UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549



 

FORM 10-K/A
(Amendment No. 1)



 

 
(Mark One)     
x   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, 2007

OR

 
o   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from   to  .

Commission File Number 000-24051



 

UNITED PANAM FINANCIAL CORP.

(Exact Name of Registrant as Specified in Its Charter)

 
California   94-3211687
(State or Other Jurisdiction of
Incorporation or Organization) 		  (I.R.S. Employer
Identification Number)

18191 Von Karman Avenue, Suite 300
Irvine, California 92612

(Address of Principal Executive Offices) (Zip Code)

(949) 224-1917

(Registrant’s Telephone Number, Including Area Code)



 

Securities registered pursuant to Section 12(b) of the Act:

 
Title of Each Class   Name of Each Exchange on Which Registered
Common Stock, no par value   The NASDAQ Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act: None



 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.Yes o NO x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.Yes o NO x

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.Yes x NO o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

     
Large accelerated filer o   Accelerated filer x   Non-accelerated filer o   Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).Yes o NO x

The aggregate market value of the Common Stock held by non-affiliates of the Registrant was approximately $94,039,000, based upon the closing sales price of the Common Stock as reported on The NASDAQ Global Market on June 30, 2007. Shares of Common Stock held by each officer, director and holder of 5% or more of the outstanding Common Stock have been excluded in that such persons may be deemed to be affiliates. Such determination of affiliate status is not necessarily a conclusive determination for other purposes.

The number of shares outstanding of the Registrant’s Common Stock as of March 4, 2008 was 15,737,399 shares.

DOCUMENTS INCORPORATED BY REFERENCE

None.

 

 

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EXPLANATORY NOTE

On March 13, 2007, United PanAm Financial Corp. (the “Company” or “UPFC”) filed its Annual Report on Form 10-K for the year ended December 31, 2007 with the Securities and Exchange Commission (the “SEC”). Because the Company will not file a definitive proxy statement for its annual meeting of shareholders to be held on July 22, 2007 within 120 days after the end of its last fiscal year, the Company is filing this Amendment No. 1 to set forth the information required by Items 10, 11, 12, 13 and 14 of Part III of Form 10-K. This Amendment No. 1 does not reflect events occurring after the filing of the Company’s Annual Report on Form 10-K for the year ended December 31, 2007 or modify or update the disclosures contained therein, except as expressly set forth herein.

PART III

Item 10. Directors, Executive Officers and Corporate Governance

Directors of United PanAm Financial Corp.

The following table identifies our directors and provides their respective ages and current positions with UPFC as of April 29, 2008. Messrs. Bron, Maizel and Thousand and Ms. Sullivan were each elected to our Board of Directors at our annual meeting of shareholders held in 2007 for a two-year term that will continue until our annual meeting of shareholders to be held in 2009 or until the director’s successor has been elected and qualified or until the director’s death, resignation or removal, and Messrs. Bateman and Lynn were each elected to our Board of Directors at our annual meeting of shareholders held in 2006 for a two-year term that will continue until our annual meeting of shareholders to be held in 2008 or until the director’s successor has been elected and qualified or until the director’s death, resignation or removal. Biographical information for each of our directors is provided below.

     
Name   Position   Age   Director Since
Guillermo Bron   Chairman of the Board   56   1994
Ray C. Thousand   President, Chief Executive Officer, Secretary and Director   50   2000
Giles H. Bateman   Lead Director   63   2006
Mitchell G. Lynn   Director   59   2001
Luis Maizel   Director   57   1997
Julie Sullivan   Director   50   2007

Guillermo Bron . Mr. Bron has served as Chairman of the Board and a director of UPFC since April 1994, and as a director of the Pan American Bank, FSB (the “Bank”), a federally chartered savings association and former wholly-owned subsidiary of UPFC, from 1994 until its dissolution in February 2005. Mr. Bron is a Managing Director of Acon Funds Management LLC, a private equity firm, and the Managing Member of PAFGP, LLC, the sole general partner of Pan American Financial, L.P. From 2000 to 2002, Mr. Bron was a director of Telemundo Group, Inc. Mr. Bron founded UPFC and organized a Hispanic investor group that acquired certain assets and assumed certain liabilities of the Bank’s predecessor from the Resolution Trust Corporation in April 1994. From 1994 to 2003, Mr. Bron was an officer, director and principal stockholder of a general partner of Bastion Capital Fund, L.P., a private equity investment fund. Previously, Mr. Bron was a Managing Director of Corporate Finance and Mergers and Acquisitions at Drexel Burnham Lambert.

Ray C. Thousand . Mr. Thousand has served as a director of UPFC since September 2000, as Chief Executive Officer of UPFC since June 2004, as President and Secretary of UPFC since January 2001, and as Chief Operating Officer of UPFC from January 2001 until June 2004. Mr. Thousand has served as President, Chief Executive Officer and a director of United Auto Credit Corporation (“UACC”), a wholly-owned subsidiary of UPFC, since February 1996. Mr. Thousand also served as President and Chief Executive Officer of the Bank from January 2001 until its dissolution in February 2005. Previously, Mr. Thousand held positions in consumer and commercial lending with Norwest Financial from 1979 to 1985, and executive positions with Bank of America/Security Pacific Credit from 1985 to 1993, TransAmerica Business Credit in 1994 and Fidelity Funding Financial Group from 1994 to 1995 with emphasis on lending to consumer finance companies engaged in indirect automobile lending.

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Giles H. Bateman . Mr. Bateman has served as a director of UPFC since April 2006, and currently serves as Chairman of UPFC’s Compensation Committee. Mr. Bateman was a co-founder of The Price Company in 1976 and served as Chief Financial Officer and Vice Chairman there until 1991. Mr. Bateman served as non- executive chairman of CompUSA Inc., a publicly traded retailer of computer hardware, software, accessories and related products, from 1994 until he retired in 2000. Mr. Bateman serves as a director, and the chair of the audit committee, of WD-40 Company and as a director of Lifetime Fitness, Inc. He also serves as a director of three private companies.

Mitchell G. Lynn. Mr. Lynn has served as a director of UPFC since April 2001. Mr. Lynn also served as a director of the bank, from 2001 until its dissolution in February 2005. Since 1995, Mr. Lynn has been founder and President of CRI2000, LP and several subsidiaries which engage in a variety of activities, but primarily the design, development and manufacturing of consumer products for wholesale distribution. From 1979 to 1994, Mr. Lynn held various senior executive level positions including member of the board of directors and executive committee with the Price Company and Price/Costco. Mr. Lynn is currently a director of Bodega Latina, a warehouse grocery retailer focusing on the Hispanic market in the Southwest.

Luis Maizel . Mr. Maizel has served as a director of UPFC since October 1997, and currently serves as Chairman of UPFC’s Investment Committee. Mr. Maizel has been President of LM Capital Group, LLC since 1989 and LM Advisors, Inc. since 1984. Mr. Maizel currently serves as a director of both such companies, which are pension fund management and financial consulting firms. From 1980 to 1984, Mr. Maizel was President of Industrias Kuick, S.A. and Blount Agroindustras, S.A., manufacturers of agribusiness equipment.

Julie Sullivan . Ms. Sullivan has served as a director of UPFC since July 2007, and currently serves as Chairman of UPFC’s Audit Committee. Ms. Sullivan has served as Member of the Audit Committee, Chair of the Audit Committee and Member of the Governance and Nominating Committee of Applied Micro Circuits Corporation since February 2005. Ms. Sullivan has been the Provost and Vice President for Academic Affairs at University of San Diego since July 2005. From July 2003 to July 2005, Ms. Sullivan was a professor at the University of California, San Diego, Rady School of Management. From July 1998 to June 2003, Ms. Sullivan was the Interim Dean and Senior Associate Dean at the University of North Carolina at Chapel Hill, Kenan-Flagler Business School.

