<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
SMC Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
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:
------------------------------------------------------------------------
<PAGE>
SMC CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 18, 2000
TO THE SHAREHOLDERS OF SMC CORPORATION:
The Annual Meeting of Shareholders of SMC Corporation, an Oregon
corporation, (the Company) will be held at the Bend Golf and Country Club,
located at 61045 Country Club Drive, Bend, Oregon, on Thursday, May 18, 2000 at
1:00 p.m. for the following purposes:
1. To elect six directors, each to serve until the next Annual Meeting of
Shareholders and until a successor has been elected and qualified;
2. To transact any other business that properly comes before the meeting or
any adjournment thereof.
Only shareholders of record at the close of business on April 3, 2000 are
entitled to notice of and to vote at the meeting or any adjournments thereof.
PLEASE DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT IN THE POSTAGE-
PREPAID ENVELOPE ENCLOSED FOR THAT PURPOSE. You may attend the meeting
in person even if you send in your proxy, because retention of the proxy is not
necessary for admission to or identification at the meeting.
BY ORDER OF THE BOARD OF DIRECTORS,
Connie M. Perlot
SECRETARY
April 7, 2000
Bend, Oregon
YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING IN
PERSON, PLEASE EXECUTE AND RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING
ENVELOPE SO THAT YOUR STOCK WILL BE VOTED. THE ENVELOPE REQUIRES NO POSTAGE IF
MAILED IN THE UNITED STATES.
<PAGE>
SMC CORPORATION
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
----------
The mailing address of the principal executive offices of the Company is
20545 Murray Road, P.O. Box 5639, Bend, Oregon 97708. This Proxy Statement and
the accompanying Notice of Annual Meeting and the Proxy Card are first being
sent to the shareholders on or about April 7, 2000.
UPON WRITTEN REQUEST TO WILLIAM L. RICH, CHIEF FINANCIAL OFFICER, ANY
PERSON WHOSE PROXY IS SOLICITED BY THIS PROXY STATEMENT WILL BE PROVIDED,
WITHOUT CHARGE, A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K. COPIES OF
THE COMPANY'S ANNUAL REPORT ON FORM 10-K ARE ALSO PUBLICLY AVAILABLE AT
www.freeedgar.com.
SOLICITATION AND REVOCABILITY OF PROXY
The enclosed proxy is solicited on behalf of the Board of Directors of SMC
Corporation, an Oregon corporation, for use at the Annual Meeting of
Shareholders to be held on May 18, 2000 and at any adjournment thereof. The
Company will bear the cost of preparing and mailing the proxy, proxy statement,
and any other material furnished to shareholders by the Company in connection
with the annual meeting. Proxies will be solicited by use of the mails, and
officers and employees of the Company may also solicit proxies by telephone or
personal contact. Copies of solicitation materials will be furnished to
fiduciaries, custodians, and brokerage houses for forwarding to beneficial
owners of the stock held in their names.
Any person giving a proxy in the form accompanying this proxy statement has
the power to revoke it at any time before its exercise. The proxy may be revoked
by filing with the Company, attention Connie M. Perlot, Secretary, an instrument
of revocation or a duly executed proxy bearing a later date. The proxy may also
be revoked by affirmatively electing to vote in person while in attendance at
the meeting. A shareholder who attends the meeting, however, need not revoke the
proxy and vote in person unless he or she wishes to do so. All valid, unrevoked
proxies will be voted at the annual meeting in accordance with the instructions
given. If no instructions are specified, the shares will be voted FOR Proposal
1, Election of Directors, in the accompanying Notice of Annual Meeting of
Shareholders, and these votes will be counted toward determining a quorum.
<PAGE>
VOTING SECURITIES AND PRINCIPAL SHAREHOLDERS
The Common Stock is the only outstanding authorized voting security of the
Company. The record date for determining holders of Common Stock entitled to
vote at the annual meeting is April 3, 2000. Each share of Common Stock
outstanding on the record date will be entitled to one vote. The Common Stock
does not have cumulative voting rights. On March 15, 2000, there were 5,780,599
shares of Common Stock outstanding.
