SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. __________)
Filed by the registrant /x/
Filed by a party other than the registrant / /
Check the appropriate box:
/X/ Preliminary proxy statement / / Confidential, for Use of the Commission Only
/ / Definitive proxy statement (as permitted by Rule 14a-6(e)(2))
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
UNIONFED FINANCIAL CORPORATION
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(Name of Registrant as Specified in Its Charter)
UNIONFED FINANCIAL CORPORATION
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(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per party to the controversy pursuant to Exchange Act Rule 14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transactions applies:
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(2) Aggregate number of securities to which transactions applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:(1)
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, schedule or registration statement no.:
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(3) Filing party:
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(4) Date filed:
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(1) Set forth the amount on which the filing fee is calculated and state how it
was determined.
UNIONFED FINANCIAL CORPORATION
1055 West Seventh Street, Suite 100
Los Angeles, California 90017
October __, 1995
Dear Fellow Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders
of UnionFed Financial Corporation ("UnionFed"), which will be held at the
Company's Headquarters Office, 1055 West Seventh Street, Suite 100, Los Angeles,
California 90017 at 3:30 p.m., California time, on November 15, 1995.
As described in the accompanying Notice of Annual Meeting of
Stockholders and Proxy Statement, stockholders will be asked to vote on the
election of two of the directors for UnionFed and to approve an amendment to the
Company's Certificate of Incorporation to reduce the required nunber of
directors.
I urge you to vote your proxy as soon as possible. Your vote is very
important, regardless of the number of shares you own. Please mark, sign and
date each proxy card you receive and return it in the postage-paid envelope
provided, even if you currently plan to attend the Annual Meeting. This will not
prevent you from voting in person, but will assure that your vote is counted if
you are unable to attend the meeting.
Please vote today.
Sincerely,
David S. Engelman
Chairman of the Board,
President and Chief Executive Officer
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If your UnionFed shares are held in the name of a brokerage firm or
nominee, only they can execute a proxy on your behalf. To ensure that your
shares are voted, please telephone the individual responsible for your account
today and obtain instructions on how to direct him or her to execute a proxy.
If you have any questions concerning this Proxy Statement or the
accompanying proxy or if you need any help in voting your stock, please
telephone D.F. King & Co., Inc., collect, at (212) 269-5550 today.
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UNIONFED FINANCIAL CORPORATION
1055 West Seventh Street, Suite 100
Los Angeles, California 90017
(213) 688-8417
-------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON NOVEMBER 15, 1995
-------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
UnionFed Financial Corporation ("UnionFed"), will be held at the Company's
Headquarters Office, 1055 West Seventh Street, Suite 100, Los Angeles,
California 90017 on November 15, 1995, at 3:30 p.m., California time, for the
following purposes:
1. To elect two directors for terms of three years each.
2. To consider a proposal to amend the Certificate of
Incorporation to reduce the required number of directors of
the Company.
3. To transact such other business as may properly come before
the Annual Meeting or any adjournment and postponement
thereof and may properly be voted upon.
The Board of Directors has selected October 4, 1995, as the record
date for the Annual Meeting. Only those stockholders of record at the close of
business on that date will be entitled to notice of and to vote at the Annual
Meeting or any adjournment thereof.
By Order of the Board of Directors
Ronald M. Griffith
Corporate Secretary
Los Angeles, California
October __, 1995
UNIONFED FINANCIAL CORPORATION
1055 West Seventh Street, Suite 100
Los Angeles, California 90017
(213) 688-8417
-----------------------------------------
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
-----------------------------------------
INFORMATION RELATING TO VOTING AT THE ANNUAL MEETING
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of UnionFed Financial Corporation, a
Delaware corporation ("UnionFed" or the "Company"), for use at the Annual
Meeting of Stockholders to be held on November 15, 1995 (the "Annual Meeting"),
and at any meetings held upon adjournment and postponement thereof. The mailing
date of this Proxy Statement and the accompanying form of proxy will be on or
about October __, 1995.