Executive Officers of United PanAm Financial Corp.

The following table identifies our executive officers and provides their respective ages and current positions with UPFC as of April 29, 2008. Biographical information for each such person, other than Guillermo Bron and Ray C. Thousand, whose biographies are provided above under the heading “Directors of United PanAm Financial Corp.,” is provided below.

   
Name   Age   Position
Guillermo Bron   56   Chairman of the Board
Ray C. Thousand   50   President, Chief Executive Officer, Secretary and Director
Arash A. Khazei   40   Executive Vice President and Chief Financial Officer
Mario Radrigan   47   Executive Vice President and Chief Marketing Officer
Stacy M. Friederichsen   39   Executive Vice President and Chief Administrative Officer

Arash A. Khazei . Mr. Khazei has served as Executive Vice President and Chief Financial Officer of UPFC since April 2007, as Senior Vice President and Chief Financial Officer of UPFC from July 2006 to April 2007, and as Vice President and Corporate Controller of UPFC from May 2005 to July 2006. From December 2002 to April 2005, Mr. Khazei served as Senior Consultant with RHI International, a consulting company, working directly with companies such as British Petroleum, GMAC and Nokia Corporation. From October 1999 to December 2002, Mr. Khazei served as Managing Consultant with RTM Norden, Inc., an information system consulting company. Prior to October 1999, Mr. Khazei worked for companies including Arthur Andersen LLP and The Walt Disney Company. Mr. Khazei is a Certified Public Accountant and Chartered Accountant.

Mario Radrigan . Mr. Radrigan has served as Executive Vice President and Chief Marketing Officer of UPFC since April 2007, as Executive Vice President and Chief Administrative Officer of UPFC from June 2004 to April 2007, as Senior Vice President of UPFC from July 2001 to June 2004, and as Executive

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Vice President, Senior Vice President and Vice President of Marketing of UACC since February 1996. Mr. Radrigan also served as Senior Vice President of the Bank from July 2001 until its dissolution in February 2005. From September 1993 to February 1996, Mr. Radrigan served as Finance Director of Webb Automotive Group. Mr. Radrigan also served as Finance Director of Peyton Cramer Automotive Group from June 1988 to September 1993, as Senior Credit Analyst for Toyota Motor Credit Corporation from February 1986 to June 1988, and as Account Representative for General Motors Acceptance Corporation from August 1981 to February 1986.

Stacy M. Friederichsen . Ms. Friederichsen has served as Executive Vice President and Chief Administrative Officer of UPFC since April 2007, as Senior Vice President of UPFC from April 2006 to April of 2007, and as Vice President and Director of Human Resources of UPFC from March 2005 to April 2006. From January 2002 to February 2005, Ms. Friederichsen served as the Director of Human Resources for Raj Manufacturing. Ms. Friederichsen also served as Director of Human Resources for Granite Homes from December 1999 until December 2001. Prior to 1999, Ms. Friederichsen served as a Senior Human Resources Consultant for Strategic Business Solutions, working directly with companies such as Allergan, Cryogen and Johnson & Johnson.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our directors, executive officers and persons who own more than 10% of our common stock to file reports of ownership and changes in ownership with the SEC. These persons are required to provide us with copies of all Section 16(a) reports that they file. Based solely upon a review of these reports and written representations from our directors and executive officers, we believe that our directors, executive officers and 10% owners complied with all Section 16(a) filing requirements applicable to them during the year ended December 31, 2007, with the exception of Guillermo Bron, our Chairman, who filed a late Form 4 on July 17, 2007 (covering one transaction reporting a restricted stock grant), Giles Bateman, a director, who filed a late Form 4 on July 13, 2007 (covering one transaction reporting a restricted stock grant), Mitchell Lynn, a director, who filed a late Form 4 on July 13, 2007 (covering one transaction reporting a restricted stock grant), Luis Maizel, a director, who filed a late Form 4 on July 13, 2007 (covering one transaction reporting a restricted stock grant) and August 16, 2007 (covering one transaction reporting his acquisition of UPFC common stock), Julie Sullivan, a director, who filed a late Form 4 on July 16, 2007 (covering one transaction reporting a restricted stock grant), Ray Thousand, our Chief Executive Officer and a director, who filed a late Form 4 on July 13, 2007 (covering one transaction reporting a restricted stock grant), Arash Khazei, our Chief Financial Officer and Executive Vice President, who filed a late Form 4 on July 16, 2007 (covering one transaction reporting a restricted stock grant), Mario Radrigan, our Chief Marketing Officer and Executive Vice President, who filed a late Form 4 on July 16, 2007 (covering one transaction reporting a restricted stock grant), and Stacy Friederichsen, our Chief Administrative Officer and Executive Vice President, who filed a late Form 4 on July 19, 2007 (covering one transaction reporting a restricted stock grant).

Code of Ethics

We have adopted a Code of Personal Business Conduct and Ethics governing activities by all directors, officers and employees. The Code of Personal Business Conduct and Ethics is available on our website at www.upfc.com. In addition, printed copies of the Code of Personal Business Conduct and Ethics are available, without charge, upon written request to:

Nancy LeBaron, Assistant Secretary
United PanAm Financial Corp.
18191 Von Karman Avenue, Suite 300
Irvine, California 92612

Any amendments or waivers to the Code of Personal Business Conduct and Ethics will promptly be disclosed by posting on our website.

Audit Committee

The Audit Committee operates under a written charter adopted by the Board of Directors. Among other things, the purpose of the Audit Committee is to oversee and monitor the integrity of our financial statements

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and our internal accounting and financial controls, our independent auditor’s qualifications, independence and compensation, the performance of our internal audit function and independent auditors, and our compliance with legal and regulatory requirements.

The Audit Committee is chaired by Ms. Julie Sullivan, and consists of Ms. Sullivan and Messrs. Bateman and Lynn. The Board has determined that each of Ms. Julie Sullivan, Mr. Bateman and Mr. Lynn is an “audit committee financial expert” as defined by the rules of the SEC. The Board has also determined that each of Ms. Sullivan, Mr. Bateman and Mr. Lynn is “independent” and meets each of the other requirements for Audit Committee members under the applicable rules and regulations of The NASDAQ Global Market.

Item 11. Executive Compensation

Compensation Discussion and Analysis

Overview of Compensation Program

The Compensation Committee of the Board of Directors (the “Committee”) has responsibility for establishing, implementing and continually monitoring adherence to the UPFC compensation philosophy. The Committee believes it ensures that the total compensation paid to the executive officers is fair, reasonable and competitive. Generally, the types of compensation and benefits provided to executive officers, including the actively-employed named executive officers, are similar to those provided to other executive officers at comparable companies.

Throughout this Compensation Discussion and Analysis, the individuals who served as Chief Executive Officer and Chief Financial Officer during 2007, as well as Chief Administrative Officer and Chief Marketing Officer at December 31, 2007, are referred to as the “named executive officers” or “NEOs.”

Process for Evaluating Executive Officer Performance and Compensation

Pursuant to its charter, the Committee meets at least twice each year to review and discuss executive compensation issues. The Committee also meets periodically throughout the year as it deems appropriate.

In February 2007, the Committee engaged Compensia, Inc., an independent compensation consulting firm, to conduct a study of executive compensation practices for the assumed NEOs for fiscal year 2007 (which did not include the Chairman of the Board). The aim of the study was to provide the foundation for creating a more formalized compensation structure, which is reflective of UPFC’s competitive environment. Compensia reports directly to the Committee. The Committee also sought ad hoc advice on regional pay differentials from other compensation consulting firms.

