SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
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UNITED BANKSHARES, INC.
P. O. BOX 1508
UNITED SQUARE
FIFTH AND AVERY STREETS
PARKERSBURG, WEST VIRGINIA 26102
(304) 424-8800
NOTICE OF 1997 ANNUAL MEETING OF SHAREHOLDERS
TO THE SHAREHOLDERS:
NOTICE IS HEREBY GIVEN that, pursuant to the call of its Board of
Directors, the 1997 Annual Meeting of Shareholders of UNITED BANKSHARES, INC.
("United") will be held at The Blennerhassett Hotel, Fourth and Market Streets,
Parkersburg, West Virginia, on May 19, 1997 at 4:00 p.m., local time, for the
purpose of considering and voting upon the following matters:
1. To elect twenty-three (23) persons to serve as Directors of United.
The nominees selected by the current Board of Directors are listed in the
accompanying Proxy Statement for this Annual Meeting.
2. To act upon any other business which may properly come before this
Annual Meeting or any adjournment or adjournments thereof. The Board of
Directors at present knows of no other business to come before this Annual
Meeting.
The close of business on April 1, 1997, has been fixed by the Board of
Directors as the record date for determining shareholders entitled to notice of
and to vote at this Annual Meeting.
WE URGE YOU TO SIGN AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE
REGARDLESS OF YOUR PLANS TO ATTEND THIS MEETING. IF YOU DO ATTEND, YOU MAY
WITHDRAW YOUR PROXY AND VOTE IN PERSON.
TWO INDIVIDUALS, WHO ARE NOT DIRECTORS OF UNITED, HAVE BEEN NAMED IN THE
PROXY TO VOTE THE SHARES REPRESENTED BY PROXY. IF YOU WISH TO CHOOSE SOME OTHER
PERSON TO ACT AS YOUR PROXY, MARK OUT THE PRINTED NAME AND WRITE IN THE NAME OF
THE PERSON YOU SELECT.
By Order of the Board of Directors
/s/ Richard M. Adams
__________________________________
Richard M. Adams
Chairman of the Board and
Chief Executive Officer
April 11, 1997
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UNITED BANKSHARES, INC.
P. O. BOX 1508
UNITED SQUARE
FIFTH AND AVERY STREETS
PARKERSBURG, WEST VIRGINIA 26102
(304) 424-8800
PROXY STATEMENT
1997 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD May 19, 1997
SOLICITATION AND REVOCATION OF PROXIES
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of United Bankshares, Inc. ("United") for its
1997 Annual Meeting of Shareholders (the "1997 Annual Meeting") to be held May
19, 1997.
A proxy for use by the shareholders of United in connection with the 1997
Annual Meeting accompanies this Proxy Statement, which is being mailed to the
shareholders of United on or about April 11, 1997. The proxy will be voted in
accordance with the specifications made thereon by the United shareholder. See
OUTSTANDING VOTING SECURITIES AND VOTING RIGHTS. If a shareholder does not
specify how the shareholder's proxy is to be voted, a properly executed proxy
will be voted "FOR" the election of the twenty-three (23) persons nominated as
directors.
As of the date of mailing of this Proxy Statement, the Board of Directors
of United is not aware of any other business to be acted upon at the 1997 Annual
Meeting, and it is not anticipated that other matters will be brought before
that meeting. However, if any other matters should be brought before the 1997
Annual Meeting, it is intended that, unless otherwise specified on the proxy of
the United shareholder, the persons appointed as proxies may vote thereon
according to their judgment in light of conditions then prevailing and the
recommendations of the Board of Directors of United.
Any shareholder of United has the right to revoke his or her proxy at any
time before it is voted (i) by giving written notice to the Chairman of United,
(ii) by submitting a subsequently dated Proxy or (iii) by appearing at the 1997
Annual Meeting and voting in person.
This proxy solicitation is made by the Board of Directors of United, and
the costs of soliciting proxies will be paid by United. In addition to
soliciting by mail, directors, officers and regular employees of United and its
subsidiaries, who will receive no compensation for their services other than
their regular salaries and fees, may solicit proxies by telephone, telegraph or
personal interview. Brokers, fiduciaries, custodians and other nominees have
been requested to forward solicitation materials to the beneficial owners of
United common stock held in their names and are to be reimbursed for their
reasonable expenses in so doing. In order to facilitate and expedite
distribution of these proxy solicitation materials to brokers, fiduciaries,
custodians, nominee holders and institutional investors, United has retained
Corporate Investor Communications, Inc. of Carlstadt, New Jersey ("CIC").
Pursuant to a retention letter dated February 10, 1997, CIC will contact all
broker and other nominee accounts identified on United's shareholder mailing
list in order to facilitate determination of the number of sets of proxy
materials such accounts require for purposes of forwarding the same to the
beneficial owners. CIC will then assist in the delivery of proxy materials to
these accounts for distribution. CIC will also assist in distribution of proxy
materials to institutional investors. CIC will follow-up with the brokers, other
nominee accounts and institutional investors, requesting return of proxies.
United is not retaining CIC to solicit proxies from registered holders or from
non-objecting beneficial owners. CIC's fee for the above services is $3,000,
plus reasonable disbursements which may include the broker search, printing,
postage, courier charges, filing reports, data transmissions and other expenses
approved by United.
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OUTSTANDING VOTING SECURITIES AND VOTING RIGHTS
Only shareholders of record at the close of business on April 1, 1997,
are entitled to notice of and to vote at the 1997 Annual Meeting. On that date,
there were 15,016,035 shares of the common stock of United issued and
outstanding, net of treasury shares, which shares were held by approximately
5,217 shareholders.
Each shareholder is entitled to one vote for each share owned on each
matter brought before the 1997 Annual Meeting. In the election of directors, a
shareholder of United may cast one vote for each share owned for each nominee.
However, every shareholder of United also has the right of cumulative voting, in
person or by proxy, in the election of directors. Cumulative voting gives each
shareholder the right to aggregate all votes which he or she is entitled to cast
in the election of directors and to cast all votes for one candidate or
distribute those votes among as many candidates and in such manner as the
shareholder desires. Assuming the number of directors is twenty-three (23), as
proposed by the current Board of Directors of United, each shareholder of United
has the right to cast twenty-three (23) votes in the election of directors for
each share of the common stock of United the shareholder held on the record
date. IF YOU WISH TO EXERCISE, BY PROXY, YOUR RIGHT TO CUMULATIVE VOTING IN THE
ELECTION OF DIRECTORS, YOU MUST PROVIDE A PROXY SHOWING HOW YOUR VOTES ARE TO BE
DISTRIBUTED AMONG ONE OR MORE CANDIDATES.
Unless contrary instructions are given by a shareholder who signs and
returns a proxy, all votes for the election of directors represented by such
proxy will be divided equally among the twenty-three (23) nominees set forth in
this Proxy Statement. However, if cumulative voting is invoked by one or more
shareholders, the votes represented by other proxies may be cumulated, at the
direction of the persons appointed as proxies with the recommendations of the
Board of Directors of United, in order to elect to the Board of Directors the
maximum number of nominees set forth in this Proxy Statement.
A majority of the outstanding shares of United will constitute a quorum
at the meeting. Abstentions and broker non-votes are counted for purposes of
determining the presence of a quorum for the transaction of business. The
election of each director nominee requires the favorable vote of a plurality of
all votes cast by the holders of common stock at a meeting at which a quorum is
present. Only shares that are voted in favor of a particular nominee will be
counted toward such nominee's achievement of a plurality. Abstentions and broker
non-votes will not be counted toward such nominee's achievement of a plurality
and thus have no effect. A broker non-vote generally occurs when a broker who
holds shares in street name for a customer does not have the authority to vote
on certain matters because its customer has not provided any voting instructions
on the matter.
