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 16, 1998
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 17, 1998 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, 1998 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
<PAGE>
<PAGE>
CASCADE FINANCIAL CORPORATION
2828 Colby Avenue
Everett, Washington 98201
(360) 339-5500
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held On October 17, 1998
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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
17, 1998 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 28, 1998, as the record
date for determination of the stockholders entitled to vote at the meeting and
any adjournments thereof.
Please complete and sign the enclosed form of proxy, which is solicited
by the Board of Directors, and 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 16, 1998
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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>
<PAGE>
PROXY STATEMENT
OF
CASCADE FINANCIAL CORPORATION
2828 Colby Avenue
Everett, Washington 98201
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ANNUAL MEETING OF STOCKHOLDERS
October 17, 1998
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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. The Annual Meeting will be held at the Corporation's main office
located at 2828 Colby Avenue, Everett, Washington, on Saturday, October 17,
1998 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 16, 1998.
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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 28, 1998 are entitled to one vote for each share of common
stock ("Common Stock") of the Corporation then held. As of August 28, 1998,
the Corporation had 4,213,038 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 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 in
accordance with the recommendations of the Board of Directors. If a
stockholder of record attends the Annual Meeting, he or she may vote by
ballot. The Board recommends a vote FOR the election of the nominees for
director.
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. 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 the nominees receiving the greatest number
of votes will be elected.
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 of record 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 to the
<PAGE>
<PAGE>
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 28, 1998,
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 28, 1998, 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 ofShares
Name Beneficial Ownership(a) Outstanding
- ---- ----------------------- ----------------
Beneficial Owners of More Than 5%
Arthur W. Skotdal 256,420(b) 6.1%
Andrew Skotdal
Craig G. Skotdal
c/o Douglas A. Schafer
Schafer Law Firm
P.O. Box 1134
Tacoma, WA 98401
Directors
Paull H. Shin 8,301 *
Joan M. Earl 4,883 *
Dwayne Lane 18,216 *
Gary L. Meisner 9,950 *
David W. Duce 17,334 *
G. Brandt Westover 15,306 *
Dennis R. Murphy 22,046 *
Ronald E. Thompson 30,819 *
Henry Robinett 14,029 *
David O'Connor 53,619 1.3
Named Executive Officers
Frank M. McCord** 243,424 5.7
C. Fredrick Safstrom** 90,099 2.1
Robert G. Disotell** 76,994 1.8
David Little 32,909 *
All Executive Officers 724,405 16.0
and Directors as a
Group (17 persons)
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<PAGE>
_______________
* 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 of June 30, 1998, as to which the holders have voting
power but not investment power, are included as follows: Mr. McCord,
6,102 shares; Mr. Safstrom, 4,508 shares; Mr. Disotell, 4,373 shares;
Mr. Little, 0 shares; all executive officers and directors as a group,
22,872 shares. Does not include 73,128 shares held under Cascade Bank's
401(k) Plan, for which Messrs. McCord and Safstrom 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 28, 1998 through the exercise of stock options granted pursuant to
the Corporation's stock option plans: Mr. Shin, 5,860; Ms. Earl, 4,687;
Mr. Lane, 4,687; Mr. Meisner, 4,687; Mr. Duce, 6,996; Mr. Westover,
5,998; Mr. Murphy, 11,128; Mr. Thompson, 11,128; Mr. Robinett, 3,956; Mr.
O'Connor, 3,956; Mr. McCord, 64,936; Mr. Safstrom, 55,313; Mr. Disotell,
51,498; Mr. Little, 26,539; and all executive officers and directors as
a group, 326,682.
(b) Information concerning the shares owned by the Skotdals was obtained from
an amended Schedule 13D dated March 6, 1998. According to this filing,
Arthur Skotdal has sole voting and dispositive power with respect to
92,397 shares and shared voting and dispositive power with respect to
164,023 shares, Andrew Skotdal has shared voting and dispositive power
with respect to 79,720 shares and Craig Skotdal has shared voting and
dispositive power with respect to 84,303 shares.
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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.Robert G. Disotell, Paull H. Shin, Gary L. Meisner and Henry Robinett
each for a three year term. All nominees currently serve as members of the
Boards of Directors of the Corporation and the Bank.
It is intended that the proxies solicited by the Board of Directors will
be voted for the election of the above named nominees. If any nominee is
unable to serve, the shares represented by all valid proxies will be voted for
the election of such substitute as the Board of Directors may recommend or the
Board of Directors may amend the Bylaws and 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.
