SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement. [ ] Confidential, for use of the
Commission only (as permitted by
Rule 14a-6(e)(2)).
[X] Definitive proxy statement.
[ ] Definitive additional materials.
[ ] Soliciting material pursuant to Section 240.14a-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 the 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 securities 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.
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[ ] 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, 2002
To Our Shareholders:
You are cordially invited to attend the Annual Meeting of Shareholders
to be held on Wednesday, April 17, 2:00 p.m. local time, at The Citizens Savings
Bank's main office, 201 South 4th at Hickory 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 proud and excited
about our 2001 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 you in a broker name. NO PAYMENT HAS BEEN INCLUDED WITH THIS MAILING OF OUR
PROXY MATERIALS.
It is important that your shares be voted, and we hope that you will be
able to attend the Annual Meeting. Please vote by executing and returning the
enclosed form of Proxy or follow the instructions to vote electronically by
phone or the Internet. We urge you to execute and return the enclosed form of
proxy as soon as possible, whether or not you expect to attend that Annual
meeting in person.
Very truly yours,
/s/ James W. Everson
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 17, 2002
TO THE SHAREHOLDERS OF
UNITED BANCORP, INC. March 15, 2002
The Annual Meeting of Shareholders of United Bancorp, Inc. will be held
at 201 South 4th at Hickory Street, Martins Ferry, Ohio, April 17, 2002, 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 three 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 6, 2002, 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, 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
/s/ Norman F. Assenza, Jr.
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 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 17, 2002
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, 2002.
At the Annual Meeting, shareholders of the Corporation will be asked to
elect three 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 206,659 common
shares of the Corporation, representing 6.5% of the Corporation's common shares
outstanding as of December 31, 2001. 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 17, 2002, 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 6, 2002 (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 1500 record holders of the
Corporation's common shares and 3,148,836 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 three 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, 2001.
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COMMON SHARES
NAME OF BENEFICIAL OWNER OWNED(1) PERCENT OF CLASS
------------------------ -------- ----------------
Michael J. Arciello 4,621 *
James W. Everson (2) 77,893 2.5%
John M. Hoopingarner (3) 2,137 *
Terry A. McGhee 1,082 *
L. E. Richardson, Jr. (4) 68,618 2.2%
Richard L. Riesbeck (5) 12,803 *
Matthew C. Thomas (6) 16,261 *
Alan M. Hooker (7) 6,363 *
All Directors and Executive
Officers as a Group
(11 in group) 206,659 6.5%
* 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 44,370 shares subject to shared voting and investment power.
(3) Includes 309 shares subject to options, which are exercisable within
sixty days of December 31, 2001.
(4) Includes 65,689 shares subject to shared voting and investment power
and 256 shares subject to options, which are exercisable within sixty
days of December 31, 2001.
(5) Includes 11,484 shares subject to shared voting and investment power.
(6) Includes 1,547 shares subject to shared voting and investment power.
(7) Includes 1,702 shares subject to options, which are exercisable within
sixty days of December 31, 2001.
As of December 31, 2001, 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 311,453 shares, or 9.8% of
all outstanding shares of the Corporation, as of December 31, 2001.
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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, three directors will be
elected to a two-year term expiring in 2004.
The nominees for election at the Annual Meeting are Michael J.
Arciello, Terry A. McGhee and L. E. Richardson, Jr., each of whom is currently a
director of the Corporation.
NOMINEES
CLASS "II" DIRECTORS. The following table sets forth-certain
information with respect to the nominees as Class "II" 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 FOR POSITIONS AND OFFICES DIRECTOR
NAME AGE PAST FIVE YEARS HELD WITH UNITED BANCORP SINCE
Michael J. Arciello 67 Retired Vice President Director 1992
Finance, Nickles Bakeries
Terry A. McGhee 51 President and Chief Director 2001
Executive Officer,
Westerman, Inc., a
manufacturing company
L. E. Richardson, Jr. 69 Retired President -- Director 1998
Community Bank of
Glouster
CONTINUING DIRECTORS
CLASS "I" DIRECTORS. The following table sets forth certain information
with respect to Class "II" Directors of United Bancorp, whose terms expire in
2003.
