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. ____)
Filed by the Registrant |X| Filed by a Party other than the Registrant |_|
Check the appropriate box:
|_| Preliminary Proxy Statement
|_| Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant toss.240.14a-12
UNITED TRUST GROUP, INC
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(I)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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pursuant to Exchange Act Rule 0-11 (set forth the amount of which the
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previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
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UNITED TRUST GROUP, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held on Wednesday, June 15, 2005
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 15,
2005 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 approve a proposal to change the state of incorporation of UTG from
Illinois to Delaware by merging UTG with and into a wholly-owned
Delaware subsidiary, referred to as the Reincorporation Proposal,
which reincorporation will make certain changes to UTG's articles of
incorporation and bylaws, all of which is more fully described in the
accompanying proxy statement;
3. 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 22, 2005 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. As a shareholder of UTG, you have the right to dissent from the
merger and receive the "fair value" of your shares of UTG common stock under
applicable provisions of Illinois law. A copy of the Illinois statutory
provisions regarding dissenters' rights is included as Appendix D to this proxy
statement.
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 26, 2005
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" or the "Company"), will be held on Wednesday, June 15, 2005
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 22, 2005, 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 26,
2005 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, 2004
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 15, 2005, 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 and "FOR" the Reincorporation Proposal.
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 the Reincorporation Proposal and any other matter
submitted to a vote at the meeting. 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, the Reincorporation Proposal and any other matter that
may be 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 affirmative vote of the holders
of two-thirds of the shares of Common Stock represented in person or by proxy at
the annual meeting is required for approval of the Reincorporation Proposal. 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. Management is
not aware of any matter other than the election of directors and the
Reincorporation Proposal 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 and the Reincorporation Proposal as
further described below.
VOTING SECURITIES OUTSTANDING
April 22, 2005 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
3,953,795 shares of Common Stock. No other voting securities of UTG are
outstanding.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table 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 22, 2005 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 Name and Address Amount and Nature of Percent
of Class of Beneficial Owner (1) Beneficial Ownership of Class (2)
Common Stock, Jess T. Correll 185,454 (3) 4.7%
no par value First Southern Bancorp, Inc. 1,739,072 (3)(4) 44.0%
First Southern Funding, LLC 335,453 (3)(4) 8.5%
First Southern Holdings, LLC 1,483,791 (3)(4) 37.5%
First Southern Capital Corp., LLC 237,333 (3)(4) 6.0%
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 66.3%
(1) 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.
(2) The percentage of outstanding shares is based on 3,953,795 shares of Common
Stock outstanding as of April 22, 2005.
(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 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 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 FSBI,
FSF and FSH, and may be deemed to share with FSBI, FSF and FSH the right to
vote and to dispose of such shares. Mr. Correll owns approximately 84% of
the outstanding membership interests of FSF; he owns directly approximately
55%, companies he controls own approximately 12%, 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 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 described above. 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 table shows with respect to each of the directors of UTG, UTG's
chief executive officer and each of UTG's executive officers whose salary plus
bonus exceeded $100,000 for fiscal 2004, and with respect to all executive
officers and directors of UTG as a group: (i) the total number of shares of
Common Stock of UTG, beneficially owned as of April 22, 2005 and the nature of
such ownership; and (ii) the percent of the issued and outstanding shares of
Common Stock so owned, and granted stock options exercisable within 60 days of
April 22, 2005.
Directors, Named Executive
Title Officers, & All Directors & Amount and Nature of Percent
of Class Executive Officers as a Group Beneficial Ownership of Class (1)
Common John S. Albin 10,503 (2) *
Stock, no Randall L. Attkisson 0 (3) *
par value Joseph A. Brinck, II 0 *
Jesse T. Correll 2,497,312 (4) 63.2%
Ward F. Correll 98,523 (5) 2.5%
Thomas F. Darden 21,095 (6) *
Theodore C. Miller 10,000 (6) *
William W. Perry 30,000 (6) *
James P. Rousey 0 *
All directors and executive officers
as a group (9 in number) 2,667,433 67.5%
(1) The percentage of outstanding shares for UTG is based on 3,953,795 shares
of Common Stock outstanding as of April 22, 2005.
(2) Includes 392 shares owned directly by Mr. Albin's spouse.
(3) 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.
(4) The share ownership of Mr. Correll includes 112,704 shares of Common Stock
owned by him individually, 255,281 shares of Common Stock held by FSBI and
335,453 shares of Common Stock owned by FSF. The share ownership of Mr.
Correll also includes 72,750 shares of Common Stock held by WCorrell, LP, 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 FSF and
FSBI, and in turn, their ownership of 100% of the outstanding membership
interests of FSH (the holder of 1,483,791 shares of Common Stock), Mr.
Correll may be deemed to beneficially own the total number of shares of
Common Stock owned by FSH, and may be deemed to share with FSH the right to
vote and to dispose of such shares. Mr. Correll owns approximately 84% of
the outstanding membership interests of FSF; he owns directly approximately
55%, companies he controls own approximately 12%, 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 237,333 shares of Common
Stock held by FSC, and may be deemed to share with it the right to vote and
to dispose of such shares. Share ownership of Mr. Correll does not include
24,086 shares of Common Stock held by FSI.
(5) CLS owns 98,523 shares of 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 Common Stock owned by WCorrell LP 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 Jesse
T. Correll.
(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 over the shares of Common Stock beneficially owned by them.
The following table shows with respect to each individual identified above under
Security Ownership of Management, the ownership of shares of FSBI, an affiliate
of UTG.
Title Director or Amount and Nature Percent of
of Class Executive Officer of UTG of Ownership Class (1)
Common Randall L. Attkisson 7,344 (2) 5.88%
Stock Jesse T. Correll 102,041 (3)(4) 70.20%
Ward F. Correll 24,174 (4)(5) 18.21%
James P. Rousey 961 (6) .77%
(1) The percentage of outstanding shares for FSBI is based on 124,201 shares
outstanding as of March 31, 2005, including outstanding options.
(2) Includes 3,427 shares owned by Mr. Attkisson's spouse and options to
purchase 792 shares that can be exercised at any time by Mr. Attkisson.
(3) Includes 15,052 shares owned by the WCorrell, Limited Partnership, of which
Jesse Correll is the managing general partner, and 3,461 shares which Mr.
Correll has the power to vote and as to which he disclaims beneficial
ownership. Also includes options to purchase 12,621 shares that can be
exercised at any time by Mr. Correll.
(4) Includes options to purchase 8,530 shares that can be exercised at any time
by either Jesse Correll, Ward Correll or the WCorrell, Limited Partnership.
(5) Includes 15,052 shares owned by the WCorrell, LP and 592 shares owned by
CLS.
(6) Includes 99 shares owned by Mr. Rousey's spouse and options to purchase 194
shares that can be exercised at any time by Mr. Rousey.
The following table shows with respect to each individual identified above under
security ownership of management the ownership held in FSF, an affiliate of UTG.
Title Director or Executive Amount and Nature Percent of
of Class Officer of UTG of Ownership Class (1)
Common Randall L. Attkisson 44.75 4.8%
Stock Jesse T. Correll 784.87 83.5%
(1) The percentage of outstanding units for FSF is based on 939.77 units
outstanding as of March 31, 2005.
THE BOARD OF DIRECTORS
In accordance with the laws of Illinois and the Articles of Incorporation and
Bylaws of UTG, as amended, UTG is managed by its executive officers under the
direction of the Board of Directors. Each of the members of the board of
directors is independent (as defined under NASD listing standards), except
Messrs. Attkisson, Jesse Correll, Ward Correll and Rousey. 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, 2004, the Board met four times. All directors
attended at least 75% of all meetings of the board, except Mr. John Albin and
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 2004 annual shareholders meeting.
The Board of Directors has an Audit Committee consisting of Messrs. Perry,
Albin, and Brinck. Each of the members of the Audit Committee is independent (as
defined under NASD listing standards). 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 2004.
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 his own company,
and their experience as businessmen provide a base of knowledge 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, and does not have a nominating
committee charter. The Board has concluded that the nominating process should
not be limited to certain members so that a comprehensive selection of
candidates can be considered. Therefore, the nomination process is conducted by
the full Board of Directors. The Board of Directors has not adopted a formal
policy with regard to the consideration of director candidates recommended by
stockholders. The Board of Directors will, however, consider nominees
recommended by stockholders. Shareholders wishing to recommend candidates for
Board membership must 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 Bylaws, the Board of Directors is comprised of at least six and no
more than eleven directors. At December 31, 2004. the Board consisted of eight
directors. Shareholders elect Directors to serve for a period of one year at
UTG's Annual Shareholders' meeting.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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 2004, UTG was aware of the following individual
who filed a late Form 4, statement of changes in beneficial ownership of
securities, with the Securities and Exchange Commission, Thomas F Darden, II,
director. This individual reported a purchase of 4,315 shares of UTG stock. 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, 2004 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) reviewed 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.
William W. Perry - Committee Chairman
John S. Albin
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 the nominees for the election of directors:
Name, Age
Position with the Company, Business Experience and Other
Directorships
John S. Albin, 76
Director of UTG since 1984; farmer in Douglas and Edgar
Counties, Illinois since 1951; Chairman of the Board of
Longview State Bank from 1978 to 2005; President of the
Longview Capital Corporation, a bank holding company, since
1978; Chairman of First National Bank of Ogden, Illinois,
from 1987 to 2005; Chairman of the State Bank of Chrisman
from 1988 to 2005; Chairman of First National Bank in
Georgetown from 1994 to 2005; Director and Secretary of
Illini Community Development Corporation since 1990;
Commissioner of Illinois Student Assistance Commission from
1996 to 2002.
Randall L. Attkisson, 59
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, Florida
from 1978 to 1980.
Joseph A. Brinck, II, 49
Director of UTG since 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 holds
Professional Engineering licenses in Ohio, Kentucky, Indiana
and Illinois.
Jesse T. Correll, 48
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, 76
Director of UTG since 2000; President, Director of Tradeway,
Inc. of Somerset, Kentucky since 1973; President, Director
of Cumberland Lake Shell, Inc. of Somerset, Kentucky since
1971; President, Director of Tradewind Shopping Center, Inc.
of Somerset, Kentucky since 1966; Director of First Southern
Bancorp, Inc. since 1987; Director of First Southern
Funding, LLC since 1991; Director of The River Foundation
since 1990; and Director of First Southern Insurance Agency
since 1987. Ward Correll is the father of Jesse Correll.
Thomas F. Darden, 50
Chief Executive Officer of Cherokee Investment Partners, a
private equity fund; Chairman of Cherokee Sanford Group, a
brick manufacturing company, from 1984 to 1990; Consultant
with Bain & Company in Boston from 1981 to 1983;
Environmental planner for the Korea Institute of Science and
Technology in Seoul, from 1981 to 1983; Director of Shaw
University and the University of North Carolina's
Environmental Department; Director of the National
Brownfield Association; Member of Board of Trustees of North
Carolina Environmental Defense; previously, Chairman of the
Research Triangle Transit Authority and served two terms on
the N.C. Board of Transportation; Director of Winston
Hotels, Inc. (NYSE); Member of Board of Governors of
Research Triangle Institute in Research Triangle Park, NC.
William W. Perry, 48
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, 46
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, 42
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 $100,000 during UTG's last fiscal year:
SUMMARY COMPENSATION TABLE
Name and Annual Compensation All Other (1)
Principal Position Year Salary ($) Bonus ($) Compensation ($)
Jesse T. Correll 2004 75,720 - 4,500
Chairman of the Board 2003 75,720 - 4,500
Chief Executive Officer 2002 75,000 - 4,500
Randall L. Attkisson 2004 75,720 - 4,500
President 2003 75,720 - 4,500
2002 75,000 - 4,500
Theodore C. Miller 2004 100,000 - 3,000
Corporate Secretary 2003 100,000 3,000 3,000
Senior Vice President 2002 100,000 - 3,000
Chief Financial Officer
James P. Rousey 2004 135,000 - 1,519
Executive Vice President 2003 135,000 - 2,025
Chief Administrative Officer 2002 135,000 10,000 2,025
Douglas A. Dockter (2) 2004 100,000 1,000 2,700
Vice President 2003 100,000 4,000 2,689
2002 95,000 - 2,316
(1) All Other Compensation consists of UTG's matching contribution to the
Employee Savings Trust 401(k) Plan.
(2) Mr. Dockter is not considered an executive officer of UTG, but is included
in this table pursuant to compensation disclosure requirements.
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.
REPORT ON EXECUTIVE COMPENSATION
Introduction
The Board of Directors does not have a formal compensation committee. 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 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.
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 allows for the issuance of up to 400,000
shares of Common Stock. 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. A total of 58,891 shares of
Common Stock were issued under this plan in 2002 to eight individuals at a
purchase price of $12.00 per share. In 2003, 16,546 shares were issued to three
participants at a purchase price of $11.84 per share. In 2004, 14,440 shares
were issued to four participants at a purchase price of $11.59 per share. 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 equal, on a per share basis, 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, 2004,
shares issued under this plan had a value of $11.63 per share pursuant to the
above formula.
