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.
--------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
--------------------------------------------------------------------------------
(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:
(2) Aggregate number of securities to which transaction applies:
(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):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] 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:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
UNITED BANCORP, INC.
201 S. FOURTH
MARTINS FERRY, OHIO 43935
March 23, 2005
To Our Shareholders:
You are cordially invited to attend the Annual Meeting of the Shareholders
to be held on Wednesday April 20, 2005, 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 pleased about our 2004
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 18th. 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 are voted, and we hope that you will
attend the Annual Meeting. Please vote by executing and returning the enclosed
form of Proxy or follow the instructions to vote electronically on the Internet
or by phone.
Very truly yours,
/s/ James W. Everson
James W. Everson
Chairman, President and Chief Executive Officer
Enclosures
UNITED BANCORP, INC.
201 S. FOURTH AT HICKORY STREET
MARTINS FERRY, OHIO 43935
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 20, 2005
TO THE SHAREHOLDERS OF
UNITED BANCORP, INC. March 23, 2005
The Annual Meeting of Shareholders of United Bancorp, Inc. will be held at
201 South 4th, Martins Ferry, Ohio, April 20, 2005, 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 8, 2005 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
/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 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 20, 2005
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"). This Proxy
Statement and the enclosed proxy are first being sent to shareholders on or
about March 23, 2005.
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.
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.
4
MEETING INFORMATION
DATE, PLACE AND TIME
The Annual Meeting of Shareholders of the Corporation will be held on Wednesday,
April 20, 2005, 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 8, 2005 (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 2,000 record holders of the
Corporation's common shares and 3,833,953 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, 2004.
COMMON SHARES
NAME OF BENEFICIAL OWNER OWNED(1) PERCENT OF CLASS
--------------------------- ------------- ----------------
Michael J. Arciello(2) 10,417 *
James W. Everson (3) 140,309 3.6%
John M. Hoopingarner (4) 5,956 *
Terry A. McGhee 3,707 *
L. E. Richardson, Jr. (5) 80,781 2.1%
5
Richard L. Riesbeck (6) 18,898 *
Matthew C. Thomas (7) 26,887 *
Alan M. Hooker (8) 9,306 *
Scott A. Everson 4,604 *
Randall M. Greenwood 2,874 *
James A. Lodes (9) 12,659 *
All Directors and Executive
Officers as a Group
(13 in group) 342,771 8.8%
* Ownership is less than 1% of the class.
------------------
(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 2,411 shares subject to options which are currently exercisable.
(3) Includes 40,175 shares subject to options which are exercisable. Includes
39,903 shares subject to shared voting and investment power.
(4) Includes 2,803 shares subject to options which are currently exercisable.
(5) Includes 325 shares subject to options which are currently exercisable.
(6) Includes 14,589 shares subject to shared voting and investment power.
Includes 2,411 shares subject to options which are currently exercisable.
(7) Includes 2,184 shares subject to shared voting and investment power.
Includes 2,411 shares subject to options which are currently exercisable.
(8) Includes 215 shares subject to shared voting and investment power.
Includes 1,080 shares subject to options which are currently exercisable.
(9) Includes 9,342 shares subject to options which are currently exercisable.
As of December 31, 2004, no person was known by the Corporation to be the
beneficial owner of more than 5% of the outstanding common shares of the
Corporation.
Shares beneficially owned by directors and officers of United Bancorp and
its subsidiaries, and shares beneficially owned by employees through the
Corporation's 401(k) employee benefit plan totaled 473,463 Shares, or 12.1% of
all outstanding shares of the Corporation, as of December 31, 2004.
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 2007.
6
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.
The Board of Directors has determined that all Directors have met the
independence standards of Rule 4200(a)(15) of the National Association of
Securities Dealers listing standards with the exception of James W. Everson, who
is the Chief Executive Officer of the Corporation. Directors deemed independent
by the Board of Directors include Michael J. Arciello, John M. Hoopingarner,
Terry A. McGhee, L. E. Richardson, Jr., Richard L. Riesbeck and Matthew C.
Thomas.
The Nominating and Governance Committee of the Board of Directors
recommends director candidates to the Board of Directors for nomination, in
accordance with the Corporation's Amended Code of Regulations. The Committee
will investigate and assess the background and skills of potential candidates.
The Nominating and Governance Committee is empowered to engage a third party
search firm to assist it in identifying candidates, but the Committee currently
believes that the existing directors and executive management of the Corporation
and its subsidiaries have sufficient networks of business contacts to identify
candidates. Upon identifying a candidate for serious consideration, one or more
members of the Nominating and Governance Committee would initially interview
such candidate. If a candidate merited further consideration, the candidate
would subsequently interview with all other Nominating and Governance Committee
members (individually or as a group), meet the Corporation's Chief Executive
Officer and other executive officers and ultimately meet many of the other
Directors. The Nominating and Governance Committee would elicit feedback from
all persons who met the candidate and then determine whether or not to recommend
the candidate to the Board of Directors for nomination.
