United Community Financial Corp. DEF 14A
SCHEDULE 14A INFORMATION
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UNITED
COMMUNITY FINANCIAL CORP.
275 West Federal Street
Youngstown, Ohio
44503-1203
(330) 742-0500
NOTICE OF ANNUAL MEETING OF
SHAREHOLDERS
The 2008 Annual Meeting of Shareholders of UCFC (UCFC) will be
held at Mr. Anthonys, 7440 South Avenue, Boardman,
Ohio, on April 24, 2008, at 10:00 a.m., Eastern Time
(Annual Meeting), for the following purposes, all of which are
more completely set forth in the accompanying proxy statement:
1. To re-elect three directors of UCFC for terms expiring
in 2011;
2. To ratify the selection of Crowe Chizek and Company LLC
as the auditors of UCFC for the current fiscal year; and
3. To transact such other business as may properly come
before the Annual Meeting.
Only shareholders of record at the close of business on
March 7, 2008, will be entitled to vote at the Annual
Meeting. Whether or not you expect to attend the Annual Meeting,
we urge you to consider the accompanying proxy statement
carefully and to SIGN, DATE AND PROMPTLY RETURN THE ENCLOSED
PROXY SO THAT YOUR SHARES MAY BE VOTED IN ACCORDANCE WITH YOUR
WISHES AND THE PRESENCE OF A QUORUM AT THE ANNUAL MEETING MAY BE
ASSURED. Submitting a proxy does not affect your right to vote
in person in the event you attend the Annual Meeting.
By Order of the Board of Directors
Douglas M. McKay
Chairman of the Board and
Chief Executive Officer
Youngstown, Ohio
April 1, 2008
United
Community Financial Corp.
275 West Federal Street
Youngstown, Ohio
44503-1203
(330) 742-0500
PROXY
STATEMENT
PROXIES
The Board of Directors of United Community Financial Corp., an
Ohio corporation (UCFC or the Company), is soliciting the
enclosed proxy for use at the 2008 Annual Meeting of
Shareholders of UCFC to be held at Mr. Anthonys, 7440
South Avenue, Boardman, Ohio, on April 24, 2008, at
10:00 a.m., Eastern Time, and at any adjournments thereof
(Annual Meeting).
Each properly executed proxy received prior to the Annual
Meeting and not revoked will be voted as specified thereon or,
in the absence of specific instructions to the contrary, will be
voted:
FOR the re-election of Richard J. Buoncore, Richard J.
Schiraldi and David C. Sweet as directors of UCFC for terms
expiring in 2011.
FOR the ratification of the selection of Crowe Chizek and
Company LLC (Crowe Chizek) as the auditors of UCFC for the
current fiscal year.
Proxies may be revoked by (a) delivering a written notice
expressly revoking the proxy to the Secretary of UCFC at the
above address prior to the Annual Meeting, (b) delivering a
later dated proxy to UCFC at the above address prior to the
Annual Meeting, or (c) attending the Annual Meeting and
voting in person. Proxies may be solicited by the directors,
officers and other employees of UCFC and The Home Savings and
Loan Company of Youngstown, Ohio, a wholly-owned subsidiary of
UCFC (Home Savings), in person or by telephone, telecopy,
telegraph or mail, only for use at the Annual Meeting. All
solicitation costs will be borne by UCFC.
In some cases, UCFC has multiple shareholders of record at a
single address. UCFC sends a single annual report and proxy
statement to that address unless it receives instructions to the
contrary. However, each shareholder of record will continue to
receive a separate proxy card. This practice, known as
householding, is designed to reduce printing and
postage costs. If you wish to receive a separate copy of this
years annual report or proxy statement, you may request it
by writing to UCFC at the above address. If you wish to
discontinue householding entirely, you may contact Registrar and
Transfer Company by telephone at
1-800-368-5948,
by e-mail at
info@rtco.com, or by written instructions sent to Registrar and
Transfer Company, 10 Commerce Drive, Cranford, New Jersey
07016-3572.
If you receive multiple copies of the annual report and proxy
statement, you may request householding by contacting Registrar
and Transfer as noted above. If your shares are held in street
name through a bank, broker or other holder of record, you may
request householding by contacting that bank, broker or other
holder of record.
This proxy statement is first being mailed to the shareholders
of UCFC on or about April 4, 2008.
VOTING
RIGHTS
Only shareholders of record as of the close of business on
March 7, 2008 (Voting Record Date), are entitled to vote at
the Annual Meeting. As of the Voting Record Date, there were
30,051,773 votes entitled to be cast at the Annual Meeting. Each
share is entitled to one vote at the Annual Meeting on all
matters properly presented at the meeting.
Shares represented by properly executed proxies returned to UCFC
prior to the Annual Meeting will be counted toward the
establishment of a quorum for the Annual Meeting even though
they are marked ABSTAIN or AGAINST or to
withhold authority on any or all matters or are not marked at
all. Broker non-votes are shares held of record by
brokers or other nominees that are present in person or by proxy
at the meeting, but are not voted because instructions have not
been received from the beneficial owner with respect to a
particular matter over which the broker or nominee does not have
discretionary authority to vote. Broker non-votes are counted
toward the establishment of a quorum. If you do not return a
proxy card and your shares are held in street name,
your broker may be permitted, under the applicable rules of the
self regulatory organizations of which it is a member, to vote
your shares in its discretion on certain matters that are deemed
to be routine.
Those shares represented by properly executed proxies received
prior to the Annual Meeting and not revoked will be voted as
directed by the shareholder. All valid proxies received prior to
the Annual Meeting that do not specify how shares should be
voted will be voted FOR the Boards nominees and FOR the
ratification of the selection of Crowe Chizek, unless the proxy
represents a broker non-vote.
Directors are elected by a plurality of the votes cast with a
quorum present. No shareholder may cumulate votes in the
election of directors. The affirmative vote of the holders of a
majority of the shares of UCFC represented in person or by proxy
at the Annual Meeting is necessary to ratify the selection of
Crowe Chizek as the auditors of UCFC for the current fiscal year.
ELECTION
OF DIRECTORS
The Board of Directors has nominated the following directors for
re-election for terms expiring in 2011:
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Director of
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Name
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Age
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Positions Held
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UCFC Since
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Richard J. Buoncore
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51
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Director
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2007
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Richard J. Schiraldi
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53
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Director
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2002
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David C. Sweet
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68
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Director
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2004
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Richard J. Buoncore. Mr. Buoncore is a
Certified Public Accountant and a managing partner of MAI Wealth
Advisors, LLC, Cleveland, Ohio, a position he has held since
December 2006. Previously, Mr. Buoncore was Managing
Partner of BC Investment Partners LLC, which merged into MAI
Wealth Advisors, a position he had held since 2005. From 1999
until 2005, he was the Chief Executive Officer of Victory
Capital Management, Cleveland, Ohio, and served as its President
and Chief Operating Officer from 1995 until 1999.
Mr. Buoncore was elected by the UCFC Board of Directors in
January 2007 to fill the vacancy created by the retirement of
Herbert F. Schuler, Sr. Mr. Buoncore also serves as a
director of Home Savings.
