SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for use of the Commission only
(as permitted by Rule 14a-6(3)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14 a-11(c) or ss. 240.14a-12
UNITED COMMUNITY BANKSHARES, INC.
(Name of Registrant as Specified In Its Charter)
Timothy P. Veith, Esquire
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
<TABLE>
<S> <C>
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 or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on
which the filing fee was 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 O-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:
........................................................................
</TABLE>
<PAGE>
UNITED COMMUNITY BANKSHARES, INC.
100 East 4th Avenue
Franklin, Virginia 23851
NOTICE OF 1998 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 28, 1998
To: SHAREHOLDERS OF UNITED COMMUNITY BANKSHARES, INC.
Notice is hereby given that the 1998 Annual Meeting of Shareholders of
United Community Bankshares, Inc. (the "Company") will be held at the Main
Street Eatery, Second Floor, 119 North Main Street, Franklin, Virginia on
Thursday, May 28, 1998, at 10:00 a.m., local time, for the following purposes:
ITEM 1. To elect three directors of the Company to serve for terms of three
years and until their successors are elected and qualified.
ITEM 2. To ratify the appointment of Goodman & Company, L.L.P. as the Company's
independent certified public accountants.
ITEM 3. For the transaction of such other business as may properly be brought
before the meeting.
The Board of Directors has fixed the close of business on April 3, 1998
as the record date for the determination of shareholders entitled to notice of,
and to vote at, the 1998 Annual Meeting of Shareholders or any adjournment or
adjournments thereof.
There is included herewith a Proxy Statement to which your attention is
directed together with the Company's Annual Report for 1997. It is the intent of
management to mail this proxy material on May 1, 1998.
By Order of the Board of Directors
/s/ F. Bruce Stewart
----------------------------
May 1, 1998 F. Bruce Stewart, Secretary
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING.
PLEASE SIGN, DATE AND MAIL PROMPTLY THE ENCLOSED PROXY IN THE RETURN ENVELOPE
PROVIDED. SHAREHOLDERS WHO ATTEND THE MEETING MAY REVOKE THEIR PROXIES AND VOTE
IN PERSON.
<PAGE>
UNITED COMMUNITY BANKSHARES, INC.
100 East 4th Avenue
Franklin, Virginia 23851
PROXY STATEMENT
1998 ANNUAL MEETING OF SHAREHOLDERS
MAY 28, 1998
It is the intent of management to mail this Proxy Statement on May 1,
1998. This statement is furnished in connection with the solicitation of proxies
to be used at the 1998 Annual Meeting of Shareholders of United Community
Bankshares, Inc. (the "Company") to be held at the Main Street Eatery, Second
Floor, 119 North Main Street, Franklin, Virginia on Thursday, May 28, 1998, at
10:00 a.m., local time.
THE ENCLOSED PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE
COMPANY AND THE ENCLOSED PROXY MAY BE REVOKED BY NOTIFYING F. BRUCE STEWART,
SECRETARY OF THE COMPANY, IN WRITING, BEFORE OR AT THE MEETING, AT ANY TIME
BEFORE IT IS VOTED, OR BY FILING ANOTHER PROXY WITH THE SECRETARY/TREASURER,
BEARING A LATER DATE.
If the proxy is validly executed and not revoked, it will be voted at
the meeting as specified therein with respect to the two items set forth. If any
other matters come before the meeting, the proxy will be voted with respect
thereto in the interest of the Company according to the best judgment of the
person or persons voting the proxy.
In addition to solicitations by mail, directors and officers of the
Company may solicit proxies personally or by telephone. The entire cost of the
solicitations will be borne by the Company.
VOTING SECURITIES
The Company currently has only one class of stock, Common, of which
1,829,209 shares were outstanding as of the close of business on April 3, 1998,
the record date for the determination of shareholders entitled to notice of and
to vote at the meeting, and each share is entitled to one vote, there being no
provision for cumulative voting.