The Board of Directors of UnionFed has selected October 4, 1995 as the
record date for the Annual Meeting. Only those stockholders of record at the
close of business on that date will be entitled to notice of and to vote at the
Annual Meeting. UnionFed had a total of 27,201,993 shares of common stock, par
value $.01 per share ("Common Stock"), outstanding at that date. Stockholders
will be entitled to one vote for each share of Common Stock held by them of
record at the close of business on the record date on any matter that may be
presented for consideration and action by the stockholders at the Annual
Meeting. The holders of a majority of the shares of Common Stock outstanding on
the record date and entitled to be voted at the Annual Meeting, present in
person or by proxy, will constitute a quorum for the transaction of business at
the Annual Meeting and any adjournments and postponements thereof. In all
matters other than the election of directors, the affirmative vote of the
majority of shares of Common Stock present in person or represented by proxy at
the Annual Meeting and entitled to vote on the subject matter will be the act of
the stockholders. Directors will be elected by a plurality of the votes of the
shares of Common Stock present in person or represented by proxy and entitled to
vote on the election of directors. Approval of the proposed amendment to the
Certificate of Incorporation requires the affirmative vote of the holders of at
least a majority of the outstanding shares of Common Stock. Abstentions and
broker non-votes are counted for the purpose of determining the presence or
absence of a quorum for the transaction of business. Abstentions are counted in
tabulations of the votes cast on proposals presented to stockholders, whereas
broker non-votes are not counted for purposes of determining whether a proposal
has been approved.
All valid proxies received in response to this solicitation will be
voted in accordance with the instructions indicated thereon by the stockholders
giving such proxies. If no contrary instructions are given, proxies received
will be voted in favor of the election of the two director nominees named in
this Proxy Statement and in favor of the proposed amendment to the Certificate
of Incorporation. The Board of Directors does not know of any other business to
be presented for action at the Annual Meeting. If any other business is properly
presented at the Annual Meeting and may properly be voted upon, the proxies
solicited hereby will be voted on such matters in accordance with the discretion
of the proxy holders named in such proxies. A stockholder may revoke his or her
proxy at any time before it is voted at the Annual Meeting by giving written
notice of such revocation to the Corporate Secretary of UnionFed (which notice
may be given by the filing of a duly executed proxy bearing a later date) or by
attending the Annual Meeting and voting in person.
The costs of this proxy solicitation will be paid by UnionFed.
UnionFed has retained D.F. King & Co., Inc. to assist in the solicitation of
proxies for a fee of $ 3,500 and reimbursement of certain expenses. To the
extent necessary, proxies may also be solicited by personnel of UnionFed or
Union Federal Bank, a federal savings bank (the "Bank"), in person, by
telephone, or through other forms of communication. UnionFed and the Bank
personnel who participate in this solicitation will not receive any additional
compensation for such solicitation. UnionFed will request record holders of
shares beneficially owned by others to forward this Proxy Statement and related
materials to the beneficial owners of such shares and will reimburse such record
holders for their reasonable expenses incurred in doing so.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The information set forth below is based upon filings known by
UnionFed to have been made with the Securities and Exchange Commission. Except
as set forth below, as of September 15, 1995, no person was known to UnionFed to
have owned beneficially more than 5% of the outstanding shares of Common Stock.
The number of shares beneficially owned is deemed to include shares of Common
Stock in which the persons named have or share either investment or voting
power. On September 15, 1995, there were 27,201,993 shares of Common Stock
outstanding.
Name and Address of Number of Shares Percentage
Beneficial Owner (1) Beneficially Owned of Class(2)
--------------------- ------------------ -------------
Morgan Stanley Asset Management, Ltd. 2,521,319 9.27%
25 Cabot Square
Canary Wharf, London E14 4QA
Smith Barney Shearson Holdings, Inc. 2,171,429 7.98%
1345 Avenue of the Americas
New York, New York 10105
First Pacific Advisors, Inc. 1,572,900(3) 5.05%
11400 West Olympic Boulevard
Suite 1200
Los Angeles, California 90064
----------------------------------
<FN>
(1) Each of the beneficial owners listed in the table is a registered
investment advisor under the Investment Advisors Act of 1940, as amended.
(2) To the best knowledge of UnionFed, none of the accounts for which such
entity provides investment advisory services individually holds 5% or more
of the outstanding shares of Common Stock of UnionFed.
(3) Includes warrants to purchase 200,000 shares issued as part of UnionFed's
recapitalization which entitle the holders to purchase Common Stock at
$2.33 per share during the five years after the September 28, 1993 issue
date.
2
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth, as of September 15, 1995, information
concerning the beneficial ownership of shares of Common Stock by each director
or director nominee of UnionFed, by each of the executive officers named in the
Summary Compensation Table set forth herein and by all directors, director
nominees and executive officers of UnionFed as a group. Unless otherwise
indicated, each person listed below has sole investment and voting power with
respect to the shares indicated, subject to applicable community property laws.
