SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission only (as permitted by
Rule 14a-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
UNITED SECURITY BANCSHARES, 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)(4) and 0-11.
(1) Title of each class of securities to which transaction
applies:
(2) Aggregte number of securities to which transaction
applies:
(3) Per unit price or other underling value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth
the amount on which the filing fee is calculated and
state how it was determined):
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[ ] 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:
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(3) Filing Party:
(4) Date Filed:
<PAGE>
UNITED SECURITY BANCSHARES, INC.
TO OUR SHAREHOLDERS:
The annual meeting of the shareholders of United Security
Bancshares, Inc. ("Bancshares"), will be held at 2:00 p.m., local
time, on Tuesday, May 4, 1999, at the Peace Memorial Park
Assembly House, 500 Vanity Fair Park Drive, Jackson, Alabama.
Enclosed is a notice of the meeting, a proxy statement, a
proxy and the Annual Report to Shareholders for 1998. We hope that
you will study the enclosed material carefully and attend the
meeting in person.
Whether you plan to attend the meeting or not, please sign and
date the enclosed proxy and return it in the accompanying envelope
as promptly as possible. The proxy may be revoked by your vote in
person at the meeting, by your execution of a later dated proxy, or
by your giving written notice of revocation to the Secretary of
Bancshares at any time prior to the voting thereof.
Sincerely,
/s/ James L. Miller
_____________________________
James L. Miller
Chairman of the Board
/s/ R. Terry Phillips
_____________________________
R. Terry Phillips
President and Chief Executive Officer
April 2, 1999
<PAGE>
UNITED SECURITY BANCSHARES, INC.
131 West Front Street
Post Office Box 249
Thomasville, Alabama 36784
Telephone 334-636-5424
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
to be held on
May 4, 1999
TO THE SHAREHOLDERS OF UNITED SECURITY BANCSHARES, INC.:
Notice is hereby given that the 1999 Annual Meeting of
Shareholders (the "Meeting") of United Security Bancshares, Inc.
("Bancshares") will be held at the Peace Memorial Park Assembly
House, 500 Vanity Fair Park Drive, Jackson, Alabama, on Tuesday,
May 4, 1999, at 2:00 p.m., local time, for the following
purposes:
(1) To elect 16 directors of Bancshares to serve for the
ensuing year;
(2) To approve a change in Bancshares' state of incorporation
from Alabama to Delaware by means of a merger of Bancshares
with and into a wholly-owned subsidiary; and
(3) To transact such other business as may properly come
before the Meeting or any adjournments thereof.
The Board of Directors has fixed the close of business on
March 26, 1999, as the record date for the determination of
shareholders entitled to notice of and to vote at the Meeting or
any adjournments thereof.
A complete list of the shareholders of Bancshares will be
available and open for examination by any shareholder of Bancshares
during ordinary business hours for a period beginning two business
days after the mailing of this notice.
All shareholders are cordially invited to attend the Meeting.
Whether or not you plan to attend the Meeting in person, you are
requested to complete, sign, and date the enclosed proxy card and
mail it promptly in the envelope provided for that purpose. The
proxy may be revoked by your vote in person at the Meeting, by your
executing a later dated proxy, or by your giving written notice to
the undersigned Secretary of Bancshares at any time prior to the
voting thereof.
By Order of the Board of Directors
/s/ Larry M. Sellers
_________________________
Larry M. Sellers
Secretary
Thomasville, Alabama
April 2, 1999
<PAGE>
UNITED SECURITY BANCSHARES, INC.
131 West Front Street
Post Office Box 249
Thomasville, Alabama 36784
Telephone 334-636-5424
PROXY STATEMENT
FOR 1999 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 4, 1999
INTRODUCTION
This Proxy Statement is furnished on or about April 2,
1999 by United Security Bancshares, Inc. ("Bancshares") to the
holders of Common Stock of Bancshares in connection with
Bancshares' Annual Meeting of Shareholders, and any adjournments
thereof, to be held on Tuesday, May 4, 1999 at 2:00 p.m. As
more fully described herein, the matters to be considered and acted
upon are: (1) the election of 16 directors of Bancshares; (2) a
change in Bancshares' state of incorporation from Alabama to
Delaware; and (3) the transaction of such other business as may
properly come before the meeting. The Board of Directors of
Bancshares recommends the election of the 16 director-nominees
named in this Proxy Statement.
The enclosed proxy is solicited on behalf of the Board of
Directors of Bancshares and is revocable at any time prior to the
voting of such proxy by voting in person at the meeting, by giving
written notice to the Secretary of Bancshares or by executing a
later-dated proxy, provided that such later-dated proxy or
revocation is actually received by Bancshares before the vote of
the shareholders. All properly executed proxies delivered pursuant
to this solicitation will be voted at the meeting and in accordance
with instructions, if any. If no instructions are given, the
proxies will be voted FOR items 1 and 2 on the proxy form and in
accordance with the instructions of management as to any other
matters that may come before the meeting.
The cost of soliciting proxies will be borne by Bancshares. In
addition to the use of the mails, proxies may be solicited by
personal interview, telephone and telegraph, and banks, brokers,
nominees or fiduciaries will be required to forward the soliciting
material to their principals and to obtain authorization for the
execution of proxies. Bancshares will, upon request, reimburse
banks, brokers and other institutions, nominees and fiduciaries for
their expenses in forwarding proxy material to their principals.
Bancshares and its Subsidiaries
Bancshares is a bank holding company registered under the Bank
Holding Company Act of 1956, as amended, with assets of
approximately $450 million. Bancshares operates one banking
subsidiary in Alabama, First United Security Bank, a bank organized
and existing under the laws of Alabama (sometimes herein referred
to as "First United Security" or the "Bank"), with sixteen banking
offices. At December 31, 1998, First United Security accounted for
substantially all of Bancshares' consolidated assets.
Bancshares also owns all the stock of First Security Courier
Corporation, Inc. ("First Security"), an Alabama corporation
organized to provide certain bank courier services. In addition,
Acceptance Loan Company, Inc. ("ALC"), is a wholly-owned subsidiary
of the Bank. ALC provides consumer loans and purchases consumer
loans from vendors.
Bancshares derives substantially all of its income from
dividends from First United Security Bank. Various statutory
provisions restrict the amount of dividends that First United
Security Bank may pay to Bancshares without regulatory approval.
Shareholders Eligible to Vote
This Proxy Statement is furnished to the holders of record of
Bancshares Common Stock as of the close of business on
March 26, 1999. Only holders as of such date are eligible to
vote at the meeting.
VOTING SECURITIES AND PRINCIPAL SHAREHOLDERS
As of January 31, 1999, Bancshares had issued 3,621,431 shares
of common stock, of which 3,548,431 were outstanding, with
approximately 980 holders of record. Bancshares also holds 64,000
shares as treasury stock. There are currently 10,000,000 shares of
Common Stock, par value $.01 per share, authorized for issuance.
Principal Shareholders Shares Owned(1) Percent Owned
_________________________ _______________ _____________
John C. Gordon 214,441(2) 6.04
P. O. Box 238
Grove Hill, Alabama 36451
(1) Based on information furnished by the named individual. Under
applicable regulations, shares are deemed to be beneficially
owned by a person if he directly or indirectly has or shares
the power to vote or to dispose or direct the disposition of
the shares, whether or not he has any economic interest in the
shares. Unless otherwise indicated, the named beneficial owner
has sole voting and dispositive power with respect to the
shares.
(2) Includes 5,280 shares owned jointly with Mr. Gordon's wife,
88,895 shares owned by the estate of Mr. Gordon's late aunt,
of which estate Mr. Gordon is executor, and 72,209 shares
owned by Mr. Gordon's mother and with respect to which Mr.
Gordon shares a power of attorney to vote the shares. Also,
includes 50 shares owned by Mr. Gordon's minor son and 50
shares owned by Mr. Gordon's minor daughter.
Security Ownership of Management
The following table indicates for each director the number of
shares of outstanding Common Stock of Bancshares beneficially
owned.
<TABLE>
<CAPTION>
Number and Percent of
Shares of Common Stock
Name Owned at January 31, 1999
____
<S> <C>
Dan R. Barlow 14,780(1)
*
Linda H. Breedlove 3,499
*
Gerald P. Corgill 75,882(2)
2.14%
Roy G. Cowan, D.M.D. 23,624
*
John C. Gordon 214,441(3)
6.04%
William G. Harrison 28,175(4)
*
Fred L. Huggins 8,498(5)
*
Hardie B. Kimbrough 15,635(6)
*
Jack W. Meigs 100
James L. Miller 12,680
*
R. Terry Phillips -0-
Ray Sheffield 27,243(7)
*
James C. Stanley, D.M.D. 5,000(8)
*
Clarence Watters 16,250(9)
*
Howard M. Whitted 4,800
*
Bruce N. Wilson 7,320(10)
*
All directors and executive officers ___________
as a group (17 persons, 464,193
including the persons named above) 13.08%
<FN>
* Represents less than one percent of the outstanding shares.
(1) Includes 274 shares owned by Mr. Barlow's spouse. Mr.
Barlow disclaims beneficial ownership of such shares.
Also includes 4,000 shares which could be acquired within
60 days pursuant to stock options.
(2) Includes 52,536 shares owned by Mr. Corgill's spouse. Mr.
Corgill disclaims beneficial ownership of such 52,536
shares. Also includes 2,394 shares owned by Dozier
Hardware Company, of which Mr. Corgill is President. Also
includes 3,620 shares owned by Dozier Hardware Profit
Sharing Plan & Trust.
(3) Includes 88,895 shares owned by the Estate of Mr.
Gordon's aunt with respect to which Mr. Gordon is
executor and 72,209 shares owned by Mr. Gordon's mother
and with respect to which Mr. Gordon shares a power of
attorney to vote the shares. Includes 5,280 shares with
respect to which Mr. Gordon shares voting and investment
power. Includes 50 shares owned by Mr. Gordon's minor son
and includes 50 shares owned by Mr. Gordon's minor
daughter.
(4) Includes 264 shares with respect to which Mr. Harrison
shares voting and investment power.
(5) Includes 2,332 shares with respect to which Mr. Huggins
shares investment and voting power.
(6) Includes 140 shares with respect to which Mr. Kimbrough
shares voting and investment power. Also includes 352
shares owned by Mr. Kimbrough's spouse with respect to
which Mr. Kimbrough disclaims beneficial ownership.
(7) Mr. Sheffield shares voting and investment power with
respect to 24,343 shares.
(8) Includes 4,800 shares held by the James C. Stanley Trust,
of which Dr. Stanley is the Trustee.
(9) Includes 8,000 shares owned by Mr. Watters' spouse. Mr.
Watters disclaims beneficial ownership of such shares.
Includes 150 shares with respect to which Mr. Watters
shares voting power.
(10) Includes 1,272 shares with respect to which Mr. Wilson
shares voting power. Includes 50 shares owned by Mr.
Wilson's minor son and includes 50 shares owned my Mr.
Wilson's minor daughter.
</FN>
</TABLE>
PROPOSAL ONE:
ELECTION OF DIRECTORS
Bancshares recommends that the shareholders elect the 16
persons named below to hold office until the 2000 annual meeting of
shareholders of Bancshares or until their successors are elected
and qualified. All director-nominees are proposed for election for
a term of one year. It is intended that unless "Withhold Authority"
is noted as to all or some of the nominees, proxies in the
accompanying form will be voted at the Annual Meeting for the
election to the Board of Directors of the 16 nominees.
If, prior to the voting at the annual meeting, any person to
be elected a director is unable to serve or for good cause cannot
serve, the shares represented by all valid proxies electing such
person may be voted for the election of such substitute as the
members of the board of directors may recommend. Bancshares
management knows of no reason why any person would be unable to
serve as a director.
The following table provides certain biographical information
about the persons who have been nominated for election as directors
of Bancshares. All of these persons are currently directors of
Bancshares, and are also directors of First United Security Bank.
Bancshares, as the sole shareholder of First United Security Bank,
intends to reelect all directors of Bancshares as directors of
First United Security Bank. Mr. Miller is the chairman of the Board
of Bancshares, and Mr. Huggins is the chairman of the Board of
First United Security Bank. Otherwise, all positions held with
Bancshares are also held with First United Security Bank.
Information regarding the executive officers of Bancshares and
First United Security Bank who are not directors is also provided.
<TABLE>
<CAPTION>
Name, Age and Year
First Became Director Position With Principal Occupation for
or Executive Officer Bancshares Last Five Years
- -------------------- ------------- -----------------------
<S> <C> <C>
Dan R. Barlow Director Bank Officer
57, 1997
Linda H. Breedlove Director Co-publisher of The South
55, 1997 Alabamian
Gerald P. Corgill Director President of Dozier Hardware
57, 1985 Company
Roy G. Cowan, D.M.D. Director Dentist (Retired)
65, 1990
John C. Gordon, Director Teacher; Forestry, timberland and
41, 1997 investment services
William G. Harrison Director Timber Harvesting & Trucking
52, 1976
Fred L. Huggins Director, Chairman Banking; President of
63, 1997 of the Board of Acceptance Loan Company
Directors of First
United Security
Bank
Hardie B. Kimbrough Director Attorney; Retired Presiding
61, 1986 Judge, First Judicial Circuit
of the State of Alabama
Jack W. Meigs Director Circuit Judge
41, 1997
James L. Miller Chairman of the Senior Vice President,
69, 1985 Board of Directors Finance, Administration
of Bancshares and Planning, MacMillan
and Director Bloedel Packaging Inc.
(forest products and container
board manufacturer) (Retired)
Ray Sheffield Director President of Deas Insurance
61, 1997
James C. Stanley, D.M.D. Director Dentist (Retired)
62, 1978
R. Terry Phillips President, Chief President and Chief
45, 1999 Executive Officer, Executive Officer of
and Director First United Security
Bank since January 1999;
President and CEO of
First Community Bank, Chatom,
AL until January, 1999
Clarence Watters Director Probate Judge of Clarke County
67, 1997
Howard M. Whitted Director Industrial Forester,
54, 1985 MacMillan Bloedel Packaging
Inc. (forest products and
container board manufacturer)
Bruce N. Wilson Director Attorney
44, 1997
EXECUTIVE OFFICER WHO
IS NOT ALSO A DIRECTOR
Larry M. Sellers Vice President/Secretary Vice President/Secretary/
50, 1984 Treasurer of Bancshares Treasurer of Bancshares and
since 1987 Senior Executive Vice Presi-
dent and Chief Administrative
Officer of First United
Security Bank since 1984
</TABLE>
The Boards of Directors of Bancshares and First United
Security Bank conduct their business through meetings of the boards
and through their committees. During 1998, the Board of Directors
of Bancshares met fourteen times and the Board of First United
Security Bank met fourteen times. In 1998, each director attended
at least 75% of the meetings of the Board of Directors.
There is no nominating committee or other committee performing
similar functions of the Board of Directors of First United
Security Bank. First United Security Bank's Board has an audit
committee which functions to ensure that the Bank's and Bancshares'
financial statements present fairly the condition of the Bank and
Bancshares, to determine that adequate accounting and operational
controls are in place to protect First United Security Bank's and
Bancshares' assets, to report to the Board of Directors of the Bank
any of its findings, and to ensure that the affairs of the Bank and
Bancshares are being conducted in accordance with policy and
regulatory and legal requirements. The members of the audit
committee are Roy G. Cowan, D.M.D., Chairman, Hardie B. Kimbrough,
James C. Stanley, D.M.D., Linda H. Breedlove, John C. Gordon and
Jack W. Meigs. During 1998, the audit committee met five times.
First United Security Bank's Board has a compensation committee
which reviews officers' salaries, benefits, incentive programs and
other items of compensation. The members of the compensation
committee are Bruce N. Wilson, Chairman, Howard Whitted, Gerald P.
Corgill, Linda H. Breedlove, and Clarence Watters. The late CEO,
Jack M. Wainwright, III, served, and Larry M. Sellers serves in a
non-voting ex-officio capacity. The compensation committee met four
times in 1998.
The policy of Bancshares is that the directors of Bancshares
receive $600 per month for service as directors, with the exception
of the Chairman of the Board who receives $900 per month. Directors
of Bancshares who also serve as directors of First United Security
Bank, and receive a fee of $400 per regular board meeting attended
of First United Security Bank. Outside members of committees of
Bancshares and First United Security Bank receive fees of $100 per
meeting attended.
COMPLIANCE WITH SECTION 16(a) OF
THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires
the directors and executive officers of Bancshares, and persons who
own more than 10% of a registered class of Bancshares' equity
securities, to file with the Securities and Exchange Commission the
initial reports of ownership and reports of changes in ownership of
common stock of Bancshares. Officers, directors and greater than
10% shareholders are required by SEC regulations to furnish
Bancshares with copies of all Section 16(a) forms they file.
To Bancshares' knowledge, based solely on review of the copies
of such reports furnished to Bancshares and written representations
that no other reports were required, during the fiscal year ended
December 31, 1998, all Section 16(a) filing requirements applicable
to its officers, directors and greater than 10% beneficial owners
were complied with, except that one report covering one transaction
was filed late by Mr. Watters.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Certain directors and officers of Bancshares and First United
Security Bank and their associates were customers of, and had
transactions with, First United Security Bank in the ordinary
course of business since the beginning of the last fiscal year, and
additional transactions may be expected to take place in the
ordinary course of business. Included in such transactions are
outstanding loans, all of which were made 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 the normal risks of collectibility or present
other unfavorable features.
During 1998, the law firms of Wilson & Drinkard, of which
Bruce N. Wilson, a director of Bancshares, is a partner, and
Gilmore & Gilmore, of which Hardie B. Kimbrough, a director of
Bancshares, is Of Counsel, rendered various legal services to
Bancshares and its subsidiaries.
COMPENSATION COMMITTEE REPORT
This report is provided by the Compensation Committee of the
Board of Directors (the "Committee") to assist stockholders in
understanding the Committee's objectives and procedures in
establishing the compensation of First United Security's Chief
Executive Officer and other senior executives.
The Committee consists of five outside directors and also
includes the chief executive officer and senior executive officer
who serve in a non-voting ex officio capacity. The committee is
responsible for establishing and administering Bancshares' and
First United Security's executive compensation program.
The Committee has been provided with competitive pay and
performance information by outside sources. First United Security's
staff provided additional analysis that was used by the Committee.
In structuring the incentive programs, the Committee has been
advised by external legal counsel, as well as Bancshares' staff, on
plan design.
Compensation Philosophy and Objective
The Committee believes that compensation of Bancshares' or
First United Security's key executives should:
-- link rewards to business results and stockholders'
returns,
-- encourage creation of stockholders' value and achievement
of strategic objectives,
-- maintain an appropriate balance between salary and
incentive opportunity,
-- attract and retain, on a long-term basis, high caliber
personnel,
-- provide a total compensation opportunity that is
competitive with the banking industry, taking into
account relative company size and performance as well as
individual responsibilities and performance, and
-- continue to provide compensation that is tax deductible.
Key Elements of Executive Compensation
Bancshares' and First United Security's existing executive
compensation program consists of three elements: Base Pay,
Incentives and Stock Options. Payment of the incentive depends on
performance measured against annual objectives as described below.