Richard J. Schiraldi. Mr. Schiraldi has
been a partner at Cohen & Company, Certified Public
Accountants, Youngstown, Ohio, since 1990. Mr. Schiraldi
served as Director of Tax Operations at Cohen from 1983 until
2003. Mr. Schiraldi also serves as a director of Home
Savings.
David C. Sweet. Dr. Sweet is the
President of Youngstown State University, a position he has held
since July 2000. Dr. Sweet also serves as a director of
Home Savings.
If any nominee is unable to stand for election, any proxies
granting authority to vote for such nominee will be voted for
such substitute as the Board of Directors recommends.
In accordance with UCFCs Code of Regulations
(Regulations), nominees for election as directors may be
proposed only by the directors or by a shareholder entitled to
vote for directors in a written nomination received by the
Secretary of UCFC by the 60th day before the first
anniversary of the most recent annual meeting of shareholders
held for the election of directors. If the annual meeting for
the election of directors in any year is not held on or before
the 31st day following such anniversary, then the written
notice shall be received by the Secretary within a reasonable
time prior to the date of the annual meeting. Each written
nomination must state the name, age, business or residence
address of the nominee, the principal occupation or employment
of the nominee, the number of common shares of UCFC owned either
beneficially or of record by each nominee and the length of time
the UCFC shares have been so owned. No nominations were received
from any shareholders of UCFC for the annual meeting of
shareholders.
UCFC encourages all directors to attend the annual meeting of
shareholders. All of UCFCs directors attended the 2007
annual meeting of shareholders, except Mr. Schiraldi.
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INCUMBENT
DIRECTORS
The following directors will continue to serve after the Annual
Meeting for the terms indicated:
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Director of
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Term
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Name
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Age
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Positions Held
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UCFC Since
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Expiring In
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Thomas J. Cavalier
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55
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Director
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2000
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2009
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Douglas M. McKay
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60
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Director, Chairman of the Board and CEO
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1998
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2009
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Donald J. Varner
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76
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Director
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2007
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2009
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Eugenia C. Atkinson
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65
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Director
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2005
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2010
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David G. Lodge
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68
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Director, President and COO
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2005
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2010
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Clarence R. Smith, Jr.
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79
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Director
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2005
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2010
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Thomas J. Cavalier. Mr. Cavalier is the
Chairman of the Board, Chief Executive Officer and President of
Butler Wick Corp., a subsidiary of UCFC (Butler Wick), positions
he has held since 1985. Mr. Cavalier joined Butler Wick in
1975.
Douglas M. McKay. Mr. McKay joined Home
Savings in 1971. Mr. McKay has been the Chairman of the
UCFC Board and CEO of UCFC since 1998. He also served as
President of UCFC from 1998 until January 2007. Since 1995,
Mr. McKay has served as Chief Executive Officer and
Chairman of the Board of Home Savings and, from 1996 until March
2000, also served as President of Home Savings. Mr. McKay
is also a director of Butler Wick Corp.
Donald J. Varner. Mr. Varner, an
attorney, was UCFCs Secretary from 1998 until his
reirement in 2004 and a Senior Vice President of Home Savings
from 1995 until his retirement in 2004. Prior to that time,
Mr. Varner served as Home Savings Vice President and
Corporate Counsel from 1976 to 1995. Mr. Varner has served
as a director of Home Savings since 1987. He was appointed to
the UCFC Board effective March 15, 2007.
Eugenia C. Atkinson. Mrs. Atkinson was
the Executive Director of Youngstown Metropolitan Housing
Authority from 2000 until her retirement in 2007. She became a
director of Home Savings in 1999.
David G. Lodge. Mr. Lodge is the
President and COO of UCFC, a position he was appointed to in
January 2007. Additionally, in January 2007, Mr. Lodge was
appointed Director of Strategic Planning for Home Savings.
Previously, Mr. Lodge served as the President, Chief
Operating Officer and a director of Home Savings, positions he
held since 2000. Prior to joining Home Savings, Mr. Lodge
was the President, Chief Operating Officer and a director of
Metropolitan Bank and Trust and its holding company,
Metropolitan Financial Corp., located in Highland Hills, Ohio.
Clarence R. Smith, Jr. Mr. Smith
serves as Chairman of S-P Company and Subsidiaries located in
Columbiana, Ohio, a position he has held since 1971. S-P Company
is the holding company for Compco Industries. Mr. Smith has
been a director of Home Savings since 1976.
BOARD
MEETINGS, COMMITTEES AND COMPENSATION
The Board of Directors has determined that
Messrs. Buoncore, Schiraldi, Smith, Sweet and Varner and
Mrs. Atkinson are each considered independent
as set forth in (a) Section 10A(m)(3) of the
Securities Exchange Act of 1934 (15 U.S.C. 78f(m)(3)),
(b) Securities and Exchange Commission (SEC)
Rule 10A-3(b)
(17CFR 240.10A-3(b)), and (c) Rule 4200(a) of the
National Association of Securities Dealers, Inc. (NASD).
The Board of Directors of UCFC met five times for regularly
scheduled meetings and five times for special meetings during
2007. The Board of Directors of UCFC has an Audit Committee, a
Compensation Committee and a Nominating and Governance
Committee. The Charters of the Audit Committee and the
Nominating and Governance Committee are available at
www.ucfconline.com. The Compensation Committee does not
have a charter.
The Audit Committee of UCFC is responsible for overseeing
UCFCs accounting functions and controls, as well as hiring
an accounting firm to audit UCFCs financial statements.
The current members of the Audit
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Committee are Richard J. Schiraldi, Chairman, Eugenia C.
Atkinson, Richard J. Buoncore and David C. Sweet, all of whom
are considered independent under the listing
standards of Nasdaq. The Board of Directors has determined that
Richard J. Schiraldi and Richard J. Buoncore qualify as
financial experts. The Audit Committee met thirteen times during
2007.
The role of the Compensation Committee of UCFC is described
under Compensation Discussion and Analysis below.
The current members of the Compensation Committee, all of whom
are independent, are Eugenia C. Atkinson, Chairwoman, Richard J.
Schiraldi and Clarence R. Smith, Jr. The Compensation
Committee met four times during 2007.
The Nominating and Governance Committee of UCFC is responsible
for receiving and evaluating recommendations for potential Board
members from directors and shareholders and recommending to the
Board of Directors a slate of director nominees to be elected by
shareholders. In selecting nominees, the Nominating and
Governance Committee considers the skills and experience desired
in a director, such as community involvement, business
development expertise and financial expertise. Any nominee for
election to the Board of Directors should possess the highest
personal values, judgment and integrity and have an
understanding of the regulatory and policy environment in which
UCFC operates. The Nominating and Governance Committee evaluates
nominations properly submitted by shareholders on the same basis
that it considers nominations submitted by directors. No
director nominations were received from shareholders for the
Annual Meeting. The current members of the Nominating and
Governance Committee, all of whom are independent, are David C.
Sweet, Chairman, Eugenia C. Atkinson, Richard J. Buoncore,
Richard J. Schiraldi, Clarence R. Smith, Jr. and Donald J.