With regard to the election of directors, votes may be cast in favor or
withheld. If a quorum is present, the nominees receiving a plurality of the
votes cast at the 1998 Annual Meeting will be elected directors; therefore,
votes withheld will have no effect. The approval of ratification of Goodman &
Company, L.L.P. as independent public accountants requires the affirmative vote
of a majority of the Company's Common Stock represented at the 1998 Annual
Meeting. Thus, although abstentions and broker non-votes (shares held by
customers which may not be voted on certain matters because the broker has not
received specific instructions from the customer) are counted for purposes of
determining the presence or absence of a quorum for the transaction of business,
they are generally not counted for purposes of determining whether such
proposals have been approved and therefore have no effect.
PRINCIPAL SHAREHOLDERS
To the best of management's knowledge, the following own either
beneficially or of record more than 5% of the Company's outstanding shares of
common stock. Additional beneficial ownership information related to the
directors and executive officers of the Company is set forth below in the
section captioned "Election of Directors of the Company".
Name and Address Amount and Nature Percent of
Beneficial Owner of Ownership Class (1)
------------------ ------------------ -------------
Hannah B. Bain 99,996 (2) 5.47%
Wakefield, Virginia
J.P. Bain 98,439 (3)(4) 5.38%
Wakefield, Virginia
James H. Lee, III 94,066 5.14%
Courtland, Virginia
(1) For purposes of this table, beneficial ownership has been
determined in accordance with the provisions of Rule 13d-3 of
the Securities Exchange Act of 1934 under which, in general, a
person is deemed to be the beneficial owner of a security if
he has or shares the power to vote or direct the voting of the
security or the power to dispose of or direct the disposition
of the security, or if he has the right to acquire beneficial
ownership of the security within sixty days.
(2) Amount does not include the 98,439 shares of the Company held
by Mrs. Bain's spouse, J.P. Bain, listed immediately below in
this table, to which Mrs. Bain disclaims beneficial ownership.
See also Note 3 below for additional information regarding Mr.
Bain's beneficial ownership.
(3) Refer to the beneficial ownership table provided in "Election
of Directors of the Company" below for detailed descriptions
of the nature of the beneficial ownership for the listed
individual.
(4) Amount does not include the 99,996 shares of the Company held
by Mr. Bain's spouse, Hannah B. Bain, listed immediately above
in this table, to which Mr. Bain disclaims beneficial
ownership.
ITEM 1
ELECTION OF DIRECTORS OF THE COMPANY
The Company's Board of Directors is divided into three classes (I, II,
and III). The term of office for Class II directors will expire at the annual
meeting. The three persons named immediately below, all of whom currently serve
as directors of the Company, are nominated to serve as Class II directors. If
elected, the three nominees will serve for terms of three years until the 2001
annual meeting. The persons named in the proxy will vote for the election of the
nominees named below unless authority is withheld. The Board believes that the
nominees will be available and able to serve as directors, but if any of these
persons should not be available or able to serve the proxies may exercise
discretionary authority to vote for substitutes proposed by the Board.
Certain information concerning the nominees for election at the annual
meeting as Class II directors is set forth below as of December 31, 1997, as
well as certain information about Class III and Class I directors, who will
continue in office after the annual meeting until the 1999 and 2000 annual
meeting of shareholders, respectively.