Base Pay
-- Salary structures are targeted to average pay levels of
other regional banks of similar size and structure.
Individual base pay within the structures is based on
sustained individual performance toward achieving USB's
goals and objectives.
-- Executive salaries are reviewed annually.
Incentive
-- The incentive plan is an annual cash incentive plan that
links incentives to performance results of the prior
year. Awards are based on three components: corporate
results, bank operating results and individual
performance.
-- Operating and financial targets are set at the beginning
of each year. Targets include a variety of elements such
as: loan growth, expense control, income generation,
return on average assets (ROAA), return on average equity
(ROAE), and loan portfolio performance. Results are
measured against annual business plan objectives and
against industry standards.
-- Actual individual incentives depend on assessments of
individual success in meeting targets.
Stock Options
Stock options are granted for two primary reasons:
-- The Committee believes stock options associate executive
compensation with shareholders' interest, since no
rewards are realized unless the stock value increases.
-- Stock options are the most common type of long term
incentive among banks and bank holding companies, and
they enable First United Security to be competitive in
retaining qualified management.
United Security's Long Term Incentive Compensation Plan was
approved by shareholders in 1997. This Plan provides for the
issuance of up to 60,000 shares of Bancshares' common stock. During
1998, options for 57,350 shares were granted and were exercisable.
They were made available to all First United Security employees.
During 1998, options for 600 shares were granted to two executive
officers of ALC. The options were issued at the fair market value
of Bancshares' common stock on the date of the grant and expire
five years after the date of the grant.
1998 CEO Compensation
In assessing the performance and establishing the base salary
and incentive compensation of the Chief Executive Officer and other
members of Bancshares' or First United Security's senior
management, the Committee paid particular attention to management's
sustained success in operating First United Security.
The 1998 base salary of First United Security's Chief
Executive Officer was set without his participation. In setting the
Chief Executive Officer's base salary, special consideration was
given to First United Security's superior earnings record since his
appointment. Net income for 1998 totalled $8.5 million, or $2.40
diluted net income per shae. 1998 was the tenth consecutive year
net income has increased. Consideration was also given to his personal
job performance, expectations of his anticipated contributions to First
United Security's future and his rights under his three-year
employment agreement dated March 18, 1997, described herein.
The 1998 incentive compensation for the Chief Executive
Officer was based on the same goals and criteria as the incentive
for bank loan officers. Bank employees earned a cash incentive
based on a minimum return on average asset goal for the Bank of 1.30%
and a minimum return on average equity goal of 14%. The incentive award
was based on the actual achievement of 2.0% and 17% ROAA and ROAE,
respectively. All loan officers were given additional financial
incentives based on the performance of the loan portfolio they
administer, and the Chief Executive Officer participated in this
incentive program. For example: the Chief Executive Officer was
awarded a cash incentive for his success in reducing the charge-off
loans in his portfolio to less than .10%. However, since his
portfolio had a delinquency rate of greater than 2.0%, his total
cash incentive was reduced. The Committee's base salary and incentive
recommendation for the Chief Executive Officer was reviewed and
approved by the full board of directors.
Based on recommendations to the Committee from the Chief
Executive Officer, the 1998 base salaries for the other executive
officers were set by the Committee, using the same review process
as applied when establishing the chief executive's base salary. The
Committee reviewed their individual recommendations regarding each
named executive officer with the Board of Directors and secured
full board approval.
Mr. Wainwright passed away on August 29, 1998. The Board of
Directors agreed to continue his salary through September 1998, and
to pay all incentive pay earned through the month of September,
1998.
Other Executive Compensation
First United Security provides programs to executives that are
also available to other employees, including The United Security
Bancshares, Inc. Employee Stock Ownership Plan, health insurance
and stock options. Bancshares provides no pension programs.
This Report furnished by:
Bruce N. Wilson (Chairman)
Linda H. Breedlove
Clarence Watters
Howard M. Whitted
Gerald P. Corgill
Comparative Stock Performance
The following graph compares cumulative total shareholder
returns on Bancshares Common Stock for the five years ended
December 31, 1998, with that of The Standard and Poor's Composite
Index ("S&P 500") and a peer group stock performance index defined
as follows: 21 independent community banks located in the Southeast
United States (the "Independent Bank Index"). The graph shows the
comparative values for $100 invested on December 31, 1993.
<TABLE>
<CAPTION>
1993 1994 1995 1996 1997 1998
____ ____ ____ ____ ____ ____
<S> <C> <C> <C> <C> <C> <C>
United Security Bancshares, Inc. 100 106 114 160 419 405
Independent Bank Index 100 119 151 191 280 296
S&P 500 Index 100 101 139 171 228 294
</TABLE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No executive officer-company director interlocks existed for
1998. During 1998, Jack M. Wainwright III, President and Chief
Executive Officer, and Larry M. Sellers, Senior Executive
Vice-President, were ex officio non-voting members of the
compensation committee. They participated only in compensation
recommendations, discussions and decisions involving Company
officers other than themselves.
EXECUTIVE COMPENSATION AND BENEFITS
The following table indicates all compensation paid by
Bancshares or First United Security Bank for services rendered to
Bancshares or First United Security Bank during 1998 by Jack M.
Wainwright, III, Larry M. Sellers, Fred L. Huggins and Dan R.
Barlow, the executive officers whose total cash compensation
exceeded $100,000.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Securities
Underlying
Name/Title Year Salary Bonus(2) Other(3) Options
___________ ____ ___________ __________ __________ __________
<S> <C> <C> <C> <C> <C>
Jack M. Wainwright, III 1998 $183,465.43 $52,746.31 $18,912.32 7,500
President & Chief 1997 206,730.51 53,550.28 16,673.44
Executive Officer (1) 1996 151,915.68 53,550.20 16,634.54
Larry M. Sellers 1998 $ 93,000.00 $32,187.00 $16,668.48 4,685
Secretary/Treasurer of Bancshares 1997 88,640.24 30,831.18 13,063.11
and Executive Vice President and 1996 83,730.96 30,143.15 11,654.12
Chief Administrative Officer of
First United Security Bank
Fred L. Huggins 1998 $ 83,200.00 $26,091.00 $17,813.94 5,000
Chairman of First United Security
Bank and Director of United
Security Bancshares and
Chairman, President and Chief
Executive Officer of ALC
Dan R. Barlow 1998 $ 82,000.00 $26,035.00 $20,079.82 4,000
Executive Vice President of
First United Security Bank and
Director of United Security
Bancshares and First United
Security Bank
<FN>
(1) Mr. Wainwright passed away on August 29, 1998. His successor,
R. Terry Phillips, became President and the Chief Executive
Officer of Bancshares effective January 1, 1999.
(2) Bonuses are earned solely through the incentive compensation
program based on (i) a return on average asset goal of two
percent; (ii) a return on average equity goal of fifteen
percent; and (iii) financial incentives based on the
performance of the loan portfolio administered by the named
officer.
(3) The totals in this column reflect First United Security
contributions under The United Security Bancshares, Inc.
Employee Stock Ownership Plan, other perquisites, and
directors' fees.
</FN>
</TABLE>
Bancshares entered into an employment agreement on January 1,
1999, with R. Terry Phillips, President and Chief Executive
Officer, which provides, among other things, that Mr. Phillips
will be employed for a period of three years as President and Chief
Executive Officer of United Security Bank and that he would receive
a minimum annual salary of $185,000.00. Mr. Phillips is also
eligible to participate in First United Security's incentive
compensation plan. Mr. Phillips' employment agreement also provides
that he is entitled to receive severance compensation in an amount
equal to his average annual salary for the period of the contract
if he is terminated for any reason other than his death or
disability, his resignation, his conviction of a crime of moral
turpitude, or the expiration of his agreement. Also, Mr. Phillips
will be entitled to such severance compensation upon any reduction
in the level or a change in nature of his responsibilities to
Bancshares or United Security Bank. The severance compensation also
includes payment of medical insurance and benefits for a period of
three years. In addition, if Mr. Phillips' employment is terminated
due to a change in ownership of the Bank, he will receive three
times his annual salary.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
At its meeting on June 18, 1998, the Board of Directors of
Bancshares, upon recommendation of the Audit Committee of the First
United Security Bank Board of Directors, approved the engagement of
the accounting firm of Arthur Andersen LLP as the independent
public accountants to audit Bancshares' financial statements for
the year ending December 31, 1998.
Arthur Andersen LLP will serve as Bancshares' principal
independent public accountant for the current year. Representatives
of Arthur Andersen are expected to be present at the 1999 Annual
Meeting of Stockholders, with the opportunity to make a statement
if they desire to do so, and are expected to be available to
respond to appropriate questions.
PROPOSAL TWO:
REINCORPORATION IN DELAWARE
Introduction
For the reasons set forth below, the Board of Directors
believes that it is in the best interests of the Company and its
shareholders to change the state of incorporation of the Company
from Alabama to Delaware (the "Reincorporation"). Throughout this
Proxy Statement, the terms "USB-Alabama," "Bancshares" or the
"Company" refer to United Security Bancshares, Inc., the existing
Alabama corporation, and the term "USB-Delaware" refers to the new
Delaware corporation, a wholly owned subsidiary of USB-Alabama,
which is the proposed successor to USB-Alabama in the proposed
Reincorporation.
As discussed below, the principal reason for the proposed
Reincorporation is management's belief that Delaware corporate law
affords a more refined and modern alternative to that of Alabama by
virtue of the greater flexibility of Delaware law and the
substantial body of case law interpreting that law. The
Reincorporation is not being proposed in order to prevent an
unsolicited takeover attempt, and the Board of Directors is not
aware of any present attempt by any person to acquire control of
the Company, obtain representation on the Board of Directors or
take any action that would materially affect the governance of the
Company. If any such action were attempted in the future, however,
the Company believes that the laws of Delaware would be better
suited to the defense of such action than the laws of Alabama.
The Merger
The Reincorporation will be effected by merging USB-Alabama
into USB-Delaware, which was incorporated solely for such purpose
(the "Merger"), pursuant to an Agreement and Plan of Merger (the
"Merger Agreement") in substantially the form attached hereto as
Exhibit A. Upon completion of the Merger, USB-Alabama will cease to
exist as a corporate entity and USB-Delaware will continue to
operate the business of the Company under the name of United
Security Bancshares, Inc. The discussion set forth below is
qualified in its entirety by reference to the Merger Agreement
attached hereto.
Pursuant to the Merger Agreement, each outstanding share of
USB-Alabama Common Stock, par value $.01 per share, will be
converted automatically into one share of USB-Delaware Common
Stock, par value $.01 per share, upon the effective date of the
Merger. Each stock certificate representing issued and outstanding
shares of USB-Alabama Common Stock will continue to represent the
same number of shares of Common Stock of USB-Delaware. The Company
expects that it will issue substitute share certificates at some
point in the relatively near future. Stockholders will be contacted
when the Company undertakes such action.
After the Merger, all employee benefit and stock option plans
of USB-Alabama will be continued by USB-Delaware, and each option
or right issued pursuant to such plans will be converted
automatically into an option or right to purchase the same number
of shares of USB-Delaware Common Stock, at the same price per
share, upon the same terms and subject to the same conditions as
set forth in such plans and any options or other rights issued
under the plans.
If the Reincorporation proposal is approved by the
stockholders, it is anticipated that the effective date of the
Merger will be as soon as practicable following the Annual Meeting.
The Merger Agreement provides that the Merger may be abandoned by
the Board of Directors of either USB-Alabama or USB-Delaware for
any reason, notwithstanding shareholder approval. The Merger
Agreement may also be amended prior to the effective date of the
Merger, except that certain material amendments may not be made
after the shareholders have approved the Reincorporation proposal.
Under the Alabama Business Corporation Act (the "Alabama
Act"), shareholders of USB-Alabama have the right to dissent with
respect to the Reincorporation proposal and to receive from the
Company payment in cash of the fair value of their shares of Common
Stock if the Merger is completed. See "Rights of Dissenting
Shareholders."
Regulatory Approvals
As a result of the Reincorporation, USB-Delaware will become
a "bank holding company," as that term is defined in the Federal
banking statutes. Any transaction that causes a company to become
a bank holding company normally requires the prior approval of the
Board of Governors of the Federal Reserve System (the "Federal
Reserve") under Section 3 of the Bank Holding Company Act. However,
because USB-Delaware is a subsidiary of USB-Alabama and the
post-Merger ownership of USB-Delaware will be identical to the
pre-Merger ownership of USB-Alabama, the Federal Reserve has waived
the application and prior approval requirements.
It is possible, although unlikely, that the prior approval of
the Federal Deposit Insurance Corporation and/or the Alabama State
Banking Department may be required under those agencies' respective
"change in control" regulations. In the event any such approvals
are necessary, their receipt is a pre-condition to the consummation
of the Merger and the Reincorporation.
Vote Required for the Reincorporation Proposal
Under the Alabama Act, approval of the Reincorporation
proposal (which will also constitute approval of the Merger
Agreement, the Certificate of Incorporation (the "Delaware
Certificate") and the Bylaws (the "Delaware Bylaws") of
USB-Delaware) will require the affirmative vote of two-thirds (2/3)
of the votes entitled to be cast on the Reincorporation proposal.
The Delaware Certificate and the Delaware Bylaws are attached
hereto as Exhibits B and C, respectively.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE
PROPOSED REINCORPORATION. THE EFFECT OF AN ABSTENTION OR A BROKER
NON-VOTE IS THE SAME AS THAT OF A VOTE AGAINST THE REINCORPORATION
PROPOSAL.
Principal Reasons for the Proposed Reincorporation
The Company was originally incorporated in Alabama in 1983.
The state of Alabama was chosen as a domicile primarily as a matter
of convenience and because the laws of that state were suitable for
the governance of the Company's operations at the time. Since 1983,
however, the Company's operations have expanded both geographically
and commercially, resulting in the significantly larger size and
broader shareholder base of the Company. As the Company plans for
the future, the Board of Directors and management believe that it
is essential to be able to draw upon well established principles of
corporate governance in making legal and business decisions. The
prominence and predictability of Delaware corporate law provide a
reliable foundation on which the Company's governance decisions can
be based, and the Company believes that shareholders will benefit
from the responsiveness of Delaware corporate law to their needs
and to those of the corporation they own.
For many years, Delaware has followed a policy of encouraging
incorporation in that state and, in furtherance of that policy, has
been a leader in adopting, construing and implementing
comprehensive, flexible corporate laws responsive to the legal and
business needs of the corporations organized under its laws. Many
corporations have chosen Delaware initially as a state of
incorporation, or have chosen to reincorporate in Delaware in a
manner similar to that proposed by the Company. The Board of
Directors believes that the principal reasons for considering such
a reincorporation are:
(i) the General Corporation Law of the State of Delaware
(the "Delaware Law"), which is generally acknowledged to be the
most advanced and flexible corporate statute in the country;
(ii) the responsiveness and efficiency of the Division of
Corporations of the Secretary of State of Delaware, which is on the
cutting edge of computer technology;
(iii) the Delaware General Assembly, which each year
considers and adopts statutory amendments that have been proposed
by the Corporation Law Section of the Delaware bar in an effort to
ensure that the corporate statute continues to be responsive to
changing business needs;
(iv) the Delaware Court of Chancery, which brings to its
handling of complex corporate issues a level of experience and a
degree of sophistication and understanding unmatched by any other
court in the country, and the Delaware Supreme Court, the only
Delaware appellate court, which is highly regarded and currently
includes former Vice Chancellors and corporate practitioners; and
(v) the development in Delaware over the last century of a
well established body of case law construing the Delaware Law,
which provides businesses with a greater measure of predictability
than exists in most if not all other jurisdictions.
The Company believes that Delaware provides a more appropriate
and flexible corporate and legal environment in which to operate
than currently exists in the state of Alabama and that the Company
and its shareholders would benefit substantially from such
environment.
Anti-takeover Implications
Delaware, like many other states, permits a corporation to
adopt a number of measures designed to reduce a corporation's
vulnerability to unsolicited takeover attempts through its
corporate charter or bylaws or otherwise. The Reincorporation
proposal is not being proposed in order to prevent such a change in
control, and the Board of Directors is not aware of any present
attempt to acquire control of the Company or to obtain
representation on the Board of Directors.
Nevertheless, certain effects of the Reincorporation proposal
may be considered to have anti-takeover implications. For example,
Section 203 of the Delaware Law restricts certain "business
combinations" with "interested stockholders" for three years
following the date that a person becomes an interested stockholder,
unless the Board of Directors approves the business combination.
Although Section 203 should not apply to USB-Delaware initially, it
may become applicable upon the occurrence of certain specified
events. See " Certain Significant Differences Between the Laws of
Alabama and Delaware -- Certain Business Combinations."
For a detailed discussion of the changes which will be
implemented as part of the Reincorporation proposal, including the
significant differences between the laws of Alabama and Delaware,
see "Charter and Bylaws of USB-Alabama and USB-Delaware" and
"Certain Significant Differences Between the Laws of Alabama and
Delaware."
The Board of Directors of the Company has considered in the
past, and may consider again in the future, implementing certain
defensive strategies designed to enhance the Board's ability to
negotiate with an unsolicited bidder (some of which may not require
shareholder approval). These strategies include, but are not
limited to, shareholder rights plans, severance agreements for its
management and key employees which become effective upon the
occurrence of a change in control of the Company, and the
designation and issuance of preferred stock, the rights and
preferences of which are determined by the Board of Directors. Some
of these measures may be implemented under Alabama law. There is
nonetheless substantial judicial precedent in the Delaware courts
as to the legal principles applicable to such defensive measures
and as to the conduct of the Board of Directors under the business
judgment rule with respect to unsolicited takeover attempts. The
Board of Directors has no current plans to implement any such
measures.
The Board of Directors believes that unsolicited takeover
attempts may be unfair or disadvantageous to the Company and its
shareholders because, among other reasons: (i) a non-negotiated
takeover bid may be timed to take advantage of temporarily
depressed stock prices; (ii) a non-negotiated takeover bid may be
designed to foreclose or minimize the possibility of more favorable
competing bids or alternative transactions; and (iii) a
non-negotiated takeover bid may involve the acquisition of only a
controlling interest in the corporation's stock, without affording
all shareholders the opportunity to receive the same economic
benefits.
By contrast, in a transaction in which a potential acquiror
must negotiate with an independent board of directors, the board
can and should take into account the underlying and long-term
values of the Company's business, the possibilities for alternative
transactions on more favorable terms, possible advantages from a
tax-free reorganization, anticipated favorable developments in the
Company's business not yet reflected in the stock price and
equality of treatment of all shareholders.
Despite the belief of the Board of Directors as to the
benefits to shareholders of the Reincorporation proposal, it may be
disadvantageous to the extent that it has the effect of
discouraging a future takeover attempt which is not approved by the
Board of Directors, but which a majority of the shareholders may
deem to be in their best interests or in which shareholders may
receive a substantial premium for their shares over the then
current market value or over their cost basis in such shares. As a
result of such effects of the Reincorporation proposal,
shareholders who might wish to participate in an unsolicited
takeover offer may not have an opportunity to do so. In addition,
to the extent that provisions of Delaware law enable the Board of
Directors to resist a takeover or a change in control of the
Company, such provisions could make it more difficult to change the
existing Board of Directors and management.
