<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)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(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
March 25, 1999
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of United
Bancorp, Inc. scheduled for Wednesday, April 21, 1999 at 2:00 p.m. WHETHER OR
NOT YOU PLAN TO ATTEND OUR ANNUAL MEETING, PLEASE EXECUTE THE PROXY AND RETURN
IT IN THE ENCLOSED POSTAGE PAID ENVELOPE. This Proxy may be revoked any time
before its exercise or by your attending our scheduled meeting.
The Annual Certified Opinion Audit of United Bancorp, Inc. is enclosed
for your review prior to attending our Annual Meeting. We are both proud and
excited about our 1998 financial results that reflect the continued cooperation
and dedication of our Directors, Officers and Employees.
Payment of our regular first quarter cash dividend was made by separate
mailing on March 19th. Whether or not you received your dividend check in a
separate mailing is dependent upon your level of participation in our Dividend
Reinvestment Plan, participation in our direct deposit program or whether your
stock is being held by you or in a broker nominee name. NO PAYMENT HAS BEEN
INCLUDED WITH THIS MAILING OF OUR PROXY MATERIALS.
As a shareholder, we encourage you to use and recommend our products
and services. Any successful effort you have in bringing additional business to
one of our Banks will increase the value of your investment. We thank you our
shareholders, customers and friends for your continued confidence and support.
Very truly yours,
UNITED BANCORP, INC.
James W. Everson
Chairman, President & Chief Executive Officer
JWE/sw
<PAGE> 3
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 25, 1999
You are hereby notified that the Annual Meeting of Shareholders of United
Bancorp, Inc. (the "Company"), will be held on Wednesday, April 21, 1999, 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 ten (10) and to elect four (4) Directors
to Class I of the Board of Directors, specifically,
Michael J. Arciello Retired - Vice President Finance, Nickles
Bakeries
John H. Clark, Jr. Retired - Foundry Owner
Dr. Leon F. Favede Optometrist
L. E. Richardson, Jr. Retired President - The Community Bank of
Glouster
to serve as Directors of Class I until the Annual Meeting of Shareholders
in 2002, 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 1999; 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 1, 1999 as the record date for the
determination of shareholders entitled to notice of and to vote at the meeting
or any adjournment thereof.
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> 4
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 21, 1999 at 2:00
p.m. (local time). The number of shares outstanding and entitled to vote thereat
is 2,800,298, $1.00 par value per share. No individual beneficially owns over 5%
of the outstanding shares. Shareholders of record on March 1, 1999, do have the
right to cumulate votes in the election of directors. This proxy statement and
proxy are being mailed on or about March 25, 1999.
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. Properly signed and dated proxies received by
the Secretary of the Company prior to or at the Annual Meeting will be voted as
instructed on the proxy or, in the absence of such instructions will be voted,
(a) "For" the election to the Board of Directors of the persons nominated by the
Board and to fix the number of Directors at ten (10), (b) to ratify and approve
the appointment of Crowe, Chizek and Company LLP independent certified public
accountants and (c) in accordance with the judgement of the Board of Directors
on any other matters which may properly come before the meeting. 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.
VOTING PROCEDURES
A quorum at any meeting to fix the number of directors and to elect
directors consists of the shareholders present at the meeting in person or by
proxy.
The four nominees for director who receive the largest number of votes cast
"For" will be elected as directors if the number of directors is fixed at ten
(10). Shares represented at the annual meeting in person or by proxy but
withheld or otherwise not cast for the election of directors, including
abstentions and broker non-votes, will have no impact on whether a quorum is
present to fix the number of directors and to elect directors or on the outcome
of the election.
Shareholders have cumulative voting rights with respect to the election of
directors. Cumulative voting rights allow shareholders to vote the number of
shares owned by them times the number of directors to be elected and to cast
such votes for one director or to allocate such votes among directors as they
deem appropriate.
Abstentions will have the same effect as votes cast against the proposal to
approve the appointment of Crowe, Chizek and Company LLP as independent auditors
of the Company, provided such share are properly present at the meeting in
person or by proxy, and shares note voted by brokers and other entities holding
shares on behalf of beneficial owners will have no effect on the outcome.
