SEC Filing | United Community Banks, Inc.

View:

Download DOC

Download PDF

Download XLS

t64897_def14a.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A INFORMATION

Consent Solicitation Statement Pursuant to Section 14(a)

of the Securities Exchange Act of 1934

Filed by the Registrant x

Filed by a Party other than the Registrant o

Check the appropriate box:

o	Preliminary Proxy Statement
o	Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
x	Definitive Proxy Statement
o	Definitive Additional Materials
o	Soliciting Material Pursuant to Section 240.14a-11c or Section 240.14a-12

UNITED COMMUNITY BANKS, INC.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

x	No fee required.

o	Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

	(1)	Title of each class of securities to which transaction applies:

	(2)	Aggregate number of securities to which transaction applies:


	(3)	Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

	(4)	Proposed maximum aggregate value of transaction:

	(5)	Total fee paid:

o	Fee paid previously with preliminary materials.

o	Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

	(1)	Amount Previously Paid:

	(2)	Form, Schedule or Registration Statement No.:

	(3)	Filing Party:

	(4)	Date Filed:


	63 HIGHWAY 515
	BLAIRSVILLE, GEORGIA 30514-0398


	NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

To be Held on April 29, 2009

The Annual Meeting of Shareholders of United Community Banks, Inc. will be held on April 29, 2009 at 2:00 p.m. at Brasstown Valley Resort, Young Harris, Georgia:


	1.	To elect nine 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 an advisory resolution supporting the compensation plan for executive officers .

	3.	To ratify the appointment of Porter Keadle Moore, LLP as independent registered public accountant for 2009.

	4.	To consider and act upon any other matters that may properly come before the meeting and any adjournment thereof.

Only shareholders of record at the close of business on March 13, 2009 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.

To ensure that your vote is recorded promptly, please vote as soon as possible. Most shareholders of record have three options for submitting their vote before the meeting. You may vote (1) by telephone if you reside in the United States, Canada or the U.S. territories, (2) via the Internet (see the instructions on the proxy card), or (3) by completing, signing and mailing the proxy card in the enclosed postage–paid envelope. 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, your 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,

	Jimmy C. Tallent,
	President and Chief Executive Officer

March 23 , 2009

WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE ANNUAL MEETING, PLEASE VOTE BY TELEPHONE, INTERNET, OR COMPLETE AND RETURN THE ENCLOSED PROXY PROMPTLY SO THAT YOUR VOTE MAY BE RECORDED.

TABLE OF CONTENTS


		Page

QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING		1
What is the purpose of the Annual Meeting?		1
Who is entitled to vote?		1
How do I cast my vote?		1
What are the quorum and voting requirements?		2
How are votes counted?		2
Will other matters be voted on at the Annual Meeting?		3
Can I revoke my proxy instructions?		3
What other information should I review before voting?		3

NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS		4

PROPOSAL 1 - ELECTION OF DIRECTORS		5
Introduction		5
Information Regarding Nominees for Director		5
Director Emeritus		5
Board of Directors and Committees		6
Vote Required		7
Recommendation		7

CORPORATE GOVERNANCE		8
Director Nominations		8
Majority Vote Requirement		9
Code of Ethical Conduct		9
Shareholder Communication		9
Certain Relationships and Related Transactions		9

COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS		11
Compensation Discussion and Analysis		11
Executive Compensation		19
Agreements with Executive Officers and Post-Employment Compensation		23
Director Compensation		25
Compensation Committee Interlocks and Insider Participation		26
Compensation Committee Report		26

PRINCIPAL AND MANAGEMENT SHAREHOLDERS		27

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE		28

AUDIT COMMITTEE REPORT		28

PROPSAL 2 – APPROVAL OF ADVISORY RESOLUTION SUPPORTING THE COMPENSATION PLAN FOR EXECUTIVE OFFICERS		30
General		30
Recommendation		30

PROPOSAL 3 - RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANT		30
General		30
Vote Required		30
Recommendation		31

OTHER MATTERS		31
Independent Registered Public Accountants		31
Expenses of Solicitation		31
Shareholder Proposals & Recommendations for Director Nominees		31
General		32

March 23 , 2009

63 HIGHWAY 515

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 2009 Annual Meeting of Shareholders to be held on Wednesday, April 29, 2009 at 2:00 p.m., at Brasstown Valley Resort, Young Harris, Georgia, and at any adjournments or postponements of the Annual Meeting.

QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING

What 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 election of nine directors, the ratification of the appointment of United’s independent registered public accountant and any other matters that may properly come before the meeting.

Who is entitled to vote?

All shareholders of record of United’s common stock at the close of business on March 13, 2009, 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.

How 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 at illinoisstocktransfer.com. 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.

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.

-1-

What 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 48,092,724 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 the advisory resolution supporting the compensation plan for the executive officers , the vote of a majority of the shares voted on the matter.

	3.	For the ratification of the appointment of Porter Keadle Moore, LLP as independent registered public accountant for 2009, the vote of a majority of the shares voted on the matter.

	4.	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.

How 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 election of directors and the ratification of independent auditors are considered routine matters by brokers and other nominees allowing them to have discretionary voting power to vote shares they hold on behalf of their clients for the election of directors and the ratification of an independent auditor.

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 the advisory vote on executive compensation, ratification of the appointment of Porter Keadle Moore, LLP as independent registered public accountant for 2009 and any other proposals that come before the meeting, 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.

-2-

Will 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.

Can 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

	●	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.

What other information should I review before voting?

The 2008 annual report to shareholders and the annual report on Form 10-K filed with the Securities and Exchange Commission, including financial statements for the year ended December 31, 2008, are enclosed with this proxy statement. The annual report is not part of the proxy solicitation material. An additional copy of the annual report on Form 10-K may be obtained without charge by:


	●	accessing United’s website at 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 sec.gov.

You may also obtain copies of United’s 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.

-3-

NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS

We have posted materials related to the 2009 annual meeting on the Internet. The following materials are available on the Internet at ucbi.com/proxy:


	●	This proxy statement for the 2009 annual meeting,

	●	United’s 2009 annual report to shareholders, and

	●	United’s annual report on Form 10-K filed with the Securities and Exchange Commission.

You are also invited to attend the 2009 annual meeting in person. To pre-register to attend the annual meeting you may:


	●	follow the instructions on the enclosed proxy card,

	●	email Investor_Relations@ucbi.com and indicate the name of the person(s) attending, or

	●	you may call (866) 270-5900.

For directions to the annual meeting, visit brasstownvalley.com, or call (866) 270-5900 and an Investor Relations professional can assist you.

-4-

PROPOSAL 1 - ELECTION OF DIRECTORS

Introduction

The Bylaws of United provide that the number of directors may range from eight to 14. The Board of Directors of United has set the number of directors at nine. 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.

Information Regarding Nominees for Director

The following information has been furnished by the respective nominees for director as of March 1, 2009. All of the nominees for director are existing directors that have been nominated by the Board of Directors for re-election. Each nominee has been or was engaged in his present or last principal employment, in the same or a similar position, for more than five years.


Name (Age)	Information About Nominee		Director Since

Jimmy C. Tallent (56)	President and Chief Executive Officer of United	1988

Robert L. Head, Jr. (69)	Chairman of the Board of United; Owner of Head Construction Company and Head-Westgate Corp., commercial construction companies, Blairsville, Georgia	1988

W. C. Nelson, Jr. (65)	Vice Chairman of the Board of United; Owner of Nelson Tractor Company, Blairsville, Georgia	1988

A. William Bennett (67)	Partner in Bennett, Davidson & Associates, LLP, Certified Public Accountants, Washington, Georgia	2003

Robert H. Blalock (61)	Owner of Blalock Insurance Agency, Inc., Clayton, Georgia	2000

Cathy Cox (50)	President of Young Harris College, Young Harris, Georgia since 2007; Secretary of State of the State of Georgia from 1999 to 2007.	2008

Hoyt O. Holloway (69)	Owner of H&H Farms, poultry farm, Blue Ridge, Georgia	1993

John D. Stephens (68)	Owner of Stephens MDS, LP, Atlanta, Georgia	2007

Tim Wallis (57)	Owner of Wallis Printing Co., Rome, Georgia	1999

There are no family relationships between any director, executive officer, or nominee for director of United.