As of December 31, 2007, the Committee was comprised of Messrs. Giles Bateman, Mitchell Lynn and Luis Maizel. Mr. Bateman is the Chair of the Committee, and each of the Committee members is “independent” as defined by the applicable rules and regulations of The NASDAQ Global Market, including Rule 4200(a)(15) of the Marketplace Rules of The NASDAQ Stock Market LLC.

Compensation Benchmarking

In February 2007, UPFC identified, with the assistance of its independent compensation consulting firm, a peer group of companies, which are referred to as the “Compensation Peer Group,” for purposes of benchmarking executive compensation. These companies, which are listed below, are comparable to UPFC in terms of industry focus and financial scope, and represent UPFC’s labor market competition.

 
•   Advanta   •   Encore Capital Group
•   America’s Car-Mart   •   Financial Federal
•   Asset Acceptance Capital   •   Marlin Business Services
•   Asta Funding   •   Medallion Financial
•   Consumer Portfolio Services   •   Nicholas Financial
•   Credit Acceptance   •   World Acceptance

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The companies in the Compensation Peer Group had the following profile as of March 1, 2007:

           
  Last Four Quarters
Revenue/Interest and
Non-Interest Income 		  Market Capitalization   Employee Size
     Range   Median   Range   Median   Range   Median
Peer Group   $ 46.8M-$507.7M     $ 228.8M     $ 110.6M-$1,218.7M     $ 360.8M       99-2,214       760  
UPFC   $ 197.0M              $ 208.9M                950           

Executive Compensation Philosophy and Framework

UPFC designs its compensation program to attract, motivate and retain high-quality executives by providing rewards that are performance-based and competitive with the labor market in its industry. UPFC’s philosophy is to provide its executives with incentive compensation opportunities that both advance the interests of shareholders and deliver levels of compensation to executives that are commensurate with performance.

UPFC designs its compensation program to:

1. Support its business strategy and business plan by clearly communicating what is expected of executives with respect to goals and results, and by aligning rewards with achievement.
2. Ensure that it can attract the highly skilled executive talent required to deliver favorable business results.
3. Strongly align the interests of its executives with the long-term interests of shareholders through the use of equity compensation.

Employment Agreements

At December 31, 2007, UPFC had entered into employment agreements with each of the NEOs with the exception of Mr. Singh. Mr. Thousand’s employment agreement, dated July 30, 2007, remains effective through December 31, 2009, and provides for base salary of $555,556 per annum between January 1, 2007 and December 31, 2007, $656,250 per annum between January 1, 2008 and December 31, 2008, and $689,063 per annum between January 1, 2009 and December 31, 2009, a target annual cash bonus of up to 60%, 40% and 40% of base salary for fiscal 2007, fiscal 2008 and fiscal 2009, respectively, based upon the satisfaction of specified performance goals approved annually by the Board of Directors, with an additional 20% discretionary bonus for a total of 120%, and severance benefits as described below in “Potential Payments Upon Termination or Change in Control.”

Mr. Khazei’s employment agreement, dated July 30, 2007, remains effective through December 31, 2009, and provides for base salary of $220,000 per annum between January 1, 2007 and December 31, 2007, $270,000 per annum between January 1, 2008 and December 31, 2008, and $283,500 per annum between January 1, 2009 and December 31, 2009, a target annual cash bonus of up to 50%, 40% and 40% of base salary for fiscal 2007, fiscal 2008 and fiscal 2009, respectively, based upon the satisfaction of specified performance goals approved annually by the Board of Directors, and severance benefits as described below in “Potential Payments Upon Termination or Change in Control.”

Mr. Radrigan’s employment agreement, dated July 30, 2007, remains effective through December 31, 2009, and provides for base salary of $225,000 per annum between January 1, 2007 and December 31, 2007, $236,250 per annum between January 1, 2008 and December 31, 2008 and $248,063 per annum between January 1, 2009 and December 31, 2009, a target annual cash bonus of up to 35% of base salary for fiscal 2007, fiscal 2008 and fiscal 2009, based upon the satisfaction of specified performance goals approved annually by the Board of Directors, and severance benefits as described below in “Potential Payments Upon Termination or Change in Control.”

Ms. Friederichsen’s employment agreement, dated July 30, 2007, remains effective through December 31, 2009, and provides for base salary of $225,000 per annum between January 1, 2007 and December 31, 2007, $236,250 per annum between January 1, 2008 and December 31, 2008, and $248,063 per annum between January 1, 2009 and December 31, 2009, a target annual cash bonus of up to 35% of base salary for fiscal

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2007, fiscal 2008 and fiscal 2009, based upon the satisfaction of specified performance goals approved annually by the Board of Directors, and severance benefits as described below in “Potential Payments Upon Termination or Change in Control.”

Evaluation of Executive Officer Compensation

Target Pay/Pay Mix

After reviewing competitive compensation practices in 2007, the Committee determined that the overall below-market positioning for cash compensation combined with a disproportionate emphasis on variable cash compensation and large periodic equity awards, while historically appropriate, required revision in order for UPFC to remain competitive in recruiting and retaining executive talent. UPFC redesigned its compensation program in early 2007 to bring cash compensation into line with market practices. The changes resulted in an overall average at approximately the Compensation Peer Group 60 th percentile in base and target cash incentive compensation. As a result, all NEOs received increases in base salary. The Market data was also used to determine the appropriate proportion of the various pay elements to the overall mix.

The Chief Executive Officer’s incentive bonus target was also lowered at that time, from 120% to 80% for 2007, to 60% for 2008 and 60% for 2009. The Committee believes this total cash compensation opportunity better balances annual operating performance objectives with the need to create shareholder value over the long-term.

As a result of the changes introduced in early 2007, the mix of fixed to variable cash compensation for fiscal year 2007 was as follows:

   
Executive Officer   Title   Pay Mix
(Fixed/
Variable)
Ray C. Thousand   President and Chief Executive Officer   56%/44%
Arash A. Khazei   Executive Vice President and Chief Financial Officer   67%/33%
Mario Radrigan   Executive Vice President and Chief Marketing Officer   74%/26%
Stacy M. Friederichsen   Executive Vice President and Chief Administrative Officer   74%/26%

UPFC has not historically made annual stock option grants. Instead, larger awards were made at the time executives renewed their employment agreements with UPFC. The awards have generally been intended to cover a five year period, and UPFC has attempted to grant awards which, when annualized over the five year period, are above median competitive levels.

Base Salary and Incentive Bonus

Base salary is the primary fixed compensation element in the executive pay program, and is used to attract, motivate and retain highly qualified executives. UPFC’s annual bonus program is an “at-risk” compensation arrangement designed to reward executives for achieving key operational goals that UPFC believes will provide the foundation for creating longer-term shareholder value.

In addition to market competitiveness, the Committee assesses the following factors when determining annual compensation levels for executives:

• The responsibilities and criticality of the position
• The performance of the executive
• The qualifications and experience of the executive
• UPFC’s financial performance (including return on equity, asset growth, revenue, growth, portfolio management, levels of general and administrative expense and budget variances) for the previous year
• The specific contributions of the executive (or his/her department) to achievement of corporate goals
• The executive’s total compensation during the previous year
• The executive’s length of service at UPFC

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• The executive’s effectiveness in dealing with external and internal audiences
• Anticipated future contribution of the executive

As discussed above, in early 2007 the Committee engaged Compensia to conduct a review of executive compensation practices at key market and labor competitors. The results of this study were evaluated, along with company performance data, when the Committee met in March 2007 to discuss the 2006 performance and compensation for the NEOs.