Varner. The Nominating and Governance Committee met one time
during 2007.
Each director attended at least 75% of the aggregate of the
meetings of the Board of Directors and the committees on which
he or she serves.
DIRECTOR
COMPENSATION
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Fees Earned or
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Paid in Cash
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Total
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Name
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($)
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($)
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Eugenia C. Atkinson
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$
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23,000
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$
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23,000
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Richard J. Buoncore
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21,167
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21,167
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Richard J. Schiraldi
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23,000
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23,000
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Clarence R. Smith, Jr.
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18,800
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18,800
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David C. Sweet
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20,200
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20,200
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Donald J. Varner
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19,600
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19,600
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Because they are employees of UCFC and its subsidiaries,
Messrs. Cavalier, Lodge, and McKays director fees are
included in the All Other Compensation column of the
Summary Compensation Table.
Each director of UCFC who is also a director of Home Savings
receives a $10,000 retainer from Home Savings, and each UCFC
director who is not a Home Savings director receives a $10,000
retainer from UCFC. Each director also receives a fee of $400
per UCFC board meeting attended, and in general, each
non-employee director receives a fee of $400 per committee
meeting attended if
he/she is a
committee member, or $600 per committee meeting attended if
he/she is
the committee chairperson.
EXECUTIVE
OFFICERS
The following information is supplied for certain executive
officers of UCFC and Home Savings who do not serve on
UCFCs Board of Directors:
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Name
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Age
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Position Held
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Patrick W. Bevack
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61
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President and COO of Home Savings
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Patrick A. Kelly
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49
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CFO and Treasurer of UCFC and SVP, CFO
and Treasurer of Home Savings
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Patrick W. Bevack. Mr. Bevack was
appointed President and Chief Operating Officer of Home Savings
in January 2007. Previously, Mr. Bevack was Executive Vice
President, Chief Financial Officer and Treasurer of Home
Savings, positions he had held since June 2003. Mr. Bevack
joined Home Savings in June 2000 and served as Senior Vice
President of Mortgage Lending until June 2003. Prior to joining
Home Savings, he was Executive Vice President and Assistant
Secretary of Metropolitan Bank and Trust.
Patrick A. Kelly. Mr. Kelly was appointed
CFO and Treasurer of Home Savings in January of 2007.
Mr. Kelly has served as Senior Vice President of Home
Savings since 1995. Previously, Mr. Kelly was CFO of Home
Savings from 1995 to 2003 and Treasurer of Home Savings from
1992 to 2003. Mr. Kelly was appointed Treasurer of UCFC in
1998 and Chief Financial Officer of UCFC in 2003. Mr. Kelly
has been employed by Home Savings since 1983 and has been a
director of Home Savings since 1996.
COMPENSATION
DISCUSSION AND ANALYSIS
Compensation
Objectives
The Companys executive compensation program for 2007 was
intended to achieve the following primary objectives:
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Drive performance relative to the Companys financial goals;
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Align executives interests with those of shareholders;
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Attract and retain highly-qualified executives and maintain a
stable executive management group; and
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Place a significant portion of total compensation at risk,
contingent on Company performance.
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The Company has employment agreements with each of the Named
Executive Officers. These agreements are described under the
headings Employment Agreements and Termination
and Change of Control Payments below.
Role of
the Compensation Committee and Management
The Compensation Committee has the primary responsibility to
assist the Board in discharging the Boards
responsibilities relating to the compensation of the
Companys executive officers. The Compensation Committee is
responsible for recommending to the Board of Directors for its
approval on an annual basis the compensation package for each of
the Named Executive Officers.
The Compensation Committee members are Ms. Atkinson,
Mr. Schiraldi and Mr. Smith, but all independent
directors of the Company are invited to attend meetings of the
Compensation Committee and to participate in the discussions.
The Compensation Committee invites Mr. McKay, the Chief
Executive Officer, to attend Committee meetings to discuss the
performance of the Company and other matters affecting the
compensation of each of the Named Executive Officers.
Mr. McKay makes recommendations to the Committee regarding
base salary, incentive compensation and performance targets for
bonuses for each of the Named Executive Officers other than
himself. The Compensation Committee discusses with
Mr. McKay matters affecting the Companys performance
relative to bonus targets, but all decisions regarding his
compensation are made in executive session, without his presence.
Occasionally, other executives may attend a Committee meeting to
provide pertinent financial, tax, accounting, or operational
information. Executives in attendance may provide their insights
and suggestions, but they do not vote on decisions regarding
executive compensation.
Compensation
Components
The Companys executive compensation program included the
following components in 2007:
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Salary fixed base pay that reflects each
executives position, individual performance, experience,
and expertise;
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Annual Cash Incentive pay that varies based on
Company and individual performance against annual business
objectives; and
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Other Compensation perquisites consistent with past
practice, as well as broad-based employee benefits such as
medical, dental, disability, and life insurance coverage.
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Salary. The Company pays its executives cash
salaries intended to be competitive and take into account the
individuals experience, performance, responsibilities, and
past and potential contribution to the Company. The Compensation
Committee met with Mr. McKay in January 2007 and discussed
his recommendations for salaries and bonuses for
Messrs. Bevack, Kelly and Lodge. In establishing base
salaries for these three executive officers, the Compensation
Committee considered Mr. McKays recommendations for
salary amounts and the individuals performance for 2006
and the Companys performance for 2006. In establishing the
base salary for Mr. McKay, the Compensation Committee
considered Mr. McKays individual performance for 2006
and the Companys performance for 2006. The Compensation
Committee did not utilize a peer group for benchmarking for 2007.
Mr. Cavaliers compensation is established separately
because of the nature of Butler Wick. Mr. Cavalier entered
into an employment agreement with Butler Wick on August 12,
1999, the terms of which are discussed under Employment
Agreements and Termination and Change of Control
Payments below. Mr. Cavaliers employment
agreement is reviewed annually by the Compensation Committee of
Butler Wick, of which Mr. McKay is Chairman. The
Compensation Committee has not increased
Mr. Cavaliers base salary as set forth in his
employment agreement since 2003.
The Named Executive Officers 2007 base salaries are set
forth in the Salary column of the Summary
Compensation Table.
Annual Cash Bonus. Executive officers other
than Mr. Cavalier receive an annual cash bonus that is
primarily based on the net income of Home Savings on an
unconsolidated basis.
In January 2008, the Compensation Committee met twice to discuss
bonuses for 2007. The Committee met with Mr. McKay and
discussed his recommendations for 2007 bonus awards for each of
the executive officers, other than himself. The Committee
decided to award bonuses for 2007, even though net income was
down for 2007, because of the impact of national and local
economic conditions and other factors beyond the control of
management that adversely affected operating results in 2007.
The Committee also considered the fact that no awards were made
under the equity plan in 2007.
The cash bonuses awarded for 2007 performance are included in
the Non-Equity Incentive Plan Compensation column of
the Summary Compensation Table.
Mr. Cavalier received a bonus in an amount recommended by
Mr. McKay to the Butler Wick Compensation Committee. The
Butler Wick Compensation Committee reviewed and approved
Mr. McKays recommendation. Mr. Cavaliers
bonus for 2007 is set forth under the Bonus column
of the Summary Compensation Table.
