UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. ____)
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|X| Definitive Proxy Statement
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|_| Soliciting Material Pursuant toss.240.14a-12
UNITED TRUST GROUP, INC
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(Name of Registrant as Specified In Its Charter)
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UNITED TRUST GROUP, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held on Wednesday, June 16, 2004
To the Shareholders of:
UNITED TRUST GROUP, INC.
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of United Trust
Group Inc., an Illinois corporation ("UTG"), will be held on Wednesday, June 16,
2004 at 10:00 a.m. at the corporate headquarters at 5250 South Sixth Street,
Springfield, Illinois 62703 for the following purposes:
1. To elect eight directors of UTG to serve for a term of one (1) year
and until their successors are elected and qualified;
2. To consider and act upon such other business as may properly be
brought before the meeting.
The Board of Directors has fixed the close of business on April 23, 2004 as the
record date for the Annual Meeting. Only shareholders of record as of the close
of business on the record date are entitled to notice of and to vote at the
Annual Meeting.
Whether or not you plan to attend the Annual Meeting, you are urged to mark,
date and sign the enclosed proxy and return it promptly so that your shares can
be represented and voted at the Annual Meeting. A proxy may be revoked at any
time prior to its exercise at the Annual Meeting by following the instructions
in the accompanying proxy statement and will not affect your right to vote in
person in the event that you decide to attend the meeting.
BY ORDER OF THE BOARD OF DIRECTORS
UNITED TRUST GROUP, INC.
Theodore C. Miller, Secretary
Dated: May 27, 2004
Springfield, Illinois
YOUR VOTE IS IMPORTANT!
PLEASE COMPLETE, DATE, SIGN AND PROMPTLY RETURN YOUR PROXY IN THE ENCLOSED
ENVELOPE, WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON.
PROXY STATEMENT FOR ANNUAL MEETING OF
SHAREHOLDERS OF
UNITED TRUST GROUP, INC.
GENERAL INFORMATION REGARDING SOLICITATION
The Annual Meeting of the Shareholders of United Trust Group, Inc., an Illinois
corporation ("UTG"), will be held on Wednesday, June 16, 2004 at 10:00 a.m. at
the corporate headquarters at 5250 South Sixth Street, Springfield, Illinois
62703. The mailing address of UTG's principal executive office is P.O. Box 5147,
Springfield, Illinois 62705.
This proxy statement is being sent to each holder of record of the issued and
outstanding shares of Common Stock of UTG, no par value (the "Common Stock"), as
of the close of business on April 23, 2004, in order to furnish to each
shareholder information relating to the business to be transacted at the
meeting.
This proxy statement and the enclosed proxy are being mailed on or about May 27,
2004 to the shareholders of UTG entitled to notice of and to vote at the
meeting. The Annual Report of UTG for the fiscal year ended December 31, 2003
has been mailed to shareholders under separate cover. UTG will bear the cost of
soliciting proxies from its shareholders. UTG may reimburse brokers and other
persons for their reasonable expenses in forwarding proxy materials to the
beneficial owners of Common Stock. Solicitations may be made by telephone,
telegram or by personal calls, and it is anticipated that such solicitations
will consist primarily of requests to brokerage houses, custodians, nominees,
and fiduciaries to forward the soliciting material to the beneficial owners of
shares held of record by such persons. If necessary, officers and regular
employees of UTG may by telephone, telegram or personal interview request the
return of proxies.
VOTING
The enclosed proxy is solicited by and on behalf of the Board of Directors of
UTG. If you are unable to attend the meeting on Wednesday, June 16, 2004, please
complete the enclosed proxy and return it to us in the accompanying envelope so
that your shares will be represented and voted at the meeting.
When the enclosed proxy is duly executed and returned in advance of the meeting,
and is not revoked, the shares represented thereby will be voted in accordance
with the authority contained therein. Any shareholder giving a proxy may revoke
it at any time before it is voted by delivering to the Secretary of UTG a
written notice of revocation or a duly executed proxy bearing a later date, or
by attending the meeting and voting his or her shares in person. If a proxy
fails to specify how it is to be voted, it will be voted "FOR" the election of
the directors.
Inspectors of election will be appointed to tabulate the number of shares of
Common Stock represented at the meeting in person or by proxy, to determine
whether or not a quorum is present and to count all votes cast at the meeting.
The holders of a majority of the outstanding shares of Common Stock as of the
record date must be represented at the meeting in person or by proxy in order
for a quorum to be present at the meeting. The inspectors of election will treat
abstentions and broker non-votes as shares that are present and entitled to vote
for purposes of determining the presence of a quorum. Abstentions and broker
non-votes will have no effect on the election of directors but will have the
effect of a vote against any other matter submitted to a vote at the meeting.
With respect to the election of directors, the affirmative vote of a plurality
of the votes duly cast is required for the election of directors (that is, the
nominees receiving the greatest number of votes will be elected). There are no
cumulative voting rights with respect to the election of directors. The holders
of Common Stock as of the record date are entitled to one vote per share of
Common Stock with respect to the election of directors and any other matter that
may be submitted to a vote at the meeting. The affirmative vote of the holders
of a majority of the shares of Common Stock represented in person or by proxy at
the annual meeting is required to approve any other matter that may be submitted
to a vote at the meeting, other than the election of directors. Management is
not aware of any matter other than the election of directors to be brought
before the shareholders at the meeting.
The Correll affiliates hold approximately 66% of the outstanding Common Stock
(See "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS") and intend to vote their
shares in favor of the election of directors as further described in proposal 1.
SIGNIFICANT MAJORITY-OWNED SUBSIDIARIES
United Trust Group, Inc. (the "Registrant") was incorporated in 1984, under the
laws of the State of Illinois to serve as an insurance holding company. The
Registrant and its subsidiaries (the "Company") have only one significant
industry segment - insurance. The Company's dominant business is individual life
insurance, which includes the servicing of existing insurance business in force,
the solicitation of new individual life insurance, the acquisition of other
companies in the insurance business, and the administration processing of life
insurance business for other entities.
At December 31, 2003, significant majority-owned subsidiaries of UTG were as
depicted on the following organizational chart:
For purposes of this proxy statement, the term "subsidiary life insurance
company" shall mean UG, and the term "non-insurance subsidiary companies" shall
mean the subsidiary companies other than UG.
The companies hereinafter are sometimes collectively referred to as the
"Subsidiary majority owned companies".
This document at times will refer to the Registrant's largest shareholder, Mr.
Jesse T. Correll and certain companies controlled by Mr. Correll. Mr. Correll
holds a majority ownership of First Southern Funding LLC, a Kentucky
corporation, (FSF) and First Southern Bancorp, Inc. (FSBI), a financial services
holding company that owns 100% of First Southern National Bank (FSNB), which
operates out of 14 locations in central Kentucky. Mr. Correll is Chief Executive
Officer and Chairman of the Board of Directors of UTG and is currently UTG's
largest shareholder through his ownership control of FSF, FSBI and affiliates.
At December 31, 2003 Mr. Correll owns or controls directly and indirectly
approximately 66% of UTG's outstanding stock. (See "SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS")
VOTING SECURITIES OUTSTANDING
April 23, 2004 has been fixed as the record date for the determination of
shareholders entitled to notice of and to vote at the annual meeting or any
adjournments or postponements thereof. On that date, UTG had outstanding
3,998,044 shares of Common Stock. No other voting securities of UTG are
outstanding.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following tabulation sets forth the name and address of the persons or
entities known to be the beneficial owners of more than 5% of UTG's outstanding
Common Stock and shows: (i) the total number of shares of Common Stock
beneficially owned by such person as of April 23, 2004 and the nature of such
ownership; and (ii) the percent of the issued and outstanding shares of common
stock so owned as of the same date.
