stock, the S&P
Composite-500 Stock Index and the S&P Financial Index, with dividends
reinvested, and shows such values at December 31, 1996.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
LOGO
<TABLE>
<CAPTION>
12/31/91 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96
- ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Green Tree Financial
Corporation............ 100 125 252 322 563 831
- ---------------------------------------------------------------------------------
S&P Composite-500 Index. 100 108 118 120 165 203
- ---------------------------------------------------------------------------------
S&P Financial Index..... 100 123 137 132 204 275
</TABLE>
4
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
INFORMATION REGARDING EXECUTIVE OFFICERS
The following table sets forth certain information concerning the executive
officers of the Company. Executive officers are elected annually by the Board
of Directors.
<TABLE>
<CAPTION>
NAME, POSITIONS, AND BUSINESS EXPERIENCE DURING THE PAST
OFFICES WITH THE COMPANY AGE FIVE YEARS
------------------------ --- -----------------------------------
<C> <C> <S>
Lawrence M. Coss................. 58 Chairman and Chief Executive Officer
Chief Executive Officer; since April 1994; Chairman, President
Chairman of the Board and Chief Executive Officer (1987-
1994); President and Chief Executive
Officer (1975-1987); Company founder;
Director of the Company since 1975
(term expires in 1999).
Robert D. Potts.................. 54 President and Chief Operating Officer
President and Chief Operating since April 1994; Executive Vice
Officer; Director President and Chief Operating Officer
(December 1993 to April 1994);
Executive Vice President,
Administration (October to November
1993); Managing Partner, Deloitte &
Touche and its predecessor, Touche Ross
& Co., Minneapolis, Minnesota (1988 to
May 1993); Partner, Deloitte & Touche
(1975 to October 1993); Director of the
Company since 1994 (nominee for term
expiring in 2000).
Richard G. Evans................. 48 Executive Vice President since May
Executive Vice President; 1996; Executive Vice President and
Director Secretary (December 1993 to May 1996);
Senior Vice President, General Counsel
and Secretary of the Company (1988-
1993); Vice President, General Counsel
and Secretary (1985-1988); Director of
the Company since 1991 (term expires in
1998).
Jerry W. Britton................. 46 Executive Vice President of the Company
Executive Vice President since May 1995; President, Commercial
Lending Division of the Company since
March 1997; President-Eastern Division
of ITT Commercial Finance Corp.,
Atlanta, Georgia (1988-1995); Senior
Vice President and Director of
Marketing of ITT Commercial Finance
Corp. (1987-1988); Vice President of
ITT Commercial Finance Corp. (1979-
1986).
Bruce A. Crittenden.............. 45 Executive Vice President of the Company
Executive Vice President since December 1996; Senior Vice
President of the Company (August 1995
to December 1996); President, Mortgage
Services and Retail Services Division
of the Company since March 1997;
Household International since November
1972--Managing Director of HFC (1993 to
1995); Senior Vice President of HFC
(1991 to 1993); Chief Operating Officer
of HRSI (1988 to 1991).
</TABLE>
5
<PAGE>
EXECUTIVE COMPENSATION
The annual compensation for executive officers, including salaries,
Directors' fees, bonuses, and option awards for the years ended December 31,
1994, 1995, and 1996, was as follows:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS(2)
------------------------------------------
NAME OF INDIVIDUAL SECURITIES
AND PRINCIPAL POSITION SALARY BONUS UNDERLYING
- ---------------------- YEAR ($)(1) ($) OPTIONS
------------------------------------------
<S> <C> <C> <C> <C>
Lawrence M. Coss.................. 1996 $433,608 $102,015,158(3) 2,000,000(4)
Chief Executive Officer; 1995 433,608 65,146,594(5) None
Chairman of the Board 1994 433,608 28,544,354(6) None
Robert D. Potts................... 1996 383,016 1,250,000 250,000
President and Chief 1995 333,000 850,000 300,000(7)
Operating Officer; 1994 281,008 600,000 None
Director
Richard G. Evans.................. 1996 268,000 350,000 85,000
Executive Vice President; 1995 258,000 350,000 100,000(7)
Director 1994 235,500 280,000 None
Jerry W. Britton.................. 1996 209,000 400,000 160,000
Executive Vice President 1995 131,428 200,000 100,000(7)
1994 N/A N/A None
Bruce A. Crittenden............... 1996 184,000 400,000 160,000
Executive Vice President 1995 70,346 75,000 80,000(7)
1994 N/A N/A None
</TABLE>
- --------
(1) Includes other compensation in the form of Director's fees, if applicable
and car allowances. Other compensation included does not exceed the lesser
of $50,000 or 10 percent of the total compensation and is not separately
shown.
