SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) July 16, 1996
United Security Bancshares, Inc.
(Exact name of registrant as specified in its charter)
Alabama 0-14549 63-0843362
(State of other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
131 West Front Street, Thomasville, AL 36784
(Address of principal executive offices)
Registrant's telephone number, including area code (334) 636-5424
(Former name of former address, if changed since last report)
<PAGE>
Item 5. Other Events
On July 16, 1996, the registrant entered into a letter of intent
(Exhibit 99.1) to merge with First Bancshares, Inc. ("FBI"). FBI is a holding
company that owns 100% of the outstanding common stock of First Bank and
Trust. First Bank and Trust is an Alabama-chartered bank, headquartered in
Grove Hill, Alabama with total assets of approximately $186 million. FBI
maintains six (6) branches in Clarke and Bibb Counties, Alabama.
The letter of intent provides for the issuance of 5.8321 shares of the
registrant's common stock for each share of FBI common stock. The registrant
and FBI also granted each other an option (Exhibits 99.2 and 99.3) to purchase
up to 8% of the outstanding shares of common stock of each entity in the event
that certain specified events occur. Those events include the willful and
intentional breach of a covenant set forth in the definitive agreement to
merge, or if the option granting party enters into an agreement to effect a
business combination with another entity.
It is anticipated that the acquisition will be accounted for as a
pooling of interests.
Item 7. Financial Statements and Exhibits
Exhibit 99.1 Letter of intent between United Security Bancshares, Inc.
and First Bancshares, Inc. to effect a merger under the
pooling of interests accounting treatment.
Exhibit 99.2 Stock Option Agreement dated as of July 16, 1996, from
First Bancshares, Inc. to United Security Bancshares, Inc.
Exhibit 99.3 Stock Option Agreement dated as of July 16, 1996, from
United Security Bancshares, Inc. to First Bancshares, Inc.
Exhibit 99.4 Press Release relating to the Letter of Intent.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Dated: July 19, 1996.
UNITED SECURITY BANCSHARES, INC.
By: /s/ Jack M. Wainwright, III
Jack M. Wainwright, III
President
<PAGE>
July 16, 1996
BY HAND DELIVERY
Board of Directors
First Bancshares, Inc.
131 Main Street
Grove Hill, Alabama 36451
Gentlemen:
On behalf of United Security Bancshares, Inc., ("United") and United
Security Bank, I am pleased to submit the following merger-of-equals proposal:
1. Merger. Subject to the terms and conditions set forth in this letter
and to a complete due diligence review of each party to this letter and the
negotiation and execution of a Definitive Agreement and Plan of Reorganization
(the "Definitive Agreement"), United proposes a "merger of equals" whereby First
Bancshares, Inc. ("FBI") will be merged with and into United and the subsidiary
banks of each party would be merged into one entity. The Definitive Agreement
will contain a requirement of applicable regulatory and shareholder approvals,
among other terms, conditions, representations and indemnifications from parties
as are customary in transactions of this nature.
By executing this letter, FBI represents to us that there are currently
outstanding 239,843 shares of common stock of FBI (the "Common Stock"), and
there are no other options, warrants, rights or convertible securities
(collectively, the "Rights") that are exercisable for shares of Common Stock
or other equity securities of any description of FBI. If the transaction is
consummated, each share of Common Stock will be converted into 5.8321 shares
of common stock of United. The exchange ratio will be adjusted for any stock
splits and stock dividends declared subsequent to the date of this letter.
2. Due Diligence: Confidentiality. United and FBI agree to hold any
materials obtained from the other party in confidence and to use such materials
only to evaluate the proposed transaction. If the proposed transaction is not
consummated, each party shall promptly return all such materials. Nothing
contained herein shall preclude either party from using information publicly
available or received from third parties for purposes other than the proposed
transaction.
<PAGE>
Board of Directors
First Bancshares, Inc.