Former director Charles E. Hill retired from his position as a director effective February 6, 2009. Due to our Corporate Governance policy regarding age limitation, current director Guy W. Freeman will retire as a director at the end of his current term on April 30, 2009 .

Director Emeritus

The Honorable Zell B. Miller, 76, serves as Director Emeritus of the Board of Directors of United. This is an elected role by the Board that provides leadership, counsel and guidance on various issues and policies that could affect United. Prior to becoming a member of the U.S. Senate, Mr. Miller served as a member of the Board of Directors of United from 1999 to 2000. Mr. Miller was a U. S. Senator from 2000 to 2005 and previously served two terms as Governor and four terms as Lt. Governor of the State of Georgia.

-5-

Board of Directors and Committees

The Board of Directors held thirteen meetings during 2008. 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 2008. Directors are expected to be present at the Annual Meeting of United.

The Board has considered and determined that a majority of the members of the Board of Directors are independent as “independent” is defined under applicable federal securities laws and the Nasdaq Marketplace Rules. During 2008, the independent directors were Directors Nelson, Bennett, Blalock, Cox, Hill, Holloway, Stephens and Wallis. The independent directors meet in executive sessions every quarter without management.

The Board currently has, and appoints members to, three standing committees: the Audit Committee, the Compensation Committee and the Nominating/Corporate Governance Committee. Each member of these Committees is independent and each Committee has a charter approved by the Board, which is available on United’s website, ucbi.com.

The current members of the Committees are identified below (M - member; C - chairman):

Name

Compensation

Audit

Nominating/

Corporate Governance

W. C. Nelson, Jr.

A. William Bennett

Robert H. Blalock

Cathy Cox

Hoyt O. Holloway

John D. Stephens

Tim Wallis

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, the Modified Retirement Plan and the Employee Stock Purchase Plan. It periodically reviews and makes recommendations to the Board with respect to Directors Compensation. The Compensation Committee met six times during 2008.

-6-

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.

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. In addition, the Board of Directors has determined that Mr. Bennett qualifies as an “audit committee financial expert” in accordance with the applicable rules and requirements of the SEC and Nasdaq.

The Audit Committee met eight times during 2008.

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 2008.

Vote Required

Each proxy executed and returned by a shareholder will be voted as specified thereon by the shareholder. If no specification is made, the proxy will be voted for the election of the nominees named above to constitute the entire Board of Directors. 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.

Recommendation

The Board of Directors unanimously recommends a vote “FOR” each nominee for director.

-7-

CORPORATE GOVERNANCE

Director 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 may 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 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.

-8-

●	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.

Majority 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.

Code 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 Marketplace Rules. 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, ucbi.com.

Shareholder 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.

Certain 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. The Board of Directors of United or the Audit Committee must approve all such transactions under the policy.

-9-

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.

United’s subsidiary banks have had, and expect 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.

-10-

COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS

Compensation Discussion and Analysis

Overview

The Compensation Committee of the Board of Directors (the “Committee”) 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.

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 “independent” is defined under the Nasdaq Marketplace Rules. Most 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, ucbi.com.

To assist it in determining how best to achieve the above objectives in 2004, the Compensation Committee conducted an interview process with several prominent compensation consulting firms that had no previous relationships with United and selected Watson Wyatt & Co. for a three-year engagement to advise it and the Board on executive compensation. In October, 2007, the Committee agreed to extend the engagement in of Watson, Wyatt for another three-year period. Watson Wyatt has provided no other consulting services to United.

