<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] 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 240.14a-11(c) or 240.14a-12
WASHINGTON FEDERAL, INC.
- --------------------------------------------------------------------------------
(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)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
---------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
---------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
---------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
---------------------------------------------------------------------
(5) Total fee paid:
---------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
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:
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(4) Date Filed:
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<PAGE> 2
Washington Federal, Inc logo
425 PIKE STREET
SEATTLE, WA 98101-2334
(206) 624-7930
December 23, 1997
Dear Stockholder:
You are invited to attend our Annual Meeting of Stockholders to be held on
Wednesday, January 28, 1998 at 2:00 p.m. at the Westin Hotel, 1900 Fifth Avenue,
Seattle, Washington.
We hope you can attend this meeting in person, but whether or not you plan
to attend, it would be very helpful if you would sign the enclosed proxy card
and return it in the envelope provided. Please do this immediately so that we
can SAVE YOUR COMPANY THE TIME AND EXPENSE OF CONTACTING YOU AGAIN. Your vote is
important regardless of the number of shares you own. Voting by proxy will not
prevent you from voting in person if you attend the meeting, but will assure
that your vote will be counted if you are unable to attend.
If you have any questions, please do not hesitate to contact us.
Sincerely,
Guy C. Pinkerton signature
Guy C. Pinkerton
Chairman, President and
Chief Executive Officer
<PAGE> 3
Washington Federal, Inc. Logo
425 PIKE STREET
SEATTLE, WA 98101-2334
(206) 624-7930
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JANUARY 28, 1998
NOTICE IS HEREBY GIVEN that an annual meeting of stockholders of Washington
Federal, Inc. ("Washington Federal") will be held at the Westin Hotel, 1900
Fifth Avenue, Seattle, Washington, on January 28, 1998, at 2:00 p.m., Pacific
Time, for the following purposes:
1. To elect three directors for a three-year term and until their
successors are elected and qualified;
2. To ratify the appointment of Deloitte & Touche LLP as Washington
Federal's independent public accountants for fiscal 1998; and
3. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The Board of Directors of Washington Federal has fixed December 8, 1997 as
the record date for the determination of stockholders entitled to notice of and
to vote at the Annual Meeting. Only those stockholders of record as of the close
of business on that date will be entitled to vote at the Annual Meeting or at
any such adjournment.
By Order of the Board of
Directors
LOGO
Charles R. Richmond
Secretary
December 23, 1997
Seattle, Washington
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING. IT IS IMPORTANT THAT
YOUR SHARES BE REPRESENTED REGARDLESS OF THE NUMBER YOU OWN. EVEN IF YOU PLAN TO
BE PRESENT, YOU ARE URGED TO COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY
PROMPTLY IN THE ENVELOPE PROVIDED. IF YOU ATTEND THIS MEETING, YOU MAY VOTE
EITHER IN PERSON OR BY YOUR PROXY. ANY PROXY GIVEN MAY BE REVOKED BY YOU IN
WRITING OR IN PERSON AT ANY TIME PRIOR TO THE EXERCISE THEREOF.
<PAGE> 4
WASHINGTON FEDERAL, INC.
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
JANUARY 28, 1998
This Proxy Statement is furnished to the holders of the common stock, $1.00
par value per share ("Common Stock"), of Washington Federal, Inc. ("Washington
Federal" or the "Company"), the parent holding company for Washington Federal
Savings, a federally-chartered savings association, in connection with the
solicitation of proxies by the Board of Directors of the Company, to be used at
the Annual Meeting of Stockholders to be held at the Westin Hotel, 1900 Fifth
Avenue, Seattle, Washington, on Wednesday, January 28, 1998, at 2:00 p.m., and
at any adjournment thereof (the "Annual Meeting"), for the purposes set forth in
the Notice of Annual Meeting of Stockholders. This Proxy Statement is first
being mailed to stockholders on or about December 23, 1997.
The proxy solicited hereby, if properly signed and returned and not revoked
prior to its use, will be voted in accordance with the instructions given
thereon. If no instructions are so specified, then the proxy will be voted for
the persons nominated to be directors by the Board of Directors, for the
ratification of the appointment of Deloitte & Touche LLP as independent auditors
for fiscal 1998 and, upon the transaction of such other business as may properly
come before the Annual Meeting, in accordance with the best judgment of the
persons appointed as proxies. Any stockholder giving a proxy has the power to
revoke it at any time before it is exercised by (i) filing written notice
thereof with the Secretary of Washington Federal (Charles R. Richmond,
Washington Federal, Inc., 425 Pike Street, Seattle, Washington 98101); (ii)
submitting a duly executed proxy bearing a later date; or (iii) appearing at the
meeting and notifying the Secretary of his or her intention to vote in person.