No Change in the Name, Board Members, Business, Management,
Employee Benefit Plans or Location of Principal Facilities of the
Company
The Reincorporation proposal will effect only a change in the
legal domicile of the Company and certain other changes of a legal
nature, the most significant of which are described in this Proxy
Statement. The proposed Reincorporation will NOT result in any
change in the name, business, management, fiscal year, assets or
liabilities or location of the principal facilities of the Company.
The 16 directors who will be elected at the Annual Meeting will
become the directors of USB-Delaware. All employee benefit and
stock option plans of USB-Alabama will be continued by
USB-Delaware, and each option or right issued pursuant to such
plans will automatically be converted into an option or right to
purchase the same number of shares of USB-Delaware Common Stock, at
the same price per share, upon the same terms and subject to the
same conditions as set forth in such plans and in any options or
other rights issued under the plans. Approval of the
Reincorporation proposal will also constitute approval of the
assumption of these plans by USB-Delaware. Other employee benefit
arrangements of USB-Alabama will also be continued by USB-Delaware
upon the terms and subject to the conditions currently in effect.
Charter and Bylaws of USB-Alabama and USB-Delaware
The following discussion summarizes the material differences
between the Delaware Certificate and Delaware Bylaws and USB-Alabama's
Restated Articles of Incorportion, as amended (the "Alabama Articles")
and Bylaws, as amended (the "Alabama Bylaws"). Copies of the Delaware
Certificate and the Delaware Bylaws are attached hereto as Exhibits
B and C, respectively, and all statements herein concerning such
documents are qualified by reference to the complete provisions
thereof.
The provisions of the Delaware Certificate and the Delaware
Bylaws are similar to those contained in the Alabama Articles and
the Alabama Bylaws in several respects. The Reincorporation
proposal, however, includes the implementation of certain
provisions in the Delaware Certificate and the Delaware Bylaws
which alter the rights of shareholders and the powers of
management. In addition, certain other changes could be implemented
in the future by amendment to the Delaware Certificate with
stockholder approval or, in certain cases, by amendment of the
Delaware Bylaws or by other action of the Board without stockholder
approval. See "Certain Significant Differences Between the Laws of
Alabama and Delaware." Approval of the Reorganization proposal by
the shareholders will result in the adoption of all provisions set
forth in the Delaware Certificate and Delaware Bylaws.
Authorized Stock. The Alabama Articles currently authorize the
Company to issue up to 10,000,000 shares of Common Stock, par value
$.01 per share. The Delaware Certificate also authorizes
USB-Delaware to issue up to 10,000,000 shares of Common Stock, par
value $.01 per share.
Monetary Liability of Directors. The Alabama Act permits a
corporation, through a provision in its articles of incorporation,
to eliminate or limit the liability of a director to the
corporation or its shareholders for money damages for any action
taken or any failure to take action, except in certain
circumstances. The Alabama Articles contain such a provision
limiting the personal monetary liability of directors.
Similarly, the Delaware Law provides that the certificate of
incorporation may contain a provision eliminating or limiting the
personal liability of a director to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as
a director, provided that such provisions may not eliminate or
limit the liability of a director (i) for any breach of the
director's duty of loyalty to the corporation or its stockholders,
(ii) for acts or omissions not in good faith or which involve
intentional misconduct or knowing violation of law, (iii) under
Section 174 of the Delaware Law, involving the payment of unlawful
dividends, stock repurchases or redemptions, or (iv) for any
transaction from which the director derived an improper personal
benefit. The Delaware Certificate contains a provision eliminating
personal monetary liability of directors to the fullest extent
possible under Delaware Law.
Stockholder Ability to Call Special Meetings. The Alabama Act
requires that holders of at least 10% of the votes entitled to be
cast on any issue be able to call a special meeting of shareholders.
Although the Delaware Law does not require that stockholders
be allowed to call a special meeting of stockholders, the Delaware
Bylaws provide likewise that special meetings of stockholders may be
called holders of at least 10% of the votes entitled to be cast
on any issue to be voted upon at such meeting.
Manner of Stockholder Vote. Under the Alabama Act, the
election of directors may proceed in the manner described in a
corporation's bylaws. The Alabama Bylaws do not provide for a
specific method of voting for the election of directors at a
shareholders' meeting. Under the Delaware Law, election of
directors is to be by written ballot, unless the certificate of
incorporation provides otherwise. The Delaware Certificate provides
that elections of directors need not be by written ballot, unless
the Bylaws so provide. The Delaware Bylaws do not require written
ballots in the election of directors, but instead provide that any
vote of the stockholders on any matter shall be by voice or hand
vote unless a written vote by ballot is requested by a stockholder
entitled to vote. The Delaware Bylaws further provide that every
vote taken by written ballot shall state the name of the
stockholder or proxy voting and such other information as may be
required under the procedure established for the meeting. Although
not required by the Delawae Law, the Delaware Certificate provides
that shareholders may act by unanimous written consent, as is
provided by the Alabama Act.
Board of Directors. Under the Alabama Act, the number of
directors constituting the Board of Directors is to be as specified
in or fixed in accordance with the articles of incorporation or
bylaws. If a board of directors has power to fix or change the
number of directors, the board of directors may only increase or
decrease by 30% or less the number of directors last approved by
the shareholders. Only the shareholders may increase or decrease by
more than 30% the number of directors last approved by the
shareholders. The Alabama Bylaws authorize the Board of Directors
or the shareholders to fix the number of directors, with the number
of directors currently set at 16.
Similar to the Alabama Act, the Delaware Law also provides
that the number of directors constituting the Board of Directors is
to be as specified in or fixed in accordance with the certificate
of incorporation or bylaws. The Delaware Law does not, however,
limit the ability of the Board of Directors to increase or decrease
the number of directors by any number or percentage or reserve such
right to the stockholders. The Delaware Certificate authorizes the
Board of Directors to fix the number of directors by resolution
within a range of three to twenty-five.
The Merger Agreement provides that the directors of
USB-Delaware, who are the same persons as the directors of
USB-Alabama and have the same terms which they have as directors of
USB-Alabama, will continue as directors at and after the Effective
Time of the Merger.
Supermajority Voting Requirements. The Alabama Articles and
Alabama Bylaws contain "supermajority" voting requirements for the
Board of Directors with respect to significant corporate events.
Specifically, the affirmative vote of two-thirds (2/3) of the total
number of directors is required to approve the following: (1) any
tender offer or exchange offer or any proposal for a merger made to
USB-Alabama; (2) the sale of all the stock or assets of, or a
business combination involving USB-Alabama or any of its
subsidiaries; (3) the sale of a substantial equity interest in, or
a substantial portion of the assets of USB-Alabama or any of its
subsidiaries, including a plan of liquidation of USB-Alabama or any
of its subsidiaries; or (4) the addition or removal of any person
with significant influence over major policymaking decisions of
USB-Alabama, including, but not limited to, those persons who,
without regard to title, exercise the authority of one or more of
the following positions: chief executive officer, president, chief
operating officer, chief financial officer, chief lending officer,
or chief investment officer.
These voting requirements were included to comply with one of
the conditions imposed in connection with the June 1997 merger of
First Bancshares, Inc. ("FBI") with and into USB-Alabama (the "FBI
Merger"). The primary purpose of the requirement is to ensure that
directors from FBI and USB have an adequate voice in major corporate
decisions after the FBI Merger. In the process of negotiating the
FBI Merger Agreement, FBI's and
USB's respective Boards of Directors agreed that a majority vote to
approve certain major corporate decisions would not ensure that
such decisions reflect the intended "merger of equals" nature of
the FBI Merger. This supermajority requirement has been included in
the Delaware Certificate and the Delaware Bylaws.
The Alabama Act provides that a corporation's board of
directors may amend or repeal the corporation's bylaws unless (i)
such power is reserved exclusively to the shareholders by the
articles of incorporation or (ii) the shareholders in amending or
repealing a particular bylaw provide expressly that the board of
directors may not amend or repeal that bylaw. The Alabama Bylaws
provide that the power to adopt, amend or repeal the Alabama Bylaws
is jointly vested in the Board of Directors and the shareholders.
Under the Delaware Law, the stockholders have the power to
adopt, amend or repeal bylaws; however, the certificate of
incorporation may confer such power upon the board of directors,
although in doing so it may not divest the stockholders of their
power to adopt, amend or repeal the bylaws. The Delaware
Certificate provides that the Board of Directors has concurrent
power with the stockholders to adopt, amend, or repeal the bylaws.
The Board of Directors may take such action upon the affirmative
vote of the number of Directors which constitutes, under the terms
of the bylaws, the action of the Board of Directors. The
stockholders may amend the bylaws upon the affirmative vote of the
holders of not less than a majority of the votes entitled to be
cast by the holders of all of the outstanding shares of the voting
stock, voting together as a class.
Certain Significant Differences Between the Laws of Alabama and
Delaware.
In addition to the matters discussed above, Delaware law
differs in a number of respects from Alabama law. The following
discussion summarizes certain differences which could materially
affect the rights of shareholders if the Reincorporation is
consummated. The discussion is not an exhaustive description of all
the differences between the two states' laws.
Alabama Constitutional Provisions. Section 234 of the Alabama
Constitution provides that the stock and bonded indebtedness of a
corporation shall not be increased without the consent of the
persons holding the larger amount in value of stock, which consent
shall be obtained at a meeting of shareholders where notice of such
meeting has been provided more than 30 days in advance. Further,
Section 237 of the Alabama Constitution provides that a corporation
may not issue preferred stock without the consent of the owners of
two-thirds of the stock of the corporation. The lack of certainty
arising from, and the burden placed on Alabama corporations in
complying with, such provisions are often viewed as disadvantages
of incorporation in Alabama. The Delaware Constitution contains no
such provisions.
Certain Business Combinations. In the past several years, a
number of states (but not including Alabama) have adopted special
laws designed to make certain kinds of "unfriendly" corporate
takeovers, or other transactions involving a corporation and one or
more of its significant shareholders, more difficult. Under Section
203 of the Delaware Law ("Section 203") certain "business
combinations" with "interested stockholders" of Delaware
corporations are subject to a three-year moratorium unless
specified conditions are met.
Section 203 prohibits certain mergers, consolidations, sales
of assets and other transactions with an "interested stockholder"
(generally a 15% stockholder or group of stockholders) for three
years following the date the stockholder became an interested
stockholder. This prohibition on business combinations is subject
to certain exceptions, the most significant of which are that the
prohibition does not apply if: (i) the business combination or
transaction in which the stockholder becomes an interested
stockholder is approved by the corporation's board of directors
prior to the stockholder becoming an interested stockholder; (ii)
the business combination is with an interested stockholder who
became an interested stockholder in a transaction whereby he
acquired 85% of the corporation's voting stock, excluding shares
held by directors who are also officers and certain employee stock
plans; or (iii) the business combination is approved by the
corporation's board of directors and authorized at a meeting by the
affirmative vote of at least 66 2/3% of the outstanding voting
stock which is not owned by the interested stockholder.
Section 203 only applies to Delaware corporations which have
a class of voting stock that is listed on a national securities
exchange, authorized for quotation on the NASDAQ Stock Market, or
held of record by more than 2,000 stockholders. Because
USB-Delaware will not satisfy any of these requirements at the time
of the Merger, it is anticipated that Section 203 will not
initially be applicable to USB-Delaware. A Delaware corporation may
elect not to be governed by Section 203 at any time by including a
provision to that effect in its certificate of incorporation or
bylaws. The Delaware Certificate and Delaware Bylaws do not contain
any such provision. Accordingly, the Company believes Section 203
will become applicable to USB-Delaware when and if any one or more
of the three requirements set forth above should ever be satisfied.
For example, if the common stock of USB-Delaware were to be listed
on a national securities exchange or authorized for quotation on
the NASDAQ Stock Market in the future, then the Company anticipates
that Section 203 would become applicable to USB-Delaware at such
time.
The Company expects that Section 203, if and when it ever
applies to USB-Delaware, would have the effect of encouraging any
potential acquiror to negotiate with the Board of Directors.
Section 203 also might have the effect of limiting the ability of
a potential acquiror to engage in certain tactics (such as
"two-tier pricing") that can result in dissimilar treatment of a
corporation's stockholders. At the time Section 203 was adopted by
the Delaware Legislature, a number of corporations had been subject
to tender offers for, or other acquisitions of, more than 15% but
less than 85% of their outstanding stock. In many cases, such
purchases were followed by business combinations in which the
purchaser either paid a lower price for the remaining outstanding
shares than the price it paid in acquiring its original interest in
the corporation, or paid a less desirable form of consideration.
Federal securities law and regulations applicable to business
combinations govern the disclosure required to be made to minority
stockholders in order to consummate such a transaction, but they do
not assure stockholders that the terms of the business combination
will be fair to them or that they can effectively prevent its
consummation. Moreover, the statutory right of the remaining
stockholders of the corporation to dissent in connection with
certain business combinations and receive the "fair value" of their
shares in cash may involve significant expense to such dissenting
stockholders and may not be meaningful in all cases. Such an
appraisal standard as applied under Delaware law does not take into
account any appreciation of the stock's market value due to
anticipation of the business combination and may not recognize that
the market value of the shares may be adversely influenced by the
interested person's controlling stock ownership. In addition, in
the case of some business combinations, such as a sale of assets or
a reclassification or recapitalization of a corporation's capital
stock, the statutory right of dissent is not available at all.
Section 203 was intended to close partially these "gaps" in federal
and state law and to prevent certain of the potential inequities of
business combinations.
Shareholders should note, however, that the application of
Section 203 to USB-Delaware would confer upon the Board of
Directors the power to reject a proposed business combination in
certain circumstances, even though a potential acquiror may be
offering a substantial premium for USB-Delaware's shares over the
then-current market price. Section 203 could also discourage
certain potential acquirors unwilling to comply with its
provisions.
Under Alabama law, except in certain circumstances, any
business combination must receive the affirmative vote of 66 2/3%
of the outstanding voting stock of the Company regardless of
whether the acquiror is an interested shareholder.
Shareholder Voting. Under the Alabama Act, action on a matter
generally is approved if a quorum is present and the votes cast
favoring the action exceed the votes cast opposing the action,
unless a greater number of affirmative votes is required by the
Alabama Constitution, the Alabama Act or the corporation's articles
of incorporation. In addition, unless the corporation's articles of
incorporation provide otherwise, directors are elected by a
majority of the votes cast by the shares entitled to vote when the
vote is taken. Under the Delaware Law, in the absence of a
specification in the corporation's certificate of incorporation or
bylaws, once a quorum is obtained, the affirmative vote of a
majority of shares present in person or represented by proxy and
entitled to vote on the subject matter is required for stockholder
action; however, directors are elected by a plurality of votes.
With certain exceptions, the Alabama Act requires that a
merger, share exchange, sale of all or substantially all the
corporation's assets or similar transaction be approved by a vote
of two-thirds of the votes entitled to be cast by each class of
shares outstanding, unless the corporation's articles of
incorporation provide for a greater or lesser vote. The Delaware
Law generally requires approval by only a majority of the shares
outstanding and does not require such class voting, except in the
case of transactions involving an amendment to the certificate of
incorporation where the amendment would increase or decrease the
aggregate number of authorized shares of such class, increase or
decrease the par value of the shares of such class, or alter or
change the powers, preferences or special rights of the shares of
such class so as to affect them adversely. Accordingly, there is a
lower threshold for approval of such transactions in Delaware.
The Delaware Law does not require a vote of the stockholders
of the surviving corporation in a merger (unless the corporation
provides otherwise in its certificate of incorporation) if (a) the
merger agreement does not amend the existing certificate of
incorporation, (b) each share of the stock of the surviving
corporation outstanding immediately before the effective date of
the merger is an identical outstanding or treasury share after the
merger, and (c) either no shares of common stock of the surviving
corporation and no shares, securities or obligations convertible
into such stock are to be issued or delivered under the plan of
merger, or the authorized and unissued shares or the treasury
shares of common stock of the surviving corporation to be issued or
delivered under the plan of merger plus those initially issuable
upon conversion of any other shares, securities or obligations to
be issued or delivered under such plan do not exceed 20% of the
shares of common stock of such constituent corporation outstanding
immediately prior to the effective date of the merger. The Alabama
Act contains a similar exception to its voting requirements.
Limitation or Elimination of Directors' Personal Liability.
Under the Alabama Act, if a corporation's articles of incorporation
so provide, the liability of a director to the corporation or its
shareholders for money damages for any action taken, or any failure
to take any action, as a director, may be eliminated or limited,
except liability for (a) the amount of financial benefit received
by a director to which he or she is not entitled, (b) an
intentional infliction of harm on the corporation or its
shareholders, (c) the payment of unlawful dividends, stock
repurchases or redemptions, (d) an intentional violation of
criminal law, or (e) a breach of the director's duty of loyalty to
the corporation or its shareholders. The Alabama Articles contain
such a provision limiting the liability of its directors.
Under the Delaware Law, if a corporation's certificate of
incorporation so provides, the personal liability of a director for
breach of fiduciary duty as a director may also be eliminated or
limited. However, a corporation's certificate of incorporation may
not limit or eliminate a director's personal liability (a) for any
breach of the director's duty of loyalty to the corporation or its
stockholders, (b) for acts or omissions not in good faith or
involving intentional misconduct or a knowing violation of law, (c)
under Section 174 of the Delaware Law, involving the payment of
unlawful dividends, stock repurchases or redemptions, or (d) for
any transaction in which the director received an improper personal
benefit. The Delaware Certificate contains a provision eliminating
the personal liability of its directors for breaches of fiduciary
duty as a director, subject to the foregoing limitations.
The Company is not aware of any pending or threatened
litigation to which the above-described limitation of directors'
liability would apply.
Indemnification. In general, the Alabama Act requires
indemnification when a director or officer has successfully
defended an action, on the merits or otherwise, when he or she was
a party because he or she is or was a director or officer. The
Delaware Law requires indemnification to the extent any present or
former director or officer has been successful, on the merits or
otherwise, in defense of an action where such person was a party by
reason of the fact that he or she was a director, officer, employee
or agent of the corporation or is or was serving at the request of
the corporation as a director, officer, employee or agent of
another entity.
The provisions of the Alabama Act and the Delaware Law are
substantially similar with respect to permissive indemnification.
In general, both permit indemnification against expenses reasonably
incurred, provided there is a determination by a majority vote of
disinterested directors or a committee thereof, by independent
legal counsel or by a majority vote of a quorum of the shareholders
that the person seeking indemnification acted in good faith and in
a manner reasonably believed to be in or not opposed to the best
interest of the corporation and, with respect to any criminal
proceeding, had no reasonable cause to believe that the person's
conduct was unlawful.
