Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the registrant [x]
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
CASCADE FINANCIAL CORPORATION
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(Name of Registrant as Specified in Its Charter)
CASCADE FINANCIAL CORPORATION
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(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[x] No filing fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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>
<PAGE>
September 22, 1997
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
Cascade Financial Corporation, to be held at the Corporation's main office,
2828 Colby Avenue, Everett, Washington on Saturday, October 25, 1997 at 10:00
a.m.
The attached Notice of Annual Meeting and Proxy Statement describe the
formal business to be transacted at the Meeting. During the Meeting, we will
also report on the operations of the Corporation. Directors and officers of
the Corporation as well as a representative from the Corporation's independent
accounting firm, KPMG Peat Marwick LLP, will be present to respond to
appropriate questions of stockholders.
Detailed information concerning our activities and operating performance
during our fiscal year ended June 30, 1997 is contained in our Annual Report
to Stockholders which is also enclosed.
To ensure proper representation of your shares at the meeting, the Board
of Directors requests that you sign, date and return the enclosed proxy card
in the enclosed postage-prepaid envelope as soon as possible, even if you
currently plan to attend the meeting. 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/ Frank M. McCord
Frank M. McCord
Chairman of the Board and
Chief Executive Officer
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CASCADE FINANCIAL CORPORATION
2828 COLBY AVENUE
EVERETT, WASHINGTON 98201
(206) 339-5500
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held On October 25, 1997
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NOTICE IS HEREBY GIVEN that The Annual Meeting of Stockholders of Cascade
Financial Corporation ("Corporation") will be held at the Corporation's main
office located at 2828 Colby Avenue, Everett, Washington on Saturday, October
25, 1997 at 10:00 a.m., for the following purposes:
1. To elect four directors to serve for a term of three years; and
2. 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. Pursuant to the Bylaws, the Board
of Directors has fixed the close of business on August 29, 1997, as the record
date for determination of the stockholders entitled to vote at the meeting and
any adjournments thereof.
You are requested to fill in 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/ Russell E. Rosendal
RUSSELL E. ROSENDAL
SECRETARY
Everett, Washington
September 22, 1997
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IMPORTANT: The prompt return of proxies will save your corporation 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>
PROXY STATEMENT
OF
CASCADE FINANCIAL CORPORATION
2828 Colby Avenue
Everett, Washington 98201
(206) 339-5500
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ANNUAL MEETING OF STOCKHOLDERS
October 25, 1997
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This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Cascade Financial Corporation
("Corporation") to be used at the Annual Meeting of Stockholders of the
Corporation ("Meeting"). The Annual Meeting will be held at the Corporation's
main office located at 2828 Colby Avenue, Everett, Washington, on Saturday,
October 25, 1997 at 10:00 a.m. The Corporation is the holding company for
Cascade Bank ("Cascade" or the "Bank"). This Proxy Statement and the enclosed
proxy card are being first mailed to stockholders on or about September 22,
1997.
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VOTING AND PROXY PROCEDURE
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Stockholders Entitled to Vote. Stockholders of record as of the close of
business on August 29, 1997 are entitled to one vote for each share of common
stock ("Common Stock") of the Corporation then held. As of August 29, 1997,
the Corporation had 3,385,358 shares of Common Stock issued and outstanding.
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 Annual Meeting. Abstentions will be
counted as shares present and entitled to vote at the Annual Meeting for
purposes of determining the existence of a quorum. Broker non-votes will not
be considered shares present for purposes of determining whether a quorum is
present.
Voting. The Board of Directors solicits proxies so that each stockholder
has the opportunity to vote on the proposals to be considered at the Annual
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. If a stockholder attends the
Annual Meeting, he or she may vote by ballot.
The four directors to be elected at the Annual Meeting will be elected by
a plurality of the votes cast by stockholders present in person or by proxy
and entitled to vote. Stockholders are not permitted to cumulate their votes
for the election of directors. With respect to the election of directors,
votes may be cast for or withheld from each nominee. 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 votes cast.
