United Community Banks, Inc.
UNITED COMMUNITY BANKS INC (Form: DEF 14A, Received: 04/03/2012 08:25:22)


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
SCHEDULE 14A INFORMATION
 
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No.     )
 
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United Community Banks, Inc.
 
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GRAPHIC
 
125 HIGHWAY 515 EAST
BLAIRSVILLE, GEORGIA 30514-0398
 

  NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

 
To be Held on May 23, 2012
 
The Annual Meeting of Shareholders of United Community Banks, Inc. will be held on May 23, 2012 at 2:00 p.m. at The Ridges Resort, 3499 Highway 76 West, Young Harris, Georgia:
 
 
1.
To elect ten directors to constitute the Board of Directors to serve until the next annual meeting and until their successors are elected and qualified.
 
2.
To approve amendments to United’s Amended and Restated 2000 Key Employee Stock Option Plan to, among other things, increase the number of shares available for grant under the plan and make directors of United eligible to participate in the plan.
 
3.
To approve an advisory “say on pay” resolution supporting the compensation plan for executive officers.
 
4.
To ratify the appointment of Porter Keadle Moore, LLC as independent registered public accountant for 2012.
 
5.
To consider and act upon other matters that may properly come before the meeting or any adjournment thereof.
 
Only shareholders of record at the close of business on March 30, 2012 will be entitled to notice of, and to vote at, the meeting.  A proxy statement and a proxy solicited by the Board of Directors are enclosed.
 
We have elected to provide access to our proxy materials over the Internet under the Securities and Exchange Commission’s “notice and access” rule to help conserve resources and reduce printing and distribution costs.  We will be mailing a Notice of Internet Availability of Proxy Materials (“ Notice ”) to our shareholders, instead of a paper copy of our proxy materials, which include this proxy statement, our 2011 Annual Report to Shareholders and our Annual Report on Form 10-K for the year ended December 31, 2011, with instructions on how to access such proxy materials over the Internet.
 
To ensure that your vote is recorded promptly, please vote as soon as possible. Many shareholders of record have multiple options for submitting their vote before the meeting.  You may vote via the Internet (see the instructions on the Notice).  Or, if you are a registered shareholder and have not voted on-line by April 23, 2012, you will receive a second mailing with the proxy statement, proxy card, and instructions on how to vote (1) by telephone if you reside in the United States, Canada or the U.S. territories, or (2) by completing, signing and mailing the accompanying proxy card in the postage-paid envelope to be provided.  If you have Internet access, we encourage you to record your vote on the Internet. It is convenient and it saves significant postage and processing costs. If you attend the meeting you may, if you wish, withdraw your proxy and vote in person.
 
If your shares are held in “street name”, that is held for your account by a broker or other nominee, you will receive instructions from the holder of record that you must follow for your shares to be voted.
   
 
BY ORDER OF THE BOARD OF DIRECTORS,
 
  /s/ Jimmy C. Tallent  
 
Jimmy C. Tallent,
 
President and Chief Executive Officer
April 3, 2012
 
 
 
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE ANNUAL MEETING, PLEASE VOTE BY TELEPHONE, INTERNET, OR COMPLETE AND RETURN THE ENCLOSED PROXY CARD PROMPTLY SO THAT YOUR VOTE MAY BE RECORDED.
 

 
 

 

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April 3, 2012
 
GRAPHIC
     
125 HIGHWAY 515 EAST
BLAIRSVILLE, GEORGIA 30514-0398
     
     
PROXY STATEMENT
     
     
 
This Proxy Statement is furnished in connection with the solicitation of proxies by the Board of Directors of United Community Banks, Inc. for use at the 2012 Annual Meeting of Shareholders to be held on Wednesday, May 23, 2012 at 2:00 p.m. at The Ridges Resort, 3499 Highway 76 West, Young Harris, Georgia, and at any adjournments or postponements of the Annual Meeting.
 
Q UESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING
 
W hat is the purpose of the Annual Meeting?
 
At the Annual Meeting, shareholders will act upon the matters set forth in the accompanying notice of meeting, including the:
 
 
1.
Election of ten directors to constitute the Board of Directors to serve until the next annual meeting and until their successors are elected and qualified;
 
 
2.
To approve amendments to United’s Amended and Restated 2000 Key Employee Stock Option Plan to, among other things, increase the number of shares available for grant under the plan and make directors of United eligible to participate in the plan;
 
 
3.
Approval of an advisory “say on pay” resolution supporting the compensation plan for executive officers; and
 
 
4.
Ratification of appointment of Porter Keadle Moore, LLC as independent registered public accountant for 2012.
 
Why did I receive a notice in the mail regarding the Internet availability of the proxy materials instead of a paper copy of the proxy materials?
 
In accordance with rules adopted by the Securities and Exchange Commission (“ SEC ”), we may furnish our proxy materials, which include this proxy statement, our 2011 Annual Report to Shareholders and our Annual Report on Form 10-K for the year ended December 31, 2011, to our shareholders by providing access to such documents on the Internet instead of mailing printed copies.
 
All shareholders will have the ability to access the proxy materials via the Internet by going to www.ucbi.com/2012 proxy or request to receive a printed set of such proxy materials.  Instructions on how to access the proxy materials over the Internet or to request a printed copy may be found on the Notice.
 
If you have not voted your proxy on-line by April 23, 2012, you may automatically receive a paper copy of this proxy statement and a proxy voting card by mail.  At that time, you may also vote by telephone or mail by following the instructions provided in this proxy statement.
 
W ho is entitled to vote?
 
All shareholders of record of United’s Common Stock at the close of business on March 30, 2012, which is referred to as the record date, are entitled to receive notice of the Annual Meeting and to vote the shares of Common Stock held by them on the record date. Each outstanding share of Common Stock entitles its holder to cast one vote for each matter to be voted upon.
 
H ow do I cast my vote?
 
If you hold your shares of Common Stock in your own name as a holder of record and you have Internet access, United prefers that you vote your shares via the Internet by going to www.proxy.ilstk.com and selecting “Shareholder Services” and then “Internet Voting”. Alternatively, you may vote your shares by telephone if you reside in the United States, Canada or the U.S. territories, or by marking, signing, dating and returning the proxy card in the postage-paid envelope provided to you, or you may vote in person at the Annual Meeting. If your shares of Common Stock are held in “street name”, that is held for your account by a broker, bank or other nominee, you will receive instructions from your nominee which you must follow in order to have your shares voted.
 
 
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Proxies that are executed and returned or submitted through the Internet, but do not contain any specific instructions on any proposal, will be voted “FOR” the proposals specified herein.
 
W hat are the quorum and voting requirements?
 
The presence, in person or by proxy, of holders of at least a majority of the total number of outstanding shares of Common Stock entitled to vote is necessary to constitute a quorum for the transaction of business at the Annual Meeting. As of the record date, there were 41,688,647 shares of Common Stock outstanding and entitled to vote at the Annual Meeting.
 
The required vote for each item of business at the Annual Meeting is as follows:
 
 
1.
For the election of directors, those nominees receiving the greatest number of votes at the Annual Meeting shall be deemed elected, even though the nominees may not receive a majority of the votes cast. However, as described in “Corporate Governance – Majority Vote Requirement”, under certain circumstances, nominees who are elected receiving less than a majority vote may be asked to resign;
 
 
2.
For the approval of amendments to United’s Amended and Restated 2000 Key Employee Stock Option Plan to, among other things, increase the number of shares available for grant under the plan and make directors of United eligible to participate in the plan, the vote of a majority of all shares of Common Stock outstanding;
 
 
3.
For the approval of the advisory “say on pay” resolution supporting the compensation plan for the executive officers, the vote of a majority of the shares voted on the matter;
 
 
4.
For the ratification of the appointment of Porter Keadle Moore, LLC as independent registered public accountant for 2012, the vote of a majority of the shares voted on the matter; and
 
 
5.
For any other business at the Annual Meeting, the vote of a majority of the shares voted on the matter, assuming a quorum is present, shall be the act of the shareholders on that matter, unless the vote of a greater number is required by law.
 
H ow are votes counted?
 
Abstentions and “broker non-votes” will be counted only for purposes of establishing a quorum, but will not otherwise affect the vote. “Broker non-votes” are proxies received from brokers or other nominees holding shares on behalf of their clients (in “street name”) who have not been given specific voting instructions from their clients with respect to non-routine matters. Typically, the ratification of independent auditors is considered a routine matter by brokers and other nominees allowing them to have discretionary voting power to vote shares they hold on behalf of their clients for the ratification of an independent auditor.
 
Proposal 1 is the election of directors. Because directors are elected by a plurality of the votes cast, except as described in “Corporate Governance – Majority Vote Requirement”, the director nominees who get the most votes will be elected even if such votes do not constitute a majority. Directors cannot be voted “against” and votes to “withhold authority” to vote for a certain nominee will have no effect if the nominee receives a plurality of the votes cast. For the approval of all other proposals, you may vote “for” or “against” the proposal.
 
If you hold your shares of Common Stock in your own name as a holder of record, and you fail to vote your shares, either in person or by proxy, the votes represented by your shares will be excluded entirely from the vote.
 
W ill other matters be voted on at the Annual Meeting?
 
We are not aware of any other matters to be presented at the Annual Meeting other than those described in this Proxy Statement. If any other matters not described in the Proxy Statement are properly presented at the meeting, proxies will be voted in accordance with the best judgment of the proxy holders.
 
C an I revoke my proxy instructions?
 
If you are a record holder, you may revoke your proxy by:
 
 
filing a written revocation with the Secretary of United at the following address:
P.O. Box 398, Blairsville, Georgia 30514-0398;
 
 
filing a duly executed proxy bearing a later date; or
 
 
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appearing in person and electing to vote by ballot at the Annual Meeting.
 
Any shareholder of record as of the record date attending the Annual Meeting may vote in person by ballot whether or not a proxy has been previously given, but the presence (without further action) of a shareholder at the Annual Meeting will not constitute revocation of a previously given proxy.
 
Any shareholder holding shares in “street name” by a broker or other nominee must contact the broker or nominee to obtain instructions for revoking the proxy instructions.
 
W hat other information should I review before voting?
 
United’s 2011 Annual Report to Shareholders and its Annual Report on Form 10-K filed with the SEC, including financial statements for the year ended December 31, 2011, are enclosed with this Proxy Statement. The 2011 Annual Report to Shareholders is not part of the proxy solicitation material. An additional copy of United’s Annual Report on Form 10-K may be obtained without charge by:
 
 
accessing United’s website at www.ucbi.com ;
 
 
writing to the Secretary of United at the following address:
P.O. Box 398, Blairsville, Georgia 30514-0398; or
 
 
accessing the EDGAR database at the SEC’s website at www.sec.gov .
 
You may also obtain copies of United’s Annual Report on Form 10-K from the SEC at prescribed rates by writing to the Public Reference Section of the SEC, Room 1580, F. Street, N.E., Washington, D.C. 20549. Please call the SEC at (800) SEC-0330 for further information about obtaining information from the SEC.
 
N OTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS
 
We have posted materials related to the 2012 Annual Meeting on the Internet. The following materials are available on the Internet at www.ucbi.com/2012proxy :
 
 
this Proxy Statement for the 2012 Annual Meeting;
 
 
United’s 2011 Annual Report to Shareholders; and
 
 
United’s Annual Report on Form 10-K for the year ended December 31, 2011 filed with the SEC.
 
You are also invited to attend the 2012 Annual Meeting in person. To pre-register to attend the Annual Meeting you may:
 
 
follow the instructions at www.ucbi.com/2012proxy ;
 
 
email Investor_Relations@ucbi.com and indicate the name of the person(s) attending; or
 
 
call (866) 270-5900 and speak with an Investor Relations professional.
 