Under the Alabama Act, expenses incurred by a director,
officer, employee or agent in defending an action may be paid in
advance, if such individual furnishes the corporation a written
affirmation of good faith belief that he or she, in the case of
conduct in his or her official capacity, acted in the corporation's
best interests and in all other cases, acted in a manner that was
at least not opposed to the corporation's best interests; provided,
however, that in the case of any criminal proceeding, such
individual had no reasonable cause to believe that his or her
conduct was unlawful. Further, the individual must undertake to
repay any amounts advanced if it is ultimately determined that he
or she is not entitled to indemnification. However, under the
Delaware Law, expenses incurred by an individual in defending an
action may be paid in advance if such individual undertakes to
repay all amounts advanced if it is ultimately determined that such
person is not entitled to be indemnified (except with respect to
former directors and officers, and employees and agents, with
respect to whom the corporation need not obtain such undertaking).
In addition, the laws of both states authorize a corporation's
purchase of indemnity insurance for the benefit of its officers,
directors, employees and agents whether or not the corporation
would have the power to indemnify against the liability covered by
the policy.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended, may be permitted to directors,
officers, or persons controlling the Company pursuant to the
foregoing provisions, the Company has been informed that, in the
opinion of the Securities and Exchange Commission, such
indemnification is against public policy and therefore
unenforceable.
Amendments to Articles or Certificate of Incorporation and
Bylaws. Amendments to the articles of incorporation may be approved
in Alabama generally by a majority of the votes cast. Under the
Delaware Law, amendments to the certificate of incorporation
generally require the affirmative vote of the holders of a majority
of the outstanding stock.
The Alabama Act, in general, provides that a corporation's
board of directors may amend or repeal the corporation's bylaws
unless (i) the articles of incorporation reserve such power
exclusively to the shareholders in whole or in part or (ii) the
shareholders in amending or repealing a particular bylaw provide
expressly that the board of directors may not amend or repeal such
bylaw. Under the Delaware Law, stockholders have the power to
adopt, amend or repeal bylaws, although a corporation's certificate
of incorporation may confer such power on the board of directors
without divesting the stockholders of their right to act.
Voting Power of Directors. The Delaware Law provides that a
corporation's certificate of incorporation may confer upon the
holders of any class or series of stock the right to elect one or
more directors who will have such voting power as stated in the
certificate of incorporation, which voting power may be greater or
less than that of other directors or classes of directors. The
Alabama Act contains no such provision.
Dissenters' Rights of Appraisal. Under both the Alabama Act
and the Delaware Law, a shareholder of a corporation participating
in certain major corporate transactions may, under varying
circumstances, be entitled to appraisal rights pursuant to which
the shareholder may receive cash in the amount of the fair market
value of his or her shares in lieu of the consideration he or she
would otherwise receive in the transaction.
Delaware law does not, in general, afford dissenters' rights
of appraisal with respect to (a) a sale of assets, (b) a merger by
a corporation, the shares of which are either (i) listed on a
national securities exchange or designated as a national market
system security or (ii) widely held (by more than 2,000
stockholders) if such stockholders receive shares of the surviving
corporation or of a listed or widely held corporation, or (c)
stockholders of a corporation surviving a merger if no vote of the
stockholders is required to approve the merger under the
circumstances set forth above in the third paragraph of the
section titled "Shareholder Voting."
The Alabama Act, in general, affords dissenters' rights of
appraisal with respect to a merger, share exchange, sale of all or
substantially all of a corporation's assets and certain amendments
to the articles of incorporation that materially and adversely
affect shareholders' rights. Alabama law does not contain the
exclusion from dissenters' rights for corporations the shares of
which are publicly traded, as described above. For a description of
dissenters' rights available to shareholders of the Company under
Alabama law, see "Rights of Dissenting Shareholders," below, and
Exhibit D attached to this Proxy Statement.
Inspection of Shareholders List. Both the Alabama Act and the
Delaware Law allow any shareholder to inspect lists of
shareholders, although the Delaware Law permits such inspection
only for a purpose germane to the meeting and, in general, only for
a period of 10 days prior to the meeting at a place within the city
where the meeting is to be held. The Alabama Act requires the list
to be available for inspection by any shareholder, beginning two
business days after notice of the meeting is given, and continuing
through the meeting, at the corporation's principal office or, if
the principal office is not located within Alabama, at the
corporation's registered office in Alabama. Lack of access to
stockholder records could result in impairment of a stockholder's
ability to coordinate opposition to management proposals, including
proposals with respect to a change in control of the Company.
Dissolution. Under the Alabama Act, a corporation can
voluntarily dissolve upon its board of directors' adopting a
resolution setting forth a proposal to dissolve which proposal is
approved by two-thirds of the votes of each class entitled to vote
thereon. Under the Delaware Law, a corporation can voluntarily
dissolve if its board of directors and stockholders owning a
majority of the shares entitled to vote approve the dissolution or
if all of its stockholders approve such a dissolution.
Preemptive Rights. Under the Delaware Law, stockholders do not
have preemptive rights to new shares unless there is a specific
provision granting such rights in the corporation's certificate of
incorporation. The Delaware Certificate does not contain such a
provision. By contrast, the Alabama Act provides that shareholders
have preemptive rights except to the extent that a corporation's
articles of incorporation otherwise provide. The Alabama Articles
contain a denial of preemptive rights. Accordingly, the
Reincorporation will not have a practical impact on shareholders of
the Company with respect to preemptive rights. The Company believes
that not providing for mandatory preemptive rights in the Delaware
Certificate is desirable to afford greater flexibility in possible
future financings.
Interested Director Transactions. Under the Delaware Law,
certain contracts or transactions in which one or more of a
corporation's directors has an interest are not void or voidable
solely because of such interest, provided that the contract or
transaction is fair and reasonable at the time it is authorized, is
ratified by the corporation's stockholders after disclosure of the
relationship or interest, or is authorized in good faith by a
majority of the disinterested members of the board of directors or
a committee thereof after disclosure of the relationship or
interest. The Delaware Law permits the interested director to be
counted in determining whether a quorum of the directors is present
at the meeting approving the transaction, and further provides that
the contract or transaction shall not be void or voidable solely
because the interested director's vote is counted at the meeting
which authorizes the transaction.
Under the Alabama Act, a "conflicting interest" with respect
to a corporation means the interest a director of the corporation
has respecting a transaction effected or proposed to be effected by
the corporation or by a subsidiary if the director knows that the
director, a person related to the director or an entity affiliated
with the director is a party to the transaction or has a beneficial
interest in or so closely linked to the transaction and of such
financial significance to the director or such other person that
the interest would reasonably be expected to exert an influence on
the director's judgment if the director were called upon to vote on
the transaction. A transaction which involves such a conflicting
interest may not be enjoined, set aside, or give rise to an award
of damages or other sanctions, in a proceeding by a shareholder or
by or in the right of the corporation, because the director, or any
person with whom or which he or she has a personal, economic, or
other association, has an interest in the transaction, if (i) the
transaction received the affirmative vote of a majority (but no
fewer than two) of qualified directors on the board of directors or
on a committee of the board who voted on the transaction after
disclosure to them; (ii) a majority of the votes entitled to be
cast by the holders of all qualified shares are cast in favor of
the transaction after notice to shareholders describing the
director's conflicting interest transaction; or (iii) the
transaction, judged according to the circumstances at the time the
corporation entered into a commitment with respect thereto, is
established to have been fair to the corporation.
For purposes of the foregoing, "qualified director" means,
with respect to a director's conflicting interest transaction, any
director who does not have either a conflicting interest respecting
the transaction or a familial, financial, professional or
employment relationship with a second director who does have a
conflicting interest respecting the transaction. A majority (but no
fewer than two) of all the qualified directors on the board of
directors, or on the committee, constitutes a quorum for purposes
of action that complies with the foregoing and directors' action
that otherwise complies with the foregoing is not affected by the
presence or vote of a director who is not a qualified director.
"Qualified shares" means any shares entitled to vote with respect
to the director's conflicting interest transaction except shares
that are beneficially owned (or the voting of which is controlled)
by a director who has a conflicting interest respecting the
transaction or by a related person of the director, or both. A
majority of the votes entitled to be cast by the holders of all
qualified shares constitutes a quorum for purposes of action that
complies with the foregoing.
Examination of Books and Records. Under the Alabama Act, a
shareholder of an Alabama corporation or of a foreign corporation
with its principal office located in Alabama has the right to
inspect and copy certain records designated by the Alabama Act.
With respect to other records, the Alabama Act requires that a
person must have been a shareholder of record for at least 180 days
or be the holder of record of at least 5% of all outstanding shares
of a corporation in order to examine the minutes, shareholder
records and other books and records of a corporation. A shareholder
who meets such requirements must also have a proper purpose for
such inspection. Since USB-Delaware will maintain its principal
office in Alabama, it will continue to be subject to such
provisions of the Alabama Act.
Under Delaware law, any stockholder of record with a proper
purpose has the right to inspect and copy stock ledgers and other
books and records of a Delaware corporation. "Proper purpose" is
defined as a purpose reasonably related to such person's interest
as a stockholder.
Filling Vacancies on the Board of Directors. Under the Alabama
Act, any vacancy on a corporation's board of directors may be
filled by the board of directors unless otherwise provided in the
articles of incorporation, except that the directors may only fill
a vacancy resulting from an increase in the number of directors if
expressly permitted by the articles of incorporation. The Alabama
Articles do not contain a provision which permits the directors to
fill a vacancy resulting from an increase in the number of
directors. Under Delaware law, vacancies and newly created
directorships may be filled by a majority of the directors then in
office (even though less than a quorum) or by a sole remaining
director, unless otherwise provided in the corporation's
certificate of incorporation or bylaws (or unless the certificate
of incorporation directs that a particular class of stock is to
elect such director(s), in which case a majority of the directors
elected by such class, or a sole remaining director so elected, may
fill such vacancy or newly created directorship). Neither the
Delaware Certificate nor the Delaware Bylaws limits the ability of
directors to fill vacancies.
In addition to the foregoing, the Alabama Act provides that
the term of a director who is elected to fill a vacancy expires at
the next shareholders' meeting at which directors are elected, even
if directors serve staggered terms on a classified board. The
Delaware Law provides that in the case of a corporation, the
directors of which are divided into classes, any director elected
to fill a vacancy is to hold office until the next election of the
class for which he or she was chosen.
Dividends and Repurchases of Shares. Under the Alabama Act and
unless otherwise restricted by its articles of incorporation, a
corporation may not make any distribution (including dividends,
whether in cash or other property, and repurchases of its shares)
if, after giving it effect, (i) the corporation would not be able
to pay its debts as they become due in the usual course of business
or (ii) the corporation's total assets would be less than the sum
of its total liabilities plus (unless the articles of incorporation
permit otherwise) the amount that would be needed, if the
corporation were to be dissolved, to satisfy the preferential
rights of shareholders whose preferential rights are superior to
those receiving the distribution.
The Delaware Law permits a corporation to declare and pay
dividends out of surplus or, if there is no surplus, out of net
profits for the fiscal year in which the dividend is declared
and/or for the preceding fiscal year as long as the amount of
capital of the corporation following the declaration and payment of
the dividend is not less than the aggregate amount of the capital
represented by the issued and outstanding stock of all classes
having a preference upon the distribution of assets. In addition,
the Delaware Law generally provides that a corporation may redeem
or repurchase its shares only if the capital of the corporation is
not impaired and such redemption or repurchase would not impair the
capital of the corporation.
Certain Differences in State Taxes. As an Alabama corporation,
USB-Alabama is subject to a domestic corporation franchise tax
calculated on the basis of the amount and par value of outstanding
capital stock and a shares tax, which is an ad valorem tax
calculated on the basis of the fair market value of its outstanding
stock. If the Reincorporation is effected, USB-Delaware will be
subject to a domestic franchise tax in Delaware calculated on the
basis of the amount of its authorized capital stock (or on its
authorized shares, its issued shares and its assets), and it will
also be subject to foreign franchise taxes in Alabama (calculated
on the basis of the amount of capital employed in Alabama) and
possibly other jurisdictions; however, it will no longer be subject
to the Alabama shares tax.
Rights of Dissenting Shareholders
In accordance with Article 13 of the Alabama Act (the "Alabama
Dissent Provisions"), a shareholder of the Company may dissent from
the Merger and obtain payment for the fair value of his or her
shares of Common Stock. The following is a summary of the Alabama
Dissent Provisions, the relevant text of which is set forth as
Exhibit D to this Proxy Statement.
Under the Alabama Dissent Provisions, a shareholder of the
Company may dissent from the Merger by following the following
procedures: (i) the dissenting shareholder must deliver to the
Company, prior to the vote being taken on the Merger at the Annual
Meeting, written notice of his or her intent to demand payment for
his or her shares of Common Stock if the Merger is effected (the
"Notice Requirement"); and (ii) the dissenting shareholder must not
vote in favor of the Merger (or submit a Proxy which results in a
vote in favor of the Merger). A shareholder who does not satisfy
these requirements waives his or her right to demand payment. For
example, a shareholder who merely votes against the Merger without
satisfying the Notice Requirement described in (i) above is not
entitled to demand payment for his or her shares of Common Stock
under the Alabama Dissent Provisions. However, a shareholder's mere
failure to vote on the Merger will not constitute a waiver of his
or her right to demand payment as long as he or she fulfills the
Notice Requirement described in (i) above.
In addition, if the Merger is approved by a vote of the
shareholders of the Company, the Company must deliver written
notice of such approval to each such dissenting shareholder (the
"Written Dissenters' Notice"), which must be sent not later than 10
days after the Merger is effected, and the dissenting shareholder
must make a demand for payment of the fair value of his or her
shares of Common Stock in accordance with the terms of the Written
Dissenters' Notice, which demand must be received by the Company by
a date to be specified by the Company in the Written Dissenters'
Notice, which date shall be not fewer than 30 nor more than 60 days
after the date on which the Written Dissenters' Notice is mailed.
Within twenty (20) days after making a formal payment demand,
each shareholder demanding payment shall submit the certificate or
certificates representing his or her shares of Common Stock to the
Company for notation thereon by the Company that such demand has
been made. The failure to submit his or her shares of Common Stock
for such notation shall, at the option of the Company, terminate
the shareholder's rights under the Alabama Dissent provisions
unless a court of competent jurisdiction, for good and sufficient
cause, shall otherwise direct.
A record shareholder may dissent as to fewer than all of the
shares of Common Stock registered in his or her name only if he or
she dissents with respect to all shares of Common Stock
beneficially owned by any one person and notifies the Company of
the name and address of each person on whose behalf he or she
asserts dissenters' rights. The rights of a partial dissenter are
determined as if the shares of Common Stock to which he or she
dissents and his or her other shares of Common Stock were
registered in the name of a different shareholder. Once a formal
demand for payment is made, such demand cannot be withdrawn by the
shareholder except with the consent of the Company.
Upon the Effective Time of the Merger, or upon receipt by the
Company of a demand for payment, the Company must offer to pay each
dissenting shareholder who has properly complied with the Alabama
Dissent Provisions the amount estimated by the Company to be the
fair value of the shares of Common Stock held by each such
dissenting shareholder, plus accrued interest. Such offer must be
accompanied by, among other information, the Company's balance
sheet as of the end of a fiscal year ending not more than 16 months
before the date of the offer, an income statement for that year,
the latest available interim financial statements, if any, a
statement of the Company's estimate of the fair value of the
shares, and an explanation of how the interest was calculated. If,
within thirty (30) days after the making of such offer of payment,
any dissenting shareholder accepts the same, then such dissenting
shareholder must surrender to the Company the certificate or
certificates representing his or her shares of Common Stock. Upon
receipt by the Company of the certificate or certificates, the
Company shall pay such dissenting shareholder the fair value of his
or her shares, plus accrued interest and such dissenting
shareholder will cease to have any interest in the shares. If,
however, a dissenting shareholder does not accept the Company's
offer of payment, then such dissenting shareholder must, within
thirty (30) days after the Company offered payment for his or her
shares of Common Stock, notify the Company in writing of his or her
own estimate of the fair value of his or her shares of Common Stock
and amount of interest due, and demand payment of such estimate, or
reject the Company's offer and demand the fair value of his or her
shares of Common Stock and interest due. If this demand by a
dissenting shareholder remains unsettled for sixty (60) days, then
the Company must commence a proceeding in the Circuit Court of
Clarke County, Alabama to determine the fair value of the shares of
Common Stock and accrued interest. If the Company does not commence
this proceeding within the 60-day period, then the Company must pay
each dissenting shareholder whose demand remains unsettled the
amount demanded. The Company must make all dissenting shareholders
whose demands remain unsettled parties to this proceeding. In such
proceeding, the court may, if it so elects, appoint one or more
persons as appraisers to receive evidence and recommend a decision
on the question of fair value. The Company must pay each dissenting
shareholder the amount found to be due after final determination of
the proceedings. Upon payment of such judgment, the dissenting
shareholder will cease to have any interest in the shares of Common
Stock.
The costs and expenses of any such dissent proceeding will be
determined by the court and will be assessed against the Company,
but costs and expenses may be apportioned and assessed against all
or some of the dissenting shareholders, in such amounts as the
court deems equitable, to the extent the court finds such
dissenting shareholders acted arbitrarily, vexatiously or not in
good faith in demanding payment after receiving an offer of payment
from the Company. The court may also assess the reasonable fees and
expenses of counsel and experts for the respective parties, in
amounts the court finds equitable (a) against the Company and in
favor of any or all dissenting shareholders if the court find that
the Company did not substantially comply with the requirements of
the Alabama Dissent Provisions, or (b) against either of the
Company or a dissenting shareholder, in favor of any other party,
if the court finds that the party against whom the fees and
expenses are assessed acted arbitrarily, vexatiously or not in good
faith with respect to the rights provided by the Alabama Dissent
Provisions. If the court finds that the services of counsel for any
dissenting shareholder were of substantial benefit to the other
dissenting shareholders similarly situated, and that the fees for
the services should not be assessed against the Company, the court
may award such counsel reasonable fees to be paid out of the
amounts awarded to dissenting shareholders who were benefitted.
The foregoing is only a summary of the Alabama Dissent
Provisions, and is qualified in its entirety by reference to the
provisions thereof, the text of which is set forth as Exhibit D to
this Proxy Statement. Each shareholder of the Company is urged to
carefully read the full text of the Alabama Dissent Provisions.
Certain Federal Income Tax Consequences
The Company has been advised by counsel that, for federal
income tax purposes, no gain or loss will be recognized by the
holders of USB-Alabama Common Stock as a result of the consummation
of the Reincorporation and no gain or loss will be recognized by
USB-Alabama or USB-Delaware. In addition, counsel has advised that
each former holder of USB-Alabama Common Stock will have the same
basis in the USB-Delaware Common Stock received by such person
pursuant to the Reorganization as such holder had in the
USB-Alabama Common Stock held by such person at the time of
consummation of the Reorganization, and such person's holding
period with respect to such USB-Delaware Common Stock will include
the period during which such holder held the corresponding
USB-Alabama Common Stock, provided the latter was held by such
person as a capital asset at the time of the consummation of the
Reincorporation.
State, local or foreign income tax consequences to
shareholders may vary from the federal tax consequences described
above. SHAREHOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE
EFFECT OF THE REINCORPORATION PROPOSAL UNDER APPLICABLE FEDERAL,
STATE, LOCAL OR FOREIGN INCOME TAX LAWS.