July 16, 1996
Page 2
3. Board of Directors. All directors of FBI at closing shall become
directors of United. Directors of United will select the board of the combined
banking institution, which will be comprised of twelve directors, six from each
institution. Prior to the proposed merger, the respective boards of United and
FBI shall meet, evaluate and mutually agree upon the following items:
a) a name for the resulting organization;
b) policies for the new organization; and
c) other matters that the parties may deem appropriate.
4. Executive Officers. At closing, Jack Wainwright, currently President
and Chief Executive Officer of United, shall enter into a three-year contract to
continue as President and Chief Executive Officer of the resulting entity, and
Fred Huggins, currently Chairman and Chief Executive Officer of FBI, shall
serve as chairman and CEO of a finance subsidiary of the resulting organization.
The Chairman of the resulting holding company will be Jim Miller, with Fred
Huggins and Ray Sheffield serving as Vice Chairmen. The Chairman of the
resulting bank will be Fred Huggins, with Don Nichols and Hardie Kimbrough
serving as Vice Chairmen.
5. Incentive Program. United and FBI shall use their best efforts to
develop a stock option or other incentive program to enhance the retention of
key senior officers at both organizations.
6. Bylaw Changes. The resulting entity will adopt amendment(s) to its
bylaws providing for super majority voting provisions that will require a two-
thirds (66.7%) board majority to approve significant corporate events or changes
in its senior management.
7. Reciprocal Options. United and FBI shall simultaneously execute and
deliver the option agreements attached hereto as Exhibits A and B.
8. Other Negotiations: Board Approvals. Upon the signing of this
letter of intent, United and FBI shall discontinue any discussions with any
party other than the respective parties hereto with respect to the sale of any
assets or stock of United or FBI, or the merger of United or FBI with a third
party, and neither United nor FBI shall solicit, review or accept any
proposal from any third party with respect to any such sales. The respective
boards of directors of United and FBI have unanimously approved the proposed
transaction, subject to an acceptable due diligence investigation and any
necessary approvals, and each such board (and all members thereof) has agreed
to use its best efforts to enter into the Definitive Agreement and to obtain
the necessary regulatory and shareholder approvals.
9. Closing. United and FBI agree to use their best efforts to effect
a closing of the transactions contemplated herein no later than December 31,
1996.
<PAGE>
Board of Directors
First Bancshares, Inc.
July 16, 1996
Page 3
10. Public Announcements. United and FBI agree that any announcement or
disclosure relating to the proposed transaction shall be made only with the
consent of both United and FBI, which consent shall not be unreasonably
withheld, unless such disclosure is required by law and time does not permit
the obtaining of such consent, or such consent is withheld.
11. Expenses. Each party to this letter of intent shall bear its own
expenses, except as specifically provided to the contrary.
12. Best Efforts. United and FBI shall use their best efforts to enter
into the Definitive Agreement and to consummate the transactions provided for
herein. Notwithstanding the foregoing, except for the provisions set forth in
paragraph 7 and 8, this letter of intent is not intended to be a legally binding
contract, nor is it intended to confer any legal rights or remedies on the
parties hereto. If a Definitive Agreement has not been signed by both parties
on or before August 19, 1996, then this proposal will be terminated and of no
further force and effect, unless extended by mutual written consent of the
parties hereto; except that the confidentiality agreement contained in paragraph
2 herein shall survive.
This proposal will be considered withdrawn at 5:00 p.m., July 16, 1996, if
we have not received a favorable response from you by that time.
We hope this meets with your approval. If additional information is needed
or further discussion is required, please let us know.
For the Board of Directors of United
By: /s/ Jack M. Wainwright, III
Jack M. Wainwright, III
Its: President and Chief Executive Officer
Accepted and Agreed to this 16th
day of July, 1996.