For directions to the Annual Meeting, visit www.theridgesresort.com , or call (866) 270-5900 and an Investor Relations professional can assist you.

 
3

 
 
P ROPOSAL 1 – ELECTION OF DIRECTORS
 
I ntroduction
 
The Bylaws of United provide that the number of directors on United’s Board of Directors may range from eight to fourteen. The Board of Directors of United has set the number of directors at ten. The number of directors may be increased or decreased from time to time by the Board of Directors by resolution, but no decrease shall have the effect of shortening the term of an incumbent director. The terms of office for directors continue until the next annual meeting and until their successors are elected and qualified.
 
I nformation Regarding Nominees for Director
 
Set forth below is information on each director and nominee, along with a summary of their experience, qualifications, attributes, and skills that qualify them for service on the Board.  The following information has been furnished by the respective nominees for director as of March 23, 2012. All of the nominees for director other than Mr. Brokaw are existing directors that have been nominated by the Board of Directors for reelection.
 
Jimmy C. Tallent
Age 59
Director since 1988
President and Chief Executive Officer
 
 
Mr. Tallent has served as President and Chief Executive Officer of United from the time it was formed in 1988. He served as United Community Bank’s President and Chief Executive Officer since 1984 and currently serves as its Chairman. Under Mr. Tallent’s leadership, United has grown from a small, one-branch banking operation in the rural community of Blairsville, Georgia to the third largest bank holding company headquartered in Georgia, with $7.4 billion in assets and 106 banking offices covering three states in the Southeast. Mr. Tallent is a member of the Georgia Power board of directors and serves as a Trustee of Young Harris College in Young Harris, Georgia. He is a former member of the State Board for the Georgia Department of Technical and Adult Education, the Global Health Action board of directors and the Georgia Chamber of Commerce board of directors. Mr. Tallent has also served as the Georgia State YMCA Finance Chairman.
 
Mr. Tallent’s many professional accomplishments include being honored with the Georgia Economic Developers Association’s Spirit of Georgia Award, which was presented to Mr. Tallent in 1999. This award is presented annually to a Georgia business executive who has demonstrated superior ability, originality, potential impact, and courage in business development. For six consecutive years, Georgia Trend magazine has recognized Mr. Tallent as one of the “100 Most Influential Georgians”. In 2007, Mr. Tallent was honored with the Ernst & Young Entrepreneur of the Year Award for Financial Services in the Alabama / Georgia / Tennessee region. Mr. Tallent attended Young Harris College and Piedmont College and is a graduate of the Georgia Banking School in Athens, Georgia.
 
For the following reasons, the Board of Directors of United has concluded that Mr. Tallent should serve as a director of the company.  As President and Chief Executive Officer, Mr. Tallent is the only officer to serve on our Board. With more than 27 years of experience, Mr. Tallent has a deep knowledge and understanding of United, its “community banks” and its lines of business. Mr. Tallent has demonstrated leadership abilities and has the integrity, values and good judgment that make him well suited to serve on the Board of Directors.
 
Robert L. Head, Jr.
Director since 1988
Age 72
Chairman of the Board
Nominating/Corporate Governance Committee
 
Compensation Committee
 
Mr. Head has served on the Board of Directors of United since its establishment in 1988, and was elected Chairman in 1989. Mr. Head has served on the board of United Community Bank since 1973. In addition to his service with United, Mr. Head serves on the Board of Trustees and Executive Committee of Young Harris College. He also served on the Georgia State Board of Industry, Trade and Tourism from 1994 to 2000.
 
Mr. Head has been president of Head-Westgate Corporation, a commercial construction and retail center management company, since 1987. Previously, he was president of Robert L. Head Building Supply from 1970 to 1986. Mr. Head began his professional career in 1961 as a production accountant for the Coca-Cola Company, followed by military service in the U.S. Army Reserves and Georgia Air National Guard.  He holds an associate’s degree from Young Harris College, as well as a graduate degree from Georgia State University.
 
United values business leadership and the experience our directors gain through such leadership. Mr. Head is recognized both locally and statewide for his knowledge of management, industry and construction – all valuable assets to the Board of Directors because a significant portion of United’s business is in the areas of construction and small business banking. Mr. Head’s extensive experience and leadership in these areas provide a unique perspective to the Board. The Board also believes that Mr. Head’s values and commitment to excellence make him well suited to serve as Chairman of the Board of Directors.
 
 
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Robert H. Blalock
Director since 2000
Age 64
Audit Committee
 
Nominating/Corporate Governance Committee
 
Compensation Committee
 
Mr. Blalock has been Chief Executive Officer of Blalock Insurance Agency, Inc. in Clayton, Georgia, since 1974. He served as an organizing director of First Clayton Bank and Trust when the bank was formed in 1988. He was a director and served on the compensation and audit committees for First Clayton Bank and Trust, which was acquired by United in 1997, and was past chairman of the board. Mr. Blalock remains on the community bank board of United Community Bank – Clayton (the former First Clayton Bank and Trust), and joined United’s Board in 2000. Mr. Blalock is a graduate of University of Georgia and served as an Infantry Officer in the U.S. Army. He served a tour of duty in Vietnam with the 101 Airborne Division. He was a member of the Rotary Club of Clayton Board of Directors from 1974 to 1991 and served as the club’s vice president.
 
Extensive knowledge and business experience, as well as involvement in our banking communities, provide critical insight to our Board of Directors. Mr. Blalock’s experience and leadership of a small business in the Clayton community provides a much-needed perspective into a business community that is representative of several others in United’s service area. As a past director of First Clayton Bank and Trust – which has been part of United since 1997 – Mr. Blalock brings not only a rich history of banking leadership, but a perspective of the bank acquisition process. The Board believes that Mr. Blalock’s 37 years of business experience and 21 years of bank board experience make him well suited to serve on the Board of Directors.
   
 
Clifford V. Brokaw
 
Age 44
 
 
Mr. Brokaw joined Corsair Capital, LLC as Managing Director in 2007.  Corsair Capital is a private equity firm focused exclusively on investing in the financial services industry.  Mr. Brokaw also services as a member of the Investment Committee and leads the quarterly valuation process.  Mr. Brokaw was Managing Director in the Financial Institutions group at Goldman Sachs & Co. from 1999 to 2007 and worked in the Mergers and Acquisition group of J.P. Morgan from 1996 to 1999.  He has had extensive financial experience with banks and insurance companies involving demutulization, initial public offerings, mergers, acquisitions, and capital offerings.  Mr. Brokaw serves as a director of Torus Insurance Holdings.  He received his bachelor’s and J.D. degrees from the University of Virginia.
     
Mr. Brokaw has a breadth of experience in the financial services industries, having served in senior executive and director positions.  Mr. Brokaw’s extensive banking and related financial experience over his tenure at a private equity firm and two of the largest financial institutions in the country, provide a valuable perspective to United’s Board of Directors making him well suited for the board.
 
L. Cathy Cox
Director since 2008
Age 53
Audit Committee
 
Nominating/Corporate Governance Committee Chairman
 
Compensation Committee Chairman
 
Ms. Cox has served on the Board of Directors of United and the board of United Community Bank since 2008. Ms. Cox has been President of Young Harris College, a private, liberal arts college in North Georgia, since 2007. In her short time at the college, she has moved the college from two-year to four-year status, increased enrollment of the institution by 50 percent, doubled the size of the faculty, and added nearly $50 million in new facilities to the campus. Prior to joining the college, Ms. Cox served as the Georgia Secretary of State. Twice elected, in this role she served as the Commissioner of Securities, overseeing the regulation of the securities industry within the state. She also participated in one of the largest ever national settlements against national investment banks for state and federal law violations.
   
Ms. Cox was twice elected to the Georgia House of Representatives where she served on the House Judiciary Committee; Game, Fish and Parks Committee; State Institutions and Properties Committee; Georgia Code Revision Commission; and various House study committees. Prior to her public service, Ms. Cox worked as an attorney, first as an associate with Hansell & Post in Atlanta, Georgia, and then as a partner with Lambert, Floyd & Conger in Bainbridge, Georgia. She started her professional career as a newspaper reporter. Ms. Cox holds an A.S. degree from Abraham Baldwin Agricultural College, an A.B.J. degree from University of Georgia, and a J.D. from Mercer University School of Law. She was Editor-in-Chief of the Mercer Law Review.
 
Ms. Cox provides a very unique combination of legal, governmental and educational experience to the Board of Directors. In her legal career, Ms. Cox served as legal counsel for community banks in Georgia. This, combined with her extensive government service, brings a depth of legal and governmental expertise to the Board. Her leadership of a college undergoing tremendous growth demonstrates Ms. Cox’s vision and strong management skills, and offers the perspective of a key educational institution to the Board. For these reasons, the Board believes Ms. Cox is well suited to serve on the Board of Directors.
 
 
5

 
 
Steven J. Goldstein
Director Since 2012
Age 60
Audit Committee
Nominating/Corporate Governance Committee
Compensation Committee
 
Mr. Goldstein was executive vice president and chief financial officer of The Federal Home Bank of Atlanta from 2007 to 2011.  His responsibilities included financial and regulatory reporting, Sarbanes-Oxley compliance, accounting operations, oversight of financial modeling, and enterprise risk management.  Mr. Goldstein was senior vice president and chief financial officer of Royal Bank of Canada’s (“ RBC ”) U.S. and International division from 2001 to 2006 following its acquisition of Centura Banks, Inc. where Mr. Goldstein had been chief financial officer from 1997 to 2001.  For the previous 15 years, Mr. Goldstein held several senior management roles with financial services consulting firms, and served as an analyst, and was a deputy director of the Office of Public and Economic Research at the Federal Home Loan Bank Board in Washington, D.C.  He began his career as Assistant Professor of Finance at the University of South Carolina. Mr. Goldstein received his bachelor’s, master’s and doctorate degrees from the University of Georgia.
 
Mr. Goldstein has a breadth of experience in the financial services industry having served in senior executive positions in finance and risk management at major banking and regulatory organizations.  Mr. Goldstein’s extensive banking and financial experience, including enterprise risk management, provide a valuable perspective to United’s Board of Directors making him well suited for the board.
 
W. C. Nelson, Jr.
Director since 1988
Age 68
Audit Committee Chairman
 
Nominating/Corporate Governance Committee
 
Compensation Committee
 
Mr. Nelson has served on the Board of Directors of United since its formation in 1988, and has served as Vice Chairman from 1992 through March 2012. He has served on the board of United Community Bank since 1974. Mr. Nelson is the co-owner and operator of Nelson Tractor Co. in Blairsville, Georgia, a dealer of farm and light industrial equipment established by the Nelson family in 1949. In this capacity, he has served on the Ford Tractor National Dealer Council, as well as the Kubota National Dealer Advisory Board representing southeast U.S. dealers. Mr. Nelson attended Young Harris College and The Georgia Institute of Technology. He has been a member of the Union County (Georgia) Development Board for more than 30 years and has served as chairman for 15 years. Mr. Nelson is a current member of the Tennessee Valley Authority (TVA) Regional Resource Stewardship Council representing the state of Georgia, and is currently on the Young Harris Board of Associates and the Blairsville Downtown Development Authority.
 
In addition to owning and operating a thriving local business, Mr. Nelson’s managerial and leadership expertise is recognized by professional and governmental entities nationwide. In addition to his keen leadership, Mr. Nelson brings to the Board of Directors a broad community perspective due to his lengthy involvement in, and leadership of, varied local and regional municipal organizations – a valued perspective because of United’s strong commitment to the communities it serves. The Board believes that Mr. Nelson’s dedication to community development, as well as his decades of business leadership and board experience makes him well suited for the Board of Directors.
 
