SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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 ss. 240.14a-11(c) or ss. 240.14a-12
UNITED FINANCIAL CORP.
- --------------------------------------------------------------------------------
(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 transactions 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>
[LOGO]
UNITED
FINANCIAL
CORP.
120 FIRST AVENUE NORTH
GREAT FALLS, MONTANA 59403
(406) 727-6106
-------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be Held May 18, 1998
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
United Financial Corp. (the "Company") will be held at the Heritage Inn, 1700
Fox Farm Road in Great Falls, Montana on May 18, 1998, at 1:00 p.m., Mountain
time, for the following purposes:
1. To elect four Directors of the Company to serve on the Board
of Directors until the annual meeting of shareholders to be
held in 2001 or until their successors are duly elected and
qualified;
2. To elect a Director of the Company to serve on the Board of
Directors until the annual meeting of shareholders to be held
in 1999 or until his successor is duly elected and qualified;
3. To ratify the appointment of KPMG Peat Marwick LLP as
independent auditors for the Company for the fiscal year
commencing January 1, 1998; and
4. To consider and act upon any other matters that may properly
come before the meeting or any adjournments thereof.
The Board of Directors has selected April 20, 1998 as the record date
for the Annual Meeting. Only those shareholders of record at the close of
business on that date will be entitled to receive notice of and to vote at the
Annual Meeting or any adjournment or adjournments thereof.
By the Order of the Board of Directors
/s/ John M. Morrison
John M. Morrison
CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER
Great Falls, Montana
April 23, 1998
<PAGE>
UNITED FINANCIAL CORP.
120 FIRST AVENUE NORTH
GREAT FALLS, MONTANA 59403
(406) 727-6106
-------------------
PROXY STATEMENT
-------------------
INFORMATION RELATING TO VOTING AT THE ANNUAL MEETING
This Proxy Statement (the "Proxy Statement") is being furnished to
shareholders of United Financial Corp., a Minnesota corporation (the "Company"),
in connection with the solicitation of proxies by the Company for use at the
Annual Meeting of Shareholders (the "Annual Meeting") to be held at the Heritage
Inn, 1700 Fox Farm Road in Great Falls, Montana on May 18, 1998, at 1:00 p.m.,
Mountain time, and at any adjournment or adjournments thereof. The approximate
date of mailing of this Proxy Statement and the accompanying form of proxy is
April 23, 1998.
The Board of Directors of the Company has selected April 20, 1998 as
the record date for the determination of shareholders entitled to notice of and
to vote at the Annual Meeting. A total of 1,698,312 shares of the Company's
Common Stock were outstanding as of the close of business on that date.
Shareholders will be entitled to cast one vote for each share of the Company's
Common Stock held by them of record at the close of business on the record date
on any matter that may be presented at the Annual Meeting for consideration and
action by the shareholders.
All valid proxies received in response to the solicitation will be
voted in accordance with the instructions indicated thereon by the shareholders
giving such proxies. If no contrary instructions are given, each such proxy will
be voted in favor of the election of the five Director nominees named in this
Proxy Statement, unless and to the extent authority to do so is withheld in the
enclosed proxy, and in favor of the proposal to ratify the appointment of KPMG
Peat Marwick LLP as independent auditors for the Company. Shares voted as
"withhold vote for" one or more Directors will be counted as shares that are
present and entitled to vote for purposes of determining the presence of a
quorum at the meeting and as unvoted, although present and entitled to vote, for
purposes of the election of the Directors with respect to which the shareholder
has abstained. If a broker submits a proxy that indicates the broker does not
have discretionary authority to vote certain shares, those shares will be
counted as shares that are present and entitled to vote for purposes of
determining the presence of a quorum at the meeting, but will not be considered
as present and entitled to vote with respect to the matters voted on at the
meeting.
The Board of Directors does not know of any business to be presented
for action at the Annual Meeting other than that described herein. If any other
business is properly presented at the Annual Meeting and may be properly voted
upon, the proxies solicited hereby will be voted on such matters in accordance
with the best judgment of the proxy holders named therein.