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
<PAGE> 5
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 four directors to serve
in Class I and to fix the number of Directors at ten (10).
The nominees for election at the forthcoming Annual Meeting are Messrs.
Michael J. Arciello, John H. Clark, Jr., Dr. Leon F. Favede and L. E.
Richardson, Jr., 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 2002, and until their successor is duly elected and shall have
qualified.
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 I (TERM EXPIRES IN 2002) PAST FIVE YEARS INITIAL ELECTION (3/ 01/99) OUTSTANDING
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MICHAEL J. ARCIELLO Retired Vice President 1992 2,373 (2) .08%
Massillon, Ohio Finance Nickles Bakeries
Age: 64
JOHN H. CLARK, JR. Retired - Foundry Owner 1976 25,719 (3) .90%
Wheeling, West Virginia
Age: 71
DR. LEON F. FAVEDE, O.D. Optometrist 1981 3,004 (4) .10%
St. Clairsville, Ohio
Age: 62
L. E. RICHARDSON, JR. Retired President 1998 60,630 (5) 2.16%
Newark, Ohio Community Bank of Glouster
Age: 66
</TABLE>
<PAGE> 6
INFORMATION AS TO DIRECTORS WHOSE TERMS OF OFFICE
WILL CONTINUE AFTER THE 1999 ANNUAL MEETING
<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 (3/01/99) OUTSTANDING
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
HERMAN E. BORKOSKI President-Borkoski 1987 15,604 (6) .56%
Tiltonsville, Ohio Funeral Homes, Inc.
Age: 61
JOHN M. HOOPINGARNER General Manager and 1992 1,337 (7) .05%.
Dover, Ohio Secretary-Treasurer Muskingum
Age: 44 Watershed Conservancy District
RICHARD L. RIESBECK President - Riesbeck 1984 10,942 (8) .39%
St. Clairsville, Ohio Food Markets, Inc.
Age: 49
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 7
<TABLE>
<CAPTION>
UNITED BANCORP,
INC. SHARES
NAME AND AGE OWNED
CLASS II (TERM EXPIRES IN 2000) PRINCIPAL OCCUPATION YEAR OF BENEFICIALLY(1) % OF
PAST FIVE YEARS INITIAL ELECTION (3/01/99) OUTSTANDING
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
JAMES W. EVERSON Chairman, President and Chief 1969 63,580 (9) 2.27%2.26%
St. Clairsville, Ohio Executive Officer - United
Age: 60 Bancorp, Inc. and The Citizens
Savings Bank,
Director - The Citizens State
Bank
Director - The Community Bank
ERROL C. SAMBUCO Director of Strategic Planning - 1996 2,488 (10) .09%
Martins Ferry, Ohio Wheeling - Pittsburgh Steel Corp.
Age: 58
MATTHEW C. THOMAS President 1988 9,584 (11) .34%
St. Clairsville, Ohio M. C. Thomas Insurance
Age: 42 Agency, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 8
SHARE OWNERSHIP OF MANAGEMENT OTHER THAN COMPANY DIRECTORS
The following table sets forth, as of March 1, 1999 the beneficial
ownership of Common Shares of the Company by each Executive Officer of the
Company and by Directors and Executive Officers, as a group.
<TABLE>
<CAPTION>
Name Common Shares
---- Beneficially Owned (1) Percent
----------------------- -------
<S> <C> <C>
Norman F. Assenza, Jr. (12) 5,033 0.18
Randall M. Greenwood 200 nil
Alan M. Hooker (13) 247 nil
James A. Lodes (14) 2,511 0.09
Harold W. Price (15) 3,548 0.13
All Company Directors and Executive
Officers as a Group (15 individuals) 205,800 7.35%
</TABLE>
All Directors and all Officers of United Bancorp, Inc. and its three subsidiary
banks plus the Employees 401(k) Plan and the Employees Defined Benefit
Retirement Plan as a group hold 354,746 shares representing 12.66% of total
outstanding shares of United Bancorp, Inc. common shares.