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TABLE OF CONTENTS
RECENT DEVELOPMENTS.......................................................1
PROPOSALS FOR ANNUAL MEETING..............................................2
INTRODUCTION.....................................................2
PROPOSAL - ELECTION OF DIRECTORS..........................................2
Nominees for Board of Directors..................................2
Meetings and Committees of the Board of Directors................5
Compensation of Directors........................................6
Principal Shareholder of United..................................6
Beneficial Ownership of Securities by Executive Officers.........6
Executive Officers...............................................7
EXECUTIVE COMPENSATION....................................................8
Board Compensation Committee Report..............................8
Performance Graph................................................9
Summary Compensation Table......................................10
Stock Option Grants Table.......................................10
Stock Option Exercises and Year-End Value Table.................11
Officer Employment Contracts....................................11
Change of Control Agreements....................................12
Employee Benefit Plans..........................................12
Compensation Committee Interlocks and Insider Participation.....13
Transactions with Management and Others.........................14
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE..................15
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS.................................15
SHAREHOLDER PROPOSALS FOR 1998 ANNUAL MEETING............................15
AUDITED FINANCIAL STATEMENTS
See separate report accompanying this proxy statement
FORM 10-K
A copy of the 1996 Form 10-K Annual Report filed with the Securities
and Exchange Commission pursuant to Section 13 of the Securities Exchange Act of
1934 will be forwarded to shareholders at no charge, upon written request.
Shareholders desiring a copy should direct their request to the Secretary,
United Bankshares, Inc., United Square, Fifth and Avery Streets, Parkersburg,
West Virginia 26102.
Registrar and
Transfer Agent: Independent Auditors:
ChaseMellon Shareholder Services, L.L.C. Ernst & Young LLP
85 Challenger Road 900 United Center
Overpeck Centre P. O. Box 2906
Ridgefield Park, NJ 07660 Charleston, WV 25330
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RECENT DEVELOPMENTS
On February 19, 1997 United Bankshares, Inc. ("United") and First
Patriot Bankshares Corporation, ("Patriot") of Reston, Virginia, jointly
announced the signing of a definitive agreement whereby United will acquire
First Patriot Bankshares Corporation and its wholly-owned subsidiary Patriot
National Bank. United will acquire 100% of the outstanding common stock of
Patriot for cash of $17.00 per share. The transaction, valued at approximately
$39,247,000, will be accounted for using the purchase method of accounting. It
is anticipated that the proposed acquisition will be consummated during the
third quarter of 1997. Consummation of the transaction is subject to approval of
the shareholders of Patriot and the receipt of all required regulatory
approvals, as well as other customary conditions. Consummation of the
transaction is not subject to approval of the shareholders of United.
Patriot, with assets of approximately $191 million, and its banking
subsidiary, Patriot National Bank, have nine offices in the strong Northern
Virginia banking market with approval to open three additional offices during
1997. Upon completion of the acquisition, it is anticipated that First Patriot
will be merged with United's Arlington, Virginia subsidiary, United Bank.
1
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PROPOSALS FOR ANNUAL MEETING
INTRODUCTION
These proxy materials are being supplied in conjunction with the 1997
Annual Meeting of Shareholders of United Bankshares, Inc. ("United"). United is
a West Virginia corporation registered as a bank holding company pursuant to the
Bank Holding Company Act of 1956, as amended. United's wholly-owned banking
subsidiaries include UBC Holding Company, Inc. and its wholly-owned subsidiary,
United National Bank ("UNB"), and United Bank ("UB"). United also owns all of
the stock of United Venture Fund, Inc. ("UVF"), a West Virginia Capital Company.
PROPOSAL - ELECTION OF DIRECTORS
Nominees for Board of Directors
The Bylaws of United provide that its Board of Directors shall consist
of not fewer than five nor more than thirty-five persons, as may be determined,
from time to time, by resolution adopted by the shareholders or by a majority of
the Board of Directors. The twenty-three (23) persons listed below have been
elected or appointed to serve as directors of United until the 1997 Annual
Meeting. The individuals identified below are the nominees for election at the
1997 Annual Meeting to serve until the 1998 Annual Meeting or until their
successors are elected and qualified. Each nominee is currently a director and
has served continuously to date as a director beginning in the indicated year.
Beneficial ownership of United's securities by directors as set forth
below is as of February 28, 1997.
Directors have sole voting and investment authority of directly owned
shares. The total of directly owned shares also includes stock options granted
to executive officers pursuant to incentive stock option plans. For three of the
directors who are executive officers, direct ownership includes options to
purchase shares as follows: Richard M. Adams, 89,928 shares, Douglass H. Adams,
12,066 shares and I. N. Smith, Jr., 16,506 shares. The options to purchase
shares included in the direct ownership of all executive officers as a group
total 215,685.
Indirect shares for each individual director include those owned by
spouses and immediate family members, shares held in any trust of which a
director is a beneficiary, and shares held by a corporation which the director
controls. These shares do not include the Trust Shares discussed herein.
RICHARD M. ADAMS, who is Chairman and Chief Executive Officer of both
United and UNB, became a director of United in 1984. Mr. Adams is 50 years old.
He owns 249,348 shares of United directly and 91,689 shares indirectly, the
total of which represents 2.26 percent of the total outstanding shares of
United. Of the 91,689 shares indirectly owned by Mr. Adams, 25,590 shares are in
the Stevenson Trust over which he exercises voting power, 35,433 shares owned by
the members of his immediate family and 30,666 shares are held in two family
trusts over which he exercises voting power but no investment authority. Messrs.
Richard M. Adams and Douglass H. Adams are brothers.
I. N. SMITH, JR., who is President of United, Vice Chairman of UNB, and
former President of UNB, became a director in 1986. Mr. Smith is 64 years old.
He owns 20,157 shares of United directly and 221,350 shares indirectly, the
total of which represents 1.61 percent of the total outstanding shares of
United. Of the 221,350 shares indirectly owned beneficially by Mr. Smith, 5,275
shares are owned by members of his immediate family and 14,575 shares are in a
trust with Mr. Smith as the beneficiary. The following shares owned of record by
others may be deemed to be owned by Mr. Smith under the rules and regulations of
the Securities and Exchange Commission: Kanawha City Company 15,000 shares;
Kanawha Company 56,000 shares; Roane Land Company 500 shares; Roxalana Land
Company 75,000 shares; and West Virginia Coal Land Company 55,000 shares.
DOUGLASS H. ADAMS, who is Executive Vice-President of United, became a
director in 1988. Mr. Adams is 58 years old. He owns 48,654 shares of United
directly and 3,876 shares indirectly, the total of which represents less than
one percent of the total outstanding shares of United. Messrs. Richard M. Adams
and Douglass H. Adams are brothers.
2
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ROBERT G. ASTORG, who is a CPA and Managing Director of American
Express Tax and Business Services, Inc., a financial consultant and tax service,
and a Partner of Astorg and Estep, CPAs, became director in 1991. Mr. Astorg is
53 years old. He owns 12,441 shares of United directly and 856 shares
indirectly, the total of which represents less than one percent of the total
outstanding shares of United. Mr. Astorg is a former Partner of Astorg and
Altizer, CPAs.
THOMAS J. BLAIR, III, who is President and Chief Executive Officer of
Kelley, Gidley, Blair & Wolfe, Inc., former Chairman of the Board of
UNB-Central, Heritage and Weston National, became a director in 1988. Mr. Blair
is 63 years old. He owns 134,210 shares of United directly and 7,100 shares
indirectly, the total of which represents less than one percent of the total
outstanding shares of United.
HARRY L. BUCH, who is an Attorney at Law, and Partner with Bailey,
Riley, Buch & Harman, became a director in 1990. Mr. Buch is 66 years old. He
owns 6,063 shares of United directly which represents less than one percent of
the total outstanding shares of United. Mr. Buch is a former Partner with
Gompers, Buch, McCarthy & McLure.