Any shareholder has the power to revoke his proxy at any time before it
is voted at the Annual Meeting by filing written notice of such revocation to
the Secretary of the Company (which notice shall be given by the filing of a
duly executed proxy bearing a later date) or by attending the Annual Meeting and
voting in person. Proxies solicited by the Company's Board of Directors hereby
are for use solely at the Annual Meeting and any adjournment or adjournments
thereof.
The expense of this proxy solicitation will be borne by the Company. To
the extent necessary, proxies may be solicited by personnel of the Company in
person, by telephone, or through other forms of communication. Company personnel
who participate in the solicitation will not receive any additional compensation
for such solicitation. The Company will request recordholders of shares
beneficially owned by others to forward this Proxy Statement and related
materials to the beneficial owners of such shares and will reimburse such
recordholders for their reasonable expenses incurred in doing so.
<PAGE>
MERGER
On February 3, 1998, Heritage Bancorporation ("Heritage") merged with
and into the Company (the "Merger"). In connection with the Merger, each
outstanding share of Heritage common stock was converted into shares of the
Company's Common Stock. An aggregate of 475,000 shares (or 28%) of the Company's
Common Stock was issued in connection with the Merger. Prior to 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.
Immediately following the Merger, the Former Heritage Shareholders owned
approximately 30% of the outstanding shares of the Company's Common Stock.
In connection with, and as a condition of the consummation of, the
Merger, John M. Morrison, Kurt R. Weise, Janice M. Graser, Larry D. Albert and
Jerome Hentges (the "Heritage Nominees") were nominated by the Former Heritage
Shareholders and were elected to the Company's Board of Directors. Consequently,
the Heritage Nominees now constitute a majority of the Company's Board of
Directors. There are no contractual or other requirements for the Heritage
Nominees to be nominated or re-elected to the Company's Board of Directors in
the future. The Heritage Nominees, representing a majority of the Company's
Board of Directors, 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.
In addition, Mr. Morrison, the former majority shareholder of Heritage
and the current Chairman of the Board of Directors and Chief Executive Officer
of the Company, was granted certain rights of first refusal by shareholders of
the Company holding 263,200 shares, or approximately 15.5%, of the Company's
outstanding Common Stock. Under these 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.
SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The only non-management person known to the Company to own beneficially
more than 5% of the outstanding shares of the Company's Common Stock is as
follows:
Name and Address Amount and Nature of Percent
of Beneficial Owner Beneficial Ownership of Class
------------------- -------------------- --------
Eighteen Seventy Financial Inc. 120,000 shares(1) 7.1
Two Manhattanville Road
Purchase, New York 10577
- ---------------
(1) As reported by Schedule 13D dated August 30, 1996 filed by Eighteen
Seventy Financial Inc. and its parent corporation, Eighteen Seventy
Corporation.
<PAGE>
SECURITIES OWNERSHIP OF MANAGEMENT
The following table sets forth information as of February 28, 1997
concerning the shares of Company's Common Stock beneficially owned by each
Director, by each nominee for Director, by the Named Executive Officer (as
defined herein) and by all Directors and executive officers of the Company as a
group. Except as otherwise noted, each beneficial owner listed has sole
investment and voting power with respect to the Common Stock indicated.
Number of Shares
Name of Individual or of Common Stock Percent
Number of Persons in Group Beneficially Owned of Class
-------------------------- ------------------ --------
John M. Morrison 419,030(1) 24.7
Kurt R. Weise 30,000 1.8
Bruce K. Weldele(2) 30,000(3) 1.8
J. William Bloemendaal 26,900(4)(5) 1.6
Kevin P. Clark 25,550(6) 1.5
Steve L. Feurt 25,150(7) 1.5
Janice M. Graser 20,570 1.2
Elliott L. Dybdal 18,750 1.1
William L. Madison 1,700 *
Larry D. Albert 200 *
Jerome Hentges -- *
All current Directors and executive
officers as a group (10 persons) 567,850 33.4
- ----------------
* Less than 1%.