In January 2008, the Committee met to discuss the 2007 performance and compensation for the NEOs. The Committee recommended to the Board of Directors that the NEOs, be granted discretionary bonuses in the amounts set forth in the following table, and such discretionary bonuses were approved by the Board of Directors and granted by the Company:

           
Executive Officer   Title   2007 Base Salary   Percent Increase Over FY06   2007 Target Bonus
Percentage 		  Bonus Payment   Percent
of Target Bonus
Ray C. Thousand     President and Chief
Executive Officer 		    $ 555,556       59 %       80 %     $ 0       0 %  
Arash A. Khazei     Executive Vice President
and Chief Financial Officer 		    $ 220,000       26 %       50 %     $ 38,500       35 %  
Mario Radrigan     Executive Vice President
and Chief Marketing Officer 		    $ 225,000       18 %       35 %     $ 0       0 %  
Stacy M. Friederichsen     Executive Vice President and
Chief Administrative Officer 		    $ 225,000       29 %       35 %     $ 27,563       35 %  

Subsequent to the Committee’s evaluation of the results of the compensation study conducted by Compensia (which did not include comparisons for the Chairman of the Board), the Committee recommended to the Board of Directors that the NEOs receive cash compensation for the years 2007-2009 as set forth in the following table, and such cash compensation was approved by the Board of Directors:

             
    Base Salary   Target Incentive Bonus
Executive Officer   Title   2007   2008   2009   2007   2008   2009
Ray Thousand     President and Chief
Executive Officer 		    $ 555,556     $ 656,250     $ 689,062       80 %       60 %       60 %  
Arash A. Khazei     Executive Vice President
and Chief Financial Officer 		    $ 220,000     $ 270,000     $ 283,500       50 %       40 %       40 %  
Mario Radrigan     Executive Vice President
and Chief Marketing Officer 		    $ 225,000     $ 236,250     $ 248,063       35 %       35 %       35 %  
Stacy M. Friederichsen     Executive Vice President and
Chief Administrative Officer 		    $ 225,000     $ 236,250     $ 248,063       35 %       35 %       35 %  

Equity Compensation

UPFC’s Amended and Restated 1997 Employee Stock Incentive Plan provides for equity awards to NEOs. The Committee believes stock awards create a critical linkage between executive and shareholder interests, and enhance UPFC’s ability to attract, motivate and retain key executives. Historically, equity awards have not been made on an annual basis, but periodically based upon an executive’s employment agreement renewal or promotion.

Beginning in 2007, the Committee decided to move away from the granting of large, periodic awards and instead adopted a program of smaller annual grants. The Committee believes this type of program will provide a more consistent base of unvested equity value and enhance the retention value of the compensation program. In light of the changes in the equity grant process, as well as changes in the competitive market, UPFC has begun providing annual equity compensation in the form of restricted stock. The restricted stock awards are based on a fixed dollar amount. The number of shares awarded on the grant date is determined by dividing the applicable fixed dollar amount by the then-current fair market value of the stock. The fixed dollar amounts

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are determined based on data obtained from the Compensation Peer Group, on each NEOs individual performance and UPFC’s operating results. The Committee does not consider stock ownership of the NEOs in setting the fixed dollar amount.

In March 2007, the Committee recommended to the Board of Directors that the NEOs receive equity compensation for the years 2007-2009 as set forth in the following table, and such equity compensation was approved by the Board of Directors:

       
    Fixed Value Restricted
Stock Grant
Executive Officer   Title   2007 (1)   2008   2009
Ray C. Thousand     President and Chief Executive Officer     $ 275,000     $ 275,000     $ 275,000  
Arash A. Khazei     Executive Vice President and
Chief Financial Officer 		    $ 150,000     $ 150,000     $ 150,000  
Mario Radrigan     Executive Vice President and
Chief Marketing Officer 		    $ 75,000     $ 75,000     $ 75,000  
Stacy M. Friederichsen     Executive Vice President and
Chief Administrative Officer 		    $ 75,000     $ 75,000     $ 75,000  

(1) The 2007 grants were made on July 10, 2007.

With the exception of the 2007 grants, the grant dates for restricted stock will be February 1 of the applicable year. For 2007, the number of shares issued under the restricted stock grants were determined by dividing the fixed value amounts reflected in the table above by $14.30, which was the closing price of UPFC’s common stock on February 1, 2007. Restricted stock awards will begin to vest on the 3 rd anniversary of the grant date and the becomes fully vested on the 5 th anniversary, subject to acceleration in the event of a change of control. For Mr. Thousand only, there is a performance requirement of achieving 10% growth rate on an annual basis in pre-tax income from 2007.

Additionally, UPFC will continue to use stock options as a supplemental equity award vehicle in certain circumstances. The Committee awarded 25,000 stock options to each of Mr. Khazei and Ms. Friederichsen on July 10, 2007, as set forth in the following table, as a result of their promotions from Senior Vice President to Executive Vice President:

         
Executive Officer   Current Title   Stock Options   Date Granted   Strike Price   Black-Scholes Value
Ray C. Thousand     President and Chief Executive Officer       N/A       N/A       N/A       N/A  
Arash A. Khazei     Executive Vice President and Chief
Financial Officer 		      25,000       07/10/07     $ 13.82     $ 163,000  
Mario Radrigan     Executive Vice President and Chief
Marketing Officer 		      N/A       N/A       N/A       N/A  
Stacy M. Friederichsen     Executive Vice President and Chief
Administrative Officer 		      25,000       07/10/07     $ 13.82     $ 163,000  

Benefits and Perquisites

Benefits provided to NEOs are substantially the same for all employees at UPFC, with the following exceptions:

• All NEOs receive a car allowance. Mr. Thousand, Mr. Khazei and Mr. Radrigan receive $200 per month under their employment agreements. Ms. Friederichsen receives $350 per month.

All NEOs participate in UPFC’s 401(k) Plan, which is available to most employees. The 401(k) Plan permits participants to make 401(k) contributions on a pretax basis. Participants can contribute up to 60% of their pretax compensation to the 401(k) Plan annually, subject to legal limitations. The 401(k) Plan also provides that UPFC and its subsidiaries will make a matching contribution on behalf of each eligible participant equal to 50% of the 401(k) contributions made by participants, up to 6% of their individual compensation.

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Post-Employment Obligations

All NEOs would be entitled to full vesting of any unvested stock options or restricted stock awards upon a change-in-control of UPFC. Messrs. Thousand, Khazei and Radrigan have severance arrangements under their current employment agreements in the event of termination without cause. Under these agreements, upon a termination without cause, the executive would be entitled to payment equal to 12 months salary at the then current base salary, plus prorated bonus through the date of termination based on the following rates: Mr. Thousand, 40% of base salary; Mr. Khazei, 40% of base salary; Mr. Radrigan, 35% of base salary; and Ms. Friederichsen, 35% of base salary. As discussed above in “Employment Agreements,” Mr. Thousand’s current employment agreement provides for base salary of $555,556 per annum between January 1, 2007 and December 31, 2007, $656,250 per annum between January 1, 2008 and December 31, 2008, and $689,063 per annum between January 1, 2009 and December 31, 2009, Mr. Khazei’s current employment agreement provides for base salary of $220,000 per annum between January 1, 2007 and December 31, 2007, $270,000 per annum between January 1, 2008 and December 31, 2008, and $283,500 per annum between January 1, 2009 and December 31, 2009, Mr. Radrigan’s current employment agreement provides for base salary of $225,000 per annum between January 1, 2007 and December 31, 2007, $236,250 per annum between January 1, 2008 and December 31, 2008, and $248,063 per annum between January 1, 2009 and December 31, 2009, and Ms. Friederichsen’s current employment agreement provides for base salary of $225,000 per annum between January 1, 2007 and December 31, 2007, $236,250 per annum between January 1, 2008 and December 31, 2008, and $248,063 per annum between January 1, 2009 and December 31, 2009.