(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 107 Common Shares held in trust as a participant in the
Directors Deferred Compensation Plan and 267 shares subject to
options which are presently exercisable.
(3) Includes 11,550 Common Shares of record held by spouse, Barbara L.
Clark; 420 Common Shares held of record by daughter Dorothy E.
Clark; 420 Common Shares held of record by John L. Clark; 420
Common Shares held of record by daughter-in-law Kimberly Clark,
772 Common Shares held in trust as a participant in the Directors
Deferred Compensation Plan and 267 shares subject to options which
are presently exercisable.
(4) Includes 245 Common Shares held of record by The Pension Plan of
Dr. Favede, Dr. Leon F. Favede, Trustee; 458 Common Shares held of
record by son Dr. Leon M. Favede, 910 Common Shares held in trust
as a participant in the Directors Deferred Compensation Plan and
267 shares subject to options which are presently exercisable.
(5) Includes 221 shares subject to options which are presently
exercisable.
(6) Includes 5,134 Common Shares held of record by spouse, Francis L.
Borkoski; 3,843 Common Shares held of record by Borkoski Funeral
Homes, Inc., 664 Common Shares held in trust as a participant in
the Directors Deferred Compensation Plan and 267 shares subject to
options which are presently exercisable.
(7) Includes 80 Common Shares held in trust as a participant in the
Directors Deferred Compensation Plan and 267 shares subject to
options which are presently exercisable.
(8) Includes 9,922 Common Shares held of record by Riesbeck Food
Market's Inc. and 267 shares subject to options which are
presently exercisable.
(9) Includes 26,089 Common Shares held of record by spouse Marlene K.
Everson; 2,017 Common Shares held of record by son Todd M.
Everson; 1,260 Common Shares held of record by son Scott A.
Everson; 28 Common Shares held of record by daughter Dr. Dana K.
Everson; 1,958 Common Shares held by son James W. Everson, Jr.
jointly with his wife Bethany Lynn Everson and 1,692 Common Shares
held in trust as a participant in the Directors Deferred
Compensation Plan and 4,447 shares subject to options which are
presently exercisable.
<PAGE> 9
(10) Includes 315 Common Shares held of record by spouse Mary Edith
Sambuco; 948 Common Shares held in trust as a participant in the
Directors Deferred Compensation Plan and 243 shares subject to
options which are presently exercisable.
(11) Includes 100 Common Shares of record held in trust each for son
Matthew Cole Thomas and daughter Jenna Caye Thomas, 1,346 Common
Shares held in trust as a participant in the Directors Deferred
Compensation Plan and 267 shares subject to options which are
presently exercisable.
(12) Includes 1,413 Common Shares held of record jointly with parent,
Helen Assenza, 2,693 Common Shares held of record by parent, Helen
Assenza with others and 889 shares subject to options which are
presently exercisable.
(13) Includes 82 Common Shares held of record by spouse, Lisa R.
Hooker.
(14) Includes 196 Common Shares held of record by spouse, Susan M.
Lodes and 889 shares subject to options which are presently
exercisable
(15) Includes 1,591 Common Shares held of record jointly with spouse,
Irene R. Price, 1,134 Common Shares held in trust as a participant
in the Directors Deferred Compensation Plan and 1,779 shares
subject to options which are presently exercisable.
<PAGE> 10
THE BOARD OF DIRECTORS, ITS COMMITTEES AND COMPENSATION
In 1998, there were a total of four regularly scheduled meetings and one
special meeting of the Board of Directors of United Bancorp, Inc. Each director
of the Company attended in excess of 75% of the combined total of the meetings
of the Board of Directors and meetings of each committee which such directors
served. At year-end, all Company Board members except Mr. Arciello, Mr.
Hoopingarner and Mr. Richardson 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 and Mr. Everson and Mr. Richardson also served on the Board of
Directors of The Community Bank of Glouster. All 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, 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 1998, 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 $1,200
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, 10% share dividend paid September 19,
1997, and 5% share dividend paid December 18, 1998, the option to purchase is
now 1,906 shares at $11.17 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 1998, meets on a weekly basis, and pays
committee fees of $525.00 per month to outside directors. The Asset/Liability
Committee consists of the Executive Committee and officers Assenza, 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 1998, 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 1998, 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. See
"Shareholders' Proposals" for 2000 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, management issues and asset/liability management. The Executive
Committee met twelve times in 1998, 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
1998, and pays Committee Fees of $50.00 per meeting to outside directors.
