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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 3, 1998
UNITED FINANCIAL CORP.
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(Exact name of registrant as specified in its charter)
Minnesota 0-28080 81-0507591
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(State or other jurisdiction (Commission (IRS employer
of incorporation) file number) identification No.)
P.O Box 2509, 601 First Avenue North, Great Falls, Montana 59403
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(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code: (406) 761-2200
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Not Applicable
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(Former name or former address, if changed since last report)
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Item 1. CHANGES IN CONTROL OF REGISTRANT.
The information required by Item 1 of the instructions to Form 8-K is
set forth under Item 2 below.
Item 2. ACQUISITION OR DISPOSITION OF ASSETS.
MERGER
On February 3, 1998, United Financial Corp. (the "Company") merged
with Heritage Bancorporation ("Heritage") pursuant to an Agreement and Plan of
Merger dated August 25, 1997, as amended (the "Merger Agreement"), under which
Heritage was merged with and into the Company. In connection with the Merger,
each outstanding share of Heritage common stock was converted into 47.50 shares
of the Company's Common Stock. An aggregate of 475,000 shares (or 28%) of the
Company's Common Stock (the "Merger Consideration") was issued in connection
with the Merger. The market value of the Merger Consideration on the date of
the consummation of the Merger was approximately $12,500,000. The Merger
Consideration was determined through negotiations between the Company and
Heritage.
Before the Merger, the former shareholders of Heritage (the "Former
Heritage Shareholders") owned approximately 3.3% of the outstanding shares of
the Company's Common Stock. Following the Merger, the Former Heritage Share-
holders own approximately 30% of the outstanding shares of the Company's Common
Stock. In addition, John M. Morrison, the former majority shareholder of
Heritage, was granted certain rights of first refusal by shareholders of the
Company holding approximately 15.5% of the Company's outstanding Common Stock.
Under those rights of first refusal, such shareholders may not sell their shares
of the Company's Common Stock for a period of two years without first offering
such stock to Mr. Morrison. A form of the right of first refusal agreements is
filed as an exhibit to Mr. Morrison's Schedule 13D filed with the Securities
and Exchange Commission (the "SEC").
MANAGEMENT
In connection with the Merger, the Board of Directors of the Company
(the "Board") was increased to nine members and five persons nominated by the
Former Heritage Shareholders (the "Heritage Nominees") were elected to the
Board. Consequently, the Heritage Nominees now constitute a majority of the
Board. Three of the Heritage Nominees were Former Heritage Shareholders and the
other two are executive officers of other banks controlled by Mr. Morrison.
There are no contractual or other requirements for the Heritage Nominees to be
nominated or re-elected to the Board in the future. The Heritage Nominees,
representing a majority of the Board, will be able to select and control the
management of the Company as well as the board of directors of the Company's
subsidiary banks. At its initial
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meeting, the Board elected John M. Morrison as President and Chief Executive
Officer, Kurt R. Weise as Chief Operating Officer and Kevin P. Clark as
Secretary. Messrs. Morrison, Weise and Clark were formerly affiliated with
Heritage. Since the Merger, certain officers of the Company, including Bruce
Weldele, the Chairman of the Board and a director, Brent Marvosh, the Vice
President and Chief Financial Officer, Dean Mart, the Executive Vice
President, and Loyall Kissee, a Branch Manager and the former Secretary,
elected to submit resignations and receive certain severance payments under
their Executive Severance Payment Agreements with the Company.
The names and ages of the new Heritage Nominee/directors and their
principal occupations are set forth below.
JOHN M. MORRISON, 60, is the newly elected President and Chief
Executive Officer of the Company. Prior to the Merger, he served as Chairman of
Heritage and was the majority shareholder of Heritage. He is also the Chief
Executive Officer and sole shareholder of Central Bancshares, Inc., the parent
company of Central Bank located in Stillwater, Minnesota, which he founded in
1988. He was the Chairman and majority shareholder of Bank of Montana System, a
bank holding company with approximately $800 million in assets, prior to its
sale to Norwest Corp. in 1994. He is currently involved as a shareholder in
businesses such as cellular phone service and precision parts manufacturing.