For the Board of Directors of FBI
By: /s/ Fred L. Huggins
Fred Huggins
Its: President and Chief Executive Officer
<PAGE>
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT ("Option Agreement") dated as of July 16, 1996
between First Bancshares, Inc., an Alabama corporation ("FBI"), and United
Security Bancshares, Inc., an Alabama corporation ("USB"), .
WITNESSETH:
WHEREAS, the Boards of Directors of the parties hereto have approved a
letter of intent to merge dated as the date hereof, and plan to enter into a
definitive contract by August 19, 1996, ("Agreement"), providing for certain
transactions pursuant to which USB and FBI will merge, and their subsidiary
banks will merge (the "Plan of Merger"); and
WHEREAS, as a condition to and as consideration for USB to enter into the
Agreement and to induce such entry, FBI has agreed to grant to USB the option
set forth herein to purchase authorized but unissued shares of FBI Common Stock;
NOW, THEREFORE, in consideration of the premises herein contained, the
parties agree as follows:
1. GRANT OF OPTION. Subject to the terms and conditions set forth herein, FBI
hereby grants to USB an option ("Option") to purchase up to 19,200 shares of FBI
Common Stock, at a price of $67.00 per share, payable in cash as provided in
Section 3 hereof.
2. EXERCISE OF OPTION. (a) Unless USB shall have breached in any material
respect any covenant or representation contained in the Agreement and such
breach has not been cured, USB may exercise the Option, in whole or part, at any
time or from time to time if, and only if, a Purchase Event (as defined
below) shall have occurred and be continuing. The Option shall terminate and
be of no further force and effect:
(i) on the effective date of the Merger; or
(ii) upon failure to execute the Agreement by August 19, 1996,
unless such date is mutually extended; or
(iii) upon termination of the Agreement in accordance with its
provisions, other than a termination resulting from:
(A) a willful or intentional breach by FBI of any Specified
Covenant (as defined below); or
(B) a failure of FBI shareholders, following the occurrence of
a Purchase Event, to approve the Merger by the vote required under
applicable law or under the FBI Articles of Incorporation; or
(iv) two months after:
(A) termination of the Agreement due to a willful breach by
FBI of any Specified Covenant; or
(B) failure of FBI shareholders, following the occurrence of
a Purchase Event, to approve the Merger by the vote required under
applicable law or under the FBI Articles of Incorporation;
and, provided further, that any such exercise shall be subject to compliance
with applicable provisions of law.
(b) As used herein, a "Purchase Event" shall mean any of the following
events or transactions occurring after the date hereof:
(i) FBI, without having received the prior written consent of USB,
shall have entered into any agreement with any person or entity to merge
or consolidate, or enter into any similar transaction, except as
contemplated in the Agreement, whereby (A) such entity would purchase,
lease or otherwise acquire all or substantially all of the assets of FBI,
or (B) such entity would purchase or otherwise acquire (including by way
of merger, consolidation, share exchange or any similar transaction)
securities representing 10% or more of the voting power of FBI;
(ii) any person shall have acquired beneficial ownership or the
right to acquire beneficial ownership of 15% or more of the outstanding
shares of FBI Common Stock after the date hereof (the term "beneficial
ownership; for purposes of this Option Agreement having the meaning
assigned thereto in Section 13(d) of the Securities Exchange Act of 1934
(the "Exchange Act") and the regulations promulgated thereunder);
(iii) any person shall have made a bona fide proposal to FBI by
public announcement or written communication that is or becomes the
subject to public disclosure to acquire FBI by merger, consolidation,
purchase of all or substantially all of its assets or any other similar
transaction, and following such bona fide proposal the shareholders of FBI
vote not to adopt the Plan of Merger; or
(iv) FBI shall have willfully breached any Specified Covenant
following a bona fide proposal by a third party to FBI for a merger,
consolidation, purchase of all or substantially all of its assets or any
other similar transaction, which breach would entitle USB to terminate the
Agreement (without regard to the cure periods provided for therein) and
such breach shall not have been cured prior to the Notice Date (as defined
below).
