<PAGE> 1
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 240.14a-11(c) or 240.14a-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/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2) or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / 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: N/A
2. Aggregate number of securities to which transaction applies:
N/A
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): N/A
4. Proposed maximum aggregate value of transaction: N/A
5. Total fee paid: $125.00
/ / 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: N/A
2. Form, Schedule or Registration Statement No. N/A
3. Filing Party: N/A
4. Date Filed: N/A
<PAGE> 2
UNITED BANCORP, INC.
NOTICE OF ANNUAL MEETING
OF SHAREHOLDERS
APRIL 16, 1996
NOTICE IS HEREBY GIVEN, that the Annual Meeting of Shareholders of United
Bancorp, Inc. will be held at the Tecumseh Country Club, 5200 Milwaukee Road,
Tecumseh, Michigan, on Tuesday, April 16, 1996 at 4:30 p.m., local time, for
the following purposes:
1. To elect five directors constituting Class II of the Board of
Directors, to serve for three years until the 1999 Annual Meeting of
Shareholders.
2. To consider and vote upon a proposal to approve the Directors Retainer
Stock Plan.
3. To consider and vote upon a proposal to approve the Senior Management
Deferred Bonus Stock Plan.
4. To ratify the appointment of Crowe, Chizek & Company, L.L.P. as
independent auditors.
5. To transact such other business as may properly come before the Annual
Meeting or any adjournment or adjournments thereof.
The Board of Directors has fixed the close of business on March 15, 1996 as the
record date for the determination of shareholders entitled to notice of and to
vote at the Annual Meeting.
The Federal Deposit Insurance Corporation (FDIC) requires state-chartered banks
that are not members of the Federal Reserve System to prepare an annual
disclosure statement that must be available to the public by March 31, 1996.
Since United Bank & Trust is a subsidiary of a one-bank holding company, the
accompanying annual report of United Bancorp, Inc. satisfies the alternative
disclosure requirements of the FDIC.
You are cordially invited to attend the Annual Meeting in person. However,
whether or not you expect to be present, please promptly sign and date the
enclosed Proxy and mail it in the return envelope, which is enclosed for that
purpose. It will assist us in preparing for the Annual Meeting, and it is
important that your shares be represented at the Annual Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
/S/ Dale L. Chadderdon
-----------------------------------
March 25, 1996 Dale L. Chadderdon
Senior Vice President, Secretary and Treasurer
<PAGE> 3
UNITED BANCORP, INC.
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
APRIL 16, 1996
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of United Bancorp, Inc. (the "Company") of the accompanying
Proxy to be used at the 1996 Annual Meeting of Shareholders of the Company and
any adjournment or adjournments thereof. The Annual Meeting will be held on
April 16, 1996 at the time and place and for the purposes set forth in the
accompanying Notice of Annual Meeting of Shareholders.
This Proxy Statement, the Proxy, and Notice of Annual Meeting will be mailed to
shareholders on or before March 25, 1996.
The mailing address of the principal executive offices of the Company is P.O.
Box 248, Tecumseh, Michigan, 49286.
Only shareholders of record at the close of business on March 15, 1996 will be
entitled to notice of and to vote at the Annual Meeting. On March 15, 1996,
there were 1,489,840 shares of the Common Stock of the Company outstanding
entitled to vote at the Annual Meeting. Each share of Common Stock is entitled
to one vote. The Common Stock constitutes the only voting security of the
Company entitled to vote upon the proposals to be presented at the Annual
Meeting.
Shares represented by properly executed Proxies received by the Company will be
voted at the Annual Meeting in the manner specified therein. If no instructions
are specified in the Proxy, the shares represented thereby will be voted in
favor of the proposals presented at the Annual Meeting by the Board of
Directors. Any Proxy may be revoked by the person giving it at any time prior
to being voted.
The cost of soliciting Proxies will be borne by the Company. The solicitation
of Proxies will be made primarily by mail. Proxies may also be solicited by
officers and regular employees of the Company and its subsidiary, United Bank &
Trust (the "Bank"), personally and by telephone or other means, for which they
will receive no additional compensation and at a minimum cost to the Company.
Arrangements may also be made directly by the Company with banks, brokerage
houses, custodians, nominees, and fiduciaries to forward soliciting matter to
the beneficial owners of stock held of record by them and to obtain
authorization for the execution of Proxies. The Company may reimburse such
institutional holders for reasonable expenses incurred by them in connection
therewith.
Any nominations to the Board of Directors, or other proposals, by a shareholder
of the Company to be considered for inclusion in the Proxy Statement for the
1997 Annual Meeting of Shareholders must be received by Dale L. Chadderdon,
Secretary and Treasurer, at the principal executive offices of the Company by
November 26, 1996.
PROPOSAL 1 - ELECTION OF DIRECTORS
In accordance with the Company's Articles of Incorporation and By-Laws, the
Board of Directors is divided into three classes. Each year, on a rotating
basis, the term of office of the Directors in
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one of the three classes will expire. Successors to the class of Directors
whose terms have expired will be elected for a three-year term. The Directors
whose terms expire at the 1996 Annual Meeting of Shareholders ("Class II
Directors") are John H. Foss, David S. Hickman, Ann Hinsdale Knisel, Jeffrey T.
Robideau and Richard S. Whelan
The Board of Directors has by resolution nominated five individuals for
election as Class II Directors at the 1996 Annual Meeting of Shareholders.
These individuals are all incumbent Class II Directors.
Those persons who are elected as Class II Directors at the 1996 Annual Meeting
of Shareholders will hold office for three years. Their terms will expire at
the 1999 Annual Meeting of Shareholders or upon the election and qualification
of their successors. If any of the nominees is unable to serve, the number of
Directors to be elected at the Annual Meeting of Shareholders may be reduced by
the number unable to serve and for whom no substitute is recommended by the
Board of Directors.
Provided that a quorum is present (i.e., a majority of the shares of the Common
Stock of the Company outstanding as of the record date and entitled to vote are
represented, in person or by proxy, at the Annual Meeting), Directors will be
elected from among those persons duly nominated for such positions by a
plurality of the votes actually cast at the Annual Meeting. Thus, for this
year, assuming the presence of a quorum, those nominees for election as Class
II Directors receiving the five highest number of votes will be elected,
regardless of the number of votes which for any reason, including abstentions,
broker non-votes or withholding of authority to vote, are not cast for the
election of such nominees.
So far as the Board is advised, only the five persons named above as nominees
will be nominated for election as Directors at the 1996 Annual Meeting of
Shareholders. It is intended that the shares represented by Proxies in the
accompanying form will be voted for the election of such nominees unless a
contrary direction is indicated. If any of the nominees should be unable to
serve, which the Board does not contemplate, the Proxies may be voted for the
election of such other person or persons as the Board of Directors may
recommend.
PROPOSAL 2 - DIRECTOR RETAINER STOCK PLAN
INTRODUCTION
Subject to shareholder approval at the Annual Meeting, the Board of Directors
of the Company has adopted a deferred compensation plan, designated as the
Director Retainer Stock Plan (the "Director Plan"). The Director Plan is
intended to provide eligible directors of the Company and/or the Bank with a
means of deferring payment of retainers and certain fees payable to them for
Board service while at the same time expressing their commitment to the Company
by subjecting such deferred amounts to the market performance of the Company's
Common Stock. The Director Plan would not increase any cash retainers or fees
payable for board service, the amounts of which would continue to be as
established from time to time by the appropriate board, and any retainers or
fees elected to be deferred under the plan by an eligible director ultimately
would be payable in shares or cash equivalent to the market value of shares,
thus more closely aligning the interest of such a director with those of the
Company's shareholders.
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The complete text of the Director Plan is attached to this Proxy Statement as
Appendix A, and shareholders are advised to review that text as they deliberate
upon the proposal to approve the plan. The remainder of this section summarizes
significant features of the Director Plan and provides other information
relevant to this proposal.
SUMMARY OF PLAN FEATURES
Eligibility and Permissible Deferrals. The only persons eligible to elect
deferrals under the Director Plan would be those individuals who at time of
election are directors of the Company and/or the Bank and are not also
employees of either the Company or the Bank. Under the terms of the Director
Plan, all or a portion of a participating eligible director's Retainer (defined
in the Plan as the entire amount payable to the participant for serving as a
director of the Company and/or the Bank during a given period, including fees
for attending board meetings, but excluding any amounts payable for serving on
or as chair of any board committee or payable for expense reimbursement) could
be deferred.
Administration. The Director Plan is to be administered by a committee of the
Company's Board of Directors (the "Director Plan committee"). Whenever (as
currently is the case) the Company's Chief Executive Office also is a Company
director, the Director Plan Committee will be comprised solely of the CEO; at
any other time, the committee will be comprised of all Company directors other
than eligible to participate in the Director Plan.
General Plan Operation. If the Director Plan is approved, each eligible
director will be permitted to elect, in accordance with specified election
procedures, to participate in the plan and thereby defer payment of some or all
of his or her future Retainers, and to change such participation election from
time to time thereafter. A participation election executed and delivered by an
eligible director within the first 30 days after the Director Plan becomes
effective (or, for persons who later become eligible directors, within the
first 30 days after becoming eligible) would be given effect commencing with
the next calendar quarter after delivery is made) or, if later, the date
specified in the participation election). Other initial participation elections
and any changes in initial elections would be given effect commencing no
earlier than the next calendar year after delivery of such initial or changed
participation election.
Once a valid participation election is made and effective, the Company would
establish a bookkeeping account (a "Reserve Account") for the participating
director. Thereafter, and for as long as the election is in effect, whenever a
portion of his or her Retainer is earned by the participating director, the
cash amount payable would be reduced by the percentage specified in the
participation election, and his or her Reserve Account would be credited with
units (carried to four decimal places) equal to the amount by which the
participating director's cash payment was reduced, divided by the Market Price
as of the payment date.
In general, pursuant to Section 7.1 of the Director Plan, on a participating
director's Determination Date under the plan (defined as the earliest date on
which he or she, for any reason, is neither a director of the Company, nor a
director of the Bank) or within 30 days thereafter, the Company would be
required to issue and deliver to the participant that number of Shares which
equals the number of whole units credited to his or her Reserve Account as of
the Determination Date and to pay the participant in cash an amount equal to
the difference (if any) between the total number of whole and fractional units
credited to the Reserve Account as of that
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date and the number of Shares being issued, multiplied by the Market Price on
that date. If, on the date Shares are issued to the participant, any cash
dividend or other cash distribution on Shares has been declared which has a
record date earlier than the issuance date but after the Determination Date,
the amount of that cash dividend or distribution, multiplied by the total
number of units in the participant's Reserve Account as of the Determination
Date, also would be payable in cash to the participant.