Proxies solicited hereby may be exercised only at the Annual Meeting and any
adjournment thereof and will not be used for any other meeting.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
VOTING SECURITIES
Only stockholders of record at the close of business on December 8, 1997
(the "Voting Record Date") will be entitled to vote at the Annual Meeting. On
the Voting Record Date, 47,526,290 shares of Common Stock were issued and
outstanding and
<PAGE> 5
the Company had no other class of equity securities issued and outstanding. Each
share of Common Stock is entitled to one vote at the Annual Meeting on matters
other than the election of directors, in respect of which cumulative voting is
permitted, as discussed below under "Information with Respect to Nominees for
Director, Directors Whose Terms Continue and Executive Officers."
VOTE REQUIRED
The election of the Company's directors requires a plurality of the votes
represented in person or by proxy at the Annual Meeting, and the other proposal
described in the accompanying Notice to Stockholders and any other business that
may properly come before the Annual Meeting require that the votes cast in favor
exceed the votes cast against the proposal.
EFFECT OF AN ABSTENTION AND BROKER NON-VOTES
A stockholder who abstains from voting on any or all proposals will be
included in the number of stockholders present at the Annual Meeting for the
purpose of determining the presence of a quorum. Abstentions will not be counted
either in favor of or against the election of the nominees or any other
proposal. Under the rules of the National Association of Securities Dealers,
brokers holding stock for the accounts of their clients who have not been given
specific voting instructions as to a matter by their clients may vote their
clients' proxies in their own discretion.
PRINCIPAL HOLDERS OF VOTING SECURITIES
The following table sets forth information as of October 1, 1997 with
respect to ownership of the Common Stock by all directors and executive officers
of Washington Federal as a group. As of October 1, 1997, no person or entity
beneficially owned 5% or more of the issued and outstanding Common Stock.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1) PERCENT OF CLASS
- ------------------------------------------ ----------------------- ----------------
<S> <C> <C>
All directors and executive officers as a
group (14 persons)...................... 1,424,969(2) 2.99%(3)
</TABLE>
- ------------------------------
(1) Pursuant to rules promulgated by the Securities and Exchange Commission
("SEC") under the Securities Exchange Act of 1934, as amended ("Exchange
Act"), a person is considered to beneficially own shares of Common Stock if
he or she has or shares: (1) voting power, which includes the power to vote,
or direct the voting of the shares; or (2) investment power, which includes
the power to dispose, or direct the disposition of the shares.
2
<PAGE> 6
(2) Includes ownership of options to purchase Common Stock that may be exercised
by all executive officers as a group prior to December 31, 1997 aggregating
121,375 shares. Also includes 421,131 shares held by the Washington Federal
Savings Retirement Plan (the "Retirement Plan") for the benefit of executive
officers who serve as directors of Washington Federal. The Retirement Plan
is a qualified, defined contribution profit sharing and employee stock
ownership plan maintained for all eligible employees of Washington Federal
that invests primarily in U.S. Government and federal agency securities,
certificates of deposit and similar instruments issued by Washington Federal
and other financial institutions. The shares of Common Stock of Washington
Federal held by the Retirement Plan are voted by the trustees of such plan,
but their disposition can be directed only by the employee to whose account
the shares are allocated. The trustees of the Retirement Plan are Karen S.
Carlson, Arline T. Fonda and Ronald L. Saper, all of whom are full or
part-time employees of Washington Federal Savings.
(3) The percentage of outstanding shares of Common Stock is based on the
47,508,759 shares of Common Stock issued and outstanding on October 1, 1997,
plus options to purchase 121,375 shares of Common Stock that are exercisable
by executive officers as a group prior to December 31, 1997.
INFORMATION WITH RESPECT TO NOMINEES FOR DIRECTOR,
DIRECTORS WHOSE TERMS CONTINUE AND EXECUTIVE OFFICERS
GENERAL
The Restated Articles of Incorporation of Washington Federal provide that
the Board of Directors shall be divided into three classes as nearly equal in
number as possible, and that the members of each class shall be elected for
terms of three years and until their successors are elected and qualified, with
one of the three classes of directors to be elected each year. The number of
directors currently authorized by Washington Federal's Bylaws is nine.
Pursuant to Washington Federal's Restated Articles of Incorporation, at
each election of directors every stockholder entitled to vote has the right to
vote, in person or by proxy, the number of shares owned by him or her for as
many persons as there are directors to be elected, or to cumulate his or her
votes by giving one candidate as many votes as the number of such directors to
be elected multiplied by the number of his or her shares shall equal, or by
distributing such votes on the same principle among any number of candidates. In
the event that cumulative voting is in effect, it is the intention of the
persons named in the accompanying
3
<PAGE> 7
proxy to vote cumulatively for the election as directors the nominees listed in
the table below.