United Bancorp's Corporate Governance Guidelines and Code of Ethics and
Business Conduct set forth the following criteria for Directors: independence (a
majority of the Directors must be independent); honesty and integrity;
willingness to devote sufficient time to fulfilling duties as a Director;
particular experience, skills or expertise relevant to the Corporation's
business; depth and breadth of business and civic experience in leadership
positions; and ties to United Bancorp's geographic markets. United Bancorp's
Corporate Governance Guidelines provide that shareholders may propose nominees
by submitting the names and qualifications of such persons to the Chairman of
the Nominating and Governance Committee. Submissions are to be addressed to the
Chairman of the Nominating and Governance Committee at the Corporation's
executive offices, which submissions will then be forwarded to the Chairman. The
Nominating and Governance Committee would then evaluate the possible nominee
using the criteria outlined above and would consider such person in comparison
to all other candidates. The submission should be made no later than December
31st of each year for consideration in regard to the next annual meeting of
shareholders. The Nominating and Governance Committee is not obligated to
recommend to the Board, nor the Board to nominate any such individual for
election.
7
The Nominating and Governance Committee has not hired any director search
firm in 2005 and, accordingly, paid no fees to any such company. As indicated
above, however, the Nominating and Governance Committee may do so in the future
if necessary.
Neither the Board nor the Nominating and Governance Committee have
implemented a formal policy regarding director attendance at the Annual Meeting.
Typically, the Board holds its annual organizational meeting directly following
the Annual Meeting, which results in most directors being able to attend the
Annual Meeting. In 2004, all United Bancorp, Inc. Directors attended the Annual
Meeting.
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 FOR PAST POSITIONS AND OFFICES DIRECTOR
NAME AGE FIVE YEARS HELD WITH UNITED BANCORP SINCE
James W. Everson 66 Chairman, President and Chief Chairman, President and Chief 1969
Executive Officer, United Bancorp; Executive Officer, United
Chairman and Chief Executive Bancorp; Chairman, The Citizens
Officer, The Citizens Savings Bank* Savings Bank.* Chairman, The
until Nov. 1, 2004. Chairman, Community Bank*
The Community Bank *
John M. Hoopingarner 50 General Manager and Director 1992
Secretary-Treasurer, Muskingum
Watershed Conservancy District
Richard L. Riesbeck 55 President, Riesbeck Food Market, Director 1984
Inc., a regional grocery store chain
Matthew C. Thomas 48 President, M. C. Thomas Insurance Director 1988
Agency, Inc.
*Subsidiaries of United Bancorp.
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 2006.
PRINCIPAL OCCUPATION FOR PAST POSITIONS AND OFFICES DIRECTOR
NAME AGE FIVE YEARS HELD WITH UNITED BANCORP SINCE
Michael J. Arciello 70 Retired Vice President Director 1992
Finance, Nickles Bakeries, Inc.
8
Terry A. McGhee 55 President and Chief Executive Director 2001
Officer, Westerman, Inc., a
manufacturing company
L. E. Richardson, Jr. 72 Retired President - Southern Director 1998
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 5 times in 2004. In 2004,
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.
The Board of Directors has adopted the United Bancorp, Inc. Corporate
Governance Guidelines, which you may find on United Bancorp's website at
www.unitedbancorp.com. The Board has also adopted the United Bancorp, Inc. Code
of Ethics and Business Conduct, which you may find on United Bancorp's website
at www.unitedbancorp.com.
Shareholders may communicate directly to the Board of Directors in writing
by sending a letter to the Board at: United Bancorp Board of Directors, 201
South Fourth Street, Martins Ferry, Ohio 43935. All letters directed to the
Board of Directors will be received and processed by the Corporate Secretary and
will be forwarded to the Chairman of the Nominating and Governance Committee
without any editing or screening.
COMMITTEES OF THE BOARD
The Board of Directors of United Bancorp has standing Executive, Audit,
Compensation, and Nominating and Governance Committees. The membership of these
committees is noted below.
EXECUTIVE COMMITTEE. Mr. James W. Everson, Chairman, and Messrs.
Hoopingarner, McGhee and Riesbeck are the members of the Corporation's Executive
Committee.
The Executive Committee met 4 times during 2004. The functions of this
committee are to act in the stead of the board between meetings, to receive
formal vendor presentations and to review with management and set the agenda for
each board meeting.
AUDIT COMMITTEE. Mr. Arciello, Chairman, and Messrs. McGhee and Riesbeck
are the members of the Audit Committee.
The Audit Committee met 4 times during 2004. The functions of this
Committee include the engagement of independent auditors, reviewing with those
independent auditors the plans and results of the audit engagement of the
Corporation, approving the annual audit plan and reviewing the results of the
procedures for internal
9
auditing, reviewing the independence of the independent auditors, reviewing the
Corporation's financial results and Securities and Exchange Commission filings,
reviewing the effectiveness of the Corporation's internal controls and similar
functions and approving all auditing and non-auditing services performed by its
independent auditors. The Board of Directors has adopted a written charter for
the Audit Committee, which is attached hereto as Annex A and which may be found
on the Corporation's website at www.unitedbancorp.com. All members of the Audit
Committee meet the independence standards of Rule 4200(a)(15) and the audit
committee qualifications of Rule 4350(d)(2) of the National Association of
Securities Dealers listing standards. The Board of Directors has determined that
Michael J. Arciello is an audit committee financial expert for the Corporation
and is independent as described in the preceding sentence. The report of the
Audit Committee for 2004 appears under the caption "Report of the Audit
Committee".
