<PAGE>
PAGE>
[MONTGOMERY FINANCIAL CORPORATION]
September 22, 1997
Dear Stockholder:
You are cordially invited to attend the First Annual Meeting of
Stockholders (the "Annual Meeting") of Montgomery Financial Corporation (the
"Company"). The Annual Meeting will be held at the main office of the Company
located at 119 East Main Street, Crawfordsville, Indiana, on Tuesday, October
21, 1997 at 2:00 p.m., Crawfordsville, Indiana time. The matters to be
considered by stockholders at the Annual Meeting are described in the
accompanying materials.
It is very important that you be represented at the Annual Meeting
regardless of the number of shares you own or whether you are able to attend
the meeting in person. We urge you to mark, sign, and date your proxy card
today and return it in the envelope provided, even if you plan to attend the
Annual Meeting. This will not prevent you from voting in person, but will
ensure that your vote is counted if you are unable to attend.
Your continued support of and interest in Montgomery Financial
Corporation are sincerely appreciated.
Sincerely,
Earl F. Elliott
Chief Executive Officer and President<PAGE>
<PAGE>
MONTGOMERY FINANCIAL CORPORATION
119 East Main Street
Crawfordsville, Indiana 47933
(765) 362-4710
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be Held on October 21, 1997
Notice is hereby given that the Annual Meeting of Stockholders (the
"Meeting") of Montgomery Financial Corporation (the "Company") will be held at
the Company's office located at 119 East Main Street, Crawfordsville, Indiana
at 2:00 p.m., Crawfordsville, Indiana time, on Tuesday, October 21, 1997.
A Proxy Card and a Proxy Statement for the Meeting are enclosed.
The Meeting is for the purpose of considering and acting upon:
1. The election of three directors of the Company;
2. The ratification of the appointment of Geo. S. Olive & Co.
LLC as the auditors of the Company for the fiscal year ending
June 30, 1998;
and such other matters as may properly come before the Meeting, or any
adjournments thereof. The Board of Directors is not aware of any other
business to come before the Meeting.
Any action may be taken on the foregoing proposals at the Meeting on the
date specified above, or on any date or dates to which the Meeting may be
adjourned. Stockholders of record at the close of business on August 31, 1997
are the stockholders entitled to vote at the Meeting and any adjournments
thereof.
You are requested to complete and sign the enclosed form of proxy, which
is solicited on behalf of the Board of Directors, and to mail it promptly in
the enclosed envelope. The proxy will not be used if you attend and vote at
the Meeting in person.
BY ORDER OF THE BOARD OF DIRECTORS
Earl F. Elliott
Chief Executive Officer and President
Crawfordsville, Indiana
September 22, 1997
- ------------------------------------------------------------------------------
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE
EXPENSE OF
FURTHER REQUESTS FOR PROXIES TO ENSURE A QUORUM AT THE MEETING. A
SELF-
ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS
REQUIRED
IF MAILED WITHIN THE UNITED STATES.
- ------------------------------------------------------------------------------
<PAGE>
<PAGE>
PROXY STATEMENT
MONTGOMERY FINANCIAL CORPORATION
119 East Main Street
Crawfordsville, Indiana 47933
(765) 362-4710
ANNUAL MEETING OF STOCKHOLDERS
October 21, 1997
This Proxy Statement is furnished in connection with the solicitation on
behalf of the Board of Directors of Montgomery Financial Corporation (the
"Company"), the parent company of Montgomery Savings, A Federal Association
("Montgomery Savings" or the "Association"), of proxies to be used at the
Annual Meeting of Stockholders of the Company (the "Meeting") which will be
held at the Company's office located at 119 East Main Street, Crawfordsville,
Indiana on Tuesday, October 21, 1997, at 2:00 p.m., Crawfordsville, Indiana
time, and all adjournments of the Meeting. The accompanying Notice of Annual
Meeting, a proxy card and this Proxy Statement are first being mailed to
stockholders on or about September 22, 1997.
At the Meeting, stockholders of the Company are being asked to consider
and vote upon the election of three directors and the appointment of Geo. S.
Olive & Co. LLC as auditors for the Company.
