SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement.
[ ] Confidential, for use of the Commission only (as permitted by Rule
14a-6(e)(2)).
[X] Definitive proxy statement.
[ ] Definitive additional materials.
[ ] Soliciting materials pursuant to Rule 14a-11(c) or Rule 14a-12.
UNITED BANCORP, INC.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of filing fee (check appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(I)(1) and 0-11.
(1) Title of each class of security to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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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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March 15, 2003
To Our Shareholders:
You are cordially invited to attend the Annual Meeting of the
Shareholders to be held on Wednesday April 23, 2003, at 2:00 p.m. local time, at
The Citizens Savings Bank's main office, 201 South Fourth Street, Martins Ferry,
Ohio.
The Annual Certified Audit of United Bancorp, Inc is enclosed for your
review prior to attending our Annual Meeting. We are both pleased and excited
about our 2002 financial results that reflect the continued cooperation and
dedication of our Directors, Officers and Staff.
Payment of our regular first quarter cash dividend was made by separate
mailing on March 20th. Whether or not you received your dividend check in a
separate mailing is dependent upon your level of participation in our Dividend
Reinvestment Plan, Direct Deposit Program or whether your stock is being held
for your in a broker name. NO PAYMENT HAS BEEN INCLUDED WITH THIS MAILING OF OUR
PROXY MATERIALS.
It is important that your shares are voted, and we hope that you will
attend the Annual Meeting. Please vote by executing and returning the enclosed
for of Proxy or follow the instructions to vote electronically on the Internet
or by phone.
Very truly yours,
James W. Everson
Chairman, President and Chief Executive Officer
ENCLOSURES
UNITED BANCORP, INC.
MARTINS FERRY, OHIO
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 23, 2003
TO THE SHAREHOLDERS OF
UNITED BANCORP, INC. March 15, 2003
The Annual Meeting of Shareholders of United Bancorp, Inc. will be held
at 201 South 4th at Hickory Street, Martins Ferry, Ohio, April 23, 2003, at 2:00
p.m. local time for the purpose of considering and voting upon the following
matters as more fully described in the Proxy Statement.
PROPOSALS:
1. ELECTION OF DIRECTORS - To elect four directors.
2. OTHER BUSINESS - To transact any other business which may properly
come before the meeting or any adjournment of it.
Shareholders of record at the close of business on March 10, 2003 will
be entitled to vote the number of shares held of record in their names
on that date.
We urge you to sign and return the enclosed proxy as promptly as
possible or vote via the phone or Internet, whether or not you plan to
attend the meeting in person. This proxy may be revoked prior to its
exercise.
By Order of the Board of Directors
Norman F. Assenza, Jr.
Secretary
YOUR VOTE IS IMPORTANT. PLEASE MARK, SIGN, DATE AND MAIL THE ENCLOSED PROXY
FORM(s) WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING. A RETURN ENVELOPE
IS ENCLOSED FOR YOUR CONVENIENCE. YOU MAY ALSO VOTE AT HOME BY PHONE OR
INTERNET. PLEASE SEE ENCLOSED INFORMATION ON HOW TO TAKE ADVANTAGE OF THIS
CONVENIENT WAY TO VOTE.
UNITED BANCORP, INC.
201 SOUTH 4TH STREET
MARTINS FERRY, OHIO 43935
PROXY STATEMENT FOR ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD APRIL 23, 2003
INTRODUCTION
This Proxy Statement is being furnished to shareholders of United
Bancorp, Inc. ("United Bancorp" or the "Corporation") in connection with the
solicitation of proxies by the Board of Directors of the Corporation to be used
at the Annual Meeting of Shareholders, and any adjournment thereof, to be held
at the time and place set forth in the accompanying notice ("Annual Meeting").
It is anticipated that the mailing of this Proxy Statement and the enclosed
proxy card will commence on or about March 15, 2003.
At the Annual Meeting, shareholders of the Corporation will be asked to
elect four directors.
VOTING AND REVOCATION OF PROXIES
If the enclosed form of proxy is properly executed and returned to the
Corporation in time to be voted at the Annual Meeting, the shares represented by
your proxy will be voted in accordance with your instructions marked on the
proxy. Where properly executed proxies are returned but no such instructions are
given, the shares will be voted "For" the election to the Board of Directors of
the persons nominated by the Board of Directors of the Corporation.