(1) Includes 39,600 shares held by Central Bancshares, Inc. ("Central
Bancshares") of which Mr. Morrison is the sole shareholder and 58,710
shares held by three trusts for the benefit of Mr. Morrison's three
daughters of which Mr. Morrison's spouse, Susan Morrison, is the
trustee.
(2) Although Mr. Weldele is no longer with the Company, his holdings are
included in the table by reason of his being the Named Executive
Officer.
(3) Includes 5,000 shares held by Mr. Weldele in an Individual Retirement
Account.
(4) Includes 4,900 shares held by Dr. Bloemendaal in an Individual
Retirement Account and 10,000 shares held by Great Falls Orthopaedic
Associates Profit Sharing and Pension Plans of which Dr. Bloemendaal is
trustee.
(5) Voting and investment power of 12,000 of such shares are shared with
Dr. Bloemendaal's spouse with whom shares are held jointly.
(6) Includes 700 shares held by Mr. Clark in an Individual Retirement
Account.
(7) Includes 4,975 shares held by Mr. Feurt in an Individual Retirement
Account.
PROPOSAL ONE--ELECTION OF DIRECTORS
In accordance with the Company's bylaws, the Company's Board of
Directors is divided into three classes, each class to have, as nearly as
possible, an equal number of members. The members of each class are elected for
terms of three years with one of the three classes of Directors to be elected
each year. On April 14, 1998, the Board of Directors approved an increase in the
size of the Board of Directors from nine Directors to ten Directors.
<PAGE>
J. William Bloemendaal, Elliott L. Dybdal, William L. Madison and Kevin
P. Clark have been nominated for election to the Company's Board of Directors
for three-year terms expiring in 2001. Steve L. Feurt has been nominated for
election to the Company's Board of Directors for a one-year term to fill the
seat vacated by the resignation of Bruce K. Weldele whose term was to expire in
1999. Each of the nominees listed below has consented to being named in this
Proxy Statement and has indicated his willingness to serve if elected. If any
nominee becomes unable to serve, the proxy solicited hereby will be voted for
the election of such other person or persons as the Board of Directors shall
select. The affirmative vote of a majority of the shares of Common Stock present
and entitled to vote with respect to the election of Directors is required for
the election of the nominees to the Board of Directors.
The following table sets forth the names of and certain information
concerning the nominees and continuing members of the Board of Directors of the
Company.
<TABLE>
<CAPTION>
Director Term of Positions Currently Held
Nominees for Director Age Since Office Expires With the Company
--------------------- --- ----- -------------- ----------------
<S> <C> <C> <C> <C>
J. William Bloemendaal 68 1976 1998 Director
Elliott L. Dybdal 66 1980 1998 Director
William L. Madison 42 1996 1998 Director
Kevin P. Clark 42 -- -- Secretary of the Company and President
and Chief Executive Officer of Heritage
Bank and United Bank
Steve L. Feurt 42 -- -- Chief Credit Officer of the Company and
Senior Vice President and Chief Credit
Officer of Heritage Bank and United Bank
Continuing Directors
--------------------
Larry D. Albert 47 1998 1999 Director
Jerome H. Hentges 56 1998 1999 Director
John M. Morrison 61 1998 2000 Chairman, Chief Executive
Officer and Director
Kurt R. Weise 41 1998 2000 President, Chief Operating Officer and
Director of the Company and Chief
Operating Officer, Vice President and
Treasurer of Heritage Bank and
United Bank
Janice M. Graser 43 1998 2000 Director
</TABLE>
DR. BLOEMENDAAL is a full-time physician specializing in orthopaedic
surgery. He has practiced medicine since 1961 and has been associated since 1975
with Great Falls Orthopaedic Associates, a five-person group actively practicing
orthopaedic surgery. Dr. Bloemendaal currently serves as President of Great
Falls Orthopaedic Associates.
MR. DYBDAL has been employed by Talcott Building Company in Great Falls
for over 34 years, serving for the last 21 years as its President and Chief
Executive Officer. He also serves as a director of Talcott Building Company.
