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:
[X] Preliminary proxy statement
[ ] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
UNION FINANCIAL BANCSHARES, INC.
(Name of Registrant as Specified in Its Charter)
UNION FINANCIAL BANCSHARES, INC.
(Name of Person(s) Filing Proxy Statement)
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:
N/A
(2) Aggregate number of securities to which transactions applies:
N/A
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
N/A
(4) Proposed maximum aggregate value of transaction:
N/A
__ 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:
N/A
(2) Form, schedule or registration statement no.:
N/A
(3) Filing party:
N/A
(4) Date filed:
N/A
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December 13, 1996
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of
Stockholders of Union Financial Bancshares, Inc. to be held in the Community
Room of the University of South Carolina, Union Campus, at Academy and North
Mountain Streets, Union, South Carolina, on Wednesday, January 22, 1997 at
2:00 p.m., Eastern time.
The Notice of Annual Meeting and Proxy Statement on the following
pages describe the formal business to be transacted at the meeting. During
the meeting, we will also report on the operations of the Corporation.
Directors and officers of the Corporation, as well as a representative from
the Corporation's independent accounting firm, Elliott, Davis & Company, LLP,
will be present to respond to appropriate questions of stockholders.
It is important that your shares are represented at this meeting,
whether or not you attend the meeting in person and regardless of the number
of shares you own. To make sure your shares are represented, we urge you to
complete and mail the enclosed proxy card. If you attend the meeting, you may
vote in person even if you have previously mailed a proxy card.
We look forward to seeing you at the meeting.
Sincerely,
Chairman of the Board
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UNION FINANCIAL BANCSHARES, INC.
203 West Main Street
Union, South Carolina 29379
(864) 427-7692
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on January 22, 1997
NOTICE IS HEREBY GIVEN THAT the 1997 Annual Meeting of Stockholders
of Union Financial Bancshares, Inc. (the "Corporation") will be held in the
Community Room of the University of South Carolina, Union Campus, at Academy
and North Mountain Streets, Union, South Carolina on Wednesday, January 22,
1997, at 2:00 p.m., Eastern time, for the following purposes:
1. To elect two directors to serve for a term of
three years;
2. To approve an amendment to the Corporation's
Certificate of Incorporation increasing the
number of authorized shares of the
Corporation's Common Stock from 1,500,000 to
2,500,000 shares.
3. To ratify the appointment of Elliott, Davis &
Company, LLP as auditors for the Corporation
for the fiscal year ending September 30,
1997; and
4. To consider and act upon such other matters
as may properly come before the meeting or
any adjournments thereof.
NOTE: The Board of Directors is not aware of any other business to
come before the meeting.
Any action may be taken on any one of the foregoing proposals at
the meeting on the date specified above, or on any date or dates to which, by
original or later adjournment, the meeting may be adjourned. Stockholders of
record at the close of business on November 30, 1996 are entitled to notice of
and to vote at the meeting and any adjournments or postponments thereof.
You are requested to complete and sign the enclosed form of proxy,
which is solicited by the Board of Directors, and to mail it promptly in the
enclosed envelope. The proxy will not be used if you attend the meeting and
vote in person.
BY ORDER OF THE BOARD OF DIRECTORS
WANDA J. WELLS
CORPORATE SECRETARY
Union, South Carolina
December 13, 1996
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE CORPORATION THE EXPENSE
OF FURTHER REQUESTS FOR PROXIES IN ORDER TO INSURE A QUORUM. A SELF-ADDRESSED
ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED
IN THE UNITED STATES.
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PROXY STATEMENT
OF
UNION FINANCIAL BANCSHARES, INC.
203 West Main Street
Union, South Carolina 29379
(864) 427-7692
ANNUAL MEETING OF STOCKHOLDERS
January 22, 1997
This Proxy Statement is furnished in connection with the
solicitation of proxies by the Board of Directors of Union Financial
Bancshares, Inc. ("Corporation") to be used at the Annual Meeting of
Stockholders of the Corporation. The Annual Meeting will be held in the
Community Room of the University of South Carolina, Union Campus, at Academy
and North Mountain Streets, on Wednesday, January 22, 1997, at 2:00 p.m.,
Eastern time. The Corporation is the holding company for Union Federal
Savings Bank (the "Savings Bank"). This Proxy Statement and the enclosed
proxy card are being first mailed to stockholders on or about December 13,
1996.
VOTING AND PROXY PROCEDURE
Stockholders of record as of the close of business on November 30,
1996 are entitled to one vote for each share of common stock ("Common Stock")
of the Corporation then held. As of November 30, 1996, the Corporation had
814,286 shares of Common Stock issued and outstanding. The presence, in
person or by proxy, of at least a majority of the total number of outstanding
shares of Common Stock entitled to vote is necessary to constitute a quorum at
the Annual Meeting. Abstentions will be counted as shares present and
entitled to vote at the Annual Meeting for purposes of determining the
existence of a quorum. Broker non-votes will not be considered shares present
and will not be included in determining whether a quorum is present.