The presence of a shareholder at the Annual Meeting will not
automatically revoke such shareholder's proxy. However, shareholders may revoke
a proxy at any time prior to its exercise by filing with the Secretary of the
Corporation a written notice of revocation, by delivering to the Corporation a
duly executed proxy bearing a later date or by attending the Annual Meeting and
voting in person. Written notices of revoked proxies may be directed to Norman
F. Assenza, Jr., Secretary, 201 South 4th Street, Martins Ferry, Ohio 43935.
Directors and executive officers of the Corporation, and their
affiliates, had sole or shared voting power with respect to 294,535 common
shares of the Corporation, representing 9.1% of the Corporation's common shares
outstanding as of December 31, 2002. Such directors and officers have advised
the Corporation that they intend to vote all of the Corporation's common shares
that they are entitled to vote for the election to the Board of Directors of the
persons nominated by the Board of Directors of the Corporation.
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SOLICITATION OF PROXIES
The cost of soliciting proxies will be borne by the Corporation. In
addition to the solicitation of proxies by mail, the Corporation, through its
directors, officers and regular employees, may also solicit proxies personally
or by telephone or telecopy without additional compensation. The Corporation
will also request persons, firms and corporations holding shares in their names
or in the name of their nominees, which are beneficially owned by others, to
send proxy material to and obtain proxies from the beneficial owners and will
reimburse the holders for their reasonable expenses in doing so.
MEETING INFORMATION
DATE, PLACE AND TIME
The Annual Meeting of Shareholders of the Corporation will be held on Wednesday,
April 23, 2003, at 2:00 p.m., local time, at The Citizens Savings Bank, 201
South 4th Street, Martins Ferry, Ohio.
RECORD DATE, VOTING RIGHTS
Only the Corporation's common shares can be voted at the Annual
Meeting. Each share entitles its owner to one vote on all matters.
The close of business on March 10, 2003, (the "Record Date"), has been
fixed as the record date for the determination of shareholders entitled to vote
at the Annual Meeting. There were approximately 2000 record holders of the
Corporation's common shares and 3,223,042 of the Corporation's common shares
outstanding as of the Record Date.
The presence in person or by proxy of a majority of the outstanding
common shares of the Corporation entitled to vote at the meeting constitutes a
quorum at the Annual Meeting. Abstentions and broker non-votes will be counted
for purposes of determining the presence of a quorum.
The four nominees for director who receive the largest number of votes
cast "For" will be elected as directors. Shares represented at the Annual
Meeting in person or by proxy but withheld or otherwise not cast for the
election of directors will have no impact on the outcome of the election of
directors.
OWNERSHIP OF VOTING SHARES
The following table sets forth the beneficial ownership of the
Corporation's common shares by each of the Corporation's directors and the
Corporation's named executive officers, and the directors and executive officers
as a group, as of December 31, 2002.
3
COMMON SHARES
NAME OF BENEFICIAL OWNER OWNED(1) PERCENT OF CLASS
------------------------ ------------- ----------------
Michael J. Arciello 5,383 *
James W. Everson (2) 79,789 2.5%
John M. Hoopingarner (3) 2,237 *
Terry A. McGhee 2,530 *
L. E. Richardson, Jr. (4) 71,779 2.2%
Richard L. Riesbeck (5) 13,819 *
Matthew C. Thomas (6) 18,288 *
Alan M. Hooker (7) 4,328 *
Scott A. Everson 3,208 *
Randall M. Greenwood 2,595 *
Norman F. Assenza, Jr. 8,381 *
All Directors and Executive 219,058
Officers as a Group
(13 in group) 6.7%
* Ownership is less than 1% of the class.
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(1) Except as otherwise noted, none of the named individuals shares with
another person either voting or investment power as to the shares reported.
(2) Includes 44,365 shares subject to shared voting and investment power.
(3) Includes 324 shares subject to options which are exercisable within sixty
days of December 31, 2002.
(4) Includes 269 shares subject to options which are exercisable within sixty
days of December 31, 2002 and 68,973 shares subject to shared voting and
investment powers
(5) Includes 12,123 shares subject to shared voting and investment power.
(6) Includes 6,919 shares subject to shared voting and investment power.
(7) Includes 1787 shares subject to shared voting and investment power.
As of December 31, 2002, no person was known by the Corporation to be the
beneficial owner of more than 5% of the outstanding common shares of the
Corporation.
Directors and officers of United Bancorp and it subsidiaries, and the
Corporation's employee benefit plans in total owned 319,685 shares, or 9.8% of
all outstanding shares of the Corporation, as of December 31, 2002.
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PROPOSAL 1
ELECTION OF DIRECTORS
The Code of Regulations of the Corporation provides that the Board of
Directors of the Corporation shall be divided into classes. Ohio law requires
that there be at least three directors in each class. Each class shall hold
office for a term of two years. At the Annual Meeting, four directors will be
elected to a two-year term expiring in 2005.