Thomas A. Richlovsky
Age 60
Director since 2012
Audit Committee
Nominating/Corporate Governance Committee
Compensation Committee
 
Mr. Richlovsky was executive vice president at PNC Financial Services Group Inc. from 2009 to 2011, following PNC’s acquisition of National City Corporation in December 2008.  While at PNC, he assisted with the integration of National City’s financial functions as well as managed or co-managed several areas within the PNC finance group.  Mr. Richlovsky was chief financial officer, treasurer and principal accounting officer of National City at the time of its acquisition by PNC.  During his 30-year tenure with National City (1978-2008), he assumed progressively greater responsibilities and gained extensive financial, accounting, and treasury expertise. At the time of the sale of National City and subsequent integration into PNC, he was a key executive and assisted in the transition with regulators, investors, and other external constituents.  Mr. Richlovsky began his career as an auditor in 1973 with Ernst & Ernst, a predecessor firm of Ernst & Young LLP, in Cleveland, Ohio.  Mr. Richlovsky received his bachelor’s degree from Cleveland State University and is a CPA.
 
 
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Mr. Richlovsky has extensive experience in the financial services industry, having served in senior executive positions in finance, accounting and treasury at major banking organizations.  Mr. Richlovsky’s expertise and experience in these finance related areas of banking will provide a valuable perspective to United’s Board of Directors, making him well suited for the Board.
   
John D. Stephens
Director since 2007
Age 71
Nominating/Corporate Governance Committee
 
Compensation Committee
 
Mr. Stephens is owner, general and managing partner of Stephens MDS, LP, in College Park, Georgia, which oversees the operation of a construction and demolition landfill. He also is owner and president of Stephens Rock and Dirt, Inc., which oversees all aspects of the operation of a facility for the recycling and processing of soil, rock, concrete, concrete blocks and cured asphalt pavement. He is general and managing partner of three real estate, development and property management companies. From 1966 to 2005, Mr. Stephens was president of John D. Stephens, Inc., an underground utility, heavy construction and pipeline construction company. Mr. Stephens also serves on the Executive Committee of the Gwinnett Chamber of Commerce and Board of Trustees of Georgia Gwinnett College. He is past president of the Georgia Utility Contractors Association and has served on the Georgia Board of Industry and Trade Commission. Mr. Stephens holds an associate’s degree and Bachelor of Science degree in Mechanical Technology from Southern Polytechnic State University.
 
Mr. Stephens has extensive experience in bank board participation and bank leadership roles, beginning in the 1970s as a board member of Gwinnett County Bank. Through various mergers and acquisitions of Gwinnett County Bank between that time and 2000, Mr. Stephens served on the boards of Button Gwinnett Savings Bank, The Bank of Gwinnett, and Premier Bank. In 1999, he participated as a director in the sale of Premier Bank to BB&T. A year later, he helped to organize and found First Bank of Gwinnett, where he served as chairman of the board. First Bank of Gwinnett became First Bank of the South, which was acquired by United in 2007.  Mr. Stephens’ involvement on the board of First Bank of South and its parent company as well as on a number of other Atlanta-area bank boards since the 1970s, provides nearly 48 years of bank leadership experience to the Board of Directors, as well as insight into the Atlanta region – an area of growth for United. His perspective of bank formation, mergers, acquisition and operation provides a unique perspective and background. Because of this, and his 44 years of business and industrial experience, the Board believes Mr. Stephens is well suited for the Board of Directors.
     
Tim R. Wallis
Director since 1999
Age 60
Nominating/Corporate Governance Committee
 
Compensation Committee
 
Mr. Wallis is owner and president of Wallis Printing in Rome, Georgia. Previously, he worked in production and sales at what was then Brazelton-Wallis Printing Company from 1974 until 1985, when he became owner and president. In addition to serving on the Board of Directors of United, Mr. Wallis also serves as chairman on the community bank board of United Community Bank – Rome. He has served on the board of directors of the Printing and Imaging Association of Georgia (PIAG) and was chairman of the association’s Government Relations Committee. In this capacity he worked directly with PIAG legislative liaisons at both the state and national levels. Mr. Wallis currently serves on the Georgia Chamber of Commerce board of directors. He also has served on the Darlington School board of trustees, Georgia Southern College Foundation board of trustees, Rome/Floyd YMCA board of trustees, and the United Way of Rome and Floyd County board of trustees. He is a graduate of Georgia Southern University.
 
Mr. Wallis has been a community leader and long-term owner of a small business. With United’s interest in small business and commercial banking, Mr. Wallis brings a valuable perspective and insight to the Board. His varied experience in a number of community boards, as well as his service on the United Community Bank – Rome community bank board, gives the Board a much needed focus on the needs of our mid-size banking communities and the business owners within those communities. For these reasons, and his experience with statewide commerce, the Board believes Mr. Wallis is well suited to serve on the Board of Directors.
 
There are no family relationships between any director, executive officer, or nominee for director of United.
 
Recent Changes
 
Messrs. Goldstein and Richlovsky were appointed to the Board and their committee positions on March 21, 2012.  Mr. Brokaw was appointed to the Board on January 19, 2012, subject to regulatory approval.  He was nominated by Corsair Georgia, L.P., which currently has a contractual right to nominate one member to United’s Board, to replace Peter E. Raskind who resigned on the same date from the Board so he could pursue an opportunity as a director of Capital One Financial Corporation.  Mr. Brokaw is being nominated for re-election to the Board of Directors.
 
At the completion of their terms at our Annual Meeting of Shareholders on May 23, 2012, Director Hoyt O. Holloway and Director Emeritus Zell B. Miller will be retiring.
 
 
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Board Independence
 
The Board has considered and determined that a majority of the members of the Board of Directors are “independent”, as defined under applicable federal securities laws and the Nasdaq Listing Requirements.  During 2011, the independent directors were Directors Head, Nelson, Blalock, Cox, Holloway, Raskind, Stephens and Wallis.  Directors Brokaw, Goldstein and Richlovsky who were appointed in the first quarter of 2012, are also independent.  The independent directors meet in executive sessions every quarter without management.
 
Board Leadership
 
The Board has elected Director Head as Chairman. The Board believes that its current leadership structure is appropriate because Director Head is both a skilled businessmen with good judgment and is a substantial shareholder of United. As a result, he provides independent, shareholder-focused leadership to United.
 
B oard Committees
 
The Board currently has, and appoints members to, three standing committees: the Audit Committee, the Nominating/Corporate Governance Committee and the Compensation Committee. Each member of these committees is independent and each committee has a charter approved by the Board, which are available on United’s website, www.ucbi.com .
 
Identified below are the members of the committees as of March 30, 2012 (M - member; C - chairman):
 
Name
Audit
 
Nominating/
Corporate Governance
 
Compensation
W. C. Nelson, Jr.                                                                   
C
 
M
 
M
           
Robert H. Blalock                                                                   
M
 
M
 
M
           
Clifford V. Brokaw (1)                                                                    
         
           
L. Cathy Cox                                                                   
M
 
C
 
C
           
Steven J. Goldstein                                                                   
M
       
 
Robert L. Head, Jr.                                                                   
   
 
M
 
 
M
           
Hoyt O. Holloway (2)                                                                    
M
 
M
 
M
           
Thomas A. Richlovsky                                                                   
M
       
           
John D. Stephens                                                                   
   
M
 
M
 
Jimmy C. Tallent                                                                   
         
           
Tim R. Wallis                                                                   
   
M
 
M
 
(1)
Subject to regulatory approval.
 
(2)
Retiring at the end of his term on May 23, 2012.
 
Audit Committee
 
The Audit Committee assists the Board in its general oversight and serves as an independent and objective party to monitor United’s financial reporting process and internal control systems, to review and assess the performance of the independent registered public accountants and internal auditing department, and to facilitate open communication among the independent registered public accountants, senior and financial management, the internal auditing department, and the Board of Directors. Certain specific responsibilities of the Audit Committee include recommending the selection of independent registered public accountants, meeting with the independent registered public accountants to review the scope and results of the annual audit, reviewing with management and the internal auditor the systems of internal controls and internal audit reports, ensuring that United’s books, records, and external financial reports are in accordance with U.S. generally accepted accounting principles, and reviewing all reports of examination made by regulatory authorities and ascertaining that any and all operational deficiencies are satisfactorily corrected.
 
 
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The Board of Directors has determined that all of the members of the Audit Committee have sufficient knowledge in financial and accounting matters to serve on the Audit Committee, including the ability to read and understand fundamental financial statements.  The Board of Directors has determined that all of the members of the Audit Committee are “financially sophisticated”, as defined under the Nasdaq Listing Requirements, and that Directors Goldstein and Richlovsky qualify as “audit committee financial experts” in accordance with the applicable rules and requirements of the SEC.
 
The Audit Committee met eight times during 2011.
 
Nomination/Corporate Governance Committee
 
The Nominating/Corporate Governance Committee reviews United’s Corporate Governance Guidelines and policies and monitors compliance with those guidelines and policies. In addition, the Nominating/Corporate Governance Committee is responsible for identifying individuals qualified to become Board members and recommending to the Board of Directors nominees for election and candidates for each committee appointed by the Board. The Nominating/Corporate Governance Committee met one time during 2011.
 
Compensation Committee
 
The Compensation Committee is responsible for establishing and administering the policies that govern the compensation arrangements for executive officers and other senior officers. The Compensation Committee is also responsible for oversight and administration of certain executive and employee compensation and benefit plans, including the Amended and Restated 2000 Key Employee Stock Option Plan (the “ Equity Plan ”), the Deferred Compensation Plan (as defined herein) and the Modified Retirement Plan and general compensation arrangements for all employees. It periodically reviews and makes recommendations to the Board with respect to directors compensation. The Compensation Committee met five times during 2011.
 
B oard Meetings
 
The Board of Directors held nineteen meetings during 2011. All of the directors attended at least 75 percent of the meetings of the Board and meetings of the committees of the Board on which they served that were held during 2011. Directors are expected to be present at the Annual Meeting of United.
 
Risk Oversight
 
Risk oversight of United is the responsibility of the Board of Directors. The Board administers this oversight function by evaluating various components of risk to the company at each meeting of the Board. United believes that its Board leadership structure facilitates careful oversight of risk to United. The structure of the Board provides strong oversight by the independent directors, with the independent directors meeting frequently in executive sessions of the Board without management. These executive sessions allow the Board of Directors to review key decisions and discuss matters in a manner that is independent of management.
 
V ote Required
 
Each proxy executed and returned by a shareholder will be voted as specified thereon by the shareholder. If any nominee withdraws or for any reason is not able to serve as a director, the proxy will be voted for such other person as may be designated by the Board of Directors as a substitute nominee, but in no event will the proxy be voted for more than nine nominees. Management of United has no reason to believe that any nominee will not serve if elected. All of the nominees are currently directors of United.
 
Pursuant to the Georgia Business Corporation Code, directors are elected by a plurality of the votes cast by the holders of the shares entitled to vote in an election at a meeting at which a quorum is present, even though the nominees may not receive a majority of the votes cast. However, as described in “Corporate Governance - Majority Vote Requirement”, under certain instances, nominees who are elected receiving less than a majority vote may be asked to resign. A quorum is present when the holders of a majority of the shares outstanding on the record date are present at a meeting in person or by proxy. An abstention or a broker non-vote will be included in determining whether a quorum is present at the meeting, but will not have any other effect on the outcome of a vote.
 