However, if the Director Plan's limits on available Shares would be violated by
settlement of the Reserve Account as described above, the number of Shares to
be issued would be reduced and the amount of cash to be paid would be increased
as contemplated by Section 7.2 of the plan, and in the case of death or mental
incapacity of a participant, Shares may be issued and/or payment made to the
participant's beneficiary or another person specified in Section 7.3. In any
case, the Company's obligation to settle a Reserve Account would be subject to
satisfaction of an applicable tax withholding requirements.
Type of Shares Covered; Limits and Adjustments. As defined in the Director
Plan, unless and until an adjustment in the kind of shares available for the
plan is required pursuant to Section 9 thereof, any reference to a "Share"
means a share of the Company's Common Stock. Subject to adjustment as provided
in Section 9, the maximum number of Shares that may be issued pursuant to the
Director Plan is 20,000. Thus, based on the number of shares of Common Stock
issued and outstanding at March 15, 1996, the maximum potential dilution in
their respective ownership of Common Stock that owners of such shares could
experience as a result of issuances of Common Stock under the Director Plan
would be 1.34%.
Section 9 of the Director Plan provides that, if any of the events specified
therein affecting the Shares should occur, there shall be made such adjustment
or adjustments (if any) in the number and type of Shares issuable under the
Director Plan and in the numbers of units credited to participating directors'
Reserve Accounts as the Company's Board of Directors deems appropriate in light
of such event in order to continue to make available the benefits intended by
the plan. The intention of Section 9 is to authorize the sorts of adjustments
normally made to prevent dilution of benefits under a plan of this sort, not to
increase such benefits.
Market Price. As used in the Director Plan, the term "Market Price" means the
price of a Share (currently, a share of Common Stock) on a given date,
determined by whichever of the four determination methods specified in the
Market Price definition then is applicable. Currently, shares of Common Stock
are not listed for trading on any national stock exchange, and bid and asked
prices for such shares are not quoted through the National Association of
Securities Dealers, Inc. Automated Quotation System ("NASDAQ"), making the
first two determination methods specified in the definition inapplicable.
However, bid and asked prices for such shares are quoted by First of Michigan
Corporation ("FoM"), a broker-dealer which acts as a market-maker in the shares
and is the only broker-dealer known to the Company to be doing so. While this
continues to be the case, the third determination method specified in the
plan's definition would apply, and the Market Price of a share of Common Stock
for a given date therefore would be the average of the highest bid and lowest
asked prices for a share quoted by FoM on that date (or, if no prices are
quoted on that date, on the next preceding date on which they were quoted). On
March 8, 1996, the high bid and low asked prices for a share of Common Stock
quoted by FoM were $29.25 and $28.00, respectively.
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Duration of the Plan; Amendments. The Director Plan will become effective only
if and when approved by the shareholders at the Annual Meeting. If approved,
the Director Plan thereafter will continue in effect until terminated by the
Company's Board of Directors. The Board may at any time and from time to time
amend, modify, suspend, or terminate the Director Plan, with or without
shareholder approval, except that; (i) no amendment or modification of the plan
would be effective without shareholder approval at any time at which such
approval is required, either by applicable rules of any national securities
exchange (including the NASDAQ National Market) on which Company stock is then
principally traded, or by Securities and Exchange Commission Rule 16b-3 as then
in effect and applicable to the Company; (ii) none of the foregoing actions by
the Board may adversely affect the rights of a participating director with
respect to an effective participation election without such participating
director's consent; and (iii) for so long as may be necessary for the plan to
satisfy Rule 16b-3 requirements for "formula plans," the eligibility provisions
of the plan and those provisions affecting the type, extent and timing of
awards thereunder may not be amended more often than every six months, other
than to comport with changes in the Internal Revenue Code, the Employee
Retirement Income Security Act, or the rules thereunder.
FUTURE PLAN BENEFITS AND ILLUSTRATIVE TABLE
Due to the nature of the Director Plan, the benefits which any individual
ultimately may receive under the plan, if it is approved, cannot be predicted
in advance. The following table illustrates, on a pro-forma basis, the number
of units that would have been credited under the Director Plan at December 31,
1995 to Reserve Accounts of the individuals and groups listed, if the Director
Plan had been in effect through 1995 and the maximum amount each individual and
group member could have deferred under the plan during that year had been
deferred.
NEW PLAN BENEFITS TABLE
(pro-forma as of December 31, 1995)
Director Retainer Stock Plan
<TABLE>
<CAPTION>
Maximum fees
No. in that could have Number of
Name and Position or Group Group been deferred units
-------------------------- ----- ------------- ---------
<S> <C> <C> <C>
David S. Hickman, President & CEO 1.00 $ 0 0.0000
John J. Wanke, Executive Vice President 1.00 $ 0 0.0000
All other current Executive Directors 1.00 $ 6,000 223.6195
All current non-Executive Directors 13.50 $81,000 3,018.8627
----------------------------------------------
All employees (including officers other 16.50 87,000 3,242.4822
than executive officers)
</TABLE>
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VOTE REQUIRED FOR APPROVAL AND RECOMMENDATION
Shareholder approval of the Director Plan is not required by Michigan corporate
law. However, because the plan contemplates the issuance of shares of Common
Stock, shareholder approval currently is required in order for the Director
Plan to meet certain requirements of Rule 16b-3.
Assuming the presence of a quorum, the proposal to approve the Director Plan
will be carried if it receives the affirmative vote of a majority of the votes
cast by the holders of shares of Common Stock entitled to vote thereon at the
Annual Meeting. Thus, any abstention or broker non-vote with respect to shares
entitled to vote will have no effect on the outcome of the vote on this
proposal.
If the Director Plan is not approved, it will not become effective. The present
intention of the Board of Directors is that in such a case it will adopt
another deferred compensation plan, which would be identical in all material
respects to the Director Plan as proposed, except that the substitute plan
would only permit settlement of Reserve Accounts in cash. Such a substitute
plan would have no potential dilutive effect on shareholders' respective
percentages of currently issued and outstanding Common Stock; however, due to
certain current differences in applicable accounting treatment, implementation
of such a substitute plan could require future charges to Company income
greater than would be the case if the Director plan were put into effect. Since
only modest potential dilution could occur under the Director Plan (see
discussion above under "Type of Shares Covered; Limitations and Adjustments")
the Board believes that implementation of the Director Plan is preferable.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE FOR APPROVAL OF THE
DIRECTOR RETAINER STOCK PLAN.
PROPOSAL 3 - SENIOR MANAGEMENT BONUS DEFERRAL STOCK PLAN
INTRODUCTION
The Board of Directors also has adopted, subject to shareholder approval, a
deferred compensation plan designated as the Senior Management Bonus Deferral
Stock Plan (the "Management Plan"). The Management Plan has essentially the
same purposes as the Director Plan discussed in the preceding section of this
Proxy Statement and would permit eligible employees of the Company or of the
Bank or another Affiliated Entity (as defined in the Management Plan) to elect
cash bonus deferrals and, after employment termination, to receive payouts in
whole or in part in the form of Shares (defined as in the Director Plan) on
terms substantially similar to those of the Director Plan. The Management Plan
would not increase the amounts of cash bonuses potentially payable to any
employee and, due to the nature of payouts under the plan, should serve to more
closely align the interest of participating employees with those of the
Company's shareholders.
The complete text of the Management Plan is attached to this Proxy Statement as
Appendix B, and shareholders are advised to review that text while deliberating
on the proposal to approve the plan. The remainder of this section summarizes
significant features of the Management Plan, particularly as they differ from
those of the Director Plan, and provides other information relevant to this
proposal.
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SUMMARY OF PLAN FEATURES
Eligibility and Permissible Deferrals. The only persons eligible to elect
deferrals under the Management Plan would be those employees of the Company or
an Affiliated Entity who at time of election are eligible to participate in the
Company's Cash Incentive Plan for "Tier 1" employees or such successor cash
bonus plan of the Company as is then effect for senior management employees of
the Company and/or Affiliated Entities (the "Cash Bonus Plan"). Under the terms
of the Management Plan, an eligible employee could defer some or all of any
bonus payable to the employee in a given calendar year under the Cash Bonus
Plan, up to the "Deferral Limit" in effect for that year. As defined in the
Management Plan, the Deferral Limit for any calendar year would be the maximum
amount that any person eligible to participate in the Director plan during the
immediately preceding calendar year could elect to defer for such preceding
calendar year.
Administration. The Management Plan is to be administered by a committee of the
Company's Board of Directors consisting of all directors of the Company other
than any who are eligible to participate in the plan.
General Plan Operation. The general operation of the Management Plan would be
the same in all material respects as summarized under this subheading in the
preceding section of this Proxy Statement concerning the Director Plan, except
that an initial election by an eligible employee to participate in the
Management Plan, if delivered during the 30 day period applicable for the
employee, would be give effect commencing with the next calendar year after
delivery, or if later, the calendar year specified in the election, and that
any other initial participation election and any changes in elections would be
given effect commencing with the second calendar year following the year which
the election or change is delivered, or, if later, the year specified therein.
Limits on Shares; Adjustments; Market Price. Subject to adjustment as provided
in Section 9 of the Management Plan, the maximum number of Shares that may be
issued under the plan is 5,000. Thus, based on the number of shares of Common
Stock issued outstanding at March 15, 1996, the maximum potential dilution in
their respective percentages of ownership of Common Stock that owners of such
shares could experience as a result of issuances of Common Stock under the
Management Plan would be .34%.
The adjustment provisions of Section 9 of the Management Plan are the same in
all material respects as those of Section 9 of the Director Plan, and the
Management Plan's definition of Market Price is the same as the definition of
that term in the Director Plan. Additional information concerning those
provisions and that definition is provided under the subheadings "Type of
Shares Covered; Limits and Adjustments" and "Market Price" in the preceding
section of this Proxy Statement concerning the Director Plan.
Effectiveness and Duration of the Plan; Amendments. Like the Director Plan, the
Management Plan is subject to shareholder approval at the Annual Meeting and
will not become effective if not so approved. In addition, even if so approved,
the Management Plan will only become effective if the Director Plan also is
approved. If the Management Plan becomes effective, it thereafter will continue
in effect until terminated by the Company's Board of Directors. The Board at
any time and from time to time may amend, modify, suspend, or terminate the
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Management Plan, with or without shareholder approval, subject to limitation on
such actions equivalent to those described under the subheading "Duration of
the Plan; Amendments" in the section of this Proxy Statement concerning the
Director Plan.