Vote Required and Proxy Information
All shares of the Company's Common Stock, par value $.01 per share (the
"Common Stock"), represented at the Meeting by properly executed proxies
received prior to or at the Meeting, and not revoked, will be voted at the
Meeting in accordance with the instructions thereon. If no instructions are
indicated, properly executed proxies will be voted for the director nominees
and the other proposal set forth in this Proxy Statement. The Company does
not know of any matters, other than as described in the Notice of Annual
Meeting, that are to come before the Meeting. If any other matters are
properly presented at the Meeting for action, the persons named in the
enclosed form of proxy and acting thereunder will have the discretion to vote
on such matters in accordance with their best judgment.
Directors shall be elected by a plurality of the votes of the shares
present or represented by proxy at the Meeting. The appointment of Geo. S.
Olive & Co. LLC as auditors requires the affirmative vote of a majority of the
votes present in person or represented by proxy at the Meeting and entitled to
vote on the matter. Proxies marked to abstain and broker non-votes have no
effect on the vote. One-third of the shares of the Common Stock, present in
person or represented by proxy, shall constitute a quorum for purposes of the
Meeting. Abstentions and broker non-votes are counted for purposes of
determining a quorum.
A proxy given pursuant to the solicitation may be revoked at any time
before it is voted. Proxies may be revoked by: (i) filing with the Secretary
of the Company at or before the Meeting a written notice of revocation bearing
a later date than the proxy, (ii) duly executing a subsequent proxy relating
to the same shares and delivering it to the Secretary of the Company at or
before the Meeting, or (iii) attending the Meeting and voting in person
(although attendance at the Meeting will not in and of itself constitute
revocation of a proxy). Any written notice revoking a proxy should be
delivered to Secretary, Montgomery Financial Corporation, 119 East Main
Street, Crawfordsville, Indiana 47933.
<PAGE>
<PAGE>
Voting Securities and Certain Holders Thereof
Stockholders of record as of the close of business on August 31, 1997
will be entitled to one vote for each share of Common Stock then held. As of
that date, the Company had 1,653,032 shares of Common Stock issued and
outstanding. The following table sets forth information regarding share
ownership of those persons or entities known by management to beneficially own
more than five percent of the Common Stock and all directors and executive
officers of the Company and the Association as a group.
<TABLE>
<CAPTION>
Shares
Beneficially Percent of
Beneficial Owner Owned Class
- ------------------------------------------------ ------------ ----------
<S> <C> <C>
Montgomery Financial Corporation 132,250(1) 8.0%
Employee Stock Ownership Plan
119 East Main Street
Crawfordsville, Indiana 47933
Directors and executive officers of the Company 77,577(2) 4.7%
and the Association, as a group (8 persons)
</TABLE>
________________
(1) The amount reported represents shares held by the Employee Stock
Ownership Plan ("ESOP"), none of which have been allocated to
accounts of participants. Community Trust & Investment Company, the
trustee of the ESOP, may be deemed to beneficially own the shares
held by the ESOP which have not been allocated to accounts of
participants. Participants in the ESOP are entitled to instruct the
trustee as to the voting of shares allocated to their accounts under
the ESOP. Unallocated shares held in the ESOP's suspense account or
allocated shares for which no voting instructions are received are
voted by the trustee in the same proportion as allocated shares
voted by participants.
(2) Includes shares held directly, as well as in retirement accounts,
held by certain members of the named individuals' families, or held
by trusts of which the named individual is a trustee or substantial
beneficiary, with respect to which the named individuals may be
deemed to have sole voting and investment power.
<PAGE>
<PAGE>
PROPOSAL I - ELECTION OF DIRECTORS
The Company's Board of Directors is presently composed of seven members,
each of whom is also a director of the Association. Directors of the Company
are generally elected to serve for a three-year term or until their respective
successors shall have been elected and shall qualify. Approximately one-third
of the directors are elected annually.
The following table sets forth certain information regarding the
Company's Board of Directors, including their terms of office and nominees for
election as directors. It is intended that the proxies solicited on behalf of
the Board of Directors (other than proxies in which the vote is withheld as to
one or more nominees) will be voted at the Meeting for the election of the
nominees identified in the following table. If any nominee is unable to
serve, the shares represented by all such proxies will be voted for the
election of such substitute as the Board of Directors may recommend. At this
time, the Board of Directors knows of no reason why any of the nominees might
be unable to serve, if elected. There are no arrangements or understandings
between any director or nominee and any other person pursuant to which such
director or nominee was selected.