Revocation of a Proxy. Stockholders who execute proxies retain the right
to revoke them at any time before they are voted. Proxies may be revoked by
written notice delivered in person or mailed to the Secretary of the
Corporation or by filing a later proxy prior to a vote being taken on a
particular proposal at the Annual Meeting. Attendance at the Annual Meeting
will not automatically revoke a proxy, but a stockholder in attendance may
request a ballot and vote in person, thereby revoking a prior granted proxy.
Participants in the Cascade Bank ESOP. If a stockholder is a participant
in the Cascade Bank, Employee Stock Ownership Plan (the "ESOP"), the proxy
card represents a voting instruction to the trustees of the ESOP as to the
number of shares in the participant's plan account. Each participant in the
ESOP may direct the trustees as
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<PAGE>
to the manner in which shares of Common Stock allocated to the participant's
plan account are to be voted. Unallocated shares of Common Stock held by the
ESOP and allocated shares for which no voting instructions are received will
be voted by the trustees.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
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Persons and groups who beneficially own more than 5% of the Corporation's
Common Stock are required to file certain reports disclosing such ownership
pursuant to the Securities Exchange Act of 1934, as amended ("Exchange Act").
Based on such reports, the following table sets forth, as of August 29, 1997,
certain information as to those persons who were beneficial owners of more
than 5% of the outstanding shares of Common Stock.
The following table sets forth, as of August 29, 1997, information as to
the shares of Common Stock beneficially owned by (a) each director, (b) each
of the executive officers named in the Summary Compensation Table found below
(the "named executive officers") and (c) by all executive officers and
directors of the Corporation as a group.
Amount and Nature of Percent of Shares
Name Beneficial Ownership(a) Outstanding
- ---- ----------------------- -----------
Beneficial Owners of More Than 5%
Arthur W. Skotdal 169,549 5.0%
Andrew Skotdal
Craig G. Skotdal
c/o Douglas A. Schafer
Schafer Law Firm
P.O. Box 1134
Tacoma, WA 98401
Directors
Paull H. Shin 6,497 *
Joan M. Earl 2,969 *
Dwayne Lane 13,636 *
Gary L. Meisner 6,998 *
David W. Duce 13,664 *
G. Brandt Westover 11,990 *
Dennis R. Murphy 17,382 *
Ronald E. Thompson 27,800 *
Henry Robinette 11,222 *
David O'Connor 42,884 1.3
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<PAGE>
Amount and Nature of Percent of Shares
Name Beneficial Ownership(a) Outstanding
- ---- ----------------------- -----------
Named Executive Officers
Frank M. McCord** 185,550(c) 5.4
C. Fredrick Safstrom** 62,541 1.8
Robert G. Disotell** 53,354 1.5
Russell E. Rosendal 35,388 1.0
Steve Erickson 19,885 *
All Executive Officers 551,132 15.4
and Directors as a
Group (17 persons)
_______________
* Less than 1%.
** Also a director of the Corporation and the Bank.
(a) 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 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. Shares held in accounts under Cascade
Bank's ESOP, as to which the holders have voting power but not investment
power, are included as follows: Mr. McCord, 4,882 shares; Mr. Safstrom,
3,607 shares; Mr. Disotell, 3,499 shares; Mr. Rosendal, 3,074 shares; Mr.
Erickson, 3,236 shares; all executive officers and directors as a group,
18,298 shares. Does not include 42,000 shares held under Cascade Bank's
401(k) Plan, for which Messrs. McCord, Safstrom and Rosendal act as
trustees. The amounts shown also include the following amounts of Common
Stock which the indicated individuals have the right to acquire within 60
days of August 29, 1997 through the exercise of stock options granted
pursuant to the Corporation's stock option plans: Mr. Shin, 4,544; Ms.
Earl, 2,813; Mr. Lane, 2,813; Mr. Meisner, 2,813; Mr. Duce, 5,393; Mr.
Westover, 8,647; Mr. Murphy, 8,647; Mr. Thompson, 8,647; Mr. McCord,
42,758; Mr. Safstrom, 35,400; Mr. Disotell, 32,959; Mr. Rosendal, 25,276;
Mr. Erickson, 14,352; and all executive officers and directors as a group,
186,624.