<PAGE>
<TABLE>
<CAPTION>
Amount and Nature of
Served as Principal Beneficial Ownership
Name Director Occupation During as of December 31, 1997
and Age Since (1) Past Five Years (Percent of Class) (2)
--------------- ----------- ------------------ -----------------------
<S> <C>
CLASS II DIRECTORS (NOMINEES)
To Serve Until 2001, If Elected
J. Philip Bain, Jr. (34) 1988 Stockbroker - Davenport and Company 68,025
3.7%
Jack P. Bain (74) 1947 Chairman, The Bank of Sussex and Surry; 198,435 (3)
Private Investor 10.8%
Harvey G. Pope (78) 1988 Vice Chairman of the Company; Chairman of The 8,881 (4)
Bank of Franklin; Consultant, Hancock Peanut Co. *
(former President)
CLASS III DIRECTORS
To Serve Until 1999
D. Eugene Brittle (48) 1986 Executive Vice President and Chief Operating 4,100 (5)
Officer of the Company; President and Chief *
Executive Officer, The Bank of Sussex and Surry,
Chief Executive Officer since 1986 & President
1997 - Present
Wenifred O. Pearce (56) 1997 President and Chief Executive Officer of the 3,291 (6)
Company and The Bank of Franklin; formerly, *
Regional President, Hampton Roads Region - First
American Bank of Virginia
J. D. Spivey (71) 1991 Retired, Vice President of Southampton 5,122 (7)
Tractor, Co., Inc. *
J. Russell West (72) 1970 Chairman of the Company; 61,653 (8)
Owner - Ivor Furniture Company 3.4%
CLASS I DIRECTORS
To Serve Until 2000
Hunter Darden , Jr. (75) 1971 Retired, Farmer 4,806
*
Gregor O. Huber (78) 1972 Retired CEO, The Bank of Sussex and Surry 13,920 (9)
*
F. Bruce Stewart (58) 1988 Attorney, Stewart & Stewart, attorneys at law 8,486 (10)
*
All directors and executive 380,180
Officers as a group (11) 20.8%
</TABLE>
* Represents less than 1% of total outstanding shares
(1) The Company was formed in 1996; therefore, the year referenced refers to
the year the director was appointed to the board of one of the Company's
subsidiary banks, The Bank of Franklin ("BOF") or The Bank of Sussex and
Surry ("BSS") (collectively, the "Subsidiary Banks").
(2) See the definition of beneficial ownership set forth in footnote 1
of "Principal Shareholders" above. (3) Includes 99,996 shares held
individually by spouse, Hannah B. Bain, to which Mr. Bain disclaims
beneficial ownership; 18,000 shares held in trust for the benefit of his
daughter for which Mr. Bain is trustee; and 23,880 shares held by Mr. Bain
as trustee under-the-will of Robert F. Bain, Jr.
(4) Includes 317 shares owned by spouse.
(5) Includes 600 shares held jointly with spouse and 600 exercisable
options.
(6) Includes 667 exercisable options.
(7) Includes 3,200 shares owned as joint tenants with spouse.
(8) Includes 600 shares held jointly with spouse.
(9) Includes 600 shares held jointly with spouse.
(10) Includes 144 shares owned by son living in the household.
Committees of the Company
Audit Committee. The Audit Committee met twice during 1997 and
consists of the following non-employee directors: Messrs. Huber, Darden and
West. Charles F. Kingery, Jack Beale, Marion G. Smith and A. Meredith Felts,
who are directors of the Subsidiary Banks, are also members of the Audit
Committee. The committee reviews financial reports of the Company and each of
its subsidiary banks and affiliates. The Audit Committee also is charged
with reporting to the Board of Directors the results of internal audit
activities and management's response to audit recommendations.
Personnel Committee. The personnel committee met five times during 1997
and consists of the following non-employee directors: Messrs. Spivey, Stewart,
Huber, West and J. Philip Bain, Jr. The committee's primary responsibility is to
consider compensation of the executive officers, employee benefits for employees
of the Subsidiary Banks, well as such other employment matters as deemed
appropriate. The committee considers management and employee performance on an
annual basis and recommends compensation to the Board of Directors after
considering various factors, primarily, bank performance, condition of the local
economy, response to the needs of the Company and its subsidiaries, past salary
and salary paid to other officers and employees of institutions of similar size
in the region.
Nominating Committee. The Company has no standing nominating committee.
The entire Board of Directors participates in the nominations process for
candidates to the Board of Directors. Any nominees for directors recommended by
shareholders should be submitted to the President sufficiently in advance of an
annual meeting to allow for consideration by the Board of Directors.
EXECUTIVE COMPENSATION
The table below sets forth information concerning the annual compensation
earned by listed executive officers as employees of the Company's subsidiary
banks. The amounts reflected below relate to compensation earned by the named
officer as paid by the officer's respective bank for which he served as
President and Chief Executive Officer for each of the three years listed. The
individuals' current positions are reflected in the principal positions listed.
