<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] 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 Rule 14a-11(c) or Rule 14a-12
UNITED BANCORP, INC.
- -------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
UNITED BANCORP, INC.
- -------------------------------------------------------------------------------
(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)(4) and 0-11.
(1) Title of each class of securities 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:
- --------------------------------------------------------------------------------
<PAGE> 2
UNITED BANCORP, INC.
Martins Ferry, Ohio 43935
NOTICE OF THE ANNUAL MEETING OF THE SHAREHOLDERS
TO THE SHAREHOLDERS OF
UNITED BANCORP, INC.
MARTINS FERRY, OHIO
March 20, 1998
You are hereby notified that the Annual Meeting of Shareholders of
United Bancorp, Inc. (the "Company"), will be held on Wednesday, April 15, 1998
at 2:00 p.m. at the Company's main office, 201 South Fourth at Hickory Street,
Martins Ferry, Ohio, for the purpose of considering and acting upon the
following:
1. To fix the number of Directors at a minimum of nine (9) and a maximum
of thirteen (13) and to elect three (3) Directors to Class III of the
Board of Directors, specifically,
Herman E. Borkoski President
Borkoski Funeral Homes, Inc.
John M. Hoopingarner General Manager and
Secretary-Treasurer
Muskingum Watershed
Conservancy District
Richard L. Riesbeck President
Riesbeck Food Markets, Inc.
to serve as Directors of Class III until the Annual Meeting of
Shareholders in 2001, and until their successors are duly elected and
shall have qualified; and
2. To ratify and approve the appointment of Crowe, Chizek and Company LLP
independent certified public accountants, to serve as the Company's
external auditor for fiscal year 1998; and
3. To transact such other business as may properly come before the meeting
or any adjournment thereof.
The Board of Directors has fixed March 2, 1998 as the record date for
the determination of shareholders entitled to notice of and to vote at
the meeting or any adjournment thereof.
ALL ARE NOTIFIED THAT PROXIES SIGNED IN BLANK, OR NAMING PRESENT
OFFICERS OR DIRECTORS AS AGENTS TO VOTE THE SHARES SO REQUESTED WILL BE
VOTED IN FAVOR OF THE PROPOSALS HEREIN CONTAINED.
Whether or not you plan to attend our annual meeting, please execute
the enclosed proxy and return it as promptly as possible in the enclosed
postage-paid envelope. If you do attend the meeting, you may withdraw your
proxy.
Signed by order of the Board of Directors
__________________________________________
Norman F. Assenza, Jr., Secretary
<PAGE> 3
UNITED BANCORP, INC.
201 South 4th at Hickory Street
Martins Ferry, Ohio 43935
PROXY STATEMENT
This statement is furnished to shareholders of United Bancorp, Inc.
(the "Company") in connection with the solicitation of proxies for use at the
Annual Meeting of Shareholders to be held at the headquarters of the Company,
201 South 4th at Hickory Street, Martins Ferry, Ohio, Wednesday, April 15, 1998
at 2:00 p.m. (local time). The number of shares outstanding and entitled to
vote thereat is 2,238,314, $1.00 par value per share. No individual
beneficially owns over 5% of the outstanding shares. Shareholders of record on
March 2, 1998, will have one vote for each share held on such date, and do not
have the right to cumulate votes in the election of directors. This proxy
statement and proxy are being mailed on or about March 20, 1998.
The accompanying proxy is solicited by the Board of Directors. It is
contemplated that solicitation of proxies will be by use of the mails only.
However, in addition, solicitation may be made by telephone or telegraph, by
officers or by employees of the Company, or officers or employees of the
Company's subsidiary banks. The cost of such solicitation will be borne by the
Company, which may reimburse brokerage firms and nominees for reasonable
expenses incurred by them, and approved by the Company, in forwarding proxy
materials to beneficial owners. You may revoke your proxy at any time prior to
its exercise by giving written or oral notice to the Chairman, President and
Chief Executive Officer, or by executing a subsequently dated proxy or by
voting in person at the annual meeting.
ELECTION OF DIRECTORS
Pursuant to the terms of the Code of Regulations of United Bancorp,
Inc., the Board of Directors is divided into three classes, designated as Class
I, Class II and Class III, with each class consisting of approximately
one-third of the total number of directors as fixed from time to time by the
shareholders. The directors serve staggered three-year terms, so that
directors of only one class are elected at each Annual Meeting of shareholders.