KURT R. WEISE, 41, is the newly elected Chief Operating Officer of the
Company. Prior to the Merger, he was a director, Vice President, Treasurer and
shareholder of Heritage. He also serves as President of Central Financial
Services Inc., a bank consulting firm, and President of Central Bancshares Inc.
He has been involved with the Central Bank group of companies since they were
founded in 1988. He was the Chief Financial Officer of Bank of Montana System
until its sale to Norwest Corp in 1994. He has over 18 years of experience in
the finance and banking industries.
JANICE M. GRASER, 43, is Executive Vice President of Central
Bancshares, Inc. and Central Financial Services Inc. She also serves as a
director of Central Bancshares Inc. Prior to the Merger, she served as director
of Heritage Bank and was a shareholder of Heritage. She has held various titles
in other companies owned or controlled by John M. Morrison since 1986.
LARRY D. ALBERT, 46, has served as President and Chief Executive
Officer of Central Bank since 1996. Before joining Central Bank, he served as
President of AmeriBank, a community bank with $150 million in assets located in
the Minneapolis/St. Paul, Minnesota area. He has over 23 years of experience in
banking.
JEROME H. HENTGES, 55, is the President of Central Bank-Eden Prairie,
and has been with Central Bank since 1989. Before joining Central Bank, he held
various senior management positions in banks such as Firstar Bank Minnesota and
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Metro Bank Bloomington. He has over 30 years of experience in banking in the
Minneapolis/St. Paul, Minnesota area.
ACCOUNTING TREATMENT AND FINANCIAL REPORTING
The Merger is being treated as a reverse acquisition accounted for as
a purchase in accordance with generally accepted accounting principles.
Heritage is considered the accounting acquirer because Heritage effectively ac-
quired the operations of the Company, including its assets and liabilities, as a
result of the change in control and other related consequences of the Merger.
Accordingly, the assets and liabilities of the Company will be recorded at their
respective fair values on the closing date. The purchase consideration assumed
to be paid the Company's shareholders for financial reporting purposes is
calculated based on a valuation of $20.25 times the 1,223,312 shares of the
Company's Common Stock assumed to be issued. Any excess of the purchase
consideration over the fair value of identifiable tangible and intangible net
assets will be assigned to goodwill. Due to the difficulty and practicality in
determining the value of United Savings Bank's core deposit relationships and
the value of United Savings Bank's non-Great Falls markets being served, any
such intangible values are necessarily included in the amount of goodwill
recorded. As such, goodwill is expected to be amortized on a straight line
basis over a short period, currently not expected to exceed 10 years.
Consistent with Heritage being the acquiring corporation, the
historical financial statements of the combined entity commencing with the
Quarterly Report on Form 10-Q for the quarter ended March 31, 1998 will be
those of Heritage. Accordingly, the historical statements of operations of
the combined entity will only reflect the operations of the Company
commencing on and after the closing date of the Merger. The Company intends
to file the December 31, 1997 fiscal year end financial statements of
Heritage in either the Company's Annual Report on Form 10-K for the year
ended December 31, 1997 or a Current Report on Form 8-K. KPMG Peat Marwick
LLP is currently the auditor for both Heritage and the Company.
ADDITIONAL INFORMATION
For additional information regarding the Merger, see the Company's
Definitive Proxy Statement on Schedule 14A filed with the SEC on January 15,
1998 (the "Proxy Statement").
Item 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED
All required financial statements have been previously
reported by the Company as part of the Proxy Statement.
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(b) PRO FORMA FINANCIAL INFORMATION
All required pro forma financial information has been
previously reported by the Company as part of the Proxy
Statement.
(c) EXHIBITS
Exhibit No. Description
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2.1 Agreement and Plan of Merger (the "Merger
Agreement") dated August 25, 1997 by and
between the Company and Heritage
(incorporated by reference to Exhibit B of
the Company's Quarterly Report on Form 10-Q
for the quarter ended September 30, 1997)
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2.2 Amendment No. 1 to the Merger Agreement by
and between the Company and Heritage,
effective as of August 25, 1997
99 Press release dated February 3, 1998
announcing the completion of the Merger
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Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: February 18, 1998 UNITED FINANCIAL CORP.