COMPENSATION COMMITTEE. Mr. Thomas, Chairman, and Messrs. Hoopingarner and
Richardson are the members of the Compensation Committee.
The Board of Directors has a Compensation Committee comprised entirely of
independent Directors. Director and executive officer compensation are
determined by this Committee of the Board of Directors. The Board of Directors
has adopted a Compensation Committee Charter which may be found on the
Corporation's website at www.unitedbancorp.com. This Committee met once during
2004. The Compensation Committee's report on executive compensation matters for
2004 appears under the caption "Compensation Committee Report on Executive
Compensation".
NOMINATING AND GOVERNANCE COMMITTEE
The Nominating and Governance Committee is comprised entirely of
independent Directors. Mr. Riesbeck, Chairman, and Messrs. Hoopingarner and
McGhee are the members of the Nominating and Governance Committee. This
Committee develops and recommends to the Board corporate governance policies and
guidelines for the Corporation and for the identification and nomination of
Director and committee member candidates and recommends to the Board for
nomination by the Board in accordance with the Corporation's Amended Code of
Regulations, nominees for election to the Board and appointment to committee
membership. The Board of Directors has adopted a Nominating and Governance
Committee Charter which may be found on the Corporation's website at
www.unitedbancorp.com. This Committee did not meet in 2004.
REPORT OF THE AUDIT COMMITTEE
The Audit Committee of the United Bancorp 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 which is
attached as Annex A.
10
Management is responsible for the Corporation's internal controls and the
financial reporting process. The independent auditors are responsible for
performing an independent audit of the Corporation's consolidated financial
statements in accordance with accounting principles generally accepted in the
United States of America, 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 auditors. In discharging its oversight
responsibility as to the audit process, the Committee obtained from the
independent auditors a formal written statement describing all relationships
between the auditors and the Corporation that might bear on the auditors'
independence consistent with Independence Standards Board Standard No. 1,
"Independence Discussions with Audit Committees," discussed with the auditors
any relationships that may impact their objectivity and independence and
satisfied itself as to the auditors' independence. The Committee also discussed
with management, the internal auditors and the independent auditors the quality
and adequacy of United Bancorp's internal controls and the internal audit
function's organization, responsibilities, budget and staffing. The Committee
reviewed both with the independent and internal auditors their audit plans,
audit scope and identification of audit risks.
The Committee discussed and reviewed with the independent auditors all
communications required by generally accepted auditing standards, including
those described in Statement on Auditing Standards No. 61, as amended,
"Communication with Audit Committees," and, with and without management present,
discussed and reviewed the results of the independent auditors' examination of
the financial statements. The Committee also discussed the results of the
internal audit examinations.
The Committee reviewed the audited consolidated financial statements of
United Bancorp as of and for the year ended December 31, 2004, with management
and the independent auditors.
Based on the above-mentioned review and discussions with management and
the independent auditors, the Committee recommended to the Board that United
Bancorp's audited consolidated financial statements be included in its Annual
Report on Form 10-K for the year ended December 31, 2004, for filing with the
Securities and Exchange Commission. The Committee also appointed the independent
auditors.
AUDIT COMMITTEE
Michael J. Arciello, Chairman
Terry A. McGhee
Richard L. Riesbeck
11
PRINCIPAL ACCOUNTING FIRM FEES
The following table sets forth the aggregate fees billed to United Bancorp
for the fiscal years ended December 31, 2004 and December 31, 2003 by Grant
Thornton LLP, United Bancorp's principal accounting firm for both years.
December 31,
2004 2003
Audit Fees $ 84,105 $ 57,575
Audit-Related Fees 3,125(a)
Tax Fees 5,500(b)
All Other Fees 1,250(c)
----------- ---------
Total $ 93,980 $ 63,075
=========== =========
----------
(a) Includes fees for services related to benefit plan audits.
(b) Includes fees for services related to tax compliance and tax planning.
(c) Consent for public filings.
The Audit Committee is responsible for pre-approving all auditing services
and permitted non-audit services to be performed by its independent auditors,
except as described below.
The Audit Committee will establish general guidelines for the permissible
scope and nature of any permitted non-audit services in connection with its
annual review of the audit plan and will review such guidelines with the Board
of Directors. Pre-approval may be granted by action of the full Audit Committee
or, in the absence of such Audit Committee action, by the Audit Committee Chair
whose action shall be considered to be that of the entire Committee.