The following table sets forth certain information regarding the beneficial
ownership as of March 15, 2000 of the Common Stock by (i) each person known by
the Company to own beneficially more than 5 percent of the Common Stock, (ii)
each director and nominee for director of the Company, (iii) each executive
officer of the Company named in the Summary Compensation Table, and (iv) all
executive officers and directors as a group. Except as otherwise noted, the
persons listed below have sole investment and voting power with respect to the
Common Stock owned by them, and their addresses are c/o SMC Corporation, 20545
Murray Road, P.O. Box 5639, Bend, Oregon, 97708.
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENTAGE
BENEFICIAL OWNER BENEFICIALLY OWNED OF SHARES
- ---------------- ------------------ ----------
<S> <C> <C>
Mathew M. Perlot............................................ 3,320,890 (1) 57%
Curtis W. Lawler............................................ 1,160,000 (2) 20%
Michael R. Jacque........................................... 189,797 (3) 3%
William L. Rich............................................. 12,069 (4) *
Lawrence S. Black........................................... 8,953 (5) *
Jim L. Traughber............................................ 10,953 (6) *
Connie M. Perlot............................................ -- (7) --
All directors and executive officers as a
group (10 persons)........................................ 4,702,662 (8) 81%
- ---------------
* Less than 1%
</TABLE>
(1) Includes 281,390 shares subject to an option exercisable within 60 days
after March 15, 2000. Excludes 118,610 shares subject to an option not
exercisable within 60 days after that date.
(2) Includes 50,000 shares subject to an option exercisable within 60 days
after March 15, 2000.
(3) Includes 71,297 shares subject to an option exercisable within 60 days
after March 15, 2000. Excludes 228,703 shares subject to options not
exercisable within 60 days after March 15, 2000.
(4) Includes 4,769 shares subject to options exercisable within 60 days after
March 15, 2000. Excludes 45,231 shares subject to options not exercisable
within 60 days after March 15, 2000.
(5) Includes 7,953 shares subject to options exercisable within 60 days after
March 15, 2000. Excludes 1,047 shares subject to options not exercisable
within 60 days after that date.
(6) Includes 8,953 shares subject to options exercisable within 60 days after
March 15, 2000. Excludes 1,047 shares subject to options not exercisable
within 60 days after that date.
(7) Excludes shares owned by Mathew M. Perlot, husband of Connie M. Perlot,
over which Ms. Perlot has no voting power or investment authority.
(8) Includes 424,362 shares subject to options held by executive officers and
directors that are exercisable within 60 days after March 15, 2000.
Excludes 394,638 shares subject to options held by executive officers and
directors that are not exercisable within 60 days after that date. The
exercisable warrants previously held by a director for 26,250 shares
expired January 20, 2000.
1
<PAGE>
PROPOSAL 1: ELECTION OF DIRECTORS
The directors of the Company are elected at the Annual Meeting to serve
until their successors are elected and qualified. Vacancies resulting from an
increase in the size of the Board may be filled by the Board of Directors or by
the shareholders. If a quorum of shareholders is present at the annual meeting,
the six nominees for election as directors who receive the greatest number of
votes cast at the meeting will be elected directors. Abstentions and broker
non-votes will have no effect on the results of the vote. Unless otherwise
instructed, proxy holders will vote the proxies they receive for the nominees
named below. If any of the nominees for director at the annual meeting becomes
unavailable for election for any reason, the proxy holders will have
discretionary authority to vote pursuant to the proxy for a substitute. The
following table briefly describes the Company's nominees for directors.
<TABLE>
<CAPTION>
DIRECTOR
NAME, PRINCIPAL OCCUPATION AND OTHER DIRECTORSHIPS AGE SINCE
- -------------------------------------------------- --- --------
<S> <C> <C>
MATHEW M. PERLOT. Mr. Perlot co-founded the Company in 1986 and has since served 63 1986
as its President, Chief Executive Officer and Chairman of the Board. Mr. Perlot
is married to Connie M. Perlot, a director and Secretary-Treasurer of the
Company.