Number of Shares Percentage
Name of Beneficial Owner Beneficially Owned of Class
----------------------- ------------------ -----------
Donald L. Criswell. . . . . . . . . . . . . . . . . . . . . . . . . . . 1,140 *
William T. Donovan. . . . . . . . . . . . . . . . . . . . . . . . . . 85,715(1) *
David S. Engelman . . . . . . . . . . . . . . . . . . . . . . . . . . 126,800 *
Thomas P. Kemp. . . . . . . . . . . . . . . . . . . . . . . . . . . . .11,453 *
David J. Primuth. . . . . . . . . . . . . . . . . . . . . . . . . . . .60,000 *
Dale A. Welke . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,007 *
John R. Wise . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,428(2) *
Ralph E. Lautmann . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 *
Ronald M. Griffith. . . . . . . . . . . . . . . . . . . . . . . . . . .25,595 *
Stephen J. Austin . . . . . . . . . . . . . . . . . . . . . . . . . . .34,285 *
All directors and executive officers as a group (11 persons). . . . . 359,563(1) 1.32%
-----------------------------
<FN>
* Less than 1% of outstanding Common Stock at September 15, 1995.
(1) Includes warrants issued as part of UnionFed's recapitalization to purchase
28,572 shares of Common Stock at $2.33 per share during the five years
after the September 28, 1993 issue date.
(2) All such shares are held indirectly by Mr. Wise. The shares are in the name
of Oakmont Mortgage Company, of which Mr. Wise is the Chairman of the
Board, Chief Executive Officer and 41% shareholder.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
UnionFed's Certificate of Incorporation and Bylaws provide that the
Board of Directors shall be divided into three classes as nearly equal in number
as possible. The members of each class are elected for terms of three years and
until their successors are elected and qualified, with one of the three classes
of directors being elected each year. The current number of directors authorized
by the Board of Directors is seven, the minmum number permitted by UnionFed's
Certificate of Incorporation. At the Annual Meeting, a proposal will be
submitted to the stockholders to reduce the authorized minimum to five members
to reduce costs to the Company. Two directors are to be elected at the Annual
Meeting for three-year terms expiring in 1998. The Board of Directors' nominees
are Thomas P. Kemp and David J. Primuth. The current board size is seven
directors following the resignation of director J. David Kall and the retirement
of director William S. Martin, Jr. after reaching the mandatory retirement age
for directors, both as of June 30, 1995. Pursuant to the Certificate of
Incorporation and the Bylaws, stockholders may not cumulate votes in the
election of directors.
The nominees for election as directors at the Annual Meeting set forth
in the table below are all incumbent directors. Each of the nominees has
consented to serve as a director if elected. Unless authority to
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vote for any directors is withheld in a proxy, it is intended that each proxy
will be voted FOR such nominees. In the event that any of the nominees for
director should before the Annual Meeting become unable to serve if elected, it
is intended that shares represented by proxies which are executed and returned
will be voted by the proxy holders for such substitute nominees as may be
recommended by the Company's existing Board of Directors, unless other
directions are given in the proxies. To the best of the Company's knowledge, all
the nominees will be available to serve.
The following table sets forth certain information concerning (i) the
two nominees standing for election to the Board of Directors at the Annual
Meeting and (ii) all other directors whose terms as directors will continue
after the Annual Meeting.
YEAR IN
POSITION(S) CURRENTLY DIRECT WHICH TERM
NAME AGE HELD WITH UNIONFED SINCE WILL EXPIRE
----- --- ---------------------- ------ -----------
NOMINEES FOR ELECTION
Thomas P. Kemp 65 Director 1991 1998
David J. Primuth 57 Director 1993 1998
CONTINUING DIRECTORS
David S. Engelman 58 Director, Chairman of the Board 1991 1996
President and Chief Executive Officer
Dale A. Welke 57 Director 1990 1996
John R. Wise 55 Director 1991 1996
Donald L. Criswell 61 Director 1983(1) 1997
William T. Donovan 43 Director 1993 1997
-----------------------------
<FN>
(1) The date given is the date such director became a director of the Bank.
UnionFed was organized on September 18, 1986 and became the holding
company for the Bank effective June 25, 1987.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS ELECTION OF EACH OF THE
ABOVE NOMINEES.
INFORMATION CONCERNING NOMINEES AND DIRECTORS
Donald L. Criswell is a certified public accountant and an independent
accounting consultant. Prior thereto, from 1974 through 1982, Mr. Criswell was a
partner in the accounting firm of Grant Thornton, UnionFed's independent
auditors prior to the selection of KPMG Peat Marwick. Mr. Criswell became a
director of UnionFed upon its formation in 1986 and has served as a director of
the Bank since 1983. He is a member of the Executive Committee of UnionFed.