Pre-approval shall not be required for the provision of non-audit services if
(1) the aggregate amount of all such non-audit services constitute no more than
5% of the total amount of revenues paid by the Corporation to the auditors
during the fiscal year in which the non-audit services are provided, (2) such
services were not recognized by the Corporation at the time of engagement to be
non-audit services, and (3) such services are promptly brought to the attention
of the Audit Committee and approved prior to the completion of the audit. No
services were provided by Grant Thornton LLP pursuant to these exceptions.
EXECUTIVE COMPENSATION
AND OTHER INFORMATION
GENERAL. The following information relates to compensation of management
for the years ended December 31, 2004, 2003 and 2002, 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 four
other
12
highest paid executive officers, as well as the total compensation paid to each
individual during United Bancorp's last three fiscal years.
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
AWARDS
------------
ANNUAL COMPENSATION SECURITIES ALL OTHER
----------------------------- UNDERLYING COMPENSATION
NAME, TITLE AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) OPTIONS(#) ($)(A)
------------------------------------------------- ---- ---------- --------- ------------ ------------
James W. Everson................................. 2004 $220,991 $38,086 0 $18,460
Chairman, President & Chief Executive 2003 212,445 67,959 0 16,556
Officer, United Bancorp, Inc. 2002 202,178 66,682 0 12,986
Principal Position: CEO, United Bancorp
Alan M. Hooker................................... 2004 $117,788 $10,332 0 $ 7,408
Executive Vice President & Chief 2003 114,314 31,832 0 7,271
Administration Officer, United Bancorp, Inc. 2002 108,622 35,036 0 7,301
Principal Position: CEO, The Community Bank
Scott A. Everson................................. 2004 $141,364 $25,318 0 $ 6,174
Senior Vice President & Chief Operating 2003 111,224 36,083 0 5,452
Officer, United Bancorp, Inc. 2002 87,960 30,764 0 5,131
Principal Position: CEO, The Citizens
Savings Bank
Randall M. Greenwood............................. 2004 $ 93,600 $11,285 0 $ 4,373
Senior Vice President, Chief Financial 2003 90,000 25,612 0 3,091
Officer & Treasurer, United Bancorp, Inc. 2002 83,562 24,824 0 2,805
Principal Position: CFO, United Bancorp
James A. Lodes................................... 2004 $ 90,362 $10,795 0 $ 3,514
Vice President, Chief Lending Officer, 2003 84,000 23,905 0 6,209
United Bancorp, Inc. 2002 79,560 23,635 0 6,079
Principal Position: CLO, The Citizens
Savings Bank
(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, $6,000; Mr. Hooker,
$3,306, Mr. Scott A. Everson $4,948, Mr. Greenwood $2,773 and Mr. Lodes,
$2,857 and (2) the economic benefit of life insurance coverage provided
for the named executive officers: Mr. James W. Everson, $9,282, Mr.
Hooker, $1,609; Mr. Scott A. Everson $606, Mr. Greenwood $423 and Mr.
Lodes, $657. Club memberships were provided to Mr. James W. Everson,
$2,161 and Mr. Hooker, $1,851.
Mr. Scott A. Everson, Senior Vice President & Chief Operating Officer is
the son of Mr. James W. Everson, Director, Chairman, President and Chief
Executive Officer.
OPTION EXERCISES AND YEAR-END VALUE TABLE. The following table presents
information about stock options exercised during 2004 and unexercised stock
options at December 31, 2004 for the named executive officers.
13
OPTION EXERCISES AND YEAR-END VALUE TABLE
AGGREGATED OPTION EXERCISES IN 2004 AND FISCAL YEAR END OPTION VALUES
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS IN-THE-MONEY OPTIONS AT
DECEMBER 31, 2004(#) DECEMBER 31, 2004($)
------------------------- -------------------------
SHARES ACQUIRED VALUE
NAME ON EXERCISE REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
-------------------- --------------- -------- ------------------------- -------------------------
James W. Everson 0 0 0/40,175 $ 0/279,618
Alan M. Hooker 0 0 1,080/14,362 $ 2,322/30,878
Scott A. Everson 0 0 0 0/0
Randall M. Greenwood 0 0 2,163/5,559 0/0
James A. Lodes 0 0 1,307/8,035 $ 9,097/55,924
CHANGE-IN-CONTROL ARRANGEMENTS. The Company has entered into
change-in-control agreements with Messrs. James W. Everson, Hooker, Scott A.
Everson, Greenwood and Lodes. The agreements provide that Mr. James W. Everson,
Mr. Hooker, Mr. Scott A. Everson, Mr. Greenwood and Mr. Lodes 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. 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. Lodes 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 Mr. Lodes prior to a change in control is
unaffected by these agreements. In the event a change in control had occurred on
January 1, 2005, and Mr. James W. Everson's, Mr. Hooker's, Mr. Scott A.
Everson's, Mr. Greenwood's or Mr. Lodes'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. Lodes would have been
entitled to receive lump sum severance benefits of $881,901, $305,852, $364,789,
$121,985 and $117,124 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. Lodes to remain in the employment of the
Corporation for not less than one year following the change in control of the
Corporation.