Chief Executive Officer
On March 27, 2000, 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 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, 2004 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, 1999 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 market under the symbol "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
performance graph 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 2004 and were officers or
employees of UTG or its affiliates during 2004: 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 2004, Jesse T. Correll and Randall L. Attkisson, executive officers of
UTG and UG, were also members of the Board of Directors of UTG's insurance
subsidiary.
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, UTG's insurance company subsidiary, purchased
$4,000,000 of a trust preferred security 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 $264,842 in dividends in 2004.
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 that are billable for a specific use.
UG has acquired mortgage loans through participation agreements with First
Southern National Bank ("FSNB"), a wholly-owned subsidiary of FSBI. 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 $45,468 in servicing fees and
$0 in origination fees to FSNB during 2004.
The Company reimbursed expenses incurred by Jesse T. Correll and Randall L.
Attkisson relating to travel and other costs incurred on behalf of or relating
to the Company. The Company paid $50,098 in 2004, to FSBI 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 $160,960 in 2004, which
included salaries and other benefits.
PROPOSAL TWO
APPROVAL OF REINCORPORATION OF THE COMPANY FROM ILLINOIS TO DELAWARE
Introduction
For the reasons set forth in "Principal Reasons for the Proposed
Reincorporation", our Board of Directors believes that it is advisable and in
the best interests of UTG and our shareholders to change the state of
incorporation of the Company from Illinois to Delaware. We propose to accomplish
the reincorporation in Delaware by merging UTG into a wholly owned subsidiary
that is incorporated in Delaware (the "Reincorporation Merger"). The name of the
Delaware corporation, which will be the successor to UTG in the Reincorporation
Merger, is UTG, Inc. ("UTG Delaware").
UTG Delaware was incorporated under Delaware law on April 4, 2005. The address
and phone number of UTG Delaware are the same as the address and phone number of
UTG. As of the date and time immediately prior to the effective date of the
Reincorporation Merger, if the Reincorporation Merger is effected, UTG Delaware
will not have any material assets or liabilities and will not have carried on
any business.
As discussed in "Principal Reasons for the Proposed Reincorporation," management
believes that reincorporation in Delaware would be beneficial to the Company
because Delaware corporate law is more comprehensive, widely used and
extensively interpreted than other state corporate laws, including Illinois
corporate law.
In addition, management believes that Delaware law is better suited than
Illinois law to protect shareholders' interests in the event of an unsolicited
takeover attempt. We are not, however, aware that any person is currently
attempting to acquire control of the Company, to obtain representation on our
board of directors or take any action that would materially affect the
governance of the Company. In addition, we are not proposing any changes to our
organizational documents to adopt any anti-takeover strategies in connection
with the reincorporation.
To accomplish the reincorporation, the board has unanimously adopted and
approved the Agreement and Plan of Merger (the "Merger Agreement"), the
Certificate of Incorporation of UTG Delaware (the "Delaware Certificate") and
the Bylaws of UTG Delaware (the "Delaware Bylaws"), copies of which are attached
to this proxy statement as Appendices A, B and C, respectively.
Because UTG Delaware will be governed by the Delaware General Corporation Law
(the "DGCL") and the Company will have new organizational documents, if the
Reincorporation Proposal is approved, the proposed reincorporation will result
in certain changes in your rights as a shareholder. These differences are
summarized under the sections entitled "Comparison of the Charters and Bylaws of
UTG and UTG Delaware and Differences Between the Corporation Laws of Illinois
and Delaware."
Our Board has unanimously approved and, for the reasons described below,
recommends that you approve the proposal to change the Company's state of
incorporation from Illinois to Delaware. If approved by shareholders, we expect
that the Reincorporation Merger will become effective as soon as practicable
(the "Effective Date") following our annual meeting of shareholders. However,
the proposed Reincorporation Merger may be abandoned, either before or after
shareholder approval, if circumstances arise which, in the opinion of the Board,
make it inadvisable to proceed. If shareholders do not approve the
Reincorporation Merger, we would not consummate the Reincorporation Merger and
we would continue to operate as a Illinois corporation.
IN ORDER FOR THE PROPOSED REINCORPORATION TO BE EFFECTED, TWO-THIRDS OF THE
OUTSTANDING SHARES OF COMMON STOCK MUST APPROVE THE PROPOSAL. SEE "VOTE REQUIRED
FOR THE REINCORPORATION PROPOSAL AND BOARD OF DIRECTORS' RECOMMENDATION" BELOW.
YOU ARE URGED TO READ CAREFULLY THIS SECTION OF THE PROXY STATEMENT, INCLUDING
THE RELATED APPENDICES, BEFORE VOTING ON THE REINCORPORATION MERGER.
Mechanics
The proposed reincorporation would be effected pursuant to the Merger Agreement
in substantially the form attached as Appendix A. The discussion of the
Reincorporation Merger and the Merger Agreement set forth below is qualified in
its entirety by reference to the Merger Agreement. Upon completion of the
Reincorporation Merger, UTG will cease to exist and UTG Delaware, which would be
the surviving corporation in the Reincorporation Merger, would continue to
operate our business under the name UTG.
Upon the Effective Date, each outstanding share of Common Stock will be
automatically converted into one share of common stock of UTG Delaware. Each
stock certificate representing issued and outstanding shares of Common Stock of
UTG will continue to represent the same number of shares of common stock of UTG
Delaware. If UTG and UTG Delaware effect the Reincorporation Merger, you would
not need to exchange your existing stock certificates of UTG for stock
certificates of UTG Delaware. You may, however, exchange your certificates if
you so choose.
The common stock of UTG trades in the over-the-counter market under the symbol
"UTGL.OB" and, after the Reincorporation Merger, UTG Delaware's common stock
will continue to be traded in the over-the-counter market without interruption,
under the same symbol as the shares of common stock of UTG are currently traded.
Pursuant to the Merger Agreement, UTG and UTG Delaware promise to take all
actions that Delaware law and Illinois law require for UTG and UTG Delaware to
effect the Reincorporation Merger. UTG Delaware also promises to qualify to do
business as a foreign corporation in the State of Illinois before UTG and UTG
Delaware effect the Reincorporation Merger. The Merger Agreement provides that
the respective obligations of UTG and UTG Delaware under the Merger Agreement
are subject to the approval of the shareholders of UTG and the sole stockholder
of UTG Delaware.
The Reincorporation Merger would only make a change in the name and legal
domicile of the Company and certain other changes of a legal nature which are
described in this proxy statement. The Reincorporation Merger would not result
in any change in the business, management, fiscal year, assets or liabilities or
location of the principal offices of the Company. We believe that the proposed
reincorporation will not affect any of our material contracts with any third
parties and that our rights and obligations under such material contractual
arrangements will continue and be assumed by the surviving corporation.
If the Reincorporation Merger is effected, all employee benefit plans of UTG
(including all stock options and other equity based plans) will be assumed and
continued by the surviving corporation. Approval of the Reincorporation Merger
will also constitute approval of the assumption of these plans by UTG Delaware.
Each stock option and other equity-based award issued and outstanding pursuant
to such plans would be converted automatically into a stock option or other
equity-based award with respect to the same number of shares of common stock of
the surviving corporation, upon the same terms and subject to the same
conditions as set forth in the applicable plan under which the award was granted
and in the agreement reflecting the award. In addition, the directors who will
be elected at the annual meeting of shareholders of UTG will become the
directors of UTG Delaware.
Vote Required For the Reincorporation Proposal and Board of Directors'
Recommendation
Illinois law requires the affirmative vote of the holders of two-thirds of the
outstanding shares of Common Stock of UTG to approve the Merger Agreement
pursuant to which UTG and UTG Delaware would effect the Reincorporation Merger.
Approval of the Reincorporation Proposal would constitute an approval of the
Merger Agreement and therefore the Reincorporation Merger. A vote in favor of
the Reincorporation Proposal is also effectively a vote in favor of the Delaware
Certificate and the Delaware Bylaws. If the shareholders approve the Merger
Agreement and the Reincorporation Merger becomes effective, the Delaware
Certificate and the Delaware Bylaws in effect immediately prior to the Effective
Date would respectively become the certificate of incorporation and bylaws of
UTG Delaware, as the surviving corporation.
THE BOARD OF DIRECTORS UNANIMOUSLY APPROVED AND RECOMMENDS THAT YOU VOTE "FOR"
THE PROPOSED REINCORPORATION. THE EFFECT OF AN ABSTENTION OR A BROKER NON-VOTE
IS THE SAME AS THAT OF A VOTE AGAINST THE REINCORPORATION PROPOSAL.
Principal Reasons for the Proposed Reincorporation
For many years, Delaware has followed a policy of encouraging corporations to
incorporate in that state. In furtherance of Delaware's policy to encourage
corporations to incorporate in that state, Delaware has been the leader in
adopting, construing and implementing comprehensive and flexible corporate laws
that have been responsive to the evolving legal and business needs of
corporations organized under Delaware law.
Delaware's corporate law has also developed progressive principles of corporate
governance that the Company could draw upon when making business and legal
decisions. Our Board believes that it is essential to be able to draw upon
well-established principles of corporate governance in making business and legal
decisions.
Management also believes that Delaware law is better suited than Illinois law to
protect shareholders' interests in the event of an unsolicited takeover attempt.
We are not aware that any person is currently attempting to acquire control of
the Company, to obtain representation on our board of directors or take any
action that would materially affect the governance of the Company.
Additionally, our management believes that, as a Delaware corporation, the
Company would be better able to continue to attract and retain qualified
directors and officers than it would be able to as a Illinois corporation in
part because Delaware law provides more predictability with respect to the issue
of liability of directors and officers than Illinois law does. The increasing
frequency of claims against directors and officers that are litigated has
greatly expanded the risks to directors and officers of exercising their
respective duties. The amount of time and money required to respond to and
litigate such claims can be substantial. Although Illinois law and Delaware law
both permit a corporation to include a provision in the corporation's articles
or certificate of incorporation, as the case may be, that in certain
circumstances reduces or limits the monetary liability of directors for breaches
of their fiduciary duty of care, Delaware law, as stated above, provides to
directors and officers more predictability than Illinois does and, therefore,
provides directors and officers of a Delaware corporation a greater comfort as
to their risk of liability than the comfort afforded under Illinois law. Our
Board, therefore, believes that the proposed reincorporation may be a
significant factor in continuing to attract and retain such individuals, and in
freeing them to make corporate decisions on their own merits and for the benefit
of shareholders rather than out of a desire to avoid personal liability.
Our Board of Directors and management have considered the following benefits of
Delaware's corporate legal framework in deciding to propose reincorporating in
Delaware:
the DGCL, which is generally acknowledged to be the most advanced and
flexible corporate statute in the country;
the Delaware General Assembly, which each year considers and adopts
statutory amendments that the Corporation Law Section of the Delaware
State Bar Association proposes in an effort to ensure that the
corporate statute continues to be responsive to the changing needs of
businesses;
the Delaware Court of Chancery, which handles complex corporate issues
with a level of experience and a degree of sophistication and
understanding unmatched by any other court in the country, and the
Delaware Supreme Court, which is highly regarded;
the well-established body of case law construing Delaware law, which
has developed over the last century and which provides businesses with
a greater predictability than most, if not all, other jurisdictions
provide; and
the responsiveness and efficiency of the Division of Corporations of
the Secretary of State of Delaware, which uses computer technology
that is on the cutting edge.
Any direct benefit that Delaware law provides to corporations indirectly
benefits the shareholders, who are the owners of the corporations. For the
reasons discussed in this proxy statement, we believe that the Company and our
shareholders will benefit in the near and longer term from reincorporating in
Delaware.
No Change in the Board Members, Business, Management, Employee Benefit Plans or
Location of Principal Offices
The Reincorporation Proposal would effect only a change in our name and legal
domicile and certain other changes of a legal nature, the most significant of
which are described in this proxy statement. The Reincorporation Proposal would
NOT result in any change in our business, management, fiscal year, assets or
liabilities or location of our principal facilities. Assuming that all nominees
are elected as directors and UTG and UTG Delaware effect the Reincorporation
Merger, the directors and officers of UTG would become the directors and
officers of the surviving corporation. All employee benefit plans (including
stock option and other equity-based plans) of UTG would be continued by the
surviving corporation. Approval of the Reincorporation Proposal would constitute
approval of the assumption of these plans by the surviving corporation. Assuming
UTG and UTG Delaware effect the Reincorporation Merger, the surviving
corporation would continue other employee benefit arrangements of UTG upon the
terms and subject to the conditions currently in effect.
Status of Existing Interested Shareholders
Under Illinois law, Mr. Correll and his affiliates are considered an "interested
shareholder". Both Delaware and Illinois each has a law that is similar in
concept and which prevents an "interested shareholder" from entering into a
business combination with the target company within three years after the date
the interested shareholder acquired such stock, subject to certain exceptions.