At the Annual Meeting, stockholders of Washington Federal will be asked to
elect three directors of Washington Federal for a three-year term and until
their successors are elected and qualified. The three nominees for election as
directors, which were selected by the Nominating Committee of the Board of
Directors, are Kermit O. Hanson, E.W. Mersereau, Jr. and Guy C. Pinkerton, all
of whom currently serve as directors of Washington Federal. There are no
arrangements or understandings between the persons named and any other person
pursuant to which such person was selected as a nominee for election as a
director at the Annual Meeting, and no director or nominee for director is
related to any other director or executive officer of Washington Federal by
blood, marriage or adoption.
If any person named as nominee should be unable or unwilling to stand for
election at the time of the Annual Meeting, the proxies will nominate and vote
for any replacement nominee or nominees recommended by the Board of Directors of
Washington Federal. Alternatively, under such circumstances the Board of
Directors of Washington Federal may reduce the number of directors of Washington
Federal.
4
<PAGE> 8
INFORMATION WITH RESPECT TO NOMINEES FOR DIRECTOR AND CONTINUING DIRECTORS
The following tables set forth information relating to the nominees of
Washington Federal for election as directors and the directors of Washington
Federal whose terms continue.
NOMINEES FOR THREE-YEAR TERM EXPIRING IN 2001
<TABLE>
<CAPTION>
COMMON STOCK OWNED
POSITIONS WITH DIRECTLY OR INDIRECTLY
WASHINGTON AS OF
FEDERAL AND PRINCIPAL OCTOBER 1, 1997(2)(3)
OCCUPATION DURING PAST DIRECTOR ----------------------
NAME AGE FIVE YEARS SINCE(1) NO. PERCENTAGE
- -------------------- --- ---------------------- -------- ------- ----------
<S> <C> <C> <C> <C> <C>
Kermit O. Hanson 81 Director; Dean 1966 13,603 .03%
Emeritus Graduate
School of Business
Administration,
University of
Washington; Vice
Chairman, Pacific Rim
Bankers Program
E.W. Mersereau, Jr. 81 Vice Chairman of 1947 21,086 .04%
Washington Federal and
former Chairman,
President and Chief
Executive Officer of
First Federal Savings
and Loan Association
of Mount Vernon
Guy C. Pinkerton 63 Chairman, President 1991 563,203(4) 1.19%
and Chief Executive
Officer of Washington
Federal
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS THAT THE NOMINEES
BE ELECTED AS DIRECTORS.
5
<PAGE> 9
DIRECTORS WITH TERM EXPIRING IN 1999
<TABLE>
<CAPTION>
POSITIONS WITH COMMON STOCK OWNED
WASHINGTON DIRECTLY OR INDIRECTLY
FEDERAL AND PRINCIPAL AS OF
OCCUPATION DURING OCTOBER 1, 1997(2)(3)
PAST DIRECTOR ----------------------
NAME AGE FIVE YEARS SINCE(1) NO. PERCENTAGE
- -------------------- --- --------------------- -------- ------- ----------
<S> <C> <C> <C> <C> <C>
Anna C. Johnson 46 Director; Senior 1995 1,225 --%
Partner, Scan East
West Travel, Seattle,
Washington
Richard C. Reed 76 Director; Management 1967 105,817 .22%
Consultant, Altman
Weil Pensa, Bellevue,
Washington; former
Chairman of the law
firm of Reed,
McClure, Moceri,
Thonn and Moriarty,
Seattle, Washington
Charles R. Richmond 58 Director; Executive 1995 262,541(4) .55%
Vice President and
Secretary of
Washington Federal
</TABLE>
6
<PAGE> 10
DIRECTORS WITH TERM EXPIRING IN 2000
<TABLE>
<CAPTION>
COMMON STOCK OWNED
DIRECTLY OR
POSITIONS WITH INDIRECTLY
WASHINGTON AS OF OCTOBER 1,
FEDERAL AND PRINCIPAL 1997(2)(3)
OCCUPATION DURING PAST DIRECTOR --------------------
NAME AGE FIVE YEARS SINCE(1) NO. PERCENTAGE
- -------------------- --- ----------------------- -------- ------- ----------
<S> <C> <C> <C> <C> <C>
John F. Clearman 60 Director; Director of 1996 8,028 .02%
Metropolitan Bancorp
from July 1993 until
its merger with and
into the Company on
November 29, 1996;
former President and
Chief Executive Officer
of N.C. Machinery Co.;
Director of Esterline
Corporation.
H. Dennis Halvorson 58 Director; Director of 1996 11,931 .03%
Metropolitan Bancorp
from September 1994
until its merger with
and into the Company on
November 29, 1996;
former President and
Chief Executive Officer
of United Bank, a
Savings Bank
W. Alden Harris 64 Director; former 1967 120,655 .25%
Executive Vice
President of Washington
Federal Savings
</TABLE>
- ------------------------------
(1) Includes tenure as a director of Washington Federal Savings and its
predecessors.