At the forthcoming Annual Meeting, the shareholders will be asked to elect
three directors to serve in Class III. Unless otherwise specified in any
proxy, the proxies solicited hereunder will be voted in favor of fixing the
number of directors at a minimum of nine (9) and a maximum of thirteen (13) and
for the election of the three nominees listed below.
The nominees for election at the forthcoming Annual Meeting are Messrs.
Herman E. Borkoski, John M. Hoopingarner and Richard L. Riesbeck, present
directors of the Company. If elected, the nominees will serve a three (3) year
term, which shall expire at the annual meeting of shareholders in 2001, and
until their successor is duly elected and shall have qualified.
<PAGE> 4
The persons named in the enclosed form of proxy will vote the proxy in
accordance with the choice specified. If no choice is specified, it is the
intention of the persons named in the enclosed form of proxy to elect the three
nominees named above.
INFORMATION AS TO NOMINEES
The Names of the nominees for election as Director, together with
specific information about the nominees, is as follows:
<TABLE>
<CAPTION>
UNITED BANCORP,
INC. SHARES
OWNED
NAME AND AGE PRINCIPAL OCCUPATION YEAR OF BENEFICIALLY (1) % OF
CLASS III (TERM EXPIRES IN 2001) PAST FIVE YEARS INITIAL ELECTION (3/02/98) OUTSTANDING
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
HERMAN E. BORKOSKI President-Borkoski 1987 13,496 (2) .60%
Tiltonsville, Ohio Funeral Homes, Inc.
Age: 60
JOHN M. HOOPINGARNER General Manager and 1992 905 .04%
Dover, Ohio Secretary-Treasurer
Age: 43 Muskingum Watershed
Conservancy District
RICHARD L. RIESBECK President - Riesbeck 1984 10,154 (3) .45%
St. Clairsville, Ohio Food Markets, Inc.
Age: 48
</TABLE>
<PAGE> 5
INFORMATION AS TO DIRECTORS WHOSE TERMS OF OFFICE
WILL CONTINUE AFTER THE 1998 ANNUAL MEETING
<TABLE>
<CAPTION>
UNITED BANCORP,
INC. SHARES
OWNED
NAME AND AGE PRINCIPAL OCCUPATION YEAR OF BENEFICIALLY(1) % OF
CLASS I (TERM EXPIRES IN 1999) PAST FIVE YEARS INITIAL ELECTION (3/02/98) OUTSTANDING
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MICHAEL J. ARCIELLO Retired Vice President- 1992 1,382 .06%
Massillon, Ohio Finance Nickles Bakeries
Age: 63
JOHN H. CLARK, JR. Retired Foundry Owner 1976 24,270 (4) 1.08%
Wheeling, West Virginia
Age: 70
DR. LEON F. FAVEDE, O.D. Optometrist 1981 1,730 (5) .07%
St. Clairsville, Ohio
Age: 61
</TABLE>
<PAGE> 6
<TABLE>
<CAPTION>
UNITED BANCORP,
INC. SHARES
OWNED
NAME AND AGE PRINCIPAL OCCUPATION YEAR OF BENEFICIALLY(1) % OF
CLASS II (TERM EXPIRES IN 2000) PAST FIVE YEARS INITIAL ELECTION (3/02/98) OUTSTANDING
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
JAMES W. EVERSON Chairman, President and 1969 55,303 (6) 2.47%
St. Clairsville, Ohio Chief Executive Officer
Age: 59 United Bancorp, Inc. and The
Citizens Savings Bank
Director - The Citizens-
State Bank
ERROL C. SAMBUCO President and Chief 1996 720 .03%
Martins Ferry, Ohio Executive Officer
Age: 57 The Ohio Coatings Company
MATTHEW C. THOMAS President 1988 7,261 .32%
St. Clairsville, Ohio M. C. Thomas Insurance
Age: 41 Agency, Inc.
</TABLE>
<PAGE> 7
SHARE OWNERSHIP OF MANAGEMENT OTHER THAN COMPANY DIRECTORS
The following table sets forth, as of March 2, 1998 the beneficial
ownership of Common Shares of the Company by each Executive Officer of the
Company and its subsidiaries and by all such persons, including Company
Directors, as a group.