(2) The Company did not issue any restricted stock to the executive officers
listed or any other employees in 1996.
(3) Includes $94,650,000 (2,400,000 shares) of the Company's Common Stock
earned as bonus, before stock withheld for federal and state tax
withholdings.
(4) Granted pursuant to the 1997 Chief Executive Cash and Stock Bonus Plan
previously approved by stockholders.
(5) Includes $59,212,820 (1,998,745 shares) of Company Common Stock earned as
bonus, before stock withheld for federal and state tax withholdings.
(6) Includes $24,538,866 (1,349,216 shares) of Company Common Stock earned as
bonus, before stock withheld for federal and state tax withholdings. Share
amount is adjusted for a two-for-one stock split in the form of a dividend
distributed October 15, 1995.
(7) Option amount is adjusted for a two-for-one stock split in the form of a
dividend distributed October 15, 1995.
6
<PAGE>
OPTIONS GRANTED, EXERCISED AND HELD BY EXECUTIVES
The following table shows the number and potential realizable value of stock
options granted in 1996.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
---------------------------------------------- POTENTIAL REALIZABLE
% OF TOTAL VALUE AT ASSUMED ANNUAL
NUMBER OF OPTIONS RATES OF STOCK PRICE
SECURITIES GRANTED TO EXERCISE APPRECIATION FOR
UNDERLYING EMPLOYEES OR BASE OPTION TERM
OPTIONS IN FISCAL PRICE EXPIRATION -----------------------
NAME GRANTED (#)(1) YEAR ($/SH)(2) DATE 5%($) 10%($)
- ---- -------------- ---------- --------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Lawrence M. Coss........ 2,000,000 35.51% $30.875 02/09/06 $38,834,243 $98,413,597
Robert D. Potts......... 150,000 2.66% 33.375 05/15/06 3,148,404 7,978,673
100,000 1.78% 28.375 12/07/06 3,474,467 7,213,252
Richard G. Evans........ 60,000 1.07% 33.375 05/15/06 1,259,361 3,191,469
25,000 0.44% 28.375 12/07/06 868,617 1,803,313
Jerry W. Britton........ 60,000 1.07% 33.375 05/15/06 1,259,361 3,191,469
100,000 1.78% 28.375 12/07/06 3,474,467 7,213,252
Bruce A. Crittenden..... 60,000 1.07% 33.375 05/15/06 1,259,361 3,191,469
100,000 1.78% 28.375 12/07/06 3,474,467 7,213,252
</TABLE>
STOCK OPTION GRANTS IN LAST FISCAL YEAR
- --------
(1) Stock options become exercisable at 20 percent of the total after each of
the first five anniversary dates from the date of grant, except that Mr.
Coss's shares vest 20 percent of the total beginning December 31, 1997.
(2) Optionees may tender previously-acquired shares of the Company's Common
Stock or request the Company to withhold sufficient shares in payment of
the exercise price of a stock option, and optionees may tender previously-
acquired shares or request the Company to withhold sufficient shares to pay
the taxes arising from the exercise. Under the terms of the 1995 Employee
Stock Option Plan, of which the above options were granted, with the
exception of Mr. Coss, the Compensation Committee may grant a reload stock
option to purchase the number of shares tendered and/or withheld in an
exercise. The reload option would have an exercise price equal to the
closing price of the Company's Common Stock on the date of the transaction,
and would expire on the scheduled expiration date of the exercised option.
The Compensation Committee has not previously granted reload options to any
optionees.
The following table shows the number and value of stock options exercised by
the named executive officers during 1996 and the number and value of stock
options retained at December 31, 1996.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
SHARES FY-END (#) FY-END ($)(1)
ACQUIRED ON --------------------- -------------------------
EXERCISE VALUE EXERCISABLE/ EXERCISABLE/
NAME (#) REALIZED ($) UNEXERCISABLE UNEXERCISABLE
- ---- ----------- ------------ --------------------- -------------------------
<S> <C> <C> <C> <C>
Lawrence M. Coss........ -- -- 1,000,000 / 2,000,000 $35,656,250 / $15,500,000
Robert D. Potts......... -- -- 126,666 / 623,334 3,054,561 / 9,676,688
Richard G. Evans........ -- -- 200,000 / 165,000 6,420,937 / 1,741,250
Jerry W. Britton........ -- -- 20,000 / 240,000 335,000 / 2,680,000
Bruce A. Crittenden..... -- -- 16,000 / 224,000 234,000 / 2,276,000
</TABLE>
- --------
(1) Based on closing price of the Company's Common Stock on December 31, 1996
($38.625) less the option exercise price.