William T. Donovan is Executive Vice President and Chief Financial
Officer of Christiana Companies, Inc., an investment holding company, which he
joined in April 1990 as a Vice President. He also serves as a member of
Christiana's board of directors. Mr. Donovan is also a member of the board of
directors of Prideco, Inc. Effective February 1980, Mr. Donovan became a partner
of Lubar & Co., a private investment and venture capital firm. Mr. Donovan
joined the Board in October 1993 and is a member of the Audit Committee.
Thomas P. Kemp is Co-Chairman of the United States Committee to Assist
Russian Reform. He is the retired Chief Executive Officer of the Coca-Cola
Bottling Company of Los Angeles. From 1989 to 1990 he served as a director of
Financial Corporation of Santa Barbara and its subsidiary, Santa Barbara Savings
and Loan Association. From 1984 to 1988 he served as a director of Financial
Corporation of America and its subsidiary,
4
American Savings and Loan Association. Mr. Kemp is presently a director of Pimco
Commercial Mortgage Security Trust, Inc. and a trustee for mutual funds advised
by Pacific Investment Management Corp. Mr. Kemp is also a member of the board of
directors of Hydro-Mill. He joined the UnionFed Board in 1991.
David J. Primuth has been the Chairman of the Board of JWP Pacific
International, Inc. since 1988 and also served as the Chairman of the Board and
Chief Executive Officer of JWP West from 1988 to 1991. JWP Pacific
International, Inc. is an electrical/mechanical contracting company listed on
the New York Stock Exchange. Mr. Primuth was appointed as a director of UnionFed
effective October 1, 1993 to fill a Board seat vacancy and is a member of the
Audit Committee.
David S. Engelman became the Chairman of the Board, President and
Chief Executive Officer of UnionFed and the Bank in April 1991. He also serves
as the Chair of UnionFed's Executive Committee. From October 1989 to March 1991,
Mr. Engelman was a consultant to Portland General Corporation, a diversified
holding company, which includes ownership of Portland General Electric Co., and
from April 1988 to May 1989 he served as a consultant to Weyerhaeuser Financial
Services, Inc. In addition, Mr. Engelman was formerly a director and Chair of
the Executive Committee of Commercial Federal Bank in Omaha, Nebraska. Mr.
Engelman is presently a director of MGIC Investment Corporation and Mortgage
Guaranty Insurance Corporation.
Dale A. Welke has been a partner in the law firm of Adams, Duque, and
Hazeltine since July 1970 and is currently a member of their Executive Committee
and Compensation Committee. Mr. Welke became a director of UnionFed and the Bank
in 1990 and is a member of UnionFed's Executive Committee.
John R. Wise has served as a director of UnionFed and the Bank since
1991. He has been the Chairman of the Board and Chief Executive Officer of
Oakmont Mortgage Company since 1989. Prior thereto, he was the President and
Chief Executive Officer of Weyerhauser Mortgage Company for over 10 years. Mr.
Wise is the Chair of UnionFed's Audit Committee.
INFORMATION REGARDING THE BOARD OF DIRECTORS
COMMITTEES AND MEETINGS
During the fiscal year ended June 30, 1995, there were six meetings of
the Board of Directors. While a director, each of the current board members
attended at least 75% of the aggregate of (i) the meetings of the Board and (ii)
the meetings of the committees of the Board on which such directors served.
The Executive Committee of the Board of Directors, which met four
times in fiscal 1995, implements the operating policy of UnionFed and is
authorized to exercise the powers of the Board of Directors between regular
meetings. Messrs. Engelman (Chair), Criswell and Welke are the current
members of the Executive Committee.
The Audit Committee of the Board of Directors, which met five times
in fiscal 1995, recommends to the Board of Directors its choice of
independent auditors to perform audit and nonaudit services, reviews the
scope and results of such services, reviews the systems of internal control
and audit with management and UnionFed's independent auditors and monitors
adherence in accounting and financial reporting to generally accepted
accounting principles. Messrs. Wise (Chair), Donovan and Primuth are the
current members of the Audit Committee.
The Executive Compensation and Stock Option Committee (the
"Compensation Committee") of the Board of Directors met three times in fiscal
1995 and was responsible for making all executive compensation determinations in
fiscal 1995. Effective July 1, 1995, these functions will be handled directly by
the full Board of Directors.
The Board of Directors selects nominees for election as directors.
UnionFed does not have a standing nominating committee. To be eligible for
appointment, election or re-election to the Board, a prospective Board member
(including incumbent directors) must not have reached his or her 68th birthday.