R ecommendation
 
The Board of Directors unanimously recommends a vote “FOR” each nominee for director.
 
 
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C ORPORATE GOVERNANCE
 
D irector Nominations
 
General
 
The Board of Directors nominates individuals for election to the Board based on the recommendations of the Nominating/Corporate Governance Committee. A candidate for the Board of Directors must meet the eligibility requirements set forth in United’s Bylaws, Corporate Governance Guidelines and in any applicable Board or committee resolutions.
 
Nominating/Corporate Governance Committee Procedures
 
The Nominating/Corporate Governance Committee considers qualifications and characteristics that it, from time to time, deems appropriate when it selects individuals to be nominated for election to the Board of Directors. These qualifications and characteristics include, without limitation, the individual’s interest in United, his or her United shareholdings, independence, integrity, business experience, education, accounting and financial expertise, age, diversity, reputation, civic and community relationships, and knowledge and experience in matters impacting financial institutions. In addition, prior to nominating an existing director for re-election to the Board of Directors, the Nominating/Corporate Governance Committee will consider and review an existing director’s Board and committee attendance and performance.
 
Shareholder Nominations
 
The Board of Directors and Nominating/Corporate Governance Committee of the Board will consider all director nominees properly recommended by any United shareholders in accordance with the standards described above. Any shareholder wishing to recommend a candidate for consideration as a possible director nominee for election at an upcoming meeting of shareholders must provide timely, written notice to the Board of Directors in accordance with the procedures available on United’s website, www.ucbi.com . The following is a summary of these procedures:
 
 
In order to be considered timely, a nomination for the election of a director must be received by United no less than 120 days before the anniversary of the date United’s proxy statement was mailed to shareholders in connection with the previous year’s annual meeting.
 
 
A shareholder nomination for director must set forth, as to each nominee such shareholder proposes to nominate:
 
 
1.
the name and business or residence address of the nominee;
 
 
2.
an Interagency Biographical and Financial Report available from the Federal Deposit Insurance Corporation completed and signed by the nominee;
 
 
3.
the number of shares of Common Stock of United which are beneficially owned by the person;
 
 
4.
the total number of shares that, to the knowledge of nominating shareholder, would be voted for such person; and
 
 
5.
the signed consent of the nominee to serve, if elected.
 
 
The notice by a nominating shareholder shall also set forth:
 
 
1.
the name and residence address of such nominating shareholder; and
 
 
2.
the class and number of shares of Common Stock of United which are beneficially owned by such shareholder.
 
Notices shall be sent to the Secretary, United Community Banks, Inc., P.O. Box 398, Blairsville, Georgia 30514-0398. There were no director nominations proposed for this year’s Annual Meeting by any shareholder.
 
M ajority Vote Requirement
 
United’s majority vote policy states that nominees for director who are elected but receive less than a majority of the votes cast for the election of directors may be asked to resign. The policy allows the Board to waive this majority vote requirement where a general campaign against the election of a class of directors of public companies resulted in a United nominee being elected with less than a majority vote without consideration of the particular facts and circumstances applicable to the individual United nominee. A waiver of the majority vote requirement will not be permitted if the votes cast resulted from a campaign directed specifically against the election of an individual United nominee, even in circumstances where a majority of the Board of Directors disagrees with those voting against that director’s election.

 
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Co de of Ethical Conduct
 
United has adopted a Code of Ethical Conduct designed to promote ethical conduct by all of United’s directors and principal financial and executive officers. The Code of Ethical Conduct complies with the federal securities law requirement that issuers have a code of ethics applicable to principal financial officers and with applicable Nasdaq Listing Requirements. United’s Code of Ethical Conduct is available on its website and was filed as Exhibit 14 to its Annual Report on Form 10-K for the year ended December 31, 2003. United has not had any amendment to or waiver of the Code of Ethical Conduct. If there is an amendment or waiver, United will post any such amendment or waiver on the company’s website, www.ucbi.com .
 
Sh areholder Communication
 
The Board of Directors maintains a process for shareholders to communicate with the Board. Shareholders wishing to communicate with the Board of Directors should send any communication in writing to the Secretary, United Community Banks, Inc. P.O. Box 398, Blairsville, Georgia 30514-0398. Any such communication must state the number of shares beneficially owned by the shareholder making the communication. The communication will be forwarded to the full Board of Directors or to any individual director or directors to whom the communication is directed unless the communication is illegal or otherwise inappropriate, in which case the communication will be disregarded.
 
Ce rtain Relationships and Related Transactions
 
United has a written related person transaction policy that governs the review, approval and ratification of any transaction that would be required to be disclosed by United pursuant to Item 404 of Regulation S-K under the Securities Act of 1933, as amended. The Board of Directors of United or the Audit Committee must approve all such transactions under the policy.
 
Prior to entering into such a related person transaction or an amendment thereof, the Board or Audit Committee must consider all of the available relevant facts and circumstances, including if applicable, benefits to United, the impact of a transaction on a director’s independence, the availability of other sources for comparable products or services, the terms of the transaction, and the terms available to or from unrelated third parties or employees generally, as the case may be. No member of the Board or Audit Committee shall participate in any review, consideration, or approval of any related person transaction with respect to which such member or any of his or her immediate family members is a related person.
 
Neither the Board of Directors of United nor the Audit Committee has approved any related person transactions during the past three years in accordance with United’s written related person transaction policy.
 
United’s wholly-owned subsidiary, United Community Bank (the “ Bank ”), has, and expects to have in the future, banking transactions in the ordinary course of business with directors and officers of United and other related persons, on the same terms (including interest rates and collateral) as those prevailing at the time for comparable transactions with unaffiliated third parties. Such transactions have not involved more than the normal risk of collectability or presented other unfavorable features.
 
 
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COM PENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
 
Co mpensation Discussion and Analysis
 
Overview
 
The Compensation Committee of the Board of Directors has the important responsibility of ensuring that United’s executive compensation policies and practices are based on three simple principles:
 
 
pay competitively within our industry;
 
 
pay for appropriate performance based on pre-established goals; and
 
 
design compensation programs with sound risk management practices and a balance between short-term and long-term objectives that provide for value creation for the company and our shareholders.
 
In addition to its focus on compensation matters, the Compensation Committee occasionally recommends policies related to leadership development and employee retention for consideration by the Board of Directors.
 
The Compensation Committee considered, among other things, the following significant matters when making its 2011 compensation decisions:
 
 
Economic conditions and the credit environment were very difficult throughout 2011. With the depressed real estate market and high unemployment continuing, business activity across a wide range of industries and regions was greatly reduced and local governments and businesses have been in serious difficulty due to the lack of consumer spending and the lack of liquidity in the credit markets. This overall environment and difficulty in United’s markets led to further declines in real estate values and elevated levels of non-performing loans and charge-offs during 2011.
 
 
United incurred a net loss of $226.7 million in 2011, of which $237.3 million was in the first quarter of 2011, primarily the result of credit losses associated with the execution of a plan to sell approximately $293 million in substandard and nonperforming loans and to accelerate the disposition of approximately $142 million in foreclosed properties. Excluding the first quarter of 2011, the remainder of the year was profitable and resulted in net income of $10.6 million.  This compared to a net loss of $502 million in 2010, which included non-cash charges of $211 million for goodwill impairment, a tax charge of $157 million to recognize a full valuation allowance on United’s net deferred tax asset, a $11.8 million partial fraud loss recovery, as well as a $45.3 million loss from United’s 2010 transaction with Fletcher International Ltd. and its affiliates.
 
 
During the first quarter of 2011, United closed a $380 million private placement pursuant to which institutional investors purchased 24,085,855 shares of common stock and 15,914,209 shares of non-voting common stock. The Private Placement resulted in an increase to shareholders’ equity of $362 million, net of transaction costs.
 
In addition, United held an advisory “say on pay” vote in 2011 on the compensation of its executive officers.  United’s shareholders overwhelmingly approved such compensation with 98% of votes cast voted in favor of the say on pay resolution.  As the Compensation Committee evaluated its compensation policies and overall objectives for 2012, it took into consideration this strong support of United’s shareholders.  As a result, the Compensation Committee decided to retain the general approach and structure of United’s compensation plan for its executive officers.  In the future, the Compensation Committee will continue to take the results of the say on pay vote into account.  While this vote was not binding on United, our Board of Directors or our Compensation Committee, we value the opinions of our shareholders and, to the extent there is any significant vote against the compensation of our executive officers, we will consider our shareholders’ concerns and the Compensation Committee will evaluate whether any actions are necessary to address those concerns.
 
As used in this “Compensation of Executive Officers and Directors” section, the following executives of United are referred to collectively as the “Named Executive Officers”: Jimmy Tallent – United’s president and chief executive officer; Rex Schuette – United’s executive vice president and chief financial officer; David Shearrow – United’s executive vice president and chief risk officer; Glenn White – United’s president of the Atlanta region; and Bill Gilbert – United’s president of the North Georgia and Coastal Georgia regions.

 
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Philosophy
 
United’s compensation programs are designed to attract and retain key employees, motivating them to achieve desired goals, both short and long-term, creating expectations for positive results and rewarding them for strong performance. Different programs are geared to short and long-term performance with the goal of increasing shareholder value over the long term. Because United believes the performance of every employee is important to the company’s success, it is mindful of the effect of executive compensation and incentive programs on all of its employees and tries to establish programs that are fair in light of the compensation programs for all other employees.
 
United believes that the compensation of the company’s senior executives should reflect their success as a management team and as individuals in attaining key operating objectives, such as growth of revenue, loans and deposits; growth of earnings and earnings per share; growth or maintenance of market share, long-term competitive advantage, customer satisfaction and operating efficiencies; and, ultimately, in attaining long-term growth in the market price of United’s stock. At the same time, United does not believe its executive compensation programs should encourage unnecessary or excessive risks. United believes that the performance of its senior executives in managing the company, considered in light of economic, industry and competitive conditions, should be the basis for determining their overall compensation.
 
United also believes that their compensation should not be excessive or based on the short-term performance of United’s stock, whether favorable or unfavorable, but rather that the price of United’s stock will, in the long-term, reflect the company’s operating performance, and ultimately, the management of the company by its executives. United seeks to have the long-term performance of its stock reflected in executive compensation through its stock option, restricted stock and other equity incentive programs.
 
Regulatory Limits
 
TARP Capital Purchase Program. On December 5, 2008, as part of the United States Department of the Treasury’s (“ Treasury ”) TARP Capital Purchase Program (the “ CPP ”), United entered into an Agreement (the “ Purchase Agreement ”) with Treasury, pursuant to which United sold 180,000 shares of Series B Cumulative Preferred Stock (the “ Series B Preferred Stock ”) and a warrant to purchase 1,099,542 shares (219,909 shares as adjusted for United’s 1 for 5 reverse stock split) of Common Stock for an aggregate purchase price of $180 million in cash.
 
In the Purchase Agreement, United agreed that, until such time as Treasury ceases to own any securities of United acquired pursuant to the Purchase Agreement, United will take all necessary action to ensure that its benefit plans with respect to its senior executive officers comply with Section 111(b) of the Emergency Economic Stabilization Act of 2008 (the “ EESA ”) as implemented by any guidance or regulation under the EESA and agreed to not adopt any benefit plans with respect to, or which covers, its senior executive officers that do not comply with the EESA, and the applicable executives have consented to the foregoing. Section 111(b)(2) of the EESA provides for the executive compensation and corporate governance standards to include:
 
 
limits on compensation that exclude incentives for senior executive officers of financial institutions to take unnecessary and excessive risks that threaten the value of the financial institution;
 
 
required recovery of any bonus or incentive compensation paid to a senior executive officer based on statements of earnings, gains, or other criteria that are later proven to be materially inaccurate;
 
 
a prohibition on the financial institution from making any “excess parachute payment” to any senior executive officer, as defined under Section 280G of the Internal Revenue Code of 1986, as amended, (an “ Excess Severance Payment ”) during the period that Treasury holds an equity or debt position; and
 
 
an agreement to limit a claim for a federal income tax deduction with respect to a senior executive’s compensation that exceeds $500,000 per year.
 