MICHAEL R. JACQUE. Mr. Jacque joined the Company in June 1999 as its President 42 1999
and Chief Operating Officer. Mr. Jacque was elected a director in November 1999.
CURTIS W. LAWLER. Mr. Lawler's most recent positions with the Company were Vice 78 1989
President of the Company and General Manager-Beaver Motor Coaches, Inc. Mr.
Lawler co-founded the Company in 1986 and had been employed by the Company in
various capacities since 1987. Mr. Lawler retired as an officer of the Company in
March 1996.
CONNIE M. PERLOT. Ms. Perlot became Secretary-Treasurer in January 1987. Since 51 1986
1986 Ms. Perlot has served as internal auditor for the Company. Ms. Perlot is
married to Mathew M. Perlot.
JIM L. TRAUGHBER. From 1968 to 1997, Mr. Traughber owned and served as President 62 1994
of Traughber Oil Company, a wholesale petroleum products distributor located in
central Oregon.
LAWRENCE S. BLACK. Mr. Black is the Chairman of the Board of Black & Company, 70 1995
Inc., an investment banking firm that served as the managing underwriter for the
initial public offering of the Company's Common Stock in January 1995. Mr. Black
is a director at Mt. Bachelor Incorporated.
</TABLE>
2
<PAGE>
BOARD MEETINGS AND COMMITTEES
The Board of Directors met four times during 1999. No director attended
fewer than 75% of the aggregate of all meetings of the Board of Directors and
the committees of which the director was a member during 1999. The standing
committees of the Board of Directors are the Audit Committee and the
Compensation Committee. The members of each of the Audit Committee and the
Compensation Committee are nonemployee directors. The Company does not have a
nominating committee.
The Audit Committee for 1999 consisted of Messrs. Traughber and Black, who
will continue as the Audit Committee for 2000. The Audit Committee oversees
actions taken by the Company's independent auditors. The Compensation Committee
for 1999 consisted of Messrs. Traughber and Black, who will continue as the
Compensation Committee for 2000. The Compensation Committee reviews the
compensation of the Company's executive officers and makes recommendations to
the Board of Directors regarding compensation. The Compensation Committee also
administers the Stock Incentive Plan and recommends grants under the Plan to the
Board of Directors. The Audit Committee met twice and the Compensation Committee
met once during 1999.
COMPENSATION OF DIRECTORS
Under the Company's 1994 Stock Incentive Plan (the Plan), each nonemployee
director automatically is granted an option to purchase 5,000 shares of Common
Stock on the date he or she becomes a nonemployee director and automatically is
granted an option to purchase 1,000 additional shares of Common Stock in each
subsequent calendar year that the nonemployee director continues to serve in
that capacity. Other than these automatic grants, nonemployee directors may not
be granted any other options under the Plan. Nonemployee directors also receive
$10,000 per year as compensation for serving on the Board of Directors and are
reimbursed for reasonable expenses incurred in attending meetings. Officers are
appointed by the Board of Directors and serve at its discretion.
3
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth the executive compensation paid by the
Company during the last three years to the Chief Executive Officer and all other
officers as of March 15, 2000 who earned more than $100,000 in combined salary
and bonus in 1999.
<TABLE>
<CAPTION>
Long-Term
Compensation Awards
Annual Compensation ---------------------
Name and ------------------- Securities All Other
Principal Position Year Salary Bonus Underlying Options(1) Compensation
- ------------------ ---- ------ ----- --------------------- ------------
<S> <C> <C> <C> <C> <C>
Mathew M. Perlot..................... 1999 $316,800 $ 6,515 4,537
Chief Executive Officer, and 1998 316,800 159,165 4,362
Chairman of the Board 1997 316,800 119,951 11,425
Michael R. Jacque.................... 1999 110,200 $ 6,515 200,000 679
President, and
Chief Operating Officer
William L. Rich ................... 1999 120,000 1,086 1,372
Vice President of Finance, and 1998 17,719 6,315 325
Chief Financial Officer
</TABLE>
- ----------
(1) Represents shares of Common Stock issuable upon exercise of stock options
granted under the Company's 1994 Stock Option Plan.