If more than one of the transactions giving rise to a Purchase Event under
this Section 2(b) is undertaken or effected, then all such transactions shall
give rise only to one Purchase Event, which Purchase Event shall be deemed
continuing for all purposes hereunder until all such transactions are abandoned.
As used in this Option Agreement, "person" shall have the meanings specified in
Sections 3(a)(9) and 13(d)(3) of the Exchange Act.
(c) As used herein, a "Specified Covenant" shall mean any of the
covenants included in the Agreement that are to be met or satisfied by FBI prior
to or in connection with the transactions contemplated therein.
(d) In the event USB wishes to exercise the Option, it shall send to FBI
a written notice (the date of which being herein referred to as "Notice Date")
specifying (i) the total number of shares it will purchase pursuant to such
exercise and (ii) a place and date not earlier than three business days nor
later than 60 business days from the Notice Date for the closing of such
purchase ("Closing Date"); provided, that if prior notification to or
approval of any federal or state regulatory agency is required in connection
with such purchase, USB shall promptly file the required notice or
application for approval and the Closing Date shall fall on the soonest
practicable date following such notification or approval.
3. PAYMENT AND DELIVERY OF CERTIFICATES. (a) At the closing, USB shall pay
to FBI the aggregate purchase price for the shares of FBI Common Stock purchased
pursuant to the exercise of the Option in immediately available funds by a wire
transfer to a bank account designated by FBI.
(b) At such closing, simultaneously with the delivery of funds as
provided in subsection (a), FBI shall deliver to USB a certificate or
certificates representing the number of shares of FBI Common Stock purchased by
USB, which such certificate or certificates may be inscribed with a legend
referencing restrictions on transfer necessary or desirable to assure compliance
with applicable laws.
4. REPRESENTATIONS. FBI hereby represents, warrants and covenants to USB as
follows:
(a) FBI shall at all times maintain sufficient authorized but unissued
shares of FBI Common Stock so that the Option may be exercised without
authorization of additional shares of FBI Common Stock.
(b) The shares to be issued upon due exercise, in whole or in part, of
the Option, when paid for as provided herein, will be duly authorized, validly
issued, fully paid and nonassessable.
5. ADJUSTMENT UPON CHANGES IN CAPITALIZATION. In the event of any change in
FBI Common Stock by reason of stock dividends, stock splits, split-ups, mergers,
recapitalization, combinations, exchanges of shares or the like, the type and
number of shares subject to the Option, and the purchase price per share, as the
case may be, shall be adjusted appropriately. In the event that any additional
shares of FBI Common Stock are issued or otherwise become outstanding after the
date of this Option Agreement (other than pursuant to this Option Agreement),
the number of shares of FBI Common Stock subject to the Option shall be
adjusted so that, after such issuance (again excluding shares issued pursuant
to this Option Agreement), it equals eight percent (8%) of the number of
shares of FBI Common Stock then issued and outstanding. Nothing contained in
this Section 5 shall be deemed to authorize FBI to breach any provision of
the Agreement.
6. REGISTRATION RIGHTS. FBI shall, if requested by USB, as expeditiously as
possible file a registration statement on a form of general use under any
applicable federal or state securities laws if necessary, in order to permit the
sale or other disposition of the shares of FBI Common Stock that have been
acquired upon exercise of the Option in accordance with the intended method of
sale or other disposition requested by USB. USB shall provide information
reasonably requested by FBI for inclusion in any registration statement to be
filed hereunder. FBI will use its best efforts to cause such registration
statement first to become effective and then to remain effective for such period
not in excess of 270 days from the day such registration statement first becomes
effective, as may be reasonably necessary to effect such sales or other
dispositions.