PROPOSALS OF SHAREHOLDERS
If any shareholder wishes to present a proposal for action at the
2000 Annual Meeting of the shareholders, the shareholder must compy with
applicable SEC regulations, including adequate notice to Bancshares.
Shareholder proposals submitted to Bancshares in compliance with SEC Rule
14a-8 (which concerns shareholder proposals that are requested to be
included in a company's proxy statement) must be received at Bancshares'
executive offices on or before December 6, 1999. Pursuant to SEC Rules
14a-4 and 14a-5 (which, among other things, concern the exercise of
discretionary voting authority with respect to shareholder proposals other
than proposals that have been requested to be included in the company's
proxy statement) shareholders are advised that a shareholder proposal will
be considered untimely if provided to Bancshares after February 16, 2000.
Any proposal must be submitted in writing by Certified Mail-Return Receipt
Requested, to United Security Bank, Attention: Larry Sellers, 131 West
Front Street, Thomasville, AL 36784.
OTHER MATTERS
Bancshares does not know of any matters to be presented for
action at the annual meeting other than those listed in the notice
of the annual meeting and referred to herein.
Bancshares will furnish without charge to its shareholders,
upon written request, a copy of its annual report on Form 10-K,
including the accompanying financial statements and schedules,
required to be filed with the Securities and Exchange Commission
for the year ended December 31, 1998. Copies of the exhibits to
such report will also be available upon payment of a reasonable fee
for copying charges. Requests should be made to Larry M. Sellers,
Treasurer, United Security Bancshares, Inc., 131 West Front Street,
Post Office Box 249, Thomasville, Alabama 36784.
PLEASE SIGN AND DATE THE ENCLOSED PROXY CARD AND RETURN IT IN
THE ACCOMPANYING ENVELOPE AS PROMPTLY AS POSSIBLE. YOU MAY REVOKE
THE PROXY BY GIVING WRITTEN NOTICE TO THE SECRETARY OF BANCSHARES
AT ANY TIME PRIOR TO THE VOTING THEREOF, BY EXECUTING A LATER DATED
PROXY OR BY ATTENDING THE MEETING AND VOTING IN PERSON.
UNITED SECURITY BANCSHARES, INC.
Thomasville, Alabama
April 2, 1999
<PAGE>
EXHIBIT A
AGREEMENT AND PLAN OF MERGER
BETWEEN UNITED SECURITY BANCSHARES, INC.,
A DELAWARE CORPORATION
AND
UNITED SECURITY BANCSHARES, INC.,
AN ALABAMA CORPORATION
THIS AGREEMENT AND PLAN OF MERGER dated this _____ day of
________________, 1999 (the "Agreement") is between United Security
Bancshares, Inc., a Delaware Corporation ("USB-Delaware"), and
United Security Bancshares, Inc., an Alabama corporation
("USB-Alabama"). USB-Delaware and USB-Alabama are sometimes
hereinafter collectively referred to as the "Constituent
Corporations."
RECITALS
A. USB-Delaware is a corporation organized and existing
under the laws of the State of Delaware and, as of the date hereof,
100 shares of Common Stock of USB-Delaware are issued and
outstanding, all of which are held by USB-Alabama.
B. USB-Alabama is a corporation organized and existing under
the laws of the State of Alabama and, as of the date hereof,
3,548,431 shares of Common Stock of USB-Alabama are issued and
outstanding and no shares of Preferred Stock are issued and
outstanding.
C. The Board of Directors of USB-Alabama has determined
that, for the purpose of effecting the reincorporation of
USB-Alabama in the State of Delaware, it is advisable and in the
best interests of USB-Alabama that it merge with and into
USB-Delaware upon the terms and conditions herein provided.
D. The respective Boards of Directors of USB-Delaware and
USB-Alabama have approved this Agreement and have directed that
this Agreement be submitted to a vote of their respective
shareholders and executed by the undersigned officers.
NOW THEREFORE, in consideration of the mutual agreements and
covenants set forth herein, USB-Delaware and USB-Alabama hereby
agree, subject to the terms and conditions hereinafter set forth,
as follows:
ARTICLE I
THE MERGER
1.1 Merger. In accordance with the provisions of this
Agreement, the Delaware General Corporation Law and the Alabama
Business Corporation Act, USB-Alabama shall be merged with and into
USB-Delaware (the "Merger"), whereupon the separate existence of
USB-Alabama shall cease and USB-Delaware shall be, and is
hereinafter sometimes referred to as, the "Surviving Corporation."
On the Effective Date of the Merger (as hereinafter defined) the
name of the Surviving Corporation shall be United Security
Bancshares, Inc.
1.2 Filing and Effectiveness. The Merger shall become
effective when the following actions shall have been completed:
(a) this Agreement and the Merger shall have been
adopted and approved by the shareholders of each Constituent
Corporation in accordance with the requirements of the Delaware
General Corporation Law and the Alabama Business Corporation Act,
as the case may be;
(b) USB-Alabama and USB-Delaware shall have
received any and all required approvals from the appropriate bank
regulatory agencies and any required waiting periods shall have
expired;
(c) all of the conditions precedent to the
consummation of the Merger specified in this Agreement shall have
been satisfied or duly waived by the party entitled to satisfaction
thereof;
(d) an executed Certificate of Merger or an
executed counterpart of this Agreement meeting the requirements of
the Delaware General Corporation Law shall have been filed with the
Secretary of State of the State of Delaware; and
(e) executed Articles of Merger meeting the
requirements of the Alabama Business Corporation Act shall have
been filed with the Secretary of State of the State of Alabama.
The date and time when the Merger shall become effective, as
aforesaid, is herein referred to as the "Effective Date of the
Merger."
1.3 Effect of the Merger. On the Effective Date of the
Merger, the separate existence of USB-Alabama shall cease, and
USB-Delaware, as the Surviving Corporation, (i) shall continue to
possess all of its assets, rights, powers and property as
constituted immediately prior to the Effective Date of the Merger;
(ii) shall be subject to all actions previously taken by its and
USB-Alabama's Board of Directors; (iii) shall succeed, without
other transfer, to all of the assets, rights, powers and property
of USB-Alabama in the manner more fully set forth in Section 259 of
the Delaware General Corporation Law; (iv) shall continue to be
subject to all of its debts, liabilities and obligations as
constituted immediately prior to the Effective Date of the Merger;
and (v) shall succeed, without other transfer, to all of the debts,
liabilities and obligations of USB-Alabama in the same manner as if
USB-Delaware had itself incurred them, all as more fully provided
under the applicable provisions of the Delaware General Corporation
Law and the Alabama Business Corporation Act.
ARTICLE II
CHARTER DOCUMENTS, DIRECTORS AND OFFICERS
2.1 Certificate of Incorporation. The Certificate of
Incorporation of USB-Delaware as in effect immediately prior to the
Effective Date of the Merger shall continue in full force and
effect as the Certificate of Incorporation of the Surviving
Corporation until duly amended in accordance with the provisions
thereof and applicable law.
2.2 Bylaws. The Bylaws of USB-Delaware as in effect
immediately prior to the Effective Date of the Merger shall
continue in full force and effect as the Bylaws of the Surviving
Corporation until duly amended in accordance with the provisions
thereof and applicable law.
2.3 Directors and Officers. The directors and officers of
USB-Alabama immediately prior to the Effective Date of the Merger,
who are serving in the same capacities, classes and terms for
USB-Delaware, shall be the directors and officers of the Surviving
Corporation, and such directors shall continue to be constituted in
the same terms of office which they had as directors of USB-Alabama
and USB-Delaware, in accordance with the Bylaws of USB-Delaware.
ARTICLE III
MANNER OF CONVERSION OF SHARES
3.1 USB-Alabama Common Shares. Upon the Effective Date of the
Merger, each share of Common Stock of USB-Alabama, $0.01 par value,
issued and outstanding immediately prior thereto shall, by virtue
of the Merger and without any action by the Constituent
Corporations, the holder of such shares or any other person, be
converted into and exchanged for one fully paid and nonassessable
share of Common Stock, $.01 par value, of the Surviving
Corporation.
3.2 USB-Alabama Options and Stock Purchase Rights.
(a) Upon the Effective Date of the Merger, the
Surviving Corporation shall assume and continue any and all stock
option, stock incentive or stock award plans heretofore adopted by
USB-Alabama. Each outstanding and unexercised option or other right
to purchase USB-Alabama common shares existing under and by virtue
of any such plan shall become an option or right to purchase the
Surviving Corporation's Common Stock on the basis of one share of
the Surviving Corporation's Common Stock for each common share of
USB-Alabama issuable pursuant to any such option or stock purchase
right, on the same terms and conditions and at an exercise or
conversion price per share equal to the exercise or conversion
price per share applicable to any such USB-Alabama option or stock
purchase right at the Effective Date of the Merger.
(b) A number of shares of the Surviving
Corporation's Common Stock shall be reserved for issuance upon the
exercise of options and stock purchase rights equal to the number
of common shares of USB-Alabama so reserved immediately prior to
the Effective Date of the Merger.
3.3 USB-Delaware Common Stock. Upon the Effective Date of the
Merger, each share of USB-Delaware Common Stock, $.01 par value,
issued and outstanding immediately prior thereto shall, by virtue
of the Merger and without any action by USB-Delaware, the holder of
such shares or any other person, be canceled and returned to the
status of authorized but unissued shares.
3.4 Exchange of Certificates.
(a) After the Effective Date of the Merger, each
holder of an outstanding certificate representing common shares of
USB-Alabama may, at such holder's option, surrender the same for
cancellation to [____________________________], or such other
entity as the Surviving Corporation so designates as exchange agent
(the "Exchange Agent"), and each such holder shall be entitled to
receive in exchange therefor a certificate or certificates
representing the number of shares of the Surviving Corporation's
Common Stock into which the surrendered shares were converted, or
to which such holder was otherwise entitled, as herein provided.
Until so surrendered, each outstanding certificate theretofore
representing common shares of USB-Alabama shall be deemed for all
purposes to represent the number of shares of the Surviving
Corporation's Common Stock into which such common shares of
USB-Alabama were converted in the Merger and which the holder of
such certificate was otherwise entitled to receive pursuant to this
Agreement.
(b) The registered owner on the books and records
of the Surviving Corporation or the Exchange Agent of any such
outstanding certificate shall, until such certificate shall have
been surrendered for transfer or conversion or otherwise accounted
for to the Surviving Corporation or the Exchange Agent, have and be
entitled to exercise any voting and other rights with respect to
and to receive dividends and other distributions upon the shares of
Common Stock of the Surviving Corporation represented by such
outstanding certificate as provided above.
(c) Each certificate representing Common Stock of
the Surviving Corporation so issued in the Merger shall bear the
same legends, if any, with respect to the restrictions on
transferability that appeared on the certificates of USB-Alabama so
converted and given in exchange therefor, unless otherwise
determined by the Board of Directors of the Surviving Corporation
in compliance with applicable laws.
(d) If any certificate for shares of Common Stock
of the Surviving Corporation is to be issued in a name other than
that in which the certificate surrendered in exchange therefor is
registered, it shall be a condition of issuance thereof that the
certificate so surrendered shall be properly endorsed and otherwise
in proper form for transfer, that such transfer otherwise be proper
and that the person requesting such transfer pay to the Exchange
Agent any transfer or other taxes payable by reason of issuance of
such new certificate in a name other than that of the registered
holder of the certificate surrendered or establish to the
satisfaction of the Surviving Corporation that such tax has been
paid or is not payable.
ARTICLE IV
GENERAL PROVISIONS
4.1 Covenants of USB-Delaware. USB-Delaware covenants and
agrees that it will on or before the Effective Date of the Merger:
(a) take such action as may be required to qualify
to do business as a foreign corporation in the states in which
USB-Alabama is qualified to do business and in connection therewith
irrevocably appoint an agent for service of process as required
under the applicable provisions of the relevant state law;
(b) with the assistance and cooperation of
USB-Alabama, take all such action as may be required to obtain the
approval of any and all bank regulatory agencies, including the
Federal Reserve System, the Federal Deposit Insurance Corporation
and the State of Alabama Banking Department, as the case may be;
and
(c) take all such other actions as may be required
by the Delaware General Corporation Law and the Alabama Business
Corporation Act to effect the Merger.
4.2 Further Assurances. From time to time, as and when
required by USB-Delaware or by its successors or assigns, there
shall be executed and delivered on behalf of USB-Alabama such deeds
and other instruments, and there shall be taken or caused to be
taken by it such further and other actions as shall be appropriate
or necessary in order to vest or perfect in or confirm of record or
otherwise by USB-Delaware the title to and possession of all the
property, interests, assets, rights, privileges, immunities,
powers, franchises and authority of USB-Alabama and otherwise to
carry out the purposes of this Agreement, and the officers and
directors of USB-Delaware are fully authorized in the name and on
behalf of USB-Alabama or otherwise to take any and all such action
and to execute and deliver any and all such deeds and other
instruments.
4.3 Abandonment. At any time before the Effective Date of the
Merger, this Agreement may be terminated and the Merger may be
abandoned for any reason whatsoever by the Board of Directors of
USB-Alabama and USB-Delaware, notwithstanding the approval of this
Agreement by the shareholders of USB-Alabama or by the sole
stockholder of USB-Delaware, or by both.
4.4 Amendment. The Boards of Directors of the Constituent
Corporations may amend this Agreement at any time prior to the
filing of this Agreement or certificate in lieu thereof with the
Secretary of State of the State of Delaware, provided that an
amendment made subsequent to the adoption of this Agreement by the
stockholders of either Constituent Corporation shall not (i) alter
or change the amount or kind of shares, securities, cash, property
or rights to be received in exchange for or on conversion of all or
any of the shares of any class or series thereof of such
Constituent Corporation; (ii) alter or change any term of the
Certificate of Incorporation of the Surviving Corporation to be
effected by the Merger; or (ii) alter or change any of the terms
and conditions of this Agreement if such alteration or change would
adversely affect the holders of any class or series of capital
stock of either Constituent Corporation.
4.5 Registered Office. The registered office of the Surviving
Corporation in the State of Delaware is located at 109 Orange
Street, Wilmington, Delaware, and The Corporation Trust Company is
the registered agent of the Surviving Corporation at such address.
4.6 Agreement. Executed copies of this Agreement will be on
file at the principal place of business of the Surviving
Corporation in Birmingham, Alabama, and copies thereof will be
furnished to any stockholder of either Constituent Corporation,
upon request and without cost.
4.7 Governing Law. This Agreement shall in all respects be
construed, interpreted and enforced in accordance with and governed
by the laws of the State of Delaware and, so far as applicable, the
merger provisions of the Alabama Business Corporation Act.
4.8 Counterparts. In order to facilitate the filing and
recording of this Agreement, the same may be executed in any number
of counterparts, each of which shall be deemed to be an original
and all of which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, this Agreement, having first been approved
by the resolutions of the Board of Directors of USB-Delaware and
USB-Alabama, is hereby executed on behalf of each of such
corporations and attested by their respective officers thereunto
duly authorized, under penalties of perjury, hereby declaring and
certifying that this is their act and deed and the facts herein
stated are true.
UNITED SECURITY BANCSHARES, INC.,
a Delaware corporation
By:______________________________
Its:__________________________
ATTEST:
By:____________________________
Its:________________________
UNITED SECURITY BANCSHARES, INC.,
an Alabama corporation
By:______________________________
Its:__________________________
ATTEST:
By:____________________________
Its:________________________
PAGE>
EXHIBIT B
CERTIFICATE OF INCORPORATION OF
UNITED SECURITY BANCSHARES, INC.
FIRST. The name of the Corporation is United Security
Bancshares, Inc.
SECOND. The address of the registered office of the
Corporation in the State of Delaware is 1209 Orange Street, in the
city of Wilmington, county of New Castle. The name of its
registered agent at such address is The Corporation Trust Company.
THIRD. The nature of the business and the objects and purposes
proposed to be transacted, promoted and carried on are to do any or
all the things herein mentioned, as fully and to the same extent as
natural persons might or could do, and in any part of the world,
and to engage in any lawful act or activity for which Corporations
may be organized under the General Corporation Law of the State of
Delaware, as amended.
FOURTH. The total number of shares of capital stock that the
Corporation shall have authority to issue is ten million
(10,000,000) shares of one class of common stock, par value $0.01
per share.
FIFTH. The incorporator is Larry M. Sellers whose mailing
address is 131 West Front Street, Thomasville, Alabama 36784.
SIXTH.
A. The number of Directors which shall constitute the whole
Board of Directors shall be as determined from time to time by
resolution and adopted by the affirmative vote of a majority of the
Board of Directors, but the number shall not be less than three (3)
or more than twenty-five (25) Directors; provided that the number
of Directors shall not be decreased if such decrease would have the
effect of shortening the term of an incumbent Director.
B. Unless and except to the extent that the Bylaws of the
Corporation shall so require, the election of Directors of the
Corporation need not be by written ballot.
C. The vote of a majority of the Directors present at a
meeting at which a quorum is in attendance shall be the act of the
Board of Directors, unless the vote of a different number is required
by this Certificate of Incorporation or the Bylaws. Notwithstanding
anything to the contrary in this Certificate of Incorporation or the
Bylaws, the affirmative vote of two-thirds (2/3) of the total number
of Directors is required to approve the following: (1) any tender
offer or exchange offer or any proposal for a merger made to the
Corporation; (2) the sale of all the stock or assets of, or a
business combination involving the Corporation or any of its
subsidiaries; (3) the sale of a substantial equity interest in, or a
substantial portion of the assets of the Corporation or any of its
subsidiaries, including a plan of liquidation of the Corporation or
any of its subsidiaries; or (4) the addition or removal of any person
with significant influence over major policymaking decisions of the
Corporation, including, but not limited to, those persons who,
without regard to title, exercise the authority of one or more of
the following positions: chief executive officer, president, chief
operating officer, chief financial officer, chief lending officer,
or chief investment officer.
SEVENTH.
A. Any action required to be taken at any annual or special
meeting of the stockholders, or any action which may be taken at
any such meeting, may be taken without a meeting, without prior
notice and without a vote, if a consent or consents in writing,
setting forth the action to be taken, shall be signed by all of
the stockholders entitled to vote with respect to the subject
matter thereof. Any such written consent or consents shall be
delivered to the Corporation by delivery to its registered office
in Delaware, its principal place of business or an officer or
agent of the Corporation having custody of the books in which
proceedings of meetings of stockholders are recorded. Delivery
made to the Corporation's registered office shall be by hand or
by certified or registered mail, return receipt requested.
B. The Board of Directors shall have concurrent power with
the stockholders as set forth in this Certificate of Incorporation
to adopt, amend, or repeal (collectively "Amend") the Bylaws of the
Corporation. The Board of Directors may Amend the Bylaws of the
Corporation upon the affirmative vote of the number of Directors
which shall constitute, under the terms of the Bylaws, the action
of the Board of Directors. The stockholders may amend the Bylaws of
the Corporation upon the affirmative vote of the holders of not
less than a majority of the votes entitled to be cast by the
holders of all of the outstanding shares of the voting stock,
voting together as a class.