R. TERRY BUTCHER, who is an Attorney at Law, and Partner with Butcher &
Butcher, became a director in 1988. Mr. Butcher is 49 years old. He owns
23,500 shares of United directly and 500 shares indirectly, the total of which
represents less than one percent of the total outstanding shares of United.
JOHN W. DUDLEY, who is President of J. W. Dudley Sons & Company, a
retail business, became a director in 1986. Mr Dudley is 50 years old. He owns
9,485 shares of United directly which represents less than one percent of the
total outstanding shares of United.
H. SMOOT FAHLGREN, who is Chairman and former Chief Executive Officer
of Fahlgren, Inc., became a director in 1984. Mr. Fahlgren is 66 years old. He
owns 131,502 shares of United directly and 5,006 shares indirectly, the total of
which represents less than one percent of the total outstanding shares of
United. Mr. Fahlgren is Mr. Graff's father-in-law.
THEODORE J. GEORGELAS, who is Chairman of the Board of United Bank,
President of Georgelas and Sons, Inc., a commercial real estate development
company, and President and Chief Executive Officer of Sector Communications,
Inc., a technology company, became a director in 1990. Mr. Georgelas is 50 years
old. He directly owns 43,957 shares of United which represents less than one
percent of the total outstanding shares of United.
C. E. GOODWIN, who is an Attorney at Law and Counsel with Goodwin &
Goodwin, became a director in 1985. Mr. Goodwin is 86 years old. He owns
15,620 shares of United directly and 1,272 shares indirectly, the total of which
represents less than one percent of the total outstanding shares of United.
F.T. GRAFF, JR., who is a practicing attorney and partner of Bowles
Rice McDavid Graff and Love, became a director of United in 1984. Mr. Graff is
57 years old. He owns 2,000 shares of United directly and 9,000 shares
indirectly, the total of which represents less than one percent of the total
outstanding shares of United. The indirectly owned shares are held by a bank in
a trustee account for Mr. Graff over which he exercises voting and dispositive
power. Mr. Graff is Mr. Fahlgren's son-in-law.
ANDREW J. HOUVOURAS, who is President of A&L Industries, an investment
company, became a director of United in 1985. Mr. Houvouras is 77 years old.
He owns 461 shares of United directly and 25,655 shares indirectly, the total of
which represents less than one percent of the total outstanding shares of
United. The indirect shares are owned by a company in which Mr. Houvouras is a
partner.
RUSSELL L. ISAACS, who is the owner of Russell L. Isaacs and Company, a
consulting firm, became a director of United in 1984. Mr. Isaacs is 64 years
old. He owns 20,958 shares of United directly which represents less than one
percent of the total outstanding shares of United.
ROBERT P. MCLEAN, who is the President of Stanaford Acres, Inc. and
Vice-President of Sigmund- McLean, Inc. became a director of United in 1992.
Mr. McLean is 66 years old. He owns 5,495 shares of United directly and 1,447
shares indirectly, the total of which represents less than one percent of the
total outstanding shares of United.
3
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G. OGDEN NUTTING, who is the former Chairman of the Board of UNB-N and
President of The Ogden Newspapers, Inc., became a director of United in 1986.
Mr. Nutting is 61 years old. He owns 326,328 shares of United indirectly which
represents 2.16 percent of the total outstanding shares of United. The voting
and investment authority for the indirectly owned shares of Mr. Nutting are as
follows: he has beneficial ownership, through shared investment or voting
authority of 326,328 shares consisting of 20,952 shares held by Mr. Nutting as
co-trustee, and 277,376 shares registered in the name of The Ogden Newspapers,
Inc. of which Mr. Nutting is President. He is also a settlor and sole
beneficiary of a trust which contains 28,000 shares.
WILLIAM C. PITT, III, who is a hotel and resort developer, became a
director of United in 1987. Mr. Pitt is 52 years old. He owns 5,000 shares of
United directly which represents less than one percent of the total outstanding
shares of United.
CHARLES E. STEALEY, who is a private consultant and former Assistant
Vice President and Director of Administration of Olsten Corporation, became a
director of United in 1986. Mr. Stealey is 56 years old. He owns 15,668 shares
of United directly and 63,362 shares indirectly, the total of which represents
less than one percent of the total outstanding shares of United. Mr. Stealey's
mother holds 7,354 of the indirect shares over which Mr. Stealey has power of
attorney and the other 40,608 indirect shares are held in a trustee account for
Mr. Stealey over which he exercises voting and investment authority.
WARREN A. THORNHILL, III, who is an Attorney at Law, former Chairman of
the Board of Summit Holding Corporation and Raleigh County National Bank and
UNB-S, became a director of United in 1992. Mr. Thornhill is 68 years old. He
owns 131,797 shares of United directly and 92,930 shares indirectly, the total
of which represents 1.49 percent of the total shares outstanding of United. Mr.
Thornhill's indirectly owned shares are owned by the members of his immediate
family.
WILLIAM W. WAGNER, who is an executive Vice President of United,
Chairman of the Board of United Mortgage Company, Inc. and former Chairman of
the Board and Chief Executive Officer of Eagle Bancorp, Inc., became a director
of United in 1996. Mr. Wagner is 64 years old. He owns 235,920 shares of
United directly and 15,038 shares indirectly, the total of which represents
1.66% of the total shares outstanding of United. The 15,038 shares indirectly
owned by Mr. Wagner, are held in an ESOP account allocated to Mr. Wagner. Mr.
Wagner is a director of three companies, W.W. McDonald Land Company, Bruce
McDonald Holding Company and Triadelphia Land Company, that have common boards
of directors and common management officials. These entities own a total of
approximately 191,898 shares or 1.27% of United stock.
HAROLD L. WILKES, who is President of Little General Stores, Inc., a
convenience store chain, became a director of United in 1993. Mr. Wilkes is 56
years old. He directly owns 2,079 shares of United which represents less than
one percent of the total outstanding shares of United.
P. CLINTON WINTER, JR., President of Bray & Oakley Insurance Agency and
former Director of Eagle Bancorp, Inc., became a director of United in 1996. Mr.
Winter is 49 years old. He owns 125,755 shares of United directly and 61,094
shares indirectly , the total of which represents 1.24% of the total shares
outstanding of United. Of the 61,094 shares indirectly owned by Mr. Winter,
41,774 shares are held in trusts for Mr. Winter's mother and children for which
Mr. Winter acts as executor and 18,400 shares are held by a company which Mr.
Winter serves as President. Mr. Winter is a director of three companies, W.W.
McDonald Land Company, Bruce McDonald Holding Company and Triadelphia Land
Company, that have common boards of directors and common management officials.
These entities own a total of approximately 191,898 shares or 1.27% of United
stock.
JAMES W. WORD, JR., who is President of Beckley Loan Company and
Vice-President of Beckley Loan and Industrial Corporation became a director of
United in 1992. He is 72 years old. He owns 31,743 shares of United directly and
29,155 shares indirectly, the total of which represents less than one percent of
the total outstanding shares of United. Mr. Word's indirectly owned shares are
owned by the members of his immediate family.
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All directors and executive officers of United as a group, 28 persons,
own 1,597,733 shares of United directly and 2,366,789 shares indirectly, the
total of which represents 26.40 percent of the total shares outstanding for
United. Included in indirectly owned shares is 1,386,744 shares of United common
stock held by UNB's Trust Department serving in a fiduciary or agency capacity
(the "Trust Shares"). The voting and investment authority for the Trust Shares
held by the Trust Department is exercised by UNB's Board of Directors. The
members of UNB's Board of Directors who are also directors or executive officers
of United are: Richard M. Adams, I. N. Smith, Jr., and Gary L. Ellis.