The nominees for election at the Annual Meeting are James W. Everson,
John M. Hoopingarner, Richard L. Riesbeck, and Matthew C. Thomas each of whom is
currently a director of the Corporation.
NOMINEES
CLASS "I" DIRECTORS. The following table sets forth certain information
with respect to the nominees as Class "I" Directors of the Corporation who will
be voted upon at the Annual Meeting. There were no arrangements or
understandings pursuant to which the persons listed below were selected as
directors or nominees for director.
PRINCIPAL OCCUPATION POSITIONS AND OFFICES DIRECTOR
NAME AGE FOR PAST FIVE YEARS HELD WITH UNITED BANCORP SINCE
James W. Everson 64 Chairman, President and Chief Chairman, President and 1969
Executive Officer, United Chief Executive Officer,
Bancorp, Chairman and Chief United Bancorp, Chairman and
Executive Officer, The Chief Executive Officer, The
Citizens Savings Bank; Citizens Savings Bank;
Chairman, The Community Bank Chairman, The Community Bank
John M. Hoopingarner 48 General Manager and Director 1992
Secretary/Treasurer,
Muskingum Watershed
Conservancy District
Richard L. Riesbeck 53 President, Riesbeck Food Director 1984
Market, Inc., a regional
grocery store chain
Matthew C. Thomas 46 President, M. C. Thomas Director 1988
Insurance Agency, Inc.
5
CONTINUING DIRECTORS
CLASS "II" DIRECTORS. The following table sets forth certain
information with respect to Class "II" Directors of United Bancorp, whose terms
expire in 2004.
PRINCIPAL OCCUPATION POSITIONS AND OFFICES DIRECTOR
NAME AGE FOR PAST FIVE YEARS HELD WITH UNITED BANCORP SINCE
Michael J. Arciello 68 Retired Vice President Director 1992
Finance, Nickles
Bakeries, Inc.
Terry A. McGhee 52 President and Chief Director 2001
Executive Officer,
Westerman, Inc., a
manufacturing company
L. E. Richardson, Jr. 70 Retired President -- Director 1998
Southern Ohio Community
Bancorporation, Inc.
There were no agreements or understandings pursuant to which any of the
persons listed above was selected as a director.
The Board of Directors of United Bancorp met 4 times in 2002. In 2002,
each director attended at least 75% of the combined total of meetings of the
Board of Directors and meetings of each committee on which such director served.
COMMITTEES OF THE BOARD
The Board of Directors of United Bancorp has established the following
standing audit and compensation committees, with membership noted:
AUDIT COMMITTEE. (Mr. Arciello, Chairman, and Messrs. McGhee and
Thomas).
The Audit Committee met 4 times during 2002. The responsibilities of
the Audit Committee include recommending the appointment of and overseeing a
firm of independent auditors whose duty it is to audit the books and records of
United Bancorp and its subsidiaries for the fiscal year for which they are
appointed; monitoring and analyzing the results of internal and regulatory
examinations; and monitoring United Bancorp's and its subsidiaries' financial
and accounting organization and financial reporting. The Audit Committee's
report appears under the caption "Audit Committee Report."
COMPENSATION COMMITTEE. (Mr. Riesbeck, Chairman, and Messrs.
Hoopingarner and Richardson).
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The Compensation Committee met once in 2002. The Compensation Committee
has the responsibility of recommending for the approval of the Board of
Directors the remuneration arrangements for the directors and chief executive
officers of United Bancorp's subsidiary banks. The Compensation Committee's
report on executive compensation matters for 2002 appears under the caption
"Compensation Committee Report on Executive Compensation".
United Bancorp does not have a nominating committee or other committee
of its Board of Directors that performs the function of nominating persons for
the Corporation's Board of Directors. The Board of Directors nominates persons
for election as United Bancorp directors.
AUDIT COMMITTEE REPORT
The Audit Committee of United Bancorp's Board of Directors (the
"Committee") is composed of three directors, each of whom is independent as
defined by the National Association of Securities Dealers' listing standards,
and operates under a written charter. The members of the Committee are Michael
J. Arciello (Chair), Terry A. McGhee and Matthew C. Thomas. The Committee
recommends to the Board of Directors the selection of the Corporation's
independent accountants.
Management is responsible for the Corporation's internal controls and
the financial reporting process. The independent accountants are responsible for
performing an independent audit of the Corporation's consolidated financial
statements in accordance with generally accepted auditing standards and to issue
a report thereon. The Committee's responsibility is to monitor and oversee the
processes.