Other Compensation. The Named Executive
Officers participate in the Companys broad-based employee
benefit plans, such as medical, dental, supplemental disability
and term life insurance programs. Perquisites for the Named
Executive Officers other than Mr. Cavalier consist of use
of a company car and fees for country club memberships.
Mr. Cavalier participates in a non-qualified deferred
compensation plan, which is discussed under the 2007
Non-qualified Deferred Compensation Table below.
Tax and
Accounting Considerations
Section 162(m) of the Internal Revenue Code places a limit
on the tax deduction for compensation in excess of
$1 million paid to the Named Executive Officers in a
taxable year. All of the compensation the Company paid in 2007
to the Named Executive Officers is expected to be deductible
under Section 162(m). The Committee retains the
flexibility, however, to pay non-deductible compensation if it
believes doing so is in the best interests of the Company.
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Future
Compensation
The Company has engaged compensation consultants and advisors
from time to time to provide input on both Board and executive
compensation issues. Although the Compensation Committee has
utilized the annual cash bonus to drive executives to increase
UCFC performance, the Committee recommended, and the Board
approved, adoption of an equity plan in order to better align
executive and shareholder interests. The shareholders approved
the equity plan at the 2007 annual meeting of shareholders, but
no awards were made under the plan in 2007. The following awards
were made in February 2008:
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Incentive Stock
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Nonqualified Stock
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Options Number of
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Options Number of
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Exercise Price Per
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Shares
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Shares
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Share
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Douglas McKay
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16,528
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54,612
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$
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6.05
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Patrick Bevack
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16,528
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|
|
|
14,036
|
|
|
$
|
6.05
|
|
David Lodge
|
|
|
16,528
|
|
|
|
14,145
|
|
|
$
|
6.05
|
|
Patrick Kelly
|
|
|
16,528
|
|
|
|
100
|
|
|
$
|
6.05
|
|
The 2008 awards are fully vested. In deciding not to delay
vesting, the Committee considered the fact that no equity
compensation had been awarded to any of the named executive
officers since 2004.
COMPENSATION
COMMITTEE REPORT
In performing its oversight role, the Compensation Committee has
considered and discussed the Compensation Discussion and
Analysis (CD&A) with executive management. On
March 19, 2008, the Compensation Committee recommended to
the Board of Directors that the CD&A be included in this
Proxy Statement for the fiscal year ended December 31, 2007.
Respectfully submitted by the members of the Compensation
Committee of the Board of Directors:
|
|
|
Eugenia
Atkinson, Chairwoman |
Richard
J. Schiraldi |
Clarence
R. Smith, Jr. |
7
COMPENSATION
OF EXECUTIVE OFFICERS
The following table presents certain information regarding the
compensation earned by Mr. McKay and Mr. Kelly and the
three highest compensated executive officers of UCFC and its
subsidiaries (Named Executive Officers) who received cash and
cash equivalent compensation in excess of $100,000 from UCFC or
one of its subsidiaries for services rendered during 2007:
Summary
Compensation Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonqualified
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
|
Deferred
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive Plan
|
|
|
Compensation
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
Salary
|
|
|
Bonus
|
|
|
Compensation
|
|
|
Earnings
|
|
|
Compensation
|
|
|
Total
|
|
Name and Principal Position
|
|
Year
|
|
|
($)
|
|
|
($)
|
|
|
($)(1)
|
|
|
($)(2)
|
|
|
($)
|
|
|
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Douglas M. McKay
|
|
|
2007
|
|
|
$
|
381,843
|
|
|
|
|
|
|
$
|
96,379
|
|
|
|
|
|
|
$
|
48,734
|
|
|
$
|
526,956
|
|
Chairman and CEO, UCFC
|
|
|
2006
|
|
|
|
367,157
|
|
|
|
|
|
|
|
275,368
|
|
|
|
|
|
|
|
68,612
|
|
|
|
711,137
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David G. Lodge
|
|
|
2007
|
|
|
|
260,583
|
|
|
|
|
|
|
|
48,701
|
|
|
|
|
|
|
|
55,742
|
|
|
|
365,026
|
|
President and COO, UCFC
|
|
|
2006
|
|
|
|
272,454
|
|
|
|
|
|
|
|
139,146
|
|
|
|
|
|
|
|
86,398
|
|
|
|
497,998
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thomas J. Cavalier
|
|
|
2007
|
|
|
|
295,864
|
|
|
$
|
426,026
|
|
|
|
|
|
|
$
|
4,842
|
|
|
|
38,042
|
|
|
|
764,773
|
|
Chairman and CEO, Butler Wick
|
|
|
2006
|
|
|
|
301,313
|
|
|
|
181,152
|
|
|
|
|
|
|
|
1,447
|
|
|
|
21,698
|
|
|
|
505,610
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Patrick W. Bevack
|
|
|
2007
|
|
|
|
256,552
|
|
|
|
|
|
|
|
51,638
|
|
|
|
|
|
|
|
50,165
|
|
|
|
358,355
|
|
President and COO, Home Savings
|
|
|
2006
|
|
|
|
196,716
|
|
|
|
29,507
|
|
|
|
118,030
|
|
|
|
|
|
|
|
58,299
|
|
|
|
402,552
|
|
Patrick A. Kelly
|
|
|
2007
|
|
|
|
187,971
|
|
|
|
|
|
|
|
35,587
|
|
|
|
|
|
|
|
45,473
|
|
|
|
269,031
|
|
Treasurer and CFO, UCFC and Home Savings
|
|
|
2006
|
|
|
|
182,496
|
|
|
|
18,249
|
|
|
|
100,373
|
|
|
|
|
|
|
|
58,377
|
|
|
|
359,495
|
|
|
|
|
(1) |
|
The values represent the annual cash bonus earned in fiscal 2007
and paid in early 2008. |
|
(2) |
|
Represents the earnings on his deferred compensation under the
Butler Wick Defined Compensation Plan. |
8
The amounts listed in the All Other Compensation
column include the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
401(k)
|
|
|
ESOP
|
|
|
Profit
|
|
|
Company
|
|
|
Club
|
|
|
|
|
|
Expense
|
|
|
Director
|
|
|
|
|
Name
|
|
Match
|
|
|
Allocation
|
|
|
Sharing
|
|
|
Car
|
|
|
Dues
|
|
|
Parking
|
|
|
Allowance
|
|
|
Fees
|
|
|
Total
|
|
|
Douglas M. McKay
|
|
$
|
6,750
|
|
|
$
|
16,648
|
|
|
|
|
|
|
$
|
2,350
|
|
|
$
|
6,940
|
|
|
$
|
446
|
|
|
|
|
|
|
$
|
15,600
|
|
|
$
|
48,734
|
|
David G. Lodge
|
|
|
6,750
|
|
|
|
16,648
|
|
|
|
|
|
|
|
2,563
|
|
|
|
15,335
|
|
|
|
446
|
|
|
|
|
|
|
|
14,000
|
|
|
|
55,742
|
|
Thomas J. Cavalier
|
|
|
3,375
|
|
|
|
|
|
|
$
|
13,067
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
8,000
|
|
|
|
13,600
|
|
|
|
38,042
|
|
Patrick W. Bevack
|
|
|
6,750
|
|
|
|
16,648
|
|
|
|
|
|
|
|
1,146
|
|
|
|
10,748
|
|
|
|
506
|
|
|
|
|
|
|
|
14,367
|
|
|
|
50,165
|
|
Patrick A. Kelly
|
|
|
6,750
|
|
|
|
16,648
|
|
|
|
|
|
|
|
1,096
|
|
|
|
4,533
|
|
|
|
446
|
|
|
|
|
|
|
|
16,000
|
|
|
|
45,473
|
|
Employment
Agreements
Home Savings has employment agreements with each of
Mr. McKay, Mr. Lodge, Mr. Bevack and
Mr. Kelly, and Butler Wick has an employment agreement with
Mr. Cavalier (collectively, Employment Agreements). Each of
the Employment Agreements has a term ending on December 31,
2010 with the exception of Mr. Cavalier whose agreement
termination date is December 31, 2009. Each agreement is
terminable by Home Savings or Butler Wick, as applicable, at any
time. Each of the executives rights upon termination is
discussed under Termination and Change of Control
Payments below.