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PROPOSAL I -- ELECTION OF DIRECTORS
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The Corporation's Board of Directors currently consists of thirteen
members. The Board of Directors is divided into three classes with three-year
staggered terms, with approximately one third of the directors elected each
year.
The Nominating Committee has nominated for election as directors Messrs.
Dwayne Lane, G. Brandt Westover, Dennis R. Murphy and Ronald E. Thompson each
for a three year term. All nominees currently serve as members of the Boards
of Directors of the Corporation and the Bank.
Following the acquisition AmFirst Bancorporation on August 1, 1997, the
Board of Directors expanded the size of the Board and appointed Henry
Robinette to a term expiring in 1998 and David O'Connor to a term expiring in
1999. Messrs. Robinette and O'Connor previously served on the board of
directors of AmFirst.
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 amend the Bylaws and
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reduce the size of the Board. At this time, the Board knows of no reason why
any nominee might be unable to serve.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" ALL OF THE
NOMINEES NAMED BELOW FOR DIRECTORS OF THE CORPORATION.
The following table sets forth certain information regarding the nominees
for election at the Annual Meeting, as well as information regarding those
directors continuing in office after the Annual Meeting.
Year First
Elected or
Positions Held With Appointed Term to
Name Age(a) the Corporation Director (b) Expire
- ---- ------ --------------- ------------ ------
BOARD NOMINEES
Dwayne Lane 62 Director 1995 2000(c)
G. Brandt Westover 37 Director 1986 2000(c)
Dennis R. Murphy 55 Director 1991 2000(c)
Ronald E. Thompson 48 Director 1991 2000(c)
DIRECTORS CONTINUING IN OFFICE
Robert G. Disotell 42 Executive Vice President 1990 1998
and Director
Paull H. Shin 61 Director 1995 1998
Gary L. Meisner 62 Director 1995 1998
Henry Robinette 66 Director 1997 1998
Joan M. Earl 43 Director 1995 1999
Frank M. McCord 76 Chairman of the Board, 1986 1999
Chief Executive Officer
and Director
C. Fredrick Safstrom 43 President, Chief Operating 1990 1999
Officer and Director
David W. Duce 38 Vice Chairman of the Board 1991 1999
David O'Connor 52 Director 1997 1999
____________
(a) At June 30, 1997.
(b) Includes prior service on the Board of Directors of the Bank.
(c) Assuming the individuals are reelected at the Annual Meeting.
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<PAGE>
The principal occupation of each director of the Corporation is set forth
below. All of the directors have held their present position for at least
five years unless otherwise stated.
DWAYNE LANE is the owner of three automobile dealerships in Everett and
Arlington, Washington. Mr. Lane, an Everett native, is active in community
affairs. Mr. Lane served 12 years as an Everett Port Commissioner and was a
board member for Olympic Bank and Providence Hospital.
G. BRANDT WESTOVER is a Vice President with PaineWebber Inc. in Bellevue,
Washington. He was an account executive with the investment firm of Smith
Barney Harris Upham, Seattle, Washington from 1987 to 1992. Mr. Westover has
been a director since January 1986.
DENNIS R. MURPHY is the Dean and a Professor of Economics at Western
Washington University, Bellingham, Washington. He has also served on the
Citizens Advisory Board of Bellingham Public Schools, Community
Problem-Solving Partnership, United Way of Whatcom County, Board of Directors
Whatcom Chamber of Commerce and Industry and Bellingham Rotary. He is a
resident of Bellingham, Washington. Dr. Murphy has been a director since
January 1991.
RONALD E. THOMPSON is the President of WRE Commercial and Property
Management, Inc., Everett, Washington, a real estate sales and property
management company. He is a past president of the Snohomish County-Camano
Association of Realtors, a current State director of the Washington
Association of Realtors, member of the Everett Rotary Club, and serves on the
Board of Directors for the Mt. Baker Council Boy Scouts of America. Mr.