Title Amount Percent
of Name and Address and Nature of of
Class of Beneficial Owner(2) Beneficial Ownership Class (1)
Common Jesse T. Correll 185,454 (3) 4.6%
Stock, no First Southern Bancorp, Inc. 1,739,072 (3)(4) 43.5%
par value First Southern Funding, LLC 335,453 (3)(4) 8.4%
First Southern Holdings, LLC 1,483,791 (3)(4) 37.1%
First Southern Capital Corp., LLC 237,333 (3)(4) 5.9%
First Southern Investments, LLC 24,086 0.6%
Ward F. Correll 98,523 (5) 2.5%
WCorrell, Limited Partnership 72,750 (3) 1.8%
Cumberland Lake Shell, Inc. 98,523 (5) 2.5%
Total(6) 2,619,921 65.5%
(1) The percentage of outstanding shares is based on 3,998,044 shares of Common
Stock outstanding as of April 23, 2004.
(2) The address for each of Jesse Correll, First Southern Bancorp, Inc.
("FSBI"), First Southern Funding, LLC ("FSF"), First Southern Holdings, LLC
("FSH"), First Southern Capital Corp., LLC ("FSC"), First Southern
Investments, LLC ("FSI"), and WCorrell, Limited Partnership ("WCorrell
LP"), is P.O. Box 328, 99 Lancaster Street, Stanford, Kentucky 40484. The
address for each of Ward Correll and Cumberland Lake Shell, Inc. ("CLS") is
P.O. Box 430, 150 Railroad Drive, Somerset, Kentucky 42502.
(3) The share ownership of Jesse Correll listed includes 112,704 shares of
Common Stock owned by him individually. The share ownership of Mr. Correll
also includes 72,750 shares of Common Stock held by WCorrell, Limited
Partnership, a limited partnership in which Jesse Correll serves as
managing general partner and, as such, has sole voting and dispositive
power over the shares held by it.
In addition, by virtue of his ownership of voting securities of FSF and
FSBI, and in turn, their ownership of 100% of the outstanding membership
interests of FSH, Jesse Correll may be deemed to beneficially own the total
number of shares of Common Stock owned by FSH (as well as the shares owned
by FSBI directly), and may be deemed to share with FSH (as well as FSBI)
the right to vote and to dispose of such shares. Mr. Correll owns
approximately 79% of the outstanding membership interests of FSF; he owns
directly approximately 50%, companies he controls own approximately 14%,
and he has the power to vote but does not own an additional 3% of the
outstanding voting stock of FSBI. FSBI and FSF in turn own 99% and 1%,
respectively, of the outstanding membership interests of FSH. Mr. Correll
is also a manager of FSC and thereby may also be deemed to beneficially own
the total number of shares of Common Stock owned by FSC, and may be deemed
to share with it the right to vote and to dispose of such shares. The
aggregate number of shares of Common Stock held by these other entities, as
shown in the above table, is 1,976,405 shares.
(4) The share ownership of FSBI consists of 255,281 shares of Common Stock held
by FSBI directly (which FSBI acquired by virtue of its merger with Dyscim,
LLC) and 1,483,791 shares of Common Stock held by FSH of which FSBI is a
99% member and FSF is a 1% member, as further described below. As a result,
FSBI may be deemed to share the voting and dispositive power over the
shares held by FSH.
(5) Represents the shares of Common Stock held by CLS, all of the outstanding
voting shares of which are owned by Ward F. Correll and his wife. As a
result, Ward F. Correll may be deemed to share the voting and dispositive
power over these shares.
(6) According to the most recent Schedule 13D, as amended, filed jointly by
each of the entities and persons listed above, Jesse Correll, FSBI, FSF,
FSH, FSC, and FSI, have agreed in principle to act together for the purpose
of acquiring or holding equity securities of UTG. In addition, the Schedule
13D indicates that because of their relationships with Jesse Correll and
these other entities, Ward Correll, CLS, and WCorrell, Limited Partnership
may also be deemed to be members of this group. Because the Schedule 13D
indicates that for its purposes, each of these entities and persons may be
deemed to have acquired beneficial ownership of the equity securities of
UTG beneficially owned by the other entities and persons, each has been
identified and listed in the above tabulation.
SECURITY OWNERSHIP OF MANAGEMENT OF UTG
The following tabulation shows with respect to each of the directors of UTG,
with respect to UTG's chief executive officer and each of UTG's executive
officers whose salary plus bonus exceeded $100,000 for fiscal 2003, and with
respect to all executive officers and directors of UTG as a group: (i) the total
number of shares of all classes of stock of UTG or any of its parents or
subsidiaries, beneficially owned as of March 1, 2004 and the nature of such
ownership; and (ii) the percent of the issued and outstanding shares of stock so
owned, and granted stock options available as of the same date.
Title Directors, Named Executive Amount Percent
of Officers, & All Directors & and Nature of of
Class Executive Officers as a Group Ownership Class (1)
UTG's John S. Albin 10,503 (4) *
Common Randall L. Attkisson 0 (2) *
Stock, no Joseph A. Brinck, II 0 *
par value Jesse T. Correll 2,497,312 (3) 62.5%
Ward F. Correll 98,523 (5) 2.5%
Thomas F. Darden 16,780 (6) *
Theodore C. Miller 10,000 (6) *
William W. Perry 20,000 (6) *
James P. Rousey 0 *
All directors and executive officers
as a group (ten in number) 2,653,118 66.4%
(1) The percentage of outstanding shares for UTG is based on 3,998,044 shares
of Common Stock outstanding as of April 23, 2004.
(2) Randall L. Attkisson is an associate and business partner of Mr. Jesse T.
Correll and holds minority ownership positions in certain of the companies
listed as owning UTG Common Stock including First Southern Bancorp, Inc.
Ownership of these shares is reflected in the ownership of Jesse T.
Correll.
(3) The share ownership of Mr. Correll includes 112,704 shares of United Trust
Group common stock owned by him individually, 255,281 shares of United
Trust Group common stock held by First Southern Bancorp, Inc. and 335,453
shares of United Trust Group common stock owned by First Southern Funding,
LLC. The share ownership of Mr. Correll also includes 72,750 shares of
United Trust Group common stock held by WCorrell, Limited Partnership, a
limited partnership in which Mr. Correll serves as managing general partner
and, as such, has sole voting and dispositive power over the shares held by
it. In addition, by virtue of his ownership of voting securities of First
Southern Funding, LLC and First Southern Bancorp, Inc., and in turn, their
ownership of 100% of the outstanding membership interests of First Southern
Holdings, LLC (the holder of 1,483,791 shares of United Trust Group common
stock), Mr. Correll may be deemed to beneficially own the total number of
shares of United Trust Group common stock owned by First Southern Holdings,
and may be deemed to share with First Southern Holdings the right to vote
and to dispose of such shares. Mr. Correll owns approximately 79% of the
outstanding membership interests of First Southern Funding; he owns
directly approximately 50%, companies he controls own approximately 14%,
and he has the power to vote but does not own an additional 3% of the
outstanding voting stock of First Southern Bancorp. First Southern Bancorp
and First Southern Funding in turn own 99% and 1%, respectively, of the
outstanding membership interests of First Southern Holdings. Mr. Correll is
also a manager of First Southern Capital Corp., LLC, and thereby may also
be deemed to beneficially own the 237,333 shares of United Trust Group
common stock held by First Southern Capital, and may be deemed to share
with it the right to vote and to dispose of such shares. Share ownership of
Mr. Correll in United Trust Group common stock does not include 24,086
shares of United Trust Group common stock held by First Southern
Investments, LLC.