The Compensation Committee adopted and the shareholders approved the Management Annual Incentive Plan in 2007. This “pay for performance” plan governed the level of bonuses that could be awarded by the Compensation Committee to senior management during the past two years. The initial performance parameters were set by the Compensation Committee at the beginning of 2007 and 2008 and no bonuses were paid for either year.

In late 2008, United applied for and received a federal government capital infusion under the provisions of the TARP Capital Purchase Program. As a result of such participation, United is now subject to substantial limitations with respect to its executive compensation practices.

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.

-11-

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 and other equity incentive programs.

Regulatory Limits

TARP Capital Purchase Program. On December 5, 2008, as part of the United States Treasury Department’s (the “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 shares 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 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 (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.

-12-

American Recovery and Reinvestment Act. On February 17, 2009, the American Recovery and Reinvestment Act of 2009 (the “ARRA”) was enacted. The ARRA, commonly known as the economic stimulus or economic recovery package, includes a wide variety of programs intended to stimulate the economy and provide for extensive infrastructure, energy, health, and education needs. In addition, ARRA imposes certain new executive compensation and corporate expenditure limits on all current and future TARP recipients until the institution has repaid Treasury the amount of a CPP investment, which is now permitted under ARRA without penalty and without the need to raise new capital, subject to Treasury’s consultation with the recipient’s appropriate regulatory agency. The executive compensation standards are more stringent than those currently in effect under the CPP or those previously proposed by Treasury, but it is not yet clear how these executive compensation standards will relate to the similar standards announced by Treasury on February 4, 2009, or when implementing regulations will be issued by Treasury.

The new 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 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;

	●	subjecting bonus, incentive and retention payments 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;

	●	establishment of a 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.

As noted, the ARRA directs Treasury and the SEC to issue regulations implementing the foregoing. There are numerous questions regarding the scope of the limitations and the requirements of the ARRA. None of the regulations mandated by the law have been issued to date. Pending the issuance of regulations, the Board of Directors, Compensation Committee and management are reviewing the requirements of the ARRA, its impact on current and future compensation, and the effect of the law’s requirements on United’s competitive position. Actions required by the ARRA and consideration of competitive factors may include changes to the form and amount of executive compensation, including adjustments to base salaries, bonus awards, equity incentive compensation awards and other existing arrangements.

-13-

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.

Though not members of the Compensation Committee, Jimmy Tallent, United’s Chief Executive Officer and Rex Schuette, United’s Executive Vice President and Chief Financial Officer were invited to most Compensation Committee meetings along with Robert Head, Chairman of the Board of Directors and Zell Miller, Director Emeritus. 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, with respect to Mr. Schuette, Mr. Freeman - United’s Executive Vice President and Chief Operating Officer, Mr. Shearrow - United’s Executive Vice President and Chief Risk Officer, and Mr. White - United’s President of the Atlanta Region (referred to herein together with Mr. Tallent as the “ Named Executive Officers ”), the Committee also considered the recommendations of Mr. Tallent in 2008.

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 2008, Watson Wyatt & Co. advised the Compensation Committee and the Board on executive compensation. Watson Wyatt reported directly to the Compensation Committee. Watson Wyatt 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 13 bank holding companies with asset sizes ranging from $6.5 to $10.5 billion and a median of $8.3 billion (the “Peer Group”) and a reference group of ten bank holding companies with asset sizes ranging from $11 to $14 billion with a median asset size of $12.9 billion (the “Reference Group”), approximately the asset size to which United may grow to in the next three years based on recent growth. The Peer Group consisted of Bank of Hawaii Corporation, Boston Private Financial Holdings, Inc., First Midwest Bancorp, Inc., FirstMerit Corporation, MB Financial, Inc., Old National Bancorp, Pacific Capital Bancorp, Provident Bankshares Corporation, Trustmark Corporation, UMB Financial Corporation, Umpqua Holdings Corporation, United Bancshares, Inc. and Wintrust Financial Corporation. The Reference Group consisted of BancorpSouth, Inc., Citizens Republic Bancorp, Inc., Cullen/Frost Bankers, Inc., International Bancshares Corporation, South Financial Group, Inc., Sterling Financial Corporation, Susquehanna Bancshares, Inc., Valley National Bancorp, Whitney Holding Corporation and Wilmington Trust 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 Watson Wyatt (the “Published Surveys”).