MR. MADISON has served as President/owner of Johnson Madison Lumber
Co., Inc., a retail building materials business in Great Falls, Montana, since
1984.
<PAGE>
MR. CLARK has served as Secretary of the Company and President and
Chief Executive Officer of United Savings Bank, F.A. ("United Bank") and
Heritage Bank, F.S.B. ("Heritage Bank" and together with United Bank, the
"Banks") since the Merger. Before joining the Company, he served as President,
Chief Executive Officer and a director of Heritage Bank since 1994. Mr. Clark
served in various capacities with Bank of Montana System, a bank holding company
with approximately $800 million in assets ("BMS"), until its sale to Norwest
Corporation in 1994, most recently as President, Chief Executive Officer and a
director of Bank of Montana, a subsidiary of BMS, and Regional Vice President of
BMS. He has over 22 years of experience in banking.
MR. FEURT has served as Chief Credit Officer of the Company and Senior
Vice President and Chief Credit Officer of the Banks since the Merger. Before
joining the Company, he served as Senior Vice President, Senior Credit Officer
and a director of Heritage Bank since 1994. Mr. Feurt served as Senior Vice
President, Senior Credit Officer and a director of BMS and Bank of Montana from
1984 until the sale of BMS to Norwest Corporation.
MR. ALBERT has served as President and Chief Executive Officer of
Central Bank, located in Stillwater, Minnesota, 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.
MR. HENTGES 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 Metro
Bank Bloomington. He has over 30 years of experience in banking in the
Minneapolis/St. Paul, Minnesota area.
MR. MORRISON has served as Chairman and Chief Executive Officer of the
Company since the Merger. Before joining the Company, he served as Chairman of
Heritage since 1994. Mr. Morrison is the Chief Executive Officer and sole
shareholder of Central Bancshares, the parent company of Central Bank, which was
founded by Mr. Morrison in 1988. He is also the sole shareholder and Chairman of
the Board of Directors of Central Financial Services, Inc. ("CFS"), a bank
consulting firm. Mr. Morrison was the Chairman and majority shareholder of BMS
prior to its sale to Norwest Corporation. He is currently involved as a
shareholder in businesses such as cellular phone service and precision parts
manufacturing. Mr. Morrison is also a director of Fingerhut Corporation, a
publicly held company, which engages in direct marketing.
MR. WEISE has served as President and Chief Operating Officer of the
Company and Chief Operating Officer, Vice President and Treasurer of the Banks
since the Merger. Before joining the Company, he served as Vice President,
Treasurer and a director of Heritage. Mr. Weise also serves as President of CFS
and President of Central Bancshares. He has been involved with the Central Bank
group of companies since they were founded in 1988. He was the Chief Financial
Officer of BMS until its sale to Norwest Corporation.
MS. GRASER is Executive Vice President and a director of Central
Bancshares and Executive Vice President of CFS. Prior to the Merger, she served
as a director of Heritage Bank.
BOARD MEETINGS AND COMMITTEES
During the fiscal year ended December 31, 1997, the Board of Directors
of the Company was comprised of Bruce K. Weldele, Dean J. Mart, Rudy Tramelli,
Larry D. Williams, J. William Bloemendaal, William L. Madison and Elliott L.
Dybdal. The Board of Directors held 13 regularly scheduled and special meetings
during the fiscal year ended December 31, 1997. During the fiscal year ended
December 31, 1997, all Directors attended at least 75% of the meetings of (i)
the Board of Directors held during the period for which they served as Directors
and (ii) the Board committees of which they served during the periods such
persons served on such committees. Mr. Williams resigned as a member of
<PAGE>
the Board of Directors in May, 1997, Messrs. Mart and Tramelli resigned as
members of the Board of Directors in connection with the Merger, and Mr. Weldele
resigned from the Company in March, 1998. The Company has a standing
Compensation Committee, Audit Committee and Nominating Committee.
The Compensation Committee for the fiscal year ended December 31, 1997
consisted of Messrs. Dybdal, Tramelli, Williams and Madison and Dr. Bloemendaal.