7
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Role of Committee. The Compensation Committee of the Board of Directors (the
"Committee") reviews and establishes compensation strategies and programs to
ensure that the Company attracts, retains, properly compensates, and motivates
the most qualified executives and key employees. The Committee consists of the
two nonemployee Directors. It regularly meets in November or December,
primarily to review and determine bonuses for executive and other key
personnel, and otherwise meets on an as-needed basis. In 1996, the Committee
met five times.
Elements of Compensation Program. The Committee believes that the Company's
success depends greatly on the efforts of its officers, regional managers, and
other key personnel. The Committee also believes the Company must compete with
a number of other financial institutions for qualified personnel. For these
reasons, the Company seeks to attract, retain, and motivate its key employees
with compensation that is competitive within the financial services industry,
provided that performance of the Company and the individual warrant such
compensation. Historically, the most significant component of key employee
compensation has been remuneration in the form of cash bonuses and stock
options awarded pursuant to the Company's Key Employee Bonus Program (the
"Bonus Program") and its stock option plans. Base salary levels for key
Company employees are generally conservative compared to similar positions at
other financial institutions. Cash bonuses typically represent a substantial
portion of a key employee's total cash compensation. The Committee believes
that, by putting a substantial portion of a key employee's compensation at
risk, the employee is further motivated to perform at a high level. The
Committee also believes that this performance-based philosophy better aligns
the employee's interests with those of the Company's stockholders.
Under the Company's Bonus Program, cash bonuses aggregating up to 4 percent
of the Company's pretax earnings may be paid to executives and other key
employees, excluding the Company's Chief Executive Officer. Employees
participating in the program include Company officers, regional managers, and
other key employees designated by the Company's Chief Executive Officer and
approved by the Committee. For 1996, 154 employees participated in the Bonus
Program.
The Committee meets to consider the amount of bonuses payable to Bonus
Program participants in November or December of each year, and bonuses are
paid before year end. The Committee determines bonus amounts on the basis of
recommendations of the Company's Chief Executive Officer who, in turn,
considers the written performance evaluations of the supervisors of
participating key employees. The Committee analyzes those recommendations in
light of a number of factors relating to both Company and individual
performance. Company performance factors include the level of profitability,
return on equity, volume of business and market share, comparison to prior
years' performance, actual versus budgeted performance, portfolio performance,
performance in relation to competitors, and other factors. Individual
performance factors include an assessment of contribution to business unit
performance, quality of work, individual and overall responsibilities, length
of service, and other factors.
During 1996, the Committee considered the growth of the Company's business
and the returns it generated for its stockholders in setting annual bonuses.
In particular, the Committee considered the Company's significant increase in
the principal balance of loans originated in 1996 over 1995. The principal
balance of loans originated by the Company for 1996 was $10.6 billion, an
increase of 53 percent over the prior year's originations. Strong loan
originations led to record revenues of $924 million, a 30 percent increase
over the prior year, and record net earnings of $309 million, an increase of
22 percent over the prior year. Lastly, the Committee considered the Company's
28 percent return on equity and the total return to stockholders (including
dividends reinvested) in 1996 of 48 percent, a return well above the Company's
peer group.
Although the Bonus Program enables the Company to pay up to 4 percent of
pretax profits as bonuses, the Company has not always paid out as much as was
available. For 1996, aggregate bonuses were $11,376,000 or 2.28 percent of
pretax earnings, and in the preceding two years aggregate bonuses under the
Bonus Program approximated 1.79 percent of pretax earnings. The foregoing
amounts include the executive officers, other than
8
<PAGE>
the Company's Chief Executive Officer, who received aggregate bonuses of
$2,400,000 or 0.59 percent of pretax earnings, and, in the preceding two
years, bonus compensation to this group of individuals approximated 0.44
percent and .051 percent of pretax earnings, respectively. Because a
significant portion of key employee cash compensation is payable as a bonus,
the Committee believes it will continue to pay bonuses in a year for which the
level of earnings declined from the previous year, although the amount of the
bonuses paid will, in all likelihood, decline to reflect the reduction in
earnings.