<TABLE>
<CAPTION>
Common Shares
Name Beneficially Owned (1) Percent
---- ----------------------- -------
<S> <C> <C>
Charles E. Allensworth 399 0.02
Norman F. Assenza, Jr. (7) 4,689 0.21
Ronald S. Blake 71 nil
Cleo S. Dull 558 0.02
William S. Holbrook 4,579 0.20
James A. Lodes (8) 1,425 0.06
Harold W. Price (9) 1,269 0.06
All Company Directors and
Officers as a Group (16 individuals) 128,211 5.73%
</TABLE>
(1) Beneficial ownership of Common Shares, as determined in
accordance with applicable rules of the Securities and Exchange
Commission, includes shares as to which a person has or shares
voting power and/or investment power. Except as otherwise
indicated, the shareholders listed above have sole voting and
investment power with respect to their Common Shares.
(2) Includes 4,890 Common Shares held of record by spouse, Frances
L. Borkoski; 3,595 Common Shares held of record by Borkoski
Funeral Homes, Inc.
(3) Includes 9,450 Common Shares held of record by Riesbeck Food
Markets, Inc.
(4) Includes 12,991 Common Shares of record held by spouse, Barbara
L. Clark.
(5) Includes 138 Common Shares held of record by Pension Plan of
Dr. Favede, Dr. Leon F. Favede, Trustee; 474 Common Shares held
of record by son Leon M. Favede.
(6) Includes 24,797 Common Shares of record held by spouse, Marlene
K. Everson; 1,885 Common Shares held of record by son Todd M.
Everson; 1,178 Common Shares held of record by son Scott A.
Everson; 1,830 Common Shares held of record by son James W.
Everson, Jr. jointly with wife Bethany Lynn Everson and 816
Common Shares held of record by daughter Dana K. Everson.
(7) Includes 1,309 Common Shares held of record jointly with
parent, Helen Assenza and 2,506 Common Shares held by parent,
Helen Assenza with others.
(8) Includes 187 Common Shares held of record by spouse, Susan M.
Lodes.
(9) Includes 445 Common Shares held jointly with spouse, Irene R.
Price.
<PAGE> 8
THE BOARD OF DIRECTORS, ITS COMMITTEES AND COMPENSATION
In 1997, there were a total of four regularly scheduled meetings of the
Board of Directors of United Bancorp, Inc. Each director of the Company
attended in excess of 75% of the meetings of the Board of Directors. At
year-end, all Company Board members except Mr. Arciello and Mr. Hoopingarner
also served on the Board of Directors of The Citizens Savings Bank, Martins
Ferry. Mr. Arciello, Mr. Everson and Mr. Hoopingarner also served on the
Board of Directors of The Citizens-State Bank of Strasburg. Both banks are
wholly-owned subsidiaries of the company and each meets monthly. The Company
has a Compensation Committee consisting of Messrs. Riesbeck, Chairman;
Arciello, Clark, Favede and Hoopingarner, and is responsible for administering
the Company's employee benefit plans, setting the compensation of the
Subsidiary banks' Presidents and recommends compensation for other holding
company officers paid through the subsidiary banks, reviewing the criteria that
form the basis for management's officer and employee compensation
recommendations and reviewing management's recommendations in this regard. The
Compensation Committee, which met one time during 1997, meets on an as needed
basis, and pays committee fees of $150.00 per meeting attended. Directors of
the Company are paid an annual retainer of $1,000 plus a fee of $225.00 per
meeting attended. Pursuant to the Company's Stock Option Plan, all directors
of the Company were awarded during 1995 an option to purchase 1,500 shares of
the Company's common stock at $14.94 per share. Due to the 10% share dividend
paid June 20, 1996 and 10% share dividend paid September 20, 1997, the option
to purchase is now 1,815 shares at $12.35 per share.
The Company's lead bank, The Citizens Savings Bank, Martins Ferry,
Ohio, has the following committees of the Board of Directors: Executive,
Asset/Liability and Audit. The Executive Committee consists of Messrs.
Riesbeck, Chairman; Clark, Everson and Thomas, and is responsible for loan
review, rate setting, management issues and asset/liability management. The
Executive Committee, which met fifty times in 1997, meets on a weekly basis,
and pays committee fees of $500.00 per month to outside directors. The
Asset/Liability Committee consists of The Executive Committee and officers
Assenza, Blake, Greenwood and Lodes and is responsible for the pricing and
repricing of loan and depository products, budgetary matters, and manages the
assets, liabilities and profitability of the Company and its subsidiary banks.
The Asset/Liability Committee met twelve times in 1997, meets on a monthly
basis, and does not pay committee fees to its members. The Audit Committee
consists of Messrs. Thomas, Chairman; Borkoski and Sambuco, and reviews the
audit plan with the Company's independent accountants, the scope and the
results of their audit engagement and the accompanying management letter;
reviews the scope and results of the Company's internal auditing procedures;
consults with independent accountants and management with regard to the
Company's accounting methods and the adequacy of its internal accounting
controls; approves professional services provided by the independent
accountants; reviews the independence of the independent accountants; and
reviews the range of the independent accountant' s audit and non-audit fees.