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 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 Watson Wyatt’s analysis to assist in determine the amounts of each element of compensation.

-14-

The Compensation Committee has met with the members of management responsible for risk management to review our incentive compensation programs for purposes of determining whether they encourage excessive or unnecessary risk-taking by our senior executive officers. As part of its review, the Compensation Committee considered the various risks to which United is subject, including market, liquidity, interest rate, operational, financial, credit quality 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.

In connection with such review, the Compensation Committee concluded that United’s incentive compensation programs do not encourage United’s senior management to take excessive or unnecessary risks that threaten the value of the company. Instead, the Compensation Committee concluded that United’s incentive compensation programs are designed to encourage long-term growth and shareholder value-creation, the delivery of superior customer service to promote core loan and deposit growth.

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.

Economic conditions and the credit environment were very difficult throughout 2008. With the recession and unemployment worsening, business activity across a wide range of industries and regions was greatly reduced and local governments and many businesses are 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, particularly the Atlanta metropolitan area, has led to a decrease in real estate values and an increase in United’s non-performing loans and charge-offs. As a result, United incurred a net loss of $64.2 million for 2008. This loss was primarily due to higher credit costs and net interest margin compression. Management has taken proactive steps to mitigate the credit issues as well as improve the margin going into 2009, but the overall performance for the company was disappointing for 2008.

As a result, the Compensation Committee determined that for 2008 senior management should be compensated with equity incentive awards for their efforts at positioning United for improved long-term performance, but that cash compensation should be tempered in light of actual 2008 performance. The Compensation Committee also believes that compensation for United’s senior management should reflect the Board’s continued confidence in and its desire to retain the current team to continue to manage the company through these difficult times. The following is a summary of the Compensation Committee’s actions during 2008 with respect to annual base salary, non-equity incentive compensation awards and equity incentive compensation awards.

-15-

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.

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.

In 2008 and 2007, the Compensation Committee did not increase the annual base salaries for any of the Named Executive Officers. Also, United did not increase annual base salaries for any other members of senior management in 2008.

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. Effective January 2007, the Board of Directors adopted the Management Annual Incentive Plan which was subsequently approved by the shareholders at the April 2007 shareholders’ meeting. The plan was designed to link salary and non-equity incentives to objective standards of performance. In addition, the plan was designed to qualify for compliance with the limitations on executive compensation deductions under Internal Revenue Code Section 162(m). Under the plan, the Compensation Committee 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 the first quarter of 2008, the Committee established the performance parameters to be used for 2008 under the Management Annual Incentive Plan, balancing the need to reward and retain executive management in a challenging banking environment with shareholders’ desire for strong financial performance with appropriate risk. Because these financial performance measures were not met during 2008, the Compensation Committee did not grant non-equity incentive compensation awards or any cash bonuses to any Named Executive Officers or any other member of senior management. Also, United did not grant non-equity incentive compensation awards to the Named Executive Officers in 2007.

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 and the market price of United’s common stock, United believes that granting stock options is 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 options to be reduced after the initial grant date. Because participants may not exercise options until they vest and because the exercise price of the options is the fair market value of the underlying stock on the date of grant, participants do not realize any benefit from stock options unless United’s stock price appreciates over the vesting period.