EIGHTH. Whenever a compromise or arrangement is proposed
between the Corporation and its creditors or any class of them
and/or between the Corporation and its stockholders or any class of
them, any court of equitable jurisdiction within the State of
Delaware may, on the application in a summary way of the
Corporation or of any creditor or stockholder thereof, or on
application of any receiver or receivers appointed for the
Corporation under the provisions of Section 291 of Title 8 of the
Delaware Code or on the application of trustees in dissolution or
of any receiver or receivers appointed for the Corporation under
the provisions of Section 279 of Title 8 of the Delaware Code,
order a meeting of the creditors or class of creditors, and/or of
the stockholders or class of stockholders of the Corporation, as
the case may be, to be summoned in such manner as the said court
directs. If all majority in number representing three-fourths in
value of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of the Corporation, as the
case may be, agree to any compromise or arrangement and to any
reorganization of the Corporation as consequence of such compromise
or arrangement, the said compromise or arrangement and the said
reorganization shall, if sanctioned by the court to which the said
application has been made, be binding on all the creditors or class
of creditors, and/or on all the stockholders or class of
stockholders, of the Corporation, as the case may be, and also on
the Corporation.
NINTH. No Director of the Corporation shall be personally
liable to the Corporation or its stockholders for monetary damages
for a breach of a fiduciary duty as a Director, except to the
extent such exemption from liability or limitation thereof is not
permitted under the General Corporation Law of the State of
Delaware as the same exists or may hereafter be amended. Neither
the repeal nor the modification of this Article NINTH nor the
adoption of any provisions of the Certificate of Incorporation of
the Corporation inconsistent with this Article NINTH shall
adversely affect the rights of any Director of the Corporation with
respect to any matter occurring, or any cause of action, suit or
claim that, but for this Article NINTH, would accrue or arise,
prior to such repeal, modification or adoption of any inconsistent
provision.
TENTH. When considering a merger, consolidation, business
combination (as defined in Section 203 of the General Corporation
Law of the State of Delaware) or similar transaction, the Board of
Directors, committees of the Board of Directors, individual
Directors and individual Officers may, in considering the best
interests of the Corporation and its stockholders, consider the
effects of any such transaction upon the employees, customers and
suppliers of the Corporation, and upon communities in which offices
of the Corporation are located, to the extent permitted by Delaware
law.
ELEVENTH.
SECTION 11.1 Right to Indemnification. Each person who was or
is made a party or is threatened to be made a party to or is
otherwise involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (hereinafter, a
"proceeding"), by reason of the fact that he or she is or was a
director or an officer of the Corporation or is or was serving at
the request of the Corporation as a director, officer, employee or
agent of another corporation or of a partnership, joint venture,
trust or other enterprise, including service with respect to an
employee benefit plan (hereinafter an "indemnitee"), whether the
basis of such proceeding is alleged action in an official capacity
as a director, officer, employee or agent or in any other capacity
while serving as a director, officer, employee or agent, shall be
indemnified and held harmless by the Corporation to the fullest
extent authorized by the Delaware General Corporation Law, as the
same exists or may hereafter be amended (but, in the case of any
such amendment, only to the extent that such amendment permits the
Corporation to provide broader indemnification rights than such law
permitted the Corporation to provide prior to such amendment),
against all expense, liability and loss (including attorneys' fees,
judgments, fines, ERISA excise tax or penalties and amounts paid in
settlement) reasonably incurred or suffered by such indemnitee in
connection therewith; provided, however, that, except as provided
in Section 11.3 hereof with respect to proceedings to enforce
rights to indemnification, the Corporation shall indemnify any such
indemnitee in connection with a proceeding (or part thereof)
initiated by such indemnitee only if such proceeding (or part
thereof) was authorized by the Board of Directors of the
Corporation.
SECTION 11.2 Right to Advancement of Expenses. The right to
indemnification conferred in Section 11.1 of this Article ELEVENTH
shall include the right to be paid by the Corporation the expenses
(including attorneys' fees) incurred in defending any such
proceeding in advance of its final disposition (hereinafter, an
"advancement of expenses"); provided, however, that, if the
Delaware General Corporation Law requires, an advancement of
expenses incurred by an indemnitee in his or her capacity as a
director or officer (and not in any other capacity in which service
was or is rendered by such indemnitee, including, without
limitation, service to an employee benefit plan) shall be made only
upon delivery to the Corporation of an undertaking (hereinafter, an
"undertaking"), by or on behalf of such indemnitee, to repay all
amounts so advanced if it shall ultimately be determined by final
judicial decision from which there is not further right to appeal
(hereinafter, a "final adjudication") that such indemnitee is not
entitled to be indemnified for such expenses under this Section
11.2 or otherwise. The rights to indemnification and to the
advancement of expenses conferred in Section 11.1 and 11.2 of this
Article ELEVENTH shall be contract rights and such rights shall
continue as to an indemnitee who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the
indemnitee's heirs, executors and administrators.
SECTION 11.3 Right of Indemnitee to Bring Suit. If a claim
under Section 11.1 or 11.2 of this Article ELEVENTH is not paid in
full by the Corporation within sixty (60) days after a written
claim therefor has been received by the Corporation (except in the
case of a claim for an advancement of expenses, in which case the
applicable period shall be twenty (20) days) the indemnitee may at
any time thereafter bring suit against the Corporation to recover
the unpaid amount of the claim. If successful in whole or in part
in any such suit, or in a suit brought by the Corporation to
recover an advancement of expenses pursuant to the terms of an
undertaking, the indemnitee shall be entitled to be paid also to
the expense of prosecuting or defending such suit. In (a) any suit
brought by the indemnitee to enforce a right to indemnification
hereunder (but not in a suit brought by the indemnitee to enforce
a right to an advancement of expenses) it shall be a defense that
and (b) in any suit brought by the Corporation to recover an
advancement of expenses pursuant to the terms of an undertaking,
the Corporation shall be entitled to recover such expenses upon a
final adjudication that, the indemnitee has not met any applicable
standard for indemnification set forth in the Delaware General
Corporation Law. Neither the failure of the Corporation (including
its Board of Directors, independent legal counsel or its
stockholders) to have made a determination prior to the
commencement of such suit that indemnification of the indemnitee is
proper in the circumstances because the indemnitee has met the
applicable standard of conduct set forth in the Delaware General
Corporation Law, nor an actual determination by the Corporation
(including its Board of Directors, independent legal counsel or its
stockholders) that the indemnitee has not met such applicable
standard of conduct shall create a presumption that the indemnitee
has not met the applicable standard of conduct or, in the case of
such a suit brought by the indemnitee, be a defense to such suit.
In any suit brought by the indemnitee to enforce a right to
indemnification or to an advancement of expenses hereunder, or
brought by the Corporation to recover an advancement of expenses
pursuant to the terms of an undertaking, the burden of proving that
the indemnitee is not entitled to be indemnified, or to such
advancement of expenses, under this Article ELEVENTH or otherwise,
shall be on the Corporation.
SECTION 11.4 Non-Exclusivity of Rights. The right to
indemnification and to the advancement of expenses conferred in
this Article ELEVENTH shall not be exclusive of any other right
which any person may have or hereafter acquire under any statute,
this Certificate of Incorporation of the Corporation, these Bylaws,
any agreement or vote of stockholder or disinterested directors or
otherwise.
SECTION 11.5 Insurance. The Corporation may maintain
insurance, at its expense, to protect itself and any director,
officer, employee or agent of the Corporation or another
corporation, partnership, joint venture, trust or other enterprise
against any expense, liability or loss, whether or not the
Corporation would have the power to indemnify such person against
such expense, liability or loss under the Delaware General
Corporation Law.
SECTION 11.6 Indemnification of Employees and Agents. The
Corporation may, to the extent authorized from time to time by the
Board of Directors, grant rights to indemnification and to the
advancement of expenses to any employee or agent of the Corporation
to the fullest extent of the provisions of this Article ELEVENTH
with respect to the indemnification and advancement of expenses of
directors and officers of the Corporation.
THE UNDERSIGNED, being the incorporator hereinabove named, for
the purpose of forming a Corporation pursuant to the General
Corporation Law of the State of Delaware, as amended, makes the
certificate as of [______________], 1999, declaring and certifying
that this is his act and deed and that the facts herein stated are
true.
Larry M. Sellers
<PAGE>
EXHIBIT C
BYLAWS
OF
UNITED SECURITY BANCSHARES, INC.
ARTICLE I.
Offices
SECTION 1.1. Registered Office. The registered office of
United Security Bancshares, Inc. (herein called the "Corporation"),
in the State of Delaware shall be in the City of Wilmington, County
of New Castle, State of Delaware.
SECTION 1.2. Other Offices. The Corporation may also have
offices at such other places both within and without the State of
Delaware as the Board of Directors may from time to time determine
or the business of the Corporation may require.
ARTICLE II.
Stockholders
SECTION 2.1. Place of Meetings. Annual and special meetings
of the stockholders shall be held at such place, either within or
without of the State of Delaware, as may be designated by the Board
of Directors. In the absence of such designation, such meeting
shall be held at the principal office of the Corporation located
within the State of Alabama.
SECTION 2.2. Annual Meeting. The annual meeting of the
stockholders for the election of directors and the transaction of
such other business as may properly come before the meeting shall
be held on such date as may be determined by resolution of the
Board of Directors.
SECTION 2.3. Special Meeting. A special meeting of the
stockholders may be called at any time by the Board of Directors
or the holders of not less than ten percent of all shares
entitled to vote at such meeting. No business other than that
specified in the notice of special meeting shall be transacted at
any such special meeting.
SECTION 2.4. Notice of Meetings. Written or printed notice
stating the place, day and hour of the meeting and, in the case of
a special meeting, the purpose or purposes for which the meeting is
called, shall be delivered not less than ten (10) nor more than
sixty (60) days before the date of the meeting, either personally
or by mail, by or at the direction of the President, the Secretary
or the Board of Directors or officer calling the meeting, to each
stockholder of record in the manner above provided. The notice of
special meeting may be waived by submitting a signed waiver or by
attendance at the meeting.
SECTION 2.5 Closing of Transfer Books and Fixing Record Date.
For the purposes of determining stockholders entitled to notice of
or to vote at any meeting of stockholders or any adjournment
thereof, or stockholders entitled to receive payment of any
dividend, or in order to make a determination of stockholders for
any other proper purpose, the Board of Directors may provide that
the stock transfer books shall be closed for a stated period not to
exceed in any case sixty (60) days immediately preceding such
meeting. In lieu of closing the stock transfer books, the Board of
Directors may fix in advance a date as the record date for any such
determination of stockholders, such date in any case to be not more
than sixty (60) days, and in case of a meeting of stockholders, not
less than ten (10) days, prior to the date on which the particular
action requiring such determination of stockholders is to be taken,
and in no event may the record date precede the date upon which the
Directors adopt a resolution fixing the record date. If the stock
transfer books are not closed and no record date is fixed for the
determination of stockholders entitled to notice of or to vote at
a meeting of stockholders, or stockholders entitled to receive
payment of a dividend, or a determination of stockholders for any
other proper purpose, the date on which notice of the meeting is
given (as defined in Article 9 hereof) or the date on which the
resolution of the Board of Directors declaring such dividend is
adopted, as the case may be, shall be the record date for such
determination of the stockholders. When a determination of
stockholders entitled to vote at any meeting of stockholders has
been made as provided in this Section 2.5, such determination shall
apply to any adjournment thereof, unless the Board of Directors
fixes a new record date for the adjournment.
SECTION 2.6 Voting List. The officer or agent having charge
of the stock transfer books for shares of the Corporation shall
make, at least ten (10) days before each meeting of stockholders,
a complete list of the stockholders entitled to vote at such
meeting or any adjournment thereof, arranged in alphabetical order,
with the address of and the number of shares held by each, which
list, for a period of ten (10) days prior to such meeting, shall be
kept on file at the principal office of the Corporation and shall
be subject to inspection by any stockholder at any time during
usual business hours. Such list shall also be produced and kept
open at the time and place of the meeting and shall be subject to
the inspection of any stockholder during the whole time of the
meeting. The original stock transfer books shall be prima facie
evidence as to who are the stockholders entitled to examine such
list or transfer books or to vote at any meeting of stockholders.
SECTION 2.7 Quorum. A majority of the outstanding shares of
the of the Corporation entitled to vote, represented in person or
by proxy, shall constitute a quorum for the transaction of business
at such meeting. If a quorum is present, the affirmative vote of
the majority of the shares represented at the meeting entitled to
vote on the subject matter shall be the act of the stockholders,
unless the vote of a greater number of shares on the matter being
voted on is required by the Certificate of Incorporation of the
Corporation, these Bylaws or applicable law. Directors shall be
elected by a plurality of the shares represented at the meeting and
entitled to vote in the election of Directors.
SECTION 2.8 Adjournment of Stockholder Meeting. Any meeting
of stockholders may be adjourned at any time, whether or not there
is a quorum, by the chairman of such meeting or the vote of the
majority of shares represented at such meeting. When a meeting is
adjourned to another time or place, notice need not be given of the
adjourned meeting if the time and place thereof are announced at
the meeting at which the adjournment is taken. At the adjourned
meeting, the Corporation may transact any business which might have
been transacted at the original meeting. If the adjournment is for
more than thirty (30) days, or if after the adjournment a new
record date is fixed for the adjourned meeting, a notice of the
adjourned meeting shall be given to each stockholder of record
entitled to vote at the meeting.
SECTION 2.9 Proxies. At all meetings of stockholders, a
stockholder may vote by proxy, executed in writing by the
stockholder or by his duly authorized attorney in fact. Such proxy
shall be filed with the Secretary of the Corporation before or at
the time of the meeting. No proxy shall be valid after three (3)
years from the date of its execution, unless otherwise provided in
the proxy.
SECTION 2.10 Voting of Shares. Each outstanding share shall
be entitled to one vote and each fractional share shall be entitled
to a corresponding fractional vote on each matter submitted to vote
at a meeting of stockholders.
SECTION 2.11 Voting by Voice, Hand or Ballot. All voting at
meetings of the stockholders, including voting for the election of
directors but excepting where otherwise required by law, shall be
by a voice or hand vote; provided, however, that upon demand
therefor by a stockholder entitled to vote or by his or her proxy,
a vote by written ballot shall be taken. Every written ballot shall
state the name of the stockholder or proxy voting and such other
information as may be required under the procedure established for
the meeting.
SECTION 2.12 Voting of Shares by Certain Holders. The rights
of persons in whose names shares stand on the stock records of the
Corporation to vote is subject to the following provisions:
(a) Neither treasury shares, nor shares of its own stock held
by the Corporation in a fiduciary capacity, nor shares held by
another Corporation if the majority of the shares entitled to vote
for the election of directors of such other Corporation is held by
the Corporation, shall be voted at any meeting or counted in
determining the total number of outstanding shares at any given
time.
(b) Shares standing in the name of another corporation,
domestic or foreign, may be voted by such officer, agent, or proxy
as the bylaws of such corporation may prescribe, or, in the absence
of such provision, as the board of directors of such Corporation
may determine.
(c) Shares held by an administrator, executor, personal
representative, guardian, or conservator may be voted by him,
either in person or by proxy, without a transfer of such shares
into his name.
(d) Shares standing in the name of a trustee may be voted by
him, either in person or by proxy, but no trustee shall be entitled
to vote shares held by him without a transfer of such shares into
his name.
(e) Shares standing in the name of a receiver may be voted by
such receiver, and shares held by or under the control of a
receiver may be voted by such receiver without the transfer thereof
into his name if authority to do so be contained in an appropriate
order of the court by which such receiver was appointed.
(f) A stockholder whose shares are pledged shall be entitled
to vote such shares until the shares have been transferred into the
name of the pledgee, and thereafter the pledgee shall be entitled
to vote the shares so transferred.
SECTION 2.13 Informal Action by Stockholders. Any action
required or permitted to be taken by the stockholders must be
affected at a duly called annual or special meeting of the
stockholders of the Corporation. Stockholders may take any action
by unanimous written consent in lieu of a meeting of the stockholders.
SECTION 2.14 Conduct of Stockholder Meetings. Meetings of the
stockholders shall be presided over by the Chairman of the Board
or, in his absence, the President of the Corporation, or, if no
such person is present, a person designated by the Chairman of the
Board or, in his absence, the President of the Corporation. The
Secretary of the Corporation or, in his absence, an Assistant
Secretary, or, if no such person is present, a person designated by
the chairman of the meeting, shall act as secretary of the meeting.
The precedence of and procedure on motions and other procedural
matters at a meeting shall be as determined by the chairman of such
meeting, in his sole discretion, provided that such chairman acts
in a manner which is not inconsistent with the Certificate of
Incorporation of the Corporation, these Bylaws and applicable law.
ARTICLE 3
Board of Directors
SECTION 3.1 General Powers. The business and affairs of the
Corporation shall be managed by its Board of Directors, except as
otherwise provided in the Certificate of Incorporation or by
applicable law.
SECTION 3.2 Number; Qualifications. The Corporation's Board
of Directors shall consist of not less than three (3) and not more
than twenty-five (25) Directors, as such number may be designated
from time to time by the Board of Directors. If such number is not
so fixed, the Corporation shall have sixteen (16) Directors.
Directors need not be stockholders of the Corporation or residents
of the State of Delaware or the State of Alabama.
SECTION 3.3 Election; Term of Office. Directors shall be
elected at each annual meeting of the stockholders. Directors shall
be elected by plurality vote of the stockholders. Each Director
shall hold office until the next annual meeting of the stockholders
and thereafter until such time as his successor shall have been
elected and qualified. No reduction in the number of Directors
shall have the effect of removing any director before such
Director's term of office shall expire. If a Director attains the age
of seventy (70) years during his or her term as a Director, he or she
may complete his or her then current term but may not stand for election
or re-election as a Director of the Corporation thereafter.
SECTION 3.4 Removal of Directors. Any Director may be removed
only in the manner provided in the Corporation's Certificate of
Incorporation, as amended. If no such provision appears therein,
any Director may be removed either with or without cause, at any
time, by vote of the stockholders holding a majority of the shares
then entitled to vote for the election of Directors, present at any
special meeting called for that purpose. In case any vacancy so
created shall not be filled by the stockholders at such meeting,
such vacancy may be filled by the Board of Directors as provided in
Section 3.6 hereof.
SECTION 3.5 Resignation. Any Director may resign at any time
by giving written notice to the President or to the Secretary of
the Corporation. Such resignation shall take effect at the time
specified therein; and unless otherwise specified therein, the
acceptance of such resignation by the Corporation shall not be
necessary to make it effective.
SECTION 3.6 Vacancies. Any vacancy occurring in the Board of
Directors, whether by resignation of a Director or an increase in
the number of Directors, may be filled by the affirmative vote of
a majority of the remaining Directors, though less than a quorum,
or by a sole remaining Director. A Director elected by the
remaining Directors or the stockholders to fill a vacancy shall be
elected for the unexpired term of his predecessor in office. Any
directorship to be filled by reason of an increase in the number of
Directors shall be filled by the affirmative vote of a majority of
the Directors then in office or by election at an annual meeting or
a special meeting of stockholders called for that purpose, and a
Director so chosen shall hold office for the term specified in
Section 3.3 of this Article.