The Compensation Committee is responsible for setting the compensation and
benefits of the Company's executive officers, including the Chief Executive
Officer, on behalf of the Board of Directors and the shareholders. The
Compensation Committee met once during the fiscal year ended December 31, 1997.
The Audit Committee for the fiscal year ended December 31, 1997
consisted of Messrs. Dybdal, Madison, Tramelli and Williams and Dr. Bloemendaal.
The Audit Committee is responsible for selecting the outside audit firm for the
Company, reviewing the auditor's and the Securities and Exchange Commission (the
"Commission") and Office of Thrift Supervision (the "OTS") reports of
examination, and overseeing matters relating to internal controls. The Audit
Committee met once during the fiscal year ended December 31, 1997.
The Nominating Committee for the fiscal year ended December 31, 1997
consisted of Messrs. Dybdal and Madison and Dr. Bloemendaal. The Nominating
Committee is responsible for interviewing and submitting the names of qualified
candidates for Director to the Secretary at least 20 days prior to the Annual
Meeting. Company shareholders who wish to nominate Director candidates must
deliver such nominations in writing to the Secretary at least five days prior to
the date of the Annual Meeting. The Nominating Committee met once during the
fiscal year ended December 31, 1997.
COMPENSATION OF DIRECTORS
All Directors of the Company receive $250 for attendance at each
monthly meeting. In addition, Directors not employed by the Company receive a
monthly retainer of $250.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE ELECTION
OF THE ABOVE NOMINEES FOR THE TERMS INDICATED.
PROPOSAL TWO--RATIFICATION OF APPOINTMENT OF AUDITORS
KPMG Peat Marwick LLP was the Company's independent public accountant
for the fiscal year ended December 31, 1997. The Board of Directors has approved
the selection of KPMG Peat Marwick LLP as its auditors for the fiscal year
commencing January 1, 1998, subject to ratification by the Company's
shareholders. A representative of KPMG Peat Marwick LLP is expected to be
present at the Annual Meeting to respond to shareholders' questions and will
have the opportunity to make a statement if he or she so desires.
Ratification of the appointment of the auditors requires the
affirmative vote of a majority of the votes cast by the shareholders of the
Company at the Annual Meeting. THE BOARD OF DIRECTORS RECOMMENDS THAT
SHAREHOLDERS VOTE "FOR" THE RATIFICATION OF THE APPOINTMENT OF KPMG PEAT MARWICK
LLP AS THE COMPANY'S AUDITORS FOR THE FISCAL YEAR COMMENCING JANUARY 1, 1998.
<PAGE>
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY COMPENSATION TABLE. The following table shows the cash
compensation paid by the Company for services rendered during the past three (3)
fiscal years ended December 31, 1997, to its President and Chief Executive
Officer (the "Named Executive Officer"). No other executive officer received
yearly cash compensation exceeding $100,000 during such period.
Annual Compensation
Name of Individual Fiscal ------------------- All Other
and Principal Positions Year Salary(1) Compensation(2)
----------------------- ---- --------- ---------------
Bruce K. Weldele 1997 $160,200 $4,750
Chairman of the Board, 1996 $155,100 $1,900
President and Chief 1995 $150,000 $3,080
Executive Officer and
Director
- ---------------
(1) Includes earnings reductions contributions made by Mr. Weldele to the
Company's 401(k) Thrift Retirement Plan (or that of United Bank prior
to the formation of the Company) (the "401(k) Plan").
(2) Represents the Company's or United Bank's contributions on behalf of
Mr. Weldele to the 401(k) Plan.
PENSION PLAN. The Company has maintained a noncontributory defined
benefit pension plan (the "Pension Plan") administered by the Financial
Institutions Retirement Fund (the "Fund"). The Fund is a nonprofit,
tax-qualified pension plan and trust through which Federal Home Loan Banks,
savings and loan associations and similar institutions may cooperate in
providing for the retirement of their employees. The Company terminated its
participation in the Pension Plan effective January 1, 1998.