During 2008, options to acquire 597,750 (606,937 adjusted for 2008 stock dividends) shares of common stock were awarded by the Compensation Committee, including options to acquire 123,500 (125,407 adjusted for 2008 stock dividends) shares of common stock awarded to the Named Executive Officers. Additionally, 31,097 (31,567 adjusted for 2008 stock dividends) restricted stock awards were awarded during 2008, including 18,500 (18,786 adjusted for 2008 stock dividends) restricted stock units awarded to the Named Executive Officers.

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 2008 benefits provided to the Named Executive Officers under the Modified Retirement Plan.

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 2008 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 2008 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 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 and receive other benefits on the same terms as other employees, which plans include medical, dental and life insurance.

Severance Benefits.

Generally, options and restricted stock grants 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 are accelerated upon a change in control. Otherwise, options and restricted stock awards cease vesting upon termination of employment.

-17-

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 agreement, including severance benefits to Mr. White under certain circumstances.

United does not provide for any other severance benefits to its Named Executive Officers, except as described below.

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, 2008, all payments of compensation and benefits under the agreements with such officers that would be payable in a lump sum (except for Mr. White, who would be paid in 24-monthly installments) and capped at the following approximate amounts: Mr. Tallent $2,375,350; Mr. Freeman $1,432,000; Mr. Schuette $1,024,050; Mr. Shearrow $1,008,250 and Mr. White $1,934,600. Without the cap, the payments of salary, bonus and benefits would have exceeded such amounts.

None of these payments would be considered Excess Parachute Payments or would violate the prohibitions under the CPP, and the Compensation Committee believes that these potential benefits would be minor relative to the substantial transaction value for United’s shareholders.

-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 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	2008	$	480,000	$	-	$	91,600	$	202,600	$	-	$	(78,600	)	$	80,086	$	775,686
President and	2007		480,000		-		94,900		186,100		-		(131,700	)		95,379		724,679
Chief Executive Officer	2006		472,500		650,000		68,000		157,000		-		66,700			119,493		1,533,693


Guy W. Freeman	2008		295,000		-		43,600		55,800		-		82,500			49,654		526,554
Executive Vice President	2007		295,000		-		22,400		30,500		-		84,600			50,722		483,222
and Chief Operating Officer	2006		290,800		300,000		86,900		172,800		-		55,800			57,843		964,143


Rex S. Schuette	2008		283,000		-		78,300		99,600		-		35,000			27,604		523,504
Executive Vice President	2007		283,000		-		72,700		102,200		-		(111,600	)		33,450		379,750
and Chief Financial Officer	2006		279,500		250,000		45,900		91,850		-		64,300			46,471		778,021


David P. Shearrow	2008		275,000		-		187,400		52,700		-		8,300			14,863		538,263
Executive Vice President	2007		195,000		145,000		127,000		30,600		-		7,500			84,893		589,993
and Chief Risk Officer (6)


Glenn S. White	2008		320,000		-		69,000		51,200		-		(143,200	)		34,454		331,454
President,
Atlanta Region (6)

(1)	Amounts shown for salary and bonus were either paid in cash or deferred, as elected by the executive under the Deferred Compensation Plan. See the “Nonqualified Deferred Compensation – Activity For 2008” table for the executive’s contributions and earnings .
(2)	The annual amounts reflect United’s amortized expense relating to the awards granted to the executive. See Note 19 to the consolidated financial statements in United’s Annual Report on Form 10-K for the year ended December 31, 2008, regarding the assumptions underlying the valuation and expense recognition of equity awards. All restricted stock and stock option awards were granted under the Equity Plan.
(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. Because the financial performance measures were not met for 2008 and 2007, 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 and earnings (losses) credited (charged) to the executive’s account for the balances held in the Deferred Compensation Plan. See the “Pension Benefits” and “Nonqualified Deferred Compensation – Activity For 2008” tables for additional information.
(5)	Amounts shown include: (i) matching 401(k) and profit sharing contributions to the 401(a) 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 2008” 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 2008, 2007 and 2006, respectively, of $33,800, $43,850 and $37,850 for Mr. Tallent; $7,400, $7,500 and $7,500 for Mr. Freeman; and, $6,000 in 2008 for Mr. White. Mr. Shearrow also received a cash payment of $60,000 in 2007 to replace certain unvested restricted stock awards that were forfeited at his previous employer as an inducement to his employment by United.
(6)	Mr. Shearrow joined United in April 2007 and Mr. White became an executive officer of United in 2008.