(4) Includes 392 shares owned directly by Mr. Albin's spouse.
(5) Cumberland Lake Shell, Inc. owns 98,523 shares of UTG Common Stock, all of
the outstanding voting shares of which are owned by Ward F. Correll and his
wife. As a result Ward F. Correll may be deemed to share the voting and
dispositive power over these shares. Ward F. Correll is the father of Jesse
T. Correll. There are 72,750 shares of UTG Common Stock owned by WCorrell
Limited Partnership in which Jesse T. Correll serves as managing general
partner and, as such, has sole voting and dispositive power over the shares
of Common Stock held by it. The aforementioned 72,750 shares are deemed to
be beneficially owned by and listed under Jesse T. Correll in this section.
(6) Shares subject to UTG Employee and Director Stock Purchase Plan.
* Less than 1%.
Except as indicated above, the foregoing persons hold sole voting and investment
power.
The following tabulation shows with respect to each individual identified above
under security ownership of management the ownership held in First Southern
Bancorp, Inc. ("FSBI"), an affiliate entity of UTG.
Title Amount Percent
of Director or and Nature of of
Class Executive Officer of UTG Ownership Class (1)
FSBI's Randall L. Attkisson 7,453 (4) 5.9%
Common Jesse T. Correll 102,101 (2)(3) 70.9%
Stock Ward F. Correll 24,184 (3)(5) 18.4%
James P. Rousey 2,159 (6) 1.7%
(1) The percentage of outstanding shares for FSBI is based on 125,393 shares
outstanding as of March 31, 2004, including outstanding options.
(2) Includes 17,611 shares owned by the WCorrell, Limited Partnership, of which
Mr. Jesse Correll is the managing general partner, 3,461 shares which Mr.
Jesse Correll has the power to vote and as to which Mr. Jesse Correll
disclaims beneficial ownership. Also includes options to purchase 12,621
shares that can be exercised at any time by Mr. Jesse Correll.
(3) Includes options to purchase 5,981 shares that can be exercised at any time
by either Jesse Correll, Ward Correll or the WCorrell, Limited Partnership.
(4) Includes 3,557 shares owned by Mr. Attkisson's spouse and options to
purchase 757 shares that can be exercised at any time by Mr. Attkisson.
(5) Includes 17,611 shares owned by the WCorrell, Limited Partnership and 592
shares owned by Cumberland Lake Shell, Inc.
(6) Includes 99 shares owned by Mr. Rousey's spouse and options to purchase
1,329 shares that can be exercised at any time by Mr. Rousey.
The following tabulation shows with respect to each individual identified above
under security ownership of management the ownership held in First Southern
Funding, LLC. ("FSF"), an affiliate entity of UTG.
Title Amount Percent
of Director or and Nature of of
Class Executive Officer of UTG Ownership Class (1)
FSF's Randall L. Attkisson 44.75 4.5%
Common Jesse T. Correll 784.87 79.3%
Stock
The percentage of outstanding units for FSF is based on 989.49 units outstanding
as of March 31, 2004.
THE BOARD OF DIRECTORS
In accordance with the laws of Illinois and the Certificate of Incorporation and
Bylaws of UTG, as amended, UTG is managed by its executive officers under the
direction of the Board of Directors. The Board elects executive officers,
evaluates their performance, works with management in establishing business
objectives and considers other fundamental corporate matters, such as the
issuance of stock or other securities, the purchase or sale of a business and
other significant corporate business transactions. In the fiscal year ended
December 31, 2003, the Board met 4 times. All directors attended at least 75% of
all meetings of the board, except Mr. Ward Correll. The Company does not have a
policy regarding Board members' attendance at annual meetings, however all
members are encouraged to attend. Six of the eight Board members were present at
the 2003 Annual Shareholders meeting.
The Board of Directors has an Audit Committee consisting of Messrs. Albin,
Perry, and Brinck. The Audit Committee performs such duties as outlined in the
Company's Audit Committee Charter. The Audit Committee reviews and acts or
reports to the Board with respect to various auditing and accounting matters,
the scope of the audit procedures and the results thereof, internal accounting
and control systems of UTG, the nature of services performed for UTG and the
fees to be paid to the independent auditors, the performance of UTG's
independent and internal auditors and the accounting practices of UTG. The Audit
Committee also recommends to the full Board of Directors the auditors to be
appointed by the Board. The Audit Committee met twice in 2003.
The Board has reviewed the qualifications of each member of the audit committee
and determined no member of the committee meets the definition of a "financial
expert". The Board concluded however, that each member of the committee has a
proven track record as a successful businessman, each operating their own
company and their experience as businessmen provide a knowledge base and
experience adequate for participation as a member of the committee.
The compensation of UTG's executive officers is determined by the full Board of
Directors (see report on Executive Compensation).
The Board of Directors does not have a formal nominating committee, or a
committee that performs similar functions. The Board has concluded that the
nominating process should not be limited to certain members and a comprehensive
selection of candidates can be considered. Therefore, the nomination process is
conducted by the full Board of Directors. Shareholders wishing to recommend
candidates for Board membership should submit the recommendations in writing to
the Secretary of the Company at least 90 days prior to a date corresponding to
the previous year's Annual Meeting, with the submitting shareholder's name and
address and pertinent information about the proposed nominee similar to that set
forth for nominees named herein. Proposed nominees will be considered in light
of their potential contributions to the Board, their backgrounds, their
independence and such other factors as the Board considers appropriate.
Under UTG's By-Laws, the Board of Directors should be comprised of at least six
and no more than eleven directors. At December 31, 2003. the Board consisted of
eight directors. Shareholders elect Directors to serve for a period of one year
at UTG's Annual Shareholders' meeting.
Directors and officers of UTG file periodic reports regarding ownership of
Company securities with the Securities and Exchange Commission pursuant to
Section 16(a) of the Securities Exchange Act of 1934 as amended, and the rules
promulgated thereunder. During 2003, UTG was aware of the following individual
who filed a late Form 3, initial statement of beneficial ownership of
securities, with the Securities and Exchange Commission; Daniel S. Maloney,
employee. This individual reported no stock ownership of UTG at the time of the
filing of the Form 3. SEC filings may be viewed from the Company's Web site
www.unitedtrustgroup.com.
The Board of Directors has provided a process for shareholders to send
communications directly to the board. These communications can be sent to James
Rousey, Executive Vice President, Chief Administrative Officer and Director of
UTG at the corporate headquarters at 5250 South Sixth Street, Springfield, IL
62703
AUDIT COMMITTEE REPORT TO SHAREHOLDERS
In connection with the December 31, 2003 financial statements, the audit
committee: (1) reviewed and discussed the audited financial statements with
management; (2) discussed with the auditors the matters required by Statement on
Auditing Standards No. 61; and (3) received and discussed with the auditors the
matters required by Independence Standards Board Statement No.1. Based upon
these reviews and discussions, the audit committee recommended to the Board of
Directors that the audited financial statements be included in the Annual Report
on Form 10-K filed with the SEC.