American Recovery and Reinvestment Act . On February 17, 2009, the American Recovery and Reinvestment Act of 2009 (the “ ARRA ”) was enacted. The ARRA imposed new executive compensation and corporate expenditure limits on all CPP recipients until the institution has repaid Treasury the amount of a CPP investment. The ARRA standards that apply to United and its senior executive officers include:
 
 
a prohibition on bonuses, retention awards and other incentive compensation, other than the granting of restricted stock awards which are limited to one-third of an employee’s total annual compensation and further, that do not fully vest while Treasury holds an investment;
 
 
a prohibition on making any payments for departure from United other than compensation earned for services rendered or accrued benefits;
 
 
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subjecting bonus, retention awards and other incentive compensation to repayment (clawback) if such payments were based on statements of earnings, revenues, gains or other criteria that are later found to be materially inaccurate;
 
 
a prohibition on compensation plans that encourage manipulation of reported earnings;
 
 
a required company-wide policy regarding excessive or luxury expenditures including office and facility renovations, aviation or other transportation services and other activities or events that are not reasonable expenditures for staff development, reasonable performance incentives or similar measures in the ordinary course of business; and
 
 
inclusion of a “say-on-pay” proposal to a non-binding vote of shareholders at the annual meetings, whereby shareholders vote to approve the compensation of executives.
 
Amendments to Compensation Arrangements . As required by the ARRA, a number of amendments were made to our compensation program. The amendments include:
 
 
Bonuses, retention awards and other incentive compensation payments to senior executive officers have been prohibited while Treasury holds an investment.
 
 
All of the Named Executive Officers have executed a letter agreement waiving their right to any severance payment that violates the ARRA.
 
 
A policy has been adopted that subjects any bonus or award payment to clawback if that payment was based on statements of earnings or other criteria that are later proven to be materially inaccurate. In addition, all of the Named Executive Officers and other applicable employees that are one of the next twenty most highly compensated employees during the time that Treasury holds an investment have executed a letter agreement reflecting this clawback policy.
 
Incentive Compensation Plan Risk Assessment . In addition to the EESA and the ARRA, the SEC now requires that the Compensation Committee review United’s compensation arrangements with the members of management responsible for risk management for all employees to determine if any such arrangements create risks that are reasonably likely to have a material adverse effect on United. The Compensation Committee also considers whether they encourage excessive or unnecessary risk-taking by our senior executive officers. As part of its review, the Compensation Committee considers the various risks to which United is subject, including market, liquidity, interest rate, operational, financial, credit quality, reputational and other risks, and how United’s incentive compensation programs may contribute to risk. The Compensation Committee also considered United’s controls and actions taken to mitigate and monitor those risks.
 
As previously described, because no bonuses, retention awards and other incentive compensation payments may be made to senior executive officers while Treasury holds an investment, the Compensation Committee determined that none of the incentive compensation plans applicable to Named Executive Officers create or encourage undue risks or are reasonably likely to have a material adverse effect on United. Generally, the Compensation Committee concluded that United’s incentive compensation programs applicable to senior management are designed to encourage long-term growth and shareholder value-creation and the delivery of superior customer service to promote core loan and deposit growth.
 
United maintains incentive compensation plans that pay loan and deposit production incentives to bank personnel. Incentives are paid for various measures of production consistent with United’s goals for the year. As part of the Compensation Committee’s risk assessment, the Committee noted that the incentive compensation plans for lenders presented somewhat more risk than other plans because commissions were based on loan production volume and constituted a higher portion of the company’s incentive compensation expense than the other plans. However, as part of the risk assessment, the Compensation Committee concluded that these plans do not create risks that are reasonably likely to have a material adverse effect on United because all loans must be approved by credit underwriting personnel and, depending on the size of the loan or credit relationship, by bank or executive management prior to being made and management has the ability to adjust bonus payments down based on the performance of the loan.
 
Administration
 
Generally, the Compensation Committee reviews the performance and approves all compensation of United’s senior executives and, based upon this evaluation, establishes their compensation. For all senior executives other than the Chief Executive Officer, the Chief Executive Officer makes recommendations to the Compensation Committee.
 
 
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No Compensation Committee member has been an officer or employee of United, and the Board has considered and determined that all of the members are independent as defined under the Nasdaq Listing Requirements. Several members of the Compensation Committee have a significant percentage of their net worth invested in shares of United and all members have interests aligned with the interests of other shareholders. The Compensation Committee’s charter is available in the corporate governance section of United’s website, www.ucbi.com .
 
Though not members of the Compensation Committee in 2011, Jimmy Tallent, United’s President and Chief Executive Officer, and Rex Schuette, United’s Executive Vice President and Chief Financial Officer, were invited to most Compensation Committee meetings. Although all invitees may participate in discussions and provide information that the Compensation Committee considers (except for discussions with respect to any invitee’s own compensation, in which an executive does not participate), invitees do not participate in voting and decision-making.
 
In setting and approving compensation of senior executives, the Compensation Committee considers objective measurements of business performance, the accomplishment of strategic and financial objectives, the development of management talent within the company, and other matters relevant to the short-term and the long-term success of the company and the enhancement of shareholder value in the broadest sense. As described above, the Committee also considered the recommendations of Mr. Tallent in 2011 with respect to the other Named Executive Officers, not including Mr. Tallent.
 
In performing its responsibilities for executive compensation, the Compensation Committee has sole authority to, and does to the extent it deems necessary or desirable, retain and consult with outside professional advisors. During 2011, Mercer, LLC advised the Compensation Committee and the Board on executive compensation and regulatory restrictions that include limits on cash bonus, options and restricted stock. Mercer reported directly to the Compensation Committee. Mercer has provided no other non-executive compensation consulting services to United.
 
Mercer performed a study of the compensation of executive management of companies within the industry and with companies of comparable size. The groups used to compare executive compensation include (1) a peer group of 12 bank holding companies with asset sizes ranging from $6.0 to $9.9 billion and a median of $8.3 billion (the “ Peer Group ”) and (2) a reference group of 11 bank holding companies with asset sizes ranging from $11.6 to $14.5 billion with a median asset size of $13.4 billion (the “ Reference Group ”), approximately the asset size to which United could grow in the next three to five years. The Peer Group consisted of Boston Private Financial Holdings, Inc., CapitalSource, Inc., F.N.B. Corporation, First Financial Bancorp, First Midwest Bancorp, Inc., IBERIABANK Corporation, National Penn Bancshares, Inc., Old National Bancorp, Park National Corporation, Sterling Financial Corporation, Trustmark Corporation and United Bancshares, Inc. The Reference Group consisted of BancorpSouth, Inc., Bank of Hawaii Corporation, FirstMerit Corporation, International Bancshares Corporation, Private Bancorp, Inc., Signature Bank, Susquehanna Bancshares, Inc., UMB Financial Corporation, Umpqua Holdings Corporation, Valley National Bancorp and Wintrust Financial Corporation. The Compensation Committee also compared United’s executive compensation to published executive compensation surveys, including bank holding companies with similar asset sizes, compiled with the assistance of Mercer.
 
The Compensation Committee compares the performance of United to the performance of the companies in the Peer Group and Reference Group and establishes United’s compensation practices similar to or more or less than such companies consistent with its goal of competitively compensating United’s Named Executive Officers. The Compensation Committee has attempted to compensate its Named Executive Officers comparable to executive officers at Peer Group and Reference Group companies but generally above the median compensation paid in each such group. The Compensation Committee also uses Mercer’s analysis to assist in determining the amounts of each element of compensation.
 
Elements of Compensation
 
Compensation for each senior executive is allocated among annual base salary, annual non-equity incentive awards and equity incentive awards. The Compensation Committee chooses to pay each element of compensation in order to attract, retain and motivate highly qualified executive talent, reward superior annual performance and provide incentives for their balanced focus on long-term strategic goals and increasing shareholder value as well as short-term performance. The amount of each element of compensation is determined by or under the direction of the Compensation Committee, which uses the following factors to determine the amount of salary and other benefits to pay each executive: performance against corporate and individual objectives for the previous year; difficulty of achieving desired results in the coming year; value of their unique skills and capabilities to support United’s long-term performance; performance of their general management responsibilities; and, contribution as a member of the executive management team.
 
Although the Compensation Committee does not set overall compensation targets and then allocate among the elements, it does review total compensation when making decisions on each element of compensation to ensure that the total compensation for each senior executive is justified and appropriate in the best interests of the company.
 
Annual Base Salary . United strives to provide its senior executives with a level of assured cash compensation in the form of annual base salary that is competitive with companies in the financial services industry and companies that are comparable in size and performance.
 
 
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The Compensation Committee reviews base salaries annually and makes adjustments, in light of past individual performance as measured by both financial and non-financial factors and the potential for making significant contributions in the future, to ensure that salary levels remain appropriate and competitive. With respect to all senior executives, other than the Chief Executive Officer, the Compensation Committee also considers Mr. Tallent’s recommendations and assessment of each officer’s performance, his or her tenure and experience in his or her respective positions, and internal comparability considerations.
 
Between 2007 and 2009, the Compensation Committee did not increase the annual base salaries for any of the Named Executive Officers as well as most other members of senior management. Further, in 2009, Mr. Tallent voluntarily requested that his salary be reduced by $80,000 to $400,000. As a result, by 2010, several of United’s executive officers’ compensation packages, as well as other key officers, had fallen well below the market median for United’s peer group. In 2010, the Compensation Committee increased Mr. Schuette’s and Mr. Shearrow’s base salaries to $325,000 and in 2011, increased their base salaries to $350,000, in each case to bring their compensation closer to the peer group median, while Mr. Tallent’s salary was restored to $500,000 which was slightly above his 2009 level.  Mr. Gilbert and Mr. White’s base salaries were not increased in 2011.
 
In June 2011, the Compensation Committee approved salary stock awards for Mr. Schuette and Mr. Shearrow of $133,500 that further increased their base salaries to $483,500.  While these adjustments moved their base salaries temporarily above peer group medians, the salary adjustments had the effect of shifting a portion of total compensation from variable to fixed. However, the executives’ total compensation after these awards remained consistent with our compensation philosophy when compared to total compensation for our peer group. The salary stock awards are paid in fully vested shares of Common Stock (“ Salary Stock ”) issued under the Equity Plan. The number of shares of Salary Stock issued to each executive is determined each pay period by dividing the amount of salary to be paid in stock by the reported closing market price for the Common Stock on the pay date for such pay period (or if not a trading day, on the immediately preceding trading day).  The Compensation Committee may, at its sole discretion and without the executives’ consent, suspend, modify or terminate this compensation component.  The Compensation Committee also approved a Salary Stock award of $100,000 for Mr. Tallent. Mr. Tallent requested this award not be paid, and the Compensation Committee accepted his request.
 
Non-Equity Incentive Awards . The Compensation Committee believes that its senior management’s incentive compensation should be linked directly to achievement of specified financial and non-financial objectives.  As a result, the Compensation Committee adopted and the shareholders approved the Management Annual Incentive Plan in 2007. This “pay for performance” plan has governed the level of bonuses that could be awarded by the Compensation Committee to senior executive officers during the past five years.
 