SECTION 3.7 Regular Meetings. A regular meeting of the Board
of Directors may be held without other notice than this Bylaw
immediately after and at the same place as the annual meeting of
the stockholders. The Board of Directors may provide by resolution
the time and place, either within or without the State of Delaware,
for the holding of additional regular meetings without other notice
than such resolution.
SECTION 3.8 Special Meetings. Special meetings of the Board
of Directors may be called by or at the request of the President,
the Chairman of the Board or a majority of the Directors. The
person or persons authorized to call special meetings of the Board
of Directors may fix any place, either within or without the State
of Delaware, as the place for holding any special meeting of the
Board of Directors called by them.
SECTION 3.9 Telephonic Meetings. Members of the Board of
Directors or any committee designated by the Board of Directors may
participate in a meeting of the Board of Directors or committee by
means of conference telephone or similar communications equipment
by which all persons participating in the meeting can hear one
another at the same time. Such participation shall constitute
presence in person at the meeting. All participants in any meeting
of Directors, by virtue of their participation and without further
action on their part, shall be deemed to have consented to the
recording of such meeting by electronic device or otherwise, and to
the making of a written transcript thereof, in order that minutes
thereof shall be available for the Corporation's records.
SECTION 3.10 Notice. Notice of any special meeting shall be
given at least four (4) days previous thereto by written notice
mailed to each Director at his business address, or by notice given
at least two (2) days prior to the meeting, in person or by any
means specified in Section 9.1(b) or (c). Any Director may waive
notice of any meeting. The attendance of a Director at a meeting
shall constitute a waiver of notice of such meeting, except where
a Director attends a meeting for the express purpose of objecting
to the transaction of any business because the meeting is not
lawfully called or convened. Neither the business to be transacted
at, nor the purpose of, any regular or special meeting of the Board
of Directors need be specified in the notice or waiver of notice of
such meeting.
SECTION 3.11 Quorum. A majority of the number of Directors
fixed in accordance with these Bylaws shall constitute a quorum for
the transaction of business. The vote of a majority of the
Directors present at a meeting at which a quorum is in attendance
shall be the act of the Board of Directors, unless the vote of a
different number is required by the Certificate of Incorporation
or these Bylaws. Notwithstanding anything to the contrary in the
Certificate of Incorporation or these Bylaws, the affirmative vote
of two-thirds (2/3) of the total number of Directors is required
to approve the following: (1) any tender offer or exchange offer
or any proposal for a merger made to the Corporation; (2) the sale
of all the stock or assets of, or a business combination involving
the Corporation or any of its subsidiaries; (3) the sale of a
substantial equity interest in, or a substantial portion of the
assets of the Corporation or any of its subsidiaries, including
a plan of liquidation of the Corporation or any of its subsidiaries;
or (4) the addition or removal of any person with significant
influence over major policymaking decisions of the Corporation,
including, but not limited to, those persons who, without regard
to title, exercise the authority of one or more of the following
positions: chief executive officer, president, chief operating
officer, chief financial officer, chief lending officer, or
chief investment officer.
SECTION 3.12 Compensation. The amount, if any, which each
Director shall be entitled to receive as compensation for his
services as a Director shall be fixed from time to time by
resolution of the Board of Directors. If any director shall serve
as a member of any committee of the Board of Directors or perform
special services at the instance of the Board of Directors, such
may be paid additional compensation as the Board of Directors may
determine. Each Director shall be entitled to reimbursement for
traveling expenses incurred by him in attending any meeting of the
Board of Directors or of a committee. Such compensation shall be
payable even though a meeting may be adjourned because of a lack of
a quorum.
SECTION 3.13 Action by Directors Without Meeting. Any action
required to be taken at a meeting of the Directors of the
Corporation or any action which may be taken at such a meeting, may
be taken without a meeting if a consent in writing, setting forth
the action so taken, shall be signed by all of the Directors
entitled to vote with respect to the subject matter thereof. A
consent shall be sufficient for this Section 3.13 if it is executed
in counterparts, in which event all of such counterparts, when
taken together, shall constitute one and the same consent.
SECTION 3.14 Designation of Committees. The Board of
Directors may by resolution or resolutions passed by a majority of
the whole Board of Directors designate one or more committees, each
committee to consist of two or more of the directors of the
Corporation, which to the extent provided in the resolution or
resolutions shall have and may exercise the powers of the Board of
Directors in the management of the business and affairs of the
Corporation, and may have power to authorize the seal of the
Corporation to be affixed to all papers which may require it;
provided, however, that no such committee shall have any power or
authority in reference to those matters prohibited by Section
141(c) of the Delaware General Corporation Law. Such committee or
committees shall have such name or names as may be determined from
time to time by resolution or resolutions adopted by the Board of
Directors. If provisions be made for any such committee or
committees, the members thereof shall be appointed by the Board of
Directors and shall serve during the pleasure of the Board of
Directors. A majority of the members of a committee shall
constitute a quorum for the transaction of business. The Board of
Directors may designate one or more directors of the Corporation as
alternate members of any committee, who may replace any absent or
disqualified member at any meeting of the committee and who, in
such event, shall be counted in determining the presence of a
quorum. Vacancies in such committees shall be filled by the Board
of Directors; provided, however, that in the absence or
disqualification of any member of such committee or committees, the
member or members thereof present at any meeting and not
disqualified from voting, whether or not he or they constitute a
quorum, may unanimously appoint another member of the Board of
Directors to act at the meeting in the place of any such absent or
disqualified member. The Board of Directors may at its pleasure
discontinue any such committee or committees.
ARTICLE 4
Officers
SECTION 4.1 Generally. The Board of Directors at its first
meeting and at each annual meeting thereafter shall elect, at a
minimum, the following officers: a President, a Secretary and a
Treasurer. The Board of Directors at any time and from time to time
may elect or appoint such other officers as it shall deem
necessary, including, but not limited to, a Chairman of the Board
of Directors, one or more Vice Presidents, one or more Assistant
Vice Presidents, one or more Assistant Treasurers, and one or more
Assistant Secretaries, who shall hold their offices for such terms
as shall be determined by the Board of Directors and shall exercise
such powers and perform such duties as are specified by these
Bylaws, or as shall be determined from time to time by the Board of
Directors. Any person may hold two or more offices, except that no
person may hold the office of President and Secretary. No officer
need be a shareholder of the Corporation.
SECTION 4.2 Compensation. The salaries of the officers of the
corporation shall be fixed by the Board of Directors, except that
the Board of Directors may delegate to any committee or officer or
officers the power to fix the compensation of any other officer.
SECTION 4.3 Tenure. Each officer of the corporation shall
hold office for the term for which he is elected or appointed, and
until his successor has been duly elected or appointed and has
qualified, or until his earlier resignation, removal from office or
death. Any officer may be removed by the Board of Directors
whenever in its judgment the best interest of the corporation will
be served thereby.
SECTION 4.4 Vacancies. A vacancy in any office, because of
resignation, removal or death may be filled by the Board of
Directors for the unexpired portion of the term.
SECTION 4.5 Chairman of the Board. The Chairman of the Board
shall preside at all meetings of stockholders and of the Board of
Directors. In general, he shall perform all duties incident to the
office of the Chairman of the Board and such other duties as may
from time to time be assigned to him by the Board.
SECTION 4.6 President. The President shall be the chief
executive officer and the head of the corporation and, subject to
the Board of Directors, shall have the general control and
management of the business and affairs of the corporation. The
President shall also be the chief operating officer of the
corporation and, subject to the control of the Board of Directors,
shall in general manage, supervise and control the day to day
business and affairs of the corporation. He shall, when present,
preside at meetings of all of the stockholders in the absence of
the Chairman of the Board or if no Chairman of the Board has been
elected. In general, the President shall perform all duties
incident to the office of the President and such other duties as
may be prescribed by the Board of Directors from time to time. He
shall vote any shares of stock or other voting securities owned by
the corporation and may sign, with the Secretary or any other
proper officer of the corporation thereunto authorized by the Board
of Directors, certificates for shares of the corporation, any
deeds, mortgages, bonds, policies of insurance, contracts,
investment certificates or other instruments which the Board of
Directors has authorized to be executed, except in cases where
signing the execution thereof shall be expressly delegated by the
Board of Directors or by these Bylaws to some other officer or
agent of the corporation, or shall be required by law to be
otherwise signed or executed.
SECTION 4.7 Vice Presidents. In the absence of the President
or in the event of his death or inability or refusal to act, the
Vice President (or in the event there may be more than one Vice
President, the Vice Presidents in the order designated at the time
of their election, or in the absence of any designation, then in
order of election) shall perform the duties of the President and,
when so acting, shall have all the powers of and be subject to all
the restrictions upon the President. Any Vice President may sign,
with the Secretary or an Assistant Secretary, certificates for
shares of the corporation and shall perform such other duties as
shall from time to time be assigned to him by the President or by
the Board of Directors. All Vice Presidents shall have such other
duties as prescribed by the Board of Directors from time to time.
SECTION 4.8 Secretary. The Secretary shall: (a) attend and
keep the minutes of the stockholders' meetings and of the Board of
Directors' meetings in one or more books provided by that purpose;
(b) see that all notices are duly given in accordance with the
provisions of these Bylaws as required by law; (c) be custodian of
the corporate records and of the seal of the corporation and see
that the seal of the corporation is affixed to all documents, the
execution of which on behalf of the corporation under its seal is
duly authorized; (d) keep a register of the post office address of
each stockholder which shall be furnished to the Secretary by such
stockholder; (e) sign with the President or a Vice President
certificates for shares of the corporation, the issuance of which
shall have been authorized by resolution of the Board of Directors;
(f) have general charge of the stock transfer books of the
corporation; (g) in general perform all duties incident to the
office of the Secretary and such other duties as from time to time
may be assigned to him by the President or the Board of Directors.
SECTION 4.9 Treasurer. The Treasurer, unless otherwise
determined by the Board of Directors, shall: (a) have charge and
custody of and be responsible for all funds and securities of the
corporation; (b) receive and give receipts for monies due and
payable to the corporation from any source whatsoever, and deposit
all such monies in the name of the corporation in such banks, trust
companies or other depositories as shall be selected by the Board
of Directors; and (c) in general perform all the duties incident to
the office of Treasurer and such other duties as from time to time
may be assigned by the Board of Directors.
SECTION 4.10 Assistant Officers. The Assistant Secretaries,
when authorized by the Board of Directors, may sign with the
President or a Vice President certificates for shares of the
corporation the issuance of which shall have been authorized by a
resolution of the Board of Directors. The Assistant Vice
Presidents, Secretaries and Treasurers, in general, shall perform
such duties as shall be assigned by the Vice President(s),
Secretary or Treasurer, respectively, or by the President or by the
Board of Directors.
ARTICLE 5
Execution of Instruments and Deposit of Funds
SECTION 5.1 Contracts and Other Documents. Contracts and
other instruments or documents may be signed in the name of the
Corporation by the President or by any other officer authorized to
sign such contract, instrument, or document by the Board of
Directors, and such authority may be general or confined to
specific instances.
SECTION 5.2 Interested Directors; Quorum. No contract or
transaction between the Corporation and one (1) or more of its
directors or officers, or between the Corporation and any other
corporation, partnership, association, or other organization in
which one (1) or more of its directors or officers are directors or
officers, or have a financial interest, shall be void or voidable
solely for this reason, or solely because the director or officer
is present at or participates in the meeting of the Board of
Directors or committee thereof which authorizes the contract or
transaction, or solely because his or their votes are counted for
such purpose, if (i) the material facts as to his relationship or
interest and as to the contract or transaction are disclosed or are
known to the Board of Directors or the committee, and the Board of
Directors or committee in good faith authorizes the contract or
transaction by the affirmative votes of a majority of the
disinterested directors, even though the disinterested directors be
less than a quorum; or (ii) the material facts as to his
relationship or interest and as to the contract or transaction are
disclosed or are known to the stockholders entitled to vote
thereon, and the contract or transaction is specifically approved
in good faith by vote of the stockholders; or (iii) the contract or
transaction is fair as to the Corporation as of the time it is
authorized, approved or ratified, by the Board of Directors, a
committee thereof, or the stockholders. Common or interested
directors may be counted in determining the presence of a quorum at
a meeting of the Board of Directors or of a committee which
authorizes the contract or transaction.
SECTION 5.3 Dividends. Subject to the laws of the State of
Delaware, the Board of Directors may, from time to time, declare
and the Corporation may pay dividends on its outstanding shares in
cash, property, or its own shares, except when the Corporation is
insolvent or when the declaration or payment thereof would be
contrary to any restrictions contained in the Certificate of
Incorporation.
SECTION 5.4 Bank Accounts and Deposits. All funds of the
Corporation shall be deposited from time to time to the credit of
the Corporation with such banks, bankers, trust companies or other
depositories as the Board of Directors may select or as may be
selected by any officer or officers, agent or agents of the
Corporation to whom such power may be delegated from time to time
by the Board of Directors.
SECTION 5.5 Signing of Checks and Drafts. Except as otherwise
provided in these Bylaws, all checks, drafts, or other order or
payment of money, notes, or other evidences of indebtedness, issued
in the name of or payable to the Corporation, shall be signed or
endorsed by such person or persons and in such manner as shall be
determined from time to time by resolution of the Board of
Directors.
SECTION 5.6 Loans. No loans and no renewals of any loans
shall be contracted on behalf of the Corporation except as
authorized by the Board of Directors. When authorized so to do by
the Board of Directors, any officer or agent of the Corporation may
effect loans and advances for the Corporation from any bank, trust
company or other institution or from any firm, corporation or
individual, and for such loans and advances may make, execute and
deliver promissory notes, bonds or other evidences of indebtedness
of the Corporation. When authorized so to do by the Board of
Directors, any officer or agent of the Corporation may pledge,
hypothecate or transfer, as security for the payment of any and all
loans, advances, indebtedness and liabilities of the Corporation,
any and all stocks, securities and other personal property at any
time held by the Corporation, and, to that end, may endorse, assign
and deliver the same. Such authority may be general or confined to
specific instances.
ARTICLE 6
Issuance and Transfer of Shares
SECTION 6.1 Issuance of Certificates. Each stockholder of the
Corporation shall be entitled to a certificate or certificates, in
such form as shall be approved by the Board of Directors and
required by law, certifying the number of shares of the Corporation
owned by such stockholder.
SECTION 6.2 Signature on Stock Certificates. The shares of
the Corporation shall be represented by certificates signed by the
President or a Vice President and the Secretary, and may be sealed
with the seal of the Corporation or a facsimile thereof. The
signature of any of these officers upon a certificate may be a
facsimile. In case any officer, transfer agent, or registrar who
has signed or whose facsimile signature has been placed upon such
certificate shall have ceased to be such officer, transfer agent or
registrar before such certificate is issued, it may be issued by
the Corporation with the same effect as if he were such officer at
the date of its issue.
SECTION 6.3 Stock Transfer Books. A record of all
certificates for shares issued by the Corporation shall be the
Secretary or by any transfer agent or registrar appointed pursuant
to Section 6.4 below at the principal office of the Corporation or
at the office of such transfer agent or registrar. Such record
shall show the name and address of the person, firm or corporation
in which certificates for shares are registered, the number and
classes of shares represented by each such certificate, the date of
each such certificate, and in case of certificates which have been
canceled, the dates of cancellation thereof.
SECTION 6.4 Transfer Agents and Registrars. The Board of
Directors may appoint one (1) or more transfer agents, registrars
of other agents for the purpose of registering transfer of shares
of the Corporation, issuing new certificates of shares of the
Corporation and canceling certificates surrendered to the
Corporation. Such agents and registrars shall be appointed at such
times and places as the requirements of the Corporation may
necessitate and the Board of Directors may designate. Any such
transfer agent, registrar or other agent shall be under a duty to
the Corporation to exercise good faith and due diligence in
performing his functions. Such transfer agent, registrar or other
agent shall have, with regard to the particular functions he
performs, the same obligation to the holder or owner of shares of
the Corporation and shall have the same rights and privileges as
the Corporation has in regard to those functions. Notice such agent,
registrar or other such agent is notice to the Corporation with
respect to the functions performed by the agent.
SECTION 6.5 Replacement of Lost, Destroyed and Stolen
Certificates. Where a certificate for shares of the Corporation has
been lost, destroyed or stolen, the Corporation shall issue a new
certificate in place of the original certificate if the owner (a)
files with the Corporation a sufficient indemnity bond, and (b)
satisfies any other reasonable requirements imposed by the Board of
Directors of the Corporation.
SECTION 6.6 Transfer of Shares. Shares of the capital stock
of the Corporation shall be transferred on the books of the
Corporation by the holder thereof in person or by his attorney duly
authorized in writing, upon surrender and cancellation of
certificates for the number of shares to be transferred, except as
provided in the preceding section. Books for the transfer of shares
of the capital stock shall be kept by the Corporation or by one or
more transfer agents appointed by it.
SECTION 6.7 Regulations. The Board of Directors shall have
power and authority to make such rules and regulations as-it may
deem expedient concerning the issue, transfer and registration of
certificates for shares of the capital stock of the Corporation.
ARTICLE 7
Corporate Records, Reports, and Seal
SECTION 7.1 Minutes of Corporate Meetings. The Corporation
shall keep at its principal place of business, or at such other
place as may be directed by the Board of Directors, a book of
minutes of all proceedings of its stockholders and Board of
Directors, with the time and place of holding of all meetings,
whether regular or special, and, if special, how authorized, the
notice thereof given, the names of those present at directors
meetings, the number of shares or members present or represented at
stockholders meetings, and the proceedings thereof.
SECTION 7.2 Inspection of Records and Properties by
Directors. Every Director shall have the absolute right at any
reasonable time to inspect all books, records, documents of every
kind, and the physical properties of the Corporation, and also of
its subsidiary corporations. Such inspection by a Director may be
made in person or by agent or attorney, and the right of inspection
includes the right to make extracts.
SECTION 7.3 Fiscal Year. The fiscal year of the Corporation
shall begin on the first day of January and terminate on the last
day of December of each succeeding year; unless the Board of
Directors shall adopt a different fiscal year.
SECTION 7.4 Corporate Seal. The seal of the Corporation shall
be circular in form and shall have engraved upon it the words,
"United Security Bancshares, Inc." The seal shall be used by
causing it to be affixed or impressed or a facsimile thereof may be
reproduced or otherwise used in such manner as the Board of
Directors shall determine.
ARTICLE 8
Adoption, Amendment, and Repeal of Bylaws
SECTION 8.1 Power of Directors to Amend. The Board of
Directors shall have the power to alter, amend or repeal the Bylaws
of the Corporation or adopt new Bylaws for the Corporation as
provided in the Certificate of Incorporation of the Corporation.
SECTION 8.2 Power of Stockholders to Amend. The stockholders
shall have the power to alter, amend or repeal the Bylaws of the
Corporation or adopt new Bylaws of the Corporation as provided in
the Certificate of Incorporation of the Corporation.