The Company's subsidiary bank, The Community Bank of Glouster has the
following committees of its Board of Directors: Executive Committee and Audit
Committee. The Executive Committee of The Community Bank consists of Messrs.
Everson, Chairman, Hooker and Richardson and met three times since the
acquisition and paid $50 per meeting to the outside director. The Audit
Committee consists of Philip Kasler, Chairman, Dean Kasler and Samuel Jones and
did not meet since the acquisition in 1998.
<PAGE> 11
The Citizens Savings Bank of Martins Ferry paid each director $3,600 Annual
Retainer plus $225 per meeting attended. The Citizens-State Bank of Strasburg
and The Community Bank of Glouster paid each director $2,700 Annual Retainer
(Glouster Directors received $1,350 since acquisition date) and $225 per meeting
attended.
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, The Citizens-State Bank of Strasburg and The
Community Bank of Glouster.
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 $2,500.00 for Mr. Everson, $2,500.00 for Mr. Price and $1,266.00
for Mr. Assenza.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
SUMMARY COMPENSATION TABLE
--------------------------
- --------------------------------------------------------------------------------------------------
Annual Compensation
Name and
Principal Position Year Salary Bonus Other
- ------------------- ---- ------ ----- -----
<S> <C> <C> <C> <C>
James W. Everson 1998 $174,700 $44,606 $2,500
Chairman, President & CEO 1997 $158,600 $40,192 $2,375
The Citizens Savings Bank and 1996 $145,000 $43,591 $2,250
United Bancorp, Inc.
Harold W. Price 1998 $129,050 $36,880 $2,500
President & CEO 1997 $110,200 $33,600 $2,040
The Citizens-State Bank 1996 $100,000 $31,000 $1,857
Vice President - Administration
United Bancorp, Inc.
Norman F. Assenza, Jr. 1998 $84,400 $19,623 $1,266
Sr. Vice President - Operations 1997 $82,400 $18,205 $1,523
and Secretary 1996 $80,000 $19,150 $1,287
The Citizens Savings Bank
Vice President - Operations
and Secretary
United Bancorp, Inc.
- --------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 12
The following table sets forth the number and value of all unexercised
stock options held by Executive Officers at year-end. The value of
"in-the-money" options refers to options having an exercise price, which is less
than the market price of the Company's stock on December 31, 1998. On that date,
the Company's named Executive Officers held exercisable options, which were
"in-the-money" as discussed in the following table. In addition, the table sets
forth the number of options exercised by each of the named Executive Officers
during 1998 and indicates the amount of value realized upon such exercise.
1998 STOCK OPTION EXERCISES AND YEAR-END VALUE TABLE
----------------------------------------------------
<TABLE>
<CAPTION>
Number (#) of Value ($) of
Unexercised Unexercised
Options- Options-
12/31/98 12/31/98(1)
Shares Acquired Net Value($) Exercisable/ Exercisable/
Name on Exercise Realized Unexercisable Unexercisable
- ------------------------------- ---------------------- ------------------ --------------------- ---------------------
<S> <C> <C> <C> <C>
James W. Everson -0- $0 4,447/ $59,888/
27,316 $367,947
Harold W. Price -0- $0 1,779/ $23,950/
10,927 $147,187
Norman F. Assenza, Jr. -0- $0 889/ $11,975/
5,463 $ 73,587
</TABLE>
(1) Represents market value at $25.00 per share of the Company's common
stock at December 31, 1998, 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> 13
SALARIES. The Committee set the base salary paid to Mr. Everson at $152,500
effective January 1, 1998 and paid him Directors Fees for serving on the Company
board of directors and three subsidiary banks boards of directors, thus
permitting him to participate in the established Directors Deferred Fee Plan,
increasing his compensation for 1998 by $16,100 or 10.2%. Mr. Price's base
salary was set at $110,500 and he was paid Directors Fees for his Boardship at
The Citizens-State Bank and The Community Bank, thus permitting him to
participate in the established Directors Deferred Compensation Fee Plan,
increasing his compensation for 1998 by $18,850 or 17.1%. Mr. Assenza's base
salary was increased by 2.4% to $84,400. The company has used the services of
Ben S. Cole Financial Inc., an independent outside consultant of Boston,
Massachusetts in setting Executive Compensation. Increases recognize additional
responsibility resulting from the mid-year acquisition of The Community Bank and
the continued improvement of 1998 earnings over 1997 and their implementation of
operating efficiencies during the year, which is reflected in the 1998 increase
in earnings per share. 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 and compensation levels within peer groups.