14
BANK OWNED LIFE INSURANCE
United Bancorp has split-dollar life insurance agreements with its
executive officers and certain directors. The economic benefit (the imputed
income amount of this insurance) for the year 2004 to the named executive
officers is included in the amounts for each of these executive officers set
forth in the Summary Compensation Table under the column "All Other
Compensation." The economic benefit (the imputed income amount of this
insurance) for the year 2004 to each director other than James W. Everson is as
follows: Mr. McGhee $365; Mr. Hoopingarner $230; Mr. Riesbeck $415; and Mr.
Thomas $198.
United Bancorp owns the policies and pays all premiums due on the policies
that provide death benefits under the split dollar life insurance agreements.
Directors have the right to designate beneficiaries of death proceeds up to
$100,000, subject to forfeiture of that right upon the occurrence of certain
events. The named executive officers have the right to designate beneficiaries
of death proceeds up to four times the named executive officer's annual base
salary, subject to forfeiture of that right upon the occurrence of certain
events.
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 $491 per meeting attended. Each
member of the Executive Committee and Compensation Committee receives $222 for
each meeting attended. The Chairman of the Audit Committee receives $416 and
each other member of the Audit Committee receives $260 for each meeting of the
Audit Committee attended other than those held in connection with a meeting of
the Board of Directors.
PENSION PLAN
United Bancorp maintains a defined benefit pension plan for its eligible
fulltime employees. It may provide monthly benefits commencing as early as age
50, but not later than age 70, for employees who terminate employment or retire
with 5 or more years of credited service.
Benefits at retirement or vested termination of employment are based on
years of credited service, and the average of the highest five consecutive years
of compensation. The plan is integrated with social security covered
compensation.
The table below sets forth annual retirement benefits at various levels of
compensation and years of service based upon retirement at age 65. For this
table, benefits are payable to the participant for life and are based on 2004
terms and factors. The plan also permits participants to elect alternative
benefits of equivalent actuarial value.
15
BENEFIT TABLE FOR A PARTICIPANT ATTAINING AGE 65 IN 2004
YEARS OF SERVICE
-------------------------------------------------------------------------
AVERAGE
ANNUAL SALARY($) 10 15 20 25 30 35 OR MORE
--------------- ------ ------ ------ ------ ------ ----------
200,000 32,142 48,213 64,284 80,355 96,426 112,497
170,000 26,692 40,338 53,784 67,230 80,676 94,122
150,000 23,392 35,088 46,784 58,480 70,176 81,872
125,000 19,017 28,526 38,034 47,543 57,051 66,560
100,000 14,642 21,963 29,284 36,605 43,926 51,247
75,000 10,267 15,401 20,534 25,668 30,801 35,935
50,000 5,892 8,838 11,784 14,730 17,676 20,622
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 2003 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 2004 is
$200,000.
As of December 31, 2004, Mr. James W. Everson had less than one year of
credited service with the Corporation, Mr. Hooker had 6 years of credited
service with the Corporation, Mr. Scott A. Everson had 13 years of credited
service with the Corporation, Mr. Greenwood had 7 years of credited service with
the Corporation and Mr. Lodes had 12 years of credited service with the
Corporation. In connection with his retirement as Chief Executive Officer of the
Citizens Savings Bank subsidiary of United Bancorp on November 1, 2004, Mr.
James Everson elected a lump sum distribution from the plan in 2004 reflecting
his then 43 years of credited service under the plan.
OTHER COMPENSATION PLANS
United Bancorp established a stock option plan under which the Corporation
has awarded options to acquire the Corporation's common shares to directors and
key employees of the Corporation and its subsidiaries. No awards were made under
this plan in 2004.
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 following retirement or other termination of membership on
the Board of Directors.
16
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
OVERVIEW AND PHILOSOPHY. The Board of Directors of United Bancorp has
established a Compensation Committee comprised entirely of independent Directors
as determined by the United Bancorp Corporate Governance Guidelines. The
Compensation Committee is responsible for developing and making recommendations
to the Board with respect to United Bancorp's executive compensation policies.
There are no interlocking relationships involving any members of the
Compensation Committee and any executive officer of United Bancorp.
Pursuant to authority delegated by the Board, the Compensation Committee
determines annually the compensation to be paid to the Chief Executive Officer
and other executive officers. The Chief Executive Officer does not participate
in nor is he present during any deliberations of the Committee regarding his own
compensation.
The objectives of United Bancorp's executive compensation program are to:
- Support the achievement of desired goals of United Bancorp.
- Provide compensation that will attract and retain superior talent
and reward performance.
- Align the executive officers' interests with those of shareholders
by placing a portion of pay at risk with payout dependent upon
corporate performance.
The executive compensation program provides an overall level of
compensation opportunity that is competitive within the banking industry. Actual
compensation levels may be greater or less than average competitive levels in
other banking companies based upon annual and long-term United Bancorp
performance. The Compensation Committee also uses its discretion to set
executive compensation based upon individual performance and responsibilities.