PRINCIPAL OCCUPATION FOR PAST POSITIONS AND OFFICES DIRECTOR
NAME AGE FIVE YEARS HELD WITH UNITED BANCORP SINCE
James W. Everson 63 Chairman, President and Chief Chairman, President and 1969
Executive Officer, United Chief Executive Officer,
Bancorp and The Citizens United Bancorp and The
Savings Bank; Chairman, The Citizens Savings Bank;
Community Bank Chairman, The Community Bank
John M. Hoopingarner 47 General Manager and Director 1992
Secretary/Treasurer,
Muskingum Watershed
Conservancy District
52 President, Riesbeck Food Director 1984
Richard L. Riesbeck Market, Inc., a grocery store
chain
Matthew C. Thomas 45 President, M. C. Thomas Director 1988
Insurance Agency, 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 2001. In 2001
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.
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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 2001. 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. Arciello
and Hoopingarner).
The Compensation Committee met in January 2002. The Compensation
Committee has the responsibility of recommending for the approval of the Board
of Directors the remuneration arrangements for the directors and executive
officers of United Bancorp. The Compensation Committee's report on executive
compensation matters for 2001 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 adopted by the Board of Directors (Appendix
A). 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.
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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 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, 2001 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
2001.
Audit Fees $ 51,225
Financial Information Systems Design and $ 0
Implementation Fees $ 0
All Other Fees $ 74,886
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EXECUTIVE COMPENSATION
AND OTHER INFORMATION
GENERAL. The following information relates to compensation of
management for the years ended December 31, 2001, 2000 and 1999, 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 2001 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................................. 2001 $198,800 $43,531 _ $12,822
Chairman, President and 2000 198,400 15,531 0 9,456
Chief Executive Officer 1999 199,075 31,774 0 4,800
Alan M. Hooker................................... 2001 $106,600 $12,500 _ $ 4,313
President and Chief Executive Officer, 2000 106,300 6,812 0 3,340
The Community Bank 1999 96,300 17,849 0 1,142
Norman F. Assenza, Jr............................ 2001 $ 84,400 $16,670 _ $ 5,304
Vice President Compliance & Secretary 2000 84,400 6,014 0 3,712
United Bancorp, Inc. 1999 84,400 11,447 0 3,171
(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. Everson, $5,100; Mr. Hooker,
$2,873; and Mr. Assenza, $ $2,712 (2) insurance premiums paid on term
life insurance policies: for the benefit of Mr. Everson, $7,722, for
the benefit of Mr. Hooker, $1,440; for the benefit of Mr. Assenza,
$2,592.
OPTION EXERCISES AND YEAR-END VALUE TABLE. The following table presents
information about stock options exercised during 2001 and unexercised
stock options at December 31, 2001 for the three named executive
officers.
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OPTION EXERCISES AND YEAR-END VALUE TABLE
AGGREGATED OPTION EXERCISES IN 2001 AND FISCAL YEAR END OPTION VALUES
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS IN-THE-MONEY OPTIONS AT
DECEMBER 31, 2001(#) DECEMBER 31, 2001($)
-------------------- --------------------
SHARES ACQUIRED VALUE
NAME ON EXERCISE REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- ----------- -------- ------------------------- -------------------------
James W. Everson 0 0 0/31,621 0/119,844
Alan M. Hooker 0 0 1,702/10,453 0/0
Norman F. Assenza, Jr. 0 0 914/6,324 3,464/23,968
CHANGE-IN-CONTROL ARRANGEMENTS. The Company has entered into
change-in-control agreements with Messrs. Everson, Hooker and Assenza. The
agreements provide that Mr. Everson and Mr. Hooker 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 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. Everson will receive 2.99 times his
annual compensation, Mr. Hooker will receive 2.0 times 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. Everson, Mr. Hooker 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, 2002, and Mr. Everson's,
Mr. Hooker's or Mr. Assenza'a employment had been involuntarily terminated on
such date (other than for cause), Mr. Everson, Mr. Hooker and Mr. Assenza would
have been entitled to receive lump sum severance benefits of $656,099, $252,570
and $93,126, respectively. In the event a potential change in control is
announced, the agreements obligate Mr. Everson, Mr. Hooker 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.