7. SEVERABILITY. If any term, provision, covenant or restriction contained
in this Option Agreement is held by a court or a federal or state regulatory
agency of competent jurisdiction to be invalid, void or unenforceable, the
remainder of the terms, provisions and covenants and restrictions contained in
this Option Agreement shall remain in full force and effect, and shall in no way
be affected, impaired or invalidated. If for any reason such court or regulatory
agency determines that the Option will not permit the holder to acquire the full
number of shares of FBI Common Stock provided in Section 2 hereof (as adjusted
pursuant to Section 5 hereof), it is the express intention of FBI to allow the
holder to acquire or to require FBI to repurchase such lesser number of shares
as may be permissible, without any amendment or modification hereof.
8. MISCELLANEOUS. (a) Except as otherwise provided herein, each of the
parties hereto shall bear and pay all costs and expenses incurred by it or on
its behalf in connection with the transactions contemplated hereunder,
including fees and expenses of its own financial consultants, investment
bankers, accountants and counsel.
(b) Except as otherwise expressly provided herein, this Option Agreement
contains the entire agreement between the parties with respect to the
transactions contemplated hereunder and supersedes all prior arrangements or
understandings with respect thereto, written or oral. The terms and conditions
of this Option Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors and permitted assigns. Nothing
is this Option Agreement, expressed or implied, is intended to confer upon any
party, other than the parties hereto, and their respective successors.
(c) Neither of the parties hereto may assign any of its rights or
obligations under this Option Agreement or the Option created hereunder to any
other person, without the express written consent of the other party, except
that in the event a Purchase Event shall have occurred and be continuing, USB
may assign, in whole or in part, its rights and obligations hereunder.
(d) All notices or other communications which are required or permitted
hereunder shall be in writing and sufficient if delivered in the manner and to
the addresses provided.
(e) The parties agree that damages would be an inadequate remedy for a
breach of the provisions of this Option Agreement by either party hereto and
that this Option Agreement may be enforced by either party hereto through
injunctive or other equitable relief.
(f) This Option Agreement shall be governed by and construed in
accordance with the laws of the State of Alabama applicable to agreements made
and entirely to be performed within such state and such federal laws as may be
applicable.
FIRST BANCSHARES, INC.
By: /s/ Fred L. Huggins
Its: President & CEO
UNITED SECURITY BANCSHARES, INC.
By: /s/ Jack M. Wainwright, III
Its: President & CEO
<PAGE>
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT ("Option Agreement") dated as of July 16, 1996
between United Security Bancshares, Inc., an Alabama corporation ("USB"), and
First Bancshares, Inc., an Alabama corporation ("FBI").
WITNESSETH:
WHEREAS, the Boards of Directors of the parties hereto have approved a
letter of intent to merge dated as the date hereof, and plan to enter into a
definitive contract by August 19, 1996, ("Agreement"), providing for certain
transactions pursuant to which FBI and USB will merge, and their subsidiary
banks will merge (the "Plan of Merger"); and
WHEREAS, as a condition to and as consideration for FBI to enter into the
Agreement and to induce such entry, USB has agreed to grant to FBI the option
set forth herein to purchase authorized but unissued shares of USB Common Stock;
NOW, THEREFORE, in consideration of the premises herein contained, the
parties agree as follows:
1. GRANT OF OPTION. Subject to the terms and conditions set forth herein, USB
hereby grants to FBI an option ("Option") to purchase up to 176,165 shares of
USB Common Stock, at a price of $13.13 per share, payable in cash as provided in
Section 3 hereof.