Tax Considerations

Section 162(m) of the Internal Revenue Code of 1986 limits the deductibility of compensation payable in any tax year to the Chief Executive Officer and the other four most highly compensated executive officers. Section 162(m) stipulates that a publicly-held company cannot deduct compensation to its top officers in excess of $1 million. Compensation that is “performance-based” compensation within the meaning of the Internal Revenue Code of 1986 does not count toward the $1 million limit. No NEO compensation in 2007 exceeded the limits of Section 162(m). UPFC structures its executive compensation to comply with Section 162(m).

Compensation Committee Report

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Form 10-K/A (Amendment No. 1).

The Compensation Committee

Giles H. Bateman, Chair
Mitchell G. Lynn
Luis Maizel

The foregoing report of the Compensation Committee is not deemed to be “soliciting material” or to be incorporated by reference by any general statement incorporating this Form 10-K/A (Amendment No. 1) by reference into any filing under the Securities Act of 1933, as amended, or under the Securities Exchange Act of 1934, as amended, except to the extent that we specifically incorporate this information by reference, and is not otherwise deemed filed under these Acts.

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Summary Compensation Table

The following table summarizes information about compensation paid to or earned by our Chief Executive Officer, our current Chief Financial Officer and our three other most highly compensated executive officers who were serving as executive officers at December 31, 2007. We collectively refer to these persons as the “named executive officers.”

                 
                 
Name and
Principal Position
(a) 		  Year
(b) 		  Salary ($) (1)
(c) 		  Bonus
($) (2)
(d) 		  Stock Awards ($) (3)
(e) 		  Option Awards ($) (4)
(f) 		  Non-Equity Incentive Plan
Compensation
($)
(g) 		  Change in
Pension Value and
Nonqualified Deferred Compensation Earnings
($)
(h) 		  All Other Compensation
($) (5)
(i) 		  Total
($)
(j)
Ray C. Thousand, Chief Executive Officer and President     2007     $ 555,556     $ 0     $ 17,103     $ 0                       $ 19,833     $ 592,492  
Arash A. Khazei, Chief Financial Officer and Executive Vice
President 		    2007     $ 220,000     $ 38,500     $ 9,324     $ 197,079                       $ 9,150     $ 474,053  
Mario Radrigan,
Executive Vice
President and Chief Marketing Officer 		    2007     $ 225,000     $ 0     $ 4,662     $ 6,550                       $ 14,012     $ 250,224  
Stacy M. Friederichsen, Executive Vice
President and Chief Administrative Officer 		    2007     $ 225,000     $ 27,563     $ 4,662     $ 82,240                       $ 10,950     $ 350,415  
Sonu Singh, Senior
Vice President 		    2007     $ 139,329     $ 27,866     $ 0     $ 27,852                       $ 8,497     $ 203,544  

(1) The amounts in column (c) reflect cash earned during 2007 salary.
(2) UPFC’s performance did not meet the criteria for bonus payouts for 2007 overall corporate performance; however, the Compensation Committee concluded that certain named executive officers did meet their own personal performance targets. Accordingly, at the recommendation of the Compensation Committee, the Board of Directors authorized the grant of bonuses to certain named executive officers.
(3) The amounts in column (e) reflect the dollar amount recognized for financial statement reporting purposes for 2007 in accordance with SFAS 123 (R) for restricted stocks granted to our named executive officers.
(4) The amounts in column (f) reflect the dollar amount recognized for financial statement reporting purposes for 2007 in accordance with SFAS 123 (R) for stock options held by our named executive officers, and thus include amounts from awards granted in and prior to 2007. For information regarding significant factors, assumptions and methodologies used in determining the fair value of our stock options, see Note 10 to the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2007.
(5) Column (i) represents the amount of all compensation paid to the named executive officers that is not reported in any other column of the table, as detailed in the table below.

           
Name   Year   401 (k) Match   Car
Allowance 		  Life
Insurance Premiums Paid by the Company 		  Unused Vacation Payouts   Total
Ray C. Thousand     2007     $ 6,750     $ 2,400     $ 0     $ 10,683     $ 19,833  
Arash A. Khazei     2007     $ 6,750     $ 2,400     $ 0     $ 0     $ 9,150  
Mario Radrigan     2007     $ 6,750     $ 2,400     $ 535     $ 4,327     $ 14,012  
Stacy M. Friederichsen     2007     $ 6,750     $ 4,200     $ 0     $ 0     $ 10,950  
Sonu Singh     2007     $ 5,818     $ 0     $ 0     $ 2,679     $ 8,497  

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Grants of Plan-Based Awards

The following table summarizes information about grants of plan-based awards for each of our named executive officers during 2007.

                     
                     
    Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1)   Estimated Future Payouts Under Equity Incentive Plan Awards   All Other Stock Awards: Number of Shares of Stock or Units
(#) (2)
(i) 		  All Other OptionAwards: Number of
Securities Underlying Options
(#) (3)
(j) 		  Exercise or Base Price of Option Awards
($/Sh)
(k) 		  Grant Date Fair Value of Stock and Option Awards
(l)
Name
(a) 		  Grant Date
(b) 		  Threshold
($)
(c) 		  Target
($)
(d) 		  Maximum
($)
(e) 		  Threshold
(#)
(f) 		  Target
(#)
(g) 		  Maximum
(#)
(h)
Ray C. Thousand     N/A     $ 0     $ 333,333     $ 444,444                                                                 
       7/10/2007                                                             19,231              $ 14.30       275,000  
Arash A. Khazei     N/A     $ 0     $ 110,000     $ 110,000                                                                 
       7/10/2007                                                                      25,000     $ 13.82       163,000  
       7/10/2007                                                             10,490              $ 14.30       150,000  
Mario Radrigan     N/A     $ 0     $ 78,750     $ 78,750                                                                 
                                                                      5,245              $ 14.30       75,000  
Stacy M. Friederichsen     N/A     $ 0     $ 78,750     $ 78,750                                                                 
       7/10/2007                                                             5,245              $ 14.30       75,000  
       7/10/2007                                                                      25,000     $ 13.82       163,000  
Sonu Singh     N/A     $ 0     $ 55,732     $ 55,732                                                                 

(1) Cash Bonus. The amounts in these columns represent threshold (no threshold for Mr. Thousand, Mr. Khazei, Mr. Radrigan, Ms. Friederichsen, and Mr. Singh), target (100% for Mr. Thousand, Mr. Khazei, Mr. Radrigan, Ms. Friederichsen, and Mr. Singh) and maximum (120% for Mr. Thousand, 100% for Mr. Khazei, Mr. Radrigan, Ms. Friederichsen, and Mr. Singh) amounts of cash bonuses that were payable to our named executive officers for 2007 performance. The terms of the cash bonus arrangement for each named executive officer identified above are set forth in the employment agreement of each such named executive officer other than Mr. Singh.
(2) The amounts reported in this column represent restricted stocks granted to our named executive officers during 2007.
(3) The amounts reported in this column represent stock options granted to our named executive officers during 2007. Options to Mr. Khazei and Ms. Friederichsen were granted on July 10, 2007 and vest 20% annually commencing on December 31, 2007. These options have a ten-year term.

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Outstanding Equity Awards at Fiscal Year End

The following table summarizes information about the number and estimated value of outstanding stock options and unvested stock awards held by our named executive officers on December 31, 2007.