ILLUSTRATIVE TABLE
As is true of the Director Plan, the benefits which any person ultimately would
receive under the Management Plan, if it is approved and becomes effective,
cannot be predicted in advance, due to the nature of the plan. The following
table illustrates, on a pro-forma basis, the number of units that would have
been credited under the Management Plan as December 31, 1995 to Reserve
Accounts of the individuals and groups listed, if the Management Plan had been
in effect throughout 1995 and the maximum amount each individual and group
member could have deferred under the plan during that year had been deferred.
NEW PLAN BENEFITS TABLE
(pro-forma as of December 31, 1995)
Senior Management Bonus Deferral Stock Plan
<TABLE>
<CAPTION>
Maximum bonus
No. in that could have
Name and Position or Group Group been deferred Number of units
-------------------------- ----- ------------- ---------------
<S> <C> <C> <C>
David S. Hickman, President & CEO 1.00 $ 6,000 221.6195
John J. Wanke, Executive Vice President 1.00 $ 6,000 223.6195
All current eligible Executive Officers, 3.00 $18,000 670.8584
including those above
All eligible employees (including officers 5.50 $33,000 1,229.9071
other than executive officers)
</TABLE>
VOTE REQUIRED FOR APPROVAL AND RECOMMENDATION
Shareholder approval of the Management Plan is not required by Michigan
corporate law, but because the plan contemplates the issuance of shares of
Common Stock, shareholder approval currently is required in order for the plan
to meet certain requirements of Rule 16b-3. If the proposal to approve the
Management Plan is submitted to a vote, the proposal receives the affirmative
vote of a majority of the votes cast by the holders of shares of Common Stock
entitled to vote thereon at the Annual Meeting, and any abstention or broker
non-vote with respect to shares entitled to vote on the proposal will have no
effect on the outcome of that vote. However, since effectiveness of the
Management Plan is conditioned, not only upon shareholder approval of that
plan, but also upon approval of the Director Plan, the proposal to approve the
Management Plan will be withdrawn and no vote on that proposal will be taken if
it has been determined by the time such a vote otherwise would be taken that
the Director Plan has not been approved, and even if a vote on approval of the
Management Plan is take and carried, the plan nevertheless will not become
effective if the Director Plan is not also approved.
If the Management Plan is not approved or otherwise does not become effective,
the present intention of the Board of Directors is to adopt another deferred
compensation plan, which would be identical in all material respects to the
Management Plan as proposed, except that the
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substitute plan would only permit settlement of Reserve Accounts in cash. Such
a substitute plan would have no potential dilutive effect on shareholders'
respective percentages of currently issued and outstanding Common Stock;
however, due to certain current differences in applicable accounting treatment,
implementation of such a substitute plan could require future charges to
Company income greater than would be the case if the Management Plan were put
into effects. Since the potential dilution under the Management Plan would be
very small (see discussion above under "Limits on Shares; Adjustments; Market
Price"), the Board believes that implementation of the Management Plan is
preferable.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE FOR APPROVAL OF THE
SENIOR MANAGEMENT BONUS DEFERRAL STOCK PLAN.
PROPOSAL 4 - INDEPENDENT AUDITORS
The Audit Committee of the Board of Directors and the Board of Directors
itself, recommends the ratification of Crowe, Chizek & Company LLP as
independent auditors for the Company and its subsidiary for the year ending
December 31, 1996. Crowe, Chizek & Company LLP first became the auditors for
the Company in 1988.
A representative of the firm of Crowe, Chizek & Company LLP will be present at
the Annual Meeting to respond to appropriate questions in regard to their audit
for 1995, and to make any comments that they deem appropriate.
DIRECTORS AND EXECUTIVE OFFICERS
LEGAL PROCEEDINGS
The Company is not involved in any material legal proceedings. The Bank is
involved in ordinary routine litigation incident to its business; however, no
such proceedings are expected to result in any material adverse effect on the
operations or earnings of the Bank. Neither the Bank nor the Company is
involved in any proceedings to which any director, principal officer, affiliate
thereof, or person who owns of record or beneficially more than five percent
(5%) of the outstanding stock of either the Company or the Bank, or any
associate of the foregoing, is a party or has a material interest adverse to
the Company or the Bank.
INFORMATION CONCERNING NOMINEES AND INCUMBENT DIRECTORS
The name and age of each nominee and each incumbent Director, his or her
five-year business experience, and the year each became a Director of the
Company, according to the information furnished to the Company by each nominee
or incumbent Director are as follows:
<TABLE>
<CAPTION>
Director
Name, Age, and Five Year Business Experience (1) Since (2)
- ------------------------------------------------ ---------
INCUMBENT DIRECTORS - TERMS EXPIRING IN 1998 (CLASS I)
<S> <C>
L. Donald Bush, age 62; Farmer; Owner, Leland D. Bush & Sons 1992
Patrick D. Farver, age 41; President and Chief Operating officer (1994); Executive 1993
Vice President (through 1994), Blissfield Manufacturing Co., Blissfield, Michigan
James C. Lawson, age 48; President, Lenawee Fuels, Inc. Tecumseh, Michigan 1986
</TABLE>
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<TABLE>
<S> <C>
D. J. Martin, age 56; President and Director, Martin's Home Center, Tecumseh, Michigan 1985
David E. Maxwell, age 56; Executive Vice President and Chief Operating Officer; 1986
Director, Brazeway, Inc., manufacturer of extruded aluminum and related products,
Adrian, Michigan
James K. Whitehouse, age 49; Director, Gift and Estate Planning, Albion College 1991
(1992); Attorney (to 1992), Whitehouse Law Office; Director (1978 - 1991), Thompson
Savings Bank, Hudson, Michigan
DIRECTOR NOMINEES - TERMS EXPIRING IN 1999 (CLASS II)
- -----------------------------------------------------
John H. Foss, Age 53; Director, Vice President, Treasurer and Chief Financial Officer, 1992
Tecumseh Products Company, manufacturer of compressors and refrigeration components,
engines, and power train components, Tecumseh, Michigan
David S. Hickman, age 55; President and Chief Executive Officer of the Company; 1985
Chairman and Chief Executive Officer of the Bank, Tecumseh, Michigan
Ann Hinsdale Knisel, age 45; County Extension Director, Michigan State University 1993
Extension Service, Adrian, Michigan.
Jeffrey T. Robideau, age 36; President, Tecumseh Corrugated Box Company, Tecumseh, 1995
Michigan
Richard S. Whelan, age 62; President and Director, Hoyt E. Whelan Co., agricultural 1985
implement dealer, Tecumseh, Michigan
INCUMBENT DIRECTORS - TERMS EXPIRING IN 1997 (CLASS III)
David N. Berlin, age 47; President, The Metalloy Corporation, foundry, die casting and 1991
machining of aluminum castings, Hudson, Michigan
Merlyn H. Downing, age 68; Chairman of the Company, Tecumseh, Michigan 1985
Charles E. Gross, age 67; C.P.A.; Gross, Puckey, Gruel & Roof, P.C., Certified Public 1989
Accountants, Adrian Michigan
Linda J. Herrick, age 52; Homemaker and community volunteer 1993
John J. Wanke, age 46; Executive Vice President of the Company (1992); Secretary of 1994
the Company (1987 to 1991); President and Chief Operating Officer of the Bank (1992);
Executive Vice President and Chief Lending Officer of the Bank (1987 to 1991)
DIRECTOR EMERITUS
- -----------------
William G. Thompson, age 82, Chairman and C.E.O. (1979 to 1991); Director (1938 to 1992
1991), Thompson Savings Bank, Hudson, Michigan
- ---------------------------------------
</TABLE>
1. None of the Incumbents or Director Nominees, with the exception of John H.
Foss, serves as a Director of any other Company with a class of securities
registered pursuant to Section 12 of the Securities Exchange Act of 1934,
as amended, or subject to the requirements of Section 15 (d) of such act,
or any Company registered as an investment company under the Investment
Company Act of 1940 as amended.
2. Incumbent Directors Downing, Hickman, Martin and Whelan were initially
elected as Directors of the Company following its organization on May 31,
1985.
Page 10
<PAGE> 13
INFORMATION CONCERNING EXECUTIVE OFFICERS
Below is a current listing of Executive Officers of the Company, setting forth
the name, age, five-year business experience, and year each became an Executive
Officer of the Company. Officer appointments for the Company are made or
reaffirmed annually at the Organizational Meeting of the Board of Directors. At
its regular meetings, the Board may also make other Executive Officer
appointments for the Company.
<TABLE>
<CAPTION>
Year Became
Name, Age, and Five-Year Business Experience Executive Officer
-------------------------------------------- -----------------
<S> <C>
Merlyn H. Downing, age 68; Chairman of the Company (1992); Chairman 1985
and Chief Executive Officer of the Company (1987 to 1992)
David S. Hickman, age 55; President (1987) and Chief Executive Officer 1985
(1992) of the Company; Chairman and Chief Executive Officer of the Bank
John J. Wanke, age 46; Executive Vice President of the Company (1992); 1987
Secretary of the Company (1987 to 1991); President and Chief Operating
Officer of the Bank (1992); Executive Vice President and Chief Lending
Officer of the Bank (1987 to 1991)
Dale L. Chadderdon, age 47; Senior Vice President, Secretary and 1987
Treasurer of the Company (1992); Vice President and Treasurer of the
Company (1987 to 1991); Executive Vice President and Chief Financial
Officer of the Bank (1992); Senior Vice President, Chief Financial
Officer, Cashier of the Bank (1987 to 1991)
</TABLE>
DIRECTORS, EXECUTIVE OFFICERS, PRINCIPAL SHAREHOLDERS AND THEIR RELATED
INTERESTS - TRANSACTIONS WITH THE BANK
Directors and Executive Officers of the Company, and their related interests,
were customers of and had transactions (including loans and commitments to
lend) with the Bank in the ordinary course of business during 1995. All such
loans and commitments were made by the Bank on substantially the same terms,
including interest rates, collateral and repayment terms, as those prevailing
at the time for comparable transactions with other persons, and did not involve
more than the normal risk of collectability or present other unfavorable
features. Similar transactions may be expected to take place in the ordinary
course of business in the future. The aggregate extensions of credit
outstanding at December 31, 1995 to all Directors and Executive Officers of the
Company, as a group, was $2,746,000. Any such loan transaction presently in
effect with any Director or Executive Officer of the Company is current as of
this date.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors of the Company and the Bank have both appointed Audit
Committees consisting of Charles E. Gross, Linda J. Herrick, James C. Lawson,
David E. Maxwell and Richard S. Whelan. One of the functions of these
Committees is to meet with the internal and independent auditors to review
audit procedures and reports and other matters with respect to the Company's
and the Bank's financial reporting. The Committees also review examination
reports of the Federal and State regulatory agencies and recommend to their
respective Boards of Directors the selection of independent auditors. Periodic
reports are made by the Committees to
Page 11
<PAGE> 14
their respective Boards of Directors regarding these matters. The Company's
Audit Committee and the Bank's Audit Committee each met four times during the
year ended December 31, 1995.