COMPENSATION MATTERS IN 2004. During 2004 the Compensation Committee
increased the levels of base salary of the Chief Executive Officer and certain
other executive officers. The increases in base salary were based upon an
analysis of compensation levels for management performing similar functions at
other banking companies of similar size, operations and financial performance.
The performance of United Bancorp for the purpose of determining the
annual cash bonuses to be paid to executive officers, including the Chief
Executive Officer, was based on whether increases were achieved in the United
Bancorp's earnings per share, loans, deposits, return on assets and return on
equity.
EXECUTIVE OFFICER COMPENSATION PROGRAM. United Bancorp's executive officer
compensation program is comprised of base salary, annual cash incentive
compensation
17
and various benefits. Although no stock options were awarded in 2004, stock
options awarded to executive officers in prior years have served as long-term
incentive compensation.
BASE SALARY. Base salary levels for United Bancorp's executive officers
are set relative to companies in the banking industry of similar size and
complexity of operations, as described above. In determining salaries, the
Compensation Committee also takes into account individual experience and
performance, United Bancorp performance, the responsibilities of the particular
executive officer and specific issues particular to United Bancorp. Mr. Scott A.
Everson's 2005 annual base salary was increased from $125,000 to $150,000 on
November 1, 2004 based on his promotion to the position of Chief Executive
Officer of The Citizens Savings Bank subsidiary of United Bancorp. The base
salary amounts shown in the Summary Compensation Table include directors fees
paid in 2004 for service as a director of United Bancorp or one or more of its
subsidiary banks in the following amounts for these executive officers:
Mr. James W. Everson $25,992
Mr. Hooker 7,578
Mr. Scott A. Everson 11,734
ANNUAL INCENTIVE COMPENSATION. United Bancorp provides annual incentive
compensation for its executive officers with established performance targets for
each executive officer. The purpose of these plans is to provide direct
financial incentives in the form of an annual cash bonus to executives to
achieve United Bancorp's annual goals. For 2004, the Compensation Committee
selected goals based on growth in United Bancorp's earnings per share, and
growth in subsidiary bank loans and deposits, return on assets and return on
equity. The amount of the annual cash bonus that may be earned by an executive
officer is based on his or her base salary and is weighted to reflect each
participant's ability to affect the performance of United Bancorp, with the
Chief Executive Officer having the largest weighting. For 2004, half the cash
bonus opportunity for each executive officer was based on achieving goals for
increased United Bancorp earnings per share, and half based on achievement of
individual goals and loan and deposit growth, return on equity and return on
assets at the subsidiary bank level. The exact weighting and mix of these goals
varies among the executive officers. All executive officers except the Chief
Executive Officer have a portion of their annual incentive goals tied to the
particular executive officer's area of responsibility within United Bancorp. For
2004, United Bancorp did not meet its threshold of earnings per share equal to
the prior year's earnings; therefore, no holding company officer received
incentive payment based upon the holding company's performance. For 2004,
Incentive Award Payments were based only upon the achievement of affiliate bank
performance goals.
BENEFITS. United Bancorp provides medical and other employee benefits to
its executive officers that are generally available to all fulltime United
Bancorp employees.
CHIEF EXECUTIVE OFFICER COMPENSATION. The base salary of James W. Everson,
United Bancorp's CEO was increased to $195,000 from $187,500, effective January
1,
18
2004. Mr. Everson's base salary is competitive while recognizing his reduced
role in day-to-day management at The Citizens Savings Bank, and his current
role as President, Chairman and Chief Executive Officer of United Bancorp.
In respect to the limits on deductibility for federal income tax purposes
of compensation paid an executive officer in excess of $1 million, United
Bancorp intends to strive to structure components of its executive compensation
to achieve maximum deductibility, while at the same time considering the goals
of its executive compensation philosophy.
MEMBERSHIP OF THE COMPENSATION COMMITTEE. United Bancorp directors serving
on the Compensation Committee are named below:
Matthew C. Thomas, Chairman
John M. Hoopingarner
L.E. Richardson, Jr.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION
DECISIONS.
In 2004 the Compensation Committee members were Matthew C. Thomas,
Chairman, John M. Hoopingarner and L.E. Richardson, Jr. No executive officer of
the Company serves on any board of directors or compensation committee of any
entity that compensates any member 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 United Bancorp's subsidiary banks. 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 collectibility or present
other unfavorable features. It is expected that similar transactions will occur
in the future. Mr. James W. Everson, Chief Executive Officer of the Corporation,
does not participate in any deliberations or decisions regarding his own
compensation.
CERTAIN TRANSACTIONS
United Bancorp has engaged and intends to continue to engage in the
lending of money through its subsidiary banks to several of its Directors,
executive officers and corporations or other entities in which they may own a
controlling interest. The loans to such persons (i) were made in the ordinary
course of business, (ii) were made on substantially the same terms, including
interest rates and collateral, as those prevailing at the time for comparable
transactions with other persons, and (iii) did not involve more than a normal
risk of collectibility or present other unfavorable features. United Bancorp,
through its subsidiary, The Citizens Savings Bank, pursuant to the terms of a
lease entered into on April 1, 1998, paid Riesbeck Food Markets, Inc. $26,004 in
2004, and over the 5-year fixed term of the lease payments will total $130,000
as lease payments
19
for space used in an in-store banking location at St. Clairsville, Ohio. Mr.