The Audit Committee met four times in 1997, and pays committee fees of $150.00
per meeting to outside directors.
The Board of Directors of the Company as a whole functions as a
nominating committee to propose nominees for director to the Board of
Directors. The Board of Directors will consider nominees recommended by
stockholders, although it has not actively solicited recommendations from
stockholders for nominees nor has it established any procedures for this
purpose other than as set forth in the Bylaws. See "Shareholders' Proposals"
for 1999 Annual Meeting below.
The Company's subsidiary bank, The Citizens-State Bank of Strasburg,
Strasburg, Ohio, has the following committees of its Board of Directors:
Executive and Audit. The Executive Committee consists of Messrs. Arciello,
Chairman; Hoopingarner and Price, and is responsible for loan review, rate
setting, compensation, management issues and asset/liability management. The
Executive Committee met twelve times in 1997, and pays Committee fees of $50.00
per meeting to outside directors. The Audit Committee consists of Messrs. Ley,
Chairman; Herzig and Arciello, and is responsible for overseeing the work of
the Bank's internal and external auditors. The Audit Committee met four times
in 1997, and pays Committee Fees of $50.00 per meeting to outside directors.
The Citizens Savings Bank of Martins Ferry paid each director $500.00
per month regardless of the number of meetings attended. The Citizens-State
Bank of Strasburg paid each director $400.00 per month regardless of the number
of meetings attended.
<PAGE> 9
During 1996 the Board of Directors implemented the United Bancorp, Inc.
and United Bancorp, Inc. Affiliate Bank Directors Deferred Compensation Plan
pursuant to which directors may elect annually to defer all or a portion of
their directors fees. Once deferred such fees are periodically invested by a
related Trust in shares of United Bancorp, Inc. common stock. Deferred
benefits are payable upon termination of service as a member of the Board of
Directors in a lump sum or periodic payments at the election of the
participant. Earlier payment of accrued benefits is provided for in the event
of death of the participant or upon the occurrence of an "Unforeseeable
Emergency."
COMPENSATION OF EXECUTIVE OFFICERS
United Bancorp, Inc. did not incur any salary expenses nor does it
provide pensions, profit sharing plans, or other benefits to any of its
officers. All such expenses are paid by United Bancorp, Inc.'s subsidiaries,
The Citizens Savings Bank of Martins Ferry and The Citizens-State Bank of
Strasburg.
The following sets forth the direct remuneration paid by the Company's
subsidiaries to the officers whose total remuneration exceeded $100,000.00. The
figures are Base Salaries plus Incentive Compensation earned in the current
year and Other Annual Compensation, which represents the Company's matching
401(k) contribution of $2,375.00 for Mr. Everson, $2,040.00 for Mr. Price and
$1,523.00 for Mr. Assenza.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation
Name and ----------------------------------------------
Principal Position Year Salary Bonus Other
- ------------------- ---- ------ ----- -----
<S> <C> <C> <C> <C>
James W. Everson 1997 $158,600 $40,192 $2,375
Chairman, President & CEO 1996 $145,000 $43,591 $2,250
The Citizens Savings Bank 1995 $135,000 $33,556 $1,875
United Bancorp, Inc.
Harold W. Price 1997 $110,200 $33,600 $2,040
President & CEO 1996 $100,000 $31,000 $1,857
The Citizens-State Bank 1995 $ 85,000 $23,800 $1,295
Vice President - Administration
United Bancorp, Inc.
Norman F. Assenza, Jr. 1997 $82,400 $18,205 $1,523
Sr. Vice President - Operations 1996 $80,000 $19,150 $1,287
and Secretary 1995 $74,000 $13,871 $1,119
The Citizens Savings Bank
Vice President - Operations
and Secretary
United Bancorp, Inc.
</TABLE>
<PAGE> 10
The following table sets forth the number and value of all unexercised
stock options held by Executive Officers at year-end. The value of
"in-the-money" options refers to options having an exercise price, which is
less than the market price of the Company's stock on December 31, 1997. On
that date, the Company's named Executive Officers held exercisable options,
which were "in-the-money" as discussed in the following table. In addition,
the table sets forth the number of options exercised by each of the named
Executive Officers during 1997 and indicates the amount of value realized upon
such exercise.
