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
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
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 23, 2000
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 23, 2000 at 1:00 p.m., Mountain
time, for the following purposes:
1. To elect three Directors of the Company to serve on the Board
of Directors until the annual meeting of shareholders to be
held in 2003 or until their successors are duly elected and
qualified;
2. To consider and act upon a proposal to approve the United
Financial Corp. 2000 Long-Term Incentive and Stock Option
Plan; and
3. 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 10, 2000 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
Great Falls, Montana
April 20, 2000
- --------------------------------------------------------------------------------
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>
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 23, 2000, 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 20, 2000.
The Board of Directors of the Company has selected April 10, 2000 as
the record date for the determination of shareholders entitled to notice of and
to vote at the Annual Meeting. A total of 1,652,312 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 three 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 approve the Company's 2000
Long-Term Incentive and Stock Option Plan. 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 or her 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.
2
<PAGE>
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.
John M. Morrison, Kurt R. Weise and Janice M. Graser have been
nominated for election to the Company's Board of Directors for three-year terms
expiring in 2003. Each of the nominees listed below has consented to being named
in this Proxy Statement and has indicated his/her 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>
John M. Morrison 63 1998 2000 Chairman and Director
Kurt R. Weise 43 1998 2000 President, Chief Executive Officer and
Director of the Company and Chief
Operating Officer, Vice President and
Treasurer of Heritage Bank
Janice M. Graser 45 1998 2000 Director
Continuing Directors
--------------------
Larry D. Albert 49 1998 2002 Director
Jerome H. Hentges 58 1998 2002 Director
Steve L. Feurt 44 1998 2002 Chief Credit Officer and Director
of the Company and Senior Vice
President and Chief Credit
Officer of Heritage Bank
J. William Bloemendaal 70 1976 2001 Director
Elliott L. Dybdal 68 1980 2001 Director
William L. Madison 44 1996 2001 Director
Kevin P. Clark 44 1998 2001 Senior Vice President, Secretary
and Director of the Company
and President and Chief Executive
Officer of Heritage Bank
</TABLE>
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
3
<PAGE>
community bank with $150 million in assets located in the Minneapolis/St. Paul,
Minnesota area. He has over 25 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. FEURT has served as Chief Credit Officer of the Company and Senior
Vice President and Chief Credit Officer of Heritage Bank since the merger of
Heritage Bancorporation into the Company in 1998 (the "Merger"). Before the
Merger, 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 Bank of Montana Systems, a bank holding Company
with approximately $800 million is assets ("BMS"), and Bank of Montana from 1984
until the sale of BMS to Norwest Corporation in 1994.
MR. MORRISON has served as Chairman of the Company since the Merger.
Before the Merger, 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, located in Stillwater, Minnesota, 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 ("CFS"), a bank consulting
firm. Mr. Morrison was the Chairman and majority shareholder of BMS prior to its
sale to Norwest Corporation. He is involved in various other businesses, and
sits on a number of boards including University of St. Thomas, Fairview
Corporation, Fairview-University Medical Center and Fairview-University of
Minnesota.
MR. WEISE has served as President, Chief Operating Officer and a
director of the Company and Vice President of Heritage Bank since the Merger.
Since 1999, Mr. Weise has also served as Chief Executive Officer of the Company.
Before the Merger, 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.
DR. BLOEMENDAAL is a 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
since 1964, serving as its President and Chief Executive Officer since 1977. 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.
MR. CLARK has served as Secretary of the Company and President and
Chief Executive Officer of Heritage Bank since the Merger. Mr. Clark was elected
as Senior Vice President of the Company in May 1998. Before the Merger, he
served as President, Chief Executive Officer and a director of Heritage Bank
since 1994. Mr. Clark served in various capacities with BMS until its sale to
Norwest Corporation, including President, Chief Executive Officer and a director
of Bank of Montana, a subsidiary of BMS, and Regional Vice President of BMS. He
has over 24 years of experience in banking.
4
<PAGE>
BOARD MEETINGS AND COMMITTEES
During the fiscal year ended December 31, 1999, the Board of Directors
of the Company held 8 regularly scheduled and special meetings. 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. The
Company has a standing Compensation Committee and Audit Committee. The Company
does not have a standing Nominating Committee.