Riesbeck 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.
20
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
[PERFORMANCE GRAPH]
PERIOD ENDING
----------------------------------------------------------------
INDEX 12/31/99 12/31/00 12/31/01 12/31/02 12/31/03 12/31/04
----- -------- -------- -------- -------- -------- --------
United Bancorp, Inc. 100.00 87.19 106.40 116.67 172.72 161.51
Nasdaq Composite 100.00 60.82 48.16 33.11 49.93 54.49
SNL Bank Index 100.00 118.10 119.29 109.38 147.55 165.34
SNL $250M-$500M Bank Index 100.00 96.28 136.80 176.39 254.86 289.27
SNL Midwest Bank Index 100.00 121.10 123.76 119.39 152.82 172.44
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
21
of reports furnished to United Bancorp by Insiders, all Section 16 reporting
requirements applicable to Insiders during 2004 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 2006 Annual Meeting, they must be received by the
Corporation no later than November 22, 2005. 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 2005 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 2006 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 2006 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, 2004, Grant Thornton LLP ("Grant
Thornton") served the Corporation as independent auditor. The Audit Committee
has retained Grant Thornton as United Bancorp's independent auditor for 2005. We
expect representatives of Grant Thornton 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.
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.
22
ANNUAL REPORT TO SHAREHOLDERS
United Bancorp's Annual Report for its fiscal year ended December 31, 2004
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. A library of
United Bancorp's annual reports can be accessed on the Corporation's website at
www.unitedbancorp.com.
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.
23
ANNEX A
UNITED BANCORP, INC.
AUDIT COMMITTEE CHARTER
STATEMENT OF POLICY
The purpose of the audit committee is to oversee the Corporation's accounting
and financial reporting processes and the audits of the Corporation's financial
statements. The audit committee shall provide assistance to the board of
directors in fulfilling its oversight responsibilities by reviewing the
financial reports and related financial information provided by the Corporation
to governmental agencies or the general public, the Corporation's system of
internal controls and the effectiveness of its control structure, the
Corporation's compliance with designated laws and regulations, and the
Corporation's accounting, internal and external auditing and financial reporting
processes. In discharging its responsibilities, the audit committee shall:
- Serve as an independent and objective party to oversee the
Corporation's accounting and financial reporting processes, internal
control system, and the audits of the Corporation's financial
statements.
- Review and evaluate the audit procedures and results of the
Corporation's independent auditor and internal audit function.
- Approve, engage and terminate the independent auditor.
- Review and evaluate the independent auditor's qualifications,
performance and independence.
- Review, evaluate and approve any non-audit services the independent
auditor may perform for the Corporation and disclose such approved
non-audit services in periodic reports to shareholders.
- Maintain free and open means of communication between the board of
directors, the independent auditor, the internal auditor, and the
management of the Corporation.
- Maintain free and open means of communication between employees and
the audit committee for the processing of complaints received by the
Corporation regarding questionable accounting or auditing matters,
including suspicions of fraudulent activity.
- At least annually, review and if necessary or appropriate, update
this charter for consideration by the board of directors and perform
an evaluation of the audit committee performance and function.
24
ORGANIZATION
The members of the audit committee shall be appointed by the board of directors
and may be removed by the board of directors. The audit committee may consult or
retain its own independent legal, accounting or other advisors and shall
determine the degree of independence from the Corporation required of those
advisors. The audit committee shall meet at least four times per year and will
report directly to the full board any issues that arise with respect to the
quality and integrity of the Corporation's general financial performance and
reporting and regulatory compliance. The audit committee may also meet
periodically by itself to discuss matters it determines require private audit
committee or board of directors' attention. Further, the audit committee shall
meet separately with management, with the internal auditor and with the
independent auditor. There will be at least three members of the audit
committee. A majority of the members of the audit committee shall be a quorum to
transact business.
RESOURCES AND AUTHORITY OF THE AUDIT COMMITTEE
The audit committee shall have the funding, resources and authority to discharge
its duties and responsibilities without seeking the approval of the board of
directors or management of the Corporation, including (1) the authority, funding
and resources to compensate the independent auditor engaged by the audit
committee for the purpose of preparing or issuing the audit report and
performing other audit, review and attest services for the Corporation, (2) the
authority, funding and resources to select, retain, terminate and approve the
fees and other terms of engagement of, special or independent counsel,
accountants and other advisors as deemed appropriate by the audit committee, and
(3) the authority to pay all its ordinary administrative expenses incurred in
carrying out its duties and responsibilities.