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation
---------------------------------------------------------
Name and All Other
Principal Position Year Salary (1) Bonus Compensation (2)(3)
------------------ ---- ---------- ----- -------------------
<S> <C>
Wenifred O. Pearce 1997 $102,400 $ 9,768 $15,218
CEO and President of 1996 $ 92,400 $ 4,579 $ 9,480
the Company and BOF 1995 $ 82,475 $ - $ 8,594
D. Eugene Brittle 1997 $ 92,339 $ 5,000 $ 895
Executive Vice President 1996 $ 88,448 $ - $ 797
and COO of the Company 1995 $ 76,820 $ - $ 726
and President and CEO of BSS
</TABLE>
(1) Amount shown includes directors' fees for Mr. Pearce of $2,400,
$2,400 and $2,375 for 1997, 1996 and 1995 respectively; and for Mr.
Brittle, directors' fees of $1,800 in each of the reported years.
(2) Amounts shown for Mr. Pearce include $8,712, $7,500 and $7,500 for each of
1997, 1996, and 1995, respectively, relating to contributions by BOF on
behalf of Mr. Pearce under BOF's deferred compensation plan. See "Deferred
Compensation and Profit-Sharing Plans" below.
(3) Consists of premiums for life insurance policies with death benefits over
$50,000 (Mr. Pearce, $1,710; and Mr. Brittle, $766) and personal use of a
bank provided vehicle, as reported for federal income tax purposes (Mr.
Pearce, $4,796; and Mr. Brittle, $129).
Employment Contracts
On August 1, 1997, Mr. Pearce and Mr. Brittle each entered into an
employment agreement with the Company. Except as otherwise stated, Mr. Pearce's
and Mr. Brittle's agreements are substantially similar. Mr. Pearce's agreement
provides that he will serve as President, Chief Executive Officer and a director
of the Company and BOF commencing for a period of three years, renewing
annually, unless either party gives the other party at least 90 days' written
notice prior to the end of the original term or any additional period, of the
intention not to renew the agreement. The agreement provides that Mr. Pearce
shall be paid a base salary of $100,000 during the first year of the contract,
with performance based increases for subsequent years, provided that in each
subsequent year he will receive not less than the previous year's base pay. In
the event the Company terminates Mr. Pearce's employment without cause or Mr.
Pearce's terminates his employment for "good reason", such as the assignment of
duties inconsistent with his position, he is entitled to receive in a lump sum
his annual base salary through the date of termination, any approved vacation
pay, and the balance of his annual base salary through the remaining term of the
agreement for a period of or one year from the date of termination which ever is
greater. In the event of disability, Mr. Pearce shall continue to receive his
agreed salary for 90 days after which he shall have been deemed to have
terminated his employment and shall be entitled only to receive disability
benefits as provided under any contract of disability insurance as may be
provided by the Company.
The agreement also provides for certain benefits in the event of a
change in control of the Company followed by termination of Mr. Pearce's
employment without cause, or by Mr. Pearce for certain reasons, including
substantial adverse change in responsibilities, decrease in base pay, change in
principal work location, or substantial decrease in benefits. Cause shall mean
termination for dishonestly, conviction of a felony, or willful unauthorized
disclosure of confidential information of the Company. The agreement
automatically is extended for 24 months or the balance of the term of the
agreement if a change in control occurs.
As noted, Mr. Brittle's employment agreement provides substantially
similar terms as those discussed above for Mr. Pearce. The agreement provides
that Mr. Brittle will serve as President, Chief Executive Officer and director
of BSS and as Executive Vice President, Chief Operating Officer and director of
the Company at a base salary of $90,000 in the first year and that in each
subsequent year he will receive not less than the previous year's base pay.
Stock Options
The table below provides information concerning stock options granted
to the named executive officers during 1997.