In this context, the Committee has met and held discussions with
management and the independent accountants. Management represented to the
Committee that the Corporation's consolidated financial statements were prepared
in accordance with generally accepted accounting principles, and the Committee
has reviewed and discussed the consolidated financial statements with management
and the independent accountants. The Committee discussed with the independent
accountants matters required to be discussed by Statement on Auditing Standards
No. 61 (communication with Audit Committees).
The Corporation's independent accountants also provided to the
Committee the written disclosures required by Independence Standards Board
Standard No. 1 (Independence Discussions with Audit Committees), and the
Committee discussed with the independent accountants that firm's independence.
The Committee has considered whether the provision of non-audit services by the
independent accountants to the Corporation and its subsidiaries is compatible
with maintaining the independence of the independent accountants.
Based upon the Committee's discussion with management and the
independent accountants and the Committee's review of the representation of
management and the
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report of the independent accountants to the Committee, the Committee
recommended that the Board of Directors include the audited consolidated
financial statements in the Corporation's Annual Report on Form 10-K for the
year ended December 31, 2002 filed with the Securities and Exchange Commission.
Michael J. Arciello, Chairman
Terry A. McGhee
Matthew C. Thomas
United Bancorp's independent accountants billed the aggregate fees
shown below for audit, financial information systems design and implementation
and other services rendered to United Bancorp and its subsidiaries for the year
2002.
Audit Fees $52,200
Financial Information Systems Design and
Implementation Fees $ 0
All Other Fees $39,490
EXECUTIVE COMPENSATION
AND OTHER INFORMATION
GENERAL. The following information relates to compensation of
management for the years ended December 31, 2002, 2001 and 2000, unless
otherwise noted below.
EXECUTIVE COMPENSATION. The following table sets forth the annual and
long-term compensation for United Bancorp's Chief Executive Officer and its
other executive officers whose total salary and bonus for 2002 exceeded
$100,000, as well as the total compensation paid to each individual during
United Bancorp's last three fiscal years.
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------- ------
SECURITIES ALL OTHER
UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) OPTIONS (#) ($) (A)
--------------------------- ---- ---------- --------- ----------- -------
James W. Everson..................................... 2002 202,178 66,862 0 12,986
Chairman, President and Chief Executive 2001 198,800 43,531 0 12,822
Officer, United Bancorp, Inc 2000 198,400 15,531 0 9,456
Alan M. Hooker....................................... 2002 108,622 35,036 0 7,301
Executive Vice President & Chief 2001 106,600 12,500 0 4,313
Administration Officer, United Bancorp, Inc. 2000 106,300 6,812 0 3,340
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Scott A. Everson..................................... 2002 87,960 30,764 0 5,131
Senior Vice President & Chief Operating 2001 70,000 13,650 0 2,344
Officer, United Bancorp, Inc. 2000 57,000 8,123 0 1,883
Randall M. Greenwood................................. 2002 83,562 24,824 0 2,805
Senior Vice President, Chief Financial 2001 80,000 15,800 0 2,722
Officer & Treasurer, United Bancorp, Inc 2000 78,000 5,558 0 191
Norman F. Assenza, Jr. ............................. 2002 86,088 25,575 0 4,594
Vice President Compliance & Secretary, 2001 84,400 16,670 0 5,304
United Bancorp, Inc. 2000 84,400 6,014 0 3,712
(A) The amounts shown in this column for the most recently completed fiscal
year were derived from the following figures: (1) contributions by
United Bancorp to its 401(k) Plan: Mr. James W. Everson, $5,946; Mr.
Hooker, $3,267; Mr. Scott A. Everson $2,874, Mr. Greenwood $2,507 and
Mr. Assenza, $3,083 (2) insurance premiums paid on term life insurance
policies: for the benefit of Mr. James W. Everson, $4,356, for the
benefit of Mr. Hooker, $943; for the benefit of Mr. Scott A. Everson
$171, for the benefit of Mr. Greenwood $298 and for the benefit of Mr.
Assenza, $1,510.
Mr. Scott A. Everson, Senior Vice President & Chief Operating Officer
is the son of Mr. James W. Everson, Chairman, President & Chief
Executive Officer and a Director.
OPTION EXERCISES AND YEAR-END VALUE TABLE. The following table presents
information about stock options exercised during 2002 and unexercised stock
options at December 31, 2002 for the three named executive officers.