Effective December 27, 1996, J. Christopher Thomas resigned as an
officer of United and has not been nominated for re-election at the 1997 Annual
Meeting.
Other nominations may be made only if such nominations are made in
accordance with the procedures set forth in Article II, Section 5 of the
Restated Bylaws of United, which section, in full, is set forth below:
Section 5. Nomination of Directors. Directors shall
be nominated by the Board prior to the giving of notice of any
meeting of shareholders wherein directors are to be elected.
Additional nominations of directors may be made by any
shareholder; provided that such nomination or nominations must
be made in writing, signed by the shareholder and received by
the Chairman or President no later than ten (10) days from the
date the notice of the meeting of shareholders was mailed;
however, in the event that notice is mailed less than thirteen
(13) days prior to the meeting, such nomination or nominations
must be received no later than three (3) days prior to any
meeting of the shareholders wherein directors are to be
elected.
If any nominee set forth above is unable to serve, which the Board of
Directors has no reason to expect, the persons named in the accompanying proxy
intend to vote for the balance of those nominees set forth above and, if they
deem it advisable, for a substitute nominee named by the Board of Directors of
United.
It is the intention of the persons named in the accompanying proxy,
unless the proxy specifies otherwise (or except under the circumstances
involving cumulative voting in the election of directors described above), to
vote "FOR" the proposal to elect the twenty-three (23) nominees to serve as
directors of United until the 1998 Annual Meeting of shareholders and until
their successors are elected and qualified.
Meetings and Committees of the Board of Directors
The Board of Directors of United met four times during 1996. The Board
reviews management reports and general corporate policy. During the calendar
year ended December 31, 1996, each director of United attended more than 75% of
the total number of meetings of the Board and Board Committees on which he
served during the period he served as a director, except for Harry L. Buch, John
W. Dudley, Theodore J. Georgelas, Andrew J. Houvouras, William W. Wagner and P.
Clinton Winter, Jr.
The Board has three standing committees--the Executive, Audit, and
Compensation Committees. The Audit Committee met four times in 1996 to review
the quarterly reports of internal audit, all reports of external auditors, and
all reports of examination by federal and state bank regulatory authorities.
This committee consisted of: Robert G. Astorg, Chairman, R. Terry Butcher, C.
E. Goodwin, P. Clinton Winter and James W. Word, Jr.
The Executive Committee met three times during 1996. The Executive
Committee may exercise the power of the Board of Directors between meetings of
the full Board of Directors or upon the call of the Chairman, as directed by the
Board and consistent with the provisions of West Virginia corporate law and
United's articles of incorporation and bylaws. During 1996, the committee
consisted of Richard M. Adams, Chairman, I. N. Smith, Jr., Thomas J. Blair, III,
Harry L. Buch, H. Smoot Fahlgren, Theodore J. Georgelas, Russell L. Isaacs, G.
Ogden Nutting, William C. Pitt, III, Warren A. Thornhill, III, William W. Wagner
and F. T. Graff, Jr., who also serves as Secretary for the Executive Committee.
5
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The Compensation Committee met one time during 1996. The Compensation
Committee makes recommendations regarding officer compensation and budgetary
matters to the Board of Directors. The committee consisted of the same members
as served on the Executive Committee except for Messrs. R. Adams and Smith. Mr.
Isaacs is Chairman of the Compensation Committee.
Compensation of Directors
Directors other than Executive Officers of United receive a retainer of
$550 per month without regard to meeting attendance. In addition, each outside
director receives a fee of $550 for each United Board Committee meeting attended
except for Messrs. Isaacs and Astorg. Mr. Isaacs, as chairman of the
Compensation Committee, receives $550 for each committee meeting attended, plus
an additional retainer payment of $550 per quarter. Mr. Astorg, as chairman of
the Audit Committee, receives an additional retainer payment of $550 per month
without regard to committee meeting attendance.
United utilizes an aircraft owned by Mr. Fahlgren, a member of United's
Board of Directors. During 1996, Mr. Fahlgren received $9,000 in compensation
for these services.
Principal Shareholder of United
The following table lists each shareholder of United who is the
beneficial owner of more than 5% of United's common stock, the only class of
stock outstanding, as of February 28, 1996.
<TABLE>
<CAPTION>
Amount and Nature of Percent of
Title of Class Name and Address of Beneficial Owner Beneficial Ownership Class
- -------------- ------------------------------------ -------------------- ---------
<S> <C>
Common Stock United National Bank Trust Department (1) 1,386,744 9.19%
514 Market Street, Parkersburg, WV 26101
(1,386,744 shares or 9.19% are registered
under the nominee name of Parbanc Co.)
</TABLE>
(1) UNB is a wholly-owned subsidiary of United and its Trust Department
holds in fiduciary or agency capacity 1,386,744 shares of United's stock. The
voting and investment authority for the shares held by the Trust Department is
exercised by UNB's Board of Directors.
Beneficial Ownership of Securities by Executive Officers
The following table sets forth certain information regarding the named
executives beneficial ownership of common stock of United as of February
28,1997:
<TABLE>
<CAPTION>
Shares of Common
Stock of the Company
Beneficially Owned (1)
------------------------------------------
Title of Class Name of Officer Direct Indirect Percent of Class
-------------- --------------- ---------- ------------ ----------------
<S> <C>
Common Stock Richard M. Adams 249,348 91,689 2.26%
Common Stock I.N. Smith, Jr. 20,157 221,350 1.61%
Common Stock Gary L. Ellis 35,985 - 0.24%
Common Stock Steven E. Wilson 50,504 4 0.33%
</TABLE>
(1) The amounts shown represent the total shares owned directly by such
named executive officers together with shares which are owned indirectly. The
indirect shares include shares which are issuable upon the exercise of all stock
options currently exercisable and those shares owned by spouses and immediate
family members, shares held in trust in which the executive is a beneficiary,
and shares held by a corporation which the executive controls.
6
<PAGE>
Executive Officers
Set forth below are the executive officers of United and relations that
exist with affiliates and others for the past five years.
<TABLE>
<CAPTION>
Principal Occupation and
Banking Experience During
Name Age Present Position The Last Five Years
---- --- ---------------- --------------------------
<S> <C>
Richard M. Adams 50 Chairman of the Chairman of the Board and
Board & Chief Chief Executive Officer-
Executive Officer- United; Chairman of the
United; Chairman Board, and Chief
of the Board & Executive Officer-UNB
Chief Executive
Officer - UNB
I.N. Smith, Jr. 64 President-United; President-United ;
Vice-Chairman - Vice-Chairman, UNB
UNB, Director -
United and UNB
Douglass H. Adams 58 Executive Vice- Executive Vice-President-
President - United; President, Vienna
United; Director- Office, UNB; Executive Vice-
United; Executive President - UNB
Vice-President - UNB
Gary L. Ellis 55 Executive Vice- Executive Vice-President
President-United; United; President UNB
Director and
President - UNB
James B. Hayhurst 50 Executive Vice- Executive Vice-President
President - United; -United; Executive Vice-
Executive Vice President - UNB; President
President - UNB UNB Wood County Offices
Joe L. Wilson 48 Executive Vice- Executive Vice-President,
President-United; United; Executive Vice
Executive Vice- President - UNB
President - UNB
Steven E. Wilson 48 Executive Vice- Executive Vice-President, Chief
President, Chief Financial Officer and Treasurer-
Financial Officer, United; Executive Vice
and Treasurer- President, Chief Financial
United; Executive Officer, Treasurer and
Vice-President, Secretary - UNB
Chief Financial
Officer, Treasurer
and Secretary - UNB
</TABLE>
7
<PAGE>
EXECUTIVE COMPENSATION
Board Compensation Committee Report
The Compensation Committee is responsible for administration of United
Bankshares, Inc.'s (United's) Executive Compensation programs. This includes
recommendations related to base salary, short term incentives and long term
stock option incentives for all Executive Officers of the Company.