Under United’s Management Annual Incentive Plan, the Compensation Committee strives to link salary and non-equity incentives to objective standards of performance and may consider the non-financial factors discussed earlier and various financial performance measures, including operating and reported earnings per share; returns on equity, tangible equity and assets; revenue, loan and deposit growth; operating efficiency; loan and credit quality; and customer satisfaction scores. In addition, the plan was designed to qualify for compliance with the limitations on executive compensation deductions under Internal Revenue Code of 1986, as amended, Section 162(m).
 
During the first quarter of 2011, the Board and Compensation Committee suspended the Management Annual Incentive Plan for 2011 due to the execution of the asset disposition plan and related significant net loss for the quarter and full year. As a result, the Compensation Committee determined that the minimum performance measures that would have been required for 2011 could not be met. Therefore, the Compensation Committee did not grant non-equity incentive compensation awards or cash bonuses in 2011 to any Named Executive Officers. Also, United did not grant non-equity incentive compensation awards or cash bonuses to the Named Executive Officers between 2007 and 2010.
 
Equity Incentive Awards . An important element of compensation in the banking industry is the provision of long-term incentives in the form of equity awards such as stock options, restricted stock, and restricted stock units. United also regards equity incentive awards as a key retention tool. These considerations are paramount in the Compensation Committee’s determination of the type of an award to grant and the number of underlying awards to be granted. Because of the direct relationship between the value of an option, restricted stock or restricted stock units and the market price of United’s Common Stock, United believes that granting these equity incentive awards are the best method of motivating executive and other senior management to manage the company in a manner that is consistent with the long-term interests of United’s shareholders.
 
Equity incentive awards are granted under the Equity Plan, which is a broad-based, shareholder approved plan covering Named Executive Officers, other members of senior management and other key management personnel. The Equity Plan permits United to grant stock options, restricted stock and restricted stock units and provides additional flexibility, if circumstances of United’s business and opportunities warrant, to grant other forms of equity-based compensation.
 
 
16

 
 
The Equity Plan does not permit the grant price for stock options to be reduced after the initial grant date. Participants may not exercise stock options, or receive restricted stock or restricted stock units until they vest. Because the exercise price of stock options is the fair market value of the underlying stock on the date of grant, participants do not realize any benefit from such stock options unless United’s stock price appreciates prior to their maturity.
 
During 2011, options to acquire 10,000 shares of Common Stock were awarded by the Compensation Committee in connection with employment offers.  Except for those options granted in connection with employment offers, there were no options awarded to the Named Executive Officers or any other employee during 2011.
 
During 2011, the Compensation Committee awarded restricted stock units as part of a retention plan to retain key individuals of the company.  As part of this retention program, 312,777 restricted stock units were granted to key personnel. Separately, the Named Executive Officers received 87,132 restricted stock units.  The restricted stock units vest equally over three years for employees and vest equally in June 2013 and June 2014 for the Named Executive Officers, subject to TARP vesting restrictions.
 
Retirement and Other Benefits
 
The Compensation Committee believes that retirement and deferred compensation benefits provide financial security to senior management and their families for their service to the company. As a result, United has adopted the following two plans:
 
Modified Retirement Plan . United maintains a modified retirement plan (the “ Modified Retirement Plan ”) for certain Named Executive Officers and other key personnel. See the disclosure provided in “Executive Compensation – Pension Benefits” for a description of the material terms of the Modified Retirement Plan and disclosure of 2011 benefits provided to the Named Executive Officers under the Modified Retirement Plan.
 
In 2011, the Compensation Committee, upon the recommendation of outside consultants, elected to increase the annual retirement benefit by $30,000 for Mr. Tallent and by $20,000 for Mr. Schuette and Mr. Shearrow. At December 31, 2011, the annual retirement benefit payable to Mr. Tallent was $180,000 and for Mr. Schuette and Mr. Shearrow was $130,000. Mr. Gilbert became a participant in the plan in 2010 and his annual retirement benefit was increased by $20,000 to $70,000 in 2011.
 
Deferred Compensation Plan . In addition, United maintains a deferred compensation plan (the “ Deferred Compensation Plan ”) for senior management, members of the Board of Directors, members of United’s local community bank boards and certain other key personnel. See the disclosure provided in “Executive Compensation – Nonqualified Deferred Compensation” for a description of the material terms of the Deferred Compensation Plan and disclosure of benefits provided to the Named Executive Officers under the Deferred Compensation Plan.
 
Perquisites and Other Benefits
 
The perquisites provided to United’s Named Executive Officers in 2011 were the use of a company-owned car or a car allowance and the payment of the dues for club memberships that are not used exclusively for business purposes. These personal benefits are generally provided to similarly situated financial institution executives in the company’s market areas, and United believes it is appropriate to award its senior executives with similar benefits.
 
United also provides matching contributions of up to 5% of the bonus contributions to the Deferred Compensation Plan. United’s Named Executive Officers also participate in company-wide contributions to the 401(k) Plan (as defined herein) and receive other benefits on the same terms as other employees, which plans include medical, dental and life insurance.
 
Severance Benefits
 
Generally, stock options, restricted stock and restricted stock unit awards do not continue to vest for United’s Named Executive Officers in the event of the officer’s termination without cause or a termination by the officer for Good Reason (as defined in the award agreements). Mr. White’s option grants could accelerate upon a Change in Control (as defined in his employment agreement); however, the grants are subject to TARP restrictions that do not allow for acceleration. Otherwise, all options and restricted stock awards cease vesting upon termination of employment.
 
As required by the acquisition agreement pursuant to which United acquired Gwinnett Commercial Group, United entered into an employment agreement with Mr. White consistent with an existing agreement he had with such company. See the disclosure provided in “Executive Compensation - Agreements with Executive Officers” for a description of the material terms of such employment agreement, including severance benefits to Mr. White under certain circumstances. As previously described, all of the Named Executive Officers have executed a letter agreement waiving their right to any severance payment that violates the ARRA.
 
United does not provide for any other severance benefits to its Named Executive Officers, except as described below.

 
17

 
        
Benefits Upon a Change in Control
 
United’s senior management has substantially contributed to the success of United, and the company believes that it is important to protect them in the event of a change in control. Further, it is United’s belief that the interests of shareholders will be best served if the interests of its senior management are aligned with them, and providing change in control benefits should reduce any reluctance of senior management to pursue potential change in control transactions that may be in the best interests of shareholders.
 
For that reason, United’s Named Executive Officers have each entered into agreements with the company, the terms of which are described in “Executive Compensation - Agreements with Executive Officers and Post-Employment Compensation”. The Compensation Committee has established the payment and benefit levels to be paid to the Named Executive Officers following a change in control under these agreements consistent with what the Compensation Committee believes is standard for financial institution executives in the markets in which United operates.
 
Based upon (1) a hypothetical change in control and (2) the termination of our Named Executive Officers as of December 31, 2011, all payments of compensation and benefits under the agreements with such officers would be payable in a lump sum (except for Mr. White, who would be paid in 24 monthly installments) and in the following approximate amounts: Mr. Tallent $1,907,517; Mr. Schuette $947,772; Mr. Shearrow $945,762; Mr. White $972,000; and Mr. Gilbert $247,500. The Compensation Committee believes that these potential benefits would be minor relative to the substantial transaction value for United’s shareholders.
 
None of these payments would be considered Excess Severance Payments but all of such payments by United would be prohibited by the ARRA during the time Treasury owns the preferred stock it purchased under the CPP. As previously described, all of the Named Executive Officers have executed a letter agreement waiving their right to any severance payment that violates the ARRA.

 
18

 
 
Executive Compensation
 
Summary Compensation Table
 
The following table sets forth the compensation paid during the past three years to the Named Executive Officers.
 
SUMMARY COMPENSATION TABLE
                                                     
Name and Principal
Position
 
Year
 
Salary (1)
   
Bonus (1)
   
Restricted
Stock
Unit
Awards (2)
   
Stock
Option
Awards (2)
   
Non-Equity
Incentive Plan
Compensation (3)
   
Change in
Pension Value
and Deferred
Compensation
Earnings (4)
   
All Other (5)
   
Total
 
Jimmy C. Tallent
 
2011
  $ 454,000     $     $ 199,998     $     $     $ 379,746     $ 77,795     $ 1,111,539  
President and
 
2010
    400,000                               264,152       80,126       744,278  
Chief Executive
 
2009
    400,000             199,877                   185,649       78,581       864,107  
Officer
                                                                   
                                                                     
Rex S. Schuette
 
2011
    410,850 (6)           241,490                   351,246       31,374       1,034,960  
Executive Vice
 
2010
    314,500                               243,686       29,438       587,624  
President
 
2009
    283,000             142,772                   185,671       27,471       638,914  
and Chief Financial
                                                                   
Officer
                                                                   
                                                                     
David P. Shearrow
 
2011
    410,850 (6)           241,490                   80,778       24,787       757,905  
Executive Vice
 
2010
    312,500                               46,465       20,920       379,885  
President
 
2009
    275,000             142,772                   29,117       19,225       466,114  
and Chief Risk
                                                                   
Officer
                                                                   
                                                                     
Glenn S. White
 
2011
    320,000             71,750                         28,295       420,045  
Regional President,
 
2010
    320,000                                     30,049       350,049  
Atlanta Region
 
2009
    320,000             71,390                         29,624       421,014  
                                                                     
Bill M. Gilbert
 
2011
    200,000       65,000       138,375                   165,475       25,990       594,840  
Regional President,
 
2010
    194,475                               43,083       18,222       255,780  
North Georgia and
 
2009
    181,000             3,182       20,169                   17,678       222,029  
Coastal Georgia
                                                                   
 

(1)
Amount shown for salary was either paid in cash, stock or deferred, as elected by the executive under the Deferred Compensation Plan. See the “Nonqualified Deferred Compensation – Activity For 2011” table for the executive’s contributions and earnings. Mr. Gilbert received a retention award while in a non-executive officer capacity that is currently deferred under TARP restrictions.
(2)
The amounts shown reflect the aggregate grant date fair value of the restricted stock units. The assumptions made when calculating the grant date fair value of stock options are found in Note 21 to the Consolidated Financial Statements of United contained in its Annual Report on Form 10-K for the year ended December 31, 2011.
(3)
Non-equity incentive plan compensation includes amounts earned under the Management Annual Incentive Plan as a result of achieving the goals specified for the designated year and other cash retention payments. Because the performance measures were not met for 2011, 2010 or 2009, no non-equity incentive compensation awards were granted by the Compensation Committee.
 (4)
Includes the annual change in the present value of the executive’s accumulated benefits under the Modified Retirement Plan. The change in present value reflects higher actuarial charges for revisions to the key actuarial assumptions, principally lowering the discount rate to 4.5 percent, and plan benefits payable to participants. See the “Pension Benefits” and “Nonqualified Deferred Compensation – Activity For 2011” tables for additional information. The Deferred Compensation Plan does not credit above-market or preferential earnings, so no amounts are included in this column with respect to the Deferred Compensation Plan.
(5)
Amounts shown include: (i) matching 401(k) and profit sharing contributions to the 401(k) Plan on behalf of the executive; (ii) matching 401(k) contributions on behalf of the executive to the Deferred Compensation Plan (see the “Nonqualified Deferred Compensation –Activity For 2011” table for additional information); (iii) the value of personal travel or allowance for a company-owned car; (iv) club membership dues that are not used exclusively for business purposes; (v) dividends on unvested restricted stock awards; (vi) life insurance premiums paid on behalf of the executive; and, (vii) directors fees paid to the executive for serving on subsidiary and community bank boards. Certain executives received directors fees in 2011, 2010 and 2009, respectively, of $34,400, $37,400 and $37,400 for Mr. Tallent; $3,000, $3,000 and $3,000 for Mr. White; and, $5,100, $5,100 and $5,227 for Mr. Gilbert.
(6)
Includes $72,300 of salary paid in the form of 5,070 shares of Salary Stock. The number of shares issued each semi-monthly pay period to Mr. Schuette and Mr. Shearrow had a value on the date of issuance of $3,325 each, which was net of $2,238 of withholding taxes, resulting in individual grants ranging from 304 to 494 shares at a per share grant date value of $10.93 to $6.73. The Salary Stock was fully vested upon issuance.