OPTION EXERCISES AND YEAR-END VALUE TABLE
AGGREGATED OPTION EXERCISES IN 2002 AND FISCAL YEAR END OPTION VALUES
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS IN-THE-MONEY OPTIONS AT
DECEMBER 31, 2002(#) DECEMBER 31, 2002($)
-------------------- --------------------
SHARES ACQUIRED VALUE
NAME ON EXERCISE REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- ----------- -------- ------------------------- -------------------------
James W. Everson 0 0 0/33,203 0/141,777
Alan M. Hooker 0 0 1,787/10,975 0/0
Scott A. Everson 0 0 0 0/0
Randall M. Greenwood 0 0 894/5,487 0/0
Norman F. Assenza, Jr. 0 0 960/6,640 4,099/28,353
CHANGE-IN-CONTROL ARRANGEMENTS. The Company has entered into
change-in-control agreements with Messrs. James W. Everson, Hooker, Scott A.
Everson, Greenwood and Assenza. The agreements provide that Mr. James W.
Everson, Mr. Hooker, Mr. Scott A. Everson, Mr. Greenwood and Mr. Assenza will be
entitled to a lump sum severance benefit in the event of their involuntary
termination of employment (other than for cause) following a "change in control"
of the Corporation. A change in
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control is defined to include the acquisition of the Corporation and certain
other changes in the voting control of the Corporation. In the event of a change
in control and the involuntary termination of employment, the agreements provide
that Mr. James W. Everson will receive 2.99 times his annual compensation, Mr.
Hooker will receive 2.0 times his annual compensation, Mr. Scott A. Everson will
receive 2.0 times his annual compensation, Mr. Greenwood will receive 1.0 time
his annual compensation and Mr. Assenza will receive 1.0 times his annual
compensation in a lump sum cash payment. Each agreement has a term of one year
and is automatically extended for one additional year unless, not later than
June 30 of the preceding year, the Corporation gives notice of termination of
the agreement. The right of the Corporation to terminate the employment of Mr.
James W. Everson, Mr. Hooker, Mr. Scott A. Everson, Mr. Greenwood and/or Mr.
Assenza prior to a change in control is unaffected by these agreements. In the
event a change in control had occurred on January 1, 2003, and Mr. James W.
Everson's, Mr. Hooker's, Mr Scott A. Everson's, Mr. Greenwood's or Mr. Assenza's
employment had been involuntarily terminated on such date (other than for
cause), Mr. James W. Everson, Mr. Hooker, Mr. Scott A. Everson, Mr. Greenwood
and Mr. Assenza would have been entitled to receive lump sum severance benefits
of $752,448, $248,778, $208,968, $101,868 and $105,841 respectively. In the
event a potential change in control is announced, the agreements obligate Mr.
James W. Everson, Mr. Hooker, Mr Scott A. Everson, Mr. Greenwood and Mr. Assenza
to remain in the employment of the Corporation for not less than one year
following the change in control of the Corporation.
DIRECTOR COMPENSATION
United Bancorp compensates each director for services as a director in the
following manner: each director receives an annual retainer fee of $5,000
regardless of board meeting attendance and $416 per meeting attended. Each
member of the Compensation Committee receives $214 for each meeting attended.
PENSION PLAN
United Bancorp maintains a defined benefit pension plan for its
eligible fulltime employees. It may provide monthly benefits commencing as early
as age 50, but not later than age 70, for employees who terminate employment or
retire with 5 or more years of credited service.
Benefits at retirement or vested termination of employment are based on
years of credited service, and the average of the highest five consecutive years
of compensation. The plan is integrated with social security covered
compensation.
The table below sets forth retirement benefits at various levels of
compensation and years of service based upon retirement at age 65. For this
table, benefits are payable to the participant for life and are based on 2002
terms and factors.
10
BENEFIT TABLE FOR A PARTICIPANT ATTAINING AGE 65 IN 2002
YEARS OF SERVICE
AVERAGE
ANNUAL SALARY 10 15 20 25 30 35 OR MORE
------------- -- -- -- -- -- ----------
$200,000 $32,436 $48,654 $64,872 $81,090 97,308 $113,526
$170,000 $27,186 $40,779 $54,372 $67,965 81,558 $95,151
$150,000 $23,686 $35,529 $47,372 $59,215 71,058 $82,901
$125,000 $19,311 $28,967 $38,622 $48,278 57,933 $67,589
$100,000 $14,936 $22,404 $29,872 $37,340 44,808 $52,276
$ 75,000 $10,561 $15,842 $21,122 $26,403 31,683 $36,964
$ 50,000 $ 6,186 $ 9,279 $12,372 $15,465 18,558 $21,651
$ 25,000 $ 2,750 $ 4,125 $ 5,500 $ 6,875 8,250 $ 9,625
$ 10,000 $ 1,100 $ 1,650 $ 2,200 $ 2,750 3,300 $ 3,850
Notes: Maximum annual pension available in 2002 in accordance with Section 415
of the Internal Revenue Code assuming a minimum of ten years
participation is $160,000.