The Compensation Committee for the fiscal year ended December 31, 1999
consisted of Messrs. Dybdal, Madison, Morrison, Weise, 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, 1999.
The Audit Committee for the fiscal year ended December 31, 1999
consisted of Messrs. Dybdal, Madison, Weise, Clark 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, 1999.
COMPENSATION OF DIRECTORS
All Directors of the Company and Heritage Bank receive one $250 fee for
each monthly board meeting. In addition, Directors not employed by the Company,
or its affiliates, receive a monthly retainer of $250. Kurt R. Weise, Kevin P.
Clark and Steve L. Feurt were eligible to participate in the Company's Stock
Appreciation Rights program prior to its termination in January 2000. See
"Executive Compensation and Other Information - Stock Appreciation Rights
Program". All Directors will be eligible for the 2000 Stock Incentive Plan. See
"Proposal Two - Approval of the 2000 Stock Incentive Plan".
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE
"FOR" THE ELECTION OF THE ABOVE NOMINEES FOR THE TERMS INDICATED.
PROPOSAL TWO -- APPROVAL OF THE 2000 STOCK INCENTIVE PLAN
On January 25, 2000, the Company's Board of Directors adopted the
United Financial Corp. 2000 Long-Term Incentive and Stock Option Plan (the
"Plan"), subject to approval by the Company's shareholders. The purpose of the
Plan is to aid in attracting and retaining employees, management, other
personnel and non-employee directors capable of assuring the future success of
the Company, to offer such persons incentives to put forth maximum efforts for
the success of the Company's business and to afford them an opportunity to
acquire a proprietary interest in the Company. Approval of the Proposal requires
the affirmative vote of the holders of a majority of the shares of Common Stock
represented at the Annual Meeting and entitled to vote. The following summary
describes all of the material features of the Plan. A copy of the full text of
the plan may be obtained by shareholders upon request directed to the Company's
Controller at 120 First Avenue North, Great Falls, Montana 59401.
The Plan provides for a maximum of 120,000 shares of the Company's
Common Stock for issuance under options or other awards, subject to adjustment
in certain circumstances. Any employee, officer, director, consultant or
independent contractor of the Company and its subsidiaries is eligible to
receive awards under the Plan. Awards under the Plan will be available for grant
until January 25, 2010. However, an option of the award granted may extend
beyond such time.
The Plan permits the granting of (a) stock options, including
"incentive stock options" ("Incentive Stock Options") meeting the requirements
of Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"),
and stock options that do not meet such requirements ("Nonqualified Stock
5
<PAGE>
Options"), (b) stock appreciation rights ("SARs"), (c) restricted stock and
restricted stock units, (d) performance awards, and (e) other awards valued in
whole or in part by reference to or otherwise based upon the Company's Common
Stock ("other stock-based awards"). The Plan is to be administered by a
Committee of the Company's Board of Directors composed of not less than two
outside Directors of the Company. Determinations and interpretations with
respect to the Plan will be at the sole discretion of the Committee and will be
binding on all interested parties.
The exercise price per share under any Incentive Stock Option shall not
be less than 100% of the fair market value of the Company's Common Stock on the
date of the grant of such option. The exercise price of Nonqualified Stock
Options and the grant or purchase price of other awards are not so limited but
the Company presently intends to issue such options and awards at not less than
100% of fair market value. Options shall be exercised by payment in full of the
exercise price, either in cash or, at the discretion of the Committee, in whole
or in part by tendering shares of Common Stock or other consideration having a
fair market value on the date the option is exercised equal to the exercise
price. Awards may provide that upon the grant or exercise thereof the holder
will receive shares of Common Stock, cash or any combination thereof, as the
Committee shall determine. Determinations of fair market value under the Plan
shall be made in accordance with methods and procedures established by the
Committee.
Generally, the holder of an SAR would be entitled to receive the excess
of the fair market value (calculated as of the exercise date or, if the
Committee shall so determine, as of any time during a specified period before or
after the exercise date) of a specified number of shares over the grant price of
the SAR. Generally, the holder of restricted stock may have all of the rights of
a shareholder of the Company, including the right to vote the shares subject to
the restricted stock award and to receive any dividends with respect thereto, or
such rights may be restricted. Restricted stock may not be transferred by the
holder until the restrictions established by the Committee have lapsed.