<TABLE>
<CAPTION>
Number of Outstanding Options
Securities Exercise as of December 31, 1997
Underlying Price Expiration -------------------------------
Name Options Granted per Share Date Exercisable Unexercisable
- ---- --------------- --------- ---- ----------- -------------
<S> <C>
Wenifred O. Pearce 16,667 $10.33 02/05/07 667 16,000
D. Eugene Brittle 15,000 $10.33 02/05/07 600 14,400
</TABLE>
The Company's 1997 Incentive Stock Plan (the "Incentive Plan") was adopted by
the Board of Directors on February 5, 1997 and approved by a majority of the
stockholders at the 1997 Annual Meeting on May 13, 1997. The Incentive Plan
makes available up to 100,000 shares of Common Stock for awards to key employees
of the Company and its subsidiaries in the form of stock options, stock
appreciation rights and restricted stock. The Incentive Plan is effective as of
February 5, 1997.
Employee Benefit Plans
Effective January 1, 1998, the Company adopted a defined contribution
plan with 401(K) features, which covers substantially all employees of the
Company and its subsidiary Banks who have completed one year of service. Vesting
in the plan begins with the second year of participation and increases annually
by 20% until full vesting occurs after six years. Employees may contribute up to
15% of their salaries, and the Company matches 50% of the first 6% of employee
contributions. Additional contributions can be made by the Company at the
discretion of the Board of Directors. Prior to the formation of this plan, each
of the Company's subsidiary Banks had qualified retirement plans for the future
benefit of their employees. The BOF plans were terminated on December 31, 1997
and the BSS Retirement Plan was terminated on January 31, 1998, subject to
regulatory approvals. Prior to January 1, 1998, all employee benefit plans in
which the executive officers participated were maintained at the bank levels.
The descriptions of such bank plans follow.
Deferred Compensation and Profit Sharing Plans. BOF maintained deferred
compensation and retirement arrangements with certain officers. The Bank's
current policy was to accrue the estimated amounts to be paid under the
contracts.
However, in previous fiscal years, the related expense was not recorded.
BOF had a profit-sharing plan for all eligible officers and employees.
Requirements for eligibility to participate included reaching the age of 19 and
one year of service. Vesting in the plan began the second year of participation
and increased annually by 20% until full vesting occurs after six years.
Employer contributions were determined annually and are calculated based on the
participant's annual compensation. The amounts contributed to the plan were
$31,250, $28,000 and $25,000 for 1997, 1996 and 1995, respectively.
Retirement Plan. BSS had a non-contributory defined benefit pension
plan ("BSS Retirement Plan") which covered all employees who were at least
twenty and a half years old, who had at least six months of service, and who
worked at least 1000 hours during the year. The benefits were based on years of
service and employee compensation during the last three years of employment.
BSS's funding policy had been to contribute annually the maximum amount that
could be deducted for federal income tax purposes. Contributions were intended
to provide not only for benefits attributed to services to date but also for
those expected to be earned in the future. Cash benefits under the plan
generally commence upon retirement, death, or other termination of employment
and were payable in various forms, generally at the election of the participant.
A participant's benefits under the plan generally became fully vested only after
a participant has completed five years of service. Based on current compensation
and assuming retirement at the normal retirement age of 65, it is estimated that
the annual retirement benefit for Mr. Brittle would be $36,000.
BSS's retirement plan expense was $59,363, $59,792 and $62,986 in 1997,
1996 and 1995, respectively.
BSS's retirement plan included a pre-retirement benefit provision to
pay a 50% joint and survivor annuity to any surviving spouse in the event a
terminated vested or an active participant died before eligibility for early
retirement. The annuity was payable from the date the participant would have
been eligible for retirement under the plan.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act requires directors,
executive officers and 10% beneficial owners of the Company's Common Stock to
file reports concerning their ownership of Common Stock. The Company believes
that its officers and directors complied with all filing requirements under
Section 16(a) of the Securities Exchange Act of 1934 during 1997, except that
each of Messrs. Pearce and Brittle inadvertently made a late Form 5 filing for
1997.