(2) Pursuant to rules promulgated by the SEC under the Exchange Act, a person is
considered to beneficially own shares of Common Stock if he or she has or
shares: (1) voting power, which includes the power to vote, or direct the
voting of the shares; or (2) investment power, which includes the power to
dispose, or direct the disposition of the shares.
(3) Based on information furnished by the respective directors. The percentage
of outstanding shares of Common Stock is based on the 47,508,759 shares of
Common Stock issued and outstanding on October 1, 1997, plus options to
7
<PAGE> 11
purchase shares of Common Stock that are exercisable by a director prior to
December 31, 1997.
(4) Includes in the case of Messrs. Pinkerton and Richmond, options to purchase
7,686 shares and 34,340 shares of Common Stock, respectively, which are
exercisable prior to December 31, 1997, as well as 234,803 shares and
158,096 shares of Common Stock, respectively, which are held pursuant to the
Retirement Plan.
CERTAIN EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
The following table sets forth information concerning the executive
officers of Washington Federal who are not directors and who are listed in the
Summary Compensation Table under "Executive Compensation" below.
<TABLE>
<CAPTION>
COMMON STOCK OWNED
DIRECTLY OR INDIRECTLY
POSITIONS WITH WASHINGTON AS OF
FEDERAL OCTOBER 1, 1997(1)(2)
AND PRINCIPAL OCCUPATION ----------------------
NAME AGE DURING PAST FIVE YEARS NO. PERCENTAGE
- ------------------- --- -------------------------------- ------- ----------
<S> <C> <C> <C> <C>
William A. 56 Executive Vice President since 101,772(3) .21 %
Cassels.......... October 1995; previously served
as Senior Vice President
Patrick F. 55 Executive Vice President since 73,029(3) .15 %
Patrick.......... November 1996; previously served
as President and Chief Executive
Officer of Metropolitan Bancorp
until its merger with and into
the Company on November 29,
1996.
Ronald L. Saper 47 Executive Vice President and 34,073(3) .07 %
Chief Financial Officer since
October 1995; previously served
as Senior Vice President and
Chief Financial Officer
</TABLE>
- ------------------------------
(1) Pursuant to rules promulgated by the SEC under the Exchange Act, a person is
considered to beneficially own shares of Common Stock if he or she has or
shares: (1) voting power, which includes the power to vote, or direct the
voting of the shares, or (2) investment power, which includes the power to
dispose, or direct the disposition of the shares.
(2) Based on information furnished by the respective officers. The percentage of
outstanding shares of Common Stock is based upon the 47,508,759 shares of
8
<PAGE> 12
Common Stock issued and outstanding on October 1, 1997, plus options to
purchase shares of Common Stock that are exercisable by that executive
officer prior to December 31, 1997.
(3) Includes in the case of Messrs. Cassels and Saper options to purchase 15,865
shares and 22,546 shares of Common Stock, respectively, which are
exercisable prior to December 31, 1997, as well as in the case of Messrs.
Cassels, Patrick and Saper, 6,777 shares, 476 shares and 6,683 shares of
Common Stock, respectively, which are held pursuant to the Retirement Plan.
STOCKHOLDER NOMINATIONS
Pursuant to Article IV, Section 4.15 of Washington Federal's Bylaws,
stockholders of Washington Federal may name nominees for election to the Board
of Directors by submitting such written nominations to the Secretary of
Washington Federal at least ninety (90) days prior to the anniversary date of
the mailing of proxy materials by Washington Federal in connection with the
immediately preceding annual meeting of stockholders of Washington Federal. Such
stockholder's notice shall set forth (a) the name and address of the stockholder
who intends to make the nomination and of the person or persons to be nominated;
(b) a representation that the stockholder is a holder of record of stock of
Washington Federal entitled to vote at such meeting and intends to appear in
person or by proxy at the meeting to nominate the person or persons specified in
the notice; (c) a description of all arrangements or understandings between the
stockholder and each nominee and any other person or persons (naming such person
or persons) pursuant to which the nomination or nominations are to be made by
the stockholder; (d) such other information regarding each nominee proposed by
such stockholder as would be required to be included in a proxy statement filed
pursuant to the proxy rules of the SEC; and (e) the consent of each nominee to
serve as director of Washington Federal if elected. If a nomination is made in
accordance with applicable requirements, then ballots will be provided for use
by stockholders at the stockholder meeting bearing the name of such nominee or
nominees. No nominations for election as a director at the Annual Meeting were
submitted to Washington Federal in accordance with the foregoing requirements.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under Section 16(a) of the Exchange Act, Washington Federal's directors and
executive officers and any persons holding more than 10% of the outstanding
Common Stock must report their ownership of Washington Federal's securities and
any changes in that ownership to the SEC by specific dates. Washington Federal
9
<PAGE> 13
believes that during the fiscal year ended September 30, 1997, all of these
filing requirements were satisfied by its directors and executive officers. In
making the foregoing statement, Washington Federal has relied in part on
representations of its directors and executive officers and copies of the
reports that they have filed with the SEC.