QUALIFICATIONS
The audit committee shall be composed entirely of independent directors,
determined by the board of directors under the United Bancorp Corporate
Governance Guidelines. The members of the audit committee, as determined by the
board of directors, shall also meet the independence and financial expertise
requirements of The Nasdaq Stock Market for audit committee members. At least
one member of the audit committee will have past employment experience in
finance or accounting, requisite professional certification in accounting, or
other comparable experience or background which results in the member's
financial sophistication.
INDEPENDENT AUDITORS
The independent auditor shall be engaged by and accountable to the audit
committee. The independent auditor will report directly to the audit committee.
The audit committee shall have the sole authority to engage, compensate,
evaluate and terminate the independent auditor, to review with the independent
auditor the nature and scope of any disclosed relationships or professional
services including all audit engagement fees and terms, and to take appropriate
action to ensure the continuing independence of the
25
auditor. The audit committee shall pre-approve, or adopt appropriate procedures
to pre-approve, all audit and non-audit services to be provided by the
independent auditor. The audit committee shall also set clear policies and
standards relating to the Corporation's hiring of employees or former employees
of the independent auditor to ensure continued independence throughout the
engagement of the independent auditor.
The audit committee shall, on an annual basis, obtain from the independent
auditor a written disclosure delineating all of its relationships and
professional services as required by Independence Standards Board Standard No.
1, Independence Discussions with Audit Committees. The audit committee shall
engage in a dialogue with the independent auditor with respect to any disclosed
relationships or services that may impact the objectivity and independence of
the independent auditor and be responsible for taking appropriate action to
oversee the independence of the independent auditor. Additionally, the audit
committee will obtain and review a report of the independent auditor describing
its internal quality-control procedures, material issues raised by the most
recent internal quality-control review of the independent auditor or an inquiry
or investigation by a governmental authority involving one or more audits
carried out by the independent auditor in the preceding five years and any steps
or procedures taken to deal with any such issues. After reviewing the
independent auditor's report, the audit committee shall evaluate the auditor's
qualifications, performance and independence. The audit committee shall consider
the opinions of management and the internal auditor in making such evaluation.
As required by law, the audit committee shall confirm the regular rotation of
the lead and concurring audit partner, and consider whether there should be a
regular rotation of the auditor itself.
The independent auditor shall ascertain that the audit committee is made aware
of and timely report to the audit committee all necessary accounting policies
and practices to be used, all alternative treatments of financial information
within generally accepted accounting principles that have been discussed with
management and the risks of using such alternative treatments, and inform the
audit committee of other material written communications between the independent
auditor and management.
The audit committee will have complete oversight of the work done by the
independent auditor for the purpose of preparing or issuing an audit report or
performing other audit, review or attest services for the Corporation, including
resolution of any disagreement between management and the independent auditor
regarding financial reporting.
INTERNAL AUDIT
The internal auditor for the Corporation shall directly report to the chairman
of the audit committee, as well as to the boards of directors of the
Corporation's subsidiary banks, with administrative oversight provided by an
appropriate executive officer of the Corporation. The audit committee will
oversee the internal audit function and determine that the internal auditor is
establishing, maintaining and executing appropriate audit
26
programs, policies and procedures that govern the examination and audit of the
ledgers, records, procedures and operations of the Corporation and its
affiliates.
COMPLAINT PROCEDURES
The audit committee will establish procedures for the receipt, retention and
treatment of complaints received by the Corporation regarding accounting,
internal accounting controls or auditing matters, and for the confidential,
anonymous submission by employees of the Corporation and its subsidiaries
regarding questionable accounting or auditing matters.
FINANCIAL REPORTING OVERSIGHT PROCESSES
In discharging its responsibilities to oversee governmental and public reporting
of financial information, the audit committee shall:
- Discuss with the internal auditor and the independent auditor, with
management present, the Corporation's significant exposures (whether
financial, operating or otherwise), and the steps management has
taken to monitor and control such exposures, including the
Corporation's risk assessment and risk management policies.
- Discuss with the independent auditor, with management present, the
financial information to be included in the Corporation's Annual
Report of Form 10-K (and the annual report to shareholders if
distributed prior to the filing of the Form 10-K). The Chairman of
the audit committee will discuss with the independent auditor the
quarterly financial information to be included in the Corporation's
Quarterly Reports on Form 10-Q, in each case including the
disclosures under "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and, in the Chairman's
judgment, involve other members of the audit committee in such
discussions as the Chairman deems appropriate.
- Discuss at least annually with the independent auditor, any problems
or difficulties the auditor has encountered in connection with the
annual audit or otherwise and review management's response.
- At least annually, discuss with the internal auditor and the
independent auditor any significant issues regarding accounting
principles and financial statement presentations and the adequacy of
the Corporation's internal controls.
- Meet with the independent auditor, at lease annually, and review the
independent auditor's performance, including the audit committee's
evaluation of the independent auditor's lead partner.
27
PROXY ANNUAL MEETING UNITED BANCORP, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoint Mr. John M. Hoopingarner, Mr. Terry A. McGhee and
Mr. 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 8, 2005, at the Annual Meeting of Shareholders to be
held on April 20, 2005, 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 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:
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: _______________, 2005
_______________________________________
_______________________________________
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.