/s/ Kurt R. Weise
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Kurt R. Weise
Chief Operating Officer
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INDEX TO EXHIBITS
Exhibit
Number Item Page
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2.2 Amendment No. 1 to the Merger Agreement by and between the
Company and Heritage, effective as of August 25, 1997
99 Press release dated February 3, 1998 announcing the completion of
the Merger
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Exhibit 2.2
AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF MERGER
This Amendment No. 1 to the Agreement and Plan of Merger, dated August 25,
1997 (the "Merger Agreement"), is made by and between United Financial Corp., a
Minnesota corporation ("United"), and Heritage Bancorporation, a Montana
corporation ("Heritage"), effective as of the 25th day of August, 1997.
Capitalized terms not otherwise defined herein shall have the meanings ascribed
to them in the Merger Agreement.
WHEREAS, the Parties executed the Merger Agreement with the intention that
the United Shares to be received by shareholders of Heritage would be registered
on a Registration Statement on Form S-4; and
WHEREAS, the Parties have decided to complete the issuance of United Shares
as a private transaction and to grant shareholders of Heritage certain demand
registration rights for future registration of such United Shares.
NOW, THEREFORE, IN CONSIDERATION of the premises and mutual promises herein
made, and in consideration of the representations, warranties and covenants
herein contained, the Parties agree as follows:
I. A new Section 2(d)(xi) is hereby added to the Merger Agreement as
follows:
(xi) UNITED SHARES TO BE RESTRICTED SECURITIES. The United Shares
issued to the Heritage stockholders in the Merger will be issued pursuant
to an exemption from registration under Section 4(2) of the Securities Act
and pursuant to Rule 506 of Regulation D promulgated under the Securities
Act. Each certificate representing the United Shares shall be endorsed
with substantially the following legend:
THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR UNDER APPLICABLE STATE LAWS
AND MAY NOT BE SOLD, TRANSFERRED, OR PLEDGED IN THE ABSENCE OF SUCH
REGISTRATION UNLESS PURSUANT TO AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS UNDER THE SECURITIES ACT OF 1933 AND APPLICABLE STATE
SECURITIES LAWS. THE COMPANY RESERVES THE RIGHT TO REQUIRE AN OPINION OF
COUNSEL SATISFACTORY TO IT BEFORE EFFECTING ANY TRANSFER OF THE SHARES.
II. Section 5(e) is hereby amended and restated to read as follows:
(e) REGISTRATION OF UNITED SHARES FOR RESALE. United will register
for resale the United Shares to be issued in the Merger on the following terms.
United agrees that, if after the Effective Time it shall receive a written
request from the holders of an aggregate of more than 50% of the United Shares
issued to stockholders of Heritage in the Merger and not sold under a previous
registration statement, United will use its best efforts to file a registration
statement on Form S-3 with the Securities and Exchange Commission ("SEC")
covering the United Shares issued in the Merger. United shall be obligated to
file only two registrations statements under this Section 5(e), and this
obligation shall terminate on the second anniversary of the Effective Time (the
"Second Anniversary"). United agrees to use its best efforts to file any such
registration statement within 30 days of receipt of such request, and to file
all other documents and to take all other steps necessary and appropriate in
order to have such registration statement declared effective as quickly as
possible. United further agrees that once any such registration statement has
been declared effective, United will use its best efforts to file such
post-effective amendments to such registration statement as are necessary to
cause such registration statement to remain effective for a period of not less
than 180 days or such shorter time as is necessary to sell such shares,
commencing on the effective date of the registration statement, provided that
United will not be required to maintain the effectiveness of any
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registration statement beyond the Second Anniversary. United's obligation to
file a registration statement shall, in all cases, be subject to the following
conditions and provisions:
(i) In the event United does not meet the requirements for use of
Form S-3 in the time period specified in the first paragraph of this
section, the time for filing any registration statement shall be extended
until United is eligible to use a Form S-3 registration statement;
provided, that United will use its best efforts to qualify for use of a
Form S-3 registration statement in the time period specified in the first
paragraph of this section and to maintain such qualification.