The maximum annual compensation allowed under Section 401(a)(17) of the
Internal Revenue Code in determining a participant's benefit in 2002 is
$200,000.
As of December 31, 2002, Mr. James W. Everson had 41 years of credited
service with the Corporation, Mr. Hooker had 4 years of credited service with
the Corporation, Mr. Scott A. Everson had 11 years of credited service with the
Corporation, Mr. Greenwood had 5 years of credited service with the Corporation
and Mr. Assenza had 24 years of credited service with the Corporation.
OTHER COMPENSATION PLANS
United Bancorp has established a stock option plan under which the
Corporation may award options to acquire the Corporation's common shares to
directors and key employees of the Corporation and its subsidiaries. As of
December 31, 2002, 49,259 common shares remained available for the grant of
options under the Plan.
United Bancorp has also established the United Bancorp, Inc. and United Bancorp,
Inc. Affiliate Banks Directors' Deferred Compensation Plan under which directors
of the Corporation may defer directors fees and instead receive United Bancorp
common shares on retirement or other termination of membership on the Board of
Directors.
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COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Under rules established by the Securities and Exchange Commission (the
"SEC"), the Corporation is required to provide certain data and information in
regard to the compensation and benefits provided to the Corporation's Chief
Executive Officer and, if applicable, the four other most highly compensated
executive officers, whose compensation exceeded $100,000 during the
Corporation's last fiscal year. The Compensation Committee (the "Committee") has
the responsibility of determining the compensation policy and practices of the
Corporation with respect to all of the Corporation's executive officers. At the
direction of the Board of Directors, the Committee has prepared the following
report for inclusion in this Proxy Statement.
COMPENSATION PHILOSOPHY. This report reflects the Corporation's
compensation philosophy as endorsed by the Committee. The Committee determines
the level of compensation for the Chief Executive Officer and all other
executive officers within the constraints of the amounts approved by the Board.
Essentially, the executive compensation program of the Corporation has
been designed to:
- Support a pay-for-performance policy that rewards executive officers
for corporate performance.
- Motivate key senior officers to achieve strategic business goals.
- Provide compensation opportunities which are comparable to those
offered by other peer group companies, thus allowing the Corporation
to compete for and retain talented executives who are critical to
the Corporation's long-term success.
SALARIES. The Committee set the base salary paid to Mr. James W.
Everson at $187,500 effective January 1, 2003 and paid him directors fees in the
amount of $23,675 for serving on the Corporation's Board of Directors and two
subsidiary banks' boards of directors. Mr. Hooker's base salary was set at
$107,000 and he was paid director fees of $6,699 for serving on the board of
directors of a subsidiary bank. Mr. Scott A. Everson's base salary was set at
$100,000 and he was paid director's fees of $5,829. Mr. Greenwood's base salary
was set at $90,000. Mr. Assenza's base salary was set at $86,000. The
Corporation has used the services of an independent outside consultant in
setting executive compensation, as well as compensation surveys. Executive
officers' salary increase determinations are based upon annual reviews of the
performance of such executives which assess, among other criteria, the
performance of the executive against goals set in the prior year, extraordinary
service and promotions within the organization and compensation levels within
peer groups.
INCENTIVE COMPENSATION. The executive officers of the Corporation
participate in incentive compensation plans which provide the opportunity to
earn an annual bonus calculated as a percentage of salary, half based on
achievement of predetermined goals established by the boards of directors of
each subsidiary bank and half by the measured
12
increase of annual earnings per share as reported to the shareholders. The type
and relative weighting of goals may change from year to year. For 2002 the
incentive amounts distributed were determined by achievement against specific
earnings per share growth, loan and deposit growth, return on assets, return on
equity. In addition, participants other than the Chief Executive Officer have a
portion of their incentives determined by goals for their individual areas of
responsibility. Eligibility and allocation of incentive awards for all
participants are determined by the Compensation Committee.
LONG-TERM COMPENSATION. Long-term incentive compensation is addressed
by the Corporation's stock option plan. The stock option plan was designed to
provide long-term incentives to the executive officers and directors of the
Corporation, and to better align the interests of management with those of the
Corporation, as the level of compensation is directly proportional to the level
of appreciation in the market value of the Corporation's common shares
subsequent to the date of the option grant.
MEMBERSHIP OF THE COMPENSATION COMMITTEE. United Bancorp Directors
serving on the Compensation Committee are named below:
Richard L. Riesbeck, Chairman
L.E. Richardson, Jr. .