The Compensation Committee's Executive Compensation policies, developed
based on competitive information, are designed to provide competitive levels of
compensation that integrate pay with United's annual and long term performance
goals and assist in attracting and retaining qualified executives.
Periodically the Committee retains the services of nationally
recognized compensation consulting firms to do an extensive review of the
compensation program for all Executive Officers.
William M. Mercer, Inc. reported to the Committee that the total
compensation plan for Executive Officers was reasonable and competitive in view
of the company's performance and the contribution of those officers to that
performance.
Executive Officers are paid base salaries determined by the value of
their position compared to published survey data, information gathered on
competing banks of similar size and the officer's individual performance level.
The short term Incentive Plan stresses reward for achievement of
performance goals set each year. Each Executive Officer participates in a pool
of funds set aside for this purpose. Participation level is based on a rating
system tied to accomplishment of assigned goals as well as a specific formula
which relates the incentive award to a percentage of salary range midpoint.
Company performance must exceed peer performance to activate compensation
incentives.
The United management team should share the same goals as its
shareholders. Toward this end, the long term Incentive Stock Option Plan is
designed to provide an ownership opportunity to key management personnel. Stock
ownership provides an ever important stockholder perspective necessary for
successful management of the company. Awards are based on industry guidelines
which relate base compensation to stock price. Grant calculations are tested for
reasonableness against competitive industry data, keeping in mind cumulative
ownership targets.
Mercer reported that stock option grants to Executive Officers have
generally been conservative when compared to general industry and practices for
major regional banking organizations. The most recent share allocations as a
percentage of outstanding shares have been consistent with competitive practices
in the banking industry.
Peer group performance analysis is a continual process at United. Data
provided by the Federal Reserve Bank Holding Company Performance Report is
analyzed quarterly. Proxy data on an appropriate group of individual financial
institutions is used to evaluate operating performance and profitability. United
consistently performs well compared to peer.
Base pay for Richard Adams, Chief Executive Officer was determined to
be slightly below the median when compared to published compensation surveys
from Watson Wyatt Data Services and the Ben Cole Financial Incorporated.
Mr. Adams is awarded a pro-rata share of the established short term
incentive pool based on his performance rating assigned by the Committee. The
Mercer report concluded that total cash compensation for the position of CEO is
appropriate in view of performance levels attained for companies of similar
size.
8
<PAGE>
Stock option shares granted to Mr. Adams were determined to be
competitive when compared by Mercer to the grant practices of a broad spectrum
of banking organizations.
Adams at age 50 has served the company for 28 years; 22 of those years
he has been responsible for motivating and building the organization.
United's stock price over the past 22 years of the current
administration has moved from $3.00 per share to a high of $33.00 per share for
an average annualized increase of 45%. The stock chart below shows how United's
stock price has performed compared to two index groups. The five year chart
shows United with price growth which has generally performed favorably compared
to both index groups.
Dividends have increased from $.11 cents per share to $1.24 cents per
share or at a 47% average annualized rate. United's pay for performance
compensation program emphasizing written performance objectives has been a major
contributor to our ability to consistently enhance long-term shareholder value.
No member of the Committee is a former or current officer or employee
of United.
COMPENSATION COMMITTEE
----------------------
Thomas J. Blair, III Warren A. Thornhill, III Harry L. Buch
Russell L. Isaacs H. Smoot Fahlgren G. Ogden Nutting
Theodore J. Georgelas William C. Pitt, III F. T. Graff, Jr.
PERFORMANCE GRAPH
The following graph compares United's cumulative total shareholder
return on its common stock for the five year period ending December 31, 1996,
with the cumulative total return of the Standard and Poor's Midcap 400 Index and
with the NASDAQ OTC Bank Index. There is no assurance that United's common stock
performance will continue in the future with the same or similar trends as
depicted in the graph. The graph shall not be deemed incorporated by reference
by any general statement incorporating by reference this proxy statement into
any filing under the Securities Act of 1933 or the Securities Exchange Act of
1934 except to the extent United specifically incorporates this graph by
reference, and shall not otherwise be filed under such Acts.
[GRAPH APPEARS BELOW]
United Bankshares, Inc.
Total Return Analysis
1996 stock performance graph plotting points
NASDAQ S&P
UBSI OTC MIDCAP
---------------------------------
1991 100.000 100.000 100.000
1992 154.973 152.022 109.523
1993 211.561 196.665 122.362
1994 201.785 198.845 115.588
1995 256.508 287.951 148.605
1996 301.736 363.264 174.350
9
<PAGE>
SUMMARY COMPENSATION TABLE
The following table is a summary of certain information concerning the
compensation awarded or paid to, or earned by, the Company's chief executive
officer and each of the Company's other four most highly compensated executive
officers during the last three fiscal years.
<TABLE>
<CAPTION>
Long-term
Annual Compensation Compensation
--------------------------- ------------
Stock All Other
Name and Principal Position Year Salary Bonus Options(#) Compensation (1)
- --------------------------------------------------- ----- --------- -------- ---------- ----------------
<S> <C>
Richard M. Adams Chairman of the Board 1996 $ 342,000 $156,000 12,714 $ 5,968 (2)
& Chief Executive Officer 1995 313,500 147,000 12,714 5,910
1994 290,413 130,000 14,500 5,934
Gary L. Ellis Executive Vice President 1996 157,200 48,000 6,028 5,153 (2)
1995 150,013 33,750 6,028 4,607
1994 144,672 45,000 5,000 4,749
Steven E. Wilson Executive Vice President 1996 148,333 48,000 6,028 4,941 (2)
Chief Financial Officer 1995 136,250 42,000 6,028 4,468
& Treasurer 1994 122,542 36,000 5,500 3,794
I. N. Smith, Jr. President 1996 145,109 16,500 4,000 4,008 (2)
1995 145,109 12,375 3,506 3,887
1994 145,109 15,900 3,000 4,052
J. Christopher Thomas Executive Vice President 1996 142,880 30,000 - 805,959 (3)
</TABLE>
(1) The aggregate value of all perquisites and other personal benefits did
not exceed either $50,000 or 10% of the total annual salary and bonus
reported for the named executive officers; therefore, no disclosure has
been made.
(2) The amounts included in "All Other Compensation" consist of United's
contributions on behalf of the listed officers to the 401(K) Plan.
(3) The amounts included in "All Other Compensation" for Mr. Thomas consist
of $1,885 of United's contributions to the 401(K) Plan, $733,047 of
accrued severance pay that is payable over a twenty-four (24) month term
that commenced on January 15, 1997, and $71,027 of accrued benefits
under a SERP Plan. Payments under the SERP obligation begin when Mr.
Thomas reaches 55 years of age. Amounts payable under the severance and
SERP obligations relate to contracts between Mr. Thomas and Eagle
Bancorp, Inc. ("Eagle") that United assumed with its acquisition of
Eagle. These obligations were triggered by the resignation of Mr. Thomas
as an officer of United effective December 27, 1996.
STOCK OPTION GRANTS TABLE
The following table sets forth information concerning individual grants
of options to purchase the Company's Common Stock made to the named executives
in 1996.
<TABLE>
<CAPTION>
Stock Option Grants in Last Fiscal Year
------------------------------------------------------------------------------------------
Potential Realizable Value
at Assumed Annual Rates
of Stock Price Appreciation
Individual Grants for Option Term
-------------------------------------------------------------- ------------------------
Number of
Securities % of Total
Underlying Options Granted to Exercise or
Options All Employees in Base Price Expiration
Name Granted (#) Fiscal Year ($/Share) Date 5% ($) 10% ($)
- --------------------- ----------- ------------------ ----------- ---------- --------- ----------
<S> <C>
Richard M. Adams 12,714 (1) 11.61% 29.75 11/7/2006 237,872 602,819
Gary L. Ellis 6,028 (1) 5.51% 29.75 11/7/2006 112,781 285,810
Steven E. Wilson 6,028 (1) 5.51% 29.75 11/7/2006 112,781 285,810
I. N. Smith, Jr. 4,000 (1) 3.65% 29.75 11/7/2006 74,838 189,655
J. Christopher Thomas - - - - - -
</TABLE>
(1) Granted under the 1996 Incentive Stock Option Plan. The option exercise
price is the market value of United's stock at the date the option was
granted. All options granted under this plan are exercisable in accordance
with a three year vesting schedule: 50% after the first year; 75% after
the second year and 100% after three years.