Generally, performance awards would provide the holder thereof the right to
receive payments, in whole or in part, upon the achievement of such goals during
such performance periods as the Committee shall establish. A performance award
granted under the Plan may be denominated or payable in cash, shares of Common
Stock or restricted stock. The Committee is also authorized to establish the
terms and conditions of other stock-based awards.
No option or award and no right under any award granted under the Plan
shall be transferable by the individual to whom it was granted otherwise than by
will or by the laws of descent and distribution. Except as otherwise provided in
any applicable no option or award agreement (other than an award agreement
relating to an Incentive Stock Option), pursuant to terms determined by the
Committee, each award or right under any award shall be exercisable during a
participant's lifetime only by the participant.
If there shall be any change in the Common Stock through merger,
consolidation, reorganization, recapitalization, dividend in the form of stock
(of whatever amount), stock split or other change in the corporate structure,
appropriate adjustments in the Plan and outstanding options and awards shall be
made by the Committee. In the event of any such changes, adjustment shall
include, where appropriate, changes in the aggregate number of shares subject to
the Plan, the number of shares and the price per share subject to outstanding
options and awards and the amount payable upon exercise of outstanding awards,
in order to prevent dilution or enlargement of option or award rights.
The Board of Directors may amend, alter or discontinue the Plan at any
time, provided that shareholder approval must be obtained for any change that
(i) requires the approval of shareholders under any rules or regulations of the
National Association of Securities Dealers, Inc. that are applicable to the
Company, or (ii) requires the approval of the Company's shareholders under the
Code in order to permit Incentive Stock Options to be granted under the Plan.
The closing price per share of the Company's Common Stock on April 17,
2000, as reported on Nasdaq National Market, was $14.50.
The following is a summary of the principal federal income tax
consequences generally applicable to awards under the Plan. The grant of an
option or SAR is not expected to result in any taxable income for the recipient.
The holder of an Incentive Stock Option generally will have no taxable income
upon
6
<PAGE>
exercising the Incentive Stock Option (except that a liability may arise
pursuant to the alternative minimum tax), and the Company will not be entitled
to a tax deduction when an Incentive Stock Option is exercised. Upon exercising
a Nonqualified Stock Option, the optionee must recognize ordinary income equal
to the excess of the fair market value of the shares of Common Stock acquired on
the date of exercise over the exercise price, and the Company will be entitled
at that time to a tax deduction for the same amount. Upon exercising a SAR, the
amount of any cash received and the fair market value on the exercise date of
any shares of Common Stock received are taxable to the recipient as ordinary
income and deductible by the Company. The tax consequence to an optionee upon a
disposition of shares acquired through the exercise of an option will depend on
how long the shares have been held and upon whether such shares were acquired by
exercising an Incentive Stock Option or by exercising a Nonqualified Stock
Option or SAR. Generally, there will be no tax consequences to the Company in
connection with the disposition of shares acquired under an option, except that
the Company may be entitled to a tax deduction in the case of a disposition of
shares acquired under an Incentive Stock Option before the applicable Incentive
Stock Option holding periods set forth in the Code have been satisfied.
With respect to other awards granted under the Plan that are payable in
cash or shares of Common Stock that are either transferable or not subject to
substantial risk of forfeiture, the holder of such an award must recognize
ordinary income equal to the excess of (a) the cash or the fair market value of
the shares of Common Stock received (determined as of the date of such receipt)
over (b) the amount (if any) paid for such shares of Common Stock by the holder
of the award, and the Company will be entitled at that time to a deduction for
the same amount if and to the extent such amount satisfies the general rules
concerning deductibility of compensation. With respect to an award that is
payable in shares of Common Stock that are restricted as to transferability and
subject to substantial risk of forfeiture, unless a special election is made
pursuant to the Code, the holder of the award must recognize ordinary income
equal to the excess of (i) the fair market value of the shares of Common Stock
received (determined as of the first time the shares became transferable or not
subject to substantial risk of forfeiture, whichever occurs earlier) over (ii)
the amount (if any) paid for such shares of Common Stock by the holder, and the
Company will be entitled at that time to a tax deduction for the same amount if
and to the extent such amount is deductible.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR"
THE PROPOSAL TO APPROVE THE 2000 STOCK INCENTIVE PLAN.