After becoming eligible for membership in the Pension Plan, employees
who completed 1,000 hours of service each calendar year were enrolled as active
members and were entitled to accrue retirement benefits under the Pension Plan.
The monthly pension amount to be received by an employee under the Pension Plan
upon retirement is based on an employee's benefit service and salary. Benefit
service includes the period of employment as an active member in the Pension
Plan in addition to any previous employment prior to the date the Company joined
the Fund and for which it has purchased credit. Salary for purposes of the
Company's contributions to the Pension Plan includes an employee's basic annual
salary rate as of each January 1, exclusive of any special payments.
Whether an employee has a vested right to receive retirement benefits
under the Pension Plan depends upon the employee's age and years of vesting
service. Vesting service includes the period of time beginning from the first
day of the month in which an employee was hired and the last day of the month in
which the employee terminates his or her employment. Vesting service
specifically excludes service performed after an employee has attained the age
of 65 and does not include any period of employment that precedes the earliest
date that the Company provided the employee with credit under any pension plan.
An active member employee who performed 5 years of vesting service, is fully
vested and is entitled to receive 100% of his retirement benefits under the
Pension Plan upon attaining the age of 65, whether or not such employee has
terminated employment with the Company prior to attaining the age of 65. Any
employee who completed fewer than 5 years of vesting service was not eligible to
receive retirement benefits if such employee terminated service with the Company
prior to becoming fully vested. All active members who were with the Company
when it terminated its participation in the Pension Plan became fully vested
regardless of the number of years of vesting service.
Retirement benefits under the Pension Plan will be paid when an
employee entitled to such benefits attains the normal retirement age of 65. In
certain circumstances, some individuals may be
<PAGE>
entitled to receive early retirement benefits upon attaining the age of 45,
although such benefits will be reduced on the basis of an early retirement
factor that is applied to the full amount the employee would be entitled to
receive at the normal retirement age of 65.
The following table sets forth, in straight life annuity amounts, the
estimated benefits payable upon retirement to active member participants in the
Pension Plan. The estimated annual benefits set forth in the table do not
reflect, however, refunds of contributions that members made and elected to
receive while the Company participated on a contributory basis. Salary is
calculated on the basis of the employee's average salary in the five highest
consecutive years of compensation; provided, however, if an employee has fewer
than five years of service at the time of his retirement, salary is based on the
employee's previous year's salary and, assuming salaries increase at 5% per
annum, the estimated pension benefits are approximately 15% lower than those
reflected in the table based on the 5-year highest salary average.
Years of Service
---------------------------------------------------------------
Salary 15 20 25 30 35
--------- --------- --------- --------- --------- ---------
$ 30,000 $ 10,125 $ 13,500 $ 16,875 $ 20,250 $ 23,625
40,000 13,500 18,000 22,500 27,000 31,500
50,000 16,875 22,500 28,125 33,750 39,375
60,000 20,250 27,000 33,750 40,500 47,250
70,000 23,625 31,500 39,375 47,250 55,125
80,000 27,000 36,000 45,000 54,000 63,000
90,000 30,375 40,500 50,625 60,750 70,875
100,000 33,750 45,000 56,250 67,500 78,750
110,000 37,125 49,500 61,875 74,250 86,625
120,000 40,500 54,000 67,500 81,000 94,500
130,000 43,875 58,500 73,125 87,750 102,375
140,000 47,250 63,000 78,750 94,500 110,250
150,000 50,625 67,500 84,375 101,250 118,125
During the fiscal year ended December 31, 1997, no funds were paid or
distributed pursuant to the Pension Plan to Mr. Weldele. At December 31, 1997,
Mr. Weldele had 13 years of credited service under the Pension Plan and his
defined compensation for purposes of the Pension Plan was $143,160.