Thompson resides in Everett and has been a director of the Bank since January
1991.
ROBERT G. DISOTELL has been employed by Cascade for approximately 18 years
and currently serves as a Director and an Executive Vice President. As Chief
Lending Officer, he is responsible for loan production. Mr. Disotell is a
resident of Arlington, Washington.
PAULL H. SHIN is a Professor of History at Shoreline Community College,
Seattle, Washington. Dr. Shin is Chairman of Transpacific Telecommunications,
Inc. and a board member of the Snohomish County United Way, YMCA and KIRO
Inc., a local broadcasting company. Dr. Shin is a resident of Mukilteo,
Washington.
GARY L. MEISNER is President of Clearview Management, Inc., a management
and investment services company in Everett, Washington. From 1978 to December
1996, Mr. Meisner served as President of the Small Business Center, Inc., an
independent insurance agency in Everett, Washington. Prior to this position,
Mr. Meisner spent 14 years in commercial and consumer banking. Mr. Meisner is
a graduate of Wayne State College and the Pacific Coast Banking School. Mr.
Meisner is active in community affairs.
HENRY ROBINETTE is Vice President of Boyden Realty and was a founding
director of American First National Bank in 1984. Mr. Robinette is active in
real estate development in Snohomish County and is very involved in community
activities.
JOAN M. EARL is the Deputy County Executive for Snohomish County.
Formerly, Ms. Earl was the City Manager of Mill Creek, Washington and the
Budget Director and Fiscal Officer for Kitsap County, Washington. Ms. Earl is
active in community affairs and is a board member of the Camp Fire Boys and
Girls of Snohomish County and Snohomish County United Way.
FRANK M. MCCORD, C.P.A. became Chairman of the Board of Directors,
President and Chief Executive Officer of the Bank in 1990. Mr. McCord was the
Managing Partner of KPMG Peat Marwick LLP, Seattle, Washington office until
his retirement in 1986. In addition to his responsibilities to the
Corporation, Mr. McCord is Co-Chairman of the Snohomish County United Way, a
director of the Everett Area Chamber of Commerce and serves as its Chairman,
the Everett Performing Arts Association, and Housing Hope, a local housing
agency. Mr. McCord also serves as a Director of Horizon/CMS Healthcare
Corporation, a publicly-held company listed on the
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<PAGE>
New York Stock Exchange, which is one of the largest diversified healthcare
providers in the United States. Mr. McCord has previously served as President
of the Evergreen Area Council of Boy Scouts of America, Treasurer of the
United Way of King County, Trustee of Seattle University, a Fellow of Seattle
Pacific University, Treasurer of the Washington Society of Certified Public
Accountants, and a Director of the Seattle Chamber of Commerce.
C. FREDRICK SAFSTROM joined Cascade in 1976 and has managed several areas
including branch management, secondary marketing, loan underwriting and
regulatory compliance. In June 1990 Mr. Safstrom was elected to the Board of
Directors and in December 1991 was elected President. Mr. Safstrom is a
trustee and the treasurer of the Snohomish County YMCA, a board member of the
Snohomish County Investment Plan Corporation, a director of the Everett Public
Schools Foundation, a member of the Everett Rotary, and is active in various
housing related boards and committees.
DAVID W. DUCE is a practicing attorney with Duce, Bastian, Peterson and
Zielke in Everett, Washington. He has also served as a volunteer attorney at
Snohomish County Legal Services, a Bishop in the Church of Jesus Christ Latter
Day Saints, and a former member of Senator Henry M. Jackson's Washington, D.C.
staff. Mr. Duce has been a director since January 1991 and was elected Vice
Chairman in 1995.
DAVID O'CONNOR is Co-Owner of Mobile Country Club in Everett Washington,
and was a founding director of American First National Bank. Mr. O'Connor was
Co-Owner of O'Connor & Oehler Construction Inc. from 1974 to 1996 and
countries in his development business. Mr. O'Connor is a member of the Master
Builders Association and the Manufactured Housing Communities of Washington.