The Committee believes that it is important for key employees to have long-
term incentives through an equity interest in the Company. Accordingly, from
time to time the Company has granted key employees stock options pursuant to
the Company's stock option plans. As of February 28, 1997, 136 of the
Company's 147 total key employees (excluding the Company's Chief Executive
Officer) held options to acquire 5,406,732 shares of the Company's Common
Stock. As of the same date, the executive officers, other than the Company's
Chief Executive Officer, whose compensation is specifically disclosed herein,
held stock and options aggregating 1,855,140 shares of the Company's Common
Stock. In addition, the Committee believes that it is important for the
Company's employees to have stock ownership in the Company. During 1996, the
Committee approved grants of 1,000 share options to a total of 1,063 employees
who at the time of grant had at least two years of full-time employment. These
options were granted at the discretion of the Committee and will vest in one-
fifth increments over a five-year period. The Company has no other long-term
incentive plans.
Compensation of Chief Executive Officer for 1996. The compensation of the
Company's Chief Executive Officer for 1996 is based entirely on an employment
agreement between Mr. Coss and the Company entered into in 1991 (the "1991
Employment Agreement"), extending similar employment and compensation
arrangements that have been in effect since 1983. The 1991 Employment
Agreement, which expired on December 31, 1996 provided that, in addition to a
base annual salary of $400,000, Mr. Coss would receive an annual bonus as
provided in his employment contract. For a description of the 1991 Employment
Agreement, see "1991 Employment Agreement With Chief Executive Officer"
beginning on page 11.
The Committee believes that the compensation arrangements with Mr. Coss meet
the Company's overall approach to performance-related executive compensation
and its goal of retaining and motivating a highly qualified Chief Executive
Officer responsible for setting and implementing the strategic direction which
has enabled the Company to perform at a very high level. The 1991 Employment
Agreement aligned management and stockholder interests by linking a
substantial portion of Mr. Coss's cash compensation to pretax earnings, with
the result that Chief Executive Officer compensation improved directly in
relation to improved Company profitability. The agreement also provided that a
significant portion of Mr. Coss's compensation was payable in Company stock.
The Committee believes that the equity position that Mr. Coss has in the
Company as a result of the 1991 Employment Agreement has provided Mr. Coss
with long-term incentives to help the Company achieve strong financial
performance.
The Committee firmly believes that the Company's compensation policy for its
key employees, which emphasizes long-term incentives through equity
appreciation, has been a key contributing factor in the extraordinary
financial performance of the Company over the last five years. The Company's
market capitalization during this period has increased from approximately $460
million at December 31, 1991 to approximately $5.3 billion at December 31,
1996. The Company's earnings per share has grown at a compound annual rate of
34 percent over the five-year period, from $0.50 per share to $2.20 per share.
The compound total annual return to stockholders over the last five years,
which includes reinvestment of dividends, was 53 percent. For additional
information on stockholder performance and the performance graph, see
"Performance Graph" on page 4. The Committee has reaffirmed its commitment to
emphasize policies which will contribute to the long-term growth of
stockholder values. It is with this commitment that the Committee approved a
new employment agreement with Mr. Coss which became effective upon the
expiration of the 1991 Employment Agreement.
9
<PAGE>
Employment Agreement With Chief Executive Officer beginning in 1997. At the
Committee's meeting on February 9, 1996, an agreement was reached with Mr. Coss
as to the terms of a new five-year employment agreement to be effective January
1, 1997 (the "1997 Employment Agreement"). The Committee determined that an
increase in base salary from $400,000 to $600,000 per year was appropriate, as
Mr. Coss's base salary had not been increased since 1985. At this level, Mr.
Coss's base salary would continue to rank in the fourth (bottom) quartile of
chief executive officers of large financial services companies and is
consistent with the Committee's policy of establishing modest base salaries for
key employees. The cash bonus and long-term incentive provisions incorporated
into the 1997 Employment Agreement are: (1) a cash bonus to be determined
pursuant to a new chief executive bonus and stock option plan (the "1997 Chief
Executive Plan"); and (2) the issuance to Mr. Coss of a two million share stock
option award pursuant to the 1997 Chief Executive Plan. For an additional
description of the terms of the 1997 Employment Agreement, see "1997 Employment
Agreement With Chief Executive Officer" beginning on page 11, below. The 1997
Chief Executive Officer Plan was approved by stockholders at the Annual Meeting
on May 15, 1996.
1997 Chief Executive Plan. The 1997 Chief Executive Plan, which was approved
by stockholders at the May 15, 1996 Annual Meeting, provides for an incentive-
based cash bonus formula equal to 2.5 percent of the net income of the Company
in excess of a 12 percent return on equity ("ROE"). Based upon the advice of
the Consultant and the Company's extraordinary record over the past five years
in terms of stockholder performance returns, the Committee determined that it
would be appropriate to target total cash compensation for Mr. Coss within the
first (top) quartile of cash compensation of chief executive officers of "large
cap" public companies. In choosing a base or threshold level of performance of
ROE, the Committee considered the historical ROE and comparative information
provided by the Consultant.