-19-

Stock Option and Restricted Stock Grants

The following table sets forth information with respect to restricted stock and stock option awards granted to the Named Executive Officers for 2008 (as adjusted for 2008 stock dividends):

GRANTS OF PLAN-BASED AWARDS

	Grant date	Number of restricted stock units (1)		Stock option awards(2)
	Grant date	Number of restricted stock units (1)		Number		Exercise price(3)		Closing price on grant date
Mr. Tallent	April 30, 2008		4,062		45,695	$	13.53	$	13.53
Mr. Freeman	May 5, 2008		4,570		23,863		13.58		13.58
Mr. Schuette	May 5, 2008		3,554		20,309		13.58		13.58
Mr. Shearrow	May 5, 2008		3,554		20,309		13.58		13.58
Mr. White	May 5, 2008		3,046		15,231		13.58		13.58

(1)	The restricted stock units vest in equal installments over a four-year period beginning on January 31, 2009.
(2)	Each stock option is exercisable for one share of United’s common stock. Stock options vest in equal installments over a four-year period from the date of the grant, beginning on May 5, 2009 (April 30, 2009 for Mr. Tallent).
(3)	The exercise price of the stock options and the grant price of the restricted stock awards were $13.58 per share ($13.53 for Mr. Tallent), the closing price of United’s common stock the day of the grant as adjusted for the 2008 stock dividends.

When awarding grants, the Compensation Committee sets option exercise prices 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. Typically, vesting is in equal increments over a four-year period from the date of the grant.

As of December 31, 2008, United had not granted stock appreciation rights or similar awards to any of its past or present executive officers.

Stock Option Exercises and Restricted Stock Vesting

The following table sets forth the value realized upon exercising stock options and vesting of restricted stock awards for the Named Executive Officers during 2008 (as adjusted for 2008 stock dividends):


OPTION EXERCISES AND VESTING OF RESTRICTED STOCK

Name	Stock option awards				Restricted stock awards
Name	Number exercised		Value realized(1)		Number vesting		Value realized(2)
Mr. Tallent		26,656	$	12,262		3,746	$	63,468
Mr. Freeman		—		—		3,096		50,006
Mr. Schuette		—		—		2,855		46,530
Mr. Shearrow		—		—		3,250		33,475
Mr. White		—		—		—		—

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

-20-

Outstanding Equity Awards as of December 31, 2008

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 awards as of December 31, 2008 (as adjusted for 2008 stock dividends):


OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

	Stock options							Restricted stock awards
Name	Number exercisable		Number unexercisable(1)		Exercise price		Expiration date (2)	Number not vested (3)		Market value not vested (4)
Mr. Tallent		36,556		—	$	12.47	4/20/10
		45,695		—		11.49	4/18/11
		60,926		—		12.80	3/11/12
		45,695		—		16.14	4/17/13
		17,262		—		23.39	6/7/14
		15,537		5,179		22.75	5/16/15
		15,739		15,739		28.41	4/26/16
		8,885		26,655		30.21	4/25/17
				45,695	13.53		4/30/18
		246,295		93,268					9,392	$	127,543
Mr. Freeman		6,093		—		12.47	4/20/10
		7,835		—		11.49	4/18/11
		24,371		—		12.80	3/11/12
		30,463		—		16.14	4/17/13
		10,154		—		23.39	6/7/14
		9,901		3,300		22.75	5/16/15
		10,154		10,155		28.41	4/26/16
		5,458		16,374		30.21	4/25/17
		—		23,863		13.58	5/5/08
		104,429		53,692					9,900		134,442
Mr. Schuette		35,032		—		11.49	3/12/11
		18,278		—		11.49	4/18/11
		24,371		—		12.80	3/11/12
		27,418		—		16.14	4/17/13
		9,138		—		23.39	6/7/14
		9,140		3,046		22.75	5/16/15
		8,885		8,886		28.41	4/26/16
		4,696		14,089		30.21	4/25/17
		—		20,309		13.58	5/5/18
		136,958		46,330					8,439		114,602
Mr. Shearrow		5,077		15,232		30.93	4/16/17
		—		20,309		13.58	5/5/18
		5,077		35,541					16,450		223,391
Mr. White		—		25,386		30.33	6/1/17
		—		15,231		13.58	5/5/18
		—		40,617					13,201		179,270