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<PAGE>
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
Positions Held Elected or
With the Appointed Term to
Name Age (a) Corporation Director (b) Expire
---- ------- -------------- ------------ -------
BOARD NOMINEES
Robert G. Disotell 43 Executive
Vice President 1990 2001(c)
and Director
Paull H. Shin 62 Director 1995 2001(c)
Gary L. Meisner 63 Director 1995 2001(c)
Henry Robinett 67 Director 1997 2001(c)
DIRECTORS CONTINUING IN OFFICE
Joan M. Earl 44 Director 1995 1999
Frank M. McCord 68 Chairman of 1986 1999
the Board,
Chief Executive
Officer and Director
C. Fredrick Safstrom 44 President, Chief 1990 1999
Operating Officer
and Director
David W. Duce 39 Director 1991 1999
David O'Connor 53 Director 1997 1999
Dwayne Lane 63 Director 1995 2000
G. Brandt Westover 38 Director 1986 2000
Dennis R. Murphy 56 Vice Chairman of 1991 2000
the Board
Ronald E. Thompson 49 Director 1991 2000
____________
(a) At June 30, 1998.
(b) Includes prior service on the Board of Directors of the Bank.
(c) Assuming the individuals are reelected at the Annual Meeting.
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.
-4-
<PAGE>
<PAGE>
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.
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.
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, Washington.
ROBERT G. DISOTELL has been employed by Cascade for approximately 19
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 retired 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 ROBINETT is general partner of Boyden, Robinett & Assoc. L.P. and
was a founding director of American First National Bank in 1984. Mr. Robinett
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 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,
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<PAGE>
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.
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
continues 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, 1998, the Board of Directors of the Corporation
and the Bank held 6 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), Robinett, Meisner
and Thompson. 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 6 times during
the 1998 fiscal year.
The Board of Directors has a Compensation and Personnel Committee
consisting of Messrs. Duce (Chairman), Lane, Shin and Earl, 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 1998 fiscal year.
In connection with the Annual Meeting and selection of the management
nominees for election as directors, the Board of Directors of the Corporation
acts 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 1998 in
order to nominate the individuals for election at the Annual Meeting.
Directors' Compensation
Outside members of the Board of Directors receive a retainer of $7,500
per year. Except for outside members of the executive committee, who receive
a retainer of $2,000 plus 150 shares of Common Stock per year, outside members
of the board receive a fee of $200 for each committee meeting attended other
than on a day of a regular board meeting. Committee chairmen receive $3,000
plus 150 shares of Common Stock per year instead of per meeting fees.
-6-
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EXECUTIVE COMPENSATION
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Summary Compensation Table. The following information is furnished for
the Chief Executive Officer of the Corporation for the year ended June 30,
1998 and those executive officers of the Corporation who received salary and
bonus in excess of $100,000 during the year ended June 30, 1998.
Annual Compensation
-----------------------------------------
Other
Annual All Other
Name and Compen- Compen-
Position Year Salary($) Bonus($) sation($)(1) sation($)(2)
- --------- ---- --------- -------- ------------ ------------
Frank M. McCord 1998 $118,680 $25,286 -- $ 6,720
Chief Executive 1997 118,680 48,368 -- 4,994
Officer 1996 103,200 39,088 -- 6,623
C. Fredrick Safstrom 1998 83,016 19,453 -- 13,459
President 1997 83,016 38,826 -- 9,246
1996 77,440 34,538 -- 11,909
Robert G. Disotell 1998 83,016 36,109 -- 8,919
Executive Vice 1997 83,016 30,780 -- 8,025
President 1996 77,190 30,890 -- 9,929
David Little (3) 1998 65,816 50,804 -- 4,643
Executive Vice
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 1998 includes the following: for
Mr. McCord, employer contribution to 401(k) Plan of $3,108 and ESOP
contribution of $3,612; for Mr. Safstrom, cash distribution of accrued
leave of $8,301 pursuant to executive's election, employer contribution
to 401(k) Plan of $1,110, ESOP contribution of $2,780, and employer
contribution to employee stock purchase plan of $1,268; for Mr. Disotell,
cash distribution of accrued leave of $3,799 pursuant to executive's
election, employer contribution to 401(k) Plan of $2,036, and ESOP
contribution of $3,084; for Mr. Little, employer contribution to 401(k)
Plan of $2,991 and ESOP contribution of $1,652.
(3) Mr. Little joined the Corporation on August 1, 1997 in connection with
the Corporation's acquisition of AmFirst Bancorporation.
Option Exercise/Value Table. The following table sets forth information
with respect to options exercised during the fiscal year ended June 30, 1998
and remaining unexercised at the end of the fiscal year for the named
executive officers.
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<TABLE>
Value of Unexercised
Number of Securities In-the-Money Options
Shares Underlying Unexercised Options at Fiscal Year End($)(1)
Acquired on Value ------------------------------ --------------------------
Name Exercise (#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
- ---- ------------ ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Frank M. McCord -- -- 64,936 -- $839,622 --
C. Fredrick Safstrom -- -- 55,313 -- 715,197 --
Robert G. Disotell -- -- 51,498 -- 665,869 --
David Little -- -- 26,539 -- 343,149 --
</TABLE>
<PAGE>
___________________
(1) The value of unexercised in-the-money options is calculated using a
fair market value of $14.50 as of June 30, 1998, based on the last
known trade on or before such date. Options have been adjusted for
stock dividends.