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 1998 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 1998: $44,606 to Mr.
Everson, $36,880 to Mr. Price and $19,623 to Mr. Assenza. Additionally, Mr.
Everson had personal use of a company vehicle valued for 1998 at $2,736.00 and a
club membership valued at $1,420.00. Mr. Price had personal use of a company
vehicle valued for 1998 at $548.00.
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> 14
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-Midwestern Bank Index, All Bank Index and
NASDAQ Total Return 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, 1993 in the Company's common stock and each index measured
over five years.
STOCK PRICE PERFORMANCE CHART
<TABLE>
<CAPTION>
INDEX 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
UNITED BANCORP, INC. 100.00 114.75 89.01 156.35 218.39 216.55
NASDAQ - TOTAL US 100.00 97.75 138.26 170.01 208.58 293.21
SNL BANKS (ALL) INDEX 100.00 97.73 152.16 212.31 321.73 348.02
SNL BANKS (MIDWEST) INDEX 100.00 96.65 142.82 194.30 315.04 335.09
</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 1998
terms and factors.
<PAGE> 15
BENEFIT TABLE FOR A PARTICIPANT
ATTAINING AGE 65 IN 1998
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 $25,977 $38,965 $51,953 $64,942 $77,930 $90,918
$150,000 $24,227 $36,340 $48,453 $60567 $72,680 $84,793
$125,000 $19,852 $29,778 $39,703 $49,629 $59,555 $69,481
$100,000 $15,477 $23,215 $30,953 $38,692 $46,430 $54,168
$ 75,000 $11,102 $16,653 $22,203 $27,754 $33,305 $38,856
$ 50,000 $6,727 $10,090 $13,453 $16,817 $20,180 $23,543
$ 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>
Notes: Maximum annual pension available in 1998 in accordance with Section
4315 of the Internal Revenue Code assuming a Minimum of ten years
participation is $130,000.
The maximum annual compensation allowed under Section 401(a)(17) of the
Internal Revenue Code in determining a participant's benefit in 1998 is
$160,000.
The above officers of the Company will have the following years of
estimated credited service at retirement: Mr. Everson 43 years; Mr. Price 18
years; Mr. Assenza, 33 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, 1999, 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 $663,200, $336,860 and $105,289,
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.
<PAGE> 16
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, The Citizens-State Bank of Strasburg, and The Community
Bank of Glouster, had banking transactions with the banks in the ordinary course
of business during 1998, and expect to have such banking transactions in the
future. All loans and commitments for loans included in such transactions 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 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, 1998, was $3,145,090
or 11.5% of the Company's consolidated equity at year-end. The Citizens Savings
Bank pursuant to the terms of a lease entered into on April 1, 1998, paid
Riesbeck Food Markets, Inc. $22,500.00 in 1998. Over the five year term of the
total payments will total $112,500 for space used as an instore banking location
at St. Clairsville, Ohio. Management believes the lease between Riesbeck Food
Markets, Inc. and the Company was made on an arms length basis, using a third
party consulting firm that specializes in grocery store banking facilities.
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 1998, all Section 16(a) filing requirements applicable to
its officers, directors and greater than 10 percent beneficial owners were
complied with by such persons.