 
19

 
                 
Grants of Restricted Stock Units, Stock Options, and Stock Awards
 
When granting equity awards, the Compensation Committee sets option exercise price or equity award price at the market closing price on the date of grant. Both stock options and restricted stock awards vest over a number of years in order to encourage employee retention and focus management’s attention on sustaining financial performance and building shareholder value over an extended term.
 
GRANTS OF PLAN-BASED AWARDS
                       
       
Number of
   
Number of
   
Number of
 
       
Restricted Stock
   
Other Stock
   
Stock
 
Name
 
Grant Date
 
Unit Awards (1)
   
Awards (2)
   
Option Awards
 
                       
Mr. Tallent
 
June 20, 2011
    19,512              
Mr. Schuette
 
June 20, 2011
    23,560              
   
Various (2)
          5,070        
Mr. Shearrow
 
June 20, 2011
    23,560              
   
Various (2)
          5,070        
Mr. White
 
June 20, 2011
    7,000              
Mr. Gilbert
 
June 20, 2011
    13,500              
 

(1)
The restricted stock units granted on June 20, 2011 vest over three years in two equal installments on June 20, 2013 and June 20, 2014.  The grant date fair value was $10.25 per share.
(2)
Represents shares of Salary Stock awarded semi-monthly beginning June 30, 2011 through December 31, 2011.  The number of shares issued each semi-monthly pay period to Mr. Schuette and Mr. Shearrow had a value on the date of issuance of $3,325, net of withholding taxes, resulting in individual grants ranging from 494 to 304 shares at a per share grant date value of $6.73 to $10.93, respectively.  The Salary Stock was fully vested upon issuance.
 
  Stock Option Exercises and Restricted Stock Vesting
 
The following table sets forth the value realized upon the exercise of stock options and the vesting and settlement of restricted stock units for the Named Executive Officers during 2011.
 
STOCK OPTION EXERCISES AND VESTING OF RESTRICTED STOCK UNITS
                     
   
Stock Option Awards
 
Restricted Stock Unit Awards
 
Name
 
Number Exercised
 
Value Realized (1)
 
Number Vesting
 
Value Realized (2)
 
                     
Mr. Tallent                                             
 
 
 
388
 
$
3,298
 
Mr. Schuette                                             
 
 
 
363
   
3,086
 
Mr. Shearrow                                             
 
 
 
182
   
1,547
 
Mr. White                                             
 
 
 
156
   
1,326
 
Mr. Gilbert                                             
 
 
 
181
   
1,539
 
 

(1)
Represents the difference between the closing price of United’s Common Stock on the date of exercise and the per share option exercise price, multiplied by the number of options exercised.
(2)
Represents the value realized by multiplying the number of restricted stock unit awards vesting by the closing price of United’s Common Stock on the date of vesting.

 
20

 
 
Outstanding Equity Awards as of December 31, 2011
 
The following table sets forth, for each Named Executive Officer, the number of stock options exercisable and unexercisable and the number and value of unvested restricted stock unit awards as of December 31, 2011.
 
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
      
   
Stock Option Awards
 
Restricted Stock Unit Awards
 
Name
 
Number
Exercisable
   
Number
Unexercisable (1)
   
Exercise
Price
 
Expiration
Date (2)
 
Number
Not Vested (3)
   
Market Value
Not Vested (4)
 
Mr. Tallent
    12,469           $ 62.50  
3/11/12
           
      9,352             78.90  
4/17/13
           
      3,533             114.25  
6/7/14
           
      4,240             111.20  
5/16/15
           
      6,442             138.80  
4/26/16
           
      7,273             147.60  
4/25/17
           
      7,014       2,338       66.15  
4/30/18
           
      50,323       2,338                 25,406     $ 177,588  
                                           
Mr. Schuette
    4,987             62.50  
3/11/12
               
      5,611             78.90  
4/17/13
               
      1,871             114.25  
6/7/14
               
      2,494             111.20  
5/16/15
               
      3,637             138.80  
4/26/16
               
      3,845             147.60  
4/25/17
               
      3,117       1,039       66.40  
5/5/18
               
      25,562       1,039                 27,803       194,343  
                                           
Mr. Shearrow
    4,156             151.15  
4/16/17
               
      3,117       1,039       66.40  
5/5/18
               
      7,273       1,039                 27,803       194,343  
                                           
Mr. White
    3,896       1,299       148.20  
6/1/17
               
      2,337       780       66.40  
5/5/18
               
      6,233       2,079                 11,264       78,735  
                                           
Mr. Gilbert
    1,434             62.50  
3/11/12
               
      1,714             78.90  
4/17/13
               
      1,454             115.85  
4/28/14
               
      935             111.20  
5/16/15
               
      1,143             138.80  
4/26/16
               
      1,247             147.60  
4/25/17
               
      1,169       390       66.40  
5/5/18
               
      705       706       31.50  
6/22/19
               
      9,801       1,096                 13,629       95,267  
  (1)
With the exception of Mr. White’s stock options that expire on June 1, 2017, stock options become exercisable in four equal annual installments beginning on the first anniversary of the grant date. Mr. White’s non-vested stock options that expire on June 1, 2017, vest on June 1, 2012.
(2)
The expiration date of each stock option is ten years after the date of grant.
(3)
With the exception of Mr. White’s restricted stock units granted on June 1, 2007 and the restricted stock units granted to the Named Executive Officers on June 20, 2011, restricted stock shares and units vest in four equal annual installments, beginning January 31 of the year following the grant date. Mr. White’s unvested restricted stock units granted on June 1, 2007 vest on June 1, 2012.  Restricted stock units granted to the Named Executive Officers on June 20, 2011 vest in two equal installments on June 20, 2013 and June 20, 2014, subject to any applicable restrictions under TARP.
(4)
The market value is based on the closing price of United’s Common Stock at December 31, 2011 of $6.99, multiplied by the number of unvested restricted stock units.
    
 
21

 
 
Equity Compensation Plan Information at December 31, 2011
 
The following table provides information about stock options outstanding as of December 31, 2011 and stock options and/or equity awards available to be granted in future years.
 
EQUITY COMPENSATION PLAN INFORMATION

   
Total
Outstanding
Options
   
Weighted-Average
Exercise Price of
Outstanding
Options
   
Number Available
for Issuance
Under Equity
Compensation
Plans (1)
 
Equity compensation plans approved by shareholders
    580,638     $ 94.76        
Equity compensation plans not approved by shareholders (2)
    3,009       40.42        
Total
    583,647       94.48        
 

(1)
Represents the number of stock options or equity awards available to be granted in future years under the existing Equity Plan.
(2)
Stock options granted under plans assumed by United through acquisitions prior to December 1, 2004. Such were frozen as to future grants at the time of the acquisitions.
 
Pension Benefits
 
The following table presents selective retirement benefit information for 2011 for each Named Executive Officer that was a participant in the Modified Retirement Plan.
 
PENSION BENEFITS

Name
 
Plan Name
 
Number of
Years of
Credited
Service
   
Present Value
of
Accumulated
Benefit
   
Payments
During
2011
 
Mr. Tallent
 
Modified Retirement Plan
    28     $ 1,201,952        
Mr. Schuette
 
Modified Retirement Plan
    11       1,059,910        
Mr. Shearrow
 
Modified Retirement Plan
    5       176,066        
Mr. Gilbert
 
Modified Retirement Plan
    12       372,784        
 
The Modified Retirement Plan provides specified benefits to certain key officers who contribute materially to the continued growth, development and future business success of United and its subsidiaries. Generally, when a participant retires, United will pay to the participant, or participant’s spouse upon death, a fixed annual amount in equal installments either for the lifetime of the participant (or participant’s spouse) or a fixed payment for 15 years. The annual benefits, based on seniority and position, range from $30,000 to $180,000 per year and are taxable to the participant. The normal retirement age defined in the plan is age 65 and completion of five years of service.
 
The Modified Retirement Plan contains provisions that provide for accelerated vesting upon a change in control of United. The Modified Retirement Plan also provides that these benefits will be forfeited if a participant is terminated for cause or, if during a certain period after his or her termination of employment, competes with United, solicits customers or employees, discloses confidential information, or knowingly or intentionally damages United’s goodwill or esteem.
 
 
22

 

Nonqualified Deferred Compensation
 
The following table presents information for each Named Executive Officer relating to the Deferred Compensation Plan.
 
NONQUALIFIED DEFERRED COMPENSATION – ACTIVITY FOR 2011
                               
Name
 
Executive
Contributions (1)
   
Company
Contributions (2)
   
Account
Earnings
   
Withdrawals/
Distributions
   
Balance at
Year-end
 
Mr. Tallent                                                    
  $ 15,395     $ 10,458     $ (23,551 )   $     $ 286,744  
Mr. Schuette                                                    
    11,723       8,293       (17,329 )           72,304  
Mr. Shearrow                                                    
    10,178       8,293       (15,821 )           75,365  
Mr. White                                                    
                             
Mr. Gilbert                                                    
    663             (2,686 )           97,516  
 

(1)
All executive contributions are included in the amounts under the column headings “Salary”, “Bonus” and “Restricted stock awards” in the “Summary Compensation Table”.
(2)
All company contributions are included in the amounts under the column heading “All other” in the “Summary Compensation Table”.
 
The Deferred Compensation Plan provides for the deferral of up to 75% of annual base salary and up to 100% of annual cash bonus payments or non-equity incentive compensation awards and other specified benefits to selected individuals who contribute materially to the continued growth, development and future business success of United and its affiliates. Further, the Deferred Compensation Plan allows for employer matching contributions for employee contributions that would have been paid under United’s tax-qualified 401(k) plan (the “ 401(k) Plan ”) if such matching contributions would otherwise exceed the maximum allowable amounts under the 401(k) Plan and matching of deferred bonuses, dollar for dollar up to 5% of bonus or non-equity incentive compensation award, subject to the same vesting provisions of the 401(k) Plan. Although the Plan allows the Board of Directors to make discretionary contributions to the account of employee participants, the Board has never made any such discretionary contributions. The Deferred Compensation Plan also provides for the deferral of up to 100% of director fees for service by a non-employee director on the Board of United or any subsidiary or community bank.
 
Contributions to the Deferred Compensation Plan may be invested in United’s Common Stock and a portfolio of various mutual funds. Participants are 100% vested in their contributions, including earnings or losses thereon. company contributions, including earnings and losses thereon, vest over a three-year period. Because the amounts deferred under the plan are invested in the underlying mutual fund or, in the case of Common Stock, recorded as common stock issuable (an equity instrument) at the time of the investment, the potential future costs of the plan are not known at this time.
 
Generally, when a participant retires or becomes disabled, United will pay the participant their accrued benefits in a lump sum or in equal installments for five, ten, or fifteen years. Alternatively, a participant may elect to have a portion (or all) of their accrued benefits paid out at a specified time before retirement in a lump sum or in annual installments for two, three, four, or five years. The benefit payments are taxable to the participant.
 