7
<PAGE>
SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The only non-management persons known to the Company to own
beneficially more than 5% of the outstanding shares of the Company's Common
Stock as of March 6, 2000 are as follows:
Name and Address Amount and Nature of Percent
of Beneficial Owner Beneficial Ownership of Class
------------------- -------------------- --------
Eighteen Seventy Financial Inc. 119,900 shares(1) 7.26
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.
SECURITIES OWNERSHIP OF MANAGEMENT
The following table sets forth information as of February 29, 2000
concerning the shares of Company's Common Stock beneficially owned by each
Director, by each nominee for Director, by the Named Executive Officers (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 492,422(1) 29.8
Kurt R. Weise 33,000 2.0
J. William Bloemendaal 30,000(2) 1.8
Kevin P. Clark 28,400(3) 1.7
Steve L. Feurt 27,625(4) 1.7
Janice M. Graser 20,570 1.2
Elliott L. Dybdal 18,750 1.1
William L. Madison 1,700 *
Larry D. Albert 500 *
Jerome Hentges 1,300 *
All Directors and executive
officers as a group (10 persons) 654,267 39.3
- --------------------
* Less than 1%.
(1) Includes 63,000 shares held by Central Bancshares, Inc. ("Central
Bancshares") of which Mr. Morrison is the sole shareholder, 39,140 shares
held by trusts for the benefit of Mr. Morrison's daughters of which Mr.
Morrison's spouse, Susan Morrison, is the trustee, and 14,300 shares each
held in the respective Individual Retirement Accounts of John Morrison and
Susan Morrison.
(2) Includes 4,100 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. Voting and
investment power of 15,900 of such shares are shared with Dr. Bloemendaal's
spouse with whom shares are held jointly.
(3) Includes 2,050 shares held by Mr. Clark in an Individual Retirement Account,
800 shares in a 401(k) Thrift Retirement Plan and 1,800 shares held in the
name of his children, for whom Mr. Clark is custodian.
8
<PAGE>
(4) Includes 4,975 shares held by Mr. Feurt in an Individual Retirement Account
and 3,050 shares in a 401(k) Thrift Retirement Plan.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY COMPENSATION TABLE. The following table shows the cash and non
cash compensation paid by the Company during the past three fiscal years, to its
Chief Executive Officers and each executive officer who received cash
compensation from the Company during the year ended December 31, 1999 exceeding
$100,000 (the "Named Executive Officers").
<TABLE>
<CAPTION>
Annual Compensation
Name of Individual Fiscal ------------------- All Other
and Principal Positions Year Salary Bonus SARs Compensation
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Bruce K. Weldele(1) 1998 $ 45,500 -- -- $7,500(2)
Chairman of the Board, 1997 $160,200 -- -- $4,750(2)
President and Chief
Director
Kevin P. Clark 1999 $105,000 $35,000 -- $8,400(3)
Senior Vice President, 1998 $100,000 $16,100 5,000 $8,100(3)
Secretary and Director
Steve L. Feurt 1999 $89,250 $29,750 -- $6,000(5)
Chief Credit Officer 1998 $85,000 $10,860 5,000 $4,290(5)
and Director
John M. Morrison 1999 (4) -- -- --
Chairman of the Board 1998 (4) -- -- --
and Director
Kurt R. Weise 1999 (4) -- -- --
Chief Executive Officer 1998 (4) -- -- --
and Director
</TABLE>
(1) Mr. Weldele retired on March 6, 1998 in connection with the Merger. See
"Executive Compensation and Other Information - Executive Officer
Severance Agreements".
(2) Represents the Company's or its subsidiaries' contributions on behalf
of such officer to the Company's 401(k) Thrift Retirement Plan ("the
401(k) Plan").
(3) Includes the Company's contributions on behalf of such officer to the
401(k) Plan of $5,100 and $4,800 in 1999 and 1998, respectively, and
contributions to a deferred compensation plan of $3,300 in both 1999
and 1998.