(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 stock options that expire on June 1, 2017, vest as follows: 12,693 on June 1, 2010, 6,346 on June 1, 2011 and 6,347 on June 1, 2012.
(2)	The expiration date of each stock option is 10 years after the date of grant.
(3)	With the exception of Mr. Shearrow’s restricted stock units granted on April 16, 2007 and Mr. White’s restricted stock units granted on June 1, 2007, restricted stock shares and units vest in four equal annual installments, beginning January 31 of the year following the grant date. Mr. Shearrow’s 6,601 unvested restricted stock shares granted on April 16, 2007 vest on January 31, 2010 and Mr. White’s unvested restricted stock units granted on June 1, 2007 vest on June 1, 2012.
(4)	The market value is based on the closing price of United’s common stock at December 31, 2008 of $13.58 multiplied by the number of unvested awards.

-21-

Equity Compensation Plan Information at December 31, 2008

The following table provides information about stock options outstanding as of December 31, 2008 and stock options and/or equity awards available to be granted in future years (adjusted for 2008 stock dividends):


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		3,356,165	$	19.75		1,401,628
Equity compensation plans not approved by shareholders (2)		84,034		8.07		—
Total		3,440,199		19.47		1,401,628

(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 plans have been frozen as to future grants at the time of the acquisitions.

Pension Benefits

The following table presents selective retirement benefit information for 2008 for each Named Executive Officer that was a participant in Modified Retirement Plan.


PENSION BENEFITS

Name	Plan name	Number of years credited service	Present value of accumulated benefit		Payments during 2008
Mr. Tallent	Modified Retirement Plan	25	$	372,405	—
Mr. Freeman	Modified Retirement Plan	14		593,406	—
Mr. Schuette	Modified Retirement Plan	8		279,308	—
Mr. Shearrow	Modified Retirement Plan	2		19,706	—

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 a fixed annual amount in equal installments either (1) for the lifetime of the participant and, if the participant is married upon death, a lesser lifetime amount to the participant’s spouse, or (2) a fixed payment for 15 years. The annual benefits, based on seniority and position, range from $25,000 to $90,000 per year and are taxable to the participant. The normal retirement age defined in the plan is 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 2008


Name	Executive contributions (1)		Company contributions (2)		Account Earnings (3)			Withdrawals/ distributions		Balance at year-end
Mr. Tallent	$	28,239	$	12,500	$	(147,129	)	$	—	$	467,862
Mr. Freeman		—		3,250		228			—		17,176
Mr. Schuette		24,739		2,650		(19,469	)		—		209,450
Mr. Shearrow		43,216		9,500		9,201			—		61,917
Mr. White		5,000		5,000		(143,173	)		—		269,545

(1)	All executive contributions are included in the amounts under the column headings “Salary” and “Bonus” 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”.
(3)	All account earnings are included in the amounts under the column heading “Changes in pension and deferred compensation earnings” 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. 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 for 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 United common stock, recorded as common stock issuable (an equity instrument) at the time of the investment, there are no potential future costs of the plan known at this time.