John S. Albin - Committee Chairman
William W. Perry
Joseph A. Brinck, II
PROPOSAL ONE
ELECTION OF DIRECTORS
At the annual meeting of shareholders of UTG, eight directors are to be elected,
each director to hold office until the next annual meeting and until his
successor is elected and qualified. Each nominee will be elected director by the
affirmative vote of a plurality of the votes duly cast for such nominee. The
persons named in the proxy intend to vote the proxies as instructed in the
proxies. If no instructions are given in a particular proxy, the persons named
in the proxy intend to vote the proxy for the nominees listed below. Should any
of the nominees listed below become unable or unwilling to accept nomination or
election, it is intended, in the absence of contrary specifications, that the
proxies will be voted for the balance of those named and for a substituted
nominee or nominees; however, the management of UTG currently knows of no reason
to anticipate such an occurrence. All of the nominees have consented to be named
as nominees and to serve as directors if elected. Information with respect to
business experience of the Board of Directors has been furnished by the
respective directors or obtained from the records of UTG. The following
individuals are nominees for the election of directors:
Name, Age
Position with the Company, Business Experience and Other
Directorships
John S. Albin, 75
Director of UTG since 1984; farmer in Douglas and Edgar counties,
Illinois, since 1951; Chairman of the Board of Longview State
Bank since 1978; President of the Longview Capitol Corporation, a
bank holding company, since 1978; Chairman of First National Bank
of Ogden, Illinois, since 1987; Chairman of the State Bank of
Chrisman since 1988; Director and Secretary of Illini Community
Development Corporation since 1990; Commissioner of Illinois
Student Assistance Commission from 1996 to 2002.
Randall L. Attkisson 58
Director of UTG since 1999; President and Chief Operating Officer
of UTG since 2001; Chief Financial Officer, Treasurer, Director
of First Southern Bancorp, Inc, a bank holding company, since
1986; Treasurer, Director of First Southern Funding, LLC since
1992; Director of Kentucky Christian Foundation since 2002;
Director of The River Foundation, Inc. since 1990; President of
Randall L. Attkisson & Associates from 1982 to 1986; Commissioner
of Kentucky Department of Banking & Securities from 1980 to 1982;
Self-employed Banking Consultant in Miami, FL from 1978 to 1980.
Joseph A. Brinck, II, 48
Director, elected in 2003; CEO of Stelter & Brinck, LTD, a full
service combustion engineering and manufacturing company from
1979 to present; President of Superior Thermal, LTD from 1990 to
present. Currently hold Professional Engineering Licenses in
Ohio, Kentucky, Indiana and Illinois.
Jesse T. Correll 47
Chairman and CEO of UTG since 2000; Director of UTG since 1999;
Chairman, President, Director of First Southern Bancorp, Inc.
since 1983; President, Director of First Southern Funding, LLC
since 1992; President, Director of The River Foundation since
1990; Director of Thomas Nelson, Inc., a premier publisher of
Bibles and Christian Books since 2001; Director of Computer
Services, Inc., provider of bank technology products and services
since 2001; Director of Global Focus since 2001; Young Life
Dominican Republic Committee Member since 2000. Jesse Correll is
the son of Ward Correll.
Ward F. Correll 75
Director of UTG since 2000; President, Director of Tradeway, Inc.
of Somerset, KY since 1973; President, Director of Cumberland
Lake Shell, Inc. of Somerset, KY since 1971; President, Director
of Tradewind Shopping Center, Inc. of Somerset, KY since 1966;
Director of First Southern Bancorp since 1988; Director of First
Southern Funding, LLC since 1991; Director of The River
Foundation since 1990; and Director First Southern Insurance
Agency since 1987. Ward Correll is the father of Jesse Correll.
Thomas F. Darden 49
Director of UTG since 2001; Managing Partner of Cherokee
Investment Partners LLC, a real estate investment firm, formerly
President and CEO of Cherokee Sanford Group, Inc. an affiliated
predecessor since 1983; Director of Winston Hotels, Inc. since
1994; Trustee of Shaw University since 1993; Member of the Board
of Governors of Research Triangle Institute since 1998; Former
Chairman of the Triangle Transit Authority, serving from 1993 to
1998 and Chairman from 1996 to 1997; Prior to 1996, twice
appointed to the North Carolina Board of Transportation.
William W. Perry 47
Director of UTG since 2001; Owner of SES Investments, Ltd., an
oil and gas investments company since 1991; President of EGL
Resources, Inc., an oil and gas operations company based in Texas
and New Mexico since 1992; President of a real estate investment
company; Chairman of Perry & Perry, Inc., a Texas oil and gas
consulting company since 1977; Director of Young Life Foundation
and involved with Young Life in various capacities; Director of
Abel-Hangar Foundation, Director of University of Oklahoma
Associates; Midland, Texas city council member since 2002
James P. Rousey 45
Executive Vice President, Chief Administrative Officer and
Director of UTG since September 2001; Regional CEO and Director
of First Southern National Bank from 1988 to 2001. Board Member
with the Illinois Fellowship of Christian Athletes since 2001.
The Board of Directors recommends that shareholders vote "FOR" the election of
the director nominees listed above.
EXECUTIVE OFFICERS OF UTG
More detailed information on the following executive officers of UTG appears
under "Directors":
Jesse T. Correll Chairman of the Board and Chief Executive Officer
Randall L. Attkisson President and Chief Operating Officer
James P. Rousey Executive Vice President and Chief Administrative Officer
Other executive officers of UTG are set forth below:
Name, Age
Position with UTG and, Business Experience
Theodore C. Miller 41
Corporate Secretary since December 2000, Senior Vice
President and Chief Financial Officer since July 1997; Vice
President since October 1992 and Treasurer from October 1992
to December 2003; Vice President and Controller of certain
affiliated companies from 1984 to 1992. Vice President and
Treasurer of certain affiliated companies from 1992 to 1997;
Senior Vice President and Chief Financial Officer of
subsidiary companies since 1997; Corporate Secretary of
subsidiary companies since 2000.
EXECUTIVE COMPENSATION
The following table sets forth certain information regarding compensation paid
to or earned by UTG's Chief Executive Officer and each of the executive officers
of UTG whose salary plus bonus exceeded $100,000 during UTG's last fiscal year:
SUMMARY COMPENSATION TABLE
Name and Annual Compensation Other Annual All Other (1)
Principal Position Year Salary ($) Bonus ($) Compensation ($) Compensation ($)
($)
Jesse T. Correll (2) 2003 75,000 - - 4,500
Chairman of the Board
Chief Executive Officer
2002 75,000 - - 4,500
2001 56,250 - - -
Randall L. Attkisson 2003 75,000 - - 4,500
President
2002 75,000 - - 4,500
2001 56,250 - - -
Theodore C. Miller (1) 2003 100,000 3,000 - 3,000
Corporate Secretary
Senior Vice President
Chief Financial Officer
2002 100,000 - - 3,000
2001 100,000 5,000 - 3,000
James P. Rousey (3) 2003 135,000 - - 2,025
Executive Vice President
Chief Administrative Officer
2002 135,000 10,000 - 2,025
2001 50,625 - - -
Douglas A Dockter (1) 2003 99,583 4,000 - 2,689
Vice President
2002 95,000 - - 2,316
2001 95,000 2,000 - 2,280
(1) All Other Compensation consists of UTG's matching contribution to the
Employee Savings Trust 401(k) Plan.