(4) Mr. Morrison and Mr. Weise do not receive compensation for their
services as the Company's Chairman of the Board and Chief Executive
Officer, respectively. Each is compensated for services as a Director
through the Directors' fees received and for services as an officer of
the Company through CFS. See "Proposal One - Election of Directors -
Compensation of Directors" and "Executive Compensation and Other
Information - Certain Relationships and Related Transactions Between
Management and the Company".
(5) Includes the Company's contributions on behalf of such officer to the
401(k) Plan of $5,000 and $4,290 in 1999 and 1998, respectively, and
contributions to a deferred compensation plan of $1,000 in 1999.
9
<PAGE>
STOCK APPRECIATION RIGHTS PROGRAM. In July 1998, the Company adopted a
stock appreciation rights ("SARs") plan. The plan was a cash bonus program tied
to the price movement of the Common Stock. During July 1998, the Company awarded
26,500 shares under the plan at a strike price of $28.06. As of December 31,
1999, 800 shares had been forfeited. The Company awarded an additional 2,400
shares during January 1999 at a strike price of $23.03. The cash award payable
under the plan will equal the number of shares awarded to an employee multiplied
by the employee's vesting percentage, multiplied by the excess of the then
current stock price over the strike price. Each award has a three-year vesting
period. As of December 31, 1999, no liability under the plan was necessary. As
of December 31, 1999, Mr. Weise had been granted 7,000 shares at a strike price
of $28.06 which are 66.67% vested for a total of 4,667 shares. Mr. Feurt had
been granted 5,000 shares at a strike price of $28.06 which are 66.67% vested
for a total of 3,333 shares. Mr. Clark had been granted 5,000 shares at a strike
price of $28.06 which are 66.67% vested for a total of 3,333 shares.
SAR EXERCISE AND VALUE TABLE. The following table sets forth SARs
exercises and values at December 31, 1999.
AGGREGATED SAR EXERCISES IN 1999 AND SAR 1999 YEAR END VALUES
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money SARs
SARs at December 31, 1999 at December 31, 1999
------------------------- --------------------
Name Exercisable Unexercisable
---- ----------- -------------
Kevin P. Clark 3,333 1,667 (1)
Steve L. Feurt 3,333 1,667 (1)
- --------------------
(1) No shares either exercisable or unexercisable were in-the-money as of
December 31, 1999
EXECUTIVE OFFICER SEVERANCE AGREEMENTS. During fiscal year 1993, the
Board of Directors approved change of control severance agreements for certain
former officers of the Company and its subsidiary United Savings 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.
DEFERRED COMPENSATION PLANS. The Company has a deferred compensation
agreement with Kevin P. Clark that provides for pre-determined periodic payments
over 15 years upon retirement or death. In the event of acquisition of the
Company by a third party, disability or early retirement, the pre-determined
payments are based on years of service. Amounts expensed under this agreement
were approximately $3,300 during the year ended December 31, 1999.
In October 1999, the Company adopted a supplemental retirement
agreement with Steve L. Feurt that provides for benefits upon retirement,
disability or death. The plan vests 10% for every plan year of employment and
100% after 10 plan years. Vesting is considered 100% upon determination of full
or partial disability, death or change of control, with payment made in a lump
sum within 60 days. The amount expensed under this agreement was approximately
$1,000 for the year ended December 31, 1999.
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,
10
<PAGE>
the manner in which those duties have been performed, and the prevailing market
conditions relative to each position. The Company maintains a bonus plan for its
executive officers. Bonuses payable under the plan are based on the Company's
subsidiary banks' return on assets, asset quality and the overall growth and
performance of the Company's subsidiary banks. The Company also provides
long-term incentive to its executive officers primarily through its SAR Program
discussed above prior to its recent termination. SARs were granted to encourage
executives to seek the same objectives as shareholders, to retain executives
through vesting and to lower the overall cash cost of compensation.
Mr. Morrison does not receive compensation for his services as the
Company's Chairman of the Board. He is compensated for his services as an
officer of the Company through CFS. See "Executive Compensation and Other
Information - Certain Relationships and Related Transactions Between Management
and the Company."