<TABLE>
<CAPTION>
Shares of
Common Stock
Beneficially
Owned at Percent
Director Term to August 31, of
Name Age Position(s) Held Since(1) Expire 1997(2) Class
- ----------------- --- ---------------- -------- ------- ------------ --------
<S> <C> <C> <C> <C> <C> <C>
NOMINEES
Earl F. Elliott 63 Director, Chief 1973 1997 13,054 *
Executive Officer
and President
Mark E. Foster 44 Director 1990 1997 2,051 *
Robert C. Wright 52 Director 1996 1997 5,186 *
DIRECTORS CONTINUING IN OFFICE
Joseph M. Malott 59 Director 1978 1998 9,327 *
J. Lee Walden 49 Director, Vice 1995 1998 7,461 *
President, Chief
Operating Officer
and Chief
Financial Officer
John E. Woodward 69 Director 1975 1999 9,327 *
C. Rex Henthorn 59 Chairman of the 1981 1999 14,327 *
Board
</TABLE>
________________________
* Less than 1%.
(1) Includes service as a director of the Association.
(2) Includes shares held directly, as well as, in retirement accounts,
held by certain members of the named individuals' families, or held
by trusts of which the named individual is a trustee or substantial
beneficiary, with respect to which the named individuals may be
deemed to have sole voting and investment power.
The business experience of each director is set forth below. All
directors have held their present positions for at least the past five years,
except as otherwise indicated.
Earl F. Elliott. Mr. Elliott is Chief Executive Officer, President and
Director of the Company and Chairman of the Board and Chief Executive Officer
of the Association. Mr. Elliott first joined the Association in 1973.<PAGE>
<PAGE>
Mark E. Foster. Mr. Foster is the General Manager of a retail farm equipment
and automobile dealership located in Warren County, Indiana, a position he has
held since 1983.
Robert C. Wright. Mr. Wright is the owner and manager of a restaurant located
in Vermillion County, Indiana, a position he has held since 1975.
Joseph M. Malott. For the past five years, Mr. Malott has been self-employed
as a consultant to financial institutions.
J. Lee Walden. Mr. Walden is currently the Vice President, Chief Operating
Officer and Chief Financial Officer of the Company and the Association's
President and Chief Financial Officer. Mr. Walden first joined the
Association in 1984.
John E. Woodward. Mr. Woodward is the President of a collection agency and
credit reporting bureau located in Montgomery County, Indiana, a position he
has held since 1959.
C. Rex Henthorn. Since 1963, Mr. Henthorn has practiced law in the State of
Indiana.
Meetings and Committees of the Board of Directors
The Company. The Company's Board of Directors meets on a monthly basis.
Since the Company was established in April, 1997, three meetings were held in
fiscal 1997. The Company does not pay directors a fee.
The Association. The Association's Board of Directors meets monthly.
Additional special meetings may be called by the Chief Executive Officer or
the Board of Directors. The Board of Directors met 15 times during the year
ended June 30, 1997. During fiscal year 1997, no director of the Association
attended fewer than 75% of the aggregate of the total number of Board meetings
and the total number of meetings held by the committees of the Board of
Directors on which he served. Directors receive an annual stipend of $4,800
plus $200 for each meeting of the Board of Directors attended. In addition,
Directors receive $100 for attendance at committee meetings lasting one hour
or less and $200 per committee meeting lasting over one hour (except that
Messrs. Elliott and Walden receive no fees for attending committee meetings
held during their normal working hours). The Association has standing Audit,
Nominating and Compensation Committees.
The members of the Audit Committee are Messrs. Woodward, Malott,
Henthorn, and Foster. This Committee is responsible for developing and
monitoring Montgomery's audit program. The Committee selects Montgomery's
outside auditor and meets with him to discuss the results of the annual audit
and any related matters. The members of the Committee also receive and review
all the reports and findings and other information presented to them by
Montgomery's officers regarding financial reporting policies and practices.
Two members of the Committee meet to audit all cash items and teller cash and
reconcile such items to the general ledger. The Audit Committee met two times
during fiscal 1997.<PAGE>
<PAGE>
The entire Board of Directors acts as the Nominating Committee. The
Board as Nominating Committee makes nominations for director candidates for
election to the Board of Directors but has no procedures or plans for
considering nominees recommended by shareholders. The Board met as Nominating
Committee two times in fiscal 1997 to nominate the three persons standing for
election identified above.