The Company itself has no standing nominating or compensation committees of the
Board of Directors, but similar nominating and compensation functions are
performed by the Executive Committee of the Board of Directors of the Bank.
The Executive Committee of the Board of Directors of the Bank met seven times
during 1995, and is composed of the following Directors of the Bank: Merlyn H.
Downing, John H. Foss, David S. Hickman, James C. Lawson, Donald J. Martin, and
David E. Maxwell. The Committee presents a slate of nominees for approval of
the Board of Directors and submission to the shareholders. Additionally, the
Committee reviews and recommends to the Board of Directors of the Bank the
compensation paid to Executive Officers of the Bank and the amounts paid, if
any, to officers under the Bank's Incentive Compensation Plan.
During the year ended December 31, 1995, the Board of Directors of the Company
met a total of five times and the Board of Directors of the Bank met a total of
twelve times. Each of the Directors attended at least 75% of the aggregate of
the total number of meetings of the Board and of the Board Committees of which
he/she is a member, with the exception of David N. Berlin and Jeffrey T.
Robideau.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
COMPENSATION OF EXECUTIVE OFFICERS
The Company has not paid any compensation, direct or indirect, to any officer.
Moreover, management has no present intention of instituting any such
compensation. In the event substantial duties unrelated to the operation of the
Bank should develop, this policy will be re-examined as necessary to attract
and retain qualified officers of the Company.
The following table sets forth the total compensation awarded to, earned by, or
paid by the Bank during 1995, 1994, and 1993 to the Chief Executive Officer and
the Executive Vice President of the Company. No other Executive Officers had
total annual salary and bonus which exceeded $100,000:
<TABLE>
<CAPTION>
Annual Compensation
------------------- All Other
Name and Principal Position Year Salary Bonus Compensation
--------------------------- ---- ------ ----- ------------
<S> <C> <C> <C> <C>
David S. Hickman, President and C.E.O. 1995 $149,000 $24,368 $14,970
1994 140,400 22,040 13,380
1993 135,000 12,399 14,207
John J. Wanke, Executive Vice President 1995 $105,000 $16,948 $11,568
1994 100,000 15,212 9,506
</TABLE>
Executive and other officers and employees of the Bank receive cash bonus
payments in addition to their base salaries. These discretionary bonuses are
based on individual contributions to performance as measured by subjective and
quantitative evaluations. These measures are constructed to recognize the
influence of both external and internal factors on performance, and also
include goals and objectives agreed upon by the plan participant and their
evaluator. The
Page 12
<PAGE> 15
calculation of share of profits to be distributed to the plan participants is
constructed to provide awards consistent with the increase in profits, and is
subject to change with the approval by the Board of Directors.
Bonuses for Executive Officers are accumulated over a five year period, subject
to an annual payment of 50% of the awarded bonus. After the fifth year, the
participants receive 30% of the accumulated fund balance annually. Since
amounts accrued pursuant to the plan are not unconditional and are subject to
future events, only the amount actually paid for the years listed are included
in the Compensation Table shown above, except where an amount has been deferred
at the request of a participant.
The amount listed above under "All other Compensation" includes contributions
to the Bank's Employee Savings Plan, commonly known as a 401(k) plan, on behalf
of those listed, as "matching contribution" and "profit sharing contribution".
COMPENSATION OF DIRECTORS
Directors of the Company were paid an annual retainer of $600 with no
additional fees for meetings attended. Directors of the Bank were paid an
annual retainer of $2,400, plus fees for meetings attended according to the
schedule below. No Director who is also an employee of either the Company or
the Bank received any compensation for their services as a Director of the
Company or the Bank.
<TABLE>
<CAPTION>
Meeting Attended Chairman All other
---------------- -------- ---------
<S> <C> <C>
Board of Directors of the Bank n/a $200
Executive Committee n/a 150
Loan Committee 150 150
Trust Committee 175 150
Audit Committee 175 150
CRA Committee n/a 150
</TABLE>
Directors who are not employees do not participate in any of the Bank's
employee benefit programs, and receive no other direct or indirect compensation
except for certain life insurance benefits. Mr. Hickman and Mr. Wanke are the
only Directors that are paid a salary and are eligible for employee benefits.
EMPLOYMENT CONTRACTS
No employment contracts currently are in effect for any Executive Officer or
Director of the Company or the Bank.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Executive Committee of the Board of Directors serves as the Compensation
Committee for the Company. The Committee reports that during 1995, Mr. Hickman,
who is an Executive Officer of the Company, served as a member of the Executive
Committee. However, Mr. Hickman did not participate in decisions with respect
to his own compensation. No other Executive Officer served as a member of the
Executive Committee during 1995.
In addition, the Committee reports that:
Page 13
<PAGE> 16
1. No executive officer of the Company serves on the Compensation Committee of
another entity, one of whose executive officers served on the compensation
committee of the Company;
2. No executive officer of the Company served as a Director of another entity,
one of whose executive officers served on the compensation committee of the
Company;
3. No executive officer of the Company served as a member of the compensation
committee of another entity, one of whose executive officers served as a
Director of the Company.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Executive Committee of the Board of Directors serves as the Board
Compensation Committee of the Company, and is composed of Directors Downing,
Foss, Hickman, Lawson, Martin and Maxwell. The Committee reviews and recommends
to the Board of Directors of the Bank the compensation paid to Executive
Officers of the Bank and the amounts paid, if any, to officers under the Bank's
Incentive Compensation Plan. The members of the above Committee offer the
following explanation for the determination of the CEO's compensation for 1995:
The base salary for 1995 for Mr. Hickman reflects an increase from 1994. The
Executive Committee is pleased with Mr. Hickman's leadership, and the combined
performance of the entire senior management group. The compensation objective
is to provide salaries above the midpoint of the range for banks in the $200 to
$500 million asset peer group, and to award bonuses that are determined by
financial performance. Beginning for the year 1994, the bonus plan for senior
management was changed to provide a higher current year payout, with smaller
amounts being deferred.
STOCK PERFORMANCE GRAPH
The chart below shows the yearly percentage change in the Company's cumulative
total shareholder return on its common stock. This increase is compared in the
chart to similar changes in the Keefe, Bruyette & Woods, Inc. ("KBW") 50 index,
as well as the Standard & Poor's 500 Stock Index. All prices are adjusted for
stock splits and stock dividends. The index is calculated on a modified equal
dollar weighted basis with January 1, 1991 as a base date.
<TABLE>
<CAPTION>
1/1/91=100 1990 1991 1992 1993 1994 1995
- ---------- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
UBI 100.0 132.2 151.8 187.3 232.0 254.3
S & P 500 100.0 130.5 140.4 154.6 156.6 215.5
KBW 50 100.0 158.3 201.7 212.8 201.9 323.4
</TABLE>
Page 14
<PAGE> 17
KBW is an institutionally oriented securities broker/dealer and a full service
investment bank. KBW is located in Hartford, CT and New York, and specializes
in the commercial banking and thrift industries. The KBW 50 index is made up of
50 of the nation's most important banking companies, including all money center
and most major regional banks, and is intended to be representative of the
price-performance of the nation's largest banks.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
So far as is known to the Company, as of March 15, 1996, no persons except
those listed below, owned beneficially more than five percent (5%) of the
voting securities of the Company. With respect to the Bank, such securities are
held in its Trust & Investment Group. The following table discloses the name
and address of such beneficial owner, the total number of shares beneficially
owned, and the percentage of ownership in relation to the total Common Stock of
the Company outstanding and entitled to vote as of December 31, 1995.
<TABLE>
<CAPTION>
Amount and Nature of Percent
Name and Address of Beneficial Owner Beneficial Ownership of Class
- ------------------------------------ -------------------- --------
<S> <C> <C>
Lilley & Co., a nominee of United Bank & Trust as Trustee 244,916 (1) 16.44%
P.O. Box 248
Tecumseh, MI 49286
Calhoun & Co., a nominee of Comerica Bank as Trustee 90,054 (2) 6.04%
P.O. Box 55-519
Detroit, MI 48255
</TABLE>
- --------------------
(1.) The Bank as Trustee has sole voting and sole investment powers with
respect to 148,215 of the shares, and shared voting and shared investment
powers with respect to the remaining 60,701 of these shares. It is the
policy of the Bank's Trust & Investment Group to obtain written direction
from the grantor or the beneficiaries for voting. If no direction is
received, the Trust & Investment Group will generally vote with the
management of the Company.
(2.) According to information provided to us by Calhoun and Co., Comerica Bank
is Trustee of seven personal trust accounts holding shares of the Company,
and has sole voting and sole investment powers with respect to 17,670 of
the shares, and shared voting and shared investment powers with respect to
the remaining 72.384 of these shares.
SECURITY OWNERSHIP OF MANAGEMENT
The following table discloses the name and address of each of the incumbent
Directors, Director Nominees and Executive Officers, the total number of shares
beneficially owned by each, and their percentage of ownership in relation to
the total Common Stock of the Company outstanding and entitled to vote as of
December 31, 1995, according to information furnished to the Company by said
persons. The table also discloses the total number of shares beneficially owned
by all of the incumbent Directors and Director nominees and Executive Officers
of the Company as a group, and the percentage of ownership of said group in
relation to the total Common Stock of the Company outstanding and entitled to
vote as of December 31, 1995, according to information furnished to the Company
by said persons. For a description and listing of the Executive Officers of the
Company, see "Executive Officers" above.