AUDITORS
The Board of Directors proposes and recommends the Shareholders approve the
selection by Board of the firm Crowe, Chizek and Company LLP to serve as
independent auditors for the Company for the year 1999. The firm has served as
independent auditors for the copany since 1989. A representative of Crowe,
Chizek Company LLP will be present at the Annual Meeting to make such comments
as they desire and to respond to questions from shareholders of the company.
Action by the shareholders is not required by law in the appointment of
independent auditors, but their appointment is submitted by the Board of
Directors in order to give the shareholders the final choice in the designation
of auditors. If the resolution approving Crowe, Chizek and Company LLP as
theCompany's independent auditors is rejected by the shareholders then the Board
of Directors will reconsider its choice of independent auditors. Proxies in the
form solicited hereby when returned to the Company will be voted in favor of the
resolution unless otherwise instructed by the shareholders. The Board of
Directors recommends the adoption of the resolution to reappoint Crowe, Chizek
and Company LLP as independent auditors of the Company.
SHAREHOLDERS' PROPOSALS
If any shareholder of the Company wishes to submit a proposal to be
included in next year's Proxy Statement and acted upon at the annual meeting of
the Company to be held in 2000, the proposal must be received by Mr. James W.
Everson, Chairman, President and Chief Executive Officer of the Company at the
principal executive offices of the Company, 201 South 4th at Hickory Street,
Martins Ferry, Ohio 43935, prior to the close of business on November 26,1999.
On any other proposal raised by a stockholder for next year's annual meeting,
the Company intends that proxies received by it will be voted in the interest of
the Company in accordance with the judgement of the Board of Directors and the
proposal will be considered untimely, unless notice of the proposal is received
by the Company not later than February 9, 2000.
<PAGE> 17
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 1998 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 [email protected] or 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
[email protected]
Martins Ferry, Ohio
March 25, 1999
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> 18
PLEASE DATE, SIGN AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE!
ANNUAL MEETING OF STOCKHOLDERS
UNITED BANCORP, INC
APRIL 21, 1999
-PLEASE DETACH AND MAIL IN THE ENVELOPE PROVIDED-
<TABLE>
<S><C>
A[X] PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE.
WITHHOLD
AUTHORITY FOR
FOR ALL NOMINEES For Against Abstain
1. Election of [ ] [ ] Nominees: Michael J. Arciello 2. Ratification of the appointment [ ] [ ] [ ]
Directors John H. Clark, Jr. of Crowe, Chizek and Company,
Dr. Leon F. Faveda LLP to serve as external
INSTRUCTION: TO WITHHOLD AUTHORITY TO L.E. Richardson, Jr. auditors for 1999.
VOTE FOR ANY INDIVIDUAL NOMINEE AT In their discretion, the proxies are authorized to vote
RIGHT, WRITE IN THAT NOMINEE'S NAME upon such other business as may properly come before
IN THE SPACE BELOW. the Annual Meeting or any adjournment or postponement
thereof.
This Proxy when properly executed will be voted in the
- ------------------------------------- manner directed herein by the undersigned shareholder.
If no direction is made, this Proxy will be voted FOR
all nominees named in Proposal 1 and FOR Proposal 2.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE.
Signature Date 1999
----------------------------------------------------------------- --------------------------
Note: Please sign name exactly as it appears on the share certificate. Only one of several joint owners needs to sign.
Fiduciaries should give full title.
</TABLE>
<PAGE> 19
UNITED BANCORP, INC.
Martins Ferry, Ohio
FORM OF PROXY FOR ANNUAL MEETING
TO HELD APRIL 21, 1999
This proxy is solicited on behalf of the Board Of Directors
The undersigned hereby appoints James W. Everson, Richard L. Riesbeck and
Matthew C. Thomas, or any of them, proxies of the undersigned, with full powers
of substitution, to vote all of the common shares of beneficial interest of
United Bancorp, Inc. that the undersigned is entitled to vote at the Annual
Meeting to be held on April 21, 1999 and at any adjournment thereof, and
authorizes and instructs said proxies to vote as set forth on the reverse side.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL NOMINEES LISTED IN PROPOSAL 1
AND FOR PROPOSAL 2.
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 the
proxy.
IMPORTANT - This Proxy must be signed and dated on reverse side.