A greements with Executive Officers and Post-Employment Compensation
 
Messrs. Tallent, Schuette, Shearrow and Gilbert have each entered into Amended and Restated Change in Control Severance Agreements (the “ Severance Agreements ”) with United. The Severance Agreements remain in effect until the termination of such executive’s employment without entitlement to the benefits under the Severance Agreements, unless earlier terminated by mutual written agreements of the executive and United.
 
The Severance Agreements provide for payment of compensation and benefits to the executive in the event of a “Change in Control” of United if the executive’s employment is involuntarily terminated by United without “Cause” or if the executive terminates his employment for “Good Reason”. The executive is not entitled to compensation or payments pursuant to his Severance Agreement if he is terminated by United for Cause, dies, incurs a disability, or voluntarily terminates employment (other than for Good Reason). If a Change in Control occurs during the term of the applicable Agreement and the executive’s employment is terminated within six months prior to, or 18 months following, the date of the Change in Control, and if such termination is an involuntary termination by United without Cause (and does not arise as a result of death or disability) or a termination by the executive for Good Reason, the executive will be entitled to a lump sum payment equal to his base salary, non-equity incentive compensation award and certain other benefits, as determined by the applicable Severance Agreement, for a period of 36 months (12 months for Mr. Gilbert) from the date of his termination. The lump sum payment of medical benefits also includes a tax-gross up.
 
The Severance Agreements were entered into as of December 31, 2008 (with minor changes from the prior agreements) and are intended to ensure that the payment of any compensation or benefits under the Severance Agreement would comply with Internal Revenue Code of 1986, as amended, Section 409A (“ Section 409A ”).
 
 
23

 
 
As required by the acquisition agreement pursuant to which United acquired Gwinnett Commercial Group, United entered into an employment agreement with Mr. White consistent with an existing agreement he had with such company that provides for a rolling three-year term unless either party gives the other party notice that the term will not be extended. The employment agreement generally provides that, if Mr. White is terminated at any time by United without Cause, or Mr. White terminates his employment with United for Cause, Mr. White will receive his base salary for a period of 36 months and an amount equal to two times his annual bonus or non-equity incentive compensation award. Additionally, if, within six months following a Change of Control of United, either Mr. White terminates his employment or United terminates Mr. White other than for Cause, the agreement provides for a payment made over 24 monthly installments equal to three times the sum of his base salary then in effect, an amount equal to his average annual bonus or non-equity incentive compensation award of the three most recent years and his monthly automobile allowance multiplied by twelve. The employment agreement also includes covenants by Mr. White not to compete with United or solicit its customers or prospective customers or employees for 36 months after the termination of his employment under certain circumstances.
 
A “Change in Control” under the Severance Agreements and employment agreement generally means the acquisition by any person of beneficial ownership of 20 to 25% or more of the voting power of United’s outstanding stock, approval by shareholders of a merger or consolidation or a complete liquidation or dissolution of United or an agreement for the sale or other disposition of all or substantially all of the assets of United, or a majority change in the composition of the Board of Directors. “Cause” with respect to a termination by United under the Severance Agreements is generally defined as the involuntary termination of the executive by United as result of an uncured breach of the employment agreement by Mr. White, commission of certain crimes, act or acts which are in violation of policies of United or the failure by the executive to perform his duties. “Cause” with respect to termination by Mr. White is generally defined as an uncured breach of the employment agreement by United, a material adverse diminution in his powers, responsibilities, or duties, or the required relocation of the executive to a location more than 20 miles from his existing business location. “Good Reason” for termination by an executive under the Severance Agreements is generally defined as the occurrence during the six-month period prior to, or within the 18-month period following, the date of a Change in Control, of a substantial adverse change in the executive’s responsibilities, the required relocation of the executive to a location outside of the market area of United, a material reduction in the levels of coverage of the executive under United’s director and officer liability insurance policy or indemnification commitments, or a reduction in the executive’s compensation or benefits.
 
The Severance Agreements provide that the compensation and benefits provided for under the Severance Agreements shall be reduced or modified so as to ensure that United does not pay an Excess Severance Payment. If a reduction is necessary, the Severance Agreements would allow the executive to choose the manner in which the payments would be modified so long as the total payments are capped to avoid being treated as an Excess Severance Payment. None of the Severance Agreements provide for the payment of any taxes or a gross-up of payments to pay any taxes in the event any of the compensation or benefits were considered to be an Excess Severance Payment.
 
Each of United’s Named Executive Officers executed a waiver in connection with United’s participation in the CPP pursuant to which they have voluntarily waived any claim against Treasury or United for any changes to such officer’s compensation or benefits that are required to comply with the limitations contained in the EESA, the ARRA or any regulation thereunder. The limitations are described in “Compensation Discussion and Analysis – Regulatory Limits”, and, as described therein, all of the Named Executive Officers have executed a letter agreement waiving their right to any severance payment that violates the ARRA.
 
United has no other employment or severance agreements with any of its Named Executive Officers.
 
D irector Compensation
 
Non-employee directors of United received an annual retainer of $20,000 and a separate meeting fee of $3,000 for each of the five regularly scheduled Board meetings attended during 2011. The members of the Audit Committee received a separate meeting fee of $500 per regularly scheduled meeting attended. The Chairmen of the Audit and Compensation Committees each received an additional annual retainer of $5,000. Executive officers who serve as directors do not receive compensation for service on the Board of Directors of United. Certain members of United’s Board of Directors and its executive officers also serve as members of one or more of United’s subsidiaries and community banks boards of directors for which they are compensated.
 
The annual retainer and meeting fees are payable in cash or may be deferred pursuant to United’s Deferred Compensation Plan. In 2011, no directors elected to defer a portion of their retainer and meeting fees.
 
In addition to the retainers and meeting fees listed above, United reimburses the non-employee Directors for their travel expenses incurred in attending meetings of the Board or its committees, as well as for fees and expenses incurred in attending director education seminars and conferences. Directors did not receive any restricted stock, stock option or other equity awards or any other personal benefits in 2011.

 
24

 
 
The following table presents a summary of non-employee director compensation for 2011.
 
DIRECTOR COMPENSATION
 
Name
 
Fees Earned or
Paid in Cash
   
Nonqualified
Deferred
Compensation
Earnings
   
All Other
Compensation (1)
   
Total
 
Robert L. Head, Jr.                                              
  $ 35,000     $ (380 )   $ 12,000     $ 46,620  
W.C. Nelson, Jr.                                              
    42,500       (4,224 )     12,000       50,276  
Robert H. Blalock                                              
    37,500             10,500       48,000  
L. Cathy Cox                                              
    42,500                   42,500  
Hoyt O. Holloway                                              
    35,000                   35,000  
Peter E. Raskind                                              
    26,250                   26,250  
John D. Stephens                                              
    35,000             3,000       38,000  
Tim R. Wallis                                              
    35,000             6,000       41,000  
 

(1)
Directors fees for serving on one or more of United’s subsidiary or community bank boards of directors.
 
C ompensation Committee Interlocks and Insider Participation
 
No member of the Compensation Committee has served as an officer or employee of United at any time or engaged in any transaction that would be required to be disclosed under “Certain Relationships and Related Transactions”.
 
None of United’s executive officers serve as a director or member of the Compensation Committee of any other entity that has an executive officer serving as a member of United’s Board of Directors or Compensation Committee.
 
C ompensation Committee Report
 
The Compensation Committee has reviewed and discussed the “Compensation Discussion and Analysis” included with this Proxy Statement with management. Based on such review and discussions, the Compensation Committee recommended to the Board of Directors that it be included herein.
 
In addition, the Compensation Committee met with United’s senior risk officers to review United’s incentive compensation plans for all employees. Based on such review and discussions, the Compensation Committee certifies that: (1) it has reviewed with senior risk officers the incentive compensation arrangements with senior executive officers and has made all reasonable efforts to ensure that such arrangements do not encourage senior executive officers to take unnecessary and excessive risks that threaten the value of United; (2) it has reviewed with senior risk officers the employee compensation plans and has made all reasonable efforts to limit any unnecessary risks these plans pose to United; and (3) it has reviewed the employee compensation plans to eliminate any features of these plans that would encourage the manipulation of reported earnings of United to enhance the compensation of any employee.
 
L. Cathy Cox, Chairman
Robert H. Blalock
Robert Head
Hoyt Holloway
W.C. Nelson, Jr.
John Stephens
Tim R. Wallis
 
 
25

 

P RINCIPAL AND MANAGEMENT SHAREHOLDERS
 
The following table sets forth information regarding beneficial ownership of United’s voting securities. Unless otherwise indicated, the information presented is as of  March 30, 2012 and is based on 41,688,647 shares of United’s Common Stock outstanding on such date. Beneficial ownership includes any shares as to which the individual or entity has sole or shared voting power or investment power and any shares as to which the individual or entity has the right to acquire beneficial ownership within 60 days of March 30, 2012, unless otherwise indicated, through the exercise of any stock option or other right, and any shares that are pledged as security pursuant to various financial obligations. The table sets forth such information with respect to:
 
 
each shareholder who is known by us to beneficially own 5% or more of our voting securities;
 
 
each director and nominee for director;
 
 
each Named Executive Officer; and
 
 
all executive officers and directors as a group.
 
Unless otherwise indicated, each of the shareholders has sole voting and investment power with respect to the shares of voting securities beneficially owned by such shareholder.

 
26

 
 
Name and Address
 
Number of
Shares of
Common
Stock Owned
Directly or
Indirectly
   
Number of
Shares
Underlying
Options
Exercisable
Within 60
Days
   
Number of
Shares of
Beneficially
Owned
Restricted
Stock
   
Number of
Shares Issuable
Under the
Deferred
Compensation
Plan
   
Number of
Shares
Underlying
Warrants
   
Total
Number of
Shares
Beneficially
Owned
   
Percentage
Beneficially
Owned
 
Fletcher Asset Management, Inc. (1)
48 Wall Street, 5th Floor
New York, NY 10005
                            4,576,096       4,576,096       9.90 %
                                                         
Corsair Capital LLC (2)
717 Fifth Avenue, 24th Floor
New York, NY 10022.
    4,109,630                               4,109,630       9.87 %
                                                         
King Street Capital Management, L.P. (3)
65 East 55th Street, 30th Floor
New York, NY 10022
    4,109,630                               4,109,630       9.87 %
                                                         
Siguler Guff Advisers (4)
825 Third Avenue, 10th Floor
New York, NY 10022
    3,915,933                               3,915,933       9.40 %
                                                         
Wellington Management Company, LLP (5)
280 Congress Street
Boston, MA 02210
    3,865,702                               3,865,702       9.28 %
                                                         
BlackRock, Inc. (6)
40 East 52nd Street
New York, NY 10022
    2,358,520                               2,358,520       5.66 %
                                                         
Jimmy C. Tallent (7)
    133,718       37,854       25,198       5,772       1,750       204,292        
                                                         
Robert L. Head, Jr. (8)
    359,157                         15,000       374,157         *
                                                         
W.C. Nelson, Jr. (9)
    422,751                         10,000       432,751       1.04 %
                                                         
Robert H. Blalock (10)
    27,646                         2,500       30,146        
                                                         
Clifford V. Brokaw
                                           
                                                         
L. Cathy Cox
    2,932                               2,932        
                                                         
Steven J. Goldstein
                                           
                                                         
Hoyt O. Holloway (11)
    29,741                         1,000       30,741        
 
Peter E. Raskind (12)
    10,000                               10,000        
                                                         
Thomas A. Richlovsky
    1,000                               1,000