In accordance with
5
UnionFed's Bylaws, stockholder nominations for election of directors may be
voted on at an annual meeting only if such nominations are made pursuant to a
written notice delivered to, or mailed and received at, the principal executive
offices of UnionFed not less than 60 days nor more than 90 days prior to the
scheduled date for the meeting, regardless of any postponements or adjournments
of the meeting to a later date. Such notice must contain certain information
specified in UnionFed's Bylaws, and the Bylaws establish a procedure for curing
notices timely made but which do not meet the applicable informational
requirements.
DIRECTOR COMPENSATION
Fees paid to the Company's directors were reduced effective June 30,
1995. Directors (including employees of UnionFed) currently receive a quarterly
retainer of $500. No additional fees are paid for committee meetings. All
directors of UnionFed also serve on the Board of Directors of the Bank, for
which they receive no additional compensation. No stock option awards have been
granted to Board members and it is not presently contemplated that such awards
will be made under the UnionFed 1992 Stock Option Plan.
REPORT OF THE COMPENSATION COMMITTEE ON COMPENSATION MATTERS
During fiscal 1995, the Compensation Committee of the Board of
Directors was responsible for the administration and further development of
UnionFed's executive compensation policies and programs and for making
recommendations to the Board of Directors with respect to these policies and
programs. The Compensation Committee was composed solely of three outside,
non-employee directors. The Compensation Committee reviewed the compensation
paid to the Chief Executive Officer and to each of the other senior executive
officers of UnionFed.
COMPENSATION PHILOSOPHY
In light of the financial condition of UnionFed in fiscal 1995, the
Compensation Committee sought to minimize cash compensation expenses. During
fiscal 1995, the Compensation Committee continued UnionFed's executive pay
freeze at the request of UnionFed management, which resulted in no increases in
1995 salaries over 1994 levels. In light of the sale of 13 branches to Glendale
Federal Bank in June 1995, the Compensation Committee has reduced the cash
compensation payable to UnionFed management consistent with their remaining
responsibilities. No option grants were made during fiscal 1995.
CHIEF EXECUTIVE OFFICER COMPENSATION
Compensation of UnionFed's Chief Executive Officer, David S. Engelman,
during fiscal 1995 was principally determined by the provisions of his April 1,
1991 employment agreement, as amended on December 1, 1993. This agreement
entitled Mr. Engelman to a base compensation of $300,000 annually, plus a
guaranteed bonus of at least 30% of his base compensation during each calendar
year and to other benefits through the June 30, 1997 term of his employment
agreement. Mr. Engelman has not taken any significant portion of his guaranteed
bonus during any fiscal year that he has been employed by UnionFed. Under his
agreement, Mr. Engelman was entitled to a severance payment upon the completion
of the sale of branches to Glendale Federal Bank generally equal to the balance
of compensation and benefits through June 30, 1997, plus a lump sum settlement
of his Supplemental Retirement Plan benefits assuming he was employed through
June 30, 1997.
In order to reduce this liability and future liabilities of UnionFed
and the Bank, the Compensation Committee of the Board in June 1995 negotiated an
amendment to Mr. Engelman's employment contract. Under the amendment, which was
approved by the Office of Thrift Supervision, Mr. Engelman's employment
agreement was amended to be terminable upon 60 days' notice and his compensation
was reduced to $150,000 per year, plus certain fringe benefits which generally
were reduced to one-half of the pre-amendment levels. In consideration for these
changes and the termination of any future retirement obligations, Mr. Engelman
was paid $350,000 (rather than the two years' salary and benefits to which he
was entitled under the agreement upon completion of the
6
Glendale Federal Bank transaction) and received a $900,000 lump sum distribution
of Supplemental Retirement Plan assets that previously had been placed in trust
to fund future retirement obligations to Mr. Engelman.
CONCLUSION
The Compensation Committee believes that the compensation programs
established for UnionFed and the Bank's senior executives reflected appropriate
levels for fiscal 1995 and provide a basis for moving forward with the reduced
size of UnionFed and the Bank in fiscal 1996.
1995 COMPENSATION COMMITTEE
Donald L. Criswell
Thomas P. Kemp
Dale A. Welke
The report of the Compensation Committee shall not be deemed
incorporated by reference by any general statement incorporating by reference
this proxy statement into any filing under the Securities Act of 1933 or under
the Securities Exchange Act of 1934, except to the extent that UnionFed
specifically incorporates this information by reference, and shall not otherwise
be deemed filed under such Acts.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The executive compensation disclosure in the following section of this
Proxy Statement reflects compensation for the named executives.