EXECUTIVE OFFICER SEVERANCE AGREEMENTS. During fiscal year 1993, the
Board of Directors approved change of control severance agreements for certain
present and former officers of the Company and United Bank. The agreements
provided for severance compensation for each of such officers in the event any
company or person acquired control of the Company, as determined in accordance
with applicable federal regulations. The Merger constituted a change in control
of the Company under the terms of such severance agreements. Pursuant to the
terms of his agreement and upon consummation of the Merger, Mr. Weldele became
entitled to and elected to receive compensation consisting of a lump-sum payment
of $320,400 and 24 months of continued welfare and employee benefits.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION. The basic
objective of the Compensation Committee is to establish a compensation package
appropriate for each officer's scale of responsibility and performance,
commensurate with the marketplace compensation for executives of companies of
similar size as the Company, and to attract, motivate and retain executives of
the necessary caliber. In determining each officer's compensation, the
Compensation Committee reviews the compensation of each officer, the individual
achievements and performance of each officer and salary recommendations made by
the Chief Executive Officer covering all officers (other than the Chief
Executive Officer). The specific recommendations reflect the job
responsibilities assigned to each officer, the manner in which those duties have
been performed, and the prevailing market conditions relative to
<PAGE>
each position. Compensation of the Chief Executive Officer for 1997 was reviewed
by the Compensation Committee and increased at approximately the inflation rate.
William L. Madison J. William Bloemendaal Elliott L. Dybdal
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS BETWEEN MANAGEMENT AND THE
COMPANY
The Company is a holding company for United Bank and, since the date of
the Merger, Heritage Bank. The Banks are federally chartered savings banks. The
Banks make mortgage and consumer loans to the Company's Directors, officers and
employees in accordance with regulations promulgated by the OTS and other
applicable statutes and regulations. These loans are currently made in the
ordinary course of business on substantially the same terms, including interest
rates and collateral, as those prevailing at the time for comparable
transactions with nonaffiliated persons and, in the judgment of management, do
not involve more than the normal risk of collectibility or present other
unfavorable features.
CFS, of which John M. Morrison is the sole shareholder and Chairman of
the Board of Directors, Kurt M. Weise is the President and Janice M. Graser is
the Executive Vice President, provided to Heritage, and will provide to the
Company and the Banks, various management services, including accounting and tax
services, investment consulting, personnel consulting, insurance advisory
services and regulatory consulting. Fees for these services are expected to
total approximately $175,000 for the fiscal year ending December 31, 1998.
Messrs. Morrison and Weise will be compensated for their services as officers of
the Company through the fees paid to CFS.
Central Bank, of which Larry D. Albert is a President and Chief
Executive Officer and Jerome H. Hentges is a President, sold loan participations
to Heritage Bank in the aggregate principal amount of $1,120,000 for the fiscal
year ended December 31, 1997 and will sell loan participations to the Banks in
the fiscal year ending December 31, 1998. Such loan participations have been,
and, in the future will be, sold on substantially the same terms as loan
participations are sold to nonaffiliated persons. Mr. Morrison is the sole
shareholder and Chief Executive Officer, Mr. Weise is the President and Ms.
Graser is Executive Vice President and a director of Central Bancshares, the
parent of Central Bank.
<PAGE>
STOCK PRICE PERFORMANCE GRAPH(1)
The graph below compares cumulative total shareholder return of the
Company, the Standard & Poor's ("S & P") 500 Index and the S & P Savings and
Loan Holding Company Index. Total returns assume a $100 investment on December
31, 1992 and are based on reinvestment of all dividends.
[PLOT POINTS GRAPH]
1993 1994 1995 1996 1997
---- ---- ---- ---- ----
UNITED FINANCIAL CORP 159.67 118.91 138.38 159.55 220.78
S & P SAVINGS AND LOAN
HOLDING COMPANIES 104.86 91.18 150.32 179.90 318.65
S & P 500 110.08 111.53 153.45 188.68 251.63
(1) The years from 1992 through 1996 of the Stock Performance Graph incorporate
the performance of United Bank prior to the formation of the Company.