STOCK OPTION GRANTS IN LAST FISCAL YEAR
The following table provides information regarding stock options granted in
1999 to the executive officers named in the Summary Compensation Table.
<TABLE>
<CAPTION>
PERCENTAGE
NUMBER OF OF OPTIONS REALIZABLE VALUE AT ASSUMED
SHARES GRANTED TO RATES OF ANNUAL STOCK PRICE
UNDERLYING EMPLOYEES EXERCISE APPRECIATION FOR OPTION TERMS(1)
OPTIONS DURING PRICE PER EXPIRATION --------------------------------
NAME GRANTED FISCAL YEAR SHARE DATE 5% 10%
- ---- ------- ----------- ----- ---- ---- ------
<S> <C> <C> <C> <C> <C> <C>
Michael R. Jacque 200,000(2) 100.0% $4.625 5/13/09 $ 479,595 $ 1,215,388
</TABLE>
(1) In accordance with rules of the Securities and Exchange Commission, these
amounts are the hypothetical gains or option spreads that would exist for
the respective options based on assumed compounded rates of annual stock
price appreciation of 5 percent and 10 percent from the date the options
were granted over the option term.
(2) This option becomes exercisable for 2.78% of the shares subject to the
option on May 13, 1999, and for an additional 2.78% of the shares subject
to the option on the first day of each month thereafter until fully
exercisable.
4
<PAGE>
OPTION EXERCISES AND YEAR-END OPTION VALUES
None of the executive officers named in the Summary Compensation Table
exercised any options during 1999. The following table indicates for all
executive officers named in the Summary Compensation Table (i) the number of
shares subject to exercisable and unexercisable stock options as of December 31,
1999 and (ii) the value of in-the-money options, which represents the positive
difference between the exercise price of existing stock options and the year-end
price of the Common Stock.
<TABLE>
<CAPTION>
NUMBER OF
SHARES SUBJECT VALUE OF
NUMBER OF TO UNEXERCISED UNEXERCISED
SHARES OPTIONS IN-THE-MONEY
ACQUIRED VALUE AT FISCAL YEAR END AT FISCAL YEAR END(1)
ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Mathew M. Perlot 0 0 261,160 38,840 $ -- $ --
Michael R. Jacque 0 0 38,920 161,080 -- --
William L. Rich 0 0 0 0 -- --
</TABLE>
- ----------
(1) Based on last sale price of $3.813 for the Company's Common Stock on
December 31, 1999.
5
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION(1)
In 1999, the Compensation Committee of the Board of Directors (the
Committee) was composed of two nonemployee directors. The Committee is
responsible for developing and making recommendations to the Board with respect
to the Company's compensation policies and the levels of compensation to be paid
to executive officers. In addition, the Committee has responsibility for the
administration of, and the grant of stock options and other awards under, the
Plan.
The objectives of the Company's executive compensation program are to
attract and retain highly qualified executives and to motivate them to maximize
shareholder returns by achieving both short-term and long-term strategic Company
goals. The two basic components of the executive compensation program are base
salary and long-term incentive compensation in the form of stock options. The
Company also has a cash bonus program for senior executives and a 401(k) Profit
Sharing Plan, both of which were instituted in 1995.
BASE SALARY. The Committee delegated authority to set executive salaries
for 1999 (other than for Mathew Perlot) to Mathew Perlot, the Chief Executive
Officer of the Company. Mr. Perlot set executive compensation to reflect the
Committee's recommendations and to provide salary levels appropriate for the
individual experience, job responsibility, and performance of each executive. In
making recommendations to Mr. Perlot concerning executive compensation, the
Committee considered, among other things, executive salary levels established by
companies of similar size in the manufacturing and motor coach industries, and
recommended salary levels near what it perceived to be the middle range of
compensation for comparable positions at comparable companies. Each executive
officer's salary is reviewed annually, and increases to base salary are made to
reflect competitive market increases and the individual factors described above.