Upon consummation of the Reincorporation Merger, Jesse T. Correll would become
an "interested shareholder" under Delaware law; however, section 203 of the DGCL
provides that the prohibition on transactions with an " interested shareholder"
shall not apply if, prior to the time of such transaction, the board of
directors of the corporation approved the transaction which resulted in the
shareholder becoming an "interested shareholder". Because the Board of Directors
of each of UTG and UTG Delaware has approved the Reincorporation Merger, the
prohibitions of Delaware's business combination statute will not apply to Mr.
Correll and his affiliates.
Rights of Dissenting Shareholders
Shareholders who do not vote in favor of the Reincorporation Proposal and who
follow certain other procedures summarized below have the right to dissent from,
and obtain payment for, their shares in the event of the consummation of the
Reincorporation Proposal. The following is a summary of the provisions of the
Illinois Business Corporation Act ("IBCA") which specify the procedures to be
followed by any shareholder who wishes to dissent and demand payment for his or
her shares in the event of consummation of the Reincorporation Proposal. The
provisions of the IBCA are set forth in their entirety in Appendix D attached to
this proxy statement, and this summary is qualified by reference to these
provisions.
Since we have furnished to shareholders in this proxy statement information with
respect to the Reincorporation Proposal in order to enable a shareholder to
evaluate the Reincorporation Proposal and to determine whether or not to
exercise dissenter's rights, a shareholder may assert these rights only if
(a) the shareholder delivers to the Company, within 30 days from the mailing of
this proxy statement, a written demand for payment for his or her shares in the
event the Reincorporation Proposal is consummated, and (b) the shareholder does
not vote in favor of the Reincorporation Proposal. If a shareholder votes in
favor of the Reincorporation Proposal, he or she will not be entitled to dissent
and demand payment for his or her shares, and a dissenting vote on the
Reincorporation Proposal will not satisfy the above requirement that a written
demand for payment be delivered to the Company.
Within the later of (a) ten days after the Reincorporation Merger under the
Merger Agreement is accomplished, or (b) 30 days after the shareholder delivers
to the Company his or her written demand for payment, the Company will send to
this shareholder, referred to as a dissenting shareholder, a statement setting
forth the Company's opinion as to the estimated value of the dissenting
shareholder's shares, referred to as a statement of value, the Company's balance
sheet as of the end of its fiscal year ended December 31, 2004, its income
statement for its fiscal year ended December 31, 2004, and its latest interim
financial statements, together with either a commitment to pay for the shares of
the dissenting shareholder at the estimated value thereof upon transmittal to
the Company of the certificate or certificates, or other evidence of ownership
with respect to such shares, or an instruction to the dissenting shareholder to
sell his or her shares within ten days after delivery of the Company's statement
of value. The Company may instruct the dissenting shareholder to sell only if
there is a public market for the shares at which the shares may be readily sold.
Since the shares of UTG are not traded on any national securities exchange, the
Company anticipates that there will not be such a public market for the shares
of UTG Delaware.
If the dissenting shareholder does not agree with the Company's opinion
regarding the estimated value of the shares and wishes to preserve appraisal
rights, the dissenting shareholder must, within 30 days from the Company's
delivery to the dissenting shareholder of the statement of value, notify the
Company of the dissenting shareholder's estimate of value and demand payment for
the difference between the dissenting shareholder's estimate of value and the
amount of the payment by the Company or the proceeds of sale by the dissenting
shareholder, whichever is applicable because of the procedure which the Company
opted.
If the Company and the dissenting shareholder are unable to agree on the value
of the shares within 60 days from delivery to the dissenting shareholder of the
Company's statement of value, the Company must either pay the difference in
value demanded by the dissenting shareholder or file a petition in the circuit
court for the county in which either the registered office or the principal
office of the Company is located, requesting the court to determine the fair
value of the shares. The Company shall make all dissenters, whether or not
residents of Illinois, whose demands remain unsettled, parties to the proceeding
as an action against their shares, and must serve all parties with a copy of the
petition. Nonresidents may be served by registered or certified mail or by
publication as required by law.
Each dissenting shareholder made a party to the proceeding is entitled to
judgment for the amount, if any, by which the court determines that the fair
value of his or her shares exceeds the amount offered to be paid by the Company
or the proceeds of sale by the dissenting shareholder, whichever amount is
applicable. The judgment will include an allowance for interest at such rate as
the court may find to be fair and equitable in all the circumstances, from the
date on which the Reincorporation Proposal is approved to the date of payment.
The court, in such an appraisal proceeding, will determine all costs of the
proceeding, including the reasonable compensation and expenses of the
appraisers, if any, and experts employed by any party, but will exclude the fees
and expenses of counsel for any party. If the fair value of the shares as
determined by the court materially exceeds the amount which the Company offered
to pay for those shares, or if no offer was made, then all or any part of such
expenses may be assessed against the Company.
Anti-takeover Implications
Delaware, like many other states, permits a corporation to adopt a number of
measures through amendment of the corporate charter or bylaws or otherwise,
which are designed to reduce a corporation's vulnerability to unsolicited
takeover attempts. It should be noted, however, that the Reincorporation Merger
is not being proposed in order to prevent any present attempt known to our board
to acquire control of the Company or to obtain representation on our board. In
addition, our Board of Directors has no current plans to implement any defensive
strategies designed to enhance the ability of the Board to negotiate with an
unsolicited offer. With respect to implementing defensive strategies, Delaware
law is preferable to Illinois law because of the substantial judicial precedent
on the legal principles applicable to defensive strategies. As an Illinois
corporation or a Delaware corporation, we could implement some of the same
defensive measures. As a Delaware corporation, however, we would benefit from
the predictability of Delaware law on such matters.
Certain provisions of Delaware law, which will be effective upon consummation of
the Reincorporation Merger without further action of our Board or shareholders,
could have a bearing on unapproved takeover attempts. Section 203 of the DGCL,
which UTG Delaware does not intend to opt out of, restricts certain "business
combinations" with "interested shareholders" for three years following the date
that a person becomes an interested shareholder, unless the Board approves the
business combination.
Comparison Of The Charters And Bylaws Of UTG And UTG Delaware and Differences
Between the Corporation Laws of Illinois and Delaware
There are significant similarities between the Delaware Certificate and the UTG
Articles of Incorporation (the "UTG Articles"). For example, both the Delaware
Certificate and the UTG Articles provide for the authorization of 7,000,000
shares of common stock and 150,000 shares of preferred stock. The Delaware
Certificate and the UTG Articles each provide that the board is entitled to
determine the rights, preferences, privileges and restrictions of the authorized
and unissued preferred stock at the time of issuance. In addition, neither the
Delaware Certificate nor the UTG Articles provides for a classified board of
directors.
The following discussion is a summary of the material differences between the
UTG Articles and the UTG Bylaws (the "UTG Bylaws") and the Delaware Certificate
and Delaware Bylaws. All statements herein are qualified in their entirety by
reference to the respective corporation laws of Illinois and Delaware and the
full text of the UTG Articles and UTG Bylaws and the Delaware Certificate and
Delaware Bylaws. Approval by our shareholders of the Reincorporation Merger will
automatically result in the adoption of all the provisions set forth in the
Delaware Certificate and Delaware Bylaws. A copy of the Delaware Certificate is
attached hereto as Appendix B and a copy of the Delaware Bylaws is attached
hereto as Appendix C. The UTG Articles and UTG Bylaws are on file with the SEC
and are available from the Company upon request.
Cumulative Voting
The Company currently does not have, nor will UTG Delaware have, cumulative
voting in the election of directors. Cumulative voting gives shareholders the
right to cast as many votes as are equal to the number of directors to be
elected times the number of shares held, which votes may be allocated among the
candidates or voted for one candidate, as the holder desires. As a result,
shareholders holding a significant percentage of the outstanding shares entitled
to vote in the election of directors may be able to assure the election of one
or more directors. Without cumulative voting, holders of a substantial number of
the shares of Common Stock may not have enough voting power to control the
election of any directors.
Filling Vacancies on the Board of Directors
As permitted by Illinois law, the UTG Bylaws provide that vacancies on the Board
may be filled by the remaining directors. A director so approved would, however,
serve only until the next meeting of shareholders at which directors are
elected. The Delaware Bylaws contain a similar provision.
Vote Required for Routine Shareholder Action
In accordance with Delaware law and the governing instruments of UTG Delaware,
unless a different number of votes is required by statute or the certificate of
incorporation (such as for the approval of a merger, sale of all or
substantially all of the Company's assets or similar extraordinary transactions
or an amendment to the certificate of incorporation), acts of shareholders on
routine matters may be taken by a majority of the votes cast on the matter where
a quorum (a majority of the outstanding shares eligible to vote) is present.
Illinois law and the governing instruments of UTG provide the same voting
requirements for routine matters. Neither the UTG Articles or UTG Bylaws, nor
the Delaware Certificate or Delaware Bylaws, contain a provision establishing a
higher voting requirement for routine matters. As a result, the voting
requirements on routine matters will be effectively the same after the
Reincorporation Proposal is effected as are currently in effect for UTG.
Vote Required for Extraordinary Events
Under Illinois law, the affirmative vote of the holders of at least two-thirds
of outstanding shares entitled to vote is required in order to approve mergers,
consolidations, mandatory share exchanges, sales of substantially all assets and
charter amendments, unless the articles of incorporation supersede that
requirement by specifying a smaller or larger vote requirement. Under Delaware
law, the affirmative vote of the holders of a majority of outstanding shares
entitled to vote would generally be required in order to approve such
transactions, unless the certificate of incorporation provides for a larger vote
requirement. The Delaware Certificate does not specify a larger vote requirement
for such transactions. As a result, such transactions will be subject to a
different vote requirement for UTG Delaware than they are for UTG.
Takeover Provisions
Delaware and Illinois each have a law that is similar in concept and which
prevents an "interested shareholder" (defined under Delaware law as a holder who
acquires 15% or more of a target company's stock) from entering into a business
combination with the target company within three years after the date it
acquired such stock. However, a business combination is permitted if (a) prior
to the date that shareholder became an interested shareholder, the board of
directors of the target company approved either the business combination or such
acquisition of stock, (b) at the time the interested shareholder acquired such
15% interest, it acquired 85% or more of the outstanding stock of the
corporation, excluding shares held by directors who are also officers and shares
held under certain employee stock plans, or (c) the business combination is
approved by the target company's board of directors and two-thirds of the
outstanding shares voting at an annual or special meeting of shareholders,
excluding shares held by the interested shareholder. This provision applies
automatically except in the case of corporations with less than 2,000
shareholders of record and without voting stock listed on a national exchange or
authorized for quotation with a registered national securities association.
Additional exceptions allow corporations, in certain instances, to adopt charter
or by-law provisions that elect not to be governed by these provisions. Neither
the UTG Articles or UTG Bylaws, nor the Delaware Certificate or Delaware Bylaws,
contain a provision electing not to be governed by these provisions.
Removal of Directors
Under Illinois law, directors may be removed with or without cause by the vote
of the holders of a majority of outstanding shares entitled to vote, unless, in
the case of a corporation whose board is classified, the articles of
incorporation provide that directors may be removed only for cause. UTG does not
have a classified board and therefore directors can be removed with or without
cause.
Under Delaware law, any director or the entire board of directors of a
corporation that does not have a classified board of directors or cumulative
voting may be removed with or without cause with the approval of a majority of
the outstanding shares entitled to vote at an election of directors. The
surviving corporation will not have a classified board and, therefore, directors
can be removed with or without cause. Unless the certificate of incorporation
otherwise provides, in the case of a Delaware corporation whose board is
classified, however, shareholders may effect such removal only for cause. In
addition, as in Illinois, if a Delaware corporation has cumulative voting, and
if less than the entire board is to be removed, a director may not be removed
without cause by a majority of the outstanding shares if the votes cast against
such removal would be sufficient to elect the director under cumulative voting
rules. Delaware law also permits a Delaware corporation to include in its
certificate of incorporation a supermajority (greater than a simple majority)
voting requirement in connection with the removal of directors.
Limitation of Liability and Indemnification
Both Illinois and Delaware law permit a corporation to have in its articles or
certificate of incorporation a provision which limits or eliminates the personal
liability of directors to the corporation or its shareholders for monetary
damages for breach of fiduciary duty as a director, subject to certain
exceptions. The Company currently has such a provision in effect and, if the
reincorporation is accomplished, UTG Delaware will have such a provision in its
certificate of incorporation. The Company believes that such a provision permits
directors to make corporate decisions on the merits free from any desire to
avoid the risk of personal liability. This provision has no effect upon any
liability that a director may have to shareholders under Federal securities laws
or upon the availability to shareholders of equitable remedies.