The Committee also concluded that a stock option grant would create added
positive incentive for Mr. Coss to continue to lead management's efforts to
sustain the Company's strong financial performance. The Committee carefully
considered the following factors in deciding to grant stock options rather than
a stock bonus as provided in the 1991 Employment Agreement, and in determining
the number of options to grant to Mr. Coss pursuant to the 1997 Chief Executive
Plan: (1) the extraordinary growth of the Company in terms of loan volume,
income, net earnings, stockholders' equity and market capitalization; (2) the
desire to provide additional long-term incentives to foster continued strong
growth in stockholder values; (3) the equity made available to other chief
executives of public companies who have developed strategies and have guided
management in the execution of such strategies to achieve a significant
increase in stockholder value; (4) Mr. Coss's present level of investment in
the Company; and (5) the accounting treatment of stock options which would not
involve a charge to earnings. No one factor was given more weight than another
factor by the Committee, and the Committee made a determination that an option
grant to Mr. Coss of two million shares was appropriate.
Statement Regarding Tax Policy Compliance. Section 162(m) of the Internal
Revenue Code of 1986, as amended (the "Code"), generally limits the Company's
federal income tax deduction for compensation paid in any year to certain named
executives (including the Chief Executive Officer) to $1 million, to the extent
that such compensation is not "performance-based compensation" within the
meaning of Section 162(m) and the Treasury Regulations promulgated thereunder.
Accordingly, in structuring the Company's compensation arrangement with its
Chief Executive Officer under the 1997 Chief Executive Plan, the Committee
designed an incentive bonus formula and stock option plan which was intended to
qualify as "performance-based compensation" in order to decrease the after-tax
cost of such arrangements to the Company. In compliance with Section 162(m),
the 1997 Chief Executive Plan, which provides for incentive-based compensation,
was approved by stockholders. Mr. Coss's compensation for 1995 and 1996 is
pursuant to the 1991 Employment Agreement, which is grandfathered under the
provisions of Section 162(m).
By the Compensation Committee:
W. Max McGee
Robert S. Nickoloff
10
<PAGE>
1991 EMPLOYMENT AGREEMENT WITH CHIEF EXECUTIVE OFFICER
The 1991 Employment Agreement extended Mr. Coss's previous employment and
noncompetition agreement with the Company from January 1, 1992, through
December 31, 1996. The agreement provided that Mr. Coss was entitled to receive
a base salary of $400,000 per year and a bonus equal to 2.5 percent of the
Company's pretax income, after deductions for bonuses paid pursuant to the Key
Executive Stock Bonus Program (described below) and certain other adjustments.
The bonus would be payable: (1) so long as the Key Executive Stock Bonus
Program is in effect, 50 percent in cash and 50 percent in Company Common
Stock, initially valued at $23.75, the closing price for the Company's Common
Stock on the New York Stock Exchange on the day the 1991 Employment Agreement
was entered into; or (2) in all other cases, 100 percent in cash. The Key
Executive Stock Bonus Program provides that the stock price for the issuance of
stock in payment of the bonus is to be adjusted for stock dividends and other
corporate events affecting the number of shares outstanding. The stock price
for the issuance of stock in payment of the stock portion of the bonus is
$2.96875 per share as a result of adjustments to reflect three separate two-
for-one stock splits in the form of stock dividends, distributed to
stockholders on January 31, 1993, June 30, 1994 and October 15, 1995.
1997 EMPLOYMENT AGREEMENT WITH CHIEF EXECUTIVE OFFICER
As indicated in the Report of the Compensation Committee, the Committee
determined that it would be in the best interests of the Company to enter into
a new employment agreement to be effective after the expiration of the 1991
Employment Agreement on December 31, 1996. The Committee retained the
Consultant to advise the Committee and to assist in developing proposals for a
new employment agreement with Mr. Coss.
The Compensation Committee reached agreement with Mr. Coss at the Committee's
meeting on February 9, 1996, as to the terms of a new employment agreement to
be effective on January 1, 1997 (the "1997 Employment Agreement"). The 1997
Employment Agreement will be for a term of five years beginning January 1, 1997
and ending on December 31, 2001. The 1997 Employment Agreement provides for:
(1) an increase in base salary from $400,000 to $600,000 per year; (2) a cash
bonus to be determined pursuant to a new chief executive officer bonus and
stock option plan (the "1997 Chief Executive Plan"); and (3) the issuance to
Mr. Coss of a two million share option award pursuant to the 1997 Chief
Executive Plan. The 1997 Chief Executive Plan was approved by stockholders at
the last Annual Meeting of Stockholders held on May 15, 1996.