10
<PAGE>
STOCK OPTION EXERCISES AND YEAR-END VALUE TABLE
The following table sets forth certain information regarding individual
exercises of stock options during 1996 by each of the named executives.
<TABLE>
<CAPTION>
Aggregate Stock Option Exercises in Last Fiscal Year and FY-End Stock Option Value
------------------------------------------------------------------------------------------------
Number of Unexercised Value of Unexercised In-the-
Stock Options at FY-End (#) Money Stock Options at FY-End ($)
--------------------------- ---------------------------------
Shares Acquired Value Exercisable/ Exercisable/
Name on Exercise (#) Realized Unexercisable Unexercisable
- --------------------- ---------------- -------- ------------- -------------------
<S> <C>
Richard M. Adams 7,500 $127,500 67,232/22,696 $1,320,835/$652,327
Gary L. Ellis 6,000 $ 93,000 19,764/10,292 $ 450,170/$298,503
Steven E. Wilson 6,500 $ 69,750 7,014/ 9,042 $ 198,420/$269,753
I. N. Smith, Jr. - - 10,003/ 6,503 $ 244,590/$188,840
J. Christopher Thomas - - - - - -
</TABLE>
Officer Employment Contracts
Richard M. Adams, Chairman and Chief Executive Officer of United and
UNB entered into an employment contract with United effective April 11, 1986.
This contract was amended in 1989, again in January and November 1991, in April
1992 and again in November 1993. This most recent amendment initiated a new
rolling five year term contract that is extended annually. Under the contract
Mr. Adams is required to devote his full-time energies to performing his duties
as Chairman and CEO on behalf of United and UNB. In November 1996, the Board
extended Mr. Adam's contract to initiate a new five year term expiring on March
31, 2002. The contract provides for a base compensation of $371,000 and
additional benefits consistent with the office. This base compensation may be
increased but not decreased. If the contract is terminated by Mr. Adams for
change in control, or for any reason other than mutual consent or criminal
misconduct, Mr. Adams, or his family or estate, is entitled to his base salary
for the remainder of the contract term.
On July 27, 1990, United also entered into a Supplemental Retirement
Plan with Mr. Adams. This plan provides for an annual supplemental retirement
benefit upon his reaching age 65 or upon the later termination of his employment
with United. The annual benefit will be equal to seventy percent of the average
of Mr. Adams' three highest base salaries during his employment with United,
reduced by benefits. The plan also provides for reduced benefits for early
retirement after age 62 as well as payments to his spouse in the event of his
death.
United and UNB entered into an employment agreement with I. N. Smith,
Jr., President of United and Vice-Chairman of UNB, on December 17, 1985. The
term of the agreement extends until Mr. Smith reaches the age of 75. Until Mr.
Smith becomes 65, he will be employed full-time by United as an executive
officer and will receive an annual salary of no less than $115,000. Upon
reaching the age of 65 and until he reaches the age of 75, Mr. Smith shall
render such consulting and advisory services as United may request, and shall
receive for such services an annual fee of $36,000 from age 65 until he reaches
age 70, and $30,000 thereafter. The agreement also contains provisions which
address the issues of disability, early retirement and the death of Mr. Smith.
All of these events result in a reduction of payments to Mr. Smith. In addition,
until Mr. Smith reaches age 65, he has agreed to serve as a director of United
and UNB, and United has agreed to use its best efforts to nominate and elect
him.
Ohio Valley National Bank, (now a part of UNB as a result of its merger
with United) entered into a Salary Contribution Agreement with Douglass H.
Adams, Executive Vice President of United, on June 13, 1985. This agreement
provides at age 65 for an annual supplemental retirement equal to $30,000 for
life or fifteen years certain. This future liability is being funded with life
insurance. Provision is made for an early retirement benefit beginning at age 60
at a reduced percentage of the normal benefit. The agreement also provides for
payment to beneficiaries in the event of his death.
11
<PAGE>
Change of Control Agreements
In March of 1994, United entered into agreements with Gary L. Ellis,
Steven E. Wilson, James B. Hayhurst, Jr. and Joe L. Wilson to encourage those
executive officers not to terminate their employment with United because of the
possibility that United might be acquired by another entity. In November of 1996
United entered into a change of control agreement with Douglass H. Adams. The
Board of Directors determined that such an arrangement was appropriate,
especially in view of the recent entry of large regional bank holding companies
into West Virginia. The agreements were not undertaken in the belief that a
change of control of United was imminent.
Generally, the agreements provide severance compensation to those
officers if their employment should end under certain specified conditions after
a change of control of United. Compensation is paid upon any involuntary
termination following a change of control unless the officer is terminated for
cause. In addition, compensation will be paid after a change of control if the
officer voluntarily terminates employment because of a decrease in the total
amount of the officer's base salary below the level in effect on the date of
consummation of the change of control, without the officer's consent; a material
reduction in the importance of the officer's job responsibilities without the
officer's consent; geographical relocation of the officer without consent to an
office more than fifty (50) miles from the officer's location at the time of a
change of control; failure by United to obtain assumption of the contract by its
successor or any termination of employment within thirty-six (36) months after
consummation of a change of control which is effected for any reason other than
good cause.
Under the agreements, a change of control is deemed to occur in the
event of a change of ownership of United which must be reported to the
Securities and Exchange Commission as a change of control, including but not
limited to the acquisition by any "person" (as such term is used in Sections
13(d) and 14(d) of the Securities and Exchange Act of 1934 (the "Exchange Act"))
of direct or indirect "beneficial ownership" (as defined by Rule 13d-3 under the
Exchange Act) of twenty-five percent (25%) or more of the combined voting power
of United's then outstanding securities, or the failure during any period of two
(2) consecutive years of individuals who at the beginning of such period
constitute the Board for any reason to constitute at least a majority thereof,
unless the election of each director who was not a director at the beginning of
such period has been approved in advance by directors representing at least
two-thirds (2/3) of the directors at the beginning of the period.
Under the agreements, severance benefits include: (a) cash payment
equal to the officers monthly base salary in effect on either (i) the date of
termination; (ii) the date immediately preceding the change of control,
whichever is higher, multiplied by the number of full months between the date of
termination and the date that is thirty-six (36) months after the date of
consummation of the change of control; (b) payment of cash incentive award, if
any, under United's Incentive Plan; (c) continuing participation in employee
benefit plans and programs such as retirement, disability and medical insurance
for a period of thirty-six (36) months following the date of termination.
The agreements do not effect the right of United to terminate the
officer, or change the salary or benefits of the officer, with or without good
cause, prior to any change of control; provided, however, any termination or
change which takes place after discussions have commenced which result in a
change of control will be presumed to be a violation of the agreement and will
entitle the officer to the benefits under the agreement, absent clear and
convincing evidence to the contrary.
Employee Benefit Plans
No directors or principal shareholders of United and its subsidiaries,
other than those persons who are salaried officers, participate in any type of
benefit plan of United.
United's subsidiaries provide, on a substantially non-contributory
basis for all full-time employees, life, disability, hospital and dental
insurance. Life insurance with value of 250% of base salary is provided to all
full-time employees, including executive officers. The premiums paid by United
for life insurance on any individual which has a face value greater than $50,000
is properly reported as compensation. These plans do not discriminate, in scope,
terms or operation, in favor of the executive officers of United or its
subsidiaries and are available generally to all salaried employees of United and
its subsidiaries.