CASH BONUS PROGRAM. In 1995 the Company instituted a cash bonus program for
senior executives. The program provides for cash payments based on a percentage
of the Company's pretax profits. The applicable percentage of pretax profits an
executive may receive under this program varies according to the executive's
experience, responsibilities and performance, up to a maximum of three percent.
LONG-TERM INCENTIVE COMPENSATION. The Plan is a long-term incentive plan
for executives, managers, and other employees within the Company. The objective
of the Plan is to align employee and shareholder long-term interests by creating
a strong and direct link between compensation and shareholder value. The Plan
authorizes the Committee to award stock options to executive officers and other
employees of the Company. Stock options are granted at an option price not less
than 100% of fair market value of the Company's Common Stock on the date of
grant, in the case of incentive stock options, and at prices otherwise
determined by the Committee, in the case of nonstatutory stock options. To date,
all options granted under the Plan have been nonstatutory stock options. Stock
options granted under the Plan to date generally become exercisable to the
extent of approximately 1/36th of the shares each month after the date of grant,
have ten year terms, and generally terminate in the event of termination of
employment. The amount of stock option grants for an individual is at the
discretion of the Committee and depends upon the individual's level of
responsibility and position in the Company.
- ----------
(1) This Section is not soliciting material, is not deemed filed with the
Securities and Exchange Commission, and is not to be incorporated by
reference in any filing of the Company under the Securities Act of 1933 or
the Securities Exchange Act of 1934, regardless of the date of the filing
or any general incorporation language contained in the filing.
6
<PAGE>
The Company's 401(k) Profit Sharing Plan allows eligible employees to
contribute up to 15 percent of their compensation annually. The Profit Sharing
Plan also permits the company to match a percentage of employees' contributions
at management's discretion.
DEDUCTIBILITY. Section 162(m) of the Internal Revenue Code of 1986 limits
to $1 million per person the amount that the Company may deduct for compensation
paid to any of its most highly compensated officers in any year after 1993. The
levels of salary and bonus generally paid by the Company do not exceed this
limit. Upon the exercise of nonstatutory incentive stock options, however, the
excess of the current market price over the option price (the option spread) is
treated as compensation and, therefore, it may be possible for option exercises
by an officer in any year to cause the officer's total compensation to exceed $1
million. Under IRS regulations, option spread compensation from options that
meet certain requirements will not be subject to the $1 million limit on
deductibility.
COMPENSATION OF CHIEF EXECUTIVE OFFICER. The Committee set Mr. Perlot's
compensation for 1999. The Committee employed the same objectives and criteria
to set Mr. Perlot's salary as it used in recommending compensation levels for
the Company's other executive officers. The Committee did not increase Mr.
Perlot's salary in 1999.
COMPENSATION COMMITTEE
Jim L. Traughber
Lawrence S. Black
7
<PAGE>
PERFORMANCE GRAPH(1)
Set forth below is a line graph comparing the cumulative total shareholder
return of the Company's Common Stock with the cumulative total return, assuming
reinvestment of dividends, of the Standard and Poor's 500 Stock Index (S&P 500
Index) and a peer group consisting of Coachman, Inc., Fleetwood Enterprises,
Monaco Coach Corporation, National RV Holdings, Inc., Thor Industries, Inc., and
Winnebago Industries for the period commencing on January 20, 1995 (the date of
the Company's initial public offering) and ending on December 31, 1999. The
graph assumes that $100 was invested in the Company's Common Stock (at the
initial public offering price) and each index on January 20, 1995.