Under Illinois law and Delaware law a corporation may indemnify directors and
officers who are or are threatened to be made parties to civil, criminal,
administrative or investigative proceedings, by reason of the fact that such
person was a director or officer of the corporation, against expenses,
judgments, fines and amounts paid in settlement if such person acted in good
faith and in a manner reasonably believed to be in, or not opposed to, the best
interests of the corporation and with respect to criminal proceedings had no
reasonable cause to believe that the conduct was unlawful. Both states' statutes
provide that they shall not be deemed to be exclusive of any rights to which a
person seeking indemnification may be entitled under any by-law, agreement, vote
of shareholders or disinterested directors or otherwise. Both states' statutes
provide that a corporation may purchase insurance on behalf of any director or
officer against liability incurred by such person in such capacity whether or
not the corporation would have power to indemnify such person against such
liability under the statute. Under Illinois law, expenses incurred by a director
or officer in defending a proceeding may be advanced by the corporation prior to
final disposition of the matter if such person undertakes to repay such amount
unless it shall be ultimately determined that such person is entitled to be
indemnified by the corporation pursuant to the statute. Under Delaware law,
expenses incurred by a director or officer in defending a proceeding may be
advanced by the corporation prior to final disposition of the matter if such
person undertakes to repay such amount if it shall ultimately be determined that
such person is not entitled to be indemnified by the corporation pursuant to the
statute. The UTG Bylaws provide for mandatory indemnification of directors and
officers and set forth procedures consistent with the foregoing statutory
provisions. The Delaware Bylaws specifically provide that directors and officers
shall be indemnified to the full extent permitted by Delaware law. Under
Illinois law, a corporation is required to notify its shareholders when
indemnity has been paid or expenses advanced. There is no similar provision
under Delaware law.
Call of Special Meetings by Shareholders.
The IBCA permits special meetings of shareholders to be called by the president,
the board of directors or the holders of at least one-fifth of all of the
outstanding shares entitled to vote on the matter for which the meeting is
called. The DGCL provides that special meetings of shareholders may be called by
the board of directors or such other persons as may be designated by the
certificate of incorporation or by the by-laws. The Company currently has a
bylaw which is consistent with the Illinois statutory provision. The Delaware
Bylaws will permit special meetings of shareholders to be called by the chairman
or chief executive officer, the board of directors or the holders of at least
one-fifth of all of the outstanding shares entitled to vote on the matter.
Shareholders Dissenter's Rights.
The IBCA permits shareholders to dissent and receive payment for their shares
with respect to: (a) the consummation of a plan of merger, consolidation or
share exchange that requires shareholder approval or involves the merger of that
corporation into its parent corporation or into another subsidiary corporation
of its parent corporation; (b) the consummation of a sale, lease or exchange of
all or substantially all of a corporation's property and assets other than in
the ordinary course of business; or (c) an amendment to a corporation's articles
of incorporation that materially and adversely affects a shareholder's rights
because it alters or abolishes preferential or redemption rights. The Company's
shareholders are entitled to exercise certain dissenter's rights in the event
the Reincorporation Proposal is approved by the shareholders. These rights are
summarized above under "Rights of Dissenting Shareholders."
Under the DGCL, shareholders will be entitled to dissenter's right in a merger
or consolidation involving the Company except that the DGCL does not provide
dissenter's rights for (1) shares that are either listed on a national
securities exchange or widely held (by more than 2,000 shareholders) if the
shareholders receive only shares of the surviving corporation, shares of a
listed or widely held corporation, or cash in lieu of fractional shares,
(2) shareholders of a corporation surviving certain types of mergers when no
vote of such shareholders is required to approve the merger, or (3) a merger of
a parent corporation and a subsidiary of the parent corporation, except that the
shareholders of the subsidiary corporation shall have appraisal rights in the
event the parent corporation does not own all of the shares of the subsidiary
corporation. Thus, if the Reincorporation Proposal is consummated, dissenter's
rights available to the shareholders of the Company will be more limited under
Delaware law than under Illinois law.
Federal Tax Consequences
The following is a discussion of certain United States federal income tax
considerations that may be relevant to holders of our Common Stock who receive
Common Stock of UTG Delaware as a result of the Reincorporation Merger. The
discussion does not address all of the tax consequences of the proposed
reincorporation that may be relevant to you, such as consequences to non-United
States persons or dealers in securities. Furthermore, no foreign, state, or
local tax considerations are addressed herein. THE U.S. FEDERAL INCOME TAX
CONSIDERATIONS APPLICABLE TO THE PROPOSED REINCORPORATION ARE COMPLEX AND ARE
SUBJECT TO CHANGE (EITHER ON A PROSPECTIVE OR RETROACTIVE BASIS), AND THIS
SUMMARY DOES NOT PURPORT TO BE A COMPLETE DISCUSSION OF ALL THE POSSIBLE TAX
CONSEQUENCES OF THE PROPOSED REINCORPORATION. IN VIEW OF THE VARYING NATURE OF
SUCH TAX CONSEQUENCES, YOU ARE URGED TO CONSULT YOUR OWN TAX ADVISOR AS TO THE
SPECIFIC TAX CONSEQUENCES OF THE PROPOSED REINCORPORATION, INCLUDING THE
APPLICABILITY OF FEDERAL, STATE, LOCAL OR FOREIGN TAX LAWS.
We believe that the reincorporation will be a tax-free reorganization under Code
Section 368(a). Accordingly, for federal income tax purposes, the holders of
common stock of UTG should not recognize any gain or loss upon receipt of common
stock of UTG Delaware by reason of the reincorporation. Each share of UTG
Delaware common stock that you acquire by reason of the reincorporation should
have the same tax basis and the same holding period as the equivalent UTG common
stock from which such shares of UTG common stock were converted, provided that
you hold such shares of UTG common stock as a capital asset on the date the
reincorporation is effected.
We have not requested a ruling from the Internal Revenue Service (the "IRS")
with respect to whether the proposed reincorporation qualifies as a
reorganization within the meaning of Code Section 368(a) or the federal income
tax consequences of the proposed reincorporation under the Code. A successful
IRS challenge to the federal tax treatment of the proposed reincorporation as a
Code Section 368(a) reorganization could result in a shareholder recognizing
gain or loss with respect to each share of common stock of UTG exchanged in the
proposed reincorporation equal to the difference between the shareholder's basis
in such share and the fair market value, as of the time of the proposed
reincorporation, of the common stock of UTG Delaware received in exchange
therefore. In such event, your aggregate basis in the shares of common stock of
UTG Delaware you receive in the exchange would equal their fair market value on
such date, and your holding period for such shares would not include the period
during which you held common stock of UTG.
If a shareholder exercises dissenter's rights, the receipt of cash for shares of
stock pursuant to the exercise of dissenter's rights will be a taxable
transaction for Federal income tax consequences to the dissenting shareholder
receiving such cash and may be a taxable transaction for state or local tax
purposes as well.
State, local or foreign income tax consequences to shareholders may vary from
the federal tax consequences described above.
The Company should not recognize gain or loss for federal income tax purposes as
a result of the proposed reincorporation, and UTG Delaware should succeed,
without adjustment, to the federal income tax attributes of UTG.
Accounting Consequences
We believe that there will be no material accounting consequences for us
resulting from the Reincorporation Merger.
Regulatory Approval
To our knowledge, the only required regulatory or governmental approval or
filings necessary in connection with the consummation of the Reincorporation
Merger would be the filings with the Secretary of State of Illinois and the
Secretary of State of Delaware and a request for exemption from certain
provisions of Ohio law regarding mergers of insurance companies.
Our board of directors believes that approval of the reincorporation of the
Company from Illinois to Delaware is in the best interests of the Company and
its shareholders.
Our board of directors unanimously recommends a vote "FOR" the reincorporation
of the Company from Illinois to Delaware.
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, 2004. 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. It is expected that representatives of KEB will be present at the
annual meeting and will have the opportunity to make a statement if they desire
to do so and to answer appropriate questions that may be asked by shareholders.
Audit Fees. Audit fees billed for these audit services in the fiscal years
ended December 31, 2004 and December 31, 2003 totaled $99,970 and $115,000,
respectively, and audit fees billed for quarterly reviews of the Company's
financial statements totaled $12,014 and $13,909 for the years 2004 and 2003,
respectively.
Audit Related Fees. No audit related fees were incurred by the Company from
KEB for the fiscal years ended December 31, 2004 and December 31, 2003.
Tax Fees. KEB did not render any services related to tax compliance, tax
advice or tax planning for the fiscal years ended December 31, 2004 and December
31, 2003.
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, 2004 and December 31, 2003.
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, 2004 and
December 31, 2003.
SUBMISSION OF SHAREHOLDER PROPOSALS FOR 2006 ANNUAL MEETING
In order for a proposal by a shareholder to be included in UTG's proxy statement
and form of proxy for the 2006 Annual Meeting of Shareholders, the proposal must
be received by UTG at its principal office on or before January 23, 2006.
Shareholder proposals submitted after April 13, 2006, 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
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 judgment.
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,
2004 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, 2004 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 26, 2005
APPENDIX A
AGREEMENT AND PLAN OF MERGER
OF
UTG, INC.
(A Delaware Corporation)
AND
UNITED TRUST GROUP, INC.
(An Illinois Corporation)
THIS AGREEMENT ANDPLAN OF MERGER, dated as of April 4, 2005 (the
"Agreement"), is made by and between UTG, Inc., a Delaware corporation ("United
Delaware"), and United Trust Group, Inc., an Illinois corporation ("United
Illinois"). United Delaware and United Illinois are sometimes referred to herein
as the "Constituent Corporations."
RECITALS
A. United Illinois is a corporation duly organized and existing under the
laws of the State of Illinois. On the date hereof, the total number of shares of
Common Stock of United Illinois (the "United Illinois Common Stock"), authorized
to be issued is 7,000,000 and the total number of shares of Preferred Stock of
United Illinois (the "United Illinois Preferred Stock") authorized to be issued
is 150,000. As of March 1, 2005, there were 3,956,759 shares of United Illinois
Common Stock issued and outstanding, and no shares of United Illinois Preferred
Stock were issued and outstanding.
B. United Delaware is a corporation duly organized and existing under the
laws of the State of Delaware. On the date hereof, the total number of shares of
Common Stock, $.01 par value per share (the "United Delaware Common Stock")
authorized to be issued is 7,000,000, and the total number of shares of
Preferred Stock, $.01 par value per share (the "United Delaware Preferred
Stock") authorized to be issued is 150,000. The United Delaware Preferred Stock
is undesignated as to series, rights, preferences, privileges, or restrictions.
As of the date hereof, 100 shares of United Delaware Common Stock were issued
and outstanding, all of which were held by United Illinois, and no shares of
United Delaware Preferred Stock were issued and outstanding.
C. United Delaware is a wholly owned subsidiary of United Illinois.
D. The Board of Directors of United Illinois has determined that, for the
purpose of effecting the reincorporation of United Illinois in the State of
Delaware, it is advisable and in the best interests of United Illinois and its
shareholders that United Illinois merge with and into United Delaware upon the
terms and conditions provided herein.
E. The respective Boards of Directors of United Delaware and United
Illinois have approved and adopted this Agreement and have directed that this
Agreement be submitted to a vote of their sole stockholder and shareholders,
respectively, and executed by the undersigned officers.
F. The Merger (as hereinafter defined) is intended to qualify as a
reorganization described in Section 368(a) of the Internal Revenue Code of 1986,
as amended.
NOW, THEREFORE, in consideration of the mutual agreements and covenants set
forth herein, United Delaware and United Illinois hereby agree, subject to the
terms and conditions hereinafter set forth, as follows:
ARTICLE I
MERGER
1.1 Merger.
In accordance with the provisions of this Agreement, the Delaware General
Corporation Law (the "DGCL") and the Illinois Business Corporation Act (the
"IBCA"), United Illinois shall be merged with and into United Delaware (the
"Merger"), the separate existence of United Illinois shall cease, and United
Delaware shall survive the Merger and shall continue to be governed by the laws
of the State of Delaware. United Delaware shall be, and is sometimes referred to
herein as, the "Surviving Corporation." The name of the Surviving Corporation
shall be United Trust Group, Inc.
1.2 Filing and Effectiveness.
The Merger shall become effective when the following actions shall have
been completed:
(a) this Agreement and the Merger shall have been adopted and approved by
each Constituent Corporation in accordance with the requirements of the DGCL and
the IBCA;
(b) all of the conditions precedent to the consummation of the Merger
specified in this Agreement shall have been satisfied or duly waived by the
party entitled to satisfaction thereof;
(c) an executed Certificate of Ownership and Merger meeting the
requirements of the DGCL shall have been filed with the Secretary of State of
the State of Delaware (the "Delaware Certificate"); and
(d) executed articles of merger, as provided in the IBCA, shall have been
filed with the Secretary of State of the State of Illinois.
The date and time when the Merger shall become effective, as aforesaid, is
herein called the "Effective Date of the Merger."