THE BOARD OF DIRECTORS AND ITS COMMITTEES
Meetings of the Board of Directors are held regularly each month. The Board
of Directors of Washington Federal held a total of 12 meetings during the last
fiscal year. No incumbent director attended fewer than 75% of the aggregate of
the total number of meetings of the Board of Directors held during his or her
tenure in office during the last fiscal year or the total number of all meetings
held by all committees of the Board of Directors on which he or she served
during such year, except Messrs. Clearman and Halvorson who were appointed after
the first committee meetings were held. Washington Federal paid its directors a
$1,200 monthly fee, provided they attended at least 10 of the 12 regular monthly
meetings of the Board of Directors held during the calendar year. The Board of
Directors has established Executive, Audit, Personnel and Stock Compensation and
Nominating Committees. Directors were paid $375 (committee chairmen were paid
$475) for each committee meeting attended, other than short meetings held in
conjunction with regularly scheduled board meetings.
The Board of Directors selects certain of its members to serve on its
Executive Committee. The present Executive Committee consists of Messrs.
Pinkerton (Chairman), Mersereau (Vice Chairman), Hanson, Harris and Reed. The
Executive Committee is authorized to exercise all the authority of the Board of
Directors in the management of Washington Federal between board meetings unless
otherwise provided by the Bylaws of Washington Federal. The Executive Committee
did not meet during the last fiscal year.
The Board of Directors has a standing Audit Committee. The Audit Committee
consists of Mr. Clearman (Chairman), Ms. Johnson and Messrs. Mersereau and Reed.
The Audit Committee reviews and accepts the reports of Washington Federal's
independent auditors and the federal examiners. The Audit Committee met two
times during the last fiscal year.
The Board of Directors has a standing Personnel and Stock Compensation
Committee (the "Committee"). The Committee consists of Messrs. Harris
(Chairman), Halvorson, Hanson and Mersereau. Except for Mr. Harris, who served
as an Executive Vice President of Washington Federal Savings until his
retirement on December 31, 1992, no member of the Committee has served as an
officer or an
10
<PAGE> 14
employee of Washington Federal or Washington Federal Savings during the past
five years. The Committee studies personnel and compensation recommendations
made by the Chief Executive Officer and makes recommendations to the Board of
Directors. Further, the Committee is authorized to act under Washington
Federal's stock option plans to grant stock options, stock appreciation rights
and performance shares. The Committee met three times during the last fiscal
year.
The Board of Directors has appointed three of its members to serve as a
Nominating Committee in connection with the election of directors. For the
present Annual Meeting, the Board of Directors appointed Messrs. Reed (Chairman)
and Halvorson and Ms. Johnson to serve on the Nominating Committee. The
Nominating Committee met one time during the last fiscal year.
11
<PAGE> 15
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth a summary of certain information concerning
the compensation awarded or paid by or on behalf of Washington Federal for
services rendered in all capacities during the last three fiscal years to the
Chief Executive Officer and the top four other executive officers of Washington
Federal whose total compensation during the last fiscal year exceeded $100,000
(the "Named Executives").
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
-------------------------------
AWARDS
ANNUAL COMPENSATION --------------------- PAYOUTS
-------------------------------------- RESTRICTED -------
NAME AND PRINCIPAL POSITION FISCAL OTHER ANNUAL STOCK OPTIONS/ LTIP ALL OTHER
DURING FISCAL 1997 YEAR SALARY(1) BONUS(2) COMPENSATION(3) AWARD(S) SARS(#) PAYOUTS COMPENSATION(4)
- --------------------------- ------ --------- -------- --------------- ---------- -------- ------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Guy C. Pinkerton 1997 $ 314,750 $ 32,118 0 0 0 0 $37,584
Chairman, President 1996 306,600 25,704 0 0 11,000 0 36,252
and Chief Executive 1995 274,050 50,250 0 0 22,000 0 33,540
Officer
William A. Cassels 1997 $ 124,800 $ 12,558 0 0 0 0 $14,688
Executive Vice President 1996 114,930 9,569 0 0 5,500 0 13,471
1995 96,630 17,754 0 0 11,000 0 11,856
Patrick F. Patrick(5) 1997 $ 150,000 $ 10,950 0 0 25,000 0 $12,600
Executive Vice President
Charles R. Richmond 1997 $ 218,550 $ 20,736 0 0 0 0 $24,264
Executive Vice President 1996 209,175 16,434 0 0 8,250 0 23,166
and Secretary 1995 186,825 32,745 0 0 16,500 0 21,840
Ronald L. Saper 1997 $ 150,300 $ 15,201 0 0 0 0 $17,784
Executive Vice President 1996 141,000 11,760 0 0 6,000 0 16,560
and Chief Financial 1995 118,500 21,600 0 0 12,100 0 14,430
Officer
</TABLE>
- ------------------------------
(1) Includes director's fees for Messrs. Pinkerton and Richmond. Includes
amounts deferred by Messrs. Cassels, Patrick and Saper pursuant to the
Retirement Plan, which permits deferrals pursuant to Section 401(k) of the
Internal Revenue Code of 1986, as amended (the "Code"). During fiscal 1997,
1996 and 1995, Messrs. Pinkerton and Richmond did not defer amounts pursuant
to the Retirement Plan.