The Compensation Committee and Mr. Coss also agreed that the terms of his
noncompetition agreement would be extended and would apply for the five-year
term of the 1997 Employment Agreement, plus one year. If retirement or a change
of control occurs during the five-year term, the noncompetition agreement will
apply from the date of such event for the remainder of the original term of the
1997 Employment Agreement, plus one year.
OTHER INFORMATION RELATING TO DIRECTORS
AND EXECUTIVE OFFICERS
CHANGE OF CONTROL AGREEMENTS
The 1997 Employment Agreement with Mr. Coss grants him the right to terminate
his employment within two years of a Critical Event, (defined as the sale of
all or substantially all of the assets of the Company to, or the acquisition of
more than 50 percent of the issued and outstanding voting stock of the Company
by, any person or group of persons acting in concert, or if the Company is
merged into another corporation or is consolidated with another corporation),
provided that the term of the noncompetition agreement will remain in effect
for the balance of the term of the 1997 Employment Agreement, plus one year.
The 1997 Employment Agreement also provides for a termination payment equal to
the largest amount that does not constitute an "excess parachute payment"
within the meaning of Section 280G of the Code, provided that the amount
thereof is subject to a cap of 0.5 percent of the valuation placed on the
entire Company in connection with such Critical Event.
11
<PAGE>
The Company has also entered into an agreement with Richard G. Evans,
Executive Vice President, which provides for specified financial arrangements
upon termination of employment with the Company after a change in control.
Generally, the agreement was for an initial one-year term and thereafter is
automatically renewable for additional one-year terms unless the Company gives
notice to Mr. Evans at least 90 days prior to each December 31 that it does not
wish to extend the agreement; provided, however, that notwithstanding any such
notice by the Company not to extend, the agreement will continue for a period
of 24 months beyond its term if a change of control of the Company occurs
during such term. The agreement provides that after a change in control of the
Company, if Mr. Evans, leaves the Company's employ either voluntarily or
involuntarily (other than a termination for cause or due to death or
disability), he is entitled to compensation equal to three times the sum of (i)
his annual base salary, and (ii) an amount equal to the product of his annual
base salary multiplied by the percentage that the discretionary bonus for the
last complete fiscal year bears to the annual base salary for the prior fiscal
year. The agreement also requires the payment of all legal fees and expenses
incurred by Mr. Evans in connection with such a termination of employment.
PENSION PLAN
Employees of the Company participate in a noncontributory pension plan (the
"Pension Plan"). The Pension Plan is a defined benefit plan qualified under the
Internal Revenue Code (the "Code"). To be eligible to receive benefits under
the Pension Plan, an employee must be at least 21 years of age, have completed
one full year of employment, and have worked for the Company for a minimum of
1,000 hours in the preceding 12 months.
Normal retirement age under the Pension Plan is generally age 65 and benefits
are reduced or increased for retirement prior to or after age 65. The formula
to determine the amount of benefits payable to an employee upon normal
retirement is as follows: 1.2 percent of monthly average earnings up to covered
compensation plus 1.75 percent of monthly average earnings in excess of covered
compensation, multiplied by service up to 35 years. Monthly average earnings is
the employee's total pay during the 60 nonconsecutive months of the employee's
last 120 months of employment with the Company which give the highest average
compensation. None of the Chief Executive Officer's stock bonus payments count
as compensation under the Pension Plan. Covered compensation is the 35-year
average of the social security wage base, varying by year of birth. The normal
Pension Plan option, upon which the funding assumptions are based, is an option
that provides that the participant will receive benefits for his or her
lifetime. Section 415 of the Code limits the annual benefit which may be paid
under a qualified plan. The annual benefit limit for an individual age 65 as of
December 31, 1996, was $120,000. The Board of Directors adopted a Restated
Supplemental Pension Plan in September 1987 pursuant to which the Company will
pay any benefits lost due to qualified plan limitations for the executive
officers listed on page 6 and certain other key officers of the Company.
On December 31, 1996, all of the individuals named in the preceding Summary
Compensation Table were participants in the Pension Plan. Mr. Coss has accrued
21 years of service; Mr. Potts, 3 years; Mr. Evans, 11 years; Mr. Britton, 2
years; and Mr. Crittenden, 1 year.
12
<PAGE>
The following table assumes a formula for normal retirement as described
above assuming all income is above covered compensation.