Meetings and Committees of the Board of Directors
The Boards of Directors of the Corporation and the Bank conduct their
business through meetings of the Boards and through their committees. During
the fiscal year ended June 30, 1997, the Board of Directors of the Corporation
and the Bank held six meetings. No director of the Corporation or the Bank
attended fewer than 75% of the total meetings of the Board of Directors and
committee meetings on which such Board member served during this period.
The Board of Directors of the Corporation and the Bank has an Audit and
Finance Committee consisting of Messrs. Murphy (Chairman), Earl and Meisner.
The purpose of the Committee is to provide direction and oversight to the
Internal Auditor and bears responsibility for the audit function and reviews
the examination of the Bank by federal and state regulatory authorities and
the audit by the independent auditing firm. The Audit and Finance Committee
meets at least quarterly and met nine times during the 1997 fiscal year.
The Board of Directors has a Compensation and Nominations Committee
consisting of Messrs. Duce (Chairman), Lane and Shin, all of whom are outside
directors. This committee is responsible for reviewing the compensation
policies of the Corporation and the Bank, approving compensation of executive
officers, and recommending the granting of stock options. The committee met
six times during the 1997 fiscal year.
In connection with the Annual Meeting and selection of the management
nominees for election as directors, Article II, Section 14 of the
Corporation's Bylaws provides that the Board of Directors of the Corporation
shall act as a nominating committee for selecting the management nominees for
election as directors. The Board of Directors of the Corporation held one
meeting in its capacity as the nominating committee during fiscal 1997 in
order to nominate the individuals for election at the Annual Meeting.
Directors' Compensation
Outside members of the Board of Directors receive a $7,200 retainer per
year. Committee meeting fees are $200 ($300 for committee chairman).
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Executive Compensation
Summary Compensation Table. The following information is furnished for
the Chief Executive Officer of the Corporation for the year ended June 30,
1997 and those executive officers of the Corporation who received salary and
bonus in excess of $100,000 during the year ended June 30, 1997.
Annual Compensation
--------------------------------------
Name and Other Annual All Other
Position Year Salary($) Bonus($) Compensation($)(1) Compensation($)(2)
- -------- ---- --------- -------- ------------------ ------------------
Frank M. 1997 $118,680 $48,368 -- $ 4,994
McCord 1996 103,200 39,088 -- 6,623
Chief 1995 103,200 58,662 -- 5,886
Executive
Officer
C. Fredrick 1997 83,016 38,826 -- 9,246
Safstrom 1996 77,440 34,538 -- 11,909
President 1995 72,192 50,057 -- 10,841
Robert G. 1997 83,016 30,780 -- 8,025
Disotell 1996 77,190 30,890 -- 9,929
Executive 1995 72,192 44,476 -- 9,717
Vice
President
Russell E. 1997 72,108 29,505 -- 7,051
Rosendal 1996 62,700 26,059 -- 7,612
Executive 1995 62,700 35,846 -- 8,673
Vice President
and Chief
Financial
Officer
Steve Erickson 1997 60,000 56,344 -- 4,346
Executive 1996 54,000 29,195 -- 2,826
Vice 1995 54,000 43,665 -- 3,913
President
_______________
(1) Does not include perquisites which did not exceed $50,000 or 10% of salary
and bonus.
(2) All Other Compensation for fiscal year 1997 includes the following: for
Mr. McCord, employer contribution to 401(k) Plan of $1,588 and ESOP
contribution of $3,407; for Mr. Safstrom, cash distribution of accrued
leave of $4,023 pursuant to executive's election, employer contribution to
401(k) Plan of $1,297, ESOP contribution of $2,567, employer contribution
to employee stock purchase plan of $1,270, and other compensation of $89;
for Mr. Disotell, cash distribution of accrued leave of $4,247 pursuant to
executive's election, employer contribution to 401(k) Plan of $1,281, ESOP
contribution of $2,407, and other compensation of $89; for Mr. Rosendal,
cash distribution of accrued leave of $3,717 pursuant to executive's
election, employer contribution to 401(k) Plan of $1,134, ESOP
contribution of $2,148, and employer contribution to employee stock
purchase plan of $52; for Mr. Erickson, cash distribution of accrued leave
of $1,846 pursuant to executive's election, ESOP contribution of $2,140,
and other compensation of $89.