(2) Represents cash profit sharing bonus paid semi-annually to all officers and
employees as of June 30 and December 31.
(3) Washington Federal owns automobiles for use by Messrs. Cassels, Patrick,
Richmond and Saper and certain other employees. Washington Federal also pays
club dues and other miscellaneous benefits for certain executive officers.
Washington Federal has concluded that the individual and aggregate amount of
personal benefits provided, which are not reflected in the above table, did
not exceed the lesser of $50,000 or 10% of the cash compensation reported
above for each of the Named Executives.
(4) Consists of amounts allocated or paid by Washington Federal to the executive
officer pursuant to the Retirement Plan.
(5) Mr. Patrick's employment with the Company began on November 29, 1996.
12
<PAGE> 16
OPTIONS/SARS GRANTED IN FISCAL 1997
The following table sets forth certain information with respect to stock
options granted to the Named Executives during the year ended September 30,
1997.
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE AT
INDIVIDUAL GRANTS ASSUMED RATES OF
------------------------------------------------------------- STOCK PRICE
% OF TOTAL OPTIONS APPRECIATION FOR
OPTIONS GRANTED TO EXERCISE OR OPTION TERM(3)
GRANTED EMPLOYEES IN BASE PRICE EXPIRATION -------------------
NAME (1) FISCAL YEAR (PER SHARE)(2) DATE 5% 10%
- ------------ ---------- ------------------ -------------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Patrick F.
Patrick 25,000 22.83% $ 23.125 11/28/06 $363,625 $921,375
</TABLE>
- ------------------------------
(1) The options vest 20% each year beginning April 30, 2000 and continuing
through April 30, 2004.
(2) The exercise price was based on the bid price of a share of Common Stock on
the date of grant.
(3) Assumes future stock prices of $37.67 and $59.98 at compounded rates of
return of five percent and 10 percent, respectively. The valuations listed
above are based on hypothetical rates of appreciation in the price of the
Common Stock (five percent and 10 percent, compounded annually) and are
included here in response to specific requirements of the SEC. Washington
Federal makes no representation that its stock will perform similarly or
show similar appreciation.
AGGREGATE OPTIONS/SARS EXERCISED IN
FISCAL 1997 AND FISCAL YEAR END OPTION/SAR VALUES
The following table sets forth certain information with respect to the
exercise of stock options during fiscal 1997 and outstanding stock options held
by the Named Executives as of September 30, 1997.
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS
SHARES AT YEAR END AT SEPTEMBER 30, 1997(1)
ACQUIRED VALUE --------------------------- ---------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------------- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Guy C. Pinkerton 34,306 $149,096 0 28,683 $ 0 $ 361,762
William A. Cassels 0 0 13,229 33,223 177,648 421,628
Patrick F. Patrick 0 0 0 27,500 0 236,638
Charles R. Richmond 11,958 201,373 27,751 55,105 375,636 705,201
Ronald L. Saper 0 0 20,789 42,986 272,425 546,798
</TABLE>
- ------------------------------
(1) The indicated value is based on the $29.625 per share market value of the
Common Stock at September 30, 1997, minus the exercise price.
13
<PAGE> 17
REPORT OF THE PERSONNEL AND STOCK COMPENSATION COMMITTEE
The Personnel and Stock Compensation Committee reviews and establishes
management compensation and compensation policies and procedures. Following
review and approval by the Committee, all issues pertaining to executive
compensation are submitted to the full Board of Directors for its approval. The
Committee also has responsibility for the grant of awards under Washington
Federal's stock option plans.
Executive officer compensation adjustments were based on Washington
Federal's overall performance in the past year and an analysis of compensation
levels necessary to attract and maintain quality personnel. In this way,
Washington Federal is able to compete for and retain talented executives who are
critical to Washington Federal's long-term success and aligns the interest of
those with the long-term interests of Washington Federal's stockholders.
Executive compensation consists of three components: cash compensation,
including base salary and semi-annual incentive bonus; long-term incentive
compensation in the form of stock options; and executive benefits. The
components are intended to provide incentives to achieve short and long-range
objectives of Washington Federal and to reward exceptional performance.