The members of the Compensation Committee are Messrs. Malott, Foster,
Elliott and Walden. The Compensation Committee reviews and approves all
salaries for officers and employees of Montgomery. The Compensation Committee
met three times during fiscal 1997.
Executive Compensation
The following table sets forth information concerning the compensation
paid or granted to the Association's and Company's Chief Executive Officer.
No other executive officer of the Company had aggregate cash compensation
exceeding $100,000.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long-Term
Compensation
--------------------
Annual Compensation Awards
---------------------- --------------------
Restricted
Stock Options/ All Other
Salary(1) Bonus Award(s) SARs Compensation
Name and Principal Position Year ($) ($) ($) (#) ($)
- --------------------------- ---- -------- ------- ---------- --------- ------------
<S> <C> <C> <C> <C> <C> <C>
Earl F. Elliott, Chief 1997 $88,875 $3,000 $24,374 2,752 $34,721(1)
Executive Officer and 1996 86,275 500 --- --- 34,039(2)
President 1995 82,500 5,000 --- --- 33,800(3)
___________
</TABLE>
(1) Represents $8,500 in Directors and committee fees, a contribution by
Montgomery of $6,221 pursuant to its 401(k) plan, and $20,000 of
deferred compensation payable to Mr. Elliott upon his retirement.
(2) Represents $8,000 in Directors and committee fees, a contribution by
Montgomery of $6,039 pursuant to its 401(k) plan, and $20,000 of
deferred compensation payable to Mr. Elliott upon his retirement.
(3) Represents $7,675 in Directors and committee fees, a contribution by
Montgomery of $6,125 pursuant to its 401(k) plan, and $20,000 of
deferred compensation payable to Mr. Elliott upon his retirement.
<PAGE>
<PAGE>
The following table sets forth certain information concerning grants of
stock options pursuant to the Company's Stock Option and Incentive Plan to the
named officer for the fiscal year ended June 30, 1997.
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
Individual Grant
--------------------------------------------- Potential Realizable
Number of Value at Assumed
Securities % of Total Annual Rates of Stock
Underlying Options/SARs Exercise Price Appreciation
Options/ Granted to or Base for Option Term
SARs Employees in Price Expiration ---------------------
Name Granted # Fiscal Year ($/Sh) Date 5% ($) 10% ($)
- -------------- ---------- ------------ --------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Earl F. Elliott 2,752 11.24% $6.97 02/18/07 $12,063 $30,570
</TABLE>
The following table sets forth certain information concerning the number
and value of in-the-money (when the fair market value of the common stock
exceeds the exercise price of the option) stock options at June 30, 1997 held
by the named executive officer and stock options exercised during fiscal 1997.
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END
OPTION/SAR VALUES
Value of
Number of Unexercised
Unexercised In-the-Money
Shares Options/SARs at Options/SARs at
Acquired Value FY-End (#) FY-End ($)(1)
on Exercise Realized ------------------------- -------------------------
Name (#) ($) Exercisable Unexercisable Exercisable Unexercisable
- ----------------- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Earl F. Elliott --- $--- --- 2,752 $--- $8,339
</TABLE>
_____________
(1) The value of options held is based upon the IPO price of the Company's
common stock of $10.00 per share on June 30, 1997, less the exercise
price of $6.97.
Employment Agreements. The Association has entered into employment
agreements with Chief Executive Officer Elliott and President Walden providing
for an initial term of three years. The agreements were filed with the OTS as
part of the application of the Company for approval to became a savings and
loan holding company. The employment agreements became effective upon
completion of the Conversion and Reorganization and provide for an annual base
salary in an amount not less than each individual's respective current salary
and provide for an annual extension subject to the performance of an annual
formal evaluation by disinterested members of the Board of Directors of the
Association. The agreements also provide for termination upon the employee's
death, for cause or in certain events specified by OTS regulations. The
employment agreements are also terminable by the employee upon 90 days's
notice of the Association.
<PAGE>
<PAGE>
The employment agreements each provide for payment in an amount equal to
299% of the five-year annual average base compensation, in the event a "change
in control" of the Association where employment involuntarily terminates in
connection with such change in control or within twelve months thereafter. For
the purposes of the employment agreements, a "change in control" is defined as
any event which would require the filing of an application for acquisition of
control or notice of change in control pursuant to 12 C.F.R. Section 574.3 or
4. Such events are generally triggered prior to the acquisition or control
of 10% of the Company's Common Stock. If the employment of Chief Executive
Officer Elliott or President Walden had been terminated as of June 30, 1997
under circumstances entitling them to severance pay as described above, they
would have been entitled to receive a lump such cash payment of approximately
$258,000 and $176,000, respectively. The agreements also provide for the
continued payment to each employee of health benefits for the remainder of the
term of their contract in the event such individual is involuntarily
terminated in the event of change in control.
