SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant (X)
Filed by a Party other than the Registrant ( )
Check the appropriate box:
( ) Preliminary Proxy Statement ( ) Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
(X) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
UNITED BANKSHARES, INC.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
(X) No fee required
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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5) Total fee paid:
( ) Fee paid previously with preliminary materials.
( ) Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule, or Registration Statement No.:
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4) Date Filed:
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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 1998 ANNUAL MEETING OF SHAREHOLDERS
TO THE SHAREHOLDERS:
NOTICE IS HEREBY GIVEN that, pursuant to the call of its Board of
Directors, the 1998 Annual Meeting of Shareholders of UNITED BANKSHARES, INC.
("United") will be held at The University of Charleston, 2300 MacCorkle Avenue,
S.E., Charleston, West Virginia, on May 18, 1998, at 4:00 p.m., local time, for
the purpose of considering and voting upon the following matters:
1. To elect twenty-one (21) 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 March 31, 1998, 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 7, 1998
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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
1998 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 18, 1998
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
1998 Annual Meeting of Shareholders (the "1998 Annual Meeting") to be held May
18, 1998.
A proxy for use by the shareholders of United in connection with the 1998
Annual Meeting accompanies this Proxy Statement, which is being mailed to the
shareholders of United on or about April 7, 1998. 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-one (21) 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 1998 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 1998
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 1998
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 March 10, 1998, 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 $3,500,
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 March 31, 1998,
are entitled to notice of and to vote at the 1998 Annual Meeting. On that date,
there were 30,029,330 shares of the common stock of United issued and
outstanding, net of treasury shares, which shares were held by approximately
5,225 shareholders.
Each shareholder is entitled to one vote for each share owned on each
matter brought before the 1998 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-one (21), as
proposed by the current Board of Directors of United, each shareholder of United
has the right to cast twenty-one (21) 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-one (21) 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
QUARTERLY COMMON STOCK PRICES AND DIVIDENDS..................................1
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........................................11
Employee Benefit Plans..............................................12
Compensation Committee Interlocks and Insider Participation.........14
Transactions with Management and Others.............................14
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE......................15
INDEPENDENT AUDITORS.........................................................15
SHAREHOLDER PROPOSALS FOR 1999 ANNUAL MEETING................................15
AUDITED FINANCIAL STATEMENTS
See separate report accompanying this proxy statement
FORM 10-K
A copy of the 1997 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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QUARTERLY COMMON STOCK PRICES AND DIVIDENDS
Dividends
Per Share High Low
--------- ---- ---
1997
----
Fourth Quarter $0.18 $24.38 $21.80
Third Quarter $0.17 $23.63 $19.13
Second Quarter $0.17 $21.25 $17.19
First Quarter $0.16 $17.44 $16.13
1996
----
Fourth Quarter $0.16 $16.50 $14.63
Third Quarter $0.16 $15.13 $13.13
Second Quarter $0.15 $14.88 $13.38
First Quarter $0.15 $15.00 $14.25
RECENT DEVELOPMENTS
On February 18, 1998 United Bankshares, Inc. ("United") and Fed One
Bancorp, Inc. ("Fed One") of Wheeling, West Virginia, signed a definitive
agreement whereby Fed One will merge with UBC Holding Company, Inc., a
wholly-owned subsidiary of United. United will exchange 1.50 shares, as
adjusted for the 100% stock dividend, of United common stock for each of the
approximate 2,373,181 shares of Fed One common stock outstanding. The
transaction will be accounted for using the pooling of interests method of
accounting. It is anticipated that the proposed merger will be consummated early
during the fourth quarter of 1998. Consummation of the transaction is subject to
approval of the shareholders of Fed One, the approval of an articles amendment
to increase United's authorized shares by United's shareholders, and the receipt
of all required regulatory approvals, as well as other customary conditions.
Fed One, with assets of approximately $367 million as of December 31,
1997, and its wholly-owned banking subsidiary, Fed One Bank, have twelve offices
in the northern panhandle of West Virginia and in adjacent Ohio. Upon completion
of the merger, it is anticipated that Fed One Bank will be merged with United's
lead banking subsidiary, United National Bank.
On March 9, 1998, both United and George Mason Bankshares, Inc.