[LINE CHART]
<TABLE>
<CAPTION>
Cumulative Return as of
--------------------------------------------------------------------------------------------
Base Period
1/20/95 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SMC Corporation 100.00 106.45 101.61 106.45 59.68 49.20
- ------------------------------------------------------------------------------------------------------------------
S&P 500 Index 100.00 134.21 164.95 221.44 284.19 339.32
- ------------------------------------------------------------------------------------------------------------------
Peer Group 100.00 123.95 187.42 264.30 330.77 327.40
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
(1) This Section is not soliciting material, is not deemed filed with the
Securities and Exchange Commission, and is not to be incorporated by
reference in any filing of the Company under the Securities Act of 1933 or
the Securities Exchange Act of 1934, regardless of the date of the filing
or any general incorporation language contained in the filing.
8
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In March 1988 Mathew M. Perlot, Chief Executive Officer and Chairman of the
Board of the Company, entered into an agreement with Curtis W. Lawler, a
director of the Company. This agreement contains a right of first refusal in
favor of the Company and then Mr. Perlot if Mr. Lawler proposes voluntarily to
transfer any shares, dies or becomes subject to a bankruptcy proceeding. If the
Company's or Mr. Perlot's purchase rights are exercised under the agreement, the
purchase price in the event of death, bankruptcy, or termination of employment
is a price agreed to annually by Mr. Perlot and Mr. Lawler, and in the event of
a proposed voluntary sale, the purchase price is the lower of the agreed price
or the proposed voluntary sales price. The last agreed price formula was to fix
the per share price at two-thirds of the Common Stock's market price as of the
date of a proposed sale.
In 1999, as part of a stock repurchase program, the Company repurchased
100,000 shares from Mr. Perlot for $5.25 per share, resulting in an overall
purchase price of approximately $525,000.
In 1999, the Company purchased electronics from a supplier company that is
owned by a principal related to Mr. Perlot. The Company purchased parts for the
total amount of $946,000 for the year ended December 31, 1999.
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP audited the Company's consolidated financial
statements for the year ended December 31, 1999 and has been selected to audit
the Company's consolidated financial statements for 2000. Representatives of
PricewaterhouseCoopers LLP will be present at the Annual Meeting and will be
available to respond to appropriate questions. They do not plan to make any
statement but will have the opportunity to make a statement if they wish.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers, directors and persons who own more than 10 percent of the
Common Stock to file reports of ownership and changes in ownership with the
Securities and Exchange Commission (SEC). Executive officers, directors and
beneficial owners of more than ten percent of the Common Stock are required by
SEC regulation to furnish the Company with copies of all Section 16(a) forms
they file. Based solely on a review of the copies of such forms received by the
Company and on written representations from certain reporting persons that they
have complied with the relevant filing requirements, the Company believes that
all Section 16(a) filing requirements applicable to its executive officers and
directors have been complied with, except that Mr. Jacque reported one
transaction late.
9
<PAGE>
DISCRETIONARY AUTHORITY
While the Notice of Annual Meeting of Shareholders provides for transaction
of such other business that properly comes before the meeting, the Board of
Directors does not know of any matters to be presented at the meeting other than
that described in this proxy statement. The enclosed proxy, however, gives the
proxy holders authority to vote in their discretion if any other matters are
presented.
For this year's annual meeting of shareholders, if notice of a shareholder
proposal to be raised at the annual meeting of shareholders was received at the
principal executive offices of the Company after March 2, 2000, proxy voting on
that proposal when and if raised at the annual meeting will be subject to the
discretionary voting authority of the designated proxy holders. For the 2001
annual meeting of shareholders, if notice of a shareholder proposal to be raised
at the meeting is received at the principal executive offices of the Company
after February 28, 2001, proxy voting on that proposal when and if raised at the
annual meeting will be subject to the discretionary voting authority of the
designated proxy holder.
SHAREHOLDER PROPOSALS
Any shareholder proposals to be considered for inclusion in proxy material
for the Company's next annual meeting must be received at the principal
executive office of the Company no later than February 28, 2001.
BY ORDER OF THE BOARD OF DIRECTORS
Connie M. Perlot
SECRETARY
Bend, Oregon
April 7, 2000
10