                 
  Option Awards   Stock Awards
Name
(a) 		  Number of Securities Underlying Unexercised Options (#) Exercisable
(b) 		  Number of Securities Underlying Unexercised Options (#) Unexercisable
(c) 		  Equity Incentive Plan Awards Number of Securities Underlying Unexercised Unearned Options (#)
(d) 		  Option Exercise Price ($)
(e) 		  Option Exploration Date
(f) 		  Number of Shares or Units of Stock That Have Not Vested (#)
(g) 		  Market Value of Shares or Units of Stock That Have Not Vested ($)
(h) 		  Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)
(i) 		  Equity
Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)
(j)
Ray C. Thousand     270,000       0              $ 4.39       3/31/2011                                      
       200,000       0              $ 10.00       7/31/2011                                      
       700,000       0              $ 10.00       9/25/2011                                      
       0       300,000 (1)              $ 30.00       3/23/2016                                      
                                                    19,231 (14)     $ 14.30              $ 275,000  
Arash A. Khazei     3,000       2,000 (2)              $ 22.20       5/9/2015                                      
       8,700       5,800 (3)              $ 23.14       5/24/2015                                      
       20,000       30,000 (4)              $ 30.85       7/3/2016                                      
       5,000       20,000 (5)              $ 13.82       7/10/2017                                      
                                                    10,490 (14)     $ 14.30              $ 150,000  
Mario Radrigan     180,000       0              $ 10.00       3/31/2011                                      
       8,000       2,000 (6)              $ 10.00       5/9/2013                                      
                                                    5,245 (14)     $ 14.30              $ 75,000  
Stacy M. Friederichsen     3,000       2,000 (7)              $ 20.10       3/10/2015                                      
       3,900       2,600 (8)              $ 23.14       5/24/2015                                      
       4,200       2,800 (9)              $ 21.42       11/17/2015                                      
       4,000       6,000 (10)              $ 30.69       4/5/2016                                      
       5,000       20,000 (11)              $ 13.82       7/10/2017                                      
                                                    5,245 (14)     $ 14.30              $ 75,000  
Sonu Singh     1,300       0              $ 6.07       4/22/2012                                      
       6,400       1,600 (12)              $ 17.91       3/1/2014                                      
       6,000       4,000 (13)              $ 22.29       10/13/2015                                      

(1) These options were granted on March 23, 2006 and vest 100% on December 7, 2010. These options have a ten-year term with performance requirements of 10% growth rate on an annual basis in pre-tax income from 2006 over a five-year term.
(2) These options were granted on May 9, 2005 and vest 20% annually commencing on December 31, 2006. These options have a ten-year term.
(3) These options were granted on May 24, 2005 and vest 20% annually commencing on December 31, 2006. These options have a ten-year term.
(4) These options were granted on July 3, 2006 and vest 20% annually commencing on December 31, 2006. These options have a ten-year term.
(5) These options were granted on July 10, 2007 and vest 20% annually commencing on December 31, 2007. These options have a ten-year term.
(6) These options were granted on May 9, 2003 and vest 20% annually commencing on May 9, 2004. These options have a ten-year term.
(7) These options were granted on March 10, 2005 and vest 20% annually commencing on December 31, 2006. These options have a ten-year term.
(8) These options were granted on May 24, 2005 and vest 20% annually commencing on December 31, 2006. These options have a ten-year term.

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(9) These options were granted on November 17, 2005 and vest 20% annually commencing on December 31, 2006. These options have a ten-year term.
(10) These options were granted on April 5, 2006 and vest 20% annually commencing on December 31, 2006. These options have a ten-year term.
(11) These options were granted on July 10, 2007 and vest 20% annually commencing on December 31, 2007. These options have a ten-year term.
(12) These options were granted on March 1, 2004 and vest 20% annually commencing on December 31, 2004. These options have a ten-year term.
(13) These options were granted on October 13, 2005 and vest 20% annually commencing on December 31, 2005. These options have a ten-year term.
(14) These restricted stocks were granted on July 10, 2007, vest 33.33% on February 1, 2010, 33.33% on February 1, 2011 and 33.33% on February 1, 2012. These restricted stocks are subject to acceleration in the event of a change of control. For Mr. Thousand only, there is a performance requirement of achieving 10% growth rate on an annual basis in pre-tax income from 2007.

Option Exercises and Stock Vested

The following table summarizes information about stock option exercises and stock vested for each of our named executive officers during 2007.

       
  Option Awards   Stock Awards
Name
(a) 		  Number of Shares Acquired on Exercise
(#)
(b) 		  Value Realized
Upon Exercise
($)
(c) 		  Number of Shares Acquired on Vesting (#) (d)   Value
Realized Upon
Vesting
($)
(e)
Ray C. Thousand     —       —       —       —  
Arash A. Khazei     —       —       —       —  
Mario Radrigan     —       —       —       —  
Stacy M. Friederichsen     —       —       —       —  
Sonu Singh     —       —       —       —  

Nonqualified Deferred Compensation

The following table summarizes information about nonqualified deferred compensation for each of our named executive officers during 2007.

         
Name
(a) 		  Executive Contributions in Last FY
($)
(b) 		  Registrant Contributions in Last FY
($)
(c) 		  Aggregate Earnings in Last FY
($)
(d) 		  Aggregate Withdrawals/ Distributions
($)
(e) 		  Aggregate Balance at Last FYE
($)
(f)
Ray C. Thousand     —       —       —       —       —  
Arash A. Khazei     —       —       —       —       —  
Mario Radrigan     —       —       —       —       —  
Stacy M. Friederichsen     —       —       —       —       —  
Sonu Singh     —       —       —       —       —  

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Potential Payments Upon Termination or Change-in-Control

The following table summarizes the potential payments that were payable to our named executive officers on December 31, 2007 upon an involuntary termination without cause or upon a change in control of the Company, assuming that such involuntary termination without cause or change in control of the Company occurred on December 31, 2007.

               
Name   Payment Trigger Event   Salary Severance   Bonus Severance   Benefits / Perquisites   Equity Acceleration   Tax Gross-Up   Other Payments   Total
Value
Ray C. Thousand (1)     Involuntary Termination
Without Cause 		    $ 555,556     $ 333,333                                         $ 888,889  
       Change in Control       —       —                                           —  
Arash A. Khazei (1)     Involuntary Termination Without Cause     $ 220,000     $ 110,000                                         $ 330,000  
       Change in Control       —       —                                           —  
Mario Radrigan (1)     Involuntary Termination Without Cause     $ 225,000     $ 78,750                                         $ 303,750  
       Change in Control       —       —                                           —  
Stacy M. Friederichsen (1)     Involuntary Termination Without Cause     $ 225,000     $ 78,750                                         $ 303,750  
       Change in Control       —       —                                           —  
Sonu Singh (2)     Involuntary Termination Without Cause       —       —                                           —  
       Change in Control       —       —                                           —  

(1) We have entered into employment agreements with Mr. Thousand, Mr. Khazei, Mr. Radrigan and Ms. Friederichsen. Pursuant to these agreements, we will owe compensation to these named executive officers if they are terminated without cause. There are no post-termination benefits payable in the event of a voluntary termination. If termination without cause occurs, the payment will be equal to 12 months salary at the then current base salary, plus prorated bonus through the date of termination.
(2) We have not entered into employment agreements with Mr. Singh.

Director Compensation

Non-employee director compensation is determined by the Board of Directors, based on the recommendations from the Compensation Committee. We use a combination of cash and stock-based incentive compensation to attract and retain qualified candidates to serve on the Board who will act on behalf of shareholders. The compensation approach is intended to provide compensation that is competitive with the market. The philosophy is reviewed annually by the Compensation Committee and adjusted, as appropriate.

For the year ended December 31, 2007, members of the Board who are not UPFC employees received annual cash compensation of $30,000 per year. In addition, the lead director received an additional $65,000 per year and the Chairman of the Audit Committee received an additional $20,000 per year. Starting in 2008, the lead director compensation has been reduced to an additional $20,000 per year from $65,000 per year. Directors who are UPFC employees receive no compensation for their services as directors.