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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 $400 per meeting attended. Each
member of the Compensation Committee receives $200 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 2001
terms and factors.
BENEFIT TABLE FOR A PARTICIPANT ATTAINING AGE 65 IN 2001
Years of Service
AVERAGE
ANNUAL SALARY 10 15 20 25 30 35 OR MORE
------------- -- -- -- -- -- ----------
$170,000 $27,331 $40,997 $54,662 $68,328 $81,994 $95,659
$160,000 $25,581 $38,372 $51,162 $63,953 $76,744 $89,534
$150,000 $23,831 $35,747 $47,662 $59,578 $71,494 $83,409
$125,000 $19,456 $29,184 $38,912 $48,641 $58,369 $68,097
$100,000 $15,081 $22,622 $30,162 $37,703 $45,244 $52,784
$ 75,000 $10,706 $16,059 $21,412 $26,766 $32,119 $37,472
$ 50,000 $ 6,331 $ 9,497 $12,662 $15,828 $19,406 $22,159
$ 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 2001 in accordance with Section 415
of the Internal Revenue Code assuming a minimum of ten years
participation is $140,000.
The maximum annual compensation allowed under Section 401(a)(17) of the
Internal Revenue Code in determining a participant's benefit in 2001 is
$170,000.
As of December 31, 2001, Mr. Everson had 40 years of credited service
with the Corporation, Mr. Hooker had 3 years of credited service with the
Corporation and Mr. Assenza had 23 years of credited service with the
Corporation.
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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, 2001, 44,707 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.
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. Everson at
$175,000 effective January 1, 2001 and paid him directors fees in the amount of
$23,800 for serving on the Corporation's Board of Directors and two subsidiary
banks' boards of directors. Mr. Hooker's base salary was set at $100,000 and he
was paid director fees of $6,600 for serving on the board of directors of a
subsidiary bank. Mr. Assenza's base salary was set at $84,400.
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The Corporation has used the services of an independent outside consultant in
setting executive compensation, as well as compensation surveys. Mr. Hooker's
salary increase reflects his additional responsibility resulting from the
Corporation's expansion into Lancaster, Ohio by The Community Bank. Executive
officers' salary increase determinations are based upon annual review 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 increase of annual earnings per
share of United Bancorp, Inc. as reported to the shareholders. The type and
relative weighting of goals may change from year to year. For 2001 the incentive
amounts distributed were determined 50% by achievement against specific earnings
per share growth at the corporation level and 50% asset growth, return on
assets, return on equity and loan to asset ratio targets at the subsidiary bank
level. No incentive award was paid on earnings per share in 2000 since they were
lower than the prior year. 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
Michael J. Arciello .
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.
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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. $22,500 in 2001, and over the
five-year term of the lease, payments will total $112,500 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.
UNITED BANCORP PERFORMANCE
The following graph shows a five-year comparison of cumulative total
returns for
UNITED BANCORP, INC.
[LINE GRAPH]
PERIOD ENDING
---------------------------------------------------------------------------
INDEX 12/31/96 12/31/97 12/31/98 12/31/99 12/31/00 12/31/01
-------------------------------------------------------------------------------------------------------------------------
United Bancorp, Inc. 100.00 139.68 138.51 94.57 82.46 100.63
NASDAQ - Total US* 100.00 122.48 172.68 320.89 193.01 153.15
SNL Bank Index 100.00 151.53 163.92 158.86 187.62 189.51
SNL $250M-$500M Bank Index 100.00 172.95 154.89 144.10 138.74 197.12
SNL Midwest Bank Index 100.00 162.14 172.46 135.50 164.09 167.69
United Bancorp, the NASDAQ-Total U. S. Stock Index, SNL Bank Index, SNL
$250M-$500M Bank Index and the SNL Midwest Bank Index.
13
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 of reports furnished to United Bancorp by
Insiders, all Section 16 reporting requirements applicable to Insiders during
2001 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 2003 Annual Meeting, they must be received by the
Corporation no later than November 15, 2002. 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 2003 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 2003 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 2003 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
Crowe, Chizek and Company LLP has served the Corporation as independent
auditor since 1989. The Board of Directors has selected Crowe, Chizek and
Company LLP as independent auditor for the current year. We expect
representatives of Crowe, Chizek and Company LLP 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.