Each employee of United, or its participating subsidiaries, who
completes one year of eligible service and is 21 years of age is eligible to
participate in the Pension Plan. The plan is noncontributory on the part of the
employee. Vesting is attained with five years of participation.
12
<PAGE>
PENSION PLAN TABLE
Years of Service
Remuneration 15 20 25 30 35
- --------------------------------------------------------------------------------
$125,000 $30,744 $40,992 $51,241 $51,241 $51,241
150,000 37,307 49,742 62,178 62,178 62,178
175,000 37,307 49,742 62,178 62,178 62,178
200,000 37,307 49,742 62,178 62,178 62,178
225,000 37,307 49,742 62,178 62,178 62,178
250,000 37,307 49,742 62,178 62,178 62,178
275,000 37,307 49,742 62,178 62,178 62,178
300,000 37,307 49,742 62,178 62,178 62,178
325,000 37,307 49,742 62,178 62,178 62,178
350,000 37,307 49,742 62,178 62,178 62,178
375,000 37,307 49,742 62,178 62,178 62,178
400,000 37,307 49,742 62,178 62,178 62,178
425,000 37,307 49,742 62,178 62,178 62,178
450,000 37,307 49,742 62,178 62,178 62,178
475,000 37,307 49,742 62,178 62,178 62,178
500,000 37,307 49,742 62,178 62,178 62,178
The table above illustrates the operation of United's Pension Plan and
Supplemental Retirement Plan ("SERP") by showing various annual benefits, after
reduction for Social Security retirement income, assuming various annual base
salaries and years of credited service. Benefit figures shown are computed on
the assumption that participants retire at the normal retirement age of 65. For
purposes of the table, it is assumed each participant is receiving benefits from
the Pension Plan in the form of a life annuity. Benefits under the SERP are paid
in the form of a life annuity.
The SERP ensures that each participating executive officer, who retires
at age 65, receives a level of retirement benefits, without regard to years of
service, equal to 70% of the executive officer's average three highest base
salary during his employment with United or an affiliated or successor entity.
At the time a participating executive officer retires, the benefit the
participant is entitled to through the SERP is calculated, and then funds from
the following sources are deducted to determine the amount, if any, of the
payment due under the SERP: (i) the benefit under the Pension Plan; (ii) Social
Security benefits payable; and (iii) any benefits under United's Savings and
Stock Investment Plan.
The estimated credited years of service for each of the executive
officers named in the Summary Compensation Table under the Pension Plan as of
December 31, 1996, are as follows: Mr. Adams 28 years; Mr. Ellis 15 years; Mr.
Wilson 25 years; Mr. Smith 37 years; Mr. Thomas 26 years.
Each employee of United, who completes one year of eligible service, is
eligible to participate in the United Savings and Stock Investment Plan, a
deferred compensation plan under Section 401(k) of the Internal Revenue Code.
Each participant may contribute from 1% to 10% of pretax earnings to his/her
account which may be invested in any of four investment options chosen by the
employee. United matches 100% of the first 2% of salary deferred and 25% of the
second 2% of salary deferred with United stock. Vesting is 100% for employee
deferrals and the company match at the time the employee makes his/her deferral.
United employees may participate in an employee stock purchase plan
whereby its employees may purchase shares of United's common stock. Purchases
made by employees under this plan are coordinated by the Trust Department of
UNB, and involve stock purchased at market price for this purpose.
Compensation Committee Interlocks and Insider Participation
F.T. Graff, Jr., a member of the Board of Directors of United, its
Executive Committee and the Board's Compensation Committee, is a partner in the
law firm of Bowles Rice McDavid Graff & Love in Charleston, West Virginia.
Bowles Rice McDavid Graff & Love rendered legal services to United and UNB
during 1996 and it is expected that the firm will continue to render certain
services to both in the future. The fees paid to Bowles Rice McDavid Graff &
Love represent less than 5% of that firm's revenues for 1996.
13
<PAGE>
Transactions with Management and Others
United's subsidiaries have had, and expect to have in the future,
banking transactions with United and with its officers, directors, principal
shareholders, or their interests (entities in which they have more than a 10%
interest). The transactions were in the ordinary course of business and, with
respect to loans, were made on substantially the same terms, including interest
rates, collateral and repayment terms as those prevailing at the time for
comparable transactions. United's subsidiary banks are subject to federal
statutes and regulations governing loans to officers and directors and extend
loans in compliance with such laws and only with the approval of the Board of
Directors.
Thomas J. Blair, III, a member of the Board of Directors of United, is
party to certain loans made to him and his related businesses by UNB. The
largest aggregate amount of indebtedness outstanding on those loans during 1996
was approximately $2,163,000. One such loan, that was acquired as a result of
the Eagle merger, with a principal balance of approximately $160,000 and an
interest rate of 7.50%, has been classified as nonaccrual by UNB. Also, the
loan, which is paying as agreed under a modified payment plan, has been
categorized as impaired and has been included in such category in United's 1996
Annual Report to Shareholders. The loan is approximately 65% guaranteed by the
Farmers Home Administration. Additionally, Mr. Blair has entered into an
agreement dated September 17, 1996, with UNB, whereby he, as principal to two
other loans with a combined principal balance of approximately $1,960,000 and an
interest rate of 9.25%, has pledged 77,300 shares of United common stock as a
security interest. The loans have been categorized as impaired by UNB. The stock
is being held by UNB's Trust Department as the collateral agent for the purpose
of receiving and accounting for the application of dividends and for the purpose
of initiating quarterly sales of the stock on Mr. Blair's behalf, as is
necessary, to satisfy the quarterly principal and interest requirements of those
two obligations. In accordance with the agreement, UNB applies quarterly
dividends when received, at its sole discretion, against either or both of the
two obligations. Such payments commenced on November 17, 1996, and shall
continue on a quarterly basis, through and until November 17, 1999, when all
accrued interest, unpaid principal and any other sum owing shall be due and
payable in full. The key assumptions utilized in reaching the agreement were
that United's stock price and market interest rate will remain at the September
17, 1996 level. The timing of the sales must comply with applicable securities
laws. Mr. Blair has complied with all aspects of the agreement.
John W. Dudley, a member of the Board of Directors of United, is party
to a loan made to him and his related businesses by UNB. The largest aggregate
amount of indebtedness outstanding on this loan during 1996 was approximately
$776,000. This loan, with a balance of approximately $723,000 and an interest
rate of 10.00%, has been categorized as impaired by UNB and has been included in
such category in United's 1996 Annual Report to Shareholders. The loan is
secured by real estate, inventory and various equity securities, including
United common stock.
The building utilized by UNB to house its Rosemar Circle Branch in
North Parkersburg, West Virginia, is owned by Richard M. Adams, Chairman and
Chief Executive Officer of United and UNB, his brother, Douglass H. Adams,
Executive Vice President of United and their step-mother, Dorothy D. Adams. The
Adams' lease the land from UNB at a nominal annual rental and lease the branch
facility they constructed to UNB. The leases were entered into prior to UNB's
ownership of the branch facility and were assumed by UNB upon its acquisition of
the previous lessee, United Bank. Management believes the lease terms are
comparable with lease terms for similar property in the market area.
H. Smoot Fahlgren, a member of the Board of Directors of United, is
Chairman of Fahlgren, Inc., an advertising agency with its headquarters in
Parkersburg, West Virginia. The agency has provided the advertising for United
since 1978. During 1996, payment for the advertising by United to Fahlgren, Inc.
was less than 5% of that firm's revenues during the year 1996.