Supplemental Retirement Benefit
The Association provides for a Supplemental Retirement Benefit to Mr.
Elliott. The benefit consists of life insurance on Mr. Elliott's life equal
in amount to twice his annual salary in the event of his death prior to
retirement. In addition, the Association has agreed to pay Mr. Elliott a cash
retirement payment, payable either in a lump sum within 30 days after his date
of retirement or, at his election, in equal annual installments of not less
than $20,000 over such period of time as he shall elect, in an amount
determined pursuant to the following table:
Retirement Date
Occurs After Amount of Cash
December 31 of: Retirement Payment
-------------- ------------------
1994 $ 40,000
1995 60,000
1996 80,000
1997 100,000
As a condition to his receiving the above-indicated cash retirement payments,
Mr. Elliott will be required to enter into a written consulting agreement with
the Association obligating him, during the remainder of his lifetime but
subject to such limitation as his physical condition might impose, to render
such reasonable business consulting and advisory services to the Association
as the Board might request, and further obligating him not to enter into or
engage in any activity or enterprise that would directly or indirectly involve
substantial competition with the Association.
<PAGE>
<PAGE>
Benefit Plans
General. The Company currently provides health care benefits to its
employees, including hospitalization, disability and major medical insurance,
subject to certain deductibles and copayments by employees.
Incentive Bonus Plan. The Company has an incentive bonus plan which
provides for annual cash bonuses to certain officers as a means of recognizing
achievement on the part of such employees. The bonuses are determined based
on a combination of the Company's and the individual employee's performance
during the year. The Company's bonus expense was $25,000 for the fiscal year
ended June 30, 1997.
401(k) Plan. The Company established a qualified, tax-exempt retirement
plan with a "cash-or-deferred arrangement" qualifying under Section 401(k) of
the Code (the "401(k) Plan"). With certain exceptions, all employees who have
attained age 21 and who have completed one year of employment, during which
they worked at least 1,000 hours, are eligible to participate in the 401(k)
Plan as of the earlier of the first day of the plan year or the next July 1 or
January 1. Eligible employees are permitted to contribute up to 15% of their
compensation to the 401(k) Plan on a pre-tax basis, up to a maximum of $9,500.
The Company matches 100% of the first 7% of each participant's salary
reduction contribution to the 401(k) Plan.
Participant contributions to the 401(k) Plan are fully and immediately
vested. Withdrawals are not permitted before age 59 1/2 except in the event of
death, disability, termination of employment or reasons of proven financial
hardship. With certain limitations, participants may make withdrawals from
their accounts while actively employed. Upon termination of employment, the
participant's accounts will be distributed, unless he or she elects to defer
the payment.
The 401(k) Plan may be amended by the Board of Directors, except that no
amendment may be made which would reduce the interest of any participant in
the 401(k) Plan trust fund or divert any of the assets of the 401(k) Plan
trust fund to purposes other than the benefit of participants or their
beneficiaries. The Company's accrued expense for the Plan was $48,000 and
$45,000 for the years ended June 30, 1997 and 1996, respectively.
Employee Stock Ownership Plan. Concurrent with the Company's
organization and public offering an Employee Stock Ownership Plan ("ESOP") was
established for the benefit of employees of the Company and its subsidiaries.
The ESOP is designed to meet the requirements of an employee stock ownership
plan as described at Section 4975(e)(7) of the Code and Section 407(d)(6) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). The
ESOP may borrow in order to finance purchases of the Company's Common Stock.
The ESOP was funded with a loan in the amount of $1,322,500 from the
Company which was used to purchase 132,250 shares of Common Stock pursuant to
the Conversion and Reorganization. The interest rate of the ESOP loan is
equal to the prime rate of interest on the date the loan is made.