1.3 Effect of the Merger.
Upon the Effective Date of the Merger, the separate existence of United Illinois
shall cease and United Delaware, as the Surviving Corporation shall:
(i) continue to possess all of its assets, rights, powers and property as
constituted immediately prior to the Effective Date of the Merger;
(ii) be subject to all actions previously taken by its and United Illinois'
Boards of Directors;
(iii)succeed, without other transfer, to all of the assets, rights, powers
and property of United Illinois in the manner more fully set forth in
Section 259 of the DGCL;
(iv) continue to be subject to all of the debts, liabilities and
obligations of United Delaware as constituted immediately prior to the
Effective Date of the Merger; and
(v) succeed, without other transfer, to all of the debts, liabilities and
obligations of United Illinois in the same manner as if United
Delaware had itself incurred them, all as more fully provided under
the applicable provisions of the DGCL and the IBCA.
ARTICLE II
CHARTER DOCUMENTS, DIRECTORS AND OFFICERS
2.1 Certificate of Incorporation.
The Certificate of Incorporation of United Delaware as in effect
immediately prior to the Effective Date of the Merger shall continue in full
force and effect as the Certificate of Incorporation of the Surviving
Corporation until duly amended in accordance with the provisions thereof and
applicable law.
2.2 By-Laws.
The By-Laws of United Delaware as in effect immediately prior to the
Effective Date of the Merger shall continue in full force and effect as the
By-Laws of the Surviving Corporation until duly amended in accordance with the
provisions thereof and applicable law.
2.3 Directors and Officers.
The directors and officers of United Illinois immediately prior to the
Effective Date of the Merger shall be the directors and officers of the
Surviving Corporation until their successors shall have been duly elected and
qualified or until as otherwise provided by law, the Certificate of
Incorporation of the Surviving Corporation or the By-Laws of the Surviving
Corporation.
ARTICLE III
MANNER OF CONVERSION OF STOCK
3.1 United Illinois Common Stock.
Upon the Effective Date of the Merger, each share of United Illinois Common
Stock, issued and outstanding immediately prior thereto shall, by virtue of the
Merger and without any action by either of the Constituent Corporations, the
holder of such shares or any other person, be converted into and exchanged for
one (1) fully paid and nonassessable share of Common Stock of the Surviving
Corporation.
3.2 United Illinois Employee Benefit Plans.
Upon the Effective Date of the Merger, the Surviving Corporation shall
assume and continue any and all stock option, stock incentive and other
equity-based award plans heretofore adopted by United Illinois (individually, an
"Equity Plan" and, collectively, the "Equity Plans"), and shall reserve for
issuance under each Equity Plan a number of shares of United Delaware Common
Stock equal to the number of shares of United Illinois Common Stock so reserved
immediately prior to the Effective Date of the Merger. Each unexercised option
or other right to purchase United Illinois Common Stock granted under and by
virtue of any such Equity Plan which is outstanding immediately prior to the
Effective Date of the Merger shall, upon the Effective Date of the Merger,
become an option or right to purchase United Delaware Common Stock on the basis
of one share of United Delaware Common Stock for each share of United Illinois
Common Stock issuable pursuant to any such option or stock purchase right, and
otherwise on the same terms and conditions and at an exercise or conversion
price per share equal to the exercise or conversion price per share applicable
to any such United Illinois option or stock purchase right. Each other
equity-based award relating to United Illinois Common Stock granted or awarded
under any of the Equity Plans which is outstanding immediately prior to the
Effective Date of the Merger shall, upon the Effective Date of the Merger,
become an award relating to United Delaware Common Stock on the basis of one
share of United Delaware Common Stock for each share of United Illinois Common
Stock to which such award relates and otherwise on the same terms and conditions
applicable to such award immediately prior to the Effective Date of the Merger.
3.3 United Delaware Common Stock.
Upon the Effective Date of the Merger, each share of United Delaware Common
Stock issued and outstanding immediately prior thereto shall, by virtue of the
Merger and without any action by United Delaware, the holder of such shares or
any other person, be canceled and returned to the status of authorized but
unissued shares.
3.4 Exchange of Certificates.
(a) After the Effective Date of the Merger, each holder of an outstanding
certificate representing United Illinois Common Stock may, at such holder's
option, surrender the same for cancellation to our Stock Transfer
Department, as exchange agent (the "Exchange Agent"), and each such holder
shall be entitled to receive in exchange therefor a certificate or
certificates representing the number of shares of the Surviving
Corporation's Common Stock into which the surrendered shares were converted
as provided herein. Unless and until so surrendered, each outstanding
certificate theretofore representing shares of United Illinois Common Stock
shall be deemed for all purposes to represent the number of shares of the
Surviving Corporation's Common Stock into which such shares of United
Illinois Common Stock were converted in the Merger.
(b) The registered owner on the books and records of the Surviving Corporation
or the Exchange Agent of any shares of stock represented by such
outstanding certificate shall, until such certificate shall have been
surrendered for transfer or conversion or otherwise accounted for to the
Surviving Corporation or the Exchange Agent, have and be entitled to
exercise any voting and other rights with respect to, and to receive
dividends and other distributions upon the shares of Common Stock of the
Surviving Corporation represented by, such outstanding certificate as
provided above.
(c) Each certificate representing Common Stock of the Surviving Corporation so
issued in the Merger shall bear the same legends, if any, with respect to
the restrictions on transferability as the certificates of United Illinois
so converted and given in exchange therefore, unless otherwise determined
by the Board of Directors of the Surviving Corporation in compliance with
applicable laws, or other such additional legends as agreed upon by the
holder and the Surviving Corporation.
(d) If any certificate for shares of the Surviving Corporation stock is to be
issued in a name other than that in which the certificate surrendered in
exchange therefor is registered, it shall be a condition of issuance
thereof: (i) that the certificate so surrendered shall be properly endorsed
and otherwise in proper form for transfer; (ii) that such transfer
otherwise be proper and comply with applicable securities laws; and (iii)
that the person requesting such transfer pay to the Surviving Corporation
or the Exchange Agent any transfer or other taxes payable by reason of
issuance of such new certificate in a name other than that of the
registered holder of the certificate surrendered or establish to the
satisfaction of the Surviving Corporation that such tax has been paid or is
not payable.
ARTICLE IV
GENERAL
4.1 Covenants of United Delaware.
United Delaware covenants and agrees that it will, on or before the
Effective Date of the Merger:
(a) qualify to do business as a foreign corporation in the State of
Illinois and in connection therewith irrevocably appoint an agent
for service of process as required under the provisions of the
IBCA;
(b) file any and all documents necessary for the assumption by United
Delaware of all of the tax liabilities of United Illinois;
(c) file the Delaware Certificate with the Secretary of State of the
State of Delaware;
(d) file articles of merger with the Secretary of State of the State
of Illinois; and
(e) take all such other actions as may be required by the DGCL and
the IBCA to effect the Merger.
4.2 Covenants of United Illinois.
United Illinois covenants and agrees that it will, on or before the
Effective Date of the Merger, take all such other actions as may be required by
the DGCL and the IBCA to effect the Merger.
4.3 Further Assurances.
From time to time, as and when required by the Surviving Corporation or by
its successors or assigns, there shall be executed and delivered on behalf of
United Illinois such deeds and other instruments, and there shall be taken or
caused to be taken by the Surviving Corporation and United Illinois such further
and other actions as shall be appropriate or necessary in order to vest or
perfect in or conform of record or otherwise by the Surviving Corporation, the
title to and possession of all the property, interests, assets, rights,
privileges, immunities, powers, franchises and authority of United Illinois and
otherwise to carry out the purposes of this Agreement, and the officers and
directors of the Surviving Corporation are fully authorized in the name and on
behalf of United Illinois or otherwise to take any and all such action and to
execute and deliver any and all such deeds and other instruments.
4.4 Abandonment.
At any time before the Effective Date of the Merger, this Agreement may be
terminated and the Merger may be abandoned for any reason whatsoever by the
Board of Directors of either United Illinois or United Delaware, or both,
notwithstanding the approval of this Agreement by the shareholders of United
Illinois or the sole stockholder of United Delaware or both.
4.5 Amendment.
The Boards of Directors of the Constituent Corporations may amend this
Agreement at any time prior to the filing of this Agreement (or certificate in
lieu thereof) with the Secretaries of State of the States of Delaware and
Illinois, provided that an amendment made subsequent to the adoption of this
Agreement by the stockholders of either Constituent Corporation shall not,
unless approved by the stockholders as required by law: (i) alter or change the
amount or kind of shares, securities, cash, property and/or rights to be
received in exchange for or on conversion of all or any of the shares of any
class or series thereof of such Constituent Corporation; (ii) alter or change
any term of the Certificate of Incorporation of the Surviving Corporation to be
effected by the Merger; or (iii) alter or change any of the terms and conditions
of this Agreement, if such alteration or change would adversely affect the
holders of any class or series of capital stock of any Constituent Corporation.
4.6 Agreement.
Executed copies of this Agreement will be on file at the principal place of
business of the Surviving Corporation at 5250 South Sixth Street, Springfield,
Illinois 62703.
4.7 Governing Law.
This Agreement shall in all respects be construed, interpreted and enforced
in accordance with and governed by the laws of the State of Delaware and, so far
as applicable, the merger provisions of the IBCA.
4.8 Counterparts.
This Agreement may be executed in counterparts (including by facsimile),
each of which shall be deemed to be an original and all of which, together,
shall constitute the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first written above.
UNITED TRUST GROUP, INC.
an Illinois corporation
By:
___/s/ Theodore C. Miller___________________
Name: Theodore C. Miller
Title: Senior Vice President
UTG, INC.
a Delaware corporation
By:
___/s/ Theodore C. Miller___________________
Name: Theodore C. Miller
Title: Senior Vice President
APPENDIX B
CERTIFICATE OF INCORPORATION
OF
UTG, INC.
1. Name. The name of the corporation is UTG, Inc. (hereinafter the or this
"Corporation").
2. Registered Office; Registered Agent. The registered office of the
Corporation in the State of Delaware is 2711 Centerville Road, Suite 400, New
Castle County, Wilmington, Delaware 19808. The Registered Agent at the same
address is Corporation Service Company.
3. Purpose. The purpose of the Corporation is to engage in any lawful act
or activity for which a corporation may be organized under the Delaware General
Corporation Law.
4. Capital Stock.
A. Classes of Stock. The Corporation is authorized to issue two (2)
classes of stock designated, respectively, "Common Stock" (the "Common
Stock") and "Preferred Stock" (the "Preferred Stock"). The total number of
shares which the Corporation is authorized to issue is Seven Million One
Hundred Fifty Thousand (7,150,000), each with a par value of $0.001 per
share, of which Seven Million (7,000,000) shares shall be Common Stock and
One Hundred Fifty Thousand (150,000) shares shall be Preferred Stock.
The following is a statement of the designations and the powers, privileges
and rights, and the qualifications, limitations or restrictions thereof in
respect of each class of capital stock of the Corporation.
B. Common Stock. The holders of the Common Stock shall be entitled to
receive such dividends as the Board of Directors may declare from time to
time, provided that any and all preferred dividends on the Preferred Stock
for the then current quarter have been theretofore set aside or paid, and
all prior quarterly dividends on the Preferred Stock have been paid in
full. Upon the liquidation of the Corporation, the holders of the Common
Stock shall receive, share and share alike, all of the net assets of the
Corporation remaining after the payment of the liquidation preference
payable with respect to the Preferred Stock. The Common Stock shall not be
subject to redemption or retirement. Each holder of the Common Stock shall
be entitled to one vote for each share of such stock standing in his name
on the books of the Corporation. The holders of the Common Stock shall not
have cumulative voting rights in the election of directors.
C. Preferred Stock.
[1] Rank. The Preferred Stock is senior to the Common Stock, and
the Common Stock is subject to the rights and preferences of the
Preferred Stock as hereinafter set forth.
[2] Series. The Preferred Stock may be issued from time to time
in one or more series in any manner permitted by law, as determined
from time to time by the Board of Directors and stated in the
resolution or resolutions providing for the issuance of such stock
adopted by the Board of Directors pursuant to authority hereby vested
in it, each series to be appropriately designated, prior to the
issuance of any shares thereof, by some distinguishing letter or
number. All shares of each series of Preferred Stock shall be alike in
every particular (except as to the dates from which dividends shall
commence to accrue). All shares of Preferred Stock shall be of equal
rank and have the same powers, preferences and rights, and shall be
subject to the same qualifications, limitations, and restrictions,
without distinction between the shares of different series thereof,
except only in regard to the following particulars, which may be
different in different series:
[a] dates from which such dividends shall commence to accrue;
[b] the amount or amounts payable upon redemption thereof and the
manner in which the same may be redeemed;
[c] the amount or amounts payable to holders thereof upon any
voluntary or involuntary liquidation, dissolution, or winding up of
the Corporation;
[d] the provisions relative to a sinking fund, if any, with
respect thereto;
[e] terms and rates of conversion or exchange thereof, if
convertible or exchangeable; and
[f] the provisions as to voting rights, if any;
provided that if the stated dividends and amounts payable on
liquidation are not paid in full, the shares of all series of the
Preferred Stock shall share ratably in the payment of dividends
including accumulation, if any, in accordance with the sums which
would be payable on such shares if all dividends were declared and
paid in full, and in any distribution of assets other than by way of
dividends in accordance with the sums which would be payable on such
distribution if all sums payable were discharged in full.