Page 15
<PAGE> 18
<TABLE>
Amount and Nature Percent of
Name and Address of Beneficial Owner of Beneficial Ownership (1) Class (11)
- ------------------------------------ --------------------------- ------------
DIRECTOR NOMINEES - CLASS II DIRECTORS
- --------------------------------------
<S> <C> <C>
John H. Foss 600 *
100 E. Patterson
Tecumseh, Michigan 49286
David S. Hickman 29,957 2.01%
P.O. Box 248
Tecumseh, Michigan 49286
Ann Hinsdale Knisel 186 *
4404 Livesay Rd.
Sand Creek, Michigan 49279
Jeffrey T. Robideau 15,149 (2) 1.02%
707 S. Evans Street
Tecumseh, Michigan 49286
Richard S. Whelan 2,702 *
106 N. Occidental
Tecumseh, Michigan 49286
INCUMBENT DIRECTORS - CLASS III DIRECTORS
- -----------------------------------------
David N. Berlin 315 *
103 W. Main
Hudson, Michigan 49247
Merlyn H. Downing 17,000 (3) 1.14%
406 Burt Street
Tecumseh, Michigan 49286
Charles E. Gross 5,131 (4) *
P.O. Box 606
Adrian, Michigan 49221
Linda J. Herrick 7,924 (5) *
261 Wildwood Circle
Tecumseh, Michigan 49286
John J. Wanke 680 (6) *
P.O. Box 248
Tecumseh, Michigan 49286
INCUMBENT DIRECTORS - CLASS I DIRECTORS
- ---------------------------------------
L. Donald Bush 703 *
9432 Welch Road
Tecumseh, Michigan 49286
</TABLE>
Page 16
<PAGE> 19
<TABLE>
<S> <C> <C>
Patrick D. Farver 2,100 (7) *
484 Seel Drive
Adrian, Michigan 49221
James C. Lawson 9,703 (8) *
4070 Allen Rd.
Tecumseh, Michigan 49286
D. J. Martin 27,062 1.82%
145 W. Chicago Boulevard
Tecumseh, Michigan 49286
David E. Maxwell 17,107 (9) 1.15%
P.O. Box 749
Adrian, Michigan 49221
James K. Whitehouse 150 (10) *
2430 N. Maple Grove
Hudson, Michigan 49247
DIRECTOR EMERITUS
- -----------------
William G. Thompson 1,105 *
331 W. Main
Hudson, Michigan 49247
All Directors and Executive Officers as a 140,769 9.45%
Group (18 persons)
</TABLE>
__________________
(1) The numbers of shares stated in this column includes shares owned directly
or indirectly, through any contract, arrangement, understanding,
relationship, or which the indicated beneficial owner otherwise has the
power to vote, or direct the voting of, and/or has investment power.
(2) Includes 11,000 shares to which Mr. Robideau has sole voting and investment
power, and 4,149 shares with respect to which he has shared voting and
investment power.
(3) Includes 1,290 shares to which Mr. Downing has sole voting and investment
power, and 15,710 shares with respect to which he has shared voting and
investment power and no direct ownership interest.
(4) Includes 1,825 shares to which Mr. Gross has sole voting and investment
power, and 3,306 shares with respect to which he has shared voting and
investment power and no direct ownership interest.
(5) Includes 1,573 shares to which Mrs. Herrick has sole voting and investment
power, and 6,351 shares with respect to which she has shared voting and
investment power and no direct ownership interest.
(6) Includes 556 shares to which Mr. Wanke has shared voting and investment
power, and 124 shares with respect to which he has shared voting and
investment power and no direct ownership interest.
(7) Includes 1,050 shares with respect to which Mr. Farver has shared voting
and investment power, and 1,050 shares with respect to which he has shared
voting and investment power.
(8) Includes 3,580 shares to which Mr. Lawson has sole voting and investment
power, and 6,123 shares with respect to which he has shared voting and
investment power and no direct ownership interest.
(9) Includes 14,876 shares to which Mr. Maxwell has sole voting and investment
power, and 1,971 shares with respect to which he has shared voting and
investment power and no direct ownership interest.
(10)Includes 150 shares for which Mr. Whitehouse has shared voting and
investment power and no direct ownership interest.
(11)The symbol *, shown in this column, indicates ownership of less than 1%.
Page 17
<PAGE> 20
DISCLOSURE OF DELINQUENT FILERS
As far as can be determined by a review of Forms 3, 4 and 5 and amendments
thereto as required by Section 12 of the Exchange Act, the following persons
who were so required, failed to file reports on a timely basis as noted:
<TABLE>
<CAPTION>
Number of Number of known
Name and relationship Form late reports failures to report
--------------------- ----- ------------ ------------------
<S> <C> <C> <C>
Jeffrey T. Robideau, Director 3 1 None
Merlyn H. Downing, Director 4 2 None
Patrick D. Farver, Director 4 3 None
James C. Lawson, Director 4 2 None
Donald J. Martin, Director 4 4 None
David E. Maxwell, Director 4 5 None
John J. Wanke, Director and Executive Officer 4 1 None
Lilley & Co., reporting shareholder 4 9 None
James J. Robideau, retired Director 5 1 None
Karl R. Schneider, retired Director 5 1 None
</TABLE>
As far as can be determined, no other persons so required to report, fail to
file such reports on a timely basis.
The stock transfer agent of the Company has historically assumed responsibility
for assuring that the proper Forms 3, 4 and 5 are filed on a timely basis.
However, due to changes in clerical responsibility during 1995, this step in
the procedures was overlooked, resulting in the above-listed late filings.
Changes have been made to assure that such late filings do not occur in the
future.
OTHER MATTERS
The Board of Directors knows of no other matter to be presented at the Annual
Meeting. If any other matter should be presented upon which a vote properly may
be taken, it is intended that shares represented by Proxies in the accompanying
form will be voted with respect thereto in accordance with the judgment of the
person or persons voting such shares.
BY ORDER OF THE BOARD OF DIRECTORS
/S/ Dale L. Chadderdon
----------------------
March 25, 1996 Dale L. Chadderdon
Senior Vice President, Secretary and Treasurer
Page 18
<PAGE> 21
APPENDIX A
UNITED BANCORP, INC.
DIRECTOR RETAINER STOCK PLAN
1 -- PURPOSE
The purpose of this Director Retainer Stock Plan is to provide Eligible
Directors with a means of deferring payment of retainers and board meeting fees
payable to them in the future as a result of serving as a director of the
Company and/or the Bank, while at the same time expressing their commitment to
the Company by subjecting such deferred retainers and fees to the stock market
performance of the common stock of the Company.
2 -- DEFINITIONS
As used in the Plan, the following terms have the following respective
meanings:
"Bank" means United Bank & Trust, a subsidiary of the Company.
"Board" means the Board of Directors of the Company.
"Committee" has the meaning given in Section 3 hereof.
"Company" means United Bancorp, Inc., a Michigan corporation, and any
successor thereof.
"Determination Date" means, for each Participating Director, the earliest
date on which, due to death, disability, or any other reason whatsoever,
such Participating Director is neither a Director of the Company, nor a
Director of the Bank.
"Eligible Director" means, for any relevant time, each individual who at
that time is a director of the Company and/or the Bank and is not also an
employee of the Company or any subsidiary of the Company.
"Market Price" means, for any given date: (i) if the Shares are then
listed for trading on one or more national securities exchanges (including for
this purpose the NASDAQ "National Market"), the average of the high and low sale
prices for a Share on the principal such exchange on the date in question (or,
if no Shares traded on such exchange on such date, the next preceding date on
which such trading occurred); (ii) if (i) is inapplicable but bid and asked
prices for Shares are quoted through NASDAQ, the average of the highest bid and
lowest asked prices so quoted for a Share on the date in question (or, if no
prices for Shares were quoted on that date, the next preceding date on which
they were quoted); (iii) if (i) and (ii) are inapplicable but bid and asked
prices for Shares are otherwise quoted by one or more broker-dealers known to
the Company to be making a market in the Shares, the average of the highest bid
and lowest asked prices so quoted on the date in question (or, if no prices were
quoted on that date, the next preceding date on which they were quoted); and
(iv) if all of the foregoing are inapplicable, the fair market value of a Share
on the date in question as determined in good faith by the Committee.
"NASDAQ" means the National Association of Securities Dealers, Inc.
Automated Quotation System.
"Participating Director" means an individual who, while an Eligible
Director, has elected to participate in the Plan as contemplated by Section 5.1
hereof.
Page 19
<PAGE> 22
"Participation Election" has the meaning given in Section 5.1 hereof.
"Plan" means this Director Retainer Stock Plan.
"Reserve Account" has the meaning given in Section 6.1 hereof.
"Retainer" means the entire amount payable to a Participating Director
for serving as a director of the Company and/or the Bank during a given period,
including amounts payable for attendance during such period at meetings of the
Board or of the board of directors of the Bank, but excluding any amounts
payable for serving on or as chair of any committee of either board and
excluding any amounts payable for reimbursement of expenses.
"Rule 16b-3" means Securities and Exchange Commission Rule 16b-3 (or any
successor rule or regulation), as in effect and applicable to the Company at a
given time.
"Shares" means shares of the no par value common stock of the Company, or
such other securities or other property as hereafter may become issuable to a
Participating Director in lieu of shares of such stock pursuant to an adjustment
made under Section 9 hereof.
3 -- ADMINISTRATION
The Plan shall be administered by a committee of the Board (the "Committee")
consisting of the Chief Executive Officer of the Company (or, if the Chief
Executive Officer is a not a member of the Board at a given time, consisting of
all members of the Board who are not Eligible Directors). To the extent
consistent with the terms of the Plan, the Committee shall have the power to
interpret any Plan provision, to prescribe, amend, and rescind rules and
regulations relating to the Plan, and to make all other determinations that it
deems necessary or advisable to administer the Plan. The Committee may appoint
such agents to assist in administration of the Plan, other than Eligible
Directors, as the Committee deems appropriate.
4 -- SHARES SUBJECT TO THE PLAN
Subject to adjustment as provided in Section 9 hereof, no more than 20,000
Shares in the aggregate may be issued pursuant to the Plan. There shall at all
times be reserved for issuance under the Plan from the authorized and unissued
Shares a number of Shares equal to the maximum number that in future may be
issued under the Plan.
5 -- ELECTION PROCEDURES
5.1 INITIAL ELECTIONS. After the Plan becomes effective, an Eligible
Director may elect to defer payment of all or a portion of his or her future
Retainer by executing and delivering to the Secretary of the Company (or such
other officer of the Company as the Committee hereafter may designate) a written
election to participate in the Plan (a "Participation Election"), identifying
(as a multiple of 10%) the percentage of the director's Retainer elected to be
deferred and otherwise in such form as the Committee shall have approved. If a
Participation Election is executed and delivered by an Eligible Director no
later than 30 days after the Plan becomes effective (or, for an individual who
later becomes an Eligible Director, no later than 30 days after he or she became
eligible), the director's election shall be given
Page 20
<PAGE> 23
effect commencing as of the next calendar quarter after delivery of the
Participation Election or, if later, the date specified therein.
5.2 CHANGES IN ELECTIONS. An Eligible Director who has become a
Participating Director by complying with the procedures set forth above
thereafter may increase or decrease the percentage of his or her Retainer to be
deferred or may terminate future deferrals by executing and delivering to the
Secretary or other designated officer another Participation Election reflecting
such increase, decrease, or termination. However, the change reflected in such
other Participation Election shall not be given effect until the next calendar
year after it is delivered or, if later, the date specified therein.
6 -- RESERVE ACCOUNTS
6.1 ESTABLISHMENT OF ACCOUNTS. For each Participating Director, the
Company shall establish and maintain a bookkeeping account (a "Reserve
Account") in which all units allocable to the Participating Director due to his
or her participation in the Plan shall be credited.