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Option Exercise/Value Table. The following table sets forth information
with respect to options exercised during the fiscal year ended June 30, 1997
and remaining unexercised at the end of the fiscal year for the named
executive officers.
Number of
Securities Value of Unexercised
Shares Underlying In-the-Money Options
Acquired Unexercised at Fiscal Year End
on Options ($)(1)
Exer- Value ---------------- --------------------
cise Realized Exer- Unexer- Exer- Unexer-
Name (#) ($) cisable cisable cisable cisable
- ---- ----- -------- ------- ------- ------- -------
Frank M. McCord -- $ -- 42,758 10,690 $482,742 $120,686
C. Fredrick Safstrom -- -- 35,400 8,850 399,866 99,917
Robert G. Disotell -- -- 32,959 8,240 372,109 93,027
Russell E. Rosendal -- -- 25,276 6,319 285,366 71,342
Steve Erickson 2,930 33,783 14,351 9,213 137,054 87,962
___________________
(1) The value of unexercised in-the-money options is calculated using a fair
market value of $13.25 as of June 30, 1997, based on the last known trade
on or before such date. Options have been adjusted for stock splits.
Notwithstanding anything to the contrary set forth in any of the
Corporation'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 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 Corporation is required to
provide certain data and information in regard to the compensation and
benefits provided to the Corporation's Chief Executive Officer and other
executive officers of the Bank and the Corporation. The Compensation and
Nominations Committee's duties are to establish and administer policies that
govern executive compensation for the Corporation. The Committee evaluates
the individual executive performance of the Chief Executive Officer, Chief
Operating Officer and President, and Chief Financial Officer of the
Corporation regarding individual compensation levels and reviews compensation
policies. The Committee receives input from the Chief Executive Officer on
the other two executive officers' performance and has final authority to set
individual compensation levels.
The executive compensation policies of the Corporation are designed to
reflect the attainment of short and long-term financial performance goals and
to enhance the ability of the Corporation to attract and retain qualified
executive officers. The Committee considers a variety of subjective and
objective factors in determining the compensation package for individual
executives including the performance of the Corporation overall, the
responsibilities assigned to each executive and the performance of each
executive of assigned responsibilities as measured by the progress of the
Corporation during the year.
Base Salary. The Corporation's compensation plan involves a combination
of salary and cash bonuses in regard to short-term performance. Salary levels
are designed to be competitive with the banking industry based on a peer group
analysis of Washington state financial institutions. Specifically, the
Committee reviews the Washington Savings League's compensation report of
senior banking executives. Given the Corporation's performance and size, the
Committee believes the base salaries of executive officers were comparable
with the peer group and determined no change was necessary for fiscal year
1998.
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Bonus program. An incentive bonus plan is in effect for the executive
officers of the Corporation which is designed to provide compensation for
performance. The plan provides for a bonus pool to be shared by the Chief
Executive Officer, President and Chief Financial Officer based on net earnings
of the Corporation that are above predetermined targets. For the year ended
June 30, 1996 the bonus pool was $195,000 and for the year ended June 30,
1997, the bonus pool was $27,000. Bonuses for the year ended June 30, 1997
will be paid in quarterly installments beginning in October 1997. Percentages
allocated among the executive officers is based on the Committee's evaluation
of individual performance.
Compensation of the Chief Executive Officer. For the year ended June 30,
1997, the base salary of Frank M. McCord, Chairman and Chief Executive Officer
of the Bank and the Corporation was $118,680. In addition, he received
$48,368 in deferred bonuses for the fiscal year ended June 30, 1996, and was
also credited with $4,994 in compensation relating to his 401(k) and ESOP
accounts. Mr. McCord's performance bonus reflected the attainment of the
specific performance criteria for the 1996 fiscal year established by the
Board of Directors. The Committee believes that Mr. McCord's compensation is
appropriate based on the Corporation's overall performance.