SUMMARY COMPENSATION TABLE
The following table sets forth the compensation paid to UnionFed's
Chief Executive Officer and the other executive officers whose base compensation
and bonus exceeded $100,000 in fiscal 1995, for services rendered in all
capacities to UnionFed and its subsidiaries.
Long-Term
Annual Compensation Compensation
-------------------------------------- --------------------
Awards
------
Other Annual
Salary (3) Bonus ($) Compensation ($) Securities Underlying All Other
Name and Principal Position Year ---------- --------- ------------ Options/SARs(#)(1) Compensation ($)(2)
--------------------------- ---- --------------------- -------------------
David S. Engelman, 1995 300,000 0 7,811 (3) 0 42,243(4)
Chairman of the Board and 1994 300,000 50,000 0 0 42,243
Chief Executive Officer 1993 300,000 0 0 0 26,757
Ralph E. Lautmann, 1995 148,292 0 0 0 24,886(5)
Senior Vice President, Special 1994 151,200 36,708 0 0 5,501
Assets Division(6) 1993 166,002 39,328 0 0 6,674
Ronald M. Griffith, 1995 125,000 0 0 0 142,358(7)
Senior Vice President, General 1994 125,000 22,500 0 0 5,702
Counsel and Corporate Secretary 1993 125,000 0 0 0 5,020
Stephen J. Austin, 1995 115,008 0 0 0 124,812(8)
Senior Vice President, 1994 115,008 17,500 0 0 4,544
Chief Financial Officer 1993 115,008 0 0 0 4,382
and Treasurer(9)
7
--------------------
<FN>
(1) As of June 30, 1995 all outstanding stock options held by all officers
of the Company, including those held by the named executives, were
canceled with the consent of the executives and therefore do not
appear in the table for 1995 and prior fiscal years. UnionFed does not
grant stock appreciation rights.
(2) The amounts disclosed in the "All Other Compensation" column for
fiscal 1995 include:
(a) contributions to UnionFed's Retirement Savings Plan, a 401(k)
plan, on behalf of each of Mr. Engelman ($5,695), Mr. Lautmann
($4,951), Mr. Griffith ($5,234) and Mr. Austin ($4,113);
(b) premiums paid by UnionFed for term life insurance on behalf of
each of Mr. Engelman ($998), Mr. Lautmann ($550), Mr. Griffith
($468) and Mr. Austin ($431);
(c) $19,800 which represents fees paid to Mr. Engelman for his
service on the Boards of Directors of UnionFed and the Bank and
various Board committees; and
(d) premiums paid for whole life insurance on a split dollar premium
payment arrangement on behalf of Mr. Engelman of $15,750.
(3) Represents amounts reimbursed to Mr. Engelman by the Company for
federal and state income tax liabilities attributable to (i) premium
payments made for whole life insurance on a split dollar premium
payment arrangement, and (ii) imputed income from benefits under the
Supplemental Retirement Plan.
(4) Does not include payments relating to the June 1995 amendment of Mr.
Engelman's employment agreement and termination of his future
retirement obligations. See "Report of the Compensation Committee
on Compensation Matters."
(5) Includes a severance payment of $19,385 paid to Mr. Lautmann relating
to the sale of branches to Glendale Federal Bank. Glendale Federal
reimbursed the Company for such payment.
(6) Mr. Lautmann ceased to be an employee of the Company on June 23, 1995.
(7) Includes a payment of $136,656 paid to Mr. Griffith by the Company on
June 23, 1995 relating to the sale of branches to Glendale Federal
Bank. Glendale Federal reimbursed the Company for such payment.
(8) Includes a severance payment of $120,268 paid to Mr. Austin on June
23, 1995 relating to the sale of branches to Glendale Federal Bank.
Glendale Federal reimbursed the Company for such payment.
(9) Mr. Austin ceased to be an employee of the Company on June 30, 1995.
EMPLOYMENT AGREEMENT
David S. Engelman is employed as the Chief Executive Officer and
President of UnionFed and the Bank pursuant to an Employment Agreement dated as
of April 1, 1991 and amended in December 1993 and June 1995. Under the agreement
as revised in June 1995, Mr. Engelman's employment is terminable upon 60 days'
notice and his compensation was reduced to $150,000 per year, plus certain
fringe benefits which generally were reduced to one-half of the pre-amendment
levels. See "Report of Compensation Committee on Compensation Matters."
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 1995, the Compensation Committee of the Board of Directors was
responsible for UnionFed's executive compensation policies and programs and for
making recommendations to the Board of Directors with respect to these policies
and programs. The following non-employee directors served on the Compensation
Committee of UnionFed's Board of Directors during fiscal 1995: Donald L.
