[Bank of Franklin Letterhead]
June 12, 1996
Dear Shareholder:
On May 13, 1996, we mailed a notice of the Annual Meeting of
the Shareholders of The Bank of Franklin to you which included a proxy
statement related to your consideration of an affiliation between the Bank
and The Bank of Sussex and Surry. A copy of the cover letter accompanying
the proxy statement is included with this letter.
As of today, we have not received your signed proxy. Management
strongly supports the proposed affiliation and it is essential that we
have enough shares represented at the meeting to conduct the business
on the agenda. If a sufficient number of signed proxies are not
received by the Bank by the time scheduled for the meeting, the Bank
may adjourn the meeting to permit continued solicitation with
respect to approval, thus incurring significant additional expenses.
To facilitate the prompt receipt of your proxy, we have enclosed
an additional proxy card. If you have not already done so, please
complete, sign and return one of the proxy cards in the self
addressed envelope provided. Returning your proxy DOES NOT restrict
your right to attend the Annual Meeting and vote your shares in
person. It will, however, save the Bank the additional
and unnecessary expense of adjournment of the meeting to a later
date.
Thank you for your continued support and prompt attention to
this matter. We look forward to seeing you at the Annual Meeting.
Sincerely,
W.O. Pearce
President
enclosures: Letter of May 13, 1996
Proxy Card
Return Envelope
<PAGE>
[The Bank of Franklin Letterhead]
May 13, 1996
Dear Fellow Shareholder:
You are cordially invited to attend the Annual Meeting of
Shareholders of The Bank of Franklin ("BOF") to be held at the American Legion
Building, located at 935 Armory Drive, Franklin, Virginia on June 27, 1996 at
7:30 p.m.
At the meeting, shareholders will consider and vote on the
Agreement and Plan of Reorganization, dated January 25, 1996 (the "Agreement"),
between BOF and The Bank of Sussex and Surry ("BSS") pursuant to which, among
other things, BOF and BSS will affiliate under a holding company structure. This
will be accomplished by BOF and BSS forming a corporation, United Community
Bankshares, Inc. (the "Holding Company"), followed by a share exchange
transaction with each of the respective banks, such that each bank will become a
wholly-owned subsidiary of the Holding Company (the "Reorganization"). The
resulting banks will have the same name, employees, branch offices and business
operations as BOF and BSS, respectively. Under the terms of the Agreement, each
share of common stock of BOF outstanding immediately prior to consummation of
the Reorganization will be converted into and exchanged for 4.806 shares of
Holding Company Common Stock, and each share of common stock of BSS outstanding
at such time will be converted into and exchanged for 3.0 shares of Holding
Company Common Stock. Following the Reorganization, BOF and BSS each will
continue to carry on its banking business as a wholly-owned subsidiary of the
Holding Company in substantially the same manner as before the Reorganization.
The conversion of shares (other than for cash in lieu of any
fractional shares) will be a tax-free transaction for federal income tax
purposes. Details of the proposed Reorganization are set forth in the
accompanying Joint Proxy Statement, which you are urged to read carefully in its
entirety. Approval of the Reorganization requires the affirmative vote of more
than of the outstanding shares of BOF common stock.
Approval of the Agreement requires the affirmative vote of the
holders of more than four-fifths of the outstanding shares of BOF Common Stock.
Your Board of Directors approved the Reorganization and believes that it is in
the best interests of BOF and its shareholders. Accordingly, the Board
recommends that you VOTE FOR the Reorganization and asks that you return the
enclosed proxy card within 10 days of receipt of the enclosed Proxy
Statement/Prospectus.
At the meeting, you also will vote on the election of three
Class A directors to serve until the consummation of the Reorganization between
BOF and BSS or, if the Reorganization is not consummated, to serve three year
terms until the 1999 Annual Meeting of Shareholders. Your Board of Directors
unanimously supports these individuals and recommends that you VOTE FOR them as
directors.
The last item of business at the meeting will be ratification
of the appointment of Goodman & Company, L.L.P. as BOF's independent certified
public accountants.
We hope you can attend the Annual Meeting. Whether or not you
plan to attend, please complete, sign and date the enclosed proxy card and
return it promptly in the enclosed envelope. Your vote is important regardless
of the number of shares you own. We look forward to seeing you at the Annual
Meeting.
Sincerely,
Wenifred O. Pearce
President and Chief
Executive Officer