<TABLE>
<CAPTION>
1997 STOCK OPTION EXERCISES AND YEAR-END VALUE TABLE
----------------------------------------------------
Number (#) of Value ($) of
Unexercised Unexercised
Options- Options-
12/31/97 12/31/97(1)
Shares Acquired Net Value($) Exercisable/ Exercisable/
Name on Exercise Realized Unexercisable Unexercisable
- ---- ---------------- ----------- -------------- --------------
<S> <C> <C> <C> <C>
James W. Everson -0- $0 0/ $0/
30,250 $443,163
Harold W. Price -0- $0 0/ $0/
12,100 $177,265
Norman F. Assenza, Jr. -0- $0 0/ $0/
6,050 $ 88,633
</TABLE>
(1) Represents market value at $27.00 per share of the Company's common
stock at December 31, 1997, less the exercise price.
REPORT OF THE COMPENSATION COMMITTEE
Under rules established by the Securities and Exchange Commission (the
"SEC"), the Company is required to provide certain data and information in
regard to the compensation and benefits provided to the Company's President
and Chief Executive Officer and, if applicable, the four other most highly
compensated executive officers, whose compensation exceeded $100,000 during
the Company's fiscal year. The disclosure requirements, as applied to the
Company, include the Company's Chairman, President and Chief Executive Officer
(Mr. James W. Everson), the Company's Vice President-Administration (Mr.
Harold W. Price), and the Company's Vice President-Operations (Mr. Norman F.
Assenza, Jr.) and includes the use of tables and a report explaining the
rationale and considerations that led to fundamental executive compensation
decisions affecting Mr. Everson, Mr. Price and Mr. Assenza. The Compensation
Committee (the "Committee") has the responsibility of determining the
compensation policy and practices with respect to all of the Company'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 Company's
compensation philosophy as endorsed by the Committee. The Committee determines
the level of compensation for all other executive officers within the
constraints of the amounts approved by the Board.
Essentially, the executive compensation program of the Company has been
designed to:
- Support a pay-for-performance policy that awards executive officers
for corporate performance.
- Motivate key senior officers to achieve strategic business
goals.
- Provide compensation opportunities which are comparable to those
officers by other peer group companies, thus allowing the Company
to compete for and retain talented executives who are critical to
the Company's long-term success.
<PAGE> 11
SALARIES. The Committee kept the base salary paid to Mr. Everson at
$145,000 effective January 1, 1997 and made him eligible to receive Directors
Fees for serving on the company board of directors and two subsidiary bank
boards of directors, thus permitting him to participate in the newly
established Directors Deferred Fee Plan, increasing his compensation for 1997
by $13,600 or 9.37%. Mr. Price' s base salary was increased $5,000 to $105,000
and he was made eligible to collect Directors Fees for his Boardship at The
Citizens-State Bank, thus permitting him to participate in the newly
established Directors Deferred Fee Plan, increasing his compensation for 1997
by $10,200 or 10.2%. Mr. Assenza's base salary was increased by 3.2% to
$82,400. The company uses the services of Ben S. Cole Financial Inc., an
independent outside consultant of Boston, Massachusetts in setting Executive
Compensation. Increases recognize the continued improvement of 1997 earnings
over 1996 and the implementation of operating efficiencies during the year,
which is reflected in the 1997 increase in shareholder value. In addition the
Committee approved compensation increases for all other executive officers of
the Company. The Board of Directors of the Company approved all such increases
upon the recommendation of the Committee. Executive Officers salary increase
determinations are based upon performance appraisals of such executives which
reviews, among other things, the performance of executives against goals set in
the prior year, extraordinary service and promotions within the organization.
INCENTIVE COMPENSATION. Officers of United Bancorp, Inc. named above
are participants in the following described plan of United Bancorp, Inc., The
Citizens Savings Bank, Martins Ferry, Ohio, and The Citizens-State Bank of
Strasburg, wholly-owned subsidiaries of the Company.
The Company and The Banks' Incentive Compensation Plans provide the
opportunity to earn a percentage of salary based on achievement of
predetermined goals established by each Board of Directors. The type and
relative weighting of goals may change from year to year. For 1997 the
incentive amounts distributed were determined by achievement against specific
asset growth, return on assets, return on equity and loan to asset ratio
targets. In addition, participants other than the CEO's have a portion of
their incentives determined by goals for their areas of responsibility.
Eligibility and allocation of incentive awards for all participants are
determined by the Compensation Committee.