6.2 CREDITS TO ACCOUNTS FOR DEFERRED RETAINERS. Whenever a portion of his
or her Retainer is earned by a Participating Director, the cash amount payable
shall be reduced by the percentage of such amount which the Participating
Director has elected to defer pursuant to his or her Participation Election
then in effect, and there shall be credited to the Participating Director's
Reserve Account a number (to four decimal places) of units that is equal to the
amount by which the Participating Director's cash payment has been reduced,
divided by the Market Price as of the date the cash payment is earned. For
this purpose, portions of a Retainer attributable to meeting attendance shall
be deemed earned as meetings are attended, and one quarter of the remainder of
a Retainer for any calendar year shall be deemed earned as of the first
business day of each calendar quarter.
6.3 CREDITS FOR CASH DIVIDENDS OR DISTRIBUTIONS. On the payment date for
any cash dividend or other cash distribution declared upon the Shares, there
shall be credited to each Participating Director's Reserve Account that number
(to four decimal places) of units that is equal to the total of units which on
the related record date were in the Participating Director's Reserve Account,
multiplied by the per Share cash dividend or other distribution, and divided by
the Market Price on such payment date.
6.4 REPORTS CONCERNING ACCOUNTS. In January of each year, the Company
shall provide each Participating Director with an report of his or her Reserve
Account balance as of the end of the preceding year.
7 -- PAYMENT OF ACCOUNT VALUES
7.1 GENERAL. Subject to the provisions of Sections 7.2 and 7.3, on or
within 30 days after a Participating Director's Determination Date, the Company
shall issue and deliver to the Participating Director that number of Shares
which equals the number of whole units credited to his or her Reserve Account
as of the Determination Date and shall pay to the Participating Director in
cash an amount equal to the difference (if any) between the total number of
whole and fractional units credited to the Reserve Account as of the
Determination Date and the number of Shares being distributed, multiplied by
the Market Price as of the Determination Date. If, on the date such Shares are
issued and/or such payment is made, any cash dividend or other cash
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distribution has been declared upon the Shares with a record date earlier than
the issuance date but after the Determination Date, then the Company also shall
pay to the Participating Director in cash an amount equal to the total number
of units in his or her Reserve Account on the Determination Date multiplied by
the per Share cash dividend or distribution.
7.2 EFFECT OF PLAN LIMITS ON SHARES. In any case in which the distribution
of Shares to a Participating Director in accordance with Section 7.1 would be
impermissible due to the Plan's limits on available Shares (after taking into
account any then pending distribution to be made to any other Participating
Director having an earlier Determination Date), the number of Shares to be
issued to the affected Participating Director shall be reduced to the maximum
number of Shares then permissible under such limits (or, if more than one
Participating Director having the same Determination Date is affected, the
highest whole number determined by multiplying the maximum number of Shares
then available by a fraction the numerator of which is the Determination Date
number of units in his or her Reserve Account and the denominator of which is
the aggregate Determination Date number of units in the affected Participating
Directors' Reserve Accounts), and the remaining value of his or her Reserve
Account (or, if necessary, the entire value of such account) shall be
determined in accordance with Section 7.1 and shall be payable in cash.
7.3 DISTRIBUTION IN CASE OF DEATH OR MENTAL INCAPACITY. If a Participating
Director's Determination Date occurs due to death, or if he or she dies prior
to delivery of Shares and any cash required to be delivered pursuant to the
Plan, the Shares deliverable shall be issued in the name of, and such Shares
and any cash required to be delivered under the Plan shall be delivered to, the
beneficiary or beneficiaries designated in the Participating Director's then
most recent Participation Election, or, if no beneficiary has been designated,
the legally appointed personal representative of the Participating Director's
estate. If no such representative is appointed by the time delivery is due,
then the Company shall hold the items to be delivered until appointment occurs
or proper claim for such items otherwise is made of the Company by the person
or persons entitled thereto. If the Company is notified that a Participating
Director has been adjudicated mentally incompetent as of the time Shares and
any cash deliverable under the Plan are to be delivered to the Participating
Director, or if it otherwise is demonstrated to the satisfaction of the Company
that such mental incapacity then exists by a person authorized by a durable
power of attorney or similar document to attend to the Participating Director's
financial affairs, the Shares shall be issued in the name of, and such Shares
and any required cash shall be delivered to, the Participating Director's
legally appointed guardian or conservator or, if none has been appointed, the
holder of such power of attorney or similar document.
8 -- MISCELLANEOUS MATTERS
8.1 DIRECTOR RIGHTS CONCERNING RESERVE ACCOUNTS. Reserve Accounts are not
intended to be and shall not be trust accounts or escrow accounts for the
benefit of any Participating Director or other person, nor shall the
establishment and maintenance of a Reserve Account in itself afford any
Participating Director or other person any right or interest in any asset the
Company may determine to earmark or in any Shares reserved for future payment
of benefits under the Plan. Rather, future benefits payable under the Plan are
intended to be unfunded for tax purposes, and the sole right of a Participating
Director or beneficiary or other successor in interest thereof with respect to
his or Reserve Account shall be the right as an unsecured general
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creditor of the Company to claim any Shares or cash to which the Participating
Director becomes entitled after his or her Determination Date, pursuant to the
terms and conditions of the Plan.
8.2 INALIENABILITY OF RESERVE ACCOUNTS. A Participating Director's right
and interest in his or her Reserve Account shall not be subject in any manner
to anticipation, alienation, sale, assignment, pledge, encumbrance, attachment,
garnishment for the benefit of creditors of the Participating Director, or
other transfer whatsoever, other than by will or the laws of descent and
distribution.
8.3 RIGHTS AS HOLDER OF SHARES. A Participating Director shall have no
rights as a holder of Shares to be delivered pursuant to the Plan unless and
until a certificate evidencing such Shares is issued by the Company.
8.4 FUTURE TERMS AS A DIRECTOR. Nothing in the Plan or any Participation
Election shall obligate any Eligible Director or Participating Director to
continue as a director of the Company or the Bank, or to accept any nomination
for a future term as such a director, or require the Company to nominate or
cause the nomination of any Eligible Director or Participating Director for a
future term as a director of the Company or the Bank.
8.5 WITHHOLDING. The Company shall be entitled to withhold and deduct from
any amounts due from the Company to a Participating Director, all legally
required amounts necessary to satisfy any Federal, state or local withholding
taxes arising directly or indirectly in connection with the Plan or any
Participation Election, and the Company may require the Participating Director
to remit promptly to the Company the amount of such taxes before taking any
future actions with respect to the Participating Director's Reserve Account or
Participation Election.
8.6 APPLICABLE LAW. The Plan and all actions taken under it shall be
governed by the internal laws of the State of Michigan.
9 -- ADJUSTMENTS
In the event of any non-cash dividend or other distribution, or any stock
split, reverse stock split, recapitalization, reorganization, split-up,
spin-off, merger, consolidation, share exchange, or other like change in the
capital or corporate structure of the Company affecting the Shares, there shall
be made such adjustment or adjustments (if any) in the number and type of
Shares issuable under the Plan and in the numbers of units credited to the
Reserve Accounts of Participating Directors as the Board determines to be
appropriate in light of such event in order to continue to make available the
benefits intended by the Plan, but no adjustment shall be required by reason of
any sales of Shares or other Company securities by the Company at any price,
whether below, or at or about, Market Price, and whether by or pursuant to
warrant, option, right, conversion right or privilege, or otherwise.
10 -- DURATION OF THE PLAN
10.1 EFFECTIVE DATE. The Plan has been adopted by the Board subject to
shareholder approval at the Company's 1996 annual meeting of shareholders and
shall become effective when, and only when, such approval is obtained.
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10.2 TERMINATION AND AMENDMENT. The Board may at any time and from time to
time amend, modify, suspend, or terminate the Plan, with or without the
approval of shareholders of the Company, except that: (i) no amendment or
modification of the Plan shall be effective without shareholder approval at any
time at which such approval is required, either by applicable rules of any
securities exchange (including the NASDAQ National Market) on which Company
stock is then principally traded, or by Rule 16b-3; (ii) none of the foregoing
actions by the Board shall adversely affect the rights of a Participating
Director with respect to an effective Participation Election without such
Participating Director's consent; and (iii) for so long as may be necessary in
order for the Plan to satisfy Rule 16b-3 requirements for "formula plans," the
eligibility provisions of the Plan and those provisions affecting the type,
extent, and timing of awards under the Plan may not be amended more often than
every six months, other than to comport with changes in the Internal Revenue
Code, the Employee Retirement Income Security Act, or the rules thereunder.
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APPENDIX B
UNITED BANCORP, INC.
SENIOR MANAGEMENT BONUS DEFERRAL STOCK PLAN
1 -- PURPOSE
1.1 DEFERRED COMPENSATION. The purpose of this Senior Management Bonus
Deferral Stock Plan is to provide Eligible Employees with a means of deferring
payment of certain bonuses payable to them in the future as a result of serving
as an employee of the Company and/or an Affiliated Entity, while at the same
time expressing their commitment to the Company by subjecting such deferred
payments to the stock market performance of the common stock of the Company.
1.2 UNFUNDED PLAN. The Plan is intended to be an unfunded plan maintained
primarily for the purpose of providing deferred compensation for a select group
of management or highly compensated employees as described in Sections
201(a)(2), 301(a)(3) and 401(a)(1) of ERISA.
2 -- DEFINITIONS
As used in the Plan, the following terms have the following respective
meanings:
"Affiliated Entity" means any corporation, partnership, or other
business enterprise in which the Company directly or indirectly has a
significant equity interest as determined by generally accepted accounting
principles.
"Board" means the Board of Directors of the Company.
"Bonus" means, for any given calendar year, the entire amount payable in
cash to an Eligible Employee in such year pursuant to the Senior Management
Cash Bonus Plan or, if less, the amount payable to the employee pursuant to
such plan which equals the Deferral Limit applicable for such calendar year.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Committee" has the meaning given in Section 3 hereof.
"Company" means United Bancorp, Inc., a Michigan corporation, and any
successor thereof.
"Deferral Limit" means, for any given calendar year, the maximum amount
which any person eligible to participate in the Director Plan during the
immediately preceding calendar year could elect to defer under that plan for
such preceding year.
"Determination Date" means, for each Participant, the earliest date on
which, due to death, disability, or any other reason whatsoever, such
Participant is neither an employee of the Company, nor an employee of any
Affiliated Entity.
"Director Plan" means the Director Retainer Stock Plan, as submitted for
approval by the shareholders of the Company at its 1996 annual meeting and
(provided such approval is obtained) as it thereafter may be amended from
time to time.