The designation of each particular series of Preferred Stock and
its terms in respect of the foregoing particulars shall be fixed and
determined by the Board of Directors in any manner permitted by law
and stated in the resolution or resolutions providing for the issuance
of such stock adopted by the Board of Directors pursuant to authority
hereby vested in it, before any shares of such series are issued, and
shall be set forth in full or summarized on the stock certificates for
such series. The Board of Directors may from time to time increase the
number of shares of any series of Preferred Stock already created by
providing that any unissued shares of Preferred Stock shall constitute
part of such series, or may decrease (but not below the number of
shares thereof then outstanding) the number of shares of any series of
Preferred Stock already created by providing that any unissued shares
previously assigned to such series shall no longer constitute part
thereof. The Board of Directors is hereby empowered to classify or
reclassify any unissued Preferred Stock by fixing or altering the
terms thereof in respect of the above-mentioned particulars and by
assigning the same to an existing or newly created series from time to
time before the issuance of such stock.
[3] Dividends. The holders of Preferred Stock of each series
shall be entitled to receive, out of any funds legally available for
the purpose, when and as declared by the Board of Directors, cash
dividends thereon at such rate per annum as shall be fixed by
resolution of the Board of Directors for such series, and no more,
payable as determined by the Board of Directors in the resolution
creating such series. Such dividends shall be cumulative or
non-cumulative, as determined by the Board of Directors in fixing the
rights and preferences of such series, and if cumulative shall be
deemed to accrue from day to day regardless of whether or not earned
or declared, and shall commence to accrue with respect to each share
of Preferred Stock from such date or dates as may be fixed by the
Board of Directors prior to the issue thereof.
In no event, so long as any Preferred Stock shall remain
outstanding, shall any dividend whatsoever (other than a dividend
payable in shares of stock ranking junior to the Preferred Stock as to
the dividends and assets) be declared or paid upon, nor shall any
distribution be made or ordered in respect of, the Common Stock or any
class of stock ranking junior to the Preferred Stock as to dividends
or assets, nor shall any moneys (other than the net proceeds received
from the sale of stock ranking junior to the Preferred Stock as to
dividends and assets) be set aside for or applied to the purchase or
redemption (through a sinking fund or otherwise) of shares of Common
Stock or of any other class of stock ranking junior to the Preferred
Stock as to dividends or assets, unless
[a] all dividends on the Preferred Stock of all series for
past dividend periods shall have been paid and the full dividend
on all outstanding shares of Preferred Stock of all series for
the then current dividend period shall have been paid or declared
and set apart for payment; and
[b] the Corporation shall have set aside all amounts, if
any, theretofore required to be set aside as and for sinking
funds, if any, for the Preferred Stock of all series for the then
current year, and all defaults, if any, in complying with any
such sinking fund requirements in respect of previous years shall
have been made good.
[4] Redemption. The Corporation, at the option of the Board of
Directors, may at any time redeem the whole, or from time to time may
redeem any part of any series of Preferred Stock by paying therefor in
cash the amount which shall have been determined by the Board of
Directors, in the resolution or resolutions authorizing such series,
to be payable upon the redemption of such shares at such time.
Redemption may be made of the whole or any part of the outstanding
shares of any one or more series, in the discretion of the Board of
Directors; if the redemption be a part of a series, the shares to be
redeemed may be selected by lot, or all of the shares of such series
may be redeemed pro rate, in such manner as may be prescribed by
resolutions of the Board of Directors.
Subject to the foregoing provisions and to any qualifications,
limitations, or restrictions applicable to any particular series of
Preferred Stock which may be stated in the resolution or resolutions
providing for the issuance of such series, the Board of Directors
shall have authority to prescribe from time to time the manner in
which any series of Preferred Stock shall be redeemed.
[5] Liquidation. Upon any liquidation, dissolution or winding up
of the Corporation, whether voluntary or involuntary, the Preferred
Stock of each series shall be entitled, before any distribution shall
be made to the Common Stock or to any other class of stock junior to
the Preferred Stock as to dividends or assets to be paid the full
preferential amount or amounts fixed the Board of Directors for such
series as herein authorized, but the Preferred Stock shall not be
entitled to any further payment and any remaining net assets shall be
distributed ratably to the holders of the outstanding Common Stock. If
upon such liquidation, dissolution or winding up of the Corporation,
whether voluntary or involuntary, the net assets of the Corporation
shall be insufficient to permit the payment to the holders of all
outstanding shares of Preferred Stock of all series of the full
preferential amounts to which they are respectively entitled, then the
entire net assets of the Corporation shall be distributed ratably to
the holders of all outstanding shares of Preferred Stock in proportion
to the full preferential amount to which each such share is entitled.
Neither a consolidation nor a merger of the Corporation with or into
any corporation or corporations nor the sale of all or substantially
all of the assets of the Corporation shall be deemed to be a
liquidation, dissolution or winding up within the meaning of this
clause.
[6] Voting. The holders of the Preferred Stock of each series
shall be entitled to such voting rights, if any, as shall be fixed by
resolution of the Board of Directors in creating such series. If so
provided in the resolution creating any series of Preferred Stock, the
shares of such series may be nonvoting.
[7] Conversion or Exchange. Any series of Preferred Stock may be
made convertible into, or exchangeable for, at the option of either
the holder or the Corporation or upon the happening of a specified
event, shares of any other class or classes or any other series of the
same or any other class or classes of stock of the Corporation, at
such price or prices or at such rate or rates of exchange and with
such adjustments as shall be stated in the resolution or resolutions
providing for the issuance of such stock adopted by the Board of
Directors.
D. No Preemptive Rights. No stockholder of the Corporation shall,
because of his ownership of stock, have a preemptive or other right to
purchase, subscribe for or take any part of any stock or any part of the
notes, debentures, bonds, or other securities convertible into or carrying
options or warrants to purchase stock of the Corporation. Any part of the
capital stock and any part of the notes, debentures, bonds or other
securities convertible into or carrying options or warrants to purchase
stock of the Corporation authorized by the Articles of Incorporation or any
amendment thereto, may at any time be issued, optioned for sale, and sold
or disposed of by the Corporation pursuant to resolutions of its Board of
Directors to such persons and upon such terms as may to such Board seem
proper without first offering such stock or securities or any part thereof
to existing stockholders.
5. Incorporator. The name and original mailing address of the sole
incorporator is as follows: WT&C Corporate Services, Inc., 500 West
Jefferson Street, Suite 2800, Louisville, Kentucky 40202.
6. Elimination of Director Liability. A director of the Corporation
shall not be personally liable to the Corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director, except for
liability (i) for any breach of the director's duty of loyalty to the
Corporation or its stockholders, (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 of the Delaware General Corporation Law, or
(iv) for any transaction from which the director derived an improper
personal benefit. If the Delaware General Corporation Law is amended after
the filing of the Certificate of Incorporation of which this Article 6 is a
part to authorize corporate action further eliminating or limiting the
personal liability of directors, then the liability of a director of the
Corporation shall be eliminated or limited to the fullest extent permitted
by the Delaware General Corporation Law, as so amended.
Any repeal or modification of the foregoing paragraph by the
stockholders of the Corporation shall not adversely affect any right or
protection of a director of the Corporation existing at the time of such
repeal or modification.
7. Bylaws. The Board of Directors of the Corporation is authorized and
empowered from time to time in its discretion to make, alter, amend or
repeal the Bylaws of the Corporation, except as such power may be
restricted or limited by Delaware General Corporation Law.
8. Election of Directors. Directors of the Corporation need not be
elected by written ballot unless otherwise required in the Corporation's
Bylaws.
IN WITNESS WHEREOF, this Certificate of Incorporation has been
executed by the Incorporator of UTG, Inc. as of the 1st day of April, 2005.
WT&C CORPORATE SERVICES, INC.
By:____/s/ Barbara G. Mangus_______
Barbara G. Mangus, Vice President
APPENDIX C
BYLAWS OF
UTG, INC.
ARTICLE I
Offices
The registered office of the corporation shall be in the City of
Wilmington, County of New Castle, State of Delaware.
The principal office of the corporation shall be located in Springfield,
Illinois, or at such other place or places from time to time as the board of
directors determines. The corporation may have such other offices as the
business of the corporation may require from time to time.
ATRICLE II
Stockholders
Section 1. Annual Meetings. The annual meeting of the stockholders shall be
held for the election of directors and for the transaction of such other
business as may properly come before the meeting at such date, time and place,
either within or without the State of Delaware, as the board of directors shall
each year fix.
Section 2. Special Meetings. Special meetings of the stockholders, for any
purpose or purposes prescribed in the notice of the meeting, may be called by
the chief executive officer, the chairman of the board, the board of directors,
or by the holders of not less than one-fifth of the shares of stock entitled to
vote at the meeting, and shall be held at such place, on such date, and at such
time as they or he may fix.
Section 3. Notice of Meetings. Whenever stockholders are required or
permitted to take any action at a meeting, a written notice of the meeting shall
be given which shall state the place, date and hour of the meeting, and, in the
case of a special meeting, the purpose or purposes for which the meeting is
called. Unless otherwise provided by law, the certificate of incorporation or
these bylaws, the written notice of any meeting shall be given not less than ten
nor more than sixty days before the date of the meeting to each stockholder
entitled to vote at such meeting. If mailed, such notice shall be deemed to be
given when deposited in the mail, postage prepaid, directed to the stockholder
at his address as it appears on the records of the corporation.
Section 4. Adjournments. Any meeting of the stockholders, annual or
special, may adjourn from time to time to reconvene at the same or some other
place, and notice need not be given of any such adjourned meeting if the time
and place thereof are announced at the meeting at which the adjournment is
taken. At the adjourned meeting the corporation may transact any business which
might have been transacted at the original meeting. If the adjournment is for
more than thirty days, or if after the adjournment a new record date is fixed
for the adjourned meeting, a notice of the adjourned meeting shall be given to
each stockholder of record entitled to vote at the meeting.
Section 5. Quorum. Except as otherwise provided by law, the certificate of
incorporation or these bylaws, at each meeting of stockholders the presence in
person or by proxy of the holders of shares of stock having a majority of the
votes which could be cast by the holders of all outstanding shares of stock
entitled to vote at the meeting shall be necessary and sufficient to constitute
a quorum. In the absence of a quorum, the stockholders so present may, by
majority vote, adjourn the meeting from time to time in the manner provided in
Article II, Section 4 of these bylaws until a quorum shall attend.
Section 6. Organization. Meetings of stockholders shall be presided over by
the chairman of the board, or in his absence by the chief executive officer, or
in his absence by the president, or in the absence of the foregoing persons by a
chairman designated by the board of directors, or in the absence of such
designation by a chairman chosen at the meeting. The secretary shall act as
secretary of the meeting, but in his absence the chairman of the meeting may
appoint any person to act as secretary of the meeting.
Section 7. Voting; Proxies. Except as otherwise provided by the certificate
of incorporation, each stockholder entitled to vote at any meeting of
stockholders shall be entitled to one vote for each share of stock held by him
which has voting power upon the matter in question. Each stockholder entitled to
vote at a meeting of stockholders may authorize another person or persons to act
for him by proxy, but no such proxy shall be voted or acted upon after three
years from its date, unless the proxy provides for a longer period. A duly
executed proxy shall be irrevocable if it states that it is irrevocable and if,
and only as long as, it is coupled with an interest sufficient in law to support
an irrevocable power. A stockholder may revoke any proxy, which is not
irrevocable, by attending the meeting and voting in person or by filing an
instrument in writing revoking the proxy or another duly executed proxy bearing
a later date with the secretary of the corporation. At all meetings of
stockholders for the election of directors a plurality of the votes cast shall
be sufficient to elect. All other elections and questions shall, unless
otherwise provided by law, the certificate of incorporation or these bylaws, be
decided by the vote of the holders of shares of stock having a majority of the
votes which could be cast by the holders of all shares of stock entitled to vote
thereon which are present in person or represented by proxy at the meeting.
Section 8. List of Stockholders Entitled to Vote. The secretary shall
prepare and make, at least ten days before every meeting of stockholders, a
complete list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder. Such list shall be open to
the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten days prior to the
meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. The list shall also be
produced and kept at the time and place of the meeting during the whole time
thereof and may be inspected by any stockholder who is present. The stock ledger
shall be the only evidence as to who are the stockholders entitled to examine
the stock ledger, the list of stockholders or the books of the corporation, or
to vote in person or by proxy at any meeting of stockholders.
Section 9. Action by Consent of Stockholders. Unless otherwise restricted
by the certificate of incorporation, any action required or permitted to be
taken at any annual or special meeting of the stockholders may be taken without
a meeting, without prior notice and without a vote, if a consent in writing,
setting forth the action so taken, shall be signed by the holders (and include
the date of signature for each such holder) of outstanding stock having not less
than the minimum number of votes that would be necessary to authorize or take
such action at a meeting at which all shares entitled to vote thereon were
present and voted and shall be delivered to the corporation by delivery to its
principal place of business or the secretary within sixty (60) days of the
earliest dated consent. Prompt notice of the taking of the corporate action
without a meeting by less than unanimous written consent shall be given to those
stockholders who have not consented in writing.