(ii) United will use its best efforts to register or qualify the
United Shares included in such registration statement under the securities
laws of such states and other jurisdictions as the former Heritage
stockholders reasonably request; provided, that United shall not for any
such purpose be required to qualify generally to transact business as a
foreign corporation in any jurisdiction where it is not so qualified or to
consent to general service of process in any such jurisdiction.
(iii) With respect to any such registration statement, United shall
bear the expense of any registration and qualification fees, state blue sky
fees, fees of United outside counsel and independent public accountants,
printing costs and the salaries and expenses of its employees, and all
other costs of preparing and filing the registration statement. Heritage's
stockholders shall pay all attorneys fees for their counsel incurred as a
part of such registration and any other costs related to the sale of the
United Shares, including commissions. United agrees to furnish the former
Heritage stockholders with such number of prospectuses or other documents
incident to any such registration as may from time to time be reasonably
requested.
(iv) United shall be entitled to postpone for a reasonable period of
time the filing of a registration statement otherwise required to be
prepared and filed by it pursuant to this section if United determines, in
its reasonable judgment, that such registration and offering would
interfere with any financing, acquisition, corporate reorganization or
other material transaction involving United or any of its affiliates or
would require premature disclosure thereof and promptly gives the holders
(or a representative) of such shares requesting registration thereof
pursuant to this section written notice of such determination, containing a
general statement of the reasons for such postponement and an approximation
of the anticipated delay. If United shall so postpone the filing of a
registration statement, such holders requesting registration thereof
pursuant to this section shall have the right to withdraw the request for
registration by giving written notice to United within 30 days after
receipt of the notice of delay and, in the event of such withdrawal, such
request shall not be counted for purposes of the requests for registration
to which such holders are entitled pursuant to this section.
III. Section 6(a)(viii) is hereby amended and restated to read as follows:
(viii) Each of the Heritage stockholders shall have provided United
with a letter of investment intent including such representations as are
reasonably requested by United to make available an appropriate exemption
from registration under the Securities Act for the United Shares to be
issued in the Merger.
IV. Except as otherwise described in this Amendment No. 1, references in
the Merger Agreement to the "Registration Statement" or the "Prospectus" shall
be deemed to be references to the Joint Disclosure Document.
V. Sections 5(c)(i) and 6(b)(ii) are hereby deleted.
IN WITNESS HEREOF, the Parties hereto have executed this Agreement on the
date second above written.
HERITAGE BANCORPORATION
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By: /s/ Kurt R. Weise
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Its: Treasurer
UNITED FINANCIAL CORP.
By: /s/ Bruce K. Weldele
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Its: Chairman
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Exhibit 99
FOR IMMEDIATE RELEASE
Contacts: Bruce Weldele and Brent
Marvosh (406) 761-2200
MERGER OF UNITED FINANCIAL CORP. AND HERITAGE
BANCORPORATION COMPLETED
Great Falls, MT - February 3, 1998. United Financial Corp. (NASDAQ-UBMT) and
Heritage Bancorporation completed their previously announced merger today.
475,000 shares of United common stock were issued to shareholders of Heritage in
the merger. Former Heritage shareholders now own approximately 30% of the
outstanding shares of United.
Bruce K. Weldele, the Chairman of the Board of United, said that: "The
combination of United and Heritage has created a banking company with
approximately $183 million of assets, $88 million in loans and $137 million in
deposits. We look forward to better serving our market and pursuing a more
growth-oriented strategy based on the strength of the combined banks."
United also announced the election of the following officers:
John M. Morrison President and CEO
Bruce K. Weldele Chairman of the Board
Kurt R. Weise Chief Operating Officer
G. Brent Marvosh Vice President/Chief Financial Officer
Kevin P. Clark Secretary
United is a savings and loan holding company headquartered in Great Falls, MT.
United has 5 full service branches and 4 loan production offices in Montana.