The above officers of the Company received the following amounts, which
are included in the above tables, under Bonus earned based on 1997: $40,192 to
Mr. Everson, $33,600 to Mr. Price and $18,205 to Mr. Assenza. Additionally,
Mr. Everson had personal use of a company vehicle valued for 1997 at $3,247.00
and a club membership valued at $1,065.00. Mr. Price had personal use of a
company vehicle valued for 1997 at $822.00.
LONG TERM COMPENSATION. Long term incentive compensation is addressed
by the Company's Stock Option Plan. The Stock Option Plan was designed to
provide long-term incentive to the executive officers and directors of the
Company, and to better align the interest of management with those of the
Company's shareholders. The Board believes that stock options provide an
effective means of accomplishing its long-term compensation objectives, as the
level of compensation is directly proportional to the level of appreciation in
the market value of the Company's common stock subsequent to the date of the
option grant.
This Report on Compensation is submitted by the Compensation Committee
Members:
Richard L. Riesbeck, Chairman
Michael J. Arciello
John H. Clark, Jr.
Dr. Leon F. Favede, O.D.
John M. Hoopingarner
<PAGE> 12
PERFORMANCE GRAPH - FIVE-YEAR SHAREHOLDER RETURN COMPARISON
The SEC requires that the Company include in this Proxy Statement a
line-graph presentation comparing cumulative, five-year shareholder returns on
an indexed basis with a broad equity market index and either a nationally
recognized industry standard or an index of peer companies selected by the
Company. The Company has chosen SNL Securities, a research and publishing firm
specializing in the collection and dissemination of data on the banking, thrift
and financial services industries for the purpose for this performance
comparison which includes the SNL-Midwest Bank Index, All Bank Index and NASDAQ
Total U.S. Index. Each index is weighted for all companies that fit the
criteria of that particular index and assumes dividends are received in cash
and reinvested to purchase additional shares. The following chart measures
$100 invested December 31, 1992 in the Company's common stock and each index
measured over five years.
STOCK PRICE PERFORMANCE CHART
<TABLE>
<CAPTION>
INDEX 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96 12/3197
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
UNITED BANCORP, INC. 100.00 230.56 264.57 205.21 360.48 503.52
NASDAQ - TOTAL US 100.00 114.80 112.21 158.70 195.19 239.53
SNL BANKS (ALL) INDEX 100.00 109.54 107.06 166.68 232.57 352.43
SNL BANKS (MIDWEST) INDEX 100.00 104.48 100.99 149.23 203.02 329.16
</TABLE>
PENSION PLAN
United Bancorp, Inc. does not have any compensated employees; however,
it does maintain a Pension Plan for the employees of its subsidiary banks' with
each bank contributing its share of the cost in annual contribution to the
Pension Plan.
United Bancorp, Inc. of Martins Ferry, Ohio and its subsidiary Banks
Employees' Retirement Plan (the Plan) is a Defined Benefit Plan for all
eligible full time employees. It may provide monthly benefits commencing as
early as age 50, but not later than age 70, for employees who terminate or
retire with 5 or more years of credited service.
Benefits at retirement or vested termination are based on all the
years-credited service, and the average of the highest five consecutive years.
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 1997
terms and factors.
<PAGE> 13
BENEFIT TABLE FOR A PARTICIPANT
ATTAINING AGE 65 IN 1997
Years of Service
<TABLE>
<CAPTION>
AVERAGE
ANNUAL SALARY 10 15 20 25 30 35 OR MORE
- ------------- -- -- -- -- -- -----------
<S> <C> <C> <C> <C> <C> <C>
$160,000 $26,095 $39,143 $52,190 $65,238 $78,286 $91,333
$150,000 $24,345 $36,518 $48,690 $60,863 $73,036 $85,208
$125,000 $19,970 $29,955 $39,940 $49,926 $59,911 $69,896
$100,000 $15,595 $23,393 $31,190 $38,988 $46,786 $54,583
$ 75,000 $11,220 $16,830 $22,440 $28,051 $33,661 $39,271
$ 50,000 $6,845 $10,268 $13,690 $17,113 $20,536 $23,958
$ 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
</TABLE>
The above officers of the Company will have the following years of
estimated credited service at retirement: Mr. Everson 42 years; Mr. Price 17
years; Mr. Assenza, 32 years.