Criswell (Chair), Thomas P. Kemp and Dale A. Welke. These functions will
be performed by the full Board of Directors in fiscal 1996.
8
STOCK PERFORMANCE GRAPH
The following graph compares the cumulative total stockholder return
of UnionFed's Common Stock with the cumulative total return of the Russell 2000
Index and the Russell S&L Peer Group for the five years ended June 30, 1995. The
graph assumes that $100 was invested on June 30, 1990 in UnionFed's Common Stock
and each index and that all dividends were reinvested. No cash dividends have
been declared on UnionFed's Common Stock since fiscal 1991. Stockholder returns
over the indicated period should not be considered indicative of future
stockholder returns.
COMPARISON OF FIVE YEAR CUMULATIVE RETURN AMONG UNIONFED
FINANCIAL CORPORATION, RUSSELL 2000, AND RUSSELL S&L PEER GROUP
[GRAPH]
--------------------------------------------------------------------------------
1990 1991 1992 1993 1994 1995
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UFF $100.00 $15.26 $13.99 $3.50 $0.89 $0.05
Russell 2000 100.00 $101.23 $115.95 $146.05 $152.48 $183.09
Peer Group 100.00 $94.46 $114.34 $132.46 $145.00 $173.58
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9
PROPOSAL NO. 2
AMENDMENT TO CERTIFICATE OF INCORPORATION
TO DECREASE REQUIRED NUMBER OF DIRECTORS
In light of the current size of the Company, the Board of Directors of
the Company believes that it is in the Company's best interest to reduce the
required number of directors from seven to five. Accordingly, the Board is
seeking stockholder approval to amend the Company's Certificate of Incorporation
to provide for a Board size in the range of five to nine directors, with the
exact number established by Board resolution. The current range provided for in
the Company's Certificate of Incorporation is seven to fifteen. Approval of the
amendment would permit the Board of Directors in the future to reduce the Board
size down to a minimum of five, avoiding the necessity to replace directors and
permitting some reduction in cost. Current federal regulations also permit the
Bank board size to be reduced to five members.
VOTE REQUIRED
Approval of the amendment to the Certificate of Incorporation requires
the favorable vote of the holders of at least a majority of the outstanding
shares of Common Stock.
BOARD RECOMMENDATION
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE PROPOSED AMENDMENT
TO THE CERTIFICATE OF INCORPORATION AND RECOMMENDS THAT THE COMPANY'S
STOCKHOLDERS VOTE FOR THE AMENDMENT.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Under the securities laws of the United States, the directors and
executive officers of UnionFed and persons who own more than ten percent of
UnionFed's Common Stock are required to report their initial ownership of
UnionFed's Common Stock and any subsequent changes in that ownership to the
Securities and Exchange Commission and the New York Stock Exchange. Specific due
dates for these reports have been established, and UnionFed is required to
disclose in this proxy statement any late filings during fiscal year 1995. To
UnionFed's knowledge, based solely on its review of the copies of such reports
required to be furnished to UnionFed during the fiscal year ended June 30, 1995,
all of these reports were timely filed except for one such report which was
scheduled to be filed in June 1995 but was instead filed in July 1995 due to
clerical error.
CERTAIN TRANSACTIONS AND OTHER MATTERS
In June 1995, the Compensation Committee of the Board of Directors
negotiated an amendment to the employment agreement of David S. Engelman, Chief
Executive Officer and President of UnionFed and the Bank to reduce the current
and future liabilities of the Bank to Mr. Engelman. See "Report of Compensation
Committee on Compensation Matters" and "Employment Agreement" for information on
this amendment.
STOCKHOLDER PROPOSALS
Any stockholder wishing to have a proposal considered for inclusion in
UnionFed's 1996 proxy solicitation materials must give notice of such proposal
in writing to the Corporate Secretary of UnionFed on or before June 23, 1996.
The notice must comply with Section 13 of Article II of UnionFed's Bylaws (a
copy of which is available upon request to the Corporate Secretary of UnionFed),
which section requires that the notice contain a brief description of such
proposal, the name and address of the stockholders making or supporting such
proposal, the number of UnionFed shares owned by such stockholders, any
financial or other interest of such stockholders in such proposal, and certain
other information specified in such section. The Board of Directors of
10
UnionFed will review any stockholder proposals which are filed and will
determine whether such proposals qualify for inclusion in UnionFed's 1996 proxy
solicitation materials.