(2) On March 27, 2000, Mr. Jesse T. Correll assumed the position as Chairman of
the Board and Chief Executive Officer of UTG and each of its affiliates. In
March 2001, the Board of Directors approved an annual salary for Mr.
Correll of $75,000, with payments to begin on April 1, 2001.
(3) Mr. James P. Rousey became an officer and employee of UTG and its
subsidiaries effective August 16, 2001.
(4) Mr. Douglas A. Dockter is not considered an executive officer of UTG, but
is included in this table pursuant to compensation disclosure requirements.
Option/SAR Grants/Aggregated Option/SAR Exercises in Last Fiscal Year and FY-End
Option/SAR Values
At December 31, 2003 there were no shares of the common stock of UTG subject to
unexercised options held by the named executive officers. There were no options
or stock appreciation rights granted to the named executive officers for the
past three fiscal years.
Compensation of Directors
UTG's standard arrangement for the compensation of directors provides that each
director shall receive an annual retainer of $2,400, plus $300 for each meeting
attended and reimbursement for reasonable travel expenses. UTG's director
compensation policy also provides that directors who are employees of UTG do not
receive any compensation for their services as directors except for
reimbursement for reasonable travel expenses for attending each meeting.
Employment Contracts
There are no employment agreements in effect with any executive officers of the
Company.
REPORT ON EXECUTIVE COMPENSATION
Introduction
The compensation of UTG's executive officers is determined by the full Board of
Directors. The Board of Directors strongly believes that UTG's executive
officers directly impact the short-term and long-term performance of UTG. With
this belief and the corresponding objective of making decisions that are in the
best interest of UTG's shareholders, the Board of Directors places significant
emphasis on the design and administration of UTG's executive compensation plans.
Executive Compensation Plan Elements
Base Salary. The Board of Directors establishes base salaries at a level
intended to be within the competitive market range of comparable companies. In
addition to the competitive market range, many factors are considered in
determining base salaries, including the responsibilities assumed by the
executive, the scope of the executive's position, experience, length of service,
individual performance and internal equity considerations. In addition to a base
salary, increased compensation of current and future executive officers of the
Company will be determined using a "performance based" philosophy. UTG's
financial results are analyzed and future increases to compensation will be
proportionately based on the profitability of the Company.
Stock Options. Stock options are granted at the discretion of the Board of
Directors. There were no options granted to the named executive officers during
the last three fiscal years.
Deferred Compensation. There are currently no deferred compensation arrangements
with any executive officers or employees of the Company.
Stock Purchase Program.
On March 26, 2002, the Board of Directors of UTG adopted, and on June 11, 2002,
the shareholders of UTG approved, the United Trust Group, Inc. Employee and
Director Stock Purchase Plan. The plan's purpose is to encourage ownership of
UTG stock by eligible directors and employees of UTG and its subsidiaries by
providing them with an opportunity to invest in shares of UTG common stock. The
plan is administered by the Board of Directors of UTG. A total of 400,000 shares
of common stock may be purchased under the plan, subject to appropriate
adjustment for stock dividends, stock splits or similar recapitalizations
resulting in a change in shares of UTG. The plan is not intended to qualify as
an "employee stock purchase plan" under Section 423 of the Internal Revenue
Code.
During 2003 and 2002, the Board of Directors of UTG approved offerings under the
plan to qualified individuals. For the years ended December 31, 2003 and 2002,
eight individuals purchased 58,891 and three individuals purchased 16,546 shares
of UTG common stock, respectively. Each participant under the plan executed a
"stock restriction and buy-sell agreement", which among other things provides
UTG with a right of first refusal on any future sales of the shares acquired by
the participant under this plan.
The purchase price of shares repurchased under the stock restriction and
buy-sell agreement shall be computed, on a per share basis, equal to the sum of
(i) the original purchase price paid to acquire such shares from UTG and (ii)
the consolidated statutory net earnings (loss) per share of such shares during
the period from the end of the month next preceding the month in which such
shares were acquired pursuant to the plan, to the end of the month next
preceding the month in which the sale of such shares to UTG occurs. At
December 31, 2003, shares issued under this program with a value of $ 11.63 per
share pursuant to the above formula.
Chief Executive Officer
On March 27, 2000, Mr. Jesse T. Correll assumed the position of Chairman of the
Board and Chief Executive Officer of UTG and each of its affiliates. Under Mr.
Correll's leadership, he declined to receive a salary, bonus or other forms of
compensation for his duties with UTG and each of its affiliates in the year
2000. In March 2001, the Board of Directors approved an annual salary for Mr.
Correll of $75,000, payment of which began on April 1, 2001. As a reflection of
Mr. Correll's leadership, the compensation of current and future executive
officers of the Company will be determined by the Board of Directors using a
"performance based" philosophy. The Board of Directors will consider UTG's
financial results and future compensation decisions will be proportionately
based on the profitability of the Company.
Conclusion
The Board of Directors believes this Executive Compensation Plan provides a
competitive and motivational compensation package to the executive officer team
necessary to produce the results UTG strives to achieve. The Board of Directors
also believes the Executive Compensation Plan addresses both the interests of
the shareholders and the executive team.
BOARD OF DIRECTORS
John S. Albin Ward F. Correll
Randall L. Attkisson Thomas F. Darden
Joseph A. Brinck, II William W. Perry
Jesse T. Correll James P. Rousey
PERFORMANCE GRAPH
The following graph compares the cumulative total shareholder return on UTG's
Common Stock during the five fiscal years ended December 31, 2003 with the
cumulative total return on the NASDAQ Composite Index Performance and the NASDAQ
Insurance Stock Index (1). The graph assumes that $100 was invested on December
31, 1998 in each of the Company's common stock, the NASDAQ Composite Index, and
the NASDAQ Insurance Stock Index, and that any dividends were reinvested.
(1) UTG selected the NASDAQ Composite Index Performance as an appropriate
comparison since during the time period reflected, UTG's Common Stock was
traded on the NASDAQ Small Cap exchange under the sign "UTGI" until
December 31, 2001. Furthermore, UTG selected the NASDAQ Insurance Stock
Index as the second comparison because there is no similar single "peer
company" in the NASDAQ system with which to compare stock performance and
the closest additional line-of-business index which could be found was the
NASDAQ Insurance Stock Index. Trading activity in UTG's Common Stock is
limited, which may be due in part as a result of UTG's low profile. The
Return Chart is not intended to forecast or be indicative of possible
future performance of UTG's stock.
The foregoing graph shall not be deemed to be incorporated by reference into any
filing of UTG under the Securities Act of 1933 or the Securities Exchange Act of
1934, except to the extent that UTG specifically incorporates such information
by reference.
Compensation Committee Interlocks and Insider Participation and Related Party
Transactions
UTG does not have a compensation committee and decisions regarding executive
officer compensation are made by the full Board of Directors of UTG. The
following persons served as directors of UTG during 2003 and were officers or
employees of UTG or its affiliates during 2003: Jesse T. Correll, Randall L.
Attkisson and James P. Rousey. Accordingly, these individuals have participated
in decisions related to compensation of executive officers of UTG and its
subsidiaries.
During 2003, Jesse T. Correll and Randall L. Attkisson, executive officers of
UTG, and the insurance subsidiaries, were also members of the Board of Directors
of the insurance subsidiaries. During 2003, James P. Rousey and Theodore C.