2. EXERCISE OF OPTION. (a) Unless FBI shall have breached in any material
respect any covenant or representation contained in the Agreement and such
breach has not been cured, FBI may exercise the Option, in whole or part, at
any time or from time to time if, and only if, a Purchase Event (as defined
below) shall have occurred and be continuing. The Option shall terminate and
be of no further force and effect:
(i) on the effective date of the Merger; or
(ii) upon failure to execute the Agreement by August 19, 1996,
unless such date is mutually extended; or
(iii) upon termination of the Agreement in accordance with its
provisions, other than a termination resulting from:
(A) a willful or intentional breach by USB of any Specified
Covenant (as defined below); or
(B) a failure of USB shareholders, following the occurrence of
a Purchase Event, to approve the Merger by the vote required under
applicable law or under the USB Articles of Incorporation; or
(iv) two months after:
(A) termination of the Agreement due to a willful breach by
USB of any Specified Covenant; or
(B) failure of USB shareholders, following the occurrence of
a Purchase Event, to approve the Merger by the vote required under
applicable law or under the USB Articles of Incorporation;
and, provided further, that any such exercise shall be subject to compliance
with applicable provisions of law.
(b) As used herein, a "Purchase Event" shall mean any of the following
events or transactions occurring after the date hereof:
(i) USB, without having received the prior written consent of FBI,
shall have entered into any agreement with any person or entity to merge
or consolidate, or enter into any similar transaction, except as
contemplated in the Agreement, whereby (A) such entity would purchase,
lease or otherwise acquire all or substantially all of the assets of USB,
or (B) such entity would purchase or otherwise acquire (including by way
of merger, consolidation, share exchange or any similar transaction)
securities representing 10% or more of the voting power of USB;
(ii) any person shall have acquired beneficial ownership or the
right to acquire beneficial ownership of 15% or more of the outstanding
shares of USB Common Stock after the date hereof (the term "beneficial
ownership; for purposes of this Option Agreement having the meaning
assigned thereto in Section 13(d) of the Securities Exchange Act of 1934
(the "Exchange Act") and the regulations promulgated thereunder);
(iii) any person shall have made a bona fide proposal to USB by
public announcement or written communication that is or becomes the
subject to public disclosure to acquire USB by merger, consolidation,
purchase of all or substantially all of its assets or any other similar
transaction, and following such bona fide proposal the shareholders of USB
vote not to adopt the Plan of Merger; or
(iv) USB shall have willfully breached any Specified Covenant
following a bona fide proposal by a third party to USB for a merger,
consolidation, purchase of all or substantially all of its assets or any
other similar transaction, which breach would entitle FBI to terminate the
Agreement (without regard to the cure periods provided for therein) and
such breach shall not have been cured prior to the Notice Date (as defined
below).
If more than one of the transactions giving rise to a Purchase Event under
this Section 2(b) is undertaken or effected, then all such transactions shall
give rise only to one Purchase Event, which Purchase Event shall be deemed
continuing for all purposes hereunder until all such transactions are abandoned.
As used in this Option Agreement, "person" shall have the meanings specified in
Sections 3(a)(9) and 13(d)(3) of the Exchange Act.
(c) As used herein, a "Specified Covenant" shall mean any of the
covenants included in the Agreement that are to be met or satisfied by USB prior
to or in connection with the transactions contemplated therein.
(d) In the event FBI wishes to exercise the Option, it shall send to USB
a written notice (the date of which being herein referred to as "Notice Date")
specifying (i) the total number of shares it will purchase pursuant to such
exercise and (ii) a place and date not earlier than three business days nor
later than 60 business days from the Notice Date for the closing of such
purchase ("Closing Date"); provided, that if prior notification to or
approval of any federal or state regulatory agency is required in connection
with such purchase, FBI shall promptly file the required notice or
application for approval and the Closing Date shall fall on the soonest
practicable date following such notification or approval.
3. PAYMENT AND DELIVERY OF CERTIFICATES. (a) At the closing, FBI shall pay
to USB the aggregate purchase price for the shares of USB Common Stock purchased
pursuant to the exercise of the Option in immediately available funds by a wire
transfer to a bank account designated by USB.
(b) At such closing, simultaneously with the delivery of funds as
provided in subsection (a), USB shall deliver to FBI a certificate or
certificates representing the number of shares of USB Common Stock purchased by
FBI, which such certificate or certificates may be inscribed with a legend
referencing restrictions on transfer necessary or desirable to assure compliance
with applicable laws.