Outstanding
Equity Awards at December 31, 2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
|
Number of
|
|
|
|
|
|
|
|
|
|
Securities
|
|
|
|
|
|
|
|
|
|
Underlying
|
|
|
|
|
|
|
|
|
|
Unexercised
|
|
|
|
|
|
|
|
|
|
Options
|
|
|
Option Exercise
|
|
|
|
|
|
|
(#)
|
|
|
Price
|
|
|
Option Expiration
|
|
Name
|
|
Exercisable
|
|
|
($)
|
|
|
Date
|
|
|
Douglas M. McKay
|
|
|
14,347
|
|
|
$
|
6.97
|
|
|
|
3/23/2010
|
|
|
|
|
15,024
|
|
|
|
6.656
|
|
|
|
3/22/2011
|
|
|
|
|
136,752
|
|
|
|
7.40
|
|
|
|
3/20/2012
|
|
|
|
|
136,752
|
|
|
|
8.97
|
|
|
|
3/19/2013
|
|
|
|
|
136,752
|
|
|
|
12.73
|
|
|
|
3/17/2014
|
|
David G. Lodge
|
|
|
66,583
|
|
|
|
7.40
|
|
|
|
3/20/2012
|
|
|
|
|
80,096
|
|
|
|
8.97
|
|
|
|
3/19/2013
|
|
|
|
|
80,096
|
|
|
|
12.73
|
|
|
|
3/17/2014
|
|
Thomas J. Cavalier
|
|
|
5,960
|
|
|
|
6.97
|
|
|
|
3/23/2010
|
|
|
|
|
6,043
|
|
|
|
6.656
|
|
|
|
3/22/2011
|
|
|
|
|
5,316
|
|
|
|
7.40
|
|
|
|
3/20/2012
|
|
|
|
|
6,315
|
|
|
|
8.97
|
|
|
|
3/19/2013
|
|
|
|
|
6,553
|
|
|
|
12.73
|
|
|
|
3/17/2014
|
|
Patrick W. Bevack
|
|
|
32,416
|
|
|
|
7.40
|
|
|
|
3/20/2012
|
|
|
|
|
52,444
|
|
|
|
8.97
|
|
|
|
3/19/2013
|
|
|
|
|
52,444
|
|
|
|
12.73
|
|
|
|
3/17/2014
|
|
Patrick A. Kelly
|
|
|
33,626
|
|
|
|
6.97
|
|
|
|
3/23/2010
|
|
|
|
|
20,336
|
|
|
|
6.656
|
|
|
|
3/22/2011
|
|
|
|
|
57,777
|
|
|
|
7.40
|
|
|
|
3/20/2012
|
|
|
|
|
57,777
|
|
|
|
8.97
|
|
|
|
3/19/2013
|
|
|
|
|
57,777
|
|
|
|
12.73
|
|
|
|
3/17/2014
|
|
All of the options were granted under the UCFC 1999 Long-Term
Incentive Plan (1999 Plan) and were 100% vested on the date of
grant. None of the Named Executive Officers exercised options
during 2007.
9
2007
Non-qualified Deferred Compensation Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive
|
|
Aggregate
|
|
Aggregate
|
|
|
Contributions in
|
|
Earnings in Last
|
|
Balance at Last
|
Name
|
|
Last Fiscal Year
|
|
Fiscal Year
|
|
Fiscal Year End
|
|
Thomas J. Cavalier
|
|
$
|
102,425
|
|
|
$
|
4,842
|
|
|
$
|
123,883
|
|
Mr. Cavalier is a participant in the Butler Wick Deferred
Compensation Plan under which he may elect to defer annually
until his retirement up to 80% of his salary and commissions,
and 100% of his bonus. The plan provides a variety of mutual
funds into which deferrals may be invested at
Mr. Cavaliers election, including a money market
fund, an intermediate bond fund and various equity funds. The
earnings that accrued in 2007 on Mr. Cavaliers plan
account balance are provided above. Butler Wick does not make
any contributions to Mr. Cavaliers deferred account
and he has not received a withdrawal or distribution from his
account.