Compensation and Nominations Committee
David W. Duce (Chairman)
Dwayne Lane
Paull H. Shin
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Performance Graph
The following graph compares the Corporation's cumulative stockholder
return on its Common Stock with the return on the Nasdaq (U.S. Stock) Index
and a peer group of the Nasdaq's Financial Index. Total return assumes the
reinvestment of all dividends.
[Performance graph appears here]
9/15/92 6/30/93 6/30/94 6/30/95 6/30/96 6/30/97
------- ------- ------- ------- ------- -------
Cascade Financial
Corporation 100 196 396 553 641 610
Nasdaq (U.S.
Stock) Index 100 121 122 163 209 254
Nasdaq Financial
Index 100 124 136 139 212 306
* Assumes that the value of the investment in the Corporation's Common Stock
and each index was $100 on September 15, 1992, the date on which the
Corporation's Common Stock began trading on the Nasdaq national Market, and
that all dividends were reinvested.
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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 Corporation's executive
officers and directors, and persons who own more than 10% of any registered
class of the Corporation's equity securities, to file reports of ownership and
changes in ownership with the Securities and Exchange Commission. Executive
officers, directors and greater than 10% shareholders are required by
regulation to furnish the Corporation with copies of all Section 16(a) forms
they file.
Based solely on its review of the copies of such forms it has received
and written representations provided to the Corporation by the above
referenced persons, the Corporation believes that during the fiscal year ended
June 30, 1997 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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As required by federal regulations, all loans or extensions by the Bank
of credit to executive officers and directors are 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 do not involve
more than the normal risk of repayment or present other unfavorable features.
In addition, loans made by the Bank to a director or executive officer in an
amount that, when aggregated with the amount of all other loans by the Bank to
such person and his or her related interests, are in excess of the greater of
$25,000 or 5% of the Bank's capital and surplus (up to a maximum of $500,000)
are subject to approval in advance by a majority of the disinterested members
of the Board of Directors.
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AUDITORS
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The Board of Directors has appointed KPMG Peat Marwick, LLP, independent
public accountants, to serve as the Corporation's auditors for the fiscal year
ending June 30, 1998. A representative of KPMG Peat Marwick, LLP will be
present at the Annual Meeting to respond to appropriate questions from
shareholders and will have the opportunity to make a statement if he or she so
desires.
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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, including matters relating to the conduct of the Meeting.
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STOCKHOLDER PROPOSALS
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In order to be eligible for inclusion in the Corporation's proxy
materials for the 1998 annual meeting of stockholders, any stockholder
proposal to take action at such meeting must be received at the Corporation's
executive offices at 2828 Colby Avenue, Everett, Washington 98201 no later
than May 25, 1998. Any such proposal shall be subject to the requirements of
the proxy rules adopted under the Exchange Act.
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The Corporation's Certificate of Incorporation provides that in order for
a stockholder to make nominations for the election of directors or proposals
for business to be brought before the Annual Meeting, a stockholder must
deliver notice of such nominations and/or proposals to the Secretary not less
than 30 nor more than 60 days prior to the date of the Annual Meeting;
provided that if less than 31 days' notice of the Annual Meeting is given to
stockholders, such notice must be delivered not later than the close of the
tenth day following the day on which notice of the Annual Meeting was mailed
to stockholders. As specified in the Certificate of Incorporation, the notice
with respect to nominations for election of directors must set forth certain
information regarding each nominee for election as a director, including such
person's written consent to being named in the proxy statement as a nominee
and to serving as a director, if elected, and certain information regarding
the stockholder giving such notice. The notice with respect to business
proposals to be brought before the Annual Meeting must state the stockholder's
name, address and number of shares of Common Stock held, and briefly discuss
the business to be brought before the Annual Meeting, the reasons for
conducting such business at the Annual Meeting and any interest of the
stockholder in the proposal.
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MISCELLANEOUS
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The cost of solicitation of proxies will be borne by the Corporation.