ARTICLE 9
Notices
SECTION 9.1 Giving of Notice. Except as otherwise provided by
the General Corporation Law of Delaware, these Bylaws, the
Corporation's Certificate of Incorporation, or resolution of the
Board of Directors, every meeting notice or other notice, demand,
bill, statement or other communication (collectively, "Notice") to
or from the Corporation from or to a Director, Officer or
stockholder shall be duly given if it is written or printed and is
(a) sent by first class mail or by overnight service of the U.S.
Postal Service, postage prepaid, (b) sent by any established
overnight air courier service, such as Federal Express, Emery,
Airborne or UPS, (c) sent by telegraph, tested telex or other
tested facsimile transmission, (d) delivered by any commercial
messenger service which regularly retains its receipts, or (e)
personally delivered, provided a receipt is obtained reflecting the
date of delivery. Notice shall not be duly given unless all
delivery or postage charges are pre-paid. Notice shall be given to
an addressee's most recent address as it appears on the
Corporation's records. A Notice shall be deemed "given" when
dispatched for delivery, or if mailed, on the date postmarked. This
Section shall not have the effect of shortening any notice period
provided for in these Bylaws.
SECTION 9.2 Waiver of Notice. Any Notice required by the
General Corporation Law of Delaware, the Certificate of
Incorporation or these Bylaws may be waived in writing at any time
by the person entitled to the Notice, and such waiver shall be
equivalent to the giving of notice. Notice of any meeting shall be
waived by attendance (if a stockholders' meeting, in person or by
proxy) at the meeting. A waiver of Notice of a special meeting of
stockholders shall state the purpose for which the meeting was
called or the business to be transacted thereat.
- - - - - - - - - - -
The foregoing are hereby certified by the undersigned officer
of the Corporation to be a true and accurate copy of the Bylaws of
the Corporation and to be in full force and effect this date.
Given under my hand and the seal of the Corporation this _____
day of _____, 1999.
_____________________________________
Signature
Print Name:__________________________
Title:_______________________________
[CORPORATE SEAL]
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EXHIBIT D
(PROVISIONS OF ALABAMA BUSINESS CORPORATION ACT
RELATING TO DISSENTERS' RIGHTS)
ALABAMA CODE ANNOTATED
TITLE 10. CORPORATIONS, PARTNERSHIPS AND ASSOCIATIONS
CHAPTER 2B. BUSINESS CORPORATIONS
Article 13. Dissenters' Rights
Section 10-2B-13.01. Definitions.
(1) "Corporate action" means the filing of articles of merger
or share exchange by the probate judge or Secretary of
State, or other action giving legal effect to a
transaction that is the subject of dissenters' rights.
(2) "Corporation" means the issuer of shares held by a
dissenter before the corporate action, or the surviving
or acquiring corporation by merger or share exchange of
that issuer.
(3) "Dissenter" means a shareholder who is entitled to
dissent from corporate action under Section 10-2B-13.02
and who exercises that right when and in the manner
required by Sections 10-2B-13.20 through 10-2B-13.28.
(4) "Fair Value," with respect to a dissenter's shares, means
the value of the shares immediately before the
effectuation of the corporate action to which the
dissenter objects, excluding any appreciation or
depreciation in anticipation of the corporate action
unless exclusion would be inequitable.
(5) "Interest" means interest from the effective date of the
corporate action until the date of payment, at the
average rate currently paid by the corporation on its
principal bank loans, or, if none, at a rate that is fair
and equitable under all circumstances.
(6) "Record shareholder" means the person in whose name
shares are registered in the records of a corporation or
the beneficial owner of shares to the extent of the
rights granted by a nominee certificate on file with a
corporation.
(7) "Beneficial shareholder" means the person who is a
beneficial owner of shares held in a voting trust or by
a nominee as the record shareholder.
(8) "Shareholder" means the record shareholder or the
beneficial shareholder.
Section 10-2B-13.02. Right to dissent.
(a) A shareholder is entitled to dissent from, and obtain
payment of the fair value of his or her shares in the
event of, any of the following corporate actions:
(1) Consummation of a plan of merger to which the
corporation is a party (i) if shareholder approval
is required for the merger by Section 10-2B-11.03
or the articles of incorporation and the
shareholder is entitled to vote on the merger or
(ii) if the corporation is a subsidiary that is
merged with its parent under Section 10-2B-11.04;
(2) Consummation of a plan of share exchange to which
the corporation is a party as the corporation whose
shares will be acquired, if the shareholder is
entitled to vote on the plan;
(3) Consummation of a sale or exchange by all, or
substantially all, of the property of the
corporation other than in the usual and regular
course of business, if the shareholder is entitled
to vote on the sale or exchange, including a sale
in dissolution, but not including a sale pursuant
to court order or a sale for cash pursuant to a
plan by which all or substantially all of the net
proceeds of the sale will be distributed to the
shareholders within one year after the date of
sale;
(4) To the extent that the articles of incorporation of
the corporation so provide, an amendment of the
articles of incorporation that materially and
adversely affects rights in respect to a
dissenter's shares because it:
(i) Alters or abolishes a preferential right of
the shares;
(ii) Creates, alters, or abolishes a right in
respect of redemption, including a provision
respecting a sinking fund for the redemption
or repurchase of the shares;
(iii) Alters or abolishes a preemptive right of the
holder of the shares to acquire shares or
other securities;
(iv) Excludes or limits the right of the shares to
vote on any matter, or to cumulate votes,
other than a limitation by dilution through
issuance of shares or other securities with
similar voting rights; or
(v) Reduces the number of shares owned by the
shareholder to a fraction of a share if the
fractional share so created is to be acquired
for cash under Section 10-2B-6.04; or
(5) Any corporate action taken pursuant to a
shareholder vote to the extent the articles of
incorporation, bylaws, or a resolution of the board
of directors provides that voting or nonvoting
shareholders are entitled to dissent and obtain
payment for their shares.
(b) A shareholder entitled to dissent and obtain payment for
shares under this chapter may not challenge the corporate
action creating his or her entitlement unless the action
is unlawful or fraudulent with respect to the shareholder
or the corporation.
Section 10-2B-13.03. Dissent by nominees and beneficial owners.
(a) A record shareholder may assert dissenters' rights as to
fewer than all of the shares registered in his or her
name only if he or she dissents with respect to all
shares beneficially owned by any one person and notifies
the corporation in writing of the name and address of
each person on whose behalf he or she asserts dissenters'
rights. The rights of a partial dissenter under this
subsection are determined as if the shares to which he or
she dissents and his or her other shares were registered
in the names of different shareholders.
(b) A beneficial shareholder may assert dissenters' rights as
to shares held on his or her behalf only if:
(1) He or she submits to the corporation the record
shareholder's written consent to the dissent not
later than the time the beneficial shareholder
asserts dissenters' rights; and
(2) He or she does so with respect to all shares of
which he or she is the beneficial shareholder or
over which he or she has power to direct the vote.
Section 10-2B-13.20. Notice of dissenters' rights.
(a) If proposed corporate action creating dissenters' rights
under Section 10-2B-13.02 is submitted to a vote at a
shareholders' meeting, the meeting notice must state that
shareholders are or may be entitled to assert dissenters'
rights under this article and be accompanied by a copy of
this article.
(b) If corporate action creating dissenters' rights under
Section 10-2B-13.02 is taken without a vote of
shareholders, the corporation shall (1) notify in writing
all shareholders entitled to assert dissenters' rights
that the action was taken; and (2) send them the
dissenters' notice described in Section 10-2B-13.22.
Section 10-2B-13.21. Notice of intent to demand payment.
(a) If proposed corporate action creating dissenters' rights
under Section 10-2B-13.02 is submitted to a vote at a
shareholder's meeting, a shareholder who wishes to assert
dissenters' rights (1) must deliver to the corporation
before the vote is taken written notice of his or her
intent to demand payment or [sic] his or her shares if
the proposed action is effectuated; and (2) must not vote
his or her shares in favor of the proposed action.
(b) A shareholder who does not satisfy the requirements of
subsection (a) is not entitled to payment for his or her
shares under this article.
Section 10-2B-13.22. Dissenters' notice.
(a) If proposed corporate action creating dissenters' rights
under Section 10-2B-13.02 is authorized at a
shareholders' meeting, the corporation shall deliver a
written dissenters' notice to all shareholders who
satisfied the requirements of Section 10-2B-13.21.
(b) The dissenters' notice must be sent no later than 10 days
after the corporate action was taken, and must:
(1) State where the payment demand must be sent;
(2) Inform holders of shares to what extent transfer of
the shares will be restricted after the payment
demand is received;
(3) Supply a form for demanding payment;
(4) Set a date by which the corporation must receive
the payment demand, which date may not be fewer
than 30 nor more than 60 days after the date the
subsection (a) notice is delivered; and
(5) Be accompanied by a copy of this article.
Section 10-2B-13.23. Duty to demand payment.
(a) A shareholder sent a dissenters' notice described in
Section 10-2B-13.22 must demand payment in accordance
with the terms of the dissenters' notice.
(b) The shareholder who demands payment retains all other
rights of a shareholder until those rights are canceled
or modified by the taking of the proposed corporate
action.
(c) A shareholder who does not demand payment by the date set
in the dissenters' notice is not entitled to payment for
his or her shares under this article.
(d) A shareholder who demands payment under subsection (a)
may not thereafter withdraw that demand and accept the
terms offered under the proposed corporate action unless
the corporation shall consent thereto.
Section 10-2B-13.24. Share restrictions.
(a) Within 20 days after making a formal payment demand, each
shareholder demanding payment shall submit the
certificate or certificates representing his or her
shares to the corporation for
(1) notation thereon by the corporation that such
demand has been made and (2) return to the
shareholder by the corporation.
(b) The failure to submit his or her shares for notation
shall, at the option of the corporation, terminate the
shareholders' rights under this article unless a court of
competent jurisdiction, for good and sufficient cause,
shall otherwise direct.
(c) If shares represented by a certificate on which notation
has been made shall be transferred, each new certificate
issued therefor shall bear similar notation, together
with the name of the original dissenting holder of such
shares.
(d) A transferee of such share shall acquire by such transfer
no rights in the corporation other than those which the
original dissenting shareholder had after making demand
for payment of the fair value thereof.
Section 10-2B-13.25. Offer of payment.
(a) As soon as the proposed corporate action is taken, or
upon receipt of a payment demand, the corporation shall
offer to pay each dissenter who complied with Section
10-2B-13.23 the amount the corporation estimates to be
the fair value of his or her shares, plus accrued
interest.
(b) The offer of payment must be accompanied by:
(1) The corporation's balance sheet as of the end of a
fiscal year ending not more than 16 months before
the date of the offer, an income statement for that
year, and the latest available interim financial
statements, if any;
(2) A statement of the corporation's estimate of the
fair value of the shares;
(3) An explanation of how the interest was calculated;
(4) A statement of the dissenter's right to demand
payment under Section 10-2B-13.28; and
(5) A copy of this article.
(c) Each dissenter who agrees to accept the corporation's
offer of payment in full satisfaction of his or her
demand must surrender to the corporation the certificate
or certificates representing his or her shares in
accordance with terms of the dissenters' notice. Upon
receiving the certificate or certificates, the
corporation shall pay each dissenter the fair value of
his or her shares, plus accrued interest, as provided in
subsection (a). Upon receiving payment, a dissenting
shareholder ceases to have any interest in the shares.
Section 10-2B-13.26. Failure to take corporate action.
(a) If the corporation does not take the proposed action
within 60 days after the date set for demanding payment,
the corporation shall release the transfer restrictions
imposed on shares.
(b) If, after releasing transfer restrictions, the
corporation takes the proposed action, it must send a new
dissenters' notice under Section 10-2B-13.22 and repeat
the payment demand procedure.
Section 10-2B-13.27. Reserved.
Section 10-2B-13.28. Procedure if shareholder dissatisfied with
offer of payment.
(a) A dissenter may notify the corporation in writing of his
or her own estimate of the fair value of his or her
shares and amount of interest due, and demand payment of
his or her estimate, or reject the corporation's offer
under Section 10-2B-13.25 and demand payment of the fair
value of his or her shares and interest due, if:
(1) The dissenter believes that the amount offered
under Section 10-2B-13.25 is less than the fair
value of his or her shares or that the interest due
is incorrectly calculated;
(2) The corporation fails to make an offer under
Section 10-2B-13.25 within 60 days after the date
set for demanding payment; or
(3) The corporation, having failed to take the proposed
action, does not release the transfer restrictions
imposed on shares within 60 days after the date set
for demanding payment.
(b) A dissenter waives his or her right to demand payment
under this section unless he or she notifies the
corporation or his or her demand in writing under
subsection (a) within 30 days after the corporation
offered payment for his or her shares.
Section 10-2B-13.30. Court action.
(a) If a demand for payment under Section 10-2B-13.28 remains
unsettled, the corporation shall commence a proceeding
within 60 days after receiving the payment demand and
petition the court to determine the fair value of the
shares and accrued interest. If the corporation does not
commence the proceeding within the 60 day period, it
shall pay each dissenter whose demand remains unsettled
the amount demanded.
(b) The corporation shall commence the proceeding in the
circuit court of the county where the corporation's
principal office (or, if none in this state, its
registered office) is located. If the corporation is a
foreign corporation without a registered office in this
state, it shall commence the proceeding in the county in
this state where the registered office of the domestic
corporation merged with or whose shares were acquired by
the foreign corporation was located.
(c) The corporation shall make all dissenters (whether or not
residents of this state) whose demands remain unsettled
parties to the proceeding as in an action against their
shares, and all parties must be served with a copy of the
petition. Nonresidents may be served by registered or
certified mail or by publication as provided under the
Alabama Rules of Civil Procedure.
(d) After service is completed, the corporation shall deposit
with the clerk of the court an amount sufficient to pay
unsettled claims of all dissenters party to the action in
an amount per share equal to its prior estimate of fair
value, plus accrued interest, under Section 10-2B-13.25.
(e) The jurisdiction of the court in which the proceeding is
commenced under subsection (b) is plenary and exclusive.
The court may appoint one or more persons as appraisers
to receive evidence and recommend decision on the
question of fair value. The appraisers have the powers
described in the order appointing them, or in any
amendment to it. The dissenters are entitled to the same
discovery rights as parties in other civil proceedings.
(f) Each dissenter made a party to the proceeding is entitled
to judgment for the amount the court finds to be the fair
value of his or her shares, plus accrued interest. If the
court's determination as to the fair value of a
dissenter's shares, plus accrued interest, is higher than
the amount estimated by the corporation and deposited
with the clerk of the court pursuant to subsection (d),
the corporation shall pay the excess to the dissenting
shareholder. If the court's determination as to fair
value, plus accrued interest, of a dissenter's shares is
less than the amount estimated by the corporation and
deposited with the clerk of the court pursuant to
subsection (d), then the clerk shall return the balance
of funds deposited, less any costs under Section
10-2B-13.31, to the corporation.
(g) Upon payment of the judgment, and surrender to the
corporation of the certificate or certificates
representing the appraised shares, a dissenting
shareholder ceases to have any interest in the shares.
Section 10-2B-13.31. Court costs and counsel fees.
(a) The court in an appraisal proceeding commenced under
Section 10-2B-13.30 shall determine all costs of the
proceeding, including compensation and expenses of
appraisers appointed by the court. The court shall assess
the costs against the corporation, except that the court
may assess costs against all or some of the dissenters,
in amounts the court finds equitable, to the extent the
court finds the dissenters acted arbitrarily,
vexatiously, or not in good faith in demanding payment
under Section 10-2B-13.28.
(b) The court may also assess the reasonable fees and
expenses of counsel and experts for the respective
parties, in amounts the court finds equitable
(1) Against the corporation and in favor of any or all
dissenters if the court finds the corporation did
not substantially comply with the requirements of
Sections 10-2B-13.20 through 10-2B-13.28; or
(2) Against either the corporation or a dissenter, in
favor of any other party, if the court finds that
the party against whom the fees and expenses are
assessed acted arbitrarily, vexatiously, or not in
good faith with respect to the rights provided by
this chapter.
(c) If the court finds that the services of counsel for any
dissenter were of substantial benefit to other dissenters
similarly situated, and that the fees for those services
should not be assessed against the corporation, the court
may award to these counsel reasonable fees to be paid out
of the amounts awarded the dissenters who were
benefitted.
Section 10-2B-13.32. Status of shares after payment.
Shares acquired by a corporation pursuant to payment of the
agreed value therefor or to payment of the judgment entered
therefor, as in this chapter provided, may be held and disposed of
by such corporation as in the case of other treasury shares, except
that, in the case of a merger or share exchange, they may be held
and disposed of as the plan of merger or share exchange may
otherwise provide.
<PAGE>
PROXY
SOLICITED BY THE BOARD OF DIRECTORS
UNITED SECURITY BANCSHARES, INC.
ANNUAL MEETING OF STOCKHOLDERS
MAY 4, 1999
The undersigned hereby appoints James L. Miller and R. Terry
Phillips, or ____________ _________________________, or any one of
them, proxies for the undersigned, or such other persons as the
board of directors of United Security Bancshares, Inc.
("Bancshares") may designate, with full power of substitution, to
represent and act for and in the name and stead of the undersigned
and to vote all of the shares of Common Stock of Bancshares, which
the undersigned is entitled to vote at the annual meeting of
stockholders of Bancshares to be held on May 4, 1999, and at
any and all adjournments thereof.
1. The election of all the nominees listed below to serve as
directors until the next annual meeting of stockholders or until
their successors shall be elected and qualified.
NOMINEES: Dan R. Barlow, Linda H. Breedlove, John C.
Gordon, Gerald P. Corgill, Roy G. Cowan, William G.
Harrison, Fred L. Huggins, Hardie B. Kimbrough, Jack W.
Meigs, James L. Miller, Ray Sheffield, James C. Stanley,
R. Terry Phillips, Clarence Watters, Howard M. Whitted,
Bruce N. Wilson.
____FOR ALL NOMINEES ____WITHHOLD AUTHORITY TO VOTE
(except for all nominees whose (for all nominees listed above)
names have been struck out)
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH THE NOMINEE'S
NAME IN THE LIST ABOVE.
2. To approve a change in Bancshares' state of incorporation
from Alabama to Delaware by means of a merger of Bancshares with
and into a wholly-owned subsidiary.
____For ____Against ____Abstain
3. In their discretion, to vote on such other matters as may
properly come before the meeting, but which are not now
anticipated, and to vote for the election of any person as a
director should any persons named in the proxy statement to be
elected be unable to serve or for good cause cannot serve.
____FOR ____WITHHOLD AUTHORITY TO VOTE
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH INSTRUCTIONS GIVEN BY
THE STOCKHOLDER. IF NO INSTRUCTIONS ARE GIVEN, THIS PROXY WILL BE
VOTED FOR PROPOSAL 1 AND PROPOSAL 2.
Dated:_______________________________, 1999
Phone No.__________________________________
___________________________________________
(Signature of Stockholder)
___________________________________________
(Signature of Stockholder, if held jointly)