14
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
United Bancorp's Annual Report for its fiscal year ended December 31,
2001 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 URGE YOU TO SIGN AND RETURN THE ENCLOSED PROXY FORM OR VOTE
ELECTRONICALLY BY PHONE OR INTERNET AS PROMPTLY AS POSSIBLE WHETHER OR NOT YOU
PLAN TO ATTEND THE MEETING IN PERSON.
15
APPENDIX A
AUDIT COMMITTEE CHARTER
The Board of Directors ("the Board") of United Bancorp, Inc. ("the Company")
hereby adopts a formal written audit committee charter for its Audit Committee
(the "Audit Committee") and will review and reassess the adequacy of the formal
written charter on an annual basis.
I. Committee Composition and Structure
The Committee will be comprised of a minimum of three directors as
determined by the Board. The members of the Committee will meet the
independence and experience requirements of the Nasdaq National Market.
The members of the Committee will be elected annually at the
re-organization meeting of the full Board held in April. One of the
members of the Committee will be elected Committee Chair by the Board.
A. At Least Three Members
The Committee will have a minimum of three independent
members.
B. Comprised of Independent Directors and Bank Management
The Committee will be comprised of directors and Senior
Officers of the Company.
C. Financial Sophistication
All Committee members must be able to read financial
statements and understand fundamental financial statements,
including a balance sheet, income statement, and cash flow
statement. By June 14, 2001, the Committee will have at least
one director with past employment experience in finance or
accounting, or requisite professional certification in
accounting, or other comparable experience or background,
including a current or past position as chief executive or
financial officer or other senior officer with financial
oversight responsibilities.
II. Committee Responsibilities
As a part of the Board, the Committee's primary function is to assist
the Board in fulfilling its oversight responsibilities concerning: (1)
the annual financial information to be provided to shareholders and the
Securities and Exchange Commission; and (2) the system of internal
controls that management has established; and (3) the independent audit
process.
In addition, the Committee provides an avenue for communication between
accounting, the independent auditors, management and the Board. The
Committee should have a clear understanding with the independent
auditors that they must maintain an open and transparent relationship
with the Committee, and that the ultimate accountability of the
independent auditors is to the Board and the Committee. The Committee
will make regular reports to the Board concerning its activities.
While the Audit Committee has the responsibilities and powers set forth
in this Charter, it is not the duty of the Committee to conduct audits
or to determine that the Company's financial statements are complete
and accurate and are in accordance with generally accepted accounting
principles. This is the responsibility of management and the
independent auditor. Nor is it the duty of the Committee to conduct
investigations to resolve disagreements, if any, between management and
the independent auditor or to assure compliance with laws and
regulations and the Company's business conduct guidelines.
III. Committee Authority
Subject to the prior approval of the Board, the Committee is granted
the authority to investigate any matter or activity involving financial
accounting and financial reporting, as well as the internal controls of
the Company. In that regard, the Committee will have the authority to
approve the retention of external professionals to render advice and
counsel in such matters. All employees will be directed to cooperate
with respect thereto as requested by members of the Committee.
IV. Committee Meetings
The Committee is to meet at least four times annually and as many
additional times as the Committee deems necessary. Content of the
agenda for each meeting should be cleared by the Committee Chair. The
Committee may meet in separate executive sessions with the chief
executive officer, the chief financial officer, and the independent
auditors.
V. Committee Attendance
Committee members will strive to be present at all meetings. The
Committee Chair may request that members of management and
representatives of the independent auditors be present at Committee
meetings.
VI. Specific Duties of the Committee
A. Review and re-assess the adequacy of this Charter annually and
recommend any proposed changed to the Board for approval.
2
B. Review with the Company's management and independent
accountants the Company's accounting and financial reporting
controls. Obtain annually in writing from the independent
accountants their letter as to the adequacy of such controls.