Miller, executive officers of UTG and the insurance subsidiaries, were also
members of the Board of Directors of ABE.
Jesse T. Correll and Randall L. Attkisson are each directors and executive
officers of FSBI and participate in compensation decisions of FSBI. FSBI owns or
controls directly and indirectly approximately 43.5% of the outstanding common
stock of UTG.
Other Related Party Transactions
On February 20, 2003, UG purchased $ 4,000,000 of a trust preferred security
offering issued by FSBI. The security has a mandatory redemption after 30 years
with a call provision after 5 years. The security pays a quarterly dividend at a
fixed rate of 6.515%. The Company received $ 226,104 of dividends in 2003.
On June 18, 2003, UG entered into a lease agreement with Bandyco, LLC, an
affiliated entity, for a one-sixth interest in an aircraft. Bandyco, LLC is
affiliated with Ward F. Correll, who is a director of the Company. The lease
term is for a period of five years at a cost of $ 523,831. The Company is
responsible for its share of annual non-operational costs, in addition to the
operational costs as are billable for specific use.
On November 6, 2003, UG purchased real estate at a cost of $ 2,220,256 from an
outside third party through the formation of an LLC in which UG is a two-thirds
owner. The other one-third partner is Millard V. Oakley, who is a former
Director of UTG. Hampshire Plaza Garage is a 578 space parking garage located in
New Hampshire.
On March 26, 2002, the Board of Directors of UTG adopted, and on June 11, 2002,
the shareholders of UTG approved, the United Trust Group, Inc. Employee and
Director Stock Purchase Plan. The plan's purpose is to encourage ownership of
UTG stock by eligible directors and employees of UTG and its subsidiaries by
providing them with an opportunity to invest in shares of UTG common stock. The
plan is administered by the Board of Directors of UTG. A total of 400,000 shares
of common stock may be purchased under the plan, subject to appropriate
adjustment for stock dividends, stock splits or similar recapitalizations
resulting in a change in shares of UTG. The plan is not intended to qualify as
an "employee stock purchase plan" under Section 423 of the Internal Revenue
Code.
During 2003 and 2002, the Board of Directors of UTG approved offerings under the
plan to qualified individuals. For the years ended December 31, 2003 and 2002,
eight individual purchased 58,891 and three individuals purchased 16,546 shares
of UTG common stock, respectively. Each participant under the plan executed a
"stock restriction and buy-sell agreement", which among other things provides
UTG with a right of first refusal on any future sales of the shares acquired by
the participant under this plan.
The purchase price of shares repurchased under the stock restriction and
buy-sell agreement shall be computed, on a per share basis, equal to the sum of
(i) the original purchase price paid to acquire such shares from UTG and (ii)
the consolidated statutory net earnings (loss) per share of such shares during
the period from the end of the month next preceding the month in which such
shares were acquired pursuant to the plan, to the end of the month next
preceding the month in which the sale of such shares to UTG occurs. At
December 31, 2003, UTG had 75,437shares outstanding that were issued under this
program with a value of $ 11.63 per share pursuant to the above formula.
On November 20, 1998, FSF and affiliates acquired 929,904 shares of common stock
of UTG from UTG and certain UTG shareholders. As consideration for the shares,
FSF paid UTG $ 10,999,995 and certain shareholders of UTG $ 999,990 in cash.
Included in the stock acquisition agreement is an earnings covenant whereby UTG
warrants UTG and its subsidiaries and affiliates will have future earnings of at
least $ 30,000,000 for a five-year period beginning January 1, 1998. Such
earnings are computed based on statutory results excluding inter-company
activities such as inter-company dividends plus realized and unrealized gains
and losses on real estate, mortgage loans and unaffiliated common stocks. At the
end of the covenant period, an adjustment is to be made equal to the difference
between the then market value and statutory carrying value of real estate still
owned that existed at the beginning of the covenant period. Should UTG not meet
the covenant requirements, any shortfall will first be reduced by the actual
average tax rate for UTG for the period, and then will be further reduced by
one-half of the percentage, if any, representing UTG's ownership percentage of
the insurance company subsidiaries. This result will then be reduced by
$ 250,000. The remaining amount will be paid by UTG in the form of UTG common
stock valued at $ 15.00 per share with a maximum number of shares to be issued
of 500,000. However, there shall be no limit to the number of shares transferred
to the extent that there are legal fees, settlements, damage payments or other
losses as a result of certain legal action taken. The price and number of shares
shall be adjusted for any applicable stock splits, stock dividends or other
recapitalizations. For the five-year period starting January 1, 1998 and ending
December 31, 2003, the Company had total earnings of $ 17,011,307 applicable to
this covenant. Therefore, UTG did not meet the earnings requirements stipulated,
and during 2003, UTG was required to issue 500,000 additional shares to FSF or
its assigns.
On November 15, 2002, North Plaza acquired 229 acres of timberland from Millard
V. Oakley, a Director of UTG at the time, for a total purchase price of
$ 54,811. The land acquired was adjacent to land already owned by North Plaza.
The purchase price was consistent with other recent similar land acquisitions
made by North Plaza.
On May 21, 2002, at a special meeting of shareholders, the shareholders of FCC,
then an 82% owned subsidiary of UTG, voted on and approved that certain
Agreement and Plan of Reorganization and related Plan of Merger, each dated as
of June 5, 2001, between UTG, and FCC (collectively, the "Merger Agreement"),
and the merger contemplated thereby in which FCC would be merged with and into
UTG, with UTG being the surviving corporation of the merger. The merger became
effective on June 12, 2002. Pursuant to the terms and conditions of the Merger
Agreement, each share of FCC stock outstanding at the effective time of the
merger (other than shares held by UTG or shares held in treasury by FCC or by
any of its subsidiaries) was at such time automatically converted into the right
to receive $ 250 in cash per share ($ 2,480,000 in the aggregate).
At a December 17, 2001 joint meeting of the Board of Directors of UTG, FCC and
their insurance subsidiaries, the Boards of Directors of the insurance
subsidiaries discussed and decided to further explore and pursue a possible sale
of the insurance charters of each of APPL and ABE. In the alternative to a sale
of the APPL charter, the boards also discussed and decided to further explore a
possible merger of APPL into UG. At the September 24, 2002 joint meeting of the
Board of Directors of UTG and its insurance subsidiaries, the Boards of
Directors of UG and ABE each approved the exploration of a merger transaction
whereby ABE would be merged with and into UG.
In preparation for a possible charter sale of APPL, UG and APPL entered into a
100% coinsurance agreement effective October 1, 2002, whereby UG assumed and
APPL ceded all of the existing business of APPL. The coinsurance transaction had
no financial impact on the consolidated financial statements or operating
results of UTG. At the March 2003 Board of Directors meeting, the APPL and UG
Boards reaffirmed the merger of APPL with and into UG and approved the final
merger documents.
Upon receiving the necessary regulatory approvals, the merger of ABE and APPL
with and into UG was consummated effective July 1, 2003. ABE and APPL were each
100% owned subsidiaries of UG prior to the merger. Management of the Company
believes the completion of the mergers will provide the Company with additional
cost savings. These cost savings result from streamlining the Company's
operations and organizational structure from three life insurance subsidiaries
to one life insurance subsidiary, UG. Thus, the Company will further improve
administrative efficiency.