SPECIAL SEVERANCE AGREEMENT
The Company has entered into a Special Severance Agreement
("Agreement") with Mr. Everson, Mr. Price, and Mr. Assenza, its Chairman,
President and Chief Executive Officer, its Vice President - Administration, and
its Vice President-Operations, respectively and other key holding company
officers. The Agreement provides that Mr. Everson, Mr. Price and Mr. Assenza
shall be entitled to a lump sum severance benefit in the event of Mr.
Everson's, Mr. Price's and Mr. Assenza's termination of employment (other than
for cause) following a Change of Control and involuntary termination of
employment. A Change of Control is defined to include merger or other
acquisition of the Company and certain other changes in the voting control of
the Company. In the event of a Change of Control and the involuntary
termination of his employment, the Agreement requires that Mr. Everson receive
2.99 times annual compensation, Mr. Price to receive 2.0 times annual
compensation and Mr. Assenza to receive 1.0 times annual compensation, in a
lump sum cash payment, at that level in effect immediately prior to such Change
of Control. The Agreement has a term of 1 year and is automatically extended
for one additional year unless, not later than June 30th of the preceding year
the Company gives notice of termination of the agreement. The rights of the
Company to choose to employ or terminate Mr. Everson, Mr. Price, and Mr.
Assenza, prior to a Change of Control are not affected by this Agreement. In
the event a Change of Control had occurred on January 1, 1998, and Mr.
Everson's, Mr. Price's and Mr. Assenza's employment had been involuntarily
terminated on such date (other than for cause), Mr. Everson, Mr. Price and Mr.
Assenza would have been entitled (subject to certain immaterial modifications
provided by the Agreement which may lower the amount), to receive a lump sum
severance benefits of $583,384, $291,680 and $102,128, respectively. In the
event a potential Change of Control is announced, all executives agree to
remain in the employment of the Company for not less than one (1) year
following the initial occurrence of such a potential change in Control of the
Company.
INTEREST IN MATERIAL TRANSACTIONS
Some of the directors and officers of United Bancorp, Inc., and the
companies with which they are associated, were customers of The Citizens
Savings Bank of Martins Ferry and The Citizens-State Bank of Strasburg, and had
banking transactions with the banks in the ordinary course of business during
1997, and expect to have such banking transactions in the future. All loans
and commitments for loans included in such transactions were made on
<PAGE> 14
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with other persons, and in
the opinion of the management of the banks, did not involve more than normal
risk of collectibility, or present other unfavorable features. The aggregate
amount of such loans outstanding at December 31, 1997, was $2,226,040 or
10.15% of the Company's consolidated equity at year-end.
COMPLIANCE WITH SECTION 16(a) OF
THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission.
Officers, directors and greater than ten percent shareholders are required by
SEC regulation to furnish the Company with copies of all Section 16(a) forms
they file.
Based solely on review of the copies of such forms furnished to the
Company, or written representations that no Form 5's were required, the Company
believes that during 1997, all Section 16(a) filing requirements applicable to
its officers, directors and greater than 10 percent beneficial owners were
complied with by such persons, except for delinquent reports by Director Leon
F. Favede relating to four (4) transactions in the company's stock. The
reports were properly filed March 3, 1998.
AUDITORS
The Board of Directors has approved and recommends to the shareholders
the re-appointment of Crowe, Chizek and Company LLP, and certified public
accountants, as the Company's external auditors.
Crowe, Chizek and Company LLP is a regional certified public accounting
and management consulting firm formed in 1942, which serves clients primarily
in Ohio, Indiana, Michigan, Illinois and Kentucky. Offices of the firm are
located in Cleveland and Columbus, Ohio; South Bend, Indianapolis, Elkhart and
Merrillville, Indiana; Grand Rapids, Michigan; Oak Brook, Illinois; Lexington
and Louisville, Kentucky; Ft. Lauderdale, Florida; and Redhill, England. The
professional staff of the firm consists of 105 partners and over 2,000
employees. Crowe, Chizek and Company LLP has become the nation's 9th largest
certified public accounting firm, and is committed to serving the banking
industry with one-third of their business related to financial institutions.
A representative of Crowe, Chizek and Company LLP will be present at the
annual meeting and will be available to respond to questions, and will be given
an opportunity to make a statement if they desire to do so.
THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY RECOMMENDS THE
ADOPTION OF THE PROPOSAL TO RE-APPOINT CROWE, CHIZEK AND COMPANY LLP
AS EXTERNAL AUDITOR OF THE COMPANY AND ITS SUBSIDIARY BANKS.