Performance is evaluated not only with respect to Washington Federal's earnings
but also with respect to comparable industry performance, the accomplishment of
Washington Federal's business objectives and the individual's contribution to
Washington Federal's core earnings and stockholder value. The competitiveness of
Washington Federal's compensation structure is determined by a thorough review
of compensation survey data collected by the Committee. To motivate job
performance and to encourage growth in stockholder value, stock options are
granted under Washington Federal's stock option plan to all executives and other
personnel in order to encourage substantial contributions toward the overall
success of Washington Federal. The Committee believes that this focuses
attention on managing Washington Federal from the perspective of an owner with
an equity stake in the business. With respect to executive benefits, executive
officers receive all normal employee fringe benefits.
In determining the overall compensation package for the Chief Executive
Officer, the Committee considered each of the factors enumerated in the
preceding paragraphs regarding compensation for executive officers of Washington
Federal, as well as the financial performance achieved by Washington Federal
during the past fiscal year. In addition to a high level of earnings, Washington
Federal continued at or near the top of the financial industry for such key
financial performance measures as return on average assets, return on average
equity,
14
<PAGE> 18
capital and efficiency ratios. Additionally, the Committee reviewed various
compensation packages provided to executive officers of publicly-traded
financial institutions. The results of such review showed Mr. Pinkerton's
overall compensation package to be below the median for chief executive officers
of publicly-traded financial institutions of comparable size and performance.
Dated this 30th day of September 1997
THE PERSONNEL AND STOCK
COMPENSATION COMMITTEE
W. Alden Harris, Chairman
H. Dennis Halvorson
Kermit O. Hanson
E. W. Mersereau, Jr.
15
<PAGE> 19
PERFORMANCE GRAPH
The following graph sets forth the cumulative total stockholder return
(assuming reinvestment of dividends) to Washington Federal's stockholders during
the period February 3, 1995 through September 30, 1997, as well as an overall
stock market index (NASDAQ-U.S.) and the NASDAQ Financial Stocks index during
this period. On February 3, 1995, Washington Federal, Inc. completed its
acquisition of Washington Federal Savings in connection with the reorganization
of Washington Federal Savings into the holding company form of organization.
Washington Federal Performance Graph
The stock performance graph assumes $100 was invested on February 3, 1995.
16
<PAGE> 20
INDEBTEDNESS OF MANAGEMENT
Washington Federal Savings will from time to time make mortgage loans to
officers and employees on the security of their residences at prevailing
contractual interest rates. Management believes that these loans do not involve
more than the normal risks of collectibility or present other unfavorable
features. Except for loan origination fees, which Washington Federal Savings
waived prior to August 1989, these loans are made on substantially the same
terms as those prevailing at the time for comparable transactions with
non-affiliated persons. Washington Federal Savings also makes loans secured by
savings accounts to its non-executive officers and employees. These loans are
made on the same terms as those prevailing for comparable loans to
non-affiliated persons.
RATIFICATION OF APPOINTMENT OF
INDEPENDENT PUBLIC ACCOUNTANTS
At the Annual Meeting, stockholders of Washington Federal will be asked to
ratify the appointment of Deloitte & Touche LLP as Washington Federal's
independent public accountants for the year ending September 30, 1998. This
appointment was recommended by the Audit Committee of Washington Federal and
approved by the Board of Directors of Washington Federal. If the stockholders of
Washington Federal do not ratify the appointment of Deloitte & Touche LLP, then
the Board of Directors of Washington Federal will reconsider the appointment.
Deloitte & Touche LLP has advised Washington Federal that neither the firm
nor any of its members has any direct or indirect financial interest in, or
during the last three years, has had any other connection with Washington
Federal other than the usual relationship which exists between independent
public accountants and clients.
The professional services rendered by Deloitte & Touche LLP during fiscal
1997 consisted of auditing Washington Federal's financial statements, services
related to filings with the OTS and consultations on matters related to taxes,
accounting and financial reporting.
A representative of Deloitte & Touche LLP will be present at the Annual
Meeting and available to respond to appropriate questions and will be given an
opportunity to make a statement if the representative chooses to do so.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE BY STOCKHOLDERS FOR
RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS WASHINGTON FEDERAL'S
INDEPENDENT PUBLIC ACCOUNTANTS FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 1998.
17
<PAGE> 21
OTHER MATTERS
Management is not aware of any business to come before the Annual Meeting
other than those matters described in this Proxy Statement. However, if any
other matters should properly come before the Annual Meeting, it is intended
that the proxies solicited hereby will be voted with respect to those other
matters in accordance with the judgment of the persons voting the proxies.
The cost of the solicitation of proxies will be borne by Washington
Federal. Washington Federal will reimburse brokerage firms and other custodians,
nominees and fiduciaries for reasonable expenses incurred by them in sending
proxy materials to the beneficial owners of the Common stock. In addition to
solicitations by mail, directors, officers and employees of Washington Federal
may solicit proxies personally or by telephone without additional compensation.