Section 10. Meeting of all Stockholders. If all of the stockholders shall
meet at any time and place, and consent to the holding of a meeting, such
meeting shall be valid without call or notice, and at such meeting any corporate
action may be taken.
ARTICLE III
Board of Directors
Section 1. Number; Qualifications. The board of directors may by resolution
from time to time designate the number of directors that shall constitute the
whole board, which shall not be less than six (6) nor more than eleven (11),
subject to the rights of the stockholders to repeal or modify such actions. Each
director shall hold office for a term expiring at the next annual stockholders'
meeting following his or her election or until his or successor shall have been
elected and qualified, whichever period is longer.
Section 2. Election; Resignation; Removal; Vacancies. At the first annual
meeting of stockholders and at each annual meeting thereafter, the stockholders
shall elect directors each of whom shall hold office until his successor is
elected and qualified or until his earlier resignation and removal. Any director
may resign at any time upon written notice to the corporation. Any newly created
directorship or any vacancy occurring in the board of directors for any cause
may be filled by a majority of the remaining members of the board of directors,
although such majority is less than a quorum, or by a plurality of the votes
cast at a meeting of stockholders, and each director so elected shall hold
office until the expiration of the term of office of the director whom he has
replaced or until his successor is elected and qualified.
Section 3. Regular Meetings. Regular meetings of the board of directors may
be held at such places and at such times within or without the State of Delaware
as the board of directors may from time to time determine, and if so determined
notices thereof need not be given.
Section 4. Special Meetings. Special meetings of the board of directors may
be held at any time or place within or without the State of Delaware whenever
called by the chairman of the board, the chief executive officer, or any member
of the board of directors. Notice of a special meeting of the board of directors
shall be given by the person or persons calling the meeting at least twenty-four
(24) hours before the special meeting.
Section 5. Telephonic Meetings Permitted. Members of the board of
directors, or any committee designated by the board of directors, may
participate in a meeting thereof by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation in a meeting pursuant to this
Section 5 shall constitute presence in person at such meeting.
Section 6. Quorum; Vote Required for Action. At all meetings of the board
of directors a majority of the whole board of directors shall constitute a
quorum for the transaction of business. Except in cases in which the certificate
of incorporation or these bylaws otherwise provide, the vote of a majority of
the directors present at a meeting at which a quorum is present shall be the act
of the board of directors.
Section 7. Organization. Meetings of the board of directors shall be
presided over by the chairman of the board, or in his absence by the chief
executive officer, or in his absence by the president, or in their absence by a
chairman chosen at the meeting. The secretary shall act as secretary of the
meeting, but in his absence the chairman of the meeting may appoint any person
to act as secretary of the meeting.
Section 8. Informal Action by Directors. Unless otherwise restricted by the
certificate of incorporation or these bylaws, any action required or permitted
to be taken at any meeting of the board of directors, or of any committee
thereof, may be taken without a meeting if all members of the board of directors
or such committee, as the case may be, consent thereto in writing, and the
writing or writings are filed with the minutes of proceedings of the board of
directors or such committee.
ATRICLE IV
Committees
Section 1. Committees. The board of directors may, by resolution passed by
a majority of the whole board of directors, designate one or more committees,
each committee to consist of one or more of the directors of the corporation.
The board of directors may designate one or more directors as alternate members
of any committee, who may replace any absent or disqualified member at any
meeting of the committee. In the absence or disqualification of a member of the
committee, the member or members thereof present at any meeting and not
disqualified from voting, whether or not he or they constitute a quorum, may
unanimously appoint another member of the board of directors to act at the
meeting in place of any such absent or disqualified member. Any such committee,
to the extent permitted by law and to the extent provided in the resolution of
the board of directors creating such committee, shall have and may exercise all
the powers and authority of the board of directors in the management of the
business and affairs of the corporation.
Section 2. Executive Committee. The board of directors may, by resolution
regularly adopted, designate one or more directors to constitute an executive
committee. The executive committee, in the intervals between the meetings of the
board, shall have and may exercise all the powers and authority of the board in
the management of the business and affairs of the corporation, except that the
executive committee shall not have any power or authority in reference to
amending the certificate of incorporation, adopting an agreement of merger or
consolidation, recommending to the stockholders the sale, lease or exchange of
all or substantially all of the corporation's property and assets, recommending
to the stockholders a dissolution of the corporation or a revocation of a
dissolution, amending the bylaws of the corporation, declaring dividends,
authorizing the issuance of stock, or adopting a certificate of ownership and
merger. A majority of such committee shall constitute a quorum.
Section 3. Committee Rules. Unless the board of directors otherwise
provides, each committee designated by the board of directors may make, alter
and repeal rules for the conduct of its business. In the absence of such rules
each committee shall conduct its business in the same manner as the board of
directors conducts its business pursuant to Article III of these bylaws.
ARTICLE V
Officers
Section 1. Classes. The officers of the corporation shall be a chairman of
the board, a chief executive officer, a chief operating officer, a secretary and
a treasurer, and such other officers, including one or more vice presidents, as
may be provided by the board of directors and elected in accordance with the
provisions of this article.
Section 2. Election and Term of Office. The officers of the corporation
shall be elected annually by the board of directors at the first meeting of the
board of directors held after each annual meeting of stockholders. If the
election of officers shall not be held at such meeting, such election shall be
held as soon thereafter as convenient. Vacancies may be filled or new offices
created and filled at any meeting of the board of directors. Each officer shall
hold office until his or her successor shall have been duly elected and shall
have qualified or until his or her death or until he or she shall resign or
shall have been removed from office in the manner hereinafter provided.
Section 3. Removal. Any officer elected by the board of directors may be
removed by the board of directors, with or without cause, whenever in its
judgment the best interest of the corporation would be served thereby, but such
removal shall be without prejudice to the contract rights, if any, of the person
so removed. Election or appointment of an officer or agent shall not of itself
create contractual rights.
Section 4. Chairman of the Board. The chairman of the board shall see that
all orders and resolutions of the board of directors are carried into effect.
The chairman of the board shall call meetings of the stockholders, the board of
directors and the executive committee, should one be established, to order and
shall act as chairman of such meetings.
Section 5. Chief Executive Officer. The chief executive officer shall be
responsible for the general and active management of the operation of the
corporation. He shall, in general, supervise and control all of the business and
affairs of the corporation. In the event the board of directors does not elect a
chairman of the board, or if elected, in the event of his inability or refusal
to act, or at his request or when specifically authorized by the board of
directors, the chief executive officer shall perform the duties of the chairman
of the board and, when so acting, shall have all the powers of and be subject to
all the restrictions upon the chairman of the board. The chief executive officer
shall perform all duties normally incident to such office and such other duties
as may be prescribed by the chairman of the board or the board of directors from
time to time.
Section 6. President. The president shall perform all duties normally
incident to the office of president and such other duties as may be prescribed
by the board of directors, the chairman of the board or the chief executive
officer. In the absence of the chief executive officer or in the event of his
inability or refusal to act, the president shall perform the duties of the chief
executive officer and, when so acting, shall have all the powers of and be
subject to all the restrictions upon the chief executive officer.
Section 7. Chief Operating Officer. The chief operating officer shall see
that all orders of the board of directors, the chairman of the board, the chief
executive officer or the president are carried into effect. In the absence of
the president or in the event of his inability or refusal to act, the chief
operating officer shall perform the duties of the president and, when so acting,
shall have all the powers of and be subject to all the restrictions upon the
president. The chief operating officer shall perform other duties commonly
incident to this office and shall perform such other duties and have such other
powers as the board of directors, the chairman of the board, the chief executive
officer or the president may from time to time prescribe.
Section 8. Vice President. The vice president shall perform such duties as
from time to time may be assigned by the board of directors, the chairman of the
board, the chief executive officer or the president.
Section 9. Treasurer. The treasurer shall [a] have charge and custody of
and be responsible for all funds and securities of the corporation; receive and
give receipts for moneys due and payable to the corporation from any source
whatsoever, and deposit all such moneys in the name of the corporation in such
banks, trust companies or other depositories as shall be selected in accordance
with the provisions of these bylaws; and, [b] in general, perform all the duties
normally incident to the office of treasurer and such other duties as from time
to time may be normally assigned by the chairman of the board or the chief
executive officer or the board of directors.
Section 10. Secretary. The secretary shall [a] keep the minutes of the
stockholders' and of the board of directors' meetings in one or more books
provided for that purpose; [b] see that all notices are duly given in accordance
with the provisions of these bylaws or as required by law; [c] be custodian of
the corporate records and stock transfer books of the corporation; and, [d] in
general, perform all duties normally incident to the office of secretary and
such other duties as from time to time may be assigned by the chairman of the
board or the chief executive officer or the board of directors.
ARTILCE VI
Stock
Section 1. Certificates. Every holder of stock shall be entitled to have a
certificate signed by or in the name of the corporation by the chairman of the
board, the chief executive officer, the president or any vice president, and by
the secretary or an assistant secretary, of the corporation, certifying the
number of shares owned by him in the corporation.
Section 2. Lost, Stolen or Destroyed Stock Certificates; Issuance of New
Certificates. The corporation may issue a new certificate of stock in the place
of any certificate theretofore issued by it, alleged to have been lost, stolen
or destroyed, and the corporation may require the owner of the lost, stolen or
destroyed certificate, or his legal representative, to give the corporation a
bond sufficient to indemnify it against any claim that may be made against it on
account of the alleged loss, theft or destruction of any such certificate or the
issuance of such new certificate.
Section 3. Transfers of Stock. Transfers of stock shall be made only upon
the transfer books of the corporation kept in an office of the corporation or by
transfer agents designated to transfer shares of the stock of the corporation.
Except where a certificate is issued in accordance with Section 2 above, an
outstanding certificate for the number of shares involved shall be surrendered
for cancellation before a new certificate is issued therefor.
Section 4. Record Date. The board of directors may fix the record date,
which shall not be more than sixty (60) days nor less than ten (10) days before
the date of any meeting of the stockholders, nor more than sixty (60) days prior
to the time where the other action hereinafter described, as of which there
shall be determined the stockholders are entitled: to notice of or to vote at
any meeting of stockholders or any adjournment thereof; to express consent to
corporate action in writing without a meeting; to receive payment of any
dividend or any other distribution or allotment of any rights; or to exercise
any rights with respect to any change, conversation, or exchange of stock or
with respect to any other lawful action.
ARTICLE VII
Indemnification and Insurance
Section 1. Right to Indemnification. Each person who was or is made a party
or is threatened to be made a party to or becomes involved in any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, and whether formal or informal, (hereinafter a
proceeding), by reason of the fact that he or she, or a person of whom he or she
is the legal representative, is or was a director or officer of the corporation
or is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation or of a partnership, joint venture,
trust or other enterprise, including service with respect to employee benefit
plans, whether the basis of such proceeding is alleged action in an official
capacity as a director, officer, employee or agent or any other capacity while
serving as a director, officer, employee or agent, shall be indemnified and held
harmless by the corporation to the fullest extent authorized by Delaware General
Corporation Law, as the same exist or may hereafter be amended (but, in the case
of any such amendment, only to the extent that such amendment permits the
corporation to provide broader indemnification rights than such law permitted
the corporation to provide prior to such amendment) against all expense,
liability and loss (including attorney fees, judgments, fines, ERISA excise
taxes or penalties and amounts paid or to be paid in settlement) actually and
reasonably incurred or suffered by such person in connection therewith, and such
indemnification shall continue as to a person who has ceased to be a director or
officer and shall inure to the benefit of his or her heirs, executors and
administrators; provided, however, that, except as provided in Section 2 of this
Article VII, the corporation shall indemnify any such person seeking
indemnification in connection with the proceeding (or part thereof) initiated by
such person only if such proceeding (or part thereof) is authorized by the board
of directors of the corporation. The right to indemnification conferred in this
Section 1 of this Article VII shall be a contract right and shall include the
right to be paid by the corporation the expenses incurred in defending any such
proceeding in advance of its final disposition; provided, however, that, if the
Delaware General Corporation Law requires, the payment of such expenses incurred
by a current director or officer in his or her capacity as director or officer
(and not in any other capacity in which service was or is rendered by such
person while a director or officer, including, without limitation, service to an
employee benefit plan) in advance of the final disposition of a proceeding,
shall be made only upon delivery to the corporation of an undertaking, by or on
behalf of such director or officer, to repay all amounts so advanced that it
shall ultimately be determined that such director or officer is not entitled to
be indemnified under this section or otherwise. The corporation may, to the
extent authorized from time to time by the board of directors, grant rights to
indemnification, and to the advancement of expenses to any employee or agent of
the corporation to the fullest extent of the provisions of this Section 1 with
respect to the indemnification and advancement of expenses of directors and
officers of the corporation.