F.T. Graff, Jr., a member of the Board of Directors of United, is a
partner in the law firm of Bowles Rice McDavid Graff & Love in Charleston, West
Virginia. Bowles Rice McDavid Graff & Love rendered legal services to United and
UNB during 1996 and it is expected that the firm will continue to render certain
services to both in the future. The fees paid to Bowles Rice McDavid Graff &
Love represent less than 5% of that firm's revenues for 1996.
14
<PAGE>
UNB leases its Wheeling branch premises from The Ogden Newspapers, Inc.
pursuant to a written lease agreement dated August 1, 1979 (the "Lease"). The
Ogden Newspapers, Inc. is a shareholder of United, and the voting and investment
authority for its shares are beneficially owned by its President, G. Ogden
Nutting who is a director of United. Management believes the Lease is on terms
comparable to market terms for similar rental space in Wheeling, West Virginia.
The Lease provides for five (5) successive options to renew and extend the terms
of the Lease for five (5) years each. United exercised its option to renew the
Lease for five (5) years in 1989 and again in 1994. In addition, during the year
1996 subsidiaries of United advertised, at market rates, in newspapers published
by The Ogden Newspaper, Inc. The fees paid in such advertising and the rent paid
to The Ogden Newspapers, Inc. represent less than 5% of that firm's revenue for
the year 1996.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities and Exchange Act of 1934 requires
United's directors and executive officers and persons who beneficially own more
than ten percent of United's stock (currently, to the best of United's
knowledge, there are no such persons) to file reports of ownership and changes
in ownership with the Securities and Exchange Commission ("SEC"). Persons filing
such reports are required by SEC regulations to furnish United with copies of
all such beneficial ownership statements filed under section 16(a) of the
Exchange Act.
Based solely on a review of such reports and written representations
from United directors and executive officers, United believes that during 1996
all such reports were filed on a timely basis, except for: Director and
President, I. N. Smith, Jr. did not file one report involving two transactions
to report the purchase of 16 shares of common stock and the exchange of Eagle
common stock for 1,150 shares of United common stock in connection with United's
acquisition of Eagle. Both transactions occurred during April 1996. Mr. Smith
subsequently reported both transactions on an amended November 1996 Form 4 in
March of 1997.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Ernst & Young LLP, Charleston, West Virginia, has served as the
independent certified public accountants for United and its subsidiaries since
1986 and has been selected by the Board of Directors to continue as the
independent certified public accountants for United and its subsidiaries for the
next fiscal year. Representatives of Ernst & Young LLP will be present at the
Annual Meeting and will have an opportunity to make a statement if they desire
to do so. Such representatives of the firm will be available to respond to
appropriate shareholder inquiries at the Annual Meeting.
SHAREHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
Presently, the next annual meeting of United shareholders is scheduled
for May 18, 1998. Any shareholder proposals to be presented at that 1998 Annual
Meeting must be received at the principal office of United no later than
December 5, 1997. If the scheduled date for the 1998 Annual Meeting is changed
by more than thirty (30) days, shareholders will be informed of the new meeting
date and the revised date by which shareholder proposals must be received.
By Order of the Board of Directors
/s/ Richard M. Adams
__________________________________
Richard M. Adams
Chairman of the Board and
Chief Executive Officer
15
<PAGE>
UNITED BANKSHARES, INC.
PROXY FOR 1997 ANNUAL SHAREHOLDERS' MEETING
Know all men by these presents that the undersigned shareholder(s) of United
Bankshares, Inc., Charleston, West Virginia, does hereby nominate, constitute,
and appoint Gary L. Ellis and Steven E. Wilson or either one of them, with full
power to act alone as the true and lawful attorneys for the undersigned with
full power of substitution for and in the name, place and stead of the
undersigned to vote all the common stock of United Bankshares, Inc., standing
in the undersigned's name on its books on April 1, 1997, at the 1997 Annual
Meeting of Shareholders to be held at the Blennerhassett Hotel, Fourth and
Market Streets, Parkersburg, West Virginia, on May 19, 1997 at 4:00 p.m., local
time or any adjournments thereof, with all the powers the undersigned would
possess if personally present as follows:
The undersigned acknowledges receipt of the Notice and Proxy Statement dated
April 11, 1997, and hereby revokes all proxies previously given by the
undersigned for said meeting.
THIS PROXY CONFERS AUTHORITY TO VOTE "FOR" THE PROPOSITIONS LISTED BELOW UNLESS
OTHERWISE INDICATED. THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE
PROPOSALS BELOW. IF ANY MATTER SHALL PROPERLY COME BEFORE THE MEETING, OR ANY
ADJOURNMENTS THEREOF, THIS PROXY WILL BE VOTED ON SUCH MATTERS IN ACCORDANCE
WITH THE JUDGMENT OF THE ABOVE PROXIES, BASED UPON THE CONDITIONS THEN
PREVAILING AND ANY RECOMMENDATION OF THE BOARD OF DIRECTORS.
Unless a different allocation is indicated, the proxies will vote your total
cumulative vote ratably for the directors for whom you are voting unless
directed otherwise by the Board of Directors of United Bankshares, Inc.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF UNITED
BANKSHARES, INC. AND MAY BE REVOKED PRIOR TO ITS EXERCISE.
CONTINUED, AND TO BE MARKED, DATED AND SIGNED, ON THE OTHER SIDE. ALL JOINT
OWNERS MUST SIGN.
When signing as attorney, executor, administrator, trustee or guardian, please
give full title. If more than one trustee, all should sign.
- --------------------------------------------------------------------------------
(caret) FOLD AND DETACH HERE (caret)
[Large reversed type (white type on black box) "UBSI" appears here]
Annual Meeting
of
United Bankshares, Inc.
Monday, May 19, 1997 at 4:00 p.m.
The Blennerhassett Hotel
4th & Market Streets
Parkersburg, WV
<PAGE>
<TABLE>
<S> <C>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING TWENTY-THREE NOMINEES: Please mark
your votes as
indicated in
this sample [ X ]
1. Election of Directors Richard M. Adams, Douglass H. Adams, Robert G. Astorg, Thomas J. Blair, III,
FOR all WITHHOLD Harry L. Buch, R. Terry Butcher, John W. Dudley, H. Smoot Fahlgren, Theodore J.
nominees listed AUTHORITY
(except as marked to to vote for all Georgelas, C. E. Goodwin, F. T. Graff, Jr., Andrew T. Houvouras, Russell L.
the contrary below) nominees listed
Isaacs, Robert P. McLean, G. Ogden Nutting, William C. Pitt, III, I. N. Smith, Jr.,
[ ] [ ]
Charles E. Stealey, Warren A. Thornhill, III, William W. Wagner, Harold L. Wilkes,
2. To transact other business that may
properly come before the meeting. P. Clinton Winter, Jr. and James W. Word, Jr. as directors.
FOR AGAINST ABSTAIN
[ ] [ ] [ ] IF YOU WISH TO WITHHOLD YOUR VOTE FOR ANY OF THE ABOVE NOMINEES, SO INDICATE BY
STRIKING THE NAME OF THE NOMINEE.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE
MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR
PROPOSALS 1 AND 2.
Dated: ________________________________________, 1997
_____________________________________________________
By: _________________________________________________
(Signature or Signatures)
PLEASE SIGN, DATE AND PROMPTLY RETURN
THIS PROXY IN THE ENCLOSED ENVELOPE
</TABLE>
"PLEASE MARK INSIDE BOXES SO THAT DATA PROCESSING EQUIPMENT WILL
RECORD YOUR VOTES"
- --------------------------------------------------------------------------------
(caret) FOLD AND DETACH HERE (caret)
========================================================================
Your vote is IMPORTANT
Please complete, date and sign the above
proxy card and return it promptly
in the accompanying envelope.
========================================================================
[United Bankshares, Inc. Logo]
THE CHALLENGE TO BE THE BEST NEVER ENDS