4. REPRESENTATIONS. USB hereby represents, warrants and covenants to FBI as
follows:
(a) USB shall at all times maintain sufficient authorized but unissued
shares of USB Common Stock so that the Option may be exercised without
authorization of additional shares of USB Common Stock.
(b) The shares to be issued upon due exercise, in whole or in part, of
the Option, when paid for as provided herein, will be duly authorized, validly
issued, fully paid and nonassessable.
5. ADJUSTMENT UPON CHANGES IN CAPITALIZATION. In the event of any change in
USB Common Stock by reason of stock dividends, stock splits, split-ups, mergers,
recapitalization, combinations, exchanges of shares or the like, the type and
number of shares subject to the Option, and the purchase price per share, as the
case may be, shall be adjusted appropriately. In the event that any additional
shares of USB Common Stock are issued or otherwise become outstanding after the
date of this Option Agreement (other than pursuant to this Option Agreement),
the number of shares of USB Common Stock subject to the Option shall be
adjusted so that, after such issuance (again excluding shares issued pursuant
to this Option Agreement), it equals eight percent (8%) of the number of
shares of USB Common Stock then issued and outstanding. Nothing contained in
this Section 5 shall be deemed to authorize USB to breach any provision of
the Agreement.
6. REGISTRATION RIGHTS. USB shall, if requested by FBI, as expeditiously as
possible file a registration statement on a form of general use under any
applicable federal or state securities laws if necessary, in order to permit the
sale or other disposition of the shares of USB Common Stock that have been
acquired upon exercise of the Option in accordance with the intended method of
sale or other disposition requested by FBI. FBI shall provide information
reasonably requested by USB for inclusion in any registration statement to be
filed hereunder. USB will use its best efforts to cause such registration
statement first to become effective and then to remain effective for such period
not in excess of 270 days from the day such registration statement first becomes
effective, as may be reasonably necessary to effect such sales or other
dispositions.
7. SEVERABILITY. If any term, provision, covenant or restriction contained
in this Option Agreement is held by a court or a federal or state regulatory
agency of competent jurisdiction to be invalid, void or unenforceable, the
remainder of the terms, provisions and covenants and restrictions contained in
this Option Agreement shall remain in full force and effect, and shall in no way
be affected, impaired or invalidated. If for any reason such court or
regulatory agency determines that the Option will not permit the holder to
acquire the full number of shares of USB Common Stock provided in Section 2
hereof (as adjusted pursuant to Section 5 hereof), it is the express
intention of USB to allow the holder to acquire or to require USB to
repurchase such lesser number of shares as may be permissible, without any
amendment or modification hereof.
8. MISCELLANEOUS. (a) Except as otherwise provided herein, each of the
parties hereto shall bear and pay all costs and expenses incurred by it or on
its behalf in connection with the transactions contemplated hereunder,
including fees and expenses of its own financial consultants, investment
bankers, accountants and counsel.
(b) Except as otherwise expressly provided herein, this Option Agreement
contains the entire agreement between the parties with respect to the
transactions contemplated hereunder and supersedes all prior arrangements or
understandings with respect thereto, written or oral. The terms and conditions
of this Option Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors and permitted assigns. Nothing
is this Option Agreement, expressed or implied, is intended to confer upon any
party, other than the parties hereto, and their respective successors.
(c) Neither of the parties hereto may assign any of its rights or
obligations under this Option Agreement or the Option created hereunder to any
other person, without the express written consent of the other party, except
that in the event a Purchase Event shall have occurred and be continuing, FBI
may assign, in whole or in part, its rights and obligations hereunder.
(d) All notices or other communications which are required or permitted
hereunder shall be in writing and sufficient if delivered in the manner and to
the addresses provided.
(e) The parties agree that damages would be an inadequate remedy for a
breach of the provisions of this Option Agreement by either party hereto and
that this Option Agreement may be enforced by either party hereto through
injunctive or other equitable relief.