<PAGE>
<PAGE>
GAAP generally requires that any borrowing by the ESOP from an
unaffiliated lender be reflected as a liability in the Company's consolidated
financial statements, whether or not such borrowing is guaranteed by, or
constitutes a legally binding contribution commitment of, the Company or the
Association. Since the Company financed the ESOP debt, the ESOP debt is
eliminated through consolidation and no liability is reflected on the
Company's consolidated financial statements. In addition, shares purchased
with borrowed funds are, to the extent of the borrowings, excluded from
stockholders' equity, representing unearned compensation to employees for
future services not yet performed. Consequently, if the ESOP purchases
already-issued shares in the open market, the Company's consolidated
liabilities will increase to the extent of the ESOP's borrowings, and total
and per share stockholders' equity will be reduced to reflect such borrowings.
If the ESOP purchases newly issued shares from the Company, total
stockholders' equity would neither increase nor decrease, but per share
stockholders' equity and per share net income would decrease because of the
increase in the number of outstanding shares. In either case, as the
borrowings used to fund ESOP purchases are repaid, total stockholders' equity
will correspondingly increase.
All employees of the Company are eligible to participate in the ESOP
after they attain age 21 and complete one year of service. Employees are
credited for years of service to the Company prior to the adoption of the ESOP
for participation and vesting purposes. The Company's contribution to the
ESOP is allocated among participants on the basis of compensation. Each
participant's account will be credited with cash and shares of Company Common
Stock based upon compensation earned during the year with respect to which the
contribution is made. Contributions credited to a participant's account are
vested on a graduated basis and become fully vested when such participant
completes ten years of service. ESOP participants are entitled to receive
distributions from their ESOP accounts only upon termination of service.
Distributions will be made in cash and in whole shares of the Company's Common
Stock. Fractional shares will be paid in cash. Participants will not incur a
tax liability until a distribution is made.
Each participating employee is entitled to instruct the trustee of the
ESOP as to how to vote the shares allocated to his or her account. The
trustee, Community Trust & Investment Company, is not affiliated with the
Company or Montgomery Savings.
The ESOP may be amended by the Board of Directors, except that no
amendment may be made which would reduce the interest of any participant in
the ESOP trust fund or divert any of the assets of the ESOP trust fund to
purposes other than the benefit of participants or their beneficiaries.
<PAGE>
<PAGE>
Certain Transactions
The Association has followed a policy of granting loans to eligible
directors, officers, employees and members of their immediate families for the
financing of their personal residences and for consumer purposes. Under the
Association's current policy, all such loans to directors and senior officers
are required to be made in the ordinary course of business and on the same
terms, including collateral and interest rates, as those prevailing at the
time for comparable transactions and do not involve more than the normal risk
of collectibility. However, prior to August 1989, the Association waived loan
origination fees on loans to directors and employees. The Association has had,
and expects to have in the future, banking transactions in the ordinary course
of its business with Directors, officers, and their associates. These
transactions have been on substantially the same terms, including interest
rates, collateral, and repayment terms on extensions of credit, as those
prevailing at the same time for comparable transactions with others and did
not involve more than the normal risk of collectibility or present other
unfavorable features.
From time to time the Company has paid fees to Henthorn, Harris & Taylor,
P.C., a law firm in which Chairman Henthorn is a principal, for legal services
performed for Montgomery. For the year ended June 30, 1997, Montgomery paid
fees totalling $3,498 to such law firm for services provided to Montgomery.
In addition, Henthorn, Harris & Taylor, P.C. provides legal services from time
to time in connection with loans made by Montgomery Savings, for which
services such law firm is compensated by the borrowers.
At June 30, 1997, the Association's loans to directors, officers and
employees totalled approximately $1,233,000 or 6.37% stockholders' equity.
PROPOSAL II - RATIFICATION OF APPOINTMENT OF AUDITORS
At the Meeting, the stockholders will consider and vote on the
ratification of the appointment of Geo. S. Olive & Co. LLC as the Company's
independent auditors for the Company's fiscal year ending June 30, 1998.
The Board of Directors of the Company has heretofore renewed the
Company's arrangement for Geo. S. Olive & Co. LLC to be the Company's auditors
for the fiscal year ending June 30, 1998, subject to ratification by the
Company's stockholders. Representatives of Geo. S. Olive & Co. LLC are
expected to attend the Meeting to respond to appropriate questions and to make
a statement if they so desire.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE
"FOR" THE
RATIFICATION OF THE APPOINTMENT OF GEO. S. OLIVE & CO. LLC AS THE
COMPANY'S
AUDITORS FOR THE FISCAL YEAR ENDING JUNE 30, 1998.
