EXHIBIT 10.2
UNITED BANCORP, INC.
UNITED BANK & TRUST
UNITED BANK & TRUST - WASHTENAW
STAKEHOLDER INCENTIVE COMPENSATION PLAN
The
Stakeholder Incentive Compensation Plan (“Plan”) has
been adopted by the Board of Directors of United Bancorp, Inc.
(“UBI”), United Bank & Trust (UB&T) and United
Bank & Trust – Washtenaw (“UB&T-W”) to be
effective on and after January 1, 2009, and until amended or
terminated by the Board of Directors.
The Purpose of the
Stakeholder Incentive Plan is to provide incentives in the form of
additional compensation to all co-workers of UBI, UB&T and
UB&T-W. The Plan is designed to reward performance
and support the concept that working as a team and executing our
goals will support the achievement of our financial plan targets
for the year, specifically including objectives for the Net Income
of UBI.
The
following defined terms shall have the meanings set forth
below:
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“Compensation Committee” shall
mean the compensation committee of UBI.
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“Management Committee Participant”
shall mean those Participants who are duly appointed members of the
UBI Management Committee.
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“Net Income” shall mean the net
income of UBI (as applicable) as determined by the certified public
accounting firm retained by UBI to audit its books and records for
the applicable Plan Year, provided that the Compensation Committee
may in its discretion make any adjustments it deems appropriate to
reflect extraordinary events that may otherwise result in
distortions of Net Income as intended for purposes of this
Plan.
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“Plan Year” shall mean the
calendar year, beginning with calendar year 2009.
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“SEO” shall mean each senior
executive officer, which shall include only the principal executive
officer of UBI, the principal financial officer of UBI, and each of
the other three (3) most highly compensated executive officers of
UBI and its controlled group, as determined according to the
requirements in Item 402 of Regulation S-K under the federal
securities laws by reference to total compensation for the last
completed fiscal year, without regard to whether the compensation
is includible in gross income. Until the compensation
data for the current fiscal year are available, UBI shall make its
best efforts to identify the
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three most highly compensated executive
officers for the current fiscal year. “Executive
officer” has the same meaning as defined in Rule 3b-7 of the
Securities Exchange Act of 1934. “Controlled
group” has the same meaning as defined in Section 414(b) and
(c) of the Internal Revenue Code, but only taking into account
parent-subsidiary relationships.
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Stakeholder
payouts will be based on UBI Net Income adjusted annually by the
Compensation Committee, with approval of the Board of
Directors.
The Plan
protects the interest of shareholders by requiring the attainment
of specified levels of Net Income for UBI, thus aligning the
interests of shareholders and participants in the Plan.
The Plan is
evidence of UBI’s commitment to the philosophy that a portion
of the total compensation of its co-workers should be awarded on an
incentive basis which recognizes the contributions of co-workers to
the success of UBI. The Plan is UBI’s method of
providing that incentive compensation on an equitable basis.
IV.
Administration
The
Compensation Committee has the responsibility to interpret,
administer, and amend the Plan. The determination of the
Compensation Committee with respect to the construction,
interpretation and administration of the Plan shall be final and
binding on all parties, subject to the provisions of the Claims and
Claims Review Procedure set forth in paragraph IX, below.
V. Plan
Participants
Participants
in the Plan shall be all full and part-time co-workers of UBI,
UB&T and UB&T-W for all or a portion of any Plan Year.
VI. Determination of
Incentive Compensation
Prior to the
beginning of each Plan Year (or prior to February 1, 2009, for the
first Plan Year), the Compensation Committee, with approval of the
Board of Directors, shall establish the following standards for the
Plan for the forthcoming Plan Year:
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The UBI Net Income targets. The UBI
Net Income targets for the Plan Year shall be adjusted
annually.
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Attached and incorporated Exhibit A sets forth
the percentage of each Participant’s base compensation which
will be paid as incentive compensation in accordance with the
percentage of the applicable target achieved for the Plan
Year. Exhibit A shall be reviewed and adjusted
annually.
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Compensation is defined as all regular
earnings paid. Overtime, bonuses and special pays are
excluded from eligible earnings, along with any “other”
special payments.
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