Section 2. Right of Claimant to Bring Suit. If a claim under Section 1 of
this Article VII is not paid in full by the corporation within 60 days after a
written claim has been received by the corporation, the claimant may, at any
time thereafter, bring suit against the corporation to recover the unpaid amount
of the claim and, if successful in whole or in part, the claimant shall be
entitled to be paid also the expense of prosecuting such a claim. It shall be a
defense to any such action (other than an action brought to enforce a claim for
expenses incurred in defending any proceeding in advance of its final
disposition where the required undertaking, if any is required, has been
tendered to the corporation) that the claimant has not met the standard of
conduct which makes it permissible under the Delaware General Corporation Law
for the corporation to indemnify the claimant for the amount claimed, but the
burden of providing such defense shall be on the corporation. Neither the
failure of the corporation (including its board of directors, independent legal
counsel or its stockholders) to have made a determination prior to the
commencement of such action that indemnification of the claimant is proper under
the circumstances because he or she has met the ethical standard of conduct set
forth in the Delaware General Corporation Law, nor an actual determination by
the corporation (including its board of directors, independent legal counsel or
its stockholders) that the claimant has not met such applicable standard of
conduct, shall be a defense to the action or create a presumption that the
claimant has not met the applicable standard of conduct.
Section 3. Non-Exclusivity of Rights. The right to indemnification and the
payment of expenses incurred in defending a proceeding in advance of its final
disposition conferred in this Article VII shall not be exclusive of any other
right which any person may have or hereafter acquire under any statute,
provision of the certificate of incorporation, bylaw, agreement, vote of
stockholders, or disinterested directors or otherwise.
Section 4. Insurance. The corporation may maintain insurance, at its
expense, to protect itself and any director, officer, employee or agent of the
corporation, or another corporation, partnership, joint venture, trust or other
enterprise against such expense, liability or loss, whether or not the
corporation will have the power to indemnify such person against such expense,
liability or loss, under the Delaware General Corporation Law.
ARTICLE VIII
Miscellaneous
Section 1. Fiscal Year. The fiscal year of the corporation shall be
determined by resolution of the board of directors.
Section 2. Waiver of Notice of Meetings of Stockholders, Directors and
Committees. Any written waiver of notice, signed by the person entitled to
notice, whether before or after the time stated therein, shall be deemed
equivalent to notice. Attendance of a person at a meeting shall constitute a
waiver of notice of such meeting, except when the person attends a meeting for
the express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at, nor the purpose of any
regular or special meeting of the stockholders, directors, or members of a
committee of directors need be specified in any written waiver of notice.
Section 3. Form of Records. Any records maintained by the corporation in
the regular course of its business, including its stock ledger, books of
account, and minute books, may be kept on, or be in the form of, punch cards,
magnetic tape, photographs, micro-photographs, or any other information storage
device, provided that the records so kept can be converted into clearly legible
form within a reasonable time. The corporation shall so convert any records so
kept upon the request of any person entitled to inspect the same.
Section 4. Amendment of Bylaws. These bylaws may be altered or repealed,
and new bylaws made, by the board of directors, but the stockholders may make
additional bylaws and may alter and repeal any bylaws whether adopted by them or
otherwise.
APPENDIX D
Section 5/11.65 and 5/11.70
Illinois Business Corporation Act
RIGHTS OF DISSENTING STOCKHOLDERS OF
UNITED TRUST GROUP, INC.
5/11.65 RIGHT TO DISSENT. - (a) A shareholder of a corporation is entitled
to dissent from, and obtain payment for his or her shares in the event of any of
the following corporate actions:
(1) consummation of a plan of merger of consolidation or a plan of share
exchange to which the corporation is a party if (i) shareholder authorization is
required for the merger or consolidation or the share exchange by Section 11.20
or the articles of incorporation or (ii) the corporation is a subsidiary that is
merged with its parent or another subsidiary under Section 11.30;
(2) consummation of a sale, lease or exchange of all, or substantially all,
of the property and assets of the corporation other than in the usual and
regular course of business;
(3) an amendment of the articles of incorporation that materially and
adversely affects rights in respect of a dissenter's shares because it:
(i) alters or abolishes a preferential right of such shares;
(ii) alters or abolishes a right in respect of redemption, including a
provision respecting a sinking fund for the redemption or repurchase, of
such shares;
(iii) in the case of a corporation incorporated prior to January 1,
1982, limits or eliminates cumulative voting rights with respect to such
shares; or
(4) any other corporate action taken pursuant to a shareholder vote if the
articles of incorporation, by-laws, or a resolution of the board of directors
provide that shareholders are entitled to dissent and obtain payment for their
shares in accordance with the procedures set forth in Section 11.70 or as may be
otherwise provided in the articles, by-laws or resolution.
(b) A shareholder entitled to dissent and obtain payment for his or her
shares under this Section may not challenge the corporate action creating his or
her entitlement unless the action is fraudulent with respect to the shareholder
or the corporation or constitutes a breach of a fiduciary duty owed to the
shareholder.
(c) A record owner of shares may assert dissenters' rights as to fewer than
all the shares recorded in such person's name only if such person dissents with
respect to all shares beneficially owned by any one person and notifies the
corporation in writing of the name and address of each person on whose behalf
the record owner asserts dissenters' rights. The rights of a partial dissenter
are determined as if the shares as to which dissent is made and the other shares
recorded in the names of different shareholders. A beneficial owner of shares
who is not the record owner may assert dissenters' rights as to shares held on
such person's behalf only if the beneficial owner submits to the corporation the
record owner's written consent to the dissent before or at the same time the
beneficial owner asserts dissenters' rights.
5/11.70 PROCEDURE TO DISSENT. - (a) If the corporate action giving rise to
the right to dissent is to be approved at a meeting of shareholders, the notice
of meeting shall inform the shareholders of their right to dissent and the
procedure to dissent. If, prior to the meeting, the corporation furnishes to the
shareholders material information with respect to the transaction that will
objectively enable a shareholder to vote on the transaction and to determine
whether or not to exercise dissenters' rights, a shareholder may assert
dissenters' rights only if the shareholder delivers to the corporation before
the vote is taken a written demand for payment for his or her shares if the
proposed action is consummated, and the shareholder does not vote in favor of
the proposed action.
(b) If the corporate action giving rise to the right to dissent is not to
be approved at a meeting of shareholders, the notice to shareholders describing
the action taken under Section 11.30 or Section 7.10 shall inform the
shareholders of their right to dissent and the procedure to dissent. If, prior
to or concurrently with the notice, the corporation furnishes to the
shareholders material information with respect to the transaction that will
objectively enable a shareholder to determine whether or not to exercise
dissenters' rights, a shareholder may assert dissenter's rights only if he or
she delivers to the corporation within 30 days from the date of mailing the
notice a written demand for payment for his or her shares.
(c) Within 10 days after the date on which the corporate action giving rise
to the right to dissent is effective or 30 days after the shareholder delivers
to the corporation the written demand for payment, whichever is later, the
corporation shall send each shareholder who has delivered a written demand for
payment a statement setting forth the opinion of the corporation as to the
estimated fair value of the shares, the corporation's latest balance sheet as of
the end of a fiscal year ending not earlier than 16 months before the delivery
of the statement, together with the statement of income for that year and the
latest available interim financial statements, and either a commitment to pay
for the shares of the dissenting shareholder at the estimated fair value thereof
upon transmittal to the corporation of the certificate or certificates, or other
evidence of ownership, with respect to the shares, or instructions to the
dissenting shareholder to sell his or her shares within 10 days after delivery
of the corporation's statement to the shareholder. The corporation may instruct
the shareholder to sell only if there is a public market for the shares at which
the shares may be readily sold. If the shareholder does not sell within that 10
day period after being so instructed by the corporation, for purposes of this
Section the shareholder shall be deemed to have sold his or her shares at the
average closing price of the shares, if listed on a national exchange, or the
average of the bid and asked price with respect to the shares quoted by a
principal market maker, if not listed on a national exchange, during that 10 day
period.
(d) A shareholder who makes written demand for payment under this Section
retains all other rights of a shareholder until those rights are cancelled or
modified by the consummation of the proposed corporate action. Upon consummation
of that action, the corporation shall pay to each dissenter who transmits to the
corporation the certificate of other evidence of ownership of the shares the
amount the corporation estimates to be the fair value of the shares, plus
accrued interest, accompanied by a written explanation of how the interest was
calculated.
(e) If the shareholder does not agree with the opinion of the corporation
as to the estimated fair value of the shares or the amount of interest due, the
shareholder, within 30 days from the delivery of the corporation's statement of
value, shall notify the corporation in writing of the shareholder's estimated
fair value and amount of interest due and demand payment for the difference
between the shareholder's estimate of fair value and interest due and the amount
of the payment by the corporation or the proceeds of sale by the shareholder,
whichever is applicable because of the procedure for which the corporation opted
pursuant to subsection (c).
(f) If, within 60 days from delivery to the corporation of the shareholder
notification of estimate of fair value of the shares and interest due, the
corporation and the dissenting shareholder have not agreed in writing upon the
fair value of the shares and interest due, the corporation shall either pay the
difference in value demanded by the shareholder, with interest or file a
petition in the circuit court of the county in which either the registered
office or the principal office of the corporation is located, requesting the
court to determine the fair value of the shares and interest due. The
corporation shall make all dissenters, whether or not residents of this State,
whose demands remain unsettled parties to the proceeding as an action against
their shares and all parties shall be served with a copy of the petition.
Nonresidents may be served by registered or certified mail or by publication as
provided by law. Failure of the corporation to commence an action pursuant to
this Section shall not limit or affect the right of the dissenting shareholders
to otherwise commence an action as permitted by law.
(g) The jurisdiction of the court in which the proceeding is commenced
under subsection (f) by a corporation is plenary and exclusive. The court may
appoint one or more persons as appraisers to receive evidence and recommend
decision on the question of fair value. The appraisers have the power described
in the order appointing them, or in any amendment to it.
(h) Each dissenter made a party to the proceeding is entitled to judgment
for the amount, if any, by which the court finds that fair value of his or her
shares, plus interest, exceeds the amount paid by the corporation or the
proceeds of sale by the shareholder, whichever amount is applicable.
(i) The court, in a proceeding commenced under subsection (f), shall
determine all costs of the proceeding, including the reasonable compensation and
expenses of the appraisers, if any, appointed by the court under subsection (g),
but shall exclude the fees and expenses of counsel and experts for the
respective parties. If the fair value of the shares as determined by the court
materially exceeds the amount which the corporation estimated to be the fair
value of the shares or if no estimate was made in accordance with subsection
(c), then all or any part of the costs may be assessed against the corporation.
If the amount which any dissenter estimated to be the fair value of the shares
materially exceeds the fair value of the shares as determined by the court, then
all or any part of the costs may be assessed against that dissenter. The court
may also assess the fees and expenses of counsel and experts for the respective
parties, in amounts the court finds equitable, as follows:
(1) Against the corporation and in favor of any or all dissenters if the
court finds that the corporation did not substantially comply with the
requirements or subsections (a), (b), (c), (d), or (f).
(2) Against either the corporation or a dissenter and in favor of any other
party if the court finds that the party against whom the fees and expenses are
assessed acted arbitrarily, vexatiously, or not in good faith with respect to
the rights provided by this Section.
If the court finds that the services of counsel for any dissenter were of
substantial benefit to other dissenters similarly situated and that the fees for
those services should not be assessed against the corporation, the court may
award to that counsel reasonable fees to be paid out of the amounts awarded to
the dissenters who are benefited. Except as otherwise provided in this Section,
the practice, procedure, judgment and costs shall be governed by the Code of
Civil Procedure.
(j) As used in this Section:
(1) "Fair value", with respect to a dissenter's shares, means the value of
the shares immediately before the consummation of the corporate action to which
the dissenter objects excluding any appreciation or depreciation in anticipation
of the corporate action, unless exclusion would be inequitable.
(2) "Interest" means interest from the effective date of the corporate
action until the date of payment, at the average rate currently paid by the
corporation on its principal bank loans or, if none, at a rate that is fair and
equitable under all the circumstances.
Dear Shareholders:
The 2005 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 15, 2005, at 10:00 a.m. At the meeting,
shareholders will act to elect eight directors, to change the state of
incorporation of UTG from Illinois to Delaware 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
Fold and Tear Here Fold and Tear Here
PROXY FORM UNITED TRUST GROUP, INC. PROXY FORM
Annual Meeting of Shareholders - To be Held June 15, 2005
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 22, 2005,
at the annual meeting of shareholders to be held at the corporate headquarters,
5250 South Sixth Street, Springfield, Illinois 62703, on Wednesday June 15, 2005
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#
Fold and Tear Here Fold and Tear Here
Wiithhold 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. Proposal to change the state of incorporation of the Company from
Illinois to Delaware by merging the Company into a wholly-owned
subsidiary of the Company that is incorporated under the laws of
Delaware.
For Against Abstain
3. 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