Termination
and Change in Control Payments
The discussion and table below reflect the amount of
compensation that would be paid to each of the Named Executive
Officers in the specified event of termination of such
executives employment. The amounts shown are
10
estimates and assume a termination date of December 31,
2007. Amounts do not include compensation and benefits available
generally to all of UCFCs salaried employees on a
non-discriminatory basis.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change of
|
|
|
|
|
|
|
|
|
Other
|
|
|
|
Control
|
|
|
Death
|
|
|
Disability
|
|
|
Termination
|
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
Douglas M. McKay
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base Amount
|
|
$
|
1,145,529
|
|
|
$
|
94,153
|
|
|
$
|
156,922
|
|
|
$
|
1,145,529
|
|
Bonus
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
96,379
|
|
Health Insurance
|
|
|
35,763
|
|
|
|
|
|
|
|
23,842
|
|
|
|
|
|
Life Insurance
|
|
|
76,866
|
|
|
|
|
|
|
|
51,244
|
|
|
|
|
|
Disability Insurance
|
|
|
26,238
|
|
|
|
|
|
|
|
17,492
|
|
|
|
|
|
Non-Compete
|
|
|
254,562
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
1,538,958
|
|
|
$
|
94,153
|
|
|
$
|
249,500
|
|
|
$
|
1,241,908
|
|
David G. Lodge
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base Amount
|
|
$
|
781,749
|
|
|
$
|
64,253
|
|
|
$
|
107,089
|
|
|
$
|
781,749
|
|
Bonus
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
48,701
|
|
Health Insurance
|
|
|
24,399
|
|
|
|
|
|
|
|
16,266
|
|
|
|
|
|
Life Insurance
|
|
|
3,513
|
|
|
|
|
|
|
|
2,342
|
|
|
|
|
|
Disability Insurance
|
|
|
3,348
|
|
|
|
|
|
|
|
2,232
|
|
|
|
|
|
Non-Compete
|
|
|
173,722
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
986,731
|
|
|
$
|
64,253
|
|
|
$
|
127,929
|
|
|
$
|
830,450
|
|
Thomas J. Cavalier
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base Amount
|
|
$
|
615,417
|
|
|
|
|
|
|
|
|
|
|
$
|
422,000
|
|
Bonus
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
426,026
|
|
Health Insurance
|
|
|
9,939
|
|
|
|
|
|
|
|
|
|
|
|
6,626
|
|
Life Insurance
|
|
|
4,860
|
|
|
|
|
|
|
|
|
|
|
|
3,240
|
|
Commission
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
84,864
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
630,216
|
|
|
|
|
|
|
|
|
|
|
$
|
942,756
|
|
Patrick W. Bevack
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base Amount
|
|
$
|
769,656
|
|
|
$
|
63,259
|
|
|
$
|
105,342
|
|
|
$
|
769,656
|
|
Bonus
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
51,638
|
|
Health Insurance
|
|
|
24,399
|
|
|
|
|
|
|
|
16,266
|
|
|
|
|
|
Life Insurance
|
|
|
3,459
|
|
|
|
|
|
|
|
2,306
|
|
|
|
|
|
Disability Insurance
|
|
|
3,297
|
|
|
|
|
|
|
|
2,198
|
|
|
|
|
|
Non-Compete
|
|
|
171,035
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
971,846
|
|
|
$
|
63,259
|
|
|
$
|
126,202
|
|
|
$
|
821,294
|
|
Patrick A. Kelly
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base Amount
|
|
$
|
563,913
|
|
|
$
|
46,349
|
|
|
$
|
77,248
|
|
|
$
|
563,913
|
|
Bonus
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
35,587
|
|
Health Insurance
|
|
|
35,763
|
|
|
|
|
|
|
|
23,842
|
|
|
|
|
|
Life Insurance
|
|
|
6,324
|
|
|
|
|
|
|
|
4,216
|
|
|
|
|
|
Disability Insurance
|
|
|
6,543
|
|
|
|
|
|
|
|
4,362
|
|
|
|
|
|
Non-Compete
|
|
|
125,314
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
737,857
|
|
|
$
|
46,349
|
|
|
$
|
109,668
|
|
|
$
|
599,500
|
|
11
Termination upon Change of Control. Each of
the Employment Agreements provides that the executive is
entitled to certain benefits if his employment is terminated
within one year before or after a Change of Control: (i) by
his employer, or (ii) by the executive because his
employment is materially adversely changed (including, for
example, a material reduction in responsibilities, change of
title, a requirement that the executive perform his functions
more than 35 miles from his primary office location, or a
non-company wide reduction in benefits). Any benefits to be
received by the executives will be reduced to the maximum amount
payable under Section 280G without penalty.
Under these circumstances, each of Messrs. McKay, Lodge,
Bevack and Kelly are entitled to an amount equal to three times
his base amount (as defined in Section 280G of
the Internal Revenue Code) less $1.00, and continued coverage at
Home Savings expense under all health and welfare benefit
plans until the earlier of the expiration of the term of the
Employment Agreement or the date on which he is included in
another employers benefit plans as a full-time employee.
Upon a termination in connection with a Change of Control,
Mr. Cavalier is entitled to 2.99 times his base
amount (as defined in Section 280G) and continued
coverage at Butler Wicks expense under all health, life
and disability plans of Butler Wick until the earlier of the
expiration of the term of the Employment Agreement or the date
on which he is included in another employers benefit plans
as a full-time employee.
In addition, if Messrs. McKay, Lodge, Bevack or
Kellys employment is terminated pursuant to a Change of
Control, he is subject to a non-compete that prohibits him from
engaging in the financial institutions business for a period of
eight months in Mahoning, Trumbull or Columbiana Counties, Ohio,
or any other geographic area in which Home Savings or UCFC is
doing business. In exchange for this non-compete, he is entitled
to receive an additional eight months of his base salary.
Under each of the Employment Agreements of Messrs. McKay,
Lodge, Bevack and Kelly, Change of Control is
defined as:
|
|
|
|
|
the acquisition of the power to vote more than 20% of the shares
of Home Savings or UCFC;
|
|
|
|
the acquisition of the ability to control the election of a
majority of the directors of Home Savings or UCFC;
|
|
|
|
such time when, during any period of three or less consecutive
years, individuals who at the beginning of that period
constituted the Board of Directors of Home Savings or UCFC cease
to constitute at least a majority of the Board; provided that
any person whose election as a director was approved by a vote
of at least 2/3 of the directors then in office will be
considered to have continued to be a director of Home Savings or
UCFC;
|
|
|
|
the acquisition by any person or entity of control of Home
Savings as defined in 12 C.F.R § 303.81(c); or
|
|
|
|
an event that would be required to be reported under
Item 5.01 of Form
8-K or
Item 6(e) of Schedule 14A.
|
Under Mr. Cavaliers Employment Agreement,
Change of Control is defined as:
|
|
|
|
|
the acquisition of the power to vote more than 25% of the shares
of Butler Wick or UCFC;
|
|
|
|
the acquisition of the ability to control the election of a
majority of the directors of Butler Wick or UCFC; or
|
|
|
|
an event that would be required to be reported under
Item 5.01 of Form
8-K or
Item 6(e) of Schedule 14A.
|
Termination upon Death. Upon
Messrs. McKay, Lodge, Bevack or Kellys death, his
estate is entitled to receive a continuation of his base salary
for 90 days. Upon Mr. Cavaliers death, his
estate is entitled to receive the compensation due to him
through the last day of the calendar month in which he died.
Termination upon Disability. If any of
Messrs. McKay, Lodge, Bevack or Kelly is unable to perform
his duties due to illness or incapacity for a period of up to
150 consecutive days, Home Savings can terminate the Employment
Agreement. After the Employment Agreement is terminated, if the
executive is eligible for long term disability benefits under
Home Savings disability plan, then he will be entitled to
continued coverage under health and life insurance plans for a
period of two years. Mr. Cavaliers employment
agreement does not provide for benefits upon termination due to
disability.
12
Termination for Cause. None of the executives
are entitled to receive any benefits following termination for
Cause. Cause is defined in the Employment Agreements
as personal dishonesty, incompetence, willful misconduct, breach
of fiduciary duty involving personal profit, intentional failure
or refusal to perform the duties and responsibilities, willful
violation of any final
cease-and-desist
order, law, rule or regulation (other than traffic violations or
other minor offenses), or material breach of the Employment
Agreement.
Other Termination. If the executive is
terminated before the expiration of his Employment Agreement for
any reason other than death, disability, Cause, or Change of
Control, then he is entitled to receive the total compensation
in effect at the time of termination until the expiration of the
term of the Employment Agreement and continued coverage under
all health and welfare benefit plans at the expense of the
individual until the earlier of the expiration of the term or
the date on which he is included in another employers
benefit plans as a full-time employee. Messrs. McKay,
Lodge, Bevack and Kelly are also entitled to receive a cash
bonus equal to the cash bonus, if any, he received in the
12 month period prior to termination.