<TABLE>
<CAPTION>
AVERAGE ESTIMATED ANNUAL PENSION BASED ON YEARS
ANNUAL OF SERVICE AT NORMAL RETIREMENT DATE
EARNINGS ------------------------------------------------------
(IGHEST 5 YEARS)H 15 20 25 30 35
- ----------------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
$5,000,000.............. $1,312,500 $1,750,000 $2,187,500 $2,625,000 $3,062,500
4,000,000.............. 1,050,000 1,400,000 1,750,000 2,100,000 2,450,000
3,000,000.............. 787,500 1,050,000 1,312,500 1,575,000 1,837,500
2,000,000.............. 525,000 700,000 875,000 1,050,000 1,225,000
1,500,000.............. 393,750 525,000 656,250 787,500 918,750
1,000,000.............. 262,500 350,000 437,500 525,000 612,500
500,000.............. 131,250 175,000 218,750 262,500 306,250
400,000.............. 105,000 140,000 175,000 210,000 245,000
300,000.............. 78,750 105,000 131,250 157,500 183,750
225,000.............. 59,060 78,750 98,440 118,130 137,810
200,000.............. 52,500 70,000 87,500 105,000 122,500
</TABLE>
SECURITY OWNERSHIP OF MANAGEMENT
As of February 28, 1997, the Company is unaware of any owner of the Company's
Common Stock which beneficially owns more than 5 percent of such stock.
The following table sets forth as of February 28, 1997, information about the
ownership of the Company's Common Stock by each Director, by each executive
officer named in the Summary Compensation Table and by all Directors and
officers as a group. The stockholders listed in the table have sole voting and
investment powers with respect to the shares indicated.
<TABLE>
<CAPTION>
PERCENT OF
AMOUNT AND NATURE OF OUTSTANDING
NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP SHARES
- ------------------------ -------------------- -----------
<S> <C> <C>
Lawrence M. Coss.............................. 6,598,927(1) 4.74%
Robert D. Potts............................... 166,666(2) *
Richard G. Evans.............................. 400,000(2) *
Jerry W. Britton.............................. 20,100(2) *
Bruce A. Crittenden........................... 16,040(2) *
W. Max McGee.................................. 577,800(3) *
Robert S. Nickoloff........................... 122,410(3) *
All Directors and Officers as a group (49
persons)...................................... 8,857,035(4) 6.37%
</TABLE>
- --------
*Less than one percent.
(1) Includes 32,000 shares held by minor children, 87,200 shares held by
spouse, 80,000 shares held by LVC Investment Company, Inc., and options for
1,000,000 shares of Common Stock exercisable within 60 days after February
28, 1997.
(2) Includes 126,666, 200,000, 20,000 and 16,000 shares issuable to Messrs.
Potts, Evans, Britton and Crittenden, respectively, upon exercise of stock
options which are exercisable currently or within 60 days after February
28, 1997. Mr. Evans' holdings include 95,000 shares held by his spouse.
(3) Includes 60,000 and 52,000 shares issuable to Messrs. McGee and Nickoloff,
respectively, upon exercise of stock options which are exercisable
currently or within 60 days after February 28, 1997. Mr. McGee's holdings
include 200,000 shares held by his spouse.
(4) Includes 2,101,564 shares issuable upon exercise of stock options
exercisable currently or within 60 days after February 28, 1997.
13
<PAGE>
SECTION 16(A) REPORTING
Section 16(a) of the 1934 Act requires the Company's Directors, executive
officers and all person who beneficially own more than 10% of the outstanding
shares of the Company's Common Stock to file with the Securities and Exchange
Commission and the New York Stock Exchange initial reports of ownership and
reports of changes in ownership of such Common Stock. Directors, executive
officers and greater-than-10%-beneficial owners are also required to furnish
the Company with copies of all Section 16(a) reports they file. To the
Company's knowledge, based upon a review of the copies of such reports
furnished to the Company during the fiscal year ended December 31, 1996, all
Section 16(a) filing requirements applicable to the Company's Directors,
executive officers and greater-than-10% beneficial owners were complied with.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors, upon the recommendation of its Audit Committee, has
appointed KPMG Peat Marwick, LLP to audit the books and accounts of the
Company and its subsidiaries for the fiscal year ending December 31, 1997,
subject to stockholder ratification.
A representative of KPMG Peat Marwick, LLP will be present at the 1997
Annual Meeting of Stockholders with the opportunity to make a statement if he
or she desires to do so, and is expected to be available to respond to
appropriate questions from stockholders.
SELECTION OF AUDITORS
(ITEM 2)
The Board of Directors of the Company has selected the firm of KPMG Peat
Marwick, LLP as independent auditors of the Company for the year ending
December 31, 1997, subject to the approval of the stockholders.