On September 27, 2001, UG purchased real estate at a cost of $ 6,333,336 from an
outside third party through the formation of an LLC in which UG is a two-thirds
owner. The other one-third partner is Millard V. Oakley, who at the time was a
Director of UTG. Mr. Oakley resigned from the Board effective March 14, 2003.
Hampshire Plaza consists of a 254,000 square foot office tower, an attached
72,000 square foot retail plaza, and an attached parking garage with
approximately 350 parking spaces located in New Hampshire.
On November 15, 2001, UTG was extended a $ 3,300,000 line of credit from the
First National Bank of the Cumberlands located in Livingston, Tennessee. The
First National Bank of the Cumberlands is owned by Millard V. Oakley, who at the
time was a Director of UTG. The original line of credit expired one year from
the date of issue and has been renewed annually for additional one-year terms.
The line of credit is available for general business uses. The interest rate
provided for in the agreement is variable and indexed to be the lowest of the
U.S. prime rates as published in the money section of the Wall Street Journal,
with any interest rate adjustments to be made monthly. During 2002, the Company
borrowed a total of $ 1,600,000 under this line of credit and incurred interest
expense of $ 17,419. All funds drawn were repaid prior to December 31, 2002. No
borrowings were incurred during 2003.
On April 12, 2001, UTG completed the purchase of 22,500 shares of UTG common
stock and 544 shares of FCC common stock from James E. Melville and family
pursuant to the Melville Purchase Agreement in exchange for five year promissory
notes of UTG in the aggregate principal amount of $ 288,800. On April 12, 2001,
UTG also completed the purchase from another family member of Mr. Melville of an
additional 100 shares of UTG for a total cash payment of $ 800. The purchase for
cash by UTG of an additional 39 shares of FCC common stock owned by Mr. Melville
at a purchase price of $ 200.00 per share was consummated on June 27, 2001. Mr.
Melville was a former Director of UTG, FCC and the three insurance subsidiaries
of UTG; he resigned from those boards on February 13, 2001.
On April 12, 2001, UTG also completed the purchase of 559,440 shares of UTG
common stock from Larry E. Ryherd and family pursuant to the Ryherd Purchase
Agreement for cash payments totaling $ 948,026 and a five year promissory note
of UTG in the principal amount of $ 3,527,494. The purchase by UTG of the
remaining 3,775 shares of UTG common stock to be purchased for cash at $ 8.00
per share pursuant to the Ryherd Purchase Agreement along with an additional 570
shares from certain parties to the Ryherd Purchase Agreement was completed on
June 20, 2001. The promissory notes of UTG received by certain of the sellers
pursuant to the Melville Purchase Agreement and the Ryherd Purchase Agreement
bear interest at a rate of 7% per annum (paid quarterly) with payments of
principal to be made in five equal annual installments, the first such payment
of principal to be due on the first anniversary of the closing.
On April 12, 2001, UTG also purchased in a separate transaction 10,891 shares of
UTG common stock from Robert E. Cook, at a price of $ 8.00 per share. At the
closing, Mr. Cook received $ 17,426 in cash and a five year promissory note of
UTG (substantially similar to the promissory notes issued pursuant to the
Melville and Ryherd Purchase Agreements described above) in the principal amount
of $ 69,702. Mr. Cook was a Director of UTG and FCC who resigned his position on
January 8, 2001. Mr. Cook proposed the stock purchase to Jesse T. Correll who
agreed to purchase Mr. Cook's stock on substantially the same terms as the
purchases of the stock held by Messrs. Melville and Ryherd as described above.
During 2001, FCC paid a majority of the general operating expenses of the
affiliated group. FCC then received management, service fees and reimbursements
from the various affiliates. Beginning in January 2002, and in anticipation of
the merger of FCC, UTG began paying a majority of the general operating expenses
of the affiliated group. Following the FCC merger in June 2002, UTG also assumed
the rights and obligations of the management and service fees agreements with
the various affiliates originally held by FCC.
UTG paid FCC $ 0 and $ 550,000 in 2002 and 2001, respectively for reimbursement
of costs attributed to UTG. During 2002 through the date of the FCC merger, FCC
paid $ 3,200,000 to UTG for reimbursement of costs attributed to FCC and
affiliates under which FCC had management and cost sharing services
arrangements.
On January 1, 1993, FCC entered an agreement with UG pursuant to which FCC
provided management services necessary for UG to carry on its business. UG paid
$ 2,974,088 and $ 6,156,903 to FCC in 2002 and 2001, respectively. UG paid
$ 5,906,406 and $ 3,025,194 to UTG in 2003 and 2002, respectively, under this
arrangement.
ABE paid fees to FCC pursuant to a cost sharing and management fee agreement.
FCC provided management services for ABE to carry on its business. The agreement
required ABE to pay a percentage of the actual expenses incurred by FCC based on
certain activity indicators of ABE business to the business of all the insurance
company subsidiaries plus a management fee based on a percentage of the actual
expenses allocated to ABE. ABE paid fees of $ 188,494 and $332,673 in 2002 and
2001, respectively under this agreement. ABE paid fees of $ 165,269 and
$ 170,729 in 2003 and 2002, respectively, to UTG under this agreement.
APPL had a management fee agreement with FCC whereby FCC provided certain
administrative duties, primarily data processing and investment advice. APPL
paid fees of $ 222,000 and $ 444,000 during 2002 and 2001, respectively under
this agreement. APPL paid fees of $ 222,000 and $ 222,000 to UTG during 2003 and
2002, respectively, under this agreement.
Respective domiciliary insurance departments have approved the agreements of the
insurance companies and it is Management's opinion that where applicable, costs
have been allocated fairly and such allocations are based upon accounting
principles generally accepted in the United States of America.
Since the Company's affiliation with FSF, UG has acquired mortgage loans through
participation agreements with FSNB. FSNB services the loans covered by these
participation agreements. UG pays a .25% servicing fee on these loans and a
one-time fee at loan origination of .50% of the original loan amount to cover
costs incurred by FSNB relating to the processing and establishment of the loan.
UG paid $ 63,214, $ 70,140 and $ 79,730 in servicing fees and $ 13,821, $ 35,127
and $ 22,626 in origination fees to FSNB during 2003, 2002 and 2001,
respectively.
The Company reimbursed expenses incurred by Mr. Jesse T. Correll and Mr. Randall
L. Attkisson relating to travel and other costs incurred on behalf of or
relating to the Company. The Company paid $ 20,238, $ 74,621 and $ 145,407 in
2003, 2002 and 2001, respectively to First Southern Bancorp, Inc. in
reimbursement of such costs. In addition, beginning in 2001, the Company began
reimbursing FSBI a portion of salaries for Mr. Correll and Mr. Attkisson. The
reimbursement was approved by the UTG Board of Directors and totaled $ 151,440,
$ 169,651 and $ 128,411 in 2003, 2002 and 2001, respectively, which included
salaries and other benefits.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
Kerber, Eck and Braeckel LLP ("KEB") served as UTG's independent certified
public accounting firm for the fiscal year ended December 31, 2003 and for
fiscal year ended December 31, 2002. In serving its primary function as outside
auditor for UTG, KEB performed the following audit services: examination of
annual consolidated financial statements; assistance and consultation on reports
filed with the Securities and Exchange Commission; and assistance and
consultation on separate financial reports filed with the State insurance
regulatory authorities pursuant to certain statutory requirements.