Stockholders who do not present proposals for inclusion in the Proxy
Statement but who still intend to submit a proposal at the 1996 Annual Meeting
must, in accordance with UnionFed's Bylaws, provide timely written notice of the
matter to the Corporate Secretary of UnionFed. To be timely, a stockholder's
written notice must be delivered to or mailed and received at the principal
executive offices of UnionFed not less than 60 days prior to the scheduled date
of the 1996 Annual Meeting. Any notice to the Corporate Secretary must comply
with the requirements of Section 13 of Article II of UnionFed's Bylaws described
above.
INDEPENDENT AUDITORS
KPMG Peat Marwick LLP has served as UnionFed's independent auditors
since fiscal 1990 and is anticipated to serve in this capacity for fiscal 1996.
A representative of KPMG Peat Marwick LLP will be present at the Annual Meeting,
at which time he or she will be given an opportunity to make a statement, if
desired, and to respond to appropriate stockholder questions.
OTHER MATTERS
The Board of Directors of UnionFed does not know of any other matters
that are to be presented for action at the Annual Meeting. Should any other
matters come before the Annual Meeting or any adjournments and postponements
thereof, the persons named in the enclosed proxy will have the discretionary
authority to vote all proxies received with respect to such matters in
accordance with their judgments.
ANNUAL REPORT
UnionFed's Annual Report to Stockholders for the fiscal year ended
June 30, 1995, including audited financial statements, is being mailed to
stockholders along with these proxy materials. In an effort to reduce the
expense associated with the preparation of a separate annual report, this year's
Annual Report to Stockholders includes, without exhibits, the Annual Report on
Form 10-K as filed with the Securities and Exchange Commission. Exhibits to the
Annual Report on Form 10-K may be obtained from UnionFed upon payment of
UnionFed's reasonable expenses to furnish such exhibits. To obtain any such
exhibits, contact Ronald M. Griffith, Corporate Secretary, UnionFed Financial
Corporation, 1055 West Seventh Street, Suite 100, Los Angeles, California 90017.
You are urged to vote, sign, date, and return the accompanying proxy
card in the enclosed postage paid envelope at your earliest convenience, whether
or not you currently plan to attend the Annual Meeting in person.
By Order of the Board of Directors
Ronald M. Griffith
Corporate Secretary
October __, 1995
11
REVOCABLE PROXY
UNIONFED FINANCIAL CORPORATION
The undersigned hereby appoints David S. Engelman and Ronald M. Griffith, or
either of them, each with full power of substitution, as the lawful proxies of
the undersigned and hereby authorizes such persons to represent and to vote as
designated below all shares of the common stock of UnionFed Financial
Corporation (the "Company") which the undersigned would be entitled to vote if
personally present at the 1995 Annual Meeting of Stockholders of the Company to
be held on November 15, 1995 and at any adjournments or postponements thereof
(the "1995 Annual Meeting").
1. ELECTION OF DIRECTORS / / FOR all nominees listed below (EXCEPT AS / / WITHHOLD AUTHORITY TO VOTE
INDICATED TO THE CONTRARY BELOW) FOR ALL NOMINEES
LISTED BELOW
Thomas P. Kemp, David J. Primuth
INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE
THAT NOMINEE'S NAME HERE:
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2. To approve the amendment of the Company's Certificate of Incorporation to
reduce the required number of directors.
/ / FOR / / AGAINST / / ABSTAIN
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the 1995 Annual Meeting or any
adjournments or postponements thereof.
/ / FOR / / AGAINST / / ABSTAIN
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE PROPOSALS.
IMPORTANT -- PLEASE SIGN AND DATE ON OTHER SIDE AND RETURN PROMPTLY.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY.
(CONTINUED ON OTHER SIDE)
THIS PROXY, WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED. IF NO DIRECTION IS GIVEN, THIS PROXY
WILL BE VOTED FOR EACH OF THE DIRECTOR NOMINEES AND FOR EACH OF THE
PROPOSALS.
The undersigned acknowledges receipt of the Notice of Annual Meeting
and Proxy Statement for the 1995 Annual Meeting.
When signed as attorney, executor, administrator, trustee or
guardian, please give full title as such. If a corporation, please sign
in full corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
Whether or not you plan to attend the 1995 Annual Meeting, you are
urged to execute, date and return this proxy, which may be revoked at
any time prior to its use.
Dated: ________________ , 1995
------------------------------
(Signature of Stockholder)
------------------------------
(Signature of Additional
Stockholder(s))
Please sign your name exactly
as it appears hereon, date and
return this proxy in the reply
envelope provided. If you
receive more than one proxy
card, please sign, date and
return all cards received.