Before the Audit Committee recommended to the full Board of Directors the
appointment of KPMG Peat Marwick, LLP, it carefully considered that firm's
qualifications. This included a review of its performance in prior years as
well as its reputation for integrity and competence in the fields of auditing
and accounting. The Audit Committee has expressed its satisfaction with KPMG
Peat Marwick in all these respects. Representatives of KPMG Peat Marwick will
be present at the Annual Meeting of Stockholders and will be given a
opportunity to make a statement if they desire to do so and will be available
to respond to appropriate questions following the meeting.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR APPROVAL OF
THE SELECTION OF KPMG PEAT MARWICK, LLP AS THE COMPANY'S AUDITORS. PROXIES
WILL BE VOTED IN FAVOR OF SUCH PROPOSAL UNLESS OTHERWISE SPECIFIED.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Certain Directors and executive officers of the Company are eligible to
execute notes to the Company to purchase Company Common Stock pursuant to the
exercise of stock options. These notes would be collateralized by the stock
purchased. These notes would be due on demand and carry an interest rate of
the greater of six percent or the Internal Revenue Service applicable federal
rate for officer borrowings. Such Directors and executive officers would be
required to pay interest quarterly on such notes and make certain annual
principal repayments. No amounts were borrowed or outstanding on such officer
notes during 1996.
14
<PAGE>
PROPOSALS OF STOCKHOLDERS FOR 1998 ANNUAL MEETING
All proposals of stockholders intended to be presented at the 1998 Annual
Meeting of Stockholders of the Company must be received by the Company at its
executive offices in Saint Paul, Minnesota on or before December 1, 1997, for
inclusion in the Company's Proxy Statement and Proxy for such meeting.
ANNUAL REPORT ON FORM 10-K
Copies of the Company's Annual Report on Form 10-K (an annual filing with
the Securities and Exchange Commission) for the fiscal year ended December 31,
1996, may be obtained without charge by writing to Green Tree Financial
Corporation, 1100 Landmark Towers, 345 St. Peter Street, Saint Paul, Minnesota
55102-1639, Attention: John A. Dolphin, Vice President and Director of
Investor Relations.
BY ORDER OF THE BOARD OF DIRECTORS
LOGO
JOEL H. GOTTESMAN
Secretary
Dated: March 29, 1997
15
<PAGE>
PROXY GREEN TREE FINANCIAL CORPORATION
1100 LANDMARK TOWERS, 345 ST. PETER STREET
SAINT PAUL, MINNESOTA 55102-1639
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF GREEN TREE
FINANCIAL CORPORATION. The undersigned hereby appoints Lawrence M. Coss and
Joel H. Gottesman, and each of them, with power of substitution, to vote all
stock the undersigned is entitled to vote at the 1997 Annual Meeting of
Stockholders of Green Tree Financial Corporation to be held on May 15, 1997, at
The Saint Paul Hotel, 350 Market Street, Saint Paul, Minnesota 55102, and at
any adjournments thereof, as specified below on the matters referred to, and in
their discretion, upon any other matters which may be brought before the
meeting.
1. ELECTION OF DIRECTORS.
___ FOR the nominees listed below. ___ WITHHOLD AUTHORITY to vote for the
nominees listed below.
Nominees for term expiring in 2000: W. Max McGee and Robert D. Potts
2. PROPOSAL TO RATIFY THE APPOINTMENT OF AUDITORS.
___ FOR ___ AGAINST ___ ABSTAIN
3. TO VOTE WITH DISCRETIONARY AUTHORITY ON ANY OTHER BUSINESS AS MAY PROPERLY
COME BEFORE THE MEETING.
___ FOR ___ AGAINST ___ ABSTAIN
This Proxy, when properly executed, will be voted in the manner directed
herein by the undersigned Stockholder(s). If no direction is made, this Proxy
will be voted FOR the directors named in Item 1 and FOR the proposal under Item
2, and with discretionary authority on any other business as may properly come
before the meeting.
<PAGE>
- --------------------------------------------------------------------------------
PROXY NO. GREEN TREE NO. OF SHARES
Please sign exactly as name(s) appear below. When shares are held by joint
tenants, both stockholders must sign. When signing as attorney, executor,
administrator, trustee or guardian, please include full title. If a
corporation, please type in full corporate name and sign by the President or
other authorized officer. If a partnership, please type in partnership name and
sign by an authorized person.
Individual(s), Corporation,
Partnership (or other entity):
------------------------------
Signature
------------------------------
Signature (if jointly held)
Title ________________________
Dated: _________________, 1997
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
- --------------------------------------------------------------------------------