             
Name
(a) 		  Fees Earned or Paid in Cash
($)
(b) 		  Stock Awards ($) (1)
(c) 		  Option Awards
($) (2)
(d) 		  Non-Equity Incentive Plan Compensation
($)
(e) 		  Change in Pension Value and
Nonqualified Deferred Compensation Earnings ($) (3)
(f) 		  All Other Compensation
($) (4)
(g) 		  Total
($)
(h)
Guillermo Bron   $ 85,000 (5)     $ 19,072     $ 0              $ 35,608     $ 5,022     $ 144,702  
Giles H. Bateman   $ 111,250 (6)     $ 23,840     $ 31,753                                $ 166,843  
Ron R. Duncanson   $ 45,000 (7)     $ 19,072     $ 24,766                                $ 88,838  
Mitchell G. Lynn   $ 30,000 (8)     $ 19,072     $ 24,766                                $ 73,838  
Luis Maizel   $ 30,000 (9)     $ 19,072     $ 24,766                                $ 73,838  
Julie Sullivan   $ 20,000 (10)     $ 19,072     $ 0                                $ 39,072  

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(1) The amounts in the column reflect dollar amount recognized for financial statement reporting purposes for 2007 in accordance with SFAS 123(R) for restricted stocks granted to our named executive officers.
(2) The amounts in the column reflect dollar amount recognized for financial statement reporting purposes for 2007 in accordance with SFAS 123(R), and thus includes amounts from awards granted in and prior to 2007. As of December 31, 2007, each director has the following number of options outstanding: Giles H. Bateman: 13,125; Ron R. Duncanson: 107,500; Mitchell G. Lynn: 52,500; Luis Maizel: 137,500.
(3) The amount in this column reflects the costs incurred for post-retirement compensation for Mr. Bron under Mr. Bron’s Salary Continuation Agreement dated October 1, 1997.
(4) The amount in this column reflects the amount of all compensation paid to Mr. Bron that is not reported in any other column of the table, and includes $2,400 car allowance and $2,622 401(k) match.
(5) The fees earned reflect compensation for Mr. Bron’s service as Chairman of the Board of Directors.
(6) The fees paid reflect compensation of $30,000 in Mr.Bateman’s capacity as a director and additional compensation of $65,000 in Mr. Bateman’s capacity as the Chairman of the Audit Committee for 2007. The fees paid also reflect additional compensation of $16,250 in Mr. Bateman’s capacity as the Chairman of the Audit Committee for his partial year service for 2006.
(7) The fees earned reflect compensation of $30,000 in Mr. Duncanson’s capacity as a director and additional compensation of $15,000 in Mr. Duncanson’s capacity as the Chairman of the Audit Committee for his partial year service.
(8) The fees earned reflect compensation for Mr. Lynn’s service as a director.
(9) The fees earned reflect compensation for Mr. Maizel’s service as a director.
(10) Ms. Sullivan was appointed a director on July 10, 2007. The fees earned reflect compensation for her partial year service.

Compensation Committee Interlocks and Insider Participation

All decisions involving executive officer compensation are made by our Compensation Committee, consisting of Messrs. Bateman, Lynn and Maizel. None of the members of the Compensation Committee is or has been an officer or employee of UPFC or any of its subsidiaries. None of our executive officers currently serves as a director or member of the compensation committee of another entity that has one or more executive officers serving as a member of our Board of Directors or Compensation Committee, and no such interlocking relationship existed during fiscal year 2007.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters

Equity Compensation Plan Information

The following table summarizes information as of December 31, 2007 relating to our equity compensation plans pursuant to which grants of options, restricted stock or other rights to acquire shares may be acquired from time to time.

     
Plan Category   Number of
Securities to be Issued Upon Exercise of
Outstanding Options,
Warrants and Rights
(a) 		  Weighted
Average Exercise Price of
Outstanding Options,
Warrants and Rights
(b) 		  Number of
Securities Remaining
Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column
(a)
Equity compensation plans approved by security holders     4,110,335     $ 14.02       631,386  
Equity compensation plans not approved by security holders     —       —       —  
Total     4,110,335     $ 14.02       631,386  

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Security Ownership of Certain Beneficial Owners

The following table shows, as of April 18, 2008, all persons (including “groups” as that term is used in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended) we know to be “beneficial owners” of more than five percent (5%) of our common stock. This information is based on reports regarding such ownership filed by such person with the SEC in accordance with Section 13(d) and 13(g) of the Securities Exchange Act of 1934, as amended.

   
  Common Stock
Beneficially Owned (1)
Name and Address of Beneficial Owner   Number of Shares (2)   Percent of Class (3)
Guillermo Bron (4)
1901 Avenue of the Stars, Suite 470
Los Angeles, California 90067 		    6,771,251       40.38 %  
PAFGP, LLC (5)
1901 Avenue of the Stars, Suite 470
Los Angeles, California 90067 		    5,079,357       32.28 %  
Pan American Financial, L.P.
1901 Avenue of the Stars, Suite 470
Los Angeles, California 90067 		    5,079,357       32.28 %  
Ray Thousand (6)
18191 Von Karman Avenue, Suite 300
Irvine, California 92612 		    1,515,281       8.96 %  
Wasatch Advisors, Inc.
150 Social Hall Avenue
Salt Lake City, Utah 84111 		    2,703,418       17.18 %  

(1) “Beneficial ownership” is a technical term broadly defined by the SEC to mean more than ownership in the usual sense. For example, a person has beneficial ownership of a share not only if he or she owns the share in the usual sense, but also if he or she has the power to vote, sell or otherwise dispose of the share. Beneficial ownership also includes that number of shares which a person has the right to acquire within 60 days of April 18, 2008.
(2) Except as otherwise noted below, each of the persons identified above has sole voting and investment power over the shares of common stock shown as beneficially owned, subject to community property laws where applicable.
(3) Shares of common stock issuable upon exercise of stock options exercisable within 60 days of April 18, 2008 are deemed outstanding for computing the percentage of the person holding such securities but are not deemed outstanding for computing the percentage of any other person.
(4) Mr. Bron is not the record owner of any such shares but has the right to acquire within 60 days of April 18, 2008, 1,030,000 shares upon exercise of stock options granted pursuant to the UPFC Amended and Restated 1997 Employee Stock Incentive Plan, as amended (the “Stock Incentive Plan”). Mr. Bron beneficially owns 5,079,357 shares through his ownership in and control of PAFGP, LLC, which is the sole general partner of Pan American Financial, L.P. (“PAFLP”), and 200,100 shares through his ownership interest in and control of B2BF, L.P.
(5) PAFGP, LLC is not the record owner of any such shares. PAFGP, LLC beneficially owns all such shares in its capacity as the sole general partner of PAFLP.
(6) Mr. Thousand is the record owner of 345,281 shares and has the right to acquire within 60 days of April 18, 2008, 1,170,000 shares upon exercise of stock options granted pursuant to the Stock Incentive Plan.

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Security Ownership of Management

The following table shows, as of April 18, 2008, beneficial ownership of our common stock by each of our directors, named executive officers and for all current directors and executive officers as a group.