("George Mason") held Special Meetings of Shareholders. George Mason
shareholders were asked to consider and vote upon the Agreement and Plan of
Merger dated September 10, 1997, and as amended December 10, 1997, between
George Mason and United whereby George Mason Holding Company, a wholly-owned
subsidiary of United would merge with and into George Mason pursuant to which
George Mason would become a wholly-owned subsidiary of United (the "George Mason
Merger"). United shareholders were asked to consider and vote upon two proposals
in connection with the Merger. The first proposal was to amend the articles of
incorporation of United to increase the number of authorized shares of common
stock, par value $2.50 per share, of United from 20,000,000 to 41,000,000
shares. The second was a proposal to approve the issuance of the shares of
United Common Stock to be issued in the merger. The respective shareholders of
both United and George Mason overwhelmingly approved their respective proposals.
No other matters came before either meeting or any adjournment or adjournments
thereof.
Effective April 2, 1998, George Mason merged with George Mason Holding
Company and became a wholly-owned subsidiary of United in accordance with the
terms and conditions of the Merger Agreement. For further details, see Note B to
the Consolidated Financial Statements.
In November 1997, United's Board of Directors approved a two-for-one
stock split effected in the form of a 100% stock dividend which was distributed
on March 27, 1998, to shareholders of record as of March 13, 1998. All
references to shares and per share data have been retroactively restated for the
effect of the dividend. For further details, see Note O to the Consolidated
Financial Statements.
1
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PROPOSALS FOR ANNUAL MEETING
INTRODUCTION
These proxy materials are being supplied in conjunction with the 1998
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-one (21) persons listed below have been
elected or appointed to serve as directors of United until the 1998 Annual
Meeting. The individuals identified below are the nominees for election at the
1998 Annual Meeting to serve until the 1999 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, 1998.
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, direct ownership includes options to purchase shares, Richard M.
Adams, who is an executive officer, 104,491 shares, Bernard H. Clineburg, who
became the President of United as a result of the George Mason Merger, 46,623
shares, and I. N. Smith, Jr., who is a United consultant and a former executive
officer, 10,506 shares. The options to purchase shares included in the direct
ownership of all executive officers as a group total 511,393.
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 51 years old.
He owns 527,478 shares of United directly and 184,140 shares indirectly, the
total of which represents 2.37 percent of the total outstanding shares of
United. Of the 184,140 shares indirectly owned by Mr. Adams, 51,180 shares are
in the Stevenson Trust over which he exercises voting power, 71,628 shares owned
by the members of his immediate family and 61,332 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, an executive officer, are brothers.
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
54 years old. He owns 25,066 shares of United directly and 1,450 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 a consulting engineer and the former
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 64 years old. He owns 239,090 shares of
United directly and 11,340 shares indirectly, the total of which represents less
than one percent of the total outstanding shares of United.
2
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HARRY L. BUCH, who is an Attorney at Law, and Partner with Bailey,
Riley, Buch & Harman, became a director in 1990. Mr. Buch is 67 years old. He
owns 12,126 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.
W. GASTON CAPERTON, III, who is the Director of the Institute on
Education and Government of the Teachers College at Columbia University, the
President of the Caperton Group and the former Governor of West Virginia, became
a director in 1997. Mr. Caperton is 58 years old. He owns 23,084 shares of
United indirectly which represents less than one percent of the total
outstanding shares of United.
BERNARD H. CLINEBURG, who is the President of United and Chairman of
the Board and Chief Executive Officer for United Bank and the former President
and Chief Executive Officer of George Mason Bankshares, Inc., became a director
of United on April 2, 1998, as a result of the George Mason Merger. Mr.
Clineburg is 49 years old. He owns 129,228 shares directly, including 67,790
owned shares jointly with his wife, which represents less than one percent of
the total shares outstanding.
C. BARRIE COOK, M.D., who is the Chairman of the Board of American
Medical Laboratories, Inc. and the former Chairman of the Board of George Mason
Bankshares, Inc., became a director of United on April 2, 1998, as a result of
the George Mason Merger. Dr. Cook is 73 years old. He owns 58,327 shares
directly, including 17,008 shares jointly with his wife and 29,085 shares
indirectly. Included in the 29,085 indirect shares are 28,688 shares held by his
wife individually and 397 shares held by the Fairfax Pathology Association Ltd.
Retirement Account for the benefit of Dr. Cook. The total of these shares
represents less than one percent of the total shares outstanding of United.
H. SMOOT FAHLGREN, who is Chairman and former Chief Executive Officer
of Fahlgren, Inc., became a director in 1984. Mr. Fahlgren is 67 years old. He
owns 299,900 shares of United directly which represents 1.00% of the total
outstanding shares of United. Mr. Fahlgren is Mr. Graff's father-in-law.
THEODORE J. GEORGELAS, who is the former Chairman of the Board of
United Bank and is, President of Georgelas and Sons, Inc., a commercial real
estate development company, and President and Chairman of the Board and Chief
Executive Officer of Sector Communications, Inc., a technology company, became a
director in 1990. Mr. Georgelas is 51 years old. He directly owns 87,914 shares
of United 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
58 years old. He owns 4,000 shares of United directly and 6,000 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.
WILLIAM A. HAZEL, who is the Chairman of the Board of William A. Hazel,
Inc., became a director of United on April 2, 1998, as a result of the George
Mason Merger. Mr. Hazel is 52 years old. He owns 60,490 shares directly which
represents less than one percent of the total outstanding shares of United.
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 65 years
old. He owns 41,916 shares of United directly which represents less than one
percent of the total outstanding shares of United.
ARTHUR KELLAR, who is the Chairman of the Board of EZ Communications,
Inc., became a director of United on April 2, 1998, as a result of the George
Mason Merger. Mr. Kellar is 74 years old. He owns 66,948 shares directly and
33,754 shares indirectly, the total of which represents less than one percent of
the total outstanding shares of United.
JOHN M. MCMAHON, who is Chairman of the Board of Miller & Long Co.,
Inc., became a director of United on April 2, 1998, as a result of the George
Mason Merger. Mr. McMahon is 57 years old. He owns 239,025 shares directly
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
is President of The Ogden Newspapers, Inc., became a director of United in 1986.
Mr. Nutting is 62 years old. He owns 652,656 shares of United indirectly which
represents 2.18 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 652,656 shares consisting of 41,904 shares held by Mr. Nutting as
co-trustee, and 554,752 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 56,000 shares.
WILLIAM C. PITT, III, who is a hotel and resort developer, became a
director of United in 1987. Mr. Pitt is 53 years old. He owns 10,000 shares of
United directly which represents less than one percent of the total outstanding
shares of United.
I. N. SMITH, JR., who is a consultant for United and the former
President of United, former Vice Chairman of UNB, and former President of UNB,
became a director in 1986. Mr. Smith is 65 years old. He owns 27,052 shares of
United directly and 442,700 shares indirectly, the total of which represents
1.56 percent of the total outstanding shares of United. Of the 442,700 shares
indirectly owned beneficially by Mr. Smith, 10,550 shares are owned by members
of his immediate family and 29,150 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 30,000 shares; Kanawha Company 112,000
shares; Roane Land Company 1,000 shares; Roxalana Land Company 150,000 shares;
and West Virginia Coal Land Company 110,000 shares.
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 69 years old. He
owns 263,394 shares of United directly and 184,060 shares indirectly, the total
of which represents 1.50 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 a former executive Vice President of United,
former 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 65 years old. He owns 534,076
shares of United directly which represents 1.78% of the total shares
outstanding 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 50 years old. He owns 251,930 shares of United directly and 123,024
shares indirectly , the total of which represents 1.25% of the total shares
outstanding of United. Of the 123,024 shares indirectly owned by Mr. Winter,
83,548 shares are held in trusts for Mr. Winter's mother and children for which
Mr. Winter acts as executor and 36,800 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 383,796 shares or 1.28% 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 73 years old. He owns 63,486 shares of United directly and
59,616 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.
Pursuant to the Merger Agreement, dated September 10, 1997 and as
amended on December 10, 1997, between United and George Mason Bankshares, Inc.,
United agreed to take such action as was necessary to cause Bernard H.
Clineburg, C. Barrie Cook, M.D., William A. Hazel, Arthur Kellar and John M.
McMahon to be elected directors of United upon consummation of the Merger, for a
term which expires at the 1998 Annual Meeting of the Shareholders. In addition,
United agreed to include such persons as nominees for election as directors of
United at the 1998 Annual Meeting of Shareholders.
4
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All directors and executive officers of United as a group, 26 persons,
own 3,278,249 shares of United directly and 3,919,095 shares indirectly, the
total of which represents 23.98 percent of the total shares outstanding for
United. Included in indirectly owned shares is 2,207,544 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 and Gary L. Ellis.
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-one (21) 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 six times during 1997. The Board
reviews management reports and general corporate policy. During the calendar
year ended December 31, 1997, each director of United attended 75% or more 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 Thomas J. Blair,
III, W. Gaston Caperton, III, John W. Dudley, Andrew J. Houvouras and William C.
Pitt, III.
The Board has three standing committees--the Executive, Audit, and
Compensation Committees. The Audit Committee met four times in 1997 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, Jr. and James W. Word, Jr.
The Executive Committee met five times during 1997. 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 1997, the committee
consisted of Richard M. Adams, Chairman,, Thomas J. Blair, III, Harry L. Buch,
W. Gaston Caperton, III, H. Smoot Fahlgren, Theodore J. Georgelas, Russell L.
Isaacs, G. Ogden Nutting, William C. Pitt, III, I. N. Smith, Jr., Warren A.
Thornhill, III, William W. Wagner and F. T. Graff, Jr., who also serves as
Secretary for the Executive Committee.
5
<PAGE>
The Compensation Committee met one time during 1997. 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, Caperton 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.
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, 1998.
<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) 2,207,544 7.37%
514 Market Street, Parkersburg, WV 26101
(2,207,544 shares or 7.37% 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 2,207,544 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 NAMED EXECUTIVE OFFICERS
The following table sets forth certain information regarding the named
executives beneficial ownership of common stock of United as of February
28,1998:
<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 527,478 184,140 2.37%
Common Stock Gary L. Ellis 83,970 - 0.28%
Common Stock James B. Hayhurst, Jr. 90,626 7,868 0.33%
Common Stock Joe L. Wilson 77,276 13,720 0.30%
Common Stock Steven E. Wilson 115,008 8 0.38%
</TABLE>
(1) The amounts shown represent the total shares owned directly by such
named executive officers together with shares which are owned indirectly. The
direct shares include shares which are issuable upon the exercise of all stock
options currently exercisable. These individuals have the right to acquire the
shares indicated after their names, upon exercise of such stock options: Mr. R.
Adams, 208,382; Mr. Ellis, 72,112; Mr. Hayhurst, 69,140; Mr. J. Wilson, 59,012;
and Mr. S. Wilson, 38,112. The indirect shares include 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 51 Chairman of the Chairman of the Board ,
Board & Chief Chief Executive Officer &
Executive Officer- President-United; Chairman of
United; Chairman of the Board and Chief
the Board & Chief Executive Officer-UNB
Executive Officer-UNB
Douglass H. Adams 59 Executive Vice- Executive Vice-President-
President & Director- United; President, Vienna
United; Executive Vice- Office, UNB; Executive Vice-
President - UNB President - UNB
Bernard H. Clineburg 49 President & Director- President and Chief Executive
United; Chairman of Officer - George Mason
the Board and Chief Bankshares, Inc.; President
Executive Officer- and Chief Executive Officer-
United Bank (1) George Mason Bank
Gary L. Ellis 56 Executive Vice- Executive Vice-President
President-United; United; President-UNB
President and
Director - UNB
James B. Hayhurst, Jr. 51 Executive Vice- Executive Vice-President-
President - United; United; Executive Vice-
Executive Vice President - UNB; President
President - UNB UNB Wood County Offices
Joe L. Wilson 49 Executive Vice- Executive Vice-President,
President-United; United; Executive Vice
Executive Vice- President - UNB
President - UNB
Steven E. Wilson 49 Executive Vice- Executive Vice-President, Chief
President, Chief Financial Officer, Secretary and
Financial Officer, Treasurer -United; Executive Vice
Secretary and President, Chief Financial
Treasurer-United; Officer, Treasurer and
Executive Vice- Secretary - UNB
President, Chief
Financial Officer,
Treasurer and
Secretary - UNB
</TABLE>
(1) Mr. Clineburg's current positions became effective on April 2, 1998, as a
result of the George Mason Merger. Also effective at the time of the
merger, Mr. Clineburg became a member of United's Executive Committee.
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 51 has served the company for 29 years; 23 of those years
he has been responsible for motivating and building the organization.
United's stock price over the past 23 years of the current
administration has moved from $3.00 per share to a high of $49.75 per share for
an average annualized increase of 68%. 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 $1.35 cents per
share or at a 49% 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, 1997,
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.
UNITED BANKSHARES, INC.
Total Return Analysis
[GRAPH APPEARS HERE--SEE PLOT POINTS BELOW]
NASDAQ S&P
UBSI OTC MIDCAP
------- ------- -------
1992 $100.000 $100.000 $100.000
1993 136.514 129.366 111.722
1994 130.206 130.800 105.537
1995 165.517 189.413 135.684
1996 194.702 238.954 159.190
1997 290.907 390.899 234.429
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 1997 $357,679 $140,400 28,000 $6,081 (2)
& Chief Executive Officer 1996 342,000 156,000 25,428 5,968
1995 313,500 147,000 25,428 5,910
Gary L. Ellis Executive Vice President 1997 161,713 43,200 12,000 5,221 (2)
1996 157,200 48,000 12,056 5,153
1995 150,013 33,750 12,056 4,607
Steven E. Wilson Executive Vice President 1997 167,730 43,200 14,000 5,253 (2)
Chief Financial Officer 1996 148,333 48,000 12,056 4,941
Secretary & Treasurer 1995 136,250 42,000 12,056 4,468
James B. Hayhurst, Jr. Executive Vice President 1997 148,594 31,500 10,000 8,169 (2)
Joe L. Wilson Executive Vice President 1997 137,222 21,600 8,000 4,008 (2)
</TABLE>
(1) The aggregate value of all perquisites and other personal benefits did not
exceed either $50,000 or 10% of the total annual salary and bonus reported
for the named executive officers; therefore, no disclosure has been made.
(2) The amounts included in "All Other Compensation" consist of United's
contributions on behalf of the listed officers to the 401(K) Plan.
STOCK OPTION GRANTS TABLE
The following table sets forth information concerning individual grants
of options to purchase the Company's Common Stock made to the named executives
in 1997.
<TABLE>
<CAPTION>
Stock Option Grants in Last Fiscal Year
------------------------------------------------------------------------------------------
Potential Realizable Value
at Assumed Annual Rates
of Stock Price Appreciation
Individual Grants for Option Term
------------------------------------------------------------- ---------------------------
Number of
Securities % of Total
Underlying Options Granted to Exercise or
Options All Employees in Base Price Expiration
Name Granted (#) Fiscal Year ($/Share) Date 5% ($) 10% ($)
- ---------------------- ----------- ------------------- ----------- ---------- ------- -------
<S><C>
Richard M. Adams 28,000 (1) 12.99% 22.00 11/14/2007 387,396 981,744
Gary L. Ellis 12,000 (1) 5.57% 22.00 11/14/2007 166,027 420,747
Steven E. Wilson 14,000 (1) 6.50% 22.00 11/14/2007 193,698 490,872
James B. Hayhurst, Jr. 10,000 (1) 4.64% 22.00 11/14/2007 138,356 350,623
Joe L .Wilson 8,000 (1) 3.71% 22.00 11/14/2007 110,685 280,498
</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 1997 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 15,000 250,313 145,786/47,072 1,583,686/900,476
Gary L. Ellis 0 0 51,070/21,042 613,797/398,877
Steven E. Wilson 8,000 45,500 15,070/23,042 225,297/442,877
James B. Hayhurst, Jr. 7,500 122,875 52,380/16,760 545,513/320,813
Joe L. Wilson 0 0 45,260/13,754 480,635/261,795
</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 1997, the Board
extended Mr. Adams' contract to initiate a new five year term expiring on March
31, 2003. The contract provides for a base compensation of $410,000 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., the now former 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. In June of 1997, Mr. Smith retired from United. 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 until he
reaches age 70, and $30,000 thereafter. The agreement also contains a provision
which addresses the death of Mr. Smith. In addition, Mr. Smith has agreed to
serve as a director of United and United has agreed to use its best efforts to
nominate and elect him.
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.
11
<PAGE>
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, 1997, are as follows: Mr. Adams 29 years; Mr. Ellis 16 years; Mr.
Hayhurst 26 years; Mr. J. Wilson 27 years; Mr. S. Wilson 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.
13
<PAGE>
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 1997 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 1997.
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, was
party to certain loans made to him and his related businesses, in the normal
course of business, by UNB. The largest aggregate amount of indebtedness
outstanding on those loans during 1997 was approximately $2,135,000. Subsequent
to year end Mr. Blair has paid off these loans. One such loan, which was
acquired as a result of the Eagle Bancorp, Inc. merger, with a principal balance
of approximately $140,000 and an interest rate of 7.50% had been classified as
nonaccrual by UNB. Also, the loan, which Mr. Blair had been paying as agreed
under a modified payment plan, was categorized as impaired and has been included
in such category in United's 1997 Annual Report to Shareholders. Additionally,
Mr. Blair had entered into an agreement dated September 17, 1996, with UNB,
whereby he, as principal to two other loans with a total principal amount of
approximately $1,960,000 and an interest rate of 9.50%, had pledged 144,420
shares of United common stock as a security interest. The stock was 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 was necessary,
to satisfy the quarterly principal and interest requirements of those two
obligations. In accordance with the agreement, UNB applied quarterly dividends
when received, at its sole discretion, against either or both of the two
obligations. Such payments commenced on November 17, 1996, and would have
continued on a quarterly basis, through and until November 17, 1999, when all
accrued interest, unpaid principal and any other sum owing would have been due
and payable in full. The key assumptions utilized in reaching the agreement were
that United's stock price and market interest rate would remain at the September
17, 1996 level. The timing of the sales must comply with applicable securities
laws. Mr. Blair complied with all aspects of the agreement. These two loans with
a combined principal balance of approximately $1,910,000 as of February 28,
1998, have also been paid off by Mr. Blair. However, these loans have been
categorized as impaired by UNB as of year end 1997.
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 1997, payment for the advertising by United to Fahlgren, Inc.
was less than 5% of that firm's revenues during the year 1997.
14
<PAGE>
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 1997 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 1997.
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
1997 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 1997.
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 1997
all such reports were filed on a timely basis, except for Director W. Gaston
Caperton. Mr. Caperton did not file one report involving two transactions.
Mr. Caperton became a director in 1997 and did not report his initial beneficial
ownership of securities registered in the names of his children in which Mr.
Caperton has the power to exercise sole voting authority. Mr. Caperton
subsequently reported the information on an amended June 1997 Form 3 in February
of 1998.
INDEPENDENT AUDITORS
Ernst & Young LLP, Charleston, West Virginia, has served as the
independent auditors for United and its subsidiaries since 1986 and has been
selected by the Board of Directors to continue as the independent auditors 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 1999 ANNUAL MEETING
Presently, the next annual meeting of United shareholders is scheduled
for May 17, 1999. Any shareholder proposals to be presented at that 1999 Annual
Meeting must be received at the principal office of United no later than
November 14, 1998. If the scheduled date for the 1999 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 1998 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 March 31, 1998, at the 1998 Annual
Meeting of Shareholders to be held at The University of Charleston, 2300
MacCorkle Avenue, S.E., Charleston, West Virginia, on May 18, 1998 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 7, 1998, 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.
<PAGE>
(up arrow) FOLD AND DETACH HERE (up arrow)
[REVERSED OUT (WHITE ON BLACK) BULLET TYPE FOLLOWS]
------------------
U B S I
------------------
Annual Meeting
of
United Bankshares, Inc.
Monday, May 18, 1998 at 4:00 p.m.
The University of Charleston
2300 MacCorkle Avenue, S.E.
Charleston, WV
<PAGE>
<TABLE>
<CAPTION>
<S><C>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING TWENTY-ONE NOMINEES: Please mark
your votes as [X]
indicated in
this example
1. ELECTION OF DIRECTORS. Richard M. Adams, Robert G. Astorg, Thomas J. Blair, III, Harry L. Buch,
W. Gaston Caperton, III, Bernard H. Clineburg, C. Barrie Cook, M.D.,
H. Smoot Fahlgren, Theodore J. Georgelas, F.T. Graff, Jr., William A. Hazel,
FOR all WITHHOLD Russell L. Isaacs, Arthur Kellar, John M. McMahon, G. Ogden Nutting,
nominees listed AUTHORITY William C. Pitt, III, I. N. Smith, Jr., Warren A. Thornhill, III, William W.
(except as marked to to vote for all Wagner, P. Clinton Winter, Jr. and James W. Word, Jr. as directors.
the contrary at right) nominees listed
|_| |_| IF YOU WISH TO WITHHOLD YOUR VOTE FOR ANY OF THE ABOVE NOMINEES, SO INDICATE
BY STRIKING THE NAME OF THE NOMINEE.
____________________________________________________________________________
2. TO TRANSACT OTHER BUSINESS THAT
MAY PROPERLY COME BEFORE THE
MEETING.
FOR AGAINST ABSTAIN
|_| |_| |_|
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 . . . . . . . . . . . . . . . . , 1998
|
| . . . . . . . . . . . . . . . . . . . . . . .
|
| 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"
- --------------------------------------------------------------------------------
(up arrow) FOLD AND DETACH HERE (up arrow)
======================================================================
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