In the event Mr. Cavalier terminates his employment without
Butler Wicks consent (other than in connection with a
Change of Control), he shall be subject to a non-compete for the
unexpired term of his Employment Agreement. The non-compete
prohibits him from engaging in any manner in any business that
competes with Butler Wick or UCFC within Mahoning, Trumbull,
Columbiana, Portage, Cuyahoga, Medina or Stark Counties, Ohio;
or Mercer or Venango Counties, Pennsylvania.
Compensation
Committee Interlocks and Insider Participation
During 2007, Ms. Atkinson and Messrs. Schiraldi and
Smith served on the UCFC Compensation Committee. None of these
individuals is a current or former executive officer or employee
of UCFC, Home Savings or Butler Wick or had a reportable
business relationship with UCFC, Home Savings or Butler Wick.
Related
Person Transactions
Home Savings makes loans to executive officers and directors of
UCFC and its subsidiaries in the ordinary course of business and
on the same terms and conditions, including interest rates and
collateral, as those of comparable loans to other persons. All
outstanding loans to executive officers and directors were made
pursuant to such policy, do not involve more than the normal
risk of collectibility or present other unfavorable features and
are current in their payments.
UCFC does not have any related person transactions as defined in
Regulation S-K
Item 404(a) and currently does not permit any such
transactions. This policy is not evidenced in writing, but has
been clearly communicated to the Board.
OWNERSHIP
OF UCFC SHARES
The following table sets forth information about the only
persons known to UCFC to own beneficially more than 5% of the
outstanding UCFC common shares as of the Voting Record Date:
|
|
|
|
|
|
|
|
|
|
|
Amount and Nature of
|
|
Percent of
|
Name and Address
|
|
Beneficial Ownership
|
|
Shares Outstanding
|
|
United Community Financial Corp.
|
|
|
3,726,474 (1
|
)
|
|
|
12.4
|
%
|
Employee Stock Ownership Plan
2321 Kochs Lane
Quincy, IL 62301
|
|
|
|
|
|
|
|
|
Dimensional Fund Advisors, Inc.
|
|
|
2,427,746 (2
|
)
|
|
|
8.1
|
%
|
1299 Ocean Avenue
11th Floor
Santa Monica, CA 90401
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
First Bankers Trust Services, Inc., as the Trustee for the
United Community Financial Corp. Employee Stock Ownership Plan
(the ESOP), has sole investment power over the ESOP shares. The
Trustee may be deemed to |
13
|
|
|
|
|
have voting power over the 1,531,753 unallocated shares,
although the ESOP provides that unallocated shares shall be
voted by the Trustee in the same proportion as participants
direct the voting of allocated ESOP shares. |
|
|
|
(2) |
|
Based on Schedule 13G, dated February 6, 2008, in
which Dimensional Fund Advisors, Inc. reports sole voting power
and sole dispositive power over all of the shares reported. |
The following table sets forth information regarding the number
of UCFC common shares beneficially owned by each director and
Named Executive Officer as of the Voting Record Date:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount and Nature of
|
|
|
|
|
|
|
Beneficial Ownership
|
|
|
|
|
|
|
Sole Voting or
|
|
|
Shared Voting or
|
|
|
Percent of
|
|
Name and Address(1)
|
|
Investment Power
|
|
|
Investment Power
|
|
|
Shares Outstanding
|
|
|
Eugenia C. Atkinson
|
|
|
20,552
|
|
|
|
0
|
|
|
|
*
|
|
Patrick W. Bevack
|
|
|
213,511
|
(2)
|
|
|
0
|
|
|
|
*
|
|
Richard J. Buoncore
|
|
|
6,000
|
|
|
|
0
|
|
|
|
*
|
|
Thomas J. Cavalier
|
|
|
75,887
|
(2)
|
|
|
0
|
|
|
|
*
|
|
Patrick A. Kelly
|
|
|
472,318
|
(2)
|
|
|
22,529
|
|
|
|
1.5
|
%
|
David G. Lodge
|
|
|
308,480
|
(2)
|
|
|
0
|
|
|
|
*
|
|
Douglas M. McKay
|
|
|
638,440
|
(2)
|
|
|
0
|
|
|
|
2.0
|
|
Richard J. Schiraldi
|
|
|
7,437
|
|
|
|
0
|
|
|
|
*
|
|
Clarence R. Smith
|
|
|
30,368
|
(2)
|
|
|
7,036
|
|
|
|
*
|
|
David C. Sweet
|
|
|
1,157
|
|
|
|
0
|
|
|
|
*
|
|
Donald J. Varner
|
|
|
166,064
|
|
|
|
34,838
|
|
|
|
|
|
All directors and executive officers as a group (11 persons)
|
|
|
1,940,214
|
(2)
|
|
|
64,403
|
|
|
|
6.2
|
|
|
|
|
* |
|
Less than one percent of the total outstanding. |
|
|
|
(1) |
|
Each of the persons listed in this table may be contacted at the
address of UCFC. |
|
(2) |
|
Includes the following number of shares that may be acquired
upon the exercise of options awarded under the United Community
Financial Corp. 1999 Plan and 2007 Plan:
Mr. Bevack 167,868;
Mr. Cavalier 30,187; Mr. Kelly
243,921; Mr. Lodge 257,448;
Mr. McKay 510,767; and directors and executive
officers as a group 1,061,186. Also, includes the
following number of shares that are pledged as security for a
loan from a lender not affiliated with UCFC:
Mr. Kelly 10,000; and
Mr. Smith 9,257. |
SECTION 16(a)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934
requires UCFCs executive officers and directors, and
persons who own more than ten percent of UCFCs common
shares, to file reports of ownership and changes in ownership on
Forms 3, 4 and 5 with the Securities and Exchange
Commission and to provide UCFC with a copy of such form. Based
on UCFCs review of the copies of such forms it has
received, UCFC believes that its executive officers and
directors complied with all filing requirements applicable to
them with respect to transactions during the fiscal year ended
December 31, 2007, except that Mr. Lodge filed a late
Form 4 reporting two sales of UCFC shares.
AUDIT
COMMITTEE REPORT
The Audit Committee is responsible for overseeing UCFCs
accounting functions and controls, as well as hiring an
accounting firm to audit UCFCs financial statements. The
Audit Committee has adopted a charter to set forth its
responsibilities (the Charter).