(f) This Option Agreement shall be governed by and construed in
accordance with the laws of the State of Alabama applicable to agreements made
and entirely to be performed within such state and such federal laws as may be
applicable.
UNITED SECURITY BANCSHARES, INC.
By: /s/ Jack M. Wainwright, III
Its: President & CEO
FIRST BANCSHARES, INC.
By: /s/ Fred L. Huggins
Its: President & CEO
<PAGE>
United Security Bancshares, Inc.
First Bancshares, Inc.
Contact Person: Jack Wainwright, FOR IMMEDIATE RELEASE
President & Chief
Executive Officer
(334) 636-5424
UNITED SECURITY BANCSHARES, INC. AND FIRST BANCSHARES, INC.
ANNOUNCE PROPOSED "MERGER OF EQUALS"
Thomasville, Alabama (July 16, 1996). United Security Bancshares, Inc. and
First Bancshares, Inc. of Grove Hill, Alabama today reported that their Boards
of Directors announced the signing of a letter of intent, pursuant to which the
two institutions would enter into a "merger of equals." The resulting
institution would be United Security Bancshares, Inc. ("USB"), with all
directors of First Bancshares joining the Board of Directors of USB. The
subsidiary banks, United Security Bank and First Bank and Trust, would also
merge into one bank, whose Board will be comprised of twelve directors, six
from each institution.
Prior to the merger, the directors of USB and First Bancshares will jointly
decide upon a new name for the combined organization and other significant
policy matters.
Jack Wainwright, President and Chief Executive Officer of USB, and Fred
Huggins, President of First Bancshares, jointly announced the execution of this
letter of intent.
"We are extremely fortunate to have reached this agreement," Wainwright
stated. "We believe the two institutions will benefit greatly from this
proposed merger. The merger will give our existing customers a stronger
community oriented bank and enable us to service an expanded customer base.
For this reason, we believe that First Bancshares is the best possible
partner for us," Wainwright concluded.
"As we join with USB, our two organizations will complement and support
each other and give the combined company the ability to provide the highest
level of service and convenience to our customers," stated Huggins. "We will
also be able to offer an expanded product line to our customers. In addition,
this merger will allow us to maintain a strong banking institution that
continues to be based in this community."
If the merger is approved, the shareholders of First Bancshares will
receive 5.8321 shares of common stock of USB for each share of common stock of
First Bancshares. There are currently outstanding 2,137,960 shares of USB
common stock and 239,843 shares of First Bancshares.
In connection with the letter of intent, USB and First Bancshares have
executed option agreements in favor of each other that are exercisable upon the
occurrence of certain events, including but not limited to the subsequent
agreement by a party to merge or consolidate with a third party or the purchase
by a third party of fifteen percent or more of the outstanding shares of USB or
First Bancshares. In such an event, each option provides for the purchase of up
to eight percent of the outstanding shares of USB or First Bancshares by the
other party, at a price of $13.13 per share for shares of USB common stock or
$67.00 per share for shares of First Bancshares common stock. These options will
terminate if the parties fail to agree upon and execute a definitive agreement
and will expire if the merger is consummated.
United Security Bank is a state bank with over $238 million in assets and
nine banking locations located in the cities of Thomasville, Coffeeville,
Fulton, Grove Hill and Jackson in Clarke County, Gilbertown and Butler in
Choctaw County and Brent in Bibb County. First Bank and Trust is also a
state bank with over $186 million in assets and six banking locations located
in the cities of Grove Hill, Jackson, and Thomasville in Clarke County and
Centreville and Woodstock in Bibb County. At closing, the combined
institution will have assets in excess of $424 million and $45 million in
capital.
The merger of USB and First Bancshares is subject to a satisfactory due
diligence review by each institution and the execution of a definitive
agreement, and to regulatory and shareholder approval.