C. Review with the Company's management and independent auditor's
significant accounting and reporting principles, practices,
and procedures applied by the Company in preparing its
financial statements. Discuss with the independent auditors
their judgements about the quality, not just the
acceptability, of the Company's accounting principles used in
financial reporting.
D. Review the scope and general extent of the independent
auditor's annual audit. The Committee's review should include
an explanation from the independent auditors of the factors
considered by the auditors in determining the audit scope,
including major risk factors. The independent auditors should
confirm to the Committee that no limitations have been placed
on the scope or nature of their audit procedures. The
Committee will review annually with management the fee
arrangement with the independent auditors.
E. Inquire as to the independence of the independent auditors and
obtain from the independent auditors, at least annually, a
formal written statement delineating all relationships between
the independent auditors and the Company.
F. Have a predetermined arrangement with the independent auditors
that they will advise the Committee through its Chair and
management of the Company of any matters identified through
procedures followed for interim quarterly financial
statements, and that such notification be made prior to the
related press release or, if not practicable, prior to filing
Forms 10-Q. Also receive a written confirmation provided by
the independent auditors at the end of each of the first three
quarters of the year that they have nothing to report to the
Committee or the written enumeration required reporting
issues.
G. At the completion of the annual audit, review with management
and the independent auditors the following:
1. The annual financial statements and related footnotes
and financial information to be included in the
Company's annual report to shareholders and on Form
10-K.
2. Results of the audit of the financial statements and
the related report thereon and, if applicable, a
report on changes during the year in accounting
principles and their application.
3
3. Significant changes to the audit plan, if any, and
any serious disputes or difficulties with management
encountered during the audit. Inquire about the
cooperation received by the independent auditors
during their audit, including access to all requested
records, data and information. Inquire of the
independent auditors whether there have been any
disagreements with management which, if not
satisfactorily resolved, would have caused them to
issue a nonstandard report on the Company's financial
statements.
4. Other communications as required to be communicated
by the independent auditor by Statement of Auditing
Standards (SAS) 61. Further, receive a written
communication provided by the independent auditors
concerning their judgment about the quality of the
Company's accounting principles and that they concur
with management's representation concerning audit
adjustments.
If deemed appropriate after such review and discussion, recommend to
the Board that the financial statements be included in the Company's
annual report on Form 10-K.
H. After preparation by management and review by independent
audit, approve the report required under SEC rules to be
included in the Company's annual proxy statement. The charter
is to be published as an appendix to the proxy statement every
three years.
I. Discuss with the independent auditors the quality of the
Company's financial and accounting personnel. Also, elicit the
comments of management regarding the responsiveness of the
independent auditors of the Company's needs.
J. Meet with management and the independent auditors to discuss
any relevant significant recommendations that the independent
auditors may have, particularly those characterized as
"material" or `serious'. Typically, such recommendations will
be presented by the independent auditors in the form of a
Letter of Comments and Recommendations to the Committee. The
Committee should review responses of management to the Letter
of Comments and Recommendations from the independent auditors
and receive follow-up reports on action taken concerning the
aforementioned recommendations.
K. Recommend to the Board the selection, retention or termination
of the Company's independent auditors.
L. Review with management and external auditors the methods used
to establish and monitor the Company's policies with respect
to unethical or
4
illegal activities by Company employees that may have a
material impact on the financial statements.
M. As the Committee may deem appropriate, obtain, weigh and
consider expert advice as to Audit Committee related rules of
Nasdaq, Statements on Auditing Standards and other accounting,
legal and regulatory provisions.
5
PROXY ANNUAL MEETING UNITED BANCORP, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoint _________________, ________________ and
__________________, 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 6, 2001, at the Annual Meeting of Shareholders to be held on April 17,
2002, or any adjournment thereof.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE ELECTION OF THE
DIRECTORS NOMINATED BY THE BOARD OF DIRECTORS AND FOR EACH OTHER PROPOSAL. 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 AND FOR EACH
OTHER PROPOSAL.
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 nominees
contrary below). listed below.
INSTRUCTION: To withhold authority to vote for any individual nominee,
strike a line through the nominee's name in the list below:
Michael J. Arciello L. E. Richardson, Jr.
Terry A. McGhee
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: _______________, 2002
________________________________
________________________________
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.