   
  Common Stock
Beneficially Owned (1)
Name of Beneficial Owner   Number of Shares (2)   Percent of Class (3)
Guillermo Bron (4)     6,771,251       40.38 %  
Ray C. Thousand (5)     1,515,281       8.96 %  
Mitchell G. Lynn (6)     240,822       1.53 %  
Luis Maizel (7)     121,542       *  
Giles H. Bateman (8)     47,223       *  
Julie Sullivan (9)     2,894       *  
Mario Radrigan (10)     346,033       2.17 %  
Arash Khazei (11)     73,961       *  
Stacy M. Friederichsen (12)     37,680       *  
All current directors and executive officers as a group (9 people) (13)     9,156,687       49.86 %  

* Less than one percent.
(1) “Beneficial ownership” is a technical term broadly defined by the SEC to mean more than ownership in the usual sense. For example, a person has beneficial ownership of a share not only if he or she owns the share in the usual sense, but also if he or she has the power to vote, sell or otherwise dispose of the share. Beneficial ownership also includes that number of shares which a person has the right to acquire within 60 days of April 18, 2008.
(2) Except as otherwise noted below, each of the persons identified above has sole voting and investment power over the shares of common stock shown as beneficially owned, subject to community property laws where applicable.
(3) Shares of common stock issuable upon exercise of stock options exercisable within 60 days of April 18, 2008 are deemed outstanding for computing the percentage of the person holding such securities but are not deemed outstanding for computing the percentage of any other person.
(4) Includes (i) 5,079,357 shares beneficially owned through his ownership interest in and control of PAFGP, LLC, (ii) 200,100 shares beneficially owned through his ownership interest in and control of B2BF, L.P., and (iii) 1,030,000 shares issuable upon the exercise of stock options granted pursuant to the Stock Incentive Plan, which options are exercisable within 60 days of April 18, 2008.
(5) Includes 1,170,000 shares issuable upon the exercise of stock options granted pursuant to the Stock Incentive Plan, which options are exercisable within 60 days of April 18, 2008.
(6) Includes 52,500 shares issuable upon the exercise of stock options granted pursuant to the Stock Incentive Plan, which options are exercisable within 60 days of April 18, 2008.
(7) Includes 117,500 shares issuable upon the exercise of stock options granted pursuant to the Stock Incentive Plan, which options are exercisable within 60 days of April 18, 2008. Excludes 5,000 shares held by LM Capital Management Pension Plan, as to which shares Mr. Maizel disclaims beneficial ownership. A trust related to Mr. Maizel is entitled to receive 91,727 shares of common stock held by PAFLP. Mr. Maizel disclaims beneficial ownership of the shares of common stock held by PAFLP except to the extent of his pecuniary interest therein.
(8) Includes 11,250 shares issuable upon the exercise of stock options granted pursuant to the Stock Incentive Plan, which options are exercisable within 60 days of April 18, 2008.
(9) No stock options exercisable within 60 days of April 18, 2008.
(10) Includes 190,000 shares issuable upon the exercise of stock options granted pursuant to the Stock Incentive Plan, which options are exercisable within 60 days of April 18, 2008.
(11) Includes 36,700 shares issuable upon the exercise of stock options granted pursuant to the Stock Incentive Plan, which options are exercisable within 60 days of April 18, 2008.
(12) Includes 20,100 shares issuable upon the exercise of stock options granted pursuant to the Stock Incentive Plan, which options are exercisable within 60 days of April 18, 2008.
(13) Includes 2,628,050 shares issuable upon the exercise of stock options granted pursuant to the Stock Incentive Plan, which options are exercisable within 60 days of April 18, 2008.

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Item 13. Certain Relationships and Related Transactions, and Director Independence

Transactions with Related Persons

The Board of Directors has adopted a Related Person Transaction Policy, which was recommended for approval by the Audit Committee. The Related Person Transaction Policy, which supplements the conflict of interest provisions in our Code of Personal Business Conduct and Ethics, covers any transaction, arrangement or relationship (or any series of similar transactions, arrangements or relationships), in which UPFC (including any of its subsidiaries) was, is or will be a participant and the amount involved exceeds $25,000, and in which any related person had, has or will have a direct or indirect interest. The Related Person Transaction Policy requires that such transactions be approved by the Audit Committee.

The Related Person Transaction Policy requires that directors and officers report relationships, potential conflicts and potential related party transactions to our Chief Financial Officer, who will then screen the information and determine if the transaction must be submitted to the Audit Committee.

There were no transactions during the fiscal year ended December 31, 2007, and there are no currently proposed transactions, in which UPFC was or is to be a participant and the amount involved exceeds $120,000, and in which any related person of UPFC had or will have a direct or indirect material interest.

Director Independence

The Board of Directors and its various committees must have participation by members who are “independent” as defined by the applicable rules and regulations of The NASDAQ Global Market, including Rule 4200(a)(15) of the Marketplace Rules of The NASDAQ Stock Market LLC. The Board of Directors has determined that each of Mr. Bateman, Mr. Lynn, Mr. Maizel and Ms. Sullivan is independent under such rules and regulations.

Item 14. Principal Accountant Fees and Services

The Audit Committee has selected Grobstein, Horwath & Company LLP as our independent public accounting firm for the fiscal year ending December 31, 2008. The following is a summary of the fees billed to us by our independent public accounting firm, Grobstein, Horwath & Company LLP, for professional services rendered for the fiscal years ended December 31, 2007 and December 31, 2006:

   
Types of Fees   2007   2006
Audit Fees   $ 473,334     $ 938,241  
Audit-Related Fees     94,244       91,250  
Tax Fees     5,127       90,788  
All Other Fees     24,075       —  
Total Fees   $ 596,780     $ 1,120,279  

In the above tables, “Audit Fees” include fees for professional services rendered for the integrated audit of our consolidated financial statements included in our annual reports on Form 10-K and of our internal control over financial reporting, review of the unaudited financial statements included in our quarterly reports on Form 10-Q, preparation of agreed-upon-procedure reports associated with our securitization activities, consents, assistance with documents filed with the SEC, and accounting and reporting consultation in connection with the audit and/or quarterly reviews. “Audit-Related Fees” are fees for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements, and include fees for professional services rendered in the preparation of comfort letters associated with documents filed with the SEC. “Tax Fees” include fees for tax compliance and tax planning. “All Other Fees” are fees for any services not included in the first three categories.

The Audit Committee has adopted a policy that requires advance approval of all audit, audit-related, tax services, and other services performed by the independent auditors. The policy provides for pre-approval by the Audit Committee of specifically defined audit and non-audit services. Unless the specific service has been previously pre-approved with respect to that year, the Audit Committee must approve the permitted service before the independent auditors are engaged to perform it. The Audit Committee has delegated to the Chair of the Audit Committee authority to approve permitted services provided that the Chair reports any decisions to the Committee at its next scheduled meeting.

The Audit Committee considered the compatibility of the provision of other services by its independent auditors with the maintenance of such independent auditors’ independence. The Audit Committee approved all audit and non-audit services provided by Grobstein, Horwath & Company LLP in 2007.

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PART IV

Item 15. Exhibits and Financial Statement Schedules

(a)(3) List of Exhibits.   The following is a list of exhibits filed as a part of this Amendment No. 1 to Annual Report on Form 10-K.

 
Exhibit No.   Description
31.1   Certification of Chief Executive Officer under Section 302 of the Sarbanes-Oxley Act 2002
31.2   Certification of Chief Financial Officer under Section 302 of the Sarbanes-Oxley Act 2002

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

UNITED PANAM FINANCIAL CORP.

By: /s/ Ray Thousand
Ray Thousand
Chief Executive Officer and President

April 29, 2008

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

   
Signature   Title   Date
/s/ GUILLERMO BRON
  Chairman of the Board   April 29, 2008
/s/ RAY C. THOUSAND
  Chief Executive Officer and President and Director (Principal Executive Officer)   April 29, 2008
/s/ ARASH A. KHAZEI
  Chief Financial Officer and Executive Vice President (Principal Financial and Accounting Officer and Corporate Treasurer)   April 29, 2008
/s/ GILES H. BATEMAN
  Lead Director   April 29, 2008
/s/ MITCHELL G. LYNN
  Director   April 29, 2008
/s/ LUIS MAIZEL
  Director   April 29, 2008
/s/ JULIE SULLIVAN
  Director   April 29, 2008

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