John M. Hoopingarner
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION
DECISIONS
Regulations of the Securities and Exchange Commission require the
disclosure of any related party transactions with members of the Compensation
Committee. During the past year, certain directors and officers, including
members of the Compensation Committee, and one or more of their associates may
have been customers of and had business transactions with one or more of the
bank subsidiaries of United Bancorp, Inc. All loans included in such
transactions were made in the ordinary course of business and on substantially
the same terms, including interest rates and collateral, as those prevailing at
the same time for comparable transactions with other persons, and did not
involve more than normal risk of collectability or present other unfavorable
features. It is expected that similar transactions will occur in the future. In
addition, The Citizens Savings Bank, a wholly-owned subsidiary of the
Corporation, pursuant to the terms of a lease entered into on April 1, 1998,
paid Riesbeck Food Markets, Inc. $25,128 in 2002, and over the five-year term of
the lease, payments will total $130,000 as lease payments for space used in an
in-store banking location at St. Clairsville, Ohio. Mr. Riesbeck, Chairman of
the Compensation Committee, is an officer, director and shareholder of Riesbeck
Food Markets, Inc. Management believes the lease between Riesbeck Food Markets,
Inc. and the Corporation was made on an arms-length basis. Management employed a
third party consulting firm that specializes in grocery store banking facilities
to establish the terms of the lease.
13
UNITED BANCORP PERFORMANCE
The following graph shows a five-year comparison of cumulative total
returns for United Bancorp, the NASDAQ-Total U. S. Stock Index, SNL Bank Index,
SNL $250M-$500M Bank Index and the SNL Midwest Bank Index.
UNITED BANCORP, INC.
TOTAL RETURN PERFORMANCE
[LINE GRAPH]
PERIOD ENDING
------------------------------------------------------------------------------------------------------
INDEX 12/31/97 12/31/98 12/31/99 12/31/00 12/31/01 12/31/02
------------------------------------------------------------------------------------------------------
United Bancorp, Inc. 100.00 99.16 67.71 59.04 72.04 78.99
NASDAQ - Total US* 100.00 140.99 261.48 157.42 124.89 86.33
SNL Bank Index 100.00 108.17 104.84 123.81 125.06 114.67
SNL $250M-$500M Bank Index 100.00 89.55 83.31 80.22 113.97 146.96
SNL Midwest Bank Index 100.00 106.37 83.57 101.20 103.43 99.77
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16 of the Securities Exchange Act of 1934 requires United
Bancorp's executive officers, directors and more than ten percent shareholders
("Insiders") to file with the Securities and Exchange Commission and United
Bancorp reports of their ownership of United Bancorp securities. Based upon
written representations and copies
14
of reports furnished to United Bancorp by Insiders, all Section 16 reporting
requirements applicable to Insiders during 2002 were satisfied on a timely
basis.
SHAREHOLDER PROPOSALS FOR NEXT ANNUAL MEETING
Shareholders may submit proposals appropriate for shareholder action at
the Corporation's Annual Meeting consistent with the regulations of the
Securities and Exchange Commission. For proposals to be considered for inclusion
in the Proxy Statement for the 2004 Annual Meeting, they must be received by the
Corporation no later than November 15, 2003. Such proposals should be directed
to United Bancorp, Inc., Attention: Chief Executive Officer, 201 South Fourth
Street, Martins Ferry, Ohio 43935. Any shareholder who intends to propose any
other matter to be acted upon at the 2004 Annual Meeting of Shareholders must
inform the Corporation not less than sixty nor more than ninety days prior to
the meeting; provided, however, that if less than seventy-five days' notice or
prior public disclosure of the date of the meeting is given to shareholders,
notice by the shareholder must be received not later than the close of business
on the fifteenth day following the earlier of the day on which such notice of
the date of the meeting was mailed or such public disclosure was made. If notice
is not provided by that date, the persons named in the Corporation's proxy for
the 2004 Annual Meeting will be allowed to exercise their discretionary
authority to vote upon any such proposal without the matter having been
discussed in the proxy statement for the 2004 Annual Meeting.
In order to make a director nomination at a shareholder meeting it is
necessary that you notify United Bancorp no fewer than 60 days in advance of the
meeting. In addition, the notice must meet all other requirements contained in
the Company's Code of Regulations.
SELECTION OF AUDITORS
For the year ended December 31, 2002, Crowe, Chizek and Company LLP
("Crowe Chizek") served the Corporation as independent auditor. We expect
representatives of Crowe Chizek to be present at the Annual Meeting with the
opportunity to make statements if they so desire and to be available to respond
to appropriate questions raised at the Annual Meeting.