Certain Relationships and Related Transactions
Some of the directors and officers of the Company and their families
are at present, as in the past, customers of one of the banking subsidiaries of
the Company, and have had and expect to have transactions with either or both of
the Subsidiary Banks in the ordinary course of business. In addition, some of
the directors and officers of the Company or its subsidiaries are at present, as
in the past, also directors and officers of corporations which are customers of
the Subsidiary Banks and which have had or expect to have transactions with the
Subsidiary Banks in the ordinary course of business. Such transactions were made
in the ordinary course of business on substantially the same terms, including
interest rates and collateral, as those prevailing at the time for comparable
transactions with other persons, and did not involve more than normal risk of
collectibility or present other unfavorable features.
As of December 31, 1997, the amount of loans, direct and indirect, from
the Subsidiary Banks to executive officers, directors of the Company,
shareholders holding more than 5% of the outstanding voting securities and
entities in which they own significant interest, was $1,185,083.
J. Phillip Bain, Jr., a director of the Company, is the son of J. P.
Bain, who is also a director of the Company.
Directors' Fees and Attendance
Each director of the Company except the Chief Executive Officer and
Chief Operating Officer are compensated for all services rendered throughout the
year in the amount of an annual retainer of $4,000 and $100.00 per committee
meeting attended. The Chief Executive Officer and Chief Operating Officer are
not compensated for Company Board of Directors' meetings or committee meetings,
but they are compensated as a member of their respective board of BOF or BSS.
Mr. Pearce receives $200 for each BOF board meeting attended and Mr. Brittle
receives $150 for each BSS board meeting attended. All incumbent nominee
directors attended at least 75% of the aggregate number of meetings held by the
Company's Board and meetings of committees on which they served.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE
SHAREHOLDERS VOTE "FOR" EACH OF THE NOMINEES.
<PAGE>
ITEM 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS FOR THE COMPANY
Goodman & Company, L.L.P. has been selected as independent accountants
for the Company for the fiscal year ending December 31, 1998, subject to
ratification by the shareholders.
If not otherwise specified, proxies will be voted in favor of
ratification of the appointment. Representatives of Goodman & Company, L.L.P.
are expected to be present at the Company's annual meeting, will have an
opportunity to make a statement if they so desire, and are expected to be
available to respond to appropriate questions.
YOUR BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE APPOINTMENT AND
RECOMMENDS A VOTE "FOR" APPROVAL OF THIS ITEM.
SHAREHOLDER PROPOSALS
In the event that a shareholder wishes to submit a proposal for
consideration by the shareholders of the Holding Company at the 1999 Annual
Meeting of Shareholders (the "1999 Annual Meeting"), then in order for the
proposal to be includable in the proxy statement for the 1999 Annual Meeting,
such proposal must be received by the Secretary of the Company no later than
November 30, 1998. It is presently anticipated, that the 1999 Annual Meeting
will be held on or around May 11, 1999, although this date may be changed at the
discretion of the Company's Board of Directors.
AVAILABILITY OF FORM 10-KSB
ON APRIL 15, 1998, THE COMPANY, FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION AN ANNUAL REPORT (FORM 10-KSB) FOR THE YEAR 1997. THE COMPANY WILL
PROVIDE A COPY OF THE COMPANY'S FORM 10-KSB, INCLUDING THE FINANCIAL STATEMENTS
AND THE SCHEDULES THERETO, WITHOUT CHARGE, TO ANY PERSON FROM WHOM THE BOARD OF
DIRECTORS HAS SOLICITED A PROXY FOR USE AT THE 1998 ANNUAL MEETING OF
SHAREHOLDERS, UPON THE WRITTEN REQUEST OF SUCH PERSON DIRECTED TO WAYNE C.
CARRUTHERS, CHIEF FINANCIAL OFFICER, 100 EAST 4TH AVENUE, FRANKLIN, VIRGINIA
23851 (TELEPHONE: (757) 562-5184).