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"Eligible Employee" means, for any relevant time, each employee of the
Company or an Affiliated Entity who at that time is eligible to participate
in the Senior Management Cash Bonus Plan.
"ERISA" means the Employment Retirement Income Security Act of 1974, as
amended from time to time.
"Market Price" means, for any given date: (i) if the Shares are then
listed for trading on one or more national securities exchanges (including
for this purpose the NASDAQ "National Market"), the average of the high and
low sale prices for a Share on the principal such exchange on the date in
question (or, if no Shares traded on such exchange on such date, the next
preceding date on which such trading occurred); (ii) if (i) is inapplicable
but bid and asked prices for Shares are quoted through NASDAQ, the average
of the highest bid and lowest asked prices so quoted for a Share on the date
in question (or, if no prices for Shares were quoted on that date, the next
preceding date on which they were quoted); (iii) if (i) and (ii) are
inapplicable but bid and asked prices for Shares are otherwise quoted by one
or more broker-dealers known to the Company to be making a market in the
Shares, the average of the highest bid and lowest asked prices so quoted on
the date in question (or, if no prices were quoted on that date, the next
preceding date on which they were quoted); and (iv) if all of the foregoing
are inapplicable, the fair market value of a Share on the date in question
as determined in good faith by the Committee.
"NASDAQ" means the National Association of Securities Dealers, Inc.
Automated Quotation System.
"Participant" means an individual who, while an Eligible Employee, has
elected to participate in the Plan as contemplated by Section 5.1 hereof.
"Participation Election" has the meaning given in Section 5.1 hereof.
"Plan" means this Senior Management Bonus Deferral Stock Plan.
"Reserve Account" has the meaning given in Section 6.1 hereof.
"Rule 16b-3" means Securities and Exchange Commission Rule 16b-3 (or any
successor rule or regulation), as in effect and applicable to the Company at
a given time.
"Shares" means shares of the no par value common stock of the Company,
or such other securities or other property as hereafter may become issuable
to a Participant in lieu of shares of such stock pursuant to an adjustment
made under Section 9 hereof.
"Senior Management Cash Bonus Plan" means the United Bancorp, Inc. Cash
Incentive Plan--Tier #1 as in effect at a relevant time or such successor
cash bonus plan of the Company as is then in effect for senior management
employees of the Company and/or Affiliated Entities.
3 -- ADMINISTRATION
The Plan shall be administered by a committee of the Board (the "Committee")
consisting of all Directors of the Company other than any who are Eligible
Employees. To the extent consistent with the terms of the Plan, Committee
shall have the power to interpret, any Plan provision, to prescribe, amend, and
rescind rules and regulations relating to the Plan, to appoint such agents to
assist in the administration of the Plan as the Committee deems appropriate,
and to
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make all other determinations that it deems necessary or advisable to
administer the Plan. The Committee's interpretation and construction of the
Plan and all other Committee decisions concerning the Plan or the rights of any
Participant or other person thereunder shall be binding and conclusive for all
purposes upon all interested parties, subject only to the procedures and
limited review permitted under Sections 11.1 through 11.4 of the Plan.
4 -- SHARES SUBJECT TO THE PLAN
Subject to adjustment as provided in Section 9 hereof, no more than 5,000
Shares in the aggregate may be issued pursuant to the Plan. There shall at all
times be reserved for issuance under the Plan from the authorized and unissued
Shares a number of Shares equal to the maximum number that in the future may be
issued under the Plan.
5 -- ELECTION PROCEDURES
5.1 INITIAL ELECTIONS. After the Plan becomes effective, an Eligible
Employee may elect to defer payment of all or a portion of his or her future
Bonuses by executing and delivering to the Secretary of the Company (or such
other officer of the Company as the Committee hereafter may designate) a
written election to participate in the Plan (a "Participation Election"),
identifying (as a multiple of 10%) the percentage of the Eligible Employee's
Bonuses elected to be deferred and otherwise in such form as the Committee
shall have approved. If a Participation Election is executed and delivered by
an Eligible Employee no later than 30 days after the Plan becomes effective
(or, for an individual who later becomes an Eligible Employee, no later than 30
days after he or she first became eligible), the employee's election shall be
given effect commencing with any Bonus payable to the employee in the next
calendar year, unless a later calendar year is specified in the Participation
Election. If a Participation Election is executed and delivered by an
Eligible Employee after the 30 day period applicable to such employee, the
election shall be given effect commencing with the second calendar year
following the calendar year in which the Participation Election is delivered
or, if later, the year specified therein.
5.2 CHANGES IN ELECTIONS. An Eligible Employee who has become a
Participant by complying with the procedures set forth above thereafter may
increase or decrease the percentage of his or her Bonuses to be deferred or may
terminate future deferrals by executing and delivering to the Secretary or
other designated officer another Participation Election reflecting such
increase, decrease, or termination. However, the change reflected in such
other Participation Election shall only become effective commencing with the
second calendar year following the calendar year in which the Participation
Election is delivered or, if later, the year specified therein.
6 -- RESERVE ACCOUNTS
6.1 ESTABLISHMENT OF ACCOUNTS. For each Participant, the Company shall
establish and maintain a bookkeeping account (a "Reserve Account") in which all
units allocable to the Participant due to his or her participation in the Plan
shall be credited.
6.2 CREDITS TO ACCOUNTS FOR DEFERRED BONUSES. Whenever a Bonus is payable
to a Participant, the cash amount otherwise payable shall be reduced by the
percentage of such amount which the Participant has elected to defer pursuant
to his or her Participation Election then in effect (up to the applicable
Deferral Limit), and there shall be credited to the Participant's
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Reserve Account a number (to four decimal places) of units that is equal to the
amount by which the Participant's cash payment has been reduced, divided by the
Market Price as of the date the cash payment is payable.
6.3 CREDITS FOR CASH DIVIDENDS OR DISTRIBUTIONS. On the payment date for
any cash dividend or other cash distribution declared upon the Shares, there
shall be credited to each Participant's Reserve Account that number (to four
decimal places) of units that is equal to the total of units which on the
related record date were in the Participant's Reserve Account, multiplied by
the per Share cash dividend or other distribution, and divided by the Market
Price on such payment date.
6.4 REPORTS CONCERNING ACCOUNTS. In January of each year, the Company
shall provide each Participant with an report of his or her Reserve Account
balance as of the end of the preceding year, which report shall show any gain
or loss in the value of the Participant's Reserve Account since the prior
report.
7 -- PAYMENT OF ACCOUNT VALUES
7.1 GENERAL. Subject to the provisions of Sections 7.2 and 7.3 and to
applicable tax withholding as contemplated in Section 8.5, on or within 30 days
after a Participant's Determination Date, the Company shall issue and deliver
to the Participant that number of Shares which equals the number of whole units
credited to his or her Reserve Account as of the Determination Date and shall
pay to the Participant in cash an amount equal to the difference (if any)
between the total number of whole and fractional units credited to the Reserve
Account as of the Determination Date and the number of Shares being
distributed, multiplied by the Market Price as of the Determination Date. If,
on the date such Shares are issued and/or such payment is made, any cash
dividend or other cash distribution has been declared upon the Shares with a
record date earlier than the issuance date but after the Determination Date,
then the Company also shall pay to the Participant in cash an amount equal to
the total number of units credited to his or her Reserve Account on the
Determination Date multiplied by the per Share cash dividend or distribution,
but net of required tax withholding.
7.2 EFFECT OF PLAN LIMITS ON SHARES. In any case in which the distribution
of Shares to a Participant in accordance with Section 7.1 would be
impermissible due to the Plan's limits on available Shares (after taking into
account any then pending distribution to be made to any other Participant
having an earlier Determination Date), the number of Shares to be issued to the
affected Participant shall be reduced to the maximum number of Shares then
permissible under such limits (or, if more than one Participant having the same
Determination Date is affected, the highest whole number determined by
multiplying the maximum number of Shares then available by a fraction the
numerator of which is the Determination Date number of units in his or her
Reserve Account and the denominator of which is the aggregate Determination
Date number of units in the affected Participants' Reserve Accounts), and the
remaining value of his or her Reserve Account (or, if necessary, the entire
value of such account) shall be determined in accordance with Section 7.1 and
shall be payable in cash.
7.3 DISTRIBUTION IN CASE OF DEATH OR MENTAL INCAPACITY. If a Participant's
Determination Date occurs due to death, or if he or she dies prior to delivery
of Shares and any cash required to be delivered pursuant to the Plan, the
Shares deliverable shall be issued in the
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name of, and such Shares and any cash required to be delivered under the Plan
shall be delivered to, the beneficiary or beneficiaries designated in the
Participant's then most recent Participation Election, or, if no beneficiary
has been designated, the legally appointed personal representative of the
Participant's estate. If no such representative is appointed by the time
delivery is due, then the Company shall hold the items to be delivered until
appointment occurs or proper claim for such items otherwise is made of the
Company by the person or persons entitled thereto. If the Company is notified
that a Participant has been adjudicated mentally incompetent as of the time
Shares and any cash deliverable under the Plan are to be delivered to the
Participant, or if it otherwise is demonstrated to the satisfaction of the
Committee that such mental incapacity then exists by a person authorized by a
durable power of attorney or similar document to attend to the Participant's
financial affairs, the Shares shall be issued in the name of, and such Shares
and any required cash shall be delivered to, the Participant's legally
appointed guardian or conservator or, if none has been appointed, the holder of
such power of attorney or similar document. Payments made pursuant to this
Section 7.3 shall operate as a complete discharge of the Company, each
Affiliated Entity, and the Committee.
8 -- MISCELLANEOUS MATTERS
8.1 PARTICIPANT RIGHTS CONCERNING RESERVE ACCOUNTS. Reserve Accounts are
not intended to be and shall not be trust accounts or escrow accounts for the
benefit of any Participant or other person, nor shall the establishment and
maintenance of a Reserve Account in itself afford any Participant or other
person any right or interest in any asset the Company may determine to earmark
or in any Shares reserved for future payment of benefits under the Plan.
Rather, deferred compensation credited to the Reserve Accounts shall constitute
general assets of the Company, shall be subject to the claims of the Company's
general creditors, and shall not cause this to be a funded plan within the
meaning of any section of ERISA or the Code. Future benefits payable under the
Plan shall be paid only from the authorized stock and general funds of the
Company, and are intended to be unfunded for tax purposes. The sole right of a
Participant or beneficiary or other successor in interest thereof with respect
to his or her Reserve Account shall be the right as an unsecured general
creditor of the Company to claim any Shares or cash to which the Participant
becomes entitled after his or her Determination Date, pursuant to the terms and
conditions of the Plan.