STOCKHOLDER PROPOSALS
Any proposal which a stockholder wishes to have included in the proxy
solicitation materials to be used in connection with the next annual meeting of
stockholders of Washington Federal must be received at the main office of
Washington Federal no later than August 25, 1998. If such proposal is in
compliance with all of the requirements of Rule 14a-8 under the Exchange Act, it
will be included in the proxy statement and set forth on the form of proxy
issued for the next annual meeting of stockholders. It is urged that any such
proposals be sent by certified mail, return receipt requested.
ANNUAL REPORTS
Stockholders of Washington Federal as of the record date for the Annual
Meeting are being forwarded a copy of Washington Federal's Annual Report to
Stockholders for the year ended September 30, 1997 (the "Annual Report").
Included in the Annual Report are the consolidated statements of financial
condition of Washington Federal as of September 30, 1997 and 1996 and the
related consolidated statements of operations, stockholders' equity and cash
flows for each of the years in the three-year period ended September 30, 1997,
prepared in accordance with generally accepted accounting principles, and the
related report of Washington Federal's independent public accountants. The
Annual Report is not a part of this Proxy Statement.
UPON RECEIPT OF A WRITTEN REQUEST, WASHINGTON FEDERAL WILL FURNISH TO ANY
STOCKHOLDER WITHOUT CHARGE A COPY OF ITS ANNUAL REPORT ON FORM 10-K FILED
18
<PAGE> 22
WITH THE SEC UNDER THE EXCHANGE ACT FOR THE YEAR ENDED SEPTEMBER 30, 1997. UPON
WRITTEN REQUEST AND A PAYMENT OF A COPYING CHARGE OF $.10 PER PAGE, WASHINGTON
FEDERAL WILL FURNISH TO ANY SUCH STOCKHOLDER A COPY OF THE EXHIBITS TO THE
ANNUAL REPORT ON FORM 10-K. SUCH WRITTEN REQUESTS SHOULD BE DIRECTED TO RONALD
L. SAPER, EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER, WASHINGTON
FEDERAL, INC., 425 PIKE STREET, SEATTLE, WASHINGTON 98101. THE ANNUAL REPORT ON
FORM 10-K IS NOT A PART OF THIS PROXY STATEMENT.
19
<PAGE> 23
Please mark
your votes as [X]
indicated in
this example.
1. Election of directors for three-year term expiring in 2001:
Kermit O. Hanson, E.W. Mersareau, Jr. and Guy C. Pinkerton
FOR all nominees named WITHHOLD AUTHORITY
below (except as marked to vote for all
to the contrary below) nominees named below
[ ] [ ]
(Instruction: To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided below.)
-------------------------------------------------
2. Proposal to ratify the appointment of Deloitte & Touche LLP as the
independent public accountants of Washington Federal for fiscal year 1998.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the Annual Meeting.
The undersigned hereby acknowledges receipt of a Notice of Annual Meeting
of Stockholders of Washington Federal called for the 28th day of January
1998 and a Proxy Statement for such Annual Meeting prior to the signing of
this proxy.
IN VIEW OF THE IMPORTANCE OF THE ACTION TO BE TAKEN AND TO SAVE THE COST OF
FURTHER PROXY SOLICITATION, WE URGE YOU TO MARK, SIGN, DATE AND RETURN THE
PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
Signature(s) ________________________________________ Dated: ______________
Please sign exactly as your name appears on the stock certificate. When
shares are held by joint tenants, both should sign. When signing as
attorney, executor, administrator, trustee or guardian, please give title
as such. If executed by a corporation, sign full corporate name by a duly
authorized officer.
- --------------------------------------------------------------------------------
(FOLD AND DETACH HERE)
[LOGO]
WASHINGTON FEDERAL, INC
Annual Meeting of Stockholders
Wednesday, January 28, 1998
2:00 p.m. PST
Westin Hotel
1900 Fifth Avenue
Seattle, Washington
<PAGE> 24
REVOCABLE PROXY
WASHINGTON FEDERAL, INC.
425 PIKE STREET, SEATTLE, WASHINGTON 98101
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints the Board of Directors as Proxies, each
with the power to appoint his substitute, and hereby authorizes them to
represent the undersigned and to vote as designated below, all the shares of
Common Stock of Washington Federal, Inc. ("Washington Federal") held of record
by the undersigned on December 8, 1997, at the Annual Meeting of Stockholders
to be held at the Westin Hotel, 1900 Fifth Avenue, Seattle, Washington, on
January 28, 1998, or at any adjournment thereof (the "Annual Meeting").
This proxy may be revoked at any time before it is exercised.
This proxy, when properly executed, will be voted in the manner directed
herein by the undersigned stockholder. If no direction is made, then this proxy
will be voted for the nominees named under Proposal 1 below and for Proposal 2.
In the discretion of the Proxies, shares may be voted cumulatively so as to
elect the maximum number of nominees for director.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)
- --------------------------------------------------------------------------------
(FOLD AND DETACH HERE)
[LOGO]
WASHINGTON FEDERAL, INC