BY ORDER OF THE BOARD OF DIRECTORS
/s/ F. Bruce Stewart
-----------------------------
FRANKLIN, VIRGINIA F. Bruce Stewart
May 1, 1998 Secretary
<PAGE>
PROXY
United Community Bankshares, Inc.
1998 Annual Meeting of
Shareholders May 28, 1998
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints F. Bruce Stewart and J. Russell West
jointly and severally, proxies, with full power to act alone, and with full
power of substitution, to represent the undersigned and to vote, as designated
below and upon any and all other matters which may properly be brought before
such meeting, all shares of Common Stock which the undersigned would be entitled
to vote at the Annual Meeting of Shareholders of United Community Bankshares,
Inc., or any adjournment thereof.
ITEM 1: To elect the three (3) nominees for Directors set forth below
including voting for a lesser number, if a vacancy occurs among the
nominees, and voting in respect to any substitute nominee or
nominees designated by the Board of Directors.
_____ FOR all nominees listed below _____ WITHHOLD AUTHORITY
(except as marked to the contrary below) to vote for all nominees
listed below
J. Philip Bain, Jr.
Jack P. Bain
Harvey G. Pope
(INSTRUCTION: To withhold authority to vote for any individual
nominee, write the nominee's name on the space provided below.)
I withhold authority for
---------------------------------------------
ITEM 2. To ratify the appointment of Goodman & Company, L.L.P. as the Company's
independent certified public accountants.
_____ FOR _____ AGAINST _____ ABSTAIN
ITEM 3. For the transaction of such other business as may properly be brought
before the meeting.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ON ITEMS 1 AND 2 LISTED
ABOVE, AND YOUR PROXY WILL BE VOTED FOR ITEMS 1 AND 2 IF NO SPECIFICATION
IS MADE. IF ANY OTHER MATTERS COME BEFORE THE MEETING, THIS PROXY WILL BE
VOTED WITH RESPECT THERETO IN THE INTEREST OF THE COMPANY ACCORDING TO
THE BEST JUDGMENT OF THE PERSON OR PERSONS VOTING THE PROXY.
This proxy is revocable by you at any time prior to the voting of the
shares represented, by notifying the Secretary of the Company in writing
before such vote or by filing another proxy with the Secretary bearing a
later date. Shareholders who are present at the meeting may withdraw their
proxy and vote in person. When signing as attorney, executor, administrator,
trustee or guardian, please give your full title as such. Both joint holders
should sign.
Dated , 1998 (SEAL)
--------------------- --------------------------------
Number of Shares (SEAL)
--------- --------------------------------
(SEAL)
--------------------------------
Return to:
United Community Bankshares, Inc.
100 East 4th Avenue
Franklin, Virginia 23851
<PAGE>
UNITED COMMUNITY BANKSHARES, INC.
100 East 4th Avenue
Franklin, Virginia 23851
May 1, 1998
Dear Shareholder:
The 1998 Annual Meeting of Shareholders of United Community Bankshares,
Inc. will be held Thursday, May 28, 1998, at 10:00 p.m., local time. The meeting
will be held at Main Street Eatery, Second Floor, 119 North Main Street,
Franklin, Virginia.
Included with this letter are several very important items which you
should take time to review. These items are:
1. Notice of the 1998 Annual Meeting of Shareholders;
2. Proxy Statement for the 1998 Annual Meeting;
3. PROXY; and
4. The Company's Annual Report for 1997.
We hope you will attend this meeting; however, if you cannot, we would
appreciate your completing the enclosed PROXY and returning it in the envelope
provided. Even if you plan to attend, it would be helpful, if you would sign and
return the PROXY so that we can be assured of a quorum for the meeting. When
registering, you may revoke your PROXY in order to vote in person.
Your support during 1997 is evidenced in the Company's continued growth.
We appreciate your efforts and look forward to 1998.
Very truly yours,
UNITED COMMUNITY BANKSHARES, INC.
/s/ W.O. Pearce
----------------------------
Wenifred O. Pearce
President and Chief Executive Officer
Enclosures