8.2 INALIENABILITY OF RESERVE ACCOUNTS. A Participant's right and interest
in his or her Reserve Account and in the benefits provided under the Plan shall
not be subject in any manner to anticipation, alienation, sale, assignment,
pledge, encumbrance, attachment, garnishment for the benefit of creditors of
the Participant, or other transfer whatsoever, other than by will or the laws
of descent and distribution. The Reserve Accounts and Plan benefits shall be
exempt from the claims of creditors or other claimants and from all orders,
decrees, levies, garnishment or executions to the fullest extent allowed by
law.
8.3 RIGHTS AS HOLDER OF SHARES. A Participant shall have no rights as a
holder of Shares to be delivered pursuant to the Plan unless and until a
certificate evidencing such Shares is issued by the Company.
8.4 NO EFFECT ON EMPLOYMENT. Nothing in the Plan or any Participation
Election shall be construed to limit in any way the right of the Company or
Affiliated Entity to terminate a
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Participant's employment at any time for any reason whatsoever; nor shall it be
evidence of any agreement or understanding, express or implied, that the
Company or any Affiliated Entity (i) will employ an employee in any particular
position or for any particular period of time, (ii) will ensure participation
in any incentive program, or (iii) will grant any awards from any such program.
Nothing in the Plan or any Participation Election shall obligate any Eligible
Employee or Participant to continue as an employee of the Company or any
Affiliated Entity.
8.5 WITHHOLDING. The Company shall be entitled to withhold and deduct from
any amounts due from the Plan to a Participant all legally required amounts
necessary to satisfy any Federal, state, or local withholding taxes arising
directly or indirectly in connection with the Plan or any Participation
Election, and the Company may require the Participant to remit promptly to the
Company the amount of any such taxes before taking any future action with
respect to the Participant's Reserve Account or Participation Election.
8.6 SEVERABILITY. The provisions of the Plan shall be deemed severable,
and in the event any provision of the Plan is held invalid or unenforceable,
the same shall not affect in any respect whatsoever the validity and
enforceability of any other provision of the Plan. The Board shall have the
power to modify any provision so held to the extent reasonably necessary to
make the provision, as so modified, valid, enforceable, and compatible with the
other provisions of the Plan.
8.7 APPLICABLE LAW. The Plan and all actions taken under it shall be
governed by the internal laws of the State of Michigan.
9 -- ADJUSTMENTS
In the event of any non-cash dividend or other distribution, or any stock
split, reverse stock split, recapitalization, reorganization, split-up,
spin-off, merger, consolidation, share exchange, or other like change in the
capital or corporate structure of the Company affecting the Shares, there shall
be made such adjustment or adjustments (if any) in the number and type of
Shares issuable under the Plan and in the numbers of units credited to the
Reserve Accounts of Participants as the Board determines to be appropriate in
light of such event in order to continue to make available the benefits
intended by the Plan, but no adjustment shall be required by reason of any
sales of Shares or other Company securities by the Company at any price,
whether below, or at or about, Market Price, and whether by or pursuant to
warrant, option, right, conversion right or privilege, or otherwise.
10 -- DURATION OF THE PLAN
10.1 EFFECTIVE DATE; PLAN YEAR. The Plan has been adopted by the Board
subject to shareholder approval thereof and of the Director Plan at the
Company's 1996 annual meeting of shareholders and shall become effective when,
and only when, such approval is obtained. The records of the Plan shall be
maintained on the basis of a calendar year, which shall be the Plan Year of the
Plan.
10.2 TERMINATION AND AMENDMENT. The Board may at any time and from time to
time amend, modify, suspend, or terminate the Plan, with or without the
approval of shareholders of the Company, except that: (i) no amendment or
modification of the Plan shall be effective without shareholder approval at any
time at which such approval is required, either by applicable
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rules of any securities exchange (including the NASDAQ National Market) on
which Company stock is then principally traded, or by Rule 16b-3; (ii) none of
the foregoing actions by the Board shall adversely affect the rights of a
Participant with respect to benefits already accrued under the Plan without
such Participant's consent; and (iii) for so long as may be necessary in order
for the Plan to satisfy Rule 16b-3 requirements for "formula plans," the
eligibility provisions of the Plan and those provisions affecting the type,
extent, and timing of awards under the Plan may not be amended more often than
every six months, other than to comport with changes in the Code, ERISA, or the
rules thereunder.
11. -- CLAIMS AND DISPUTES; ARBITRATION
11.1 CLAIMS. Claims for benefits under the Plan shall be made in writing to
the Committee. The claimant may furnish the Committee with any written
material he or she believes necessary to perfect the claim.
11.2 REQUEST FOR REVIEW. A person whose claim for benefits under the Plan
has been denied, or his or her duly authorized representative, may request a
review upon written application to the Committee, may review pertinent
documents, and may submit issues and comments in writing. The claimant's
written request for review must be submitted to the Committee within 60 days
after receipt by the claimant of written notification of the denial of a claim.
A decision by the Committee shall be made promptly, and not later than 60 days
after the Committee's receipt of a request for review, unless special
circumstances require an extension of time for proceeding, in which case a
decision shall be rendered as soon as possible, but not later than 120 days
after receipt of the request for review. The decision on review shall be in
writing, shall include reasons for the decision, may include specific reference
to the pertinent provision of the Plan on which the decision is based, and
shall be written in a manner calculated to be understood by the claimant.
11.3 ARBITRATION. Unless otherwise required by law, any controversy or
claim arising out of or relating to the Plan or the breach thereof shall be
settled by binding arbitration in the City of Tecumseh in accordance with the
laws of the State of Michigan by three arbitrators, one of whom shall be
appointed by the Company, one by the claimant, and the third of whom shall be
appointed by the first two arbitrators. If the selected (third) arbitrator
declines or is unable to serve for any reason, the appointed arbitrators shall
select another arbitrator. Upon their failure to agree on another arbitrator,
the jurisdiction of the Circuit Court of Lenawee County, Michigan shall be
invoked to make such selection. The arbitration shall be conducted in
accordance with the commercial arbitration rules of the American Arbitration
Association except as provided in Section 11.4 below. Judgment upon the award
rendered by the arbitrators may be entered in any court having jurisdiction
thereof. Review by the arbitrators of any decision, action, or interpretation
of the Board or Committee shall be limited to a determination of whether it was
arbitrary and capricious or constituted an abuse of discretion, within the
guidelines of Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (1989). In
the event the claimant shall retain legal counsel and/or incur other costs and
expenses in connection with enforcement of any of the claimant's rights under
this Plan, the claimant shall not be entitled to recover from the Company any
attorney fees, costs, or expenses in connection with the enforcement of such
rights (including enforcement of any arbitration award in court), regardless of
the final outcome.
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11.4 CONDUCT OF ARBITRATION HEARING. Any arbitration shall be
conducted as follows:
(a) The arbitrators shall follow the Commercial Arbitration Rules of
the American Arbitration Association, except as otherwise provided
herein. The arbitrators shall substantially comply with the rules of
evidence, shall grant essential but limited discovery, shall provide for
the exchange of witness lists and exhibit copies, and shall conduct a
pretrial and consider dispositive motions. Each party shall have the
right to request the arbitrators to make findings of specific factual
issues.
(b) The arbitrators shall complete their proceedings and render their
decision within 40 days after submission of the dispute to them, unless
both parties agree to an extension. Each party shall cooperate with
the arbitrators to comply with procedural time requirements and the
failure of either to do so shall entitle the arbitrators to extend the
arbitration proceedings accordingly and to impose sanctions on the
party responsible for the delay, payable to the other party. In the
event the arbitrators do not fulfill their responsibilities on a timely
basis, either party shall have the right to require a replacement and
the appointment of new arbitrators.
(c) The decision of the arbitrator shall be final and binding upon the
parties, and a judgment by any Circuit Court of the State of Michigan
or any other court of competent jurisdiction may be entered in
accordance therewith.
(d) The costs of the arbitration shall be borne equally by the parties
to such arbitration, except that each party shall bear its own legal
and accounting expenses relating to its participation in the
arbitration.
(e) Every asserted claim to benefits or other right of action by or on
behalf of any Participant (or any beneficiary or other successor in
interest or guardian, personal representative, or other representative
thereof) against the Company or any Affiliated Entity arising out of
or in connection with the Plan shall, irrespective of the place where
such right of action may arise or be asserted, cease and be barred by
the expiration of the earliest of: (i) one year from the date of the
alleged act or omission in respect of which such right of action first
arises in whole or in part, (ii) one year after the Participant's
Determination Date, or (iii) six months after notice is given to the
Participant (or his or her beneficiary or other successor in interest
or guardian, personal representative, or other representative, as the
case may be) of the amount of benefits payable to or in the right of
the Participant under the Plan.
Page 32
<PAGE> 35
UNITED BANCORP, INC.
Tecumseh, Michigan 49286
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR
ANNUAL MEETING OF SHAREHOLDERS ON APRIL 16, 1996
The undersigned hereby appoints M. H. Downing and David S. Hickman, and either
of them, with full power of substitution, Proxies to attend the Annual Meeting
of the Shareholders of United Bancorp, Inc. ("Company"), to be held at the
Tecumseh Country Club, 5200 Milwaukee Road, Tecumseh, Michigan on Tuesday,
April 16, 1996 at 4:30 p.m., local time, and any adjournment thereof, and to
vote all shares of the common stock of the Company which the undersigned is
entitled to vote upon each of the matters referred to in this Proxy and, at
their discretion, upon such other matters as may properly come before this
meeting.
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 proposals.
The Board of Directors recommends a vote FOR all proposals.
<TABLE>
<S><C>
PROPOSAL 1
To elect five directors to serve as "Class II Directors" until the 1999 Annual Meeting of Shareholders, or
until their successors have been elected and qualified:
Class II Director Nominees:
John H. Foss David S. Hickman Ann Hinsdale Knisel
Jeffrey T. Robideau Richard S. Whelan
Mark only one box
/ / FOR all nominees / / FOR, except vote withheld from the
following nominees:
/ / WITHHELD from all nominees
-----------------------------------
-----------------------------------
PROPOSAL 2
To establish a Directors' Retainer Stock Plan.
/ / FOR / / AGAINST / / ABSTAIN
PROPOSAL 3
To establish a Senior Management Deferred Bonus Stock Plan.
/ / FOR / / AGAINST / / ABSTAIN
PROPOSAL 4
To ratify the appointment of Crowe, Chizek and Company LLP as independent auditors.
/ / FOR / / AGAINST / / ABSTAIN
Witness my hand and seal this _____ day of
______________, 1996.
___________________________________________
(Signature)
___________________________________________
(Signature)
</TABLE>
Note: Please sign exactly as your name appears on this Proxy. If signing
for estates, trusts, corporations or partnerships, title or capacity should be
stated. If shares are held jointly, each holder should sign.