Audit Fees. Audit fees billed for these audit services in the fiscal year
ended Company's financial statements totaled $ 13,909 and $ 15,595 for the year
2003 and 2002, respectively.
Audit Related Fees. No audit related fees were incurred by the Company from
KEB for the fiscal years ended December 31, 2003 and December 31, 2002.
Tax Fees. KEB did not render any services related to tax compliance, tax
advice or tax planning for the fiscal years ended December 31, 2003 and December
31, 2002.
All Other Fees. No other services besides the audit services described
above were performed by, and therefore no other fees were billed by, KEB for
services in the fiscal years ended December 31, 2003 and December 31, 2002.
The audit committee of the Company appoints the independent certified public
accounting firm, with the appointment approved by the entire Board of Directors.
Non-audit related services to be performed by the firm are to be approved by the
audit committee prior to engagement. The Company had no non-audit related
services performed by KEB for the fiscal years ended December 31, 2003 and
December 31, 2002.
SUBMISSION OF SHAREHOLDER PROPOSALS FOR 2005 ANNUAL MEETING
In order for a proposal by a shareholder to be included in UTG's proxy statement
and form of proxy for the 2005 Annual Meeting of Shareholders, the proposal must
be received by UTG at its principal office on or before January 23, 2005.
Shareholder proposals submitted after April 8, 2005, will be considered
untimely, and the proxy solicited by UTG for next year's annual meeting may
confer discretionary authority to vote on any such matters without a description
of them in the proxy statement for that meeting.
OTHER MATTERS TO COME BEFORE THE MEETING
The management does not intend to bring any other business before the meeting of
UTG's shareholders and has no reason to believe that any will be presented to
the meeting. If, however, any other business should properly be presented to the
meeting, the proxies named in the enclosed form of proxy will vote the proxies
in accordance with their best judgement.
MULTIPLE STOCKHOLDERS SHARING THE SAME ADDRESS
In late 2000, the Securities and Exchange Commission adopted new rules that
permit companies and intermediaries (e.g., brokers) to satisfy the delivery
requirements for proxy statements with respect to two or more stockholders
sharing the same address by delivering a single proxy statement addressed to
those stockholders. This process allows for extra convenience for stockholders
and potential costs savings for companies.
This year, one or more brokers with accountholders who are UTG shareholders may
send a single proxy statement addressed to two or more shareholders sharing the
same address. In those cases, a single proxy statement and Annual Report will be
delivered to multiple stockholders sharing an address unless contrary
instructions have been received from the affected stockholder. Once you have
received notice from your broker that they will be sending communications to
your address in this way, they will continue this practice until you are
notified otherwise or until you revoke your consent. If, at any time, you no
longer wish to receive proxy materials and communications in this way and would
prefer to receive a separate proxy statement, please notify your broker or
direct your written request to United Trust Group, Inc., Theodore C. Miller,
Secretary, 5250 South Sixth Street, P.O. Box 5147, Springfield, Illinois,
62705-5147, or contact Mr. Miller at 217-241-6300. UTG will deliver promptly,
upon written or oral request in the manner provided above, a separate copy of
the proxy statement and Annual Report for the fiscal year ended December 31,
2003 to a shareholder at a shared address to which a single copy was delivered.
If your broker is not currently delivering a single proxy statement addressed to
two or more shareholders sharing the same address (i.e., you received multiple
copies of this proxy statement), and you would like to request delivery of a
single copy, you should contact your broker.
AVAILABILITY OF ANNUAL REPORT ON FORM 10-K
UTG has filed its Annual Report for the year ended December 31, 2003 on Form
10-K with the Securities and Exchange Commission. A copy of the report,
including any financial statements and financial statement schedules, may be
obtained without charge by any shareholder. Requests for copies of the report
should be sent to Theodore C. Miller, Secretary, United Trust Group, Inc., P.O.
Box 5147, Springfield, Illinois, 62705-5147.
BY ORDER OF THE BOARD OF DIRECTORS
UNITED TRUST GROUP, INC.
Theodore C. Miller, Secretary
Dated: May 27, 2004
Dear Shareholders:
The 2004 Annual Meeting of Shareholders of United Trust Group, Inc. will be
held at the corporate headquarters, 5250 South Sixth Street, Springfield,
Illinois 62703, on Wednesday June 16, 2004, at 10:00 a.m. At the meeting,
shareholders will act to elect eight directors and to vote upon such other
business as may properly be brought before the meeting.
Your vote is important. Whether or not you plan to attend the meeting,
please review the enclosed proxy statement, complete the proxy form below
and return it promptly in the envelope provided.
It is important to keep your stock portfolio current. Registrations should
be kept up-to-date. Remember to notify the Company of a change in address.
Our stock transfer department is available to assist you with these and
other shareholder questions.
Sincerely,
Theodore C. Miller
Corporate Secretary
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PROXY FORM UNITED TRUST GROUP, INC. PROXY FORM
Annual Meeting of Shareholders - To be Held June 16, 2004
THE BOARD OF DIRECTORS SOLICITS THIS PROXY
The undersigned hereby appoints Jesse T. Correll and Randall L. Attkisson, or
either of them, the attorneys and proxies with full power of substitution and
revocation to represent and to vote, as designated below, all the shares of
common stock of the Company held of record by the undersigned on April 23, 2004,
at the annual meeting of shareholders to be held at the corporate headquarters,
5250 South Sixth Street, Springfield, Illinois 62703, on Wednesday June 16, 2004
at 10:00 a.m., or any adjournment thereof.
This proxy when properly executed will be voted in the manner directed herein by
the undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR ALL PROPOSALS PRESENTED.
Please sign exactly as your name appears on the form and date and mail the proxy
promptly. When signing as an attorney, executor, administrator, trustee or
guardian, please give your full title as such. If shares are held jointly, both
owners must sign. If a corporation, please sign in full corporate name by
President and other authorized officer. If a partnership, please sign in
partnership name by authorized person.
Continued and to be voted and signed on reverse.
Our Stock Transfer Department is available to assist you with changes or
questions concerning your account.
Lost Certificate - Notification of a lost stock certificate must be made in
writing.
Address - Notification of shareholder address changes must be made in writing.
If your address has changed or should change in the future, please give us
your new address below.
Your
(Old Address) - Street
City State Zip
(New Address) - Street
City State Zip
Date new address in effect Signature
Registration - A change in certification registration is needed because of:
Marriage Divorce
Death of a tenant Establishment of a trust
Remove custodian Other - Explain
For instructions about your specific situation, contact our Stock Transfer
Department by phone at (217) 241-6410, by writing to United Trust Group, Inc.,
Attn: Stock Transfer Department, P.O. Box 5147, Springfield, IL 62705-5147 or
through our website at www.unitedtrustgroup.com.
Signature
Date
Acct#
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Withhold For All
For Authority Except
*
1. To elect all Director Nominees to serve on the Board of Directors. The
nominees are: John S. Albin, Randall L. Attkisson, Joseph A. Brinck, II,
Jesse T. Correll, Ward F. Correll, Thomas F. Darden II, William W. Perry,
James P. Rousey.
*Exceptions: To vote for all director nominees, mark the "For" box. To
withhold voting for all nominees, mark the "Withhold Authority" box. To
withhold voting for a particular nominee, mark the "For All Except" box and
enter name(s) of the exception(s) in the space provided. Your shares will
be voted for the remaining nominees.
2. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournment
thereof.
Signature Date
Signature Date