The Corporation will reimburse brokerage firms and other custodians, nominees
and fiduciaries for reasonable expenses incurred by them in sending proxy
material to the beneficial owners of the Corporation's Common Stock. In
addition to solicitations by mail, directors, officers and regular employees
of the Corporation and Bank may solicit proxies personally, by telegraph or
telephone without additional compensation. The Corporation may use the
services of a proxy solicitor.
The Corporation's Annual Report to Stockholders, including financial
statements, has been mailed to all stockholders of record as of the close of
business on August 29, 1997. Any stockholder who has not received a copy of
such Annual Report may obtain a copy by writing to the Secretary of the
Corporation. Such Annual Report is not to be treated as part of the proxy
solicitation material or as having been incorporated herein by reference.
A copy of the Form 10-K as filed with the Securities and Exchange
Commission will be furnished without charge to stockholders of record as of
August 29, 1997 upon written request to Russell E. Rosendal, Secretary,
Cascade Financial Corporation, 2828 Colby Avenue, Everett, Washington 98201.
Reports, proxy statements and other information filed by the Corporation are
also available on the Internet at the Securities and Exchange Commission's
World Wide Web site at http://www.sec.gov.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Russell E. Rosendal
RUSSELL E. ROSENDAL
SECRETARY
Everett, Washington
September 22, 1997
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<PAGE>
REVOCABLE PROXY
CASCADE FINANCIAL CORPORATION
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ANNUAL MEETING OF STOCKHOLDERS
October 25, 1997
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The undersigned hereby appoints the official proxy committee consisting
of all of the members of the Board of Directors of Cascade Financial
Corporation ("Corporation"), Everett, Washington, with full powers of
substitution, to act as attorneys and proxies for the undersigned, to vote all
shares of Common Stock of the Corporation which the undersigned is entitled to
vote at the Annual Meeting of Stockholders, to be held at the Corporation's
main office located at 2828 Colby Avenue, Everett, Washington, on Saturday,
October 25, 1997, at 10:00 a.m., and at any and all adjournments thereof, as
follows:
FOR AGAINST ABSTAIN
1. The election as directors of all nominees [ ] [ ] [ ]
listed below (except as marked to the
contrary below).
Dwayne Lane
G. Brandt Westover
Dennis R. Murphy
Ronald E. Thompson
INSTRUCTION: To withhold your vote for any individual
nominee, write the nominee's name on the line below.
-----------------------------------------------
2. In their discretion, upon such other matters as may
properly come before the meeting.
The Board of Directors recommends a vote "FOR" the listed proposition.
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THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED
THIS PROXY WILL BE VOTED "FOR" THE PROPOSAL STATED. IF ANY OTHER BUSINESS IS
PRESENTED AT THE 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. THIS PROXY ALSO
CONFERS DISCRETIONARY AUTHORITY ON THE BOARD OF DIRECTORS TO VOTE WITH RESPECT
TO THE ELECTION OF ANY PERSON AS DIRECTOR WHERE THE NOMINEE IS UNABLE TO SERVE
OR FOR GOOD CAUSE WILL NOT SERVE, AND MATTERS INCIDENT TO THE CONDUCT OF THE
ANNUAL MEETING.
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THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
Should the undersigned be present and elect to vote at the Annual Meeting
or at any adjournment thereof and after notification to the Secretary of the
Corporation at the Annual Meeting of the stockholder'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 Corporation prior to the
execution of this Proxy, of the Notice of the Annual Meeting of Stockholders,
a Proxy Statement dated September 22, 1997 and the 1997 Annual Report to
Stockholders.
Dated: , 1997
-------------------
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PRINT NAME OF STOCKHOLDER PRINT NAME OF STOCKHOLDER
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SIGNATURE OF STOCKHOLDER SIGNATURE OF STOCKHOLDER
Please sign exactly as your name appears on the envelope in which this card
was mailed. When signing as attorney, executor, administrator, trustee or
guardian, please give your full title. If a corporation, please sign in full
corporate name by the president or other authorized officer. If a
partnership, please sign in partnership name by authorized person. For joint
accounts, only one signature is required.
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PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.
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