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's Directors and executive officers and all persons who
beneficially own more than 10% of the outstanding shares of the Company's Common
Stock to file with the Commission initial reports of ownership and reports of
changes in ownership of such Common Stock. Based solely on a review of the
copies of such forms furnished to the Company during the fiscal year ended
December 31, 1997, the Company believes all Section 16(a) filing requirements
applicable to the Company's Directors, executive officers and 10% shareholders
were satisfied.
SHAREHOLDER PROPOSALS
Any proposal by a shareholder of the Company to be presented at the
1999 Annual Meeting of Shareholders of the Company must be received by the
Company at P.O. Box 2779, Great Falls, Montana 59403, Attention: Secretary, on
or before December 24, 1998, for inclusion in the Company's Proxy Statement and
form of proxy related to that meeting.
ADDITIONAL INFORMATION
The Company has filed with the Commission, for the year ended December
31, 1997, an Annual Report on Form 10-K, together with applicable financial
statements and schedules thereto. THE COMPANY WILL FURNISH, WITHOUT CHARGE, UPON
WRITTEN REQUEST OF ANY SHAREHOLDER WHO REPRESENTS IN HIS REQUEST THAT HE WAS THE
BENEFICIAL OWNER OF THE COMPANY'S COMMON STOCK ON APRIL 20, 1998, A COPY OF THE
ANNUAL REPORT ON FORM 10-K. Requests should be directed to: Julie Kimmey, Vice
President, Heritage Bank, P.O. Box 2779, Great Falls, Montana 59403.
YOU ARE URGED TO VOTE, SIGN, DATE AND RETURN THE ACCOMPANYING PROXY
IN THE ENCLOSED POSTAGE-PAID ENVELOPE AT YOUR EARLIEST CONVENIENCE, WHETHER OR
NOT YOU CURRENTLY PLAN TO ATTEND THE ANNUAL MEETING IN PERSON.
By the Order of the Board of Directors
/s/ John M. Morrison
JOHN M. MORRISON
CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER
Great Falls, Montana
April 23, 1998
<PAGE>
UNITED FINANCIAL CORP.
REVOCABLE PROXY FOR 1998 ANNUAL MEETING OF SHAREHOLDERS
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned, having duly received the Notice of Annual Meeting of
Shareholders and Proxy Statement dated April 23, 1998, hereby appoints Kurt R.
Weise and Kevin P. Clark (each with the power to act alone and with the power of
substitution and revocation) to vote all shares of Common Stock of United
Financial Corp. which the undersigned is entitled to vote at the Annual Meeting
of Shareholders (the "Annual Meeting"), to be held at the Heritage Inn, 1700 Fox
Farm Road in Great Falls, Montana on May 18, 1998, at 1:00 p.m., Mountain time,
and at any and all adjournments thereof, as follows:
1. Election of directors for all nominees listed below (except as
marked to the contrary):
[ ] FOR [ ] WITHHELD
TO WITHHOLD YOUR VOTE FOR ANY INDIVIDUAL NOMINEE, PLACE A LINE THROUGH
THE NOMINEE'S NAME BELOW:
J. William Bloemendaal, Elliott L. Dybdal, William L. Madison,
Kevin P. Clark, Steve L. Feurt
2. Proposal to ratify the appointment of KPMG Peat Marwick LLP as
independent auditors of United Financial Corp., for the fiscal
year ending December 31, 1998.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
The Board of Directors recommends a vote "FOR" propositions 1 and 2.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED,
THIS PROXY WILL BE VOTED FOR EACH OF THE PROPOSITIONS STATED.
<PAGE>
This proxy may be revoked by filing a subsequently dated proxy or by
notifying the Secretary of United Financial Corp. of your decision to revoke
this proxy, either in person at the Annual Meeting or in writing.
When shares are held by joint tenants, both should sign, When signing
as attorney, executor, administrator, trustee or guardian, please give full
title as such. If a corporation, please sign in full corporate name by the
President or other authorized officer. If a partnership, please sign in
partnership name by an authorized person.
Date:______________________________, 1998
_________________________________________
Signature
_________________________________________
Signature if jointly held
PLEASE MARK, DATE AND RETURN THIS PROXY PROMPTLY