As required by the Charter, the Audit Committee received and
reviewed the report of Crowe Chizek regarding the results of
their audit, as well as the written disclosures and the letter
from Crowe Chizek required by Independence Standards Board
Standard No. 1. The Audit Committee reviewed and discussed
the audited financial
14
statements with the management of UCFC. A representative of
Crowe Chizek also discussed with the Audit Committee the
independence of Crowe Chizek from UCFC, as well as the matters
required to be discussed by Statement of Auditing Standards 61,
as may be amended from time to time. Discussions between the
Audit Committee and the representative of Crowe Chizek included
the following:
|
|
|
|
|
Crowe Chizeks responsibilities in accordance with
generally accepted auditing standards
|
|
|
|
The initial selection of, and whether there were any changes in,
significant accounting policies or their application
|
|
|
|
Managements judgments and accounting estimates
|
|
|
|
Whether there were any significant audit adjustments
|
|
|
|
Whether there were any disagreements with management
|
|
|
|
Whether there was any consultation with other accountants
|
|
|
|
Whether there were any major issues discussed with management
prior to Crowe Chizeks retention
|
|
|
|
Whether Crowe Chizek encountered any difficulties in performing
the audit
|
|
|
|
Crowe Chizeks judgments about the quality of UCFCs
accounting principles
|
|
|
|
Crowe Chizeks responsibilities for information prepared by
management that is included in documents containing audited
financial statements
|
Based on its review of the financial statements and its
discussions with management and the representative of Crowe
Chizek, the Audit Committee recommended to the Board of
Directors that the audited financial statements be included in
the Annual Report on
Form 10-K
for the year ended December 31, 2007.
|
|
|
|
Richard
J. Schiraldi, Chairman |
Eugenia
C. Atkinson |
Richard
J. Buoncore |
David C.
Sweet |
SELECTION
OF AUDITORS
The Audit Committee of the Board of Directors has selected Crowe
Chizek as the independent auditors for the 2008 fiscal year. The
Board is requesting that the shareholders ratify this selection.
If the shareholders do not ratify the selection of Crowe Chizek,
the selection of independent auditors may be reconsidered by the
Audit Committee.
Management expects that a representative from Crowe Chizek will
be present at the Annual Meeting, will have the opportunity to
make a statement if he or she desires to do so and will be
available to respond to appropriate questions from shareholders.
AUDIT
FEES
The aggregate fees billed by Crowe Chizek to UCFC for the years
ended December 31, 2007 and 2006 are as follows:
|
|
|
|
|
|
|
|
|
|
|
2007
|
|
|
2006
|
|
|
Audit Fees
|
|
$
|
396,145
|
|
|
$
|
321,790
|
|
Audit-Related Fees
|
|
|
95,635
|
(1)
|
|
|
32,400
|
|
Tax Fees
|
|
|
59,500
|
(2)
|
|
|
62,500
|
|
All Other Fees
|
|
|
4,345
|
(3)
|
|
|
4,254
|
|
|
|
|
(1) |
|
Includes time incurred for the proposed merger and
S-4 filing,
fees for services related to attestation on internal controls,
the audit of the 401(k) and ESOP and an evaluation of
managements assertions relative to U.S. Department of
Education reporting requirements for the student loan portfolio. |
15
|
|
|
(2) |
|
Includes fees for services related to the preparation of various
federal, state and local income tax returns and various
consulting services. |
|
(3) |
|
Includes fees for software licensing and maintenance agreements
relating to managements review and reporting on internal
controls for compliance with Section 404 of the
Sarbanes-Oxley Act. |
PROPOSALS OF
SHAREHOLDERS, COMMUNICATIONS WITH THE BOARD OF DIRECTORS AND
OTHER MATTERS
Any proposals of qualified shareholders intended to be included
in the proxy statement for the 2009 Annual Meeting of
Shareholders of UCFC should be sent to UCFC by certified mail
and must be received by UCFC not later than December 2,
2008. In addition, if a shareholder intends to present a
proposal at the 2009 Annual Meeting without including the
proposal in the proxy materials related to that meeting, and if
the proposal is not received by February 18, 2009, then the
proxies designated by the Board of Directors of UCFC for the
2009 Annual Meeting of Shareholders of UCFC may vote in their
discretion on any such proposal any shares for which they have
been appointed proxies without mention of such matter in the
proxy statement or on the proxy card for such meeting.
Shareholders may send written communications to the Board of
Directors or any of the directors
c/o Secretary,
United Community Financial Corp., 275 West Federal Street,
Youngstown, Ohio
44503-1203.
All communications will be compiled by the Secretary of UCFC and
submitted to the Board of Directors or the individual directors.
Management knows of no other business which may be brought
before the Annual Meeting. It is the intention of the persons
named in the enclosed Proxy to vote the Proxy in accordance with
their best judgment on any other matters which may be brought
before the Annual Meeting.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. WHETHER OR
NOT YOU EXPECT TO ATTEND THE MEETING IN PERSON, WE URGE YOU TO
COMPLETE, SIGN AND RETURN THE PROXY IN THE ENCLOSED
SELF-ADDRESSED ENVELOPE.
By Order of the Board of Directors
Douglas M. McKay
Chairman of the Board and
Chief Executive Officer
Youngstown, Ohio
April 1, 2008
16
REVOCABLE PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
UNITED COMMUNITY FINANCIAL CORP.
UNITED COMMUNITY FINANCIAL CORP.
2008 ANNUAL MEETING OF SHAREHOLDERS
April 24, 2008
The undersigned shareholder of United Community Financial Corp. (UCFC) hereby constitutes
and appoints Patrick W. Bevack and Patrick A. Kelly, or either of them, as the Proxy or Proxies of
the undersigned with full power of substitution and resubstitution, to vote at the Annual Meeting
of Shareholders of UCFC to be held at Mr. Anthonys, 7440 South Avenue, Boardman, Ohio , on April
24, 2008, at 10:00 a.m. Eastern Time (the Annual Meeting), all of the shares of UCFC which the
undersigned is entitled to vote at the Annual Meeting, or at any adjournment thereof, on each of
the following proposals, all of which are described in the accompanying Proxy Statement:
1. |
|
The re-election of three directors for terms expiring in 2011: |
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o |
|
FOR all nominees
listed below
(except as marked to the
contrary below):
|
|
o
|
|
WITHHOLD authority to
vote for all nominees
listed below:
|
Richard J. Buoncore
Richard J. Schiraldi
David C. Sweet
(INSTRUCTION: To withhold authority to vote for any individual nominee, write that nominees name
in the space provided below).
2. |
|
The ratification of the selection of Crowe Chizek and Company LLC, certified public
accountants, as the auditors of UCFC for the current fiscal year. |
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o |
FOR |
o |
AGAINST |
o |
ABSTAIN |
IMPORTANT: Please sign and date this Proxy on the reverse side.
3. |
|
In their discretion, upon such other business as may properly come before the Annual Meeting
or any adjournments thereof. |
|
|
|
The Board of Directors recommends a vote FOR the nominees and the proposals listed above. |
This Proxy, when properly executed, will be voted in the manner directed herein by the
undersigned shareholder. Unless otherwise specified, the shares will be voted FOR proposals 1 and
2.
All Proxies previously given by the undersigned are hereby revoked. Receipt of the Notice of
the Annual Meeting and of the accompanying Proxy Statement is hereby acknowledged.
o
In order to accommodate all shareholders, please check if you plan on attending the
Annual Meeting.
Please sign exactly as your name appears on your Stock Certificate(s). Executors,
Administrators, Trustees, Guardians, Attorneys and Agents should give their full titles.
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Signature |
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Signature |
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Print or Type Name |
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Print or Type Name |
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Dated: |
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Dated: |
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PLEASE DATE, SIGN AND RETURN THIS PROXY PROMPTLY IN THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED
FOR MAILING IN THE USA.