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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 and Personnel 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 Corporation. The Compensation and
Personnel Committee of the Board of Directors establishes and administers
policies that govern executive compensation for the Corporation, nominates
corporate officers, and makes awards of stock options to key bank employees.
The Committee evaluates the individual performance of the Chief Executive
Officer, the Chief Operating Officer and President, and the Chief Financial
Officer of the Corporation and establishes individual compensation levels for
each of these officers. The Committee interviews all executive officers of
the bank and retains final authority to set individual compensation levels
for the executive officers.
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 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. These factors include the performance of the Corporation overall,
the responsibilities assigned to each executive, and the performance of
assigned responsibilities by each executive during the year.
Base salary. The Corporation's compensation plan involves a
combination of salary (cash and/or restricted stock), and cash and /or
restricted stock bonuses in regard short-term performance. Base 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 concluded that base salaries of executive officers should be
increased for fiscal 1999 by 10%.
Bonus program. An incentive bonus plan is in effect for the executive
officers of the Corporation that is designed to compensate for performance.
The plan is designed to provide for a bonus pool to be shared by the Chief
Executive Officer, President, and Chief Financial Officer based on net
earnings of the Corporation above increasing predetermined annual targets.
For the year ended June 30, 1997 the bonus pool was $27,000 and for the year
ended June 30, 1998 the bonus pool was $81,750. Bonuses for the year ended
June 30, 1998 will be paid in quarterly installments beginning in October
1998. The allocation of the bonus among the executive officers is based on
the Committees evaluation of individual performance.
Option grants. The Committee selects employees who will receive stock
options and determines the number to be granted. Stock option grants are
designed to provide long-term incentives for key employees. The Committee
grants options throughout each year. The Committee granted options to
purchase 10,000 and 5,000 shares to the President and Chief Financial Officer,
respectively in July 1998. These grants were made at current market prices
under the rules of the 1997 Stock Option Plan. No options were granted to
executive officers whose compensation is set by the Committee for Fiscal 1997.
Compensation of the Chief Executive Officer. For the year ended June
30, 1998, the base salary of Frank M. McCord, Chairman and Chief Executive
Officer of the Bank and Cascade Financial Corporation was $118,680. In
addition he received $25,286 in deferred bonuses for the fiscal year ended
June 30, 1997. He was also credited with $6,720 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 1998 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.
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<PAGE>
Compensation and Personnel Committee
David W. Duce (Chairman)
Dwayne Lane
Paull H. Shin
Joan Earl
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.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL*
[Graph appears here]
6/30/93 6/30/94 6/30/95 6/30/96 6/30/97 6/30/98
------- ------- ------- ------- ------- -------
Cascade Financial Corporation 100.00 172.73 241.48 279.65 321.82 402.27
Nasdaq (U.S. Stock) Index 100.00 100.96 134.77 173.03 210.38 277.69
Nasdaq Financial Index 100.00 112.89 129.06 167.99 245.73 318.85
* Assumes that the value of the investment in the Corporation's Common Stock
and each index was $100 on June 30, 1993, 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, 1998 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, 1999. 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
Annual 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 Annual
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 1999 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 19, 1999. Any such proposal shall be subject to the requirements of
the proxy rules adopted under the Exchange Act.
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
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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. Based on the date of the 1998 Annual Meeting, the
Corporation anticipates that, in order to be timely, shareholder nominations
or proposals intended to be made at the 1999 Annual Meeting must be made by
September 17, 1999. 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's Annual Report to Stockholders, including financial
statements, has been mailed to all stockholders of record as of the close of
business on August 28, 1998. 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 28, 1998 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 16, 1998
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REVOCABLE PROXY
CASCADE FINANCIAL CORPORATION
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ANNUAL MEETING OF STOCKHOLDERS
October 17, 1998
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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 17, 1998, at 10:00 a.m., and at any and all adjournments thereof, as
follows:
FOR VOTE WITHHELD
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1. The election as directors
of all nominees listed below [ ] [ ]
(except as marked to the
contrary below).
Robert G. Disotell
Paull H. Shin
Gary L. Meisner
Henry Robinett
INSTRUCTION: To withhold your vote for any individual
nominee, write the nominee's name on the line below.
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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 16, 1998 and the 1998 Annual Report to
Stockholders.
Dated: _________________, 1998
_________________________ __________________________
PRINT NAME OF STOCKHOLDER PRINT NAME OF STOCKHOLDER
_________________________ _________________________
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 presidentor other authorized officer. If a partnership,
please sign in partnership name by authorized person. For joint accounts,
only onesignature is required.
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PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED
POSTAGE-PAIDENVELOPE.
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