SHAREHOLDERS' PROPOSALS
Proposals of shareholders which are to be presented at the 1999 Annual
Meeting of Shareholders of the Company must be received by the Company no later
than December 31, 1998, for inclusion in the Company's proxy statement and form
of proxy relating to such meeting. Proposals should be sent by certified mail,
return receipt requested, to James W. Everson, Chairman, President and Chief
Executive Officer, United Bancorp, Inc., 201 South 4th at Hickory Street,
Martins Ferry, Ohio 43935.
<PAGE> 15
OTHER BUSINESS
The management at present knows of no other business to be brought
before the meeting. If any other business is presented at such meeting, the
proxy will be voted in accordance with the recommendations of the Board of
Directors. A copy of the Company's 1997 financial report filed with the
Securities and Exchange Commission, on Form 10-K, will be available without
charge to shareholders upon request. Address all requests, in writing, for
this document to Randall M. Greenwood, Vice President and Chief Financial
Officer, United Bancorp, Inc., 201 South 4th at Hickory Street, Martins
Ferry, Ohio 43935.
By order of the Board of Directors
James W. Everson
Chairman, President and Chief
Executive Officer
Martins Ferry, Ohio
March 20, 1998
WE URGE YOU TO SIGN AND RETURN THE ENCLOSED PROXY FORM AS PROMPTLY AS
POSSIBLE WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON. IF YOU DO
ATTEND THE MEETING, YOU MAY THEN WITHDRAW YOUR PROXY.
<PAGE> 16
UNITED BANCORP, INC.
Martins Ferry, Ohio 43935
-PROXY-
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 15, 1998
PLEASE SIGN AND RETURN IMMEDIATELY
KNOW ALL MEN BY THESE PRESENTS that the undersigned Shareholder or Shareholders
of United Bancorp, Inc. (the "Company"), Martins Ferry, Ohio, do hereby
nominate, constitute and appoint John H. Clark, Jr., James W. Everson, Richard
L. Riesbeck and Matthew C. Thomas or any one of them (with substitution, for
me or our stock and in my or our name, place and stead) to vote all the common
stock of said Company standing in my or our name, on its books on March 2,
1998, at the Annual Meeting of Shareholders to be held at the main office of
the Company, 201 South Fourth at Hickory Street, Martins Ferry, Ohio, on
Wednesday, April 15, 1998, at 2:00 o'clock p.m., or any adjournment thereof
with all the powers the undersigned would possess if personally present. The
shares will be voted in accordance with my specifications, as follows:
1. To fix the number of Directors at a minimum of nine (9) and a maximum
of thirteen (13) and to elect three (3) Directors to Class III of the
Board of Directors, specifically,
Herman E. Borkoski President
Borkoski Funeral Homes, Inc.
John M. Hoopingarner General Manager and
Secretary-Treasurer
Muskingum Watershed
Conservancy District
Richard L. Riesbeck President
Riesbeck Food Markets, Inc.
to serve as Directors of Class III until the Annual Meeting of
Shareholders in 2001, and until their successors are duly elected and
shall have qualified.
For ____ Withhold Authority to vote for all nominees _______
(TO WITHHOLD AUTHORITY TO VOTE FOR ONE OR MORE OF THE ABOVE NOMINEES,
STRIKE A LINE THROUGH THEIR NAME)
2. To ratify and approve the appointment of Crowe, Chizek and Company LLP
independent certified public accountants, to serve as the Company's
external auditor for fiscal year 1998.
For ____ Against ____ Abstain ____
3. To transact such other business as may properly come before the meeting
or any adjournment thereof.
For ____ Against ____ Abstain ____
This Proxy confers authority to vote "FOR" each proposition listed
above unless "AGAINST" or "ABSTAIN" is indicated. (IF ANY OTHER
BUSINESS IS PRESENTED AT SAID MEETING, THE PROXY SHALL BE VOTED IN
ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF DIRECTORS.)
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" EACH OF THE
LISTED PROPOSITIONS. (THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS AND MAY BE REVOKED PRIOR TO ITS EXERCISE.)
Dated ___________________________
___________________________
signature of shareholder
___________________________
signature of shareholder
When signing as attorney, executor,
administrator, trustee or
guardian, please give full title.
If more than one trustee, all
should sign. ALL JOINT OWNERS
MUST SIGN.
PLEASE SIGN AND RETURN YOUR PROXY NOW. IT IS IMPORTANT THAT WE RECEIVE YOUR
VOTE, AS PASSAGE OF EACH OF THE PROPOSALS REQUIRES THE FAVORABLE VOTE OF A
MAJORITY OF THE OUTSTANDING SHARES.