STOCKHOLDER PROPOSALS
In order to be eligible for inclusion in the Company's proxy materials
for the next annual meeting of stockholders, any stockholder proposal to take
action at such meeting must be received at the Company's office located at 119
East Main Street, Crawfordsville, Indiana 47933, no later than May 23, 1998.
Any such proposal shall be subject to the requirements of the proxy rules
adopted under the Exchange Act.
<PAGE>
<PAGE>
OTHER MATTERS
The Board of Directors is not aware of any business to come before the
Meeting other than those matters described above in this Proxy Statement.
However, if any other matter should properly come before the Meeting, it is
intended that holders of the proxies will act in accordance with their best
judgment.
The cost of solicitation of proxies will be borne by the Company. The
Company will reimburse brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending proxy
materials to the beneficial owners of Common Stock. In addition to
solicitation by mail, directors, officers and regular employees of the Company
and/or the Association may solicit proxies personally or by telegraph or
telephone without additional compensation.
Crawfordsville, Indiana
September 22, 1997<PAGE>
<PAGE>
<TABLE>
<CAPTION>
X PLEASE MARK VOTES
- ---- AS IN THIS EXAMPLE
REVOCABLE PROXY
MONTGOMERY FINANCIAL CORPORATION
<S> <C> <C> <C>
FIRST ANNUAL MEETING OF STOCKHOLDERS I. The election of the following
OCTOBER 21, 1997 directors for the terms specified:
The undersigned hereby appoints the Board FOR WITHHELD
EXCEPT
of Directors of Montgomery Financial
Corporation ("Company"), and its survivor,
with full power of substitution, to act as EARL F. ELLIOTT (3-year term) --- ---
---
attorneys and proxies for the undersigned
to vote all shares of common stock of the ROBERT C. WRIGHT (3-year term) ---
- --- ---
Company which the undersigned is entitled to
vote at the Annual Meeting of Stockholders MARK E. FOSTER (3-year term) ---
- --- ---
(the "Meeting"), to be held on Wednesday
October 15, 1997 at the Company's main office,
located at 102 East Main Street, Washington, INSTRUCTION: To withhold authority to vote
for any individual
Iowa, at 4:30 P.M. local time, and at any and nominee, mark "Except" and write that nominee's
name in the
all adjournments thereof, as follows: space provided below.
______________________________________________
FOR AGAINST ABSTAIN
II. The ratification of the --- --- ---
appointment of Geo. S. Olive &
LLC, independent auditors for
the Company for the fiscal year
ending June 30, 1998
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
"FOR" THE LISTED
PROPOSALS.
Please be sure to sign and Date THIS PROXY WILL BE VOTED AS DIRECTED,
BUT IF NO INSTRUCTIONS
and date this Proxy in the ARE SPECIFIED, THIS PROXY WILL BE VOTED
FOR THE PROPOSALS
box below. ------------- STATED. IF ANY OTHER BUSINESS IS PRESENTED
AT SUCH MEETING,
THIS PROXY WILL BE VOTED BY THOSE NAMED IN
THIS PROXY
IN THEIR BEST JUDGMENT. AT THE PRESENT TIME,
THE BOARD
- -------------------------------------------- OF DIRECTORS KNOWS OF NO OTHER BUSINESS
TO BE PRESENTED AT
Stockholder sign above Co-holder (if any) THE MEETING.
sign above
THE PROXY IS SOLICITED BY THE BOARD OF
DIRECTORS.
/TABLE
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Detach above card, sign, date and mail in postage paid envelope provided.
MONTGOMERY FINANCIAL CORPORATION
- ------------------------------------------------------------------------------
This proxy may be revoked at any time before it is voted by: (i) filing
with the Secretary of the Company at or before the Meeting a written notice of
revocation bearing a later date than the proxy; (ii) duly executing a
subsequent proxy relating to the same shares and delivering it to the
Secretary of the Company at or before the Meeting; or (iii) attending the
Meeting and voting in person (although attendance at the Meeting will not in
and of itself constitute revocation of a proxy). If this proxy is properly
revoked as described above, then the power of such attorneys and proxies shall
be deemed terminated and of no further force and effect.
The undersigned acknowledges receipt from the Company, prior to the
execution of this Proxy, of a Notice of the Annual Meeting, a Proxy Statement
and the Company's Annual Report to Stockholders for the fiscal year ended June
30, 1997.
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
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