<TABLE>
<S> <C> <C> <C> <C>
William L. Madison J. William Bloemendaal Elliott L. Dybdal John M. Morrison Kurt R. Weise
</TABLE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS BETWEEN MANAGEMENT AND THE
COMPANY
The Company is a holding company for Heritage Bank and Heritage State
Bank. These banks have made and may in the future 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 R. Weise is the President and Janice M. Graser is
the Executive Vice President, provides to the Company and its subsidiary banks,
various management services, including accounting and tax services, investment
consulting, personnel consulting, insurance advisory services and regulatory
consulting. Fees for these services totaled approximately $309,000 for the
fiscal year ending December 31, 1999. Messrs. Morrison and Weise are 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 original principal amount of $1,076,130 for
the fiscal year ended December 31, 1999 and is expected to sell loan
participations to Heritage Bank in the fiscal year ending December 31, 2000.
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.
11
<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, the S & P Savings and Loan
Index and the SNL Thrift Index. Total returns assume a $100 investment on
December 31, 1994 and are based on reinvestment of all dividends.
TOTAL RETURN PERFORMANCE
[PLOT POINT CHART]
<TABLE>
<CAPTION>
PERIOD ENDING
---------------------------------------------------------
INDEX 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99
- ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
United Financial Corp. 100.00 116.54 134.59 191.55 166.99 149.56
S&P 500 100.00 137.58 169.03 225.44 289.79 350.78
SNL Thrift Index 100.00 155.74 202.92 345.28 303.68 248.07
</TABLE>
(1) The years from 1994 through 1996 of the Stock Performance Graph
incorporate the performance of United Savings Bank prior to the formation
of the Company.
12
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's Directors and executive officers to file reports of ownership and
changes in ownership of the Company's Common Stock with the Securities and
Exchange Commission, and the Company is required to identify any of those
individuals who failed to file such reports on a timely basis. The Company
believes that during 1999 all Directors and executive officers of the company
complied with their Section 16(a) filing requirements, except: a Form 5 Annual
Statement of Changes in Beneficial Ownership was filed for Mr. Clark with regard
to the late reporting of the purchase of 50 shares of Common Stock in 1998 and
181 shares of Common Stock in 1999.
SHAREHOLDER PROPOSALS
Any shareholder wishing to include a proposal in the Company's Proxy
Statement for its 2001 Annual Meeting of Shareholders must submit such proposal
for consideration in writing to the Secretary of the Company at the address
indicated on the first page of this Proxy Statement no later than December 19,
2000. Any such proposal will be subject to the requirements of the proxy rules
adopted under the Securities Exchange Act of 1934.
Management may use discretionary authority to vote against any
shareholder proposal presented at the Company's 2001 Annual Meeting of
Shareholders if: (1) such proposal has been properly omitted from the Company's
proxy materials under federal securities law, (2) notice of such proposal was
not submitted to the Secretary of the Company at the address indicated on the
first page of this Proxy Statement by March 1, 2001 or (3) the proponent has not
solicited proxies in compliance with federal securities laws from the holders of
at least the percentage of the Company's Common Stock required to carry the
proposal.
ADDITIONAL INFORMATION
The Company has filed with the Commission, for the year ended December
31, 1999, 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 10, 2000, A COPY OF THE
ANNUAL REPORT ON FORM 10-K. Requests should be directed to: Paula Delaney,
Controller, 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
Great Falls, Montana
April 20, 2000
13
<PAGE>
UNITED FINANCIAL CORP.
REVOCABLE PROXY FOR 2000 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 20, 2000, 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 23, 2000 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:
JOHN M. MORRISON, KURT R. WEISE, JANICE M. GRASER
2. Proposal to approve the United Financial Corp. 2000 Long-Term Incentive and
Stock Option Plan.
[ ] 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.
(CONTINUED, AND TO BE COMPLETED AND SIGNED, ON THE REVERSE SIDE)
<PAGE>
(CONTINUED FROM THE OTHER SIDE)
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: ___________________________, 2000
Signature
_______________________________________
Signature if jointly held
PLEASE MARK, DATE AND RETURN THIS PROXY PROMPTLY