On November 19, 2002, the Board of Directors of United Bancorp, upon
the recommendation of its Audit Committee, dismissed Crowe Chizek as the its
independent public accountant for all periods commencing on or after January 1,
2003, and engaged the firm of Grant Thornton, LLP as its new independent public
accountant, effective for the fiscal year beginning January 1, 2003. Crowe
Chizek's report on the consolidated financial statements of the Corporation for
each of the fiscal years ended December 31, 2002 and December 31, 2001 did not
contain an adverse opinion or a disclaimer of opinion and was not qualified or
modified as to uncertainty, audit scope or accounting principles. During the
fiscal years ended December 31, 2002 and December 31, 2001, there were no
disagreements between the United Bancorp and Crowe Chizek on any
15
matter of accounting principles or practices, financial statement disclosure, or
auditing scope or procedure, which disagreements, if not resolved to the
satisfaction of Crowe Chizek, would have caused it to make reference to the
subject matter of the disagreement in connection with its reports. During the
fiscal years ended December 31, 2002 and December 31, 2001, there were no
reportable events as defined in Item 304(a)(1)(v) of SEC Regulation S-K.
OTHER BUSINESS
Management is not aware of any other matter which may be presented for
action at the meeting other than the matters set forth herein. Should any matter
other than those set forth herein be presented for a vote of the shareholders,
the proxy in the enclosed form directs the persons voting such proxy to vote in
accordance with their judgement.
ANNUAL REPORT TO SHAREHOLDERS
HOUSEHOLDING OF PROXY STATEMENTS AND ANNUAL REPORTS
United Bancorp's Annual Report for its fiscal year ended December 31,
2002 accompanies this Proxy Statement but is not part of our proxy soliciting
material. You may obtain additional copies of our Annual Report by requesting
them from Norman F. Assenza, Jr., United Bancorp's Secretary.
We undertake to deliver promptly, upon written or oral request, a
separate copy of this Proxy Statement or the Annual Report, as applicable, to a
shareholder at a shared address to which a single copy of the document was
delivered. Requests should be addressed to Norman J. Assenza, Jr., Secretary,
United Bancorp, Inc., 201 South 4th Street, Martins Ferry, Ohio 43935,
(740) 633-0445.
WE URGE YOU TO SIGN AND RETURN THE ENCLOSED PROXY FORM AS PROMPTLY AS
POSSIBLE OR VOTE VIA PHONE OR INTERNET WHETHER OR NOT YOU PLAN TO ATTEND THE
MEETING IN PERSON.
16
PROXY ANNUAL MEETING UNITED BANCORP, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoint John M. Hoopingarner, Terry A. McGhee and Richard
L. Riesbeck, as Proxies, each with the power to appoint his substitute, and
hereby authorize each of them to represent and to vote, as designated below, all
the common shares of United Bancorp, Inc. held of record by the undersigned on
March 10, 2003, at the Annual Meeting of Shareholders to be held on April 23,
2003, or any adjournment thereof.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE ELECTION OF THE
DIRECTORS NOMINATED BY THE BOARD OF DIRECTORS. THIS PROXY WHEN PROPERLY EXECUTED
WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF
NO DIRECTION IS MADE, THE PROXY WILL BE VOTED FOR THE ELECTION OF THE DIRECTORS
NOMINATED BY THE BOARD OF DIRECTORS.
PROXY VOTING INSTRUCTIONS
TO VOTE BY MAIL
Please date, sign and mail your proxy card in the envelope provided as soon as
possible.
TO VOTE BY TELEPHONE (TOUCH-TONE PHONE ONLY)
Please call toll-free 1-800-PROXIES and follow the instructions. Have your
control number and the proxy card available when you access the web page.
TO VOTE BY INTERNET
Please access the web page at "www.voteproxy.com and follow the on-screen
instructions. Have your control number available when you access the web page.
YOUR CONTROL NUMBER IS ____________.
1. TO ELECT AS DIRECTORS THE NOMINEES SET FORTH BELOW:
[ ] FOR all of the nominees listed [ ] WITHHOLD AUTHORITY to
below (except as marked to the vote for all of the
contrary below). nominees listed below.
INSTRUCTION: To withhold authority to vote for any individual nominee,
strike a line through the nominee's name in the list below:
James W. Everson
John M. Hoopingarner
Richard L. Riesbeck
Matthew C. Thomas
2. Upon the direction of the Board of Directors, the proxy holders are
authorized to vote upon such other business as may properly come before
the Annual Meeting.
Date: _______________, 2003
_______________________________
_______________________________
NOTE: Please sign exactly as name appears above. When signing 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.
YOUR VOTE IS IMPORTANT. PLEASE MAKE, SIGN, DATE AND MAIL THIS PROXY FORM
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL
MEETING.
A RETURN ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE.