<PAGE>
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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 Rule 14a-11(c) or Rule 14a-12
Fed One Bancorp, Inc.
------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies: _______
(2) Aggregate number of securities to which transaction applies: __________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on
which the filing fee is calculated and state how it was
determined): __________________________________________________________
(4) Proposed maximum aggregate value of transaction: ______________________
(5) Total fee paid: _______________________________________________________
/ / 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.: _________________________
(3) Filing party: _________________________________________________________
(4) Date filed: ___________________________________________________________
<PAGE>
March 25, 1998
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders of
Fed One Bancorp, Inc. The meeting will be held at the Company's corporate
headquarters located at 21 Twelfth Street, Wheeling, West Virginia 26003, on
Wednesday, April 22, 1998 at 10:00 a.m., Eastern Time. The matters to be
considered by shareholders at the Annual Meeting are described in the
accompanying materials.
It is very important that you be represented at the Annual Meeting
regardless of the number of shares you own or whether you are able to attend
the meeting in person. We urge you to mark, sign and date your proxy card
today and return it in the envelope provided, even if you plan to attend the
Annual Meeting. This will not prevent you from voting in person, but will
ensure that your vote is counted if you are unable to attend.
We appreciate your support and interest in Fed One Bancorp, Inc.
SINCERELY,
Alan E. Groover
Chairman, President and
Chief Executive Officer
<PAGE>
FED ONE BANCORP, INC.
21 Twelfth Street
Wheeling, West Virginia 26003
(304) 234-1100
---------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held on April 22, 1998
---------------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders ("Annual
Meeting") of Fed One Bancorp, Inc. (the "Company") will be held at the
Company's corporate headquarters located at 21 Twelfth Street, Wheeling, West
Virginia 26003, on Wednesday, April 22, 1998 at 10:00 a.m., Eastern Time, for
the following purposes, all of which are more completely set forth in the
accompanying Proxy Statement:
(1) To elect four (4) directors for a three-year term and until their
successors are elected and qualified;
(2) To ratify the appointment by the Board of Directors of KPMG Peat
Marwick LLP as the Company's independent auditors for the year ending
December 31, 1998; and
(3) To transact such other business as may properly come before the
meeting or any adjournment thereof. Management is not aware of any other such
business.
The Board of Directors has fixed March 6, 1998 as the voting record date
for the determination of shareholders entitled to notice of and to vote at
the Annual Meeting and at any adjournment thereof. Only those shareholders of
record as of the close of business on that date will be entitled to vote at
the Annual Meeting or at any such adjournment.
By Order of the Board of Directors
Jean E. Huff
Corporate Secretary
Wheeling, West Virginia
March 25, 1998
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING. IT IS IMPORTANT
THAT YOUR SHARES BE REPRESENTED REGARDLESS OF THE NUMBER YOU OWN. EVEN IF YOU
PLAN TO BE PRESENT, YOU ARE URGED TO COMPLETE, SIGN, DATE AND RETURN THE
ENCLOSED PROXY PROMPTLY IN THE ENVELOPE PROVIDED. IF YOU ATTEND THE MEETING,
YOU MAY VOTE EITHER IN PERSON OR BY PROXY. ANY PROXY GIVEN MAY BE REVOKED BY
YOU IN WRITING OR IN PERSON AT ANY TIME PRIOR TO THE EXERCISE THEREOF.
<PAGE>
PROXY STATEMENT
---------------
FED ONE BANCORP, INC.
21 Twelfth Street
Wheeling, West Virginia 26003
---------------
1998 ANNUAL MEETING OF SHAREHOLDERS
APRIL 22, 1998
This Proxy Statement is furnished to holders of common stock, $.10 par
value per share ("Common Stock"), of Fed One Bancorp, Inc. (the "Company"), a
Delaware corporation which acquired all of the outstanding stock of Fed One
Bank (the "Bank") in connection with the conversion of Fed One Bancorp,
M.H.C. and the reorganization of the Bank to the holding company form of
organization in January 1995 (the "Conversion and Reorganization"). Proxies
are being solicited on behalf of the Board of Directors of the Company to be
used at the Annual Meeting of Shareholders ("Annual Meeting") to be held at
the Company's corporate headquarters located at 21 Twelfth Street, Wheeling,
West Virginia 26003, on Wednesday, April 22, 1998 at 10:00 a.m., Eastern
Time, and at any adjournment thereof for the purposes set forth in the Notice
of Annual Meeting of Shareholders. This Proxy Statement is first being mailed
to shareholders on or about March 25, 1998.
The proxy solicited hereby, if properly signed and returned to the
Company and not revoked prior to its use, will be voted in accordance with
the instructions contained therein. If no contrary instructions are given,
each proxy received will be voted for the nominees for director described
herein and for the matters described below and, upon the transaction of such
other business as may properly come before the meeting, in accordance with
the best judgment of the persons appointed as proxies. Any shareholder giving
a proxy has the power to revoke it at any time before it is exercised by (i)
filing with the Secretary of the Company written notice thereof (Jean E.
Huff, Corporate Secretary, Fed One Bancorp, Inc., 21 Twelfth Street,
Wheeling, West Virginia 26003); (ii) submitting a duly-executed proxy bearing
a later date; or (iii) appearing at the Annual Meeting and giving the
Secretary notice of his or her intention to vote in person. Proxies solicited
hereby may be exercised only at the Annual Meeting and any adjournment
thereof and will not be used for any other meeting.
<PAGE>
VOTING
Only shareholders of record at the close of business on March 6, 1998
(the "Voting Record Date") will be entitled to vote at the Annual Meeting. On
the Voting Record Date, there were 2,377,879 shares of Common Stock issued
and outstanding and the Company had no other class of equity securities
outstanding. Each share of Common Stock is entitled to one vote at the Annual
Meeting on all matters properly presented at the meeting.
The presence in person or by proxy of at least a majority of the
outstanding shares of Common Stock entitled to vote is necessary to
constitute a quorum at the Annual Meeting. Directors are elected by a
plurality of the votes cast at the Annual Meeting. The affirmative vote of
the holders of a majority of the total votes cast at the Annual Meeting is
required for approval of the proposal to ratify the appointment of the
Company's independent auditors.
Abstentions will be counted for purposes of determining the presence of a
quorum at the Annual Meeting. Because of the required votes, abstentions will
not be counted as votes cast for the election of directors and the proposal
to ratify the appointment of the Company's independent auditors and, thus,
will have no effect on the voting of these proposals. Under rules applicable
to broker-dealers, the election of directors and the proposal to ratify the
auditors are considered "discretionary" items upon which brokerage firms may
vote in their discretion on behalf of their clients if such clients have not
furnished voting instructions and, thus, there will be no "broker non-votes"
at the Annual Meeting.
2
<PAGE>
INFORMATION WITH RESPECT TO NOMINEES FOR DIRECTOR,
DIRECTORS WHOSE TERMS CONTINUE AND EXECUTIVE OFFICERS
ELECTION OF DIRECTORS
The Certificate of Incorporation and Bylaws of the Company provide that
the Board of Directors of the Company shall be divided into three classes as
nearly equal in number as possible, and that the members of each class are to
be elected for a term of three years and until their successors are elected
and qualified. One class of directors is to be elected annually, and
shareholders of the Company are not permitted to cumulate their votes for the
election of directors.
No nominee for director is related to any other director or executive
officer of the Company by blood, marriage or adoption, except that Louis
Salvatori is the father of William Salvatori. All nominees currently serve as
directors of the Company.
Unless otherwise directed, each proxy executed and returned by a
shareholder will be voted for the election of the nominees for director
listed below. If any person named as nominee should be unable or unwilling to
stand for election at the time of the Annual Meeting, the proxies will vote
for any replacement nominee or nominees recommended by the Board of
Directors. At this time, the Board of Directors knows of no reason why any of
the nominees listed below may not be able to serve as a director if elected.
The following tables present information concerning the nominees for
director and each director whose term continues, including his tenure as a
director of the Company.
NOMINEES FOR DIRECTOR FOR THREE-YEAR TERM EXPIRING IN 2001
<TABLE>
<CAPTION>
POSITIONS HELD IN DIRECTOR
NAME AGE THE COMPANY SINCE (1)
- ------------------------------------- --- ------------------ -----------
<S> <C> <C> <C>
Danny C. Aderholt.................... 47 Director 1995
Louis Salvatori...................... 88 Director 1955
William Salvatori.................... 42 Director, Senior 1991
Vice President
Paul R. Turner....................... 47 Director 1997
</TABLE>
The Board of Directors recommends a vote FOR election of the nominees for
director.
3
<PAGE>
Members of the Board of Directors Continuing in Office
Directors With Terms Expiring in 1999
<TABLE>
<CAPTION>
POSITIONS HELD IN DIRECTOR
NAME AGE THE COMPANY SINCE (1)
- ------------------------------------- --- ------------------ -----------
<S> <C> <C> <C>
George J. Anetakis................... 63 Director 1992
George Margaretes.................... 69 Director 1988
Gareth F. Vorhees.................... 71 Director 1983
</TABLE>
Directors With Terms Expiring in 2000
<TABLE>
<CAPTION>
POSITIONS HELD IN DIRECTOR
NAME AGE THE COMPANY SINCE (1)
- ------------------------------------- --- ------------------ -----------
<S> <C> <C> <C>
Dudley E. Beck....................... 74 Director 1974
Alan E. Groover...................... 50 Chairman, President 1988
and Chief
Executive Officer
Gilbert R. Haller.................... 60 Director 1985
</TABLE>
- ------------------------
(1) Includes service as a director of the Bank and its predecessors.
Each of the directors of the Company is also director of the Bank. The
business experience of each of the directors for at least the past five years
is as follows:
Danny C. Aderholt was appointed to the Board in 1995. Mr. Aderholt is
President and Chief Executive Officer of Century Equities, Inc., a regional
investment banking firm located in Wheeling, West Virginia.
George J. Anetakis was elected to the Board of Directors in March 1992
and was appointed General Counsel to the Bank in July 1988. Mr. Anetakis is a
partner in the law firm of Frankovitch, Anetakis, Colantonio & Simon,
Weirton, West Virginia.
Dudley E. Beck has served as the Bank's Chairman of the Board since March
1991. Initially appointed to the Board of Directors in 1974, he served as
Vice Chairman from 1983 to 1991. Prior to his retirement, Mr. Beck held
executive management positions including General Manager of Halcyon Hills
Memorial Park, Business Manager of West Virginia Penitentiary, General
Manager of Grand Vue Park and County Commissioner for Marshall County, West
Virginia.
4
<PAGE>
Alan E. Groover serves as Chairman of the Board, President and Chief
Executive Officer of the Company. Mr. Groover has served as President and
Chief Executive Officer of the Bank since March 1990 and Director since 1988.
Prior to that time, Mr. Groover served as Executive Vice President and Chief
Operating Officer of the Bank.
Gilbert R. Haller was elected to the Board in 1985 and previously served
as a Board member with a predecessor institution. Mr. Haller is owner and
Chairman of the Board of Wheeling Office Supply, Wheeling, West Virginia.
George Margaretes was elected to the Board in 1988. He is retired and
formerly served as a real estate broker with Century 21, Shirley Vargo
Realty. Previously, he was owner of Century 21, George Margaretes, Inc.,
Wheeling, West Virginia.
Louis Salvatori was appointed to the Board in 1955 and prior to his
retirement served as President of the Bank from 1959 through 1989. Mr.
Salvatori remains as a consultant to the Bank. Mr. Salvatori is the father of
William Salvatori.
William Salvatori was elected to the Board in 1991 having previously
served as an Advisory Board Member since 1988. He serves as Senior Vice
President of the Company and the Bank and joined the Bank in 1977. Mr.
Salvatori is the son of Louis Salvatori.
Paul R. Turner was appointed to the Board in May 1997. Mr. Turner is the
President of Acordia of West Virginia/Wheeling, an insurance brokerage firm
located in Wheeling, West Virginia.
Gareth F. Vorhees was appointed to the Board in 1983 having previously
served as a Director with a predecessor institution. Prior to his retirement,
Mr. Vorhees served as Vice President of Programming with WTRF-TV and held
executive positions with the company for over 33 years.
SHAREHOLDER NOMINATIONS
Article IV, Section 4.15 of the Company's Bylaws governs nominations for
election to the Board and requires all such nominations, other than those
made by the Board, to be made at a meeting of shareholders called for the
election of directors, and only by a shareholder who has complied with the
notice provisions in that section. Shareholder nominations must be made
pursuant to timely notice in writing to the Secretary of the Company. To be
timely, a shareholder's notice must be delivered to, or mailed and received
at, the principal executive offices of the Company not later than (i) with
respect to an election to be held at an annual meeting of shareholders, 90
days prior to the anniversary date of the mailing of proxy materials by the
Company for the immediately preceding annual meeting, and (ii) with respect
to an election to be held at a special meeting of shareholders for the
election of directors, the close of business on the tenth day following the
date on which notice of such meeting is first given to shareholders.
5
<PAGE>
Each written notice of a shareholder nomination shall set forth: (a) the
name and address of the shareholder who intends to make the nomination and of
the person or persons to be nominated; (b) a representation that the
shareholder is a holder of record of stock of the Company entitled to vote at
such meeting and intends to appear in person or by proxy at the meeting to
nominate the person or persons specified in the notice; (c) a description of
all arrangements or understandings between the shareholder and each nominee
and any other person or persons (naming such person or persons) pursuant to
which the nomination or nominations are to be made by the shareholder; (d)
such other information regarding each nominee proposed by such shareholder as
would be required to be included in a proxy statement filed pursuant to the
proxy rules of the Securities and Exchange Commission; and (e) the consent of
each nominee to serve as a director of the Company if so elected. The
chairman of the meeting may refuse to acknowledge the nomination of any
person not made in compliance with the foregoing procedures. The Company did
not receive any nominations from shareholders for the Annual Meeting.
THE BOARD OF DIRECTORS AND ITS COMMITTEES
Regular meetings of the Board of Directors of the Company and the Bank
are held on a monthly basis. The Board of Directors of the Company held a
total of 14 regular and special meetings during the year ended December 31,
1997. No incumbent director attended fewer than 75% of the aggregate total
number of meetings of the Board of Directors held during the year ended
December 31, 1997, and the total number of meetings held by all committees on
which he served during such year. The Boards of Directors of the Company and
the Bank have established several committees, including an Executive
Committee, an Audit Committee, a Compensation Committee and a Nominating
Committee.
The Executive Committee consists of Messrs. Beck, Groover, Margaretes
and Louis Salvatori. The Executive Committee has the authority to exercise
powers of the Board of Directors in the intervals between meetings of the
Board and meets as necessary to oversee the business of the Company and the
Bank. The Executive Committee met four times in 1997.
The Audit Committee consists of the full Board excluding Alan E. Groover
and William Salvatori. The Audit Committee met three times in 1997. The Audit
Committee is responsible for overseeing the internal and external audit
functions of the Company and the Bank. The internal auditor reports directly
to the Committee on internal audit findings and activities. The Committee
reviews and approves the Company's and the Bank's external audit and meets
with the independent auditors regarding the results of their auditing
procedures. In addition to internal and external audit findings, the Board
reviews all regulatory examination reports and meets with regulatory
officials as necessary.
The Compensation Committee consists of Messrs. Beck, Anetakis,
Margaretes and Louis Salvatori. The Committee is responsible for determining
the compensation of the
6
<PAGE>
President and Chief Executive Officer and other executive officers and met
two times in 1997.
The Nominating Committee consists of the full Board of Directors and is
authorized to select management nominees for election as directors. The
Nominating Committee met one time in 1997.
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
The following sets forth certain information with respect to the
executive officers of the Company and the Bank who are not directors,
including their business experience for at least the past five years.
Lisa K. DiCarlo, Senior Vice President and Treasurer of the Company, has
been Senior Vice President and Treasurer of the Bank since April 1992 and
prior thereto was Vice President and Treasurer of the Bank. She has been with
the Bank since 1985.
Tina A. Silvis, Senior Vice President of the Company, has served as
Senior Vice President of the Bank since April 1992, was Vice President from
January 1990 to March 1992 and prior thereto was Assistant Vice President of
the Bank. She has been with the Bank since 1988.
7
<PAGE>
BENEFICIAL OWNERSHIP OF COMMON STOCK
BY CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table includes, as of the Voting Record Date, certain
information as to the Common Stock beneficially owned by (i) the only persons
or entities, including any "group" as that term is used in Section 13(d)(3)
of the Securities Exchange Act of 1934, as amended ("1934 Act"), who or which
was known to the Company to be the beneficial owner of more than 5% of the
issued and outstanding Common Stock, (ii) the directors of the Company and
(iii) all directors and executive officers of the Company and the Bank as a
group.
<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY
NAME OF OWNED AS OF
BENEFICIAL OWNER MARCH 6,1998(1)
- ---------------- ----------------------
<S> <C> <C>
NO. %
United Bankshares, Inc.
300 United Center
500 Virginia Street, East
Charleston, West Virginia 25301.................. 493,800(2) 17.3%
Directors:
Danny C.Aderholt................................. 24,905(3) 1.0%
George J. Anetakis............................... 21,767(4) 0.9
Dudley E. Beck................................... 22,188(5) 0.9
Alan E. Groover.................................. 103,001(6) 4.3
Gilbert R. Haller................................ 36,660(7) 1.5
George Margaretes................................ 7,174(8) 0.3
Louis Salvatori.................................. 43,632(9) 1.8
William Salvatori................................ 44,324(10) 1.9
Paul R. Turner................................... 1,677(11) 0.1
Gareth F. Vorhees................................ 4,662(12) 0.2
All directors and executive officers
of the Company and the Bank as a
group (12 persons)............................... 375,384(13) 15.0
</TABLE>
- ------------------------
(1) For purposes of this table, pursuant to rules promulgated under the 1934
Act, an individual is considered to beneficially own shares of voting power,
which includes the power to vote or to direct the voting of the shares; or
(2) investment power, which includes the
8
<PAGE>
power to dispose or direct the disposition of the shares. Unless
otherwise indicated, a director has sole voting power and sole investment
power with respect to the indicated shares. Shares which are subject to
stock options which are exercisable within 60 days of the Voting Record
Date are deemed to be outstanding for the purpose of computing the
percentages of Common Stock beneficially owned by the respective
individuals and group.
(2) Includes 474,800 shares which may be acquired upon the occurrence of
certain triggering events pursuant a Stock Option Agreement dated
February 18, 1998 entered into between United Bankshares, Inc. ("United")
and the Company in connection with an Agreement and Plan of Merger dated
February 18, 1998 entered into by the parties pursuant to which the
Company will be acquired by United.
(3) Includes 3,224 shares which may be acquired upon the exercise of stock
options exercisable within 60 days of the Voting Record Date.
(4) Includes 6,040 shares which may be acquired upon the exercise of stock
options exercisable within 60 days of the Voting Record Date. Also includes
1,661 shares held by Mr. Anetakis' wife; Mr. Anetakis disclaims beneficial
ownership of such shares.
(5) Includes 4,364 shares which may be acquired upon the exercise of stock
options exercisable within 60 days of the Voting Record Date. Also includes
4,406 shares held by Mr. Beck's wife; Mr. Beck disclaims beneficial
ownership of such shares.
(6) Includes 34,353 shares held jointly with Mr. Groover's wife, with whom
voting and dispositive power is shared, 39,751 shares which may be acquired
upon the exercise of stock options exercisable within 60 days of the Voting
Record Date, 9,674 shares held in a Recognition and Retention Plan and Trust
of the Company ("RRP"), which may be voted by him pending vesting and
distribution and 1,947 shares allocated to Mr. Groover's account in the
Company's Employee Stock Ownership Plan ("ESOP"). Also includes 7,314 shares
held by Mr. Groover's wife, who is an employee of the Bank, exercisable
stock options held by Ms. Groover to purchase 2,288 shares, 967 shares held
for Ms. Groover's account in the RRP and 392 shares allocated to Ms.
Groover's account in the ESOP. Mr. Groover disclaims beneficial ownership of
the shares held by his wife.
(7) Includes 21,607 shares held jointly with Mr. Haller's wife, with whom voting
and dispositive power is shared and 6,769 shares which may be acquired upon
the exercise of stock options exercisable within 60 days of the Voting
Record Date. Also includes 4,132 shares held by Mr. Haller's wife; Mr.
Haller disclaims beneficial ownership of such shares.
9
<PAGE>
(8) Includes 1,290 shares which may be acquired upon the exercise of stock
options exercisable within 60 days of the Voting Record Date.
(9) Includes 38,484 shares held jointly with Mr. Salvatori's wife and children,
with whom voting and dispositive power is shared, and 5,148 shares which may
be acquired upon the exercise of stock options exercisable within 60 days of
the Voting Record Date.
(10)Includes 12,176 shares held jointly with Mr. Salvatori's father, spouse or
brother, with whom voting and dispositive power is shared, 2,692 shares held
in a partnership that Mr. Salvatori is a partner, 15,455 shares which may be
acquired upon the exercise of stock options exercisable within 60 days of
the Voting Record Date, 4,441 shares held in the RRP, which may be voted by
him pending vesting and ESOP and 591 shares held by Mr. Salvatori's
children.
(11)Includes 1,177 shares held jointly with Mr. Turner's wife, with whom voting
and dispositive power is shared, and 500 shares which may be acquired upon
the exercise of stock options exercisable within 60 days of the Voting
Record Date.
(12)Includes 1,423 shares which may be acquired upon the exercise of stock
options exercisable within 60 days of the Voting Record Date.
(13)Includes 133,066 shares which may be acquired by all directors and
executive officers as a group upon the exercise of stock options exercisable
within 60 days of the Voting Record Date, 23,964 shares held in the RRP on
behalf of all directors and executive officers as a group, which may be
voted by such individuals pending vesting and distribution and 6,131 shares
held in the ESOP for the account of all directors and executive officers as
a group.
10
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY
The following table sets forth a summary of certain information
concerning the compensation awarded to or paid by the Company for services
rendered in all capacities during the last three fiscal years to the Chief
Executive Officer of the Company. No other executive officer had total
compensation during the last fiscal year which exceeded $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION
-------------------------------------- -------------------
AWARDS
OTHER ------------------- ALL
NAME AND ANNUAL STOCK OTHER
PRINCIPAL POSITION YEAR SALARY(1) BONUS COMPENSATION (2) GRANTS OPTIONS COMPENSATION
- -------------------------- ---- ---------- --------- ---------------- --------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Alan E. Groover 1997 $ 183,596 $ 32,100 $ 0 $ 0 0 $ 29,370(4)
Chairman, President and 1996 171,562 30,050 0 0 10,000 15,876
Chief Executive Officer 1995 157,285 24,850 0 201,550(3) 25,750 14,757
</TABLE>
- ------------------------
(1) Includes Directors' fees.
(2) Does not include amounts attributable to miscellaneous benefits received by
executive officers, including the use of Company-owned automobiles. In the
opinion of management of the Company the costs to the Company of providing
such benefits to any individual executive officer during the year ended
December 31, 1997 did not exceed the lesser of $50,000 or 10% of the total
of annual salary and bonus reported for the individual.
(3) Represents the grant of 16,124 shares of restricted Common Stock in 1995
pursuant to the 1995 RRP, which had a fair market value of $434,410 at
December 31, 1997. The restricted stock awarded vests over five years, 20%
per year from the date of grant.
(4) For 1997, includes $19,552, which represents the fair market value of 711
shares of Common Stock allocated to Mr. Groover's account pursuant to the
Company's ESOP and $9,818 allocated to Mr. Groover under the Company's
Excess Benefit Plan.
11
<PAGE>
STOCK OPTIONS
The following table sets forth certain information concerning exercises of
stock options granted pursuant to the Company's stock option plans by the named
executive officer during the year ended December 31, 1997 and options held at
December 31, 1997.
Aggregated Option Exercise in Last Fiscal Year
and Year End Option Values
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
SHARES UNEXERCISED OPTIONS AT
ACQUIRED OPTIONS AT YEAR END YEAR END(1)
ON VALUE -------------------------- ----------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------ ----------- ------------------ ----------- ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Alan E. Groover........ 6,000 $ 103,687 32,601 23,450 $ 631,638 $ 330,750
</TABLE>
- ------------------------
(1) Based on a per share market price of $27.50 at December 31, 1997.
PENSION PLAN
The following table sets forth estimated annual benefits payable upon
retirement at age 65 to the named executive officers under the Company's defined
benefit pension plan ("Pension Plan") based upon various levels of compensation
and years of service.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
-----------------------------------------------------
REMUNERATION 10 15 20 25 30
- ------------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
$ 20,000.... $ 4,000 $ 6,000 $ 8,000 $ 10,000 $ 12,000
30,000.... 6,000 9,000 12,000 15,000 18,000
50,000.... 10,000 15,000 20,000 25,000 30,000
75,000.... 15,000 22,500 30,000 37,500 45,000
100,000.... 20,000 30,000 40,000 50,000 60,000
150,000.... 30,000 45,000 60,000 75,000 90,000
</TABLE>
The indicated amounts in the above table assume that participants elect the
normal retirement form of benefit.
Benefits are generally payable under the Pension Plan upon retirement at
age 65 based upon an average of an employee's five highest consecutive annual
amounts of base salary. The plan provides for an early retirement option with
reduced benefits for eligilbe participants who exceed 45 years of age.
Employee benefits vest 100% after 5 years of service. Benefits under the
Pension Plan are not offset by Social Security payments. Such amounts are
within 10% of the salary reported for the named individual in the Summary
Compensation Table above.
12
<PAGE>
At December 31, 1997, Mr. Groover had eleven years and eight months of
credited service under the Pension Plan.
SUPPLEMENTAL BENEFIT PLAN
The Board of Directors of the Company has authorized an excess benefit
plan ("EBP") to provide certain additional retirement benefits to Mr.
Groover. The EBP provides that Mr. Groover shall receive an annual allocation
of stock units representing shares of Common Stock of the Company. The number
of stock units allocable to his benefit each year shall be equal to the
difference between the allocation were made without giving effect to the
limitations on compensation and allocations imposed by Sections 401(a)(17),
414(g)(6) and 415 of the Internal Revenue Code of 1986 ("Code"), minus the
number of shares actually allocated to his ESOP account in a particular year.
The Company allocated $9,818 to the EBP on behalf of Mr. Groover's account
for 1997.
COMPENSATION OF DIRECTORS
BOARD FEES. Members of the Board of Directors of the Bank are entitled to
a retainer of $500, payable monthly. Members of the Executive Committee also
are entitled to a retainer of $250, payable monthly. The Bank paid a total of
$60,000 in directors' and committee fees during 1997. Mr. Groover has waived
his Executive Committee fees in past years, including 1997, and has advised
the Bank of his intention to continue to do so. Mr. Louis Salvatori has
waived his Directors' and Executive Committee fees in past years, including
1997, and has advised the Bank of his intention to continue to do so. Members
of the Board of Directors of the Company were not paid a separate fee in 1997.
DIRECTORS' STOCK OPTION PLANS. The Company maintains the 1992 Stock Plan
for Outside Directors ("Directors' Plan"), pursuant to which the Bank
previously granted stock options to non-employee directors of the Bank. The
maximum number of shares of Common Stock of the Company which may be issued
under the Directors' Plan is 23,738 shares, 17,980 of which had been issued
upon the exercise of stock options as of December 31, 1997. In October 1992,
the Bank granted options to purchase 23,738 shares to non-employee directors
of the Bank pursuant to the Directors' Plan at $4.47 per share. The share
amounts of options granted and the exercise price of the options have been
adjusted for the exchange in the Conversion and Reorganization.
The Company maintains the 1995 Stock Option Plan, pursuant to which the
Company grants stock options to non-employee directors pursuant to a formula
contained in the 1995 Option Plan. In April 1995, the Company granted options
to purchase 25,798 shares of Common Stock to non-employee directors of the
Company pursuant to the 1995 Option Plan at an exercise price of $12.50 per
share, 2,592 of which had been issued upon the exercise of stock options as
of December 31, 1997. In addition, options to purchase 3,225 shares of Common
Stock were granted to non-employee directors under the plan in April
13
<PAGE>
1996 and in April 1997 with an exercise price of $15.125 and $18.25 per
share, respectively. In addition, Mr. Turner was granted an option to
purchase 500 shares of Common Stock in May 1997 with an exercise price of
$18.875 per share.
COMPENSATION COMMITTEE
The Compensation Committee of the Board of Directors of the Company
determines executive compensation. During 1997, the members of the Committee
were Messrs. Anetakis, Beck, Margaretes and Louis Salvatori. No member of the
Committee is a current officer or employee of the Company or the Bank. Louis
Salvatori is a former President of the Bank. The report of the Committee with
respect to compensation for the Chief Executive Officer and all other
executive officers is set forth below.
REPORT OF THE COMPENSATION COMMITTEE
The goals of the Committee are to assist the Company in attracting and
retaining qualified management, motivating executives to achieve performance
goals, rewarding management for outstanding performance and to ensure that
the financial interests of the Company's management and shareholders are
satisfied.
The Committee considered several financial and non-financial
accomplishments in setting the compensation of the Chief Executive Officer
and other executive officers, including but not limited to, net income of the
Company, profitability ratios, satisfactory regulatory examinations, and
market value of the Company. In addition, other objectives such as loan and
deposit growth were reviewed. The Committee reviewed and considered the SNL
Executive Compensation Review for a comparison of compensation paid by the
Company's peer group.
The compensation set by the Committee includes a base salary and a bonus
component, based upon the Company's Incentive Compensation Plan, an annual
bonus plan. Based upon the above factors, the Committee extended the
employment agreement of Mr. Groover for an additional year pursuant to the
terms of the agreement, and maintained Mr. Groover's base compensation of
$180,000, and approved Mr. Groover's participation in the Bank's Incentive
Compensation Plan. In addition, the Committee provided for other executive
officers participation in the Company's Incentive Compensation Plan.
George J. Anetakis
Dudley E. Beck
George Margaretes
Louis Salvatori
14
<PAGE>
PERFORMANCE GRAPH
The following graph compares the yearly cumulative total return on the
Common Stock over the past five years with (i) the yearly cumulative total
return on the stocks included in the Standard and Poor's 500 Market Index and
(ii) the yearly cumulative total return on the stocks included in the SNL
Securities Thrift Stock Index. The return on the Common Stock prior to
January 1995 reflects the return on common stock of the Bank as adjusted for
the exchange of such stock for Common Stock of the Company in the Conversion
and Reorganization. All of these cumulative returns are computed assuming the
reinvestment of dividends at the frequency with which dividends were paid
during the applicable years.
GRAPH POINTS
<TABLE>
<CAPTION>
Period Ending
---------------------------------------------------------------
Index 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Fed One Bancorp..... 100.00 167.42 195.02 285.48 308.26 552.61
SNL All Thrifts..... 100.00 125.50 124.03 193.16 251.68 428.24
S&P 500............. 100.00 110.08 111.53 153.44 188.52 251.44
</TABLE>
15
<PAGE>
EMPLOYMENT AND SEVERANCE AGREEMENTS
The bank has entered into an employment agreement with Mr. Groover,
President and Chief Executive Officer. Under the terms of the employment
agreement, Mr. Groover is entitled to a base salary and fringe benefits
applicable to executive personnel. The agreement provides for a three-year
term and, subject to satisfactory performance reviews by the Board of
Directors or a committee designated by the Board, extends on each anniversary
date for an additional year. The agreement provides for termination by the
Bank for cause at any time. In the event that the Bank terminates Mr.
Groover's employment for reasons other than for cause, disability, retirement
or death, or if Mr. Groover terminates the agreement due to a material breach
by the Bank, or for good reason, as defined, following a change in control of
the Bank, than Mr. Groover will be entitled to a severance payment equal to
three times his average annual compensation for the last five years. A
"change in control" is generally defined for purposes of the agreement to
include the acquisition by a person or group of persons of beneficial
ownership of 20.0% or more of the Common Stock during the term of the
agreement or a tender offer or exchange offer, merger or other form of
business combination, sale of assets, or contested election of Directors
which results in a change of a majority of the Board of Directors. The
employment agreement with the Bank provides that if the payments and benefits
to be provided thereunder or otherwise upon termination of employment Section
280G of the Internal Revenue Code of 1986 (the "Code"), then such payments
and benefits payable thereunder shall be reduced, in the manner determined by
Mr. Groover, by the amount, if any, which is the minimum necessary to result
in no portion of the payments and benefits being non-deductible by the Bank
for federal income tax purposes.
The Company has also entered into an employment agreement with Mr.
Groover to serve on terms substantially similar to the agreement entered into
between him and the Bank, except as provided below. Mr. Groover's
compensation, benefits and expenses are paid by the Company and the Bank in
the same proportion as the time and services actually expended by Mr. Groover
on behalf of each company. The agreement with the Company provides that
severance payments to Mr. Groover upon a change of control shall be equal to
three times that portion of his base salary paid by the Company plus the
amounts not able to be paid by the Bank because of Section 280G of the Code.
The amounts payable to Mr. Groover by the Company in the event of a change in
control may constitute "parachute payments" under Section 280G of the Code,
and the amounts payable by the Company are not subject to reduction as are
the amounts payable by the Bank. In addition, the agreement with the Company
provides that the Company shall reimburse Mr. Groover for any resulting
excise taxes payable by him, plus such additional amount as may be necessary
to compensate him for the payment of state and federal income, excise and
other employment-related taxes on the additional payments.
16
<PAGE>
The Bank has entered into severance agreements with eight officers of the
Bank in order to assist the Bank in maintaining a stable and competent
management base. The agreements provide for a three-year term, and subject to
satisfactory performance reviews by the Board of Directors or a committee
designated by the Board, extends on each anniversary date for an additional
year so that the remaining term will be three years. The agreements provide
for severance payments upon a "change in control" of the Bank in an amount
ranging from one-half to one and one-half times the employee's annual
compensation.
INDEBTEDNESS OF MANAGEMENT
Prior to the enactment of the Financial Institutions Reform, Recovery,
and Enforcement Act of 1989 ("FIRREA"), the Bank followed the policy of
making loans to its officers and employees at preferred interest rates.
Management believes that these loans do not involve more than the normal risk
of collectibility or present other unfavorable features. In accordance with
FIRREA, all loans to officers are now made on the same terms (including
interest rate and loan fees) as comparable loans to unaffiliated persons.
During 1997, no director or executive officer of the Company or the Bank had
loans outstanding at preferred interest rates which aggregated $60,000 or
more. At December 31, 1997, loans to directors and executive officers of the
Company and the Bank and their affiliates amounted to $3.6 million or
approximately 9% of the Company's shareholders' equity at such date.
RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors of the Company has appointed KPMG Peat Marwick
LLP, independent certified public accountants, to perform the audit of the
Company's financial statements for the year ending December 31, 1998, and
further directed that the selection of auditors be submitted for ratification
by the shareholders at the Annual Meeting.
The Company has been advised by KPMG Peat Marwick LLP that neither that
firm nor any of its associates has any relationship with the Company other
than the usual relationship that exists between independent certified public
accountants and clients. KPMG Peat Marwick LLP will have one or more
representatives at the Annual Meeting who will have an opportunity to make a
statement, if they so desire, and will be available to respond to appropriate
questions.
The Board of Directors recommends that you vote FOR the ratification of
the appointment of KPMG Peat Marwick LLP as independent auditors for 1998.
17
<PAGE>
SHAREHOLDER PROPOSALS
Any proposal which a shareholder wishes to have included in the proxy
materials of the Company relating to the next annual meeting of shareholders
of the Company, which is scheduled to be held in April 1999 (in the event the
Company's proposed merger with United Bankshares is not consummated), must be
received at the principal executive offices of the Company, 21 Twelfth
Street, Wheeling, West Virginia 26003, Attention: Jean E. Huff, Corporate
Secretary, no later than November 25, 1998. If such proposal is in compliance
with all of the requirements of Rule 14a-8 under the 1934 Act, it will be
included in the proxy statement and set forth on the form of proxy issued for
such annual meeting of shareholders. It is urged that any such proposals be
sent certified mail, return receipt requested.
Shareholder proposals which are not submitted for inclusion in the
Company's proxy materials pursuant to Rule 14a-8 under the 1934 Act may be
brought before an annual meeting pursuant to Article II, Section 2.14 of the
Company's Bylaws, which provides that business at an annual meeting of
shareholders must be (a) specified in the notice of meeting (or any
supplement thereto) given by or at the direction of the Board of Directors,
or (b) otherwise properly brought before the meeting by a shareholder. For
business to be properly brought before an annual meeting by a shareholder,
the shareholder must have given timely notice thereof in writing to the
Secretary of the Company. To be timely, a shareholder's notice must be
delivered to or mailed and received at the principal executive offices of the
Company not less than 90 days prior to the anniversary date of the mailing of
proxy materials by the Company for the immediately preceding annual meeting.
A shareholder's notice must set forth as to each matter the shareholder
proposes to bring before an annual meeting (a) a brief description of the
business desired to be brought before the annual meeting, (b) the name and
address, as they appear on the Company's books, of the shareholder proposing
such business, (c) the class and number of shares of Common Stock of the
Company which are beneficially owned by the shareholder, and (d) any material
interest of the shareholder in such business. No shareholder proposals were
received by the Company in connection with the Annual Meeting.
ANNUAL REPORTS
A copy of the Company's Annual Report to Shareholders for the year ended
December 31, 1997 accompanies this Proxy Statement. Such annual report is not
part of the proxy solicitation materials.
Upon receipt of a written request, the Company will furnish to any
shareholder without charge a copy of the Company's Annual Report on Form 10-K
required to be filed with the Securities and Exchange Commission under the
1934 Act. Such written requests should be directed to Lisa K. DiCarlo, Senior
Vice President and Treasurer, Fed One Bancorp, Inc., 21 Twelfth Street,
Wheeling, West Virginia 26003. The Form 10-K is not part of the proxy
solicitation materials.
18
<PAGE>
OTHER MATTERS
Management is not aware of any business to come before the Annual Meeting
other than the matters described above in this Proxy Statement. However, if
any other matters should properly come before the meeting, it is intended
that the proxies solicited hereby will be voted with respect to those other
matters in accordance with the judgment of the persons voting the proxies.
The cost of the solicitation of proxies will be borne by the Company. The
Company will reimburse brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending the proxy
materials to the beneficial owners of the Company's Common Stock. In addition
to solicitations by mail, directors, officers and employees of the Company
may solicit proxies personally or by telephone without additional
compensation.
19
<PAGE>
REVOCABLE PROXY
FED ONE BANCORP, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF FED ONE
BANCORP, INC. FOR USE AT THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON
APRIL 22, 1998 AND AT ANY ADJOURNMENT THEREOF.
The undersigned hereby appoints the Board of Directors of Fed One
Bancorp, Inc. (the "Company") as proxies, each with power to appoint his
substitute, and hereby authorizes them to represent and vote, as designated
below, all the shares of Common Stock of the Company held of record by the
undersigned on March 6, 1998 at the Annual Meeting of Shareholders to be held
at the Company's corporate headquarters located at 21 Twelfth Street,
Wheeling, West Virginia 26003, on Wednesday, April 22, 1998, at 10:00 a.m.,
Eastern Time, and any adjournment thereof.
1. ELECTION OF DIRECTORS FOR THREE-YEAR TERM
/ / FOR all nominees listed below / / WITHHOLD AUTHORITY
(except as marked to the to vote for all
contrary below) nominees listed
below
Nominees for three-year term expiring in 2001:
Danny C. Aderholt, Louis Salvatori, William Salvatori and Paul R. Turner.
(Instruction: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.)
- -------------------------------------------------------
2. PROPOSAL TO RATIFY THE APPOINTMENT by the Board of Directors of KPMG
Peat Marwick LLP as the Company's independent auditors for the year ending
December 31, 1998
/ / FOR / / AGAINST / / ABSTAIN
3. In their discretion, the proxies are authorized to vote upon such
other business as may properly come before the meeting.
(Continued on reverse side)
<PAGE>
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS. THE SHARES OF THE
COMPANY'S COMMON STOCK WILL BE VOTED AS SPECIFIED. IF NOT OTHERWISE
SPECIFIED, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE BOARD OF
DIRECTORS' NOMINEES TO THE BOARD OF DIRECTORS, FOR THE RATIFICATION OF
AUDITORS IN PROPOSAL 2 AND OTHERWISE AT THE DISCRETION OF THE PROXIES. YOU
MAY REVOKE THIS PROXY AT ANY TIME PRIOR TO THE TIME IT IS VOTED AT THE ANNUAL
MEETING.
Dated:________________________ , 1998
____________________________
____________________________
Signatures
Please sign this proxy exactly as your names(s) appear(s) on this proxy. When
signing in a representative capacity, please give title. When shares are held
jointly, only one holder need sign.
--------------------------------------------------------------------
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
--------------------------------------------------------------------
<PAGE>
FED ONE BANCORP, INC.
The undersigned hereby instructs the Trustee of the Employee Stock
Ownership Plan ("ESOP") of Fed One Bancorp, Inc. (the "Company") to vote, as
designated below, all the shares of Common Stock of the Company allocated to
my account pursuant to the ESOP as of March 6, 1998 at the Annual Meeting of
Shareholders to be held at the Company's corporate headquarters located at 21
Twelfth Street, Wheeling, West Virginia 26003, on Wednesday, April 22, 1998,
at 10:00 a.m., Eastern Time, and any adjournment thereof.
1. ELECTION OF DIRECTORS FOR THREE-YEAR TERM
/ / FOR all nominees listed below / / WITHHOLD AUTHORITY
(except as marked to the to vote for all
contrary below) nominees listed
below
Nominees for three-year term expiring in 2001:
Danny C. Aderholt, Louis Salvatori, William Salvatori and Paul R. Turner.
(Instruction: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.)
- -------------------------------------------------------------------------------
2. PROPOSAL TO RATIFY THE APPOINTMENT by the Board of Directors of KPMG
Peat Marwick LLP as the Company's independent auditors for the year ending
December 31, 1998.
/ / FOR / / AGAINST / / ABSTAIN
3. In its discretion, the Trustee is authorized to vote upon such other
business as may properly come before the meeting.
The Company's Board of Directors recommends a vote FOR the Board's
nominees for director and FOR Proposal 2. Such votes are hereby solicited by
the Company's Board of Directors.
Dated: ________________, 1998
____________________________
Signatures
If you return this card properly signed but you do not otherwise specify,
shares will be voted for the Board of Directors' nominees for director and
for Proposal 2. If you do not return this card, your shares will be voted by
the Trustee in the same proportion as all allocated shares under the ESOP are
voted.
<PAGE>
FED ONE BANCORP, INC.
The undersigned hereby instructs the Trustee of the Recognition and
Retention Plan and Trust ("Recognition Plan") of Fed One Bancorp, Inc. (the
"Company") to vote, as designated below, all the shares of Common Stock of
the Company granted pursuant to the Recognition Plan to the undersigned as of
March 6, 1998 at the Annual Meeting of Shareholders to be held at the
Company's corporate headquarters located at 21 Twelfth Street, Wheeling, West
Virginia 26003, on Wednesday, April 22, 1998, at 10:00 a.m., Eastern Time,
and any adjournment thereof.
1. ELECTION OF DIRECTORS FOR THREE-YEAR TERM
/ / FOR all nominees listed below / / WITHHOLD AUTHORITY
(except as marked to the to vote for all
contrary below) nominees listed
below
Nominees for three-year term expiring in 2001:
Danny C. Aderholt, Louis Salvatori, William Salvatori and Paul R. Turner.
(Instruction: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.)
2. PROPOSAL TO RATIFY THE APPOINTMENT by the Board of Directors of KPMG
Peat Marwick LLP as the Company's independent auditors for the year ending
December 31, 1998.
/ / FOR / / AGAINST / / ABSTAIN
3. In its discretion, the Trustee is authorized to vote upon such other
business as may properly come before the meeting.
The Company's Board of Directors recommends a vote FOR the Board's
nominees for director and FOR Proposal 2. Such votes are hereby solicited by
the Company's Board of Directors.
Dated: ________________, 1998
____________________________
Signatures
If you return this card properly signed but you do not otherwise specify,
shares will be voted for the Board of Directors' nominees for director and
for Proposal 2. If you do not return this card, your shares will not be voted.
<PAGE>
[FED ONE LETTERHEAD]
March 25, 1998
To: Persons Granted Restricted Stock Under the Company's Recognition and
Retention Plan
As described in the attached materials, your proxy as a shareholder of
Fed One Bancorp, Inc. (the Company") is being solicited in connection with
the proposals to be considered at the Company's upcoming Annual Meeting of
Shareholders. We hope you will take advantage of the opportunity to direct
the manner in which shares of restricted Common Stock of the Company granted
to you pursuant to the Recognition and Retention Plan and Trust ("Recognition
Plan") will be voted.
Enclosed with this letter is the Proxy Statement, which describes the
matters to be voted upon, and a voting instruction ballot, which will permit
you to vote the restricted shares granted to you. After you have reviewed the
Proxy Statement, we urge you to vote your restricted shares held pursuant to
the Recognition Plan by marking, dating, signing and returning the enclosed
voting instruction ballot to the administrators of the Recognition Plan. The
Plan Administrators will certify the totals to the Trustee of the Recognition
Plan for the purpose of having those shares voted by the Trustee.
We urge each of you to vote, as a means of participating in the
governance of the affairs of the Company. If your voting instructions for the
shares held in the Recognition Plan are not received, the shares will not be
voted. While I hope that you will vote in the manner recommended by the Board
of Directors, the most important thing is that you vote in whatever manner
you deem appropriate. Please take a moment to do so.
Please note that the enclosed material relates only to those shares which
have been granted to you under the Recognition Plan. You will receive other
voting material for those shares owned by you individually and not under the
Recognition Plan.
Sincerely,
Alan E. Groover
Chairman, President and
Chief Executive Officer
<PAGE>
[FED ONE LETTERHEAD]
March 25, 1998
To: Participants in the Company's Employee Stock Ownership Plan
As described in the attached materials, your proxy as a shareholder of
Fed One Bancorp, Inc. (the Company") is being solicited in connection with
the proposals to be considered at the Company's upcoming Annual Meeting of
Shareholders. We hope you will take advantage of the opportunity to direct
the manner in which shares of Common Stock of the Company allocated to your
account pursuant to the Company's Employee Stock Ownership Plan ("ESOP") will
be voted.
Enclosed with this letter is the Proxy Statement, which describes the
matters to be voted upon, and a voting instruction ballot, which will permit
you to vote the shares in your account. After you have reviewed the Proxy
Statement, we urge you to vote your restricted shares held pursuant to the
ESOP to the administrators of the ESOP. The Plan Administrators will certify
the totals to the ESOP Trustee for the purpose of having those shares voted
by the Trustees.
We urge each of you to vote, as a means of participating in the
governance of the affairs of the Company. If your voting instructions for the
ESOP are not received, the shares allocated to your account will be voted in
the same proportion as all allocated shares under the ESOP are voted. While I
hope that you will vote in the manner recommended by the Board of Directors,
the most important thing is that you vote in whatever manner you deem
appropriate. Please take a moment to do so.
Please note that the enclosed material relates only to those shares which
have been allocated to you under the ESOP. You will receive other voting
material for those shares owned by you individually and not under the ESOP.
Sincerely,
Alan E. Groover
Chairman, President and
Chief Executive Officer