The Board of Directors solicits proxies so that each stockholder
has the opportunity to vote on the proposals to be considered at the Annual
Meeting. When a proxy card is returned properly signed and dated, the shares
represented thereby will be voted in accordance with the instructions on the
proxy card. Where no instructions are indicated, proxies will be voted FOR
the nominees for directors set forth below, FOR approval of the amendment to
the Corporation's Certificate of Incorporation and FOR ratification of the
appointment of auditors. If a stockholder attends the Annual Meeting, he or
she may vote by ballot.
Stockholders who execute proxies retain the right to revoke them at
any time. Proxies may be revoked by written notice delivered in person or
mailed to the Secretary of the Corporation or by filing a later proxy prior to
a vote being taken on a particular proposal at the Annual Meeting. Attendance
at the Annual Meeting will not automatically revoke a proxy, but a stockholder
in attendance may request a ballot and vote in person, thereby revoking a
prior granted proxy.
The two directors to be elected at the Annual Meeting will be
elected by a plurality of the votes cast by stockholders present in person or
by proxy and entitled to vote. Stockholders are not permitted to cumulate
their votes for the election of directors. With respect to the election of
directors, votes may be cast for or withheld from each nominee. Votes that
are withheld and broker non-votes will have no effect on the outcome of the
election because directors will be elected by a plurality of votes cast. With
respect to the other proposals to be voted upon, stockholders may vote for a
proposal, against a proposal or may abstain from voting. The approval of the
adoption of the amendment to the Corporation's Certificate of Incorporation
requires the affirmative vote of a majority of the outstanding shares of the
Corporation's Common Stock. Abstentions and broker non-votes are not
affirmative votes and, therefore, will have the same effect as a vote against
the proposal. Ratification of the appointment of Elliot,
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Davis & Company, LLP as auditors will require the affirmative vote of a
majority of the shares represented at the Annual Meeting and entitled to vote.
Thus, abstentions on the Corporation's proposal to ratify the appointment of
auditors will have the effect of a vote against such proposal. Broker
non-votes will not be included in vote totals and will have no effect on the
outcome of the vote.
SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Persons and groups who beneficially own in excess of 5% of the
Corporation's Common Stock are required to file certain reports regarding such
ownership pursuant to the Securities Exchange Act of 1934, as amended
("Exchange Act"). Based upon such reports, the following table sets forth, as
of November 30, 1996, certain information as to those persons who were
beneficial owners of more than 5% of the outstanding shares of Common Stock.
Management knows of no persons other than those set forth below who owned more
than 5% of the Corporation's outstanding shares of Common Stock at November
30, 1996. The table also sets forth, as of November 30, 1996, information as
to the shares of Common Stock beneficially owned by each director, by the
Chief Executive Officer of the Corporation and by all executive officers and
directors of the Corporation as a group.
Amount and Nature Percent of
of Beneficial Common Stock
Beneficial Owner Ownership (a) Outstanding
Beneficial Owners of More Than 5%
A. Foster Jordan 48,336 (b) 6.0%
537 Thompson Blvd.
Union, South Carolina 29379
Directors and Chief Executive Officer
Dwight V. Neese(c) 25,597 3.1
David G. Russell 8,966 1.1
Carl L. Mason 4,080 0.5
William M. Graham 4,248 0.5
Louis M. Jordan 32,918 4.0
Mason G. Alexander 1,000 0.1
James W. Edwards 1,375 0.2
All Executive Officers and 119,907 13.7
Directors as a group
(11 persons)
(a) In accordance with Rule 13d-3 under the Exchange Act, a person is
deemed to be the beneficial owner, for purposes of this table, of any
shares of the Corporation's Common Stock if he or she has voting or
investment power with respect to such security. The table includes
shares owned by spouses, other immediate family members in trust,
shares held in retirement accounts or funds for the benefit of the
named individuals, and other forms of ownership, over which the persons
named in the table possess voting and/or investment power. The amounts
shown also include the following amounts of Common Stock which the
indicated individuals have the right to acquire within 60 days of
November 30, 1996 through the exercise of stock options granted
pursuant to the Corporation's stock option plans: Mr. Neese, 21,900;
Mr. Russell, 2,000; Mr. Mason, 2,000; Mr. Graham, 2,000; Mr. Jordan,
2,000; Mr. Alexander, 0; Mr. Edwards, 1,000; and all executive officers
and directors as a group, 58,918.
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(b) Based on Amendment No. 1 to Schedule 13D dated May 13, 1996. According
to this filing, Mr. Jordan has sole voting and dispositive power with
respect to 48,336 shares.
(c) Mr. Neese is also the Chief Executive Officer of the Corporation.
PROPOSAL 1 -- ELECTION OF DIRECTORS
The Corporation's Board of Directors consists of seven members.
The Board is divided into three classes with three-year staggered terms, with
approximately one third of the directors elected each year. Two directors
will be elected at the Annual Meeting to serve for a three year period, or
until their respective successors have been elected and qualified. The Board
of Directors has nominated for election as directors Louis M. Jordan and
Dwight V. Neese. The nominees are current members of the Board of Directors
of the Corporation.
It is intended that the proxies solicited by the Board of
Directors will be voted "FOR" the election of the above named nominees. If
any nominee is unable to serve, the shares represented by all valid proxies
will be voted for the election of such substitute director as the Board of
Directors may recommend. At this time, the Board knows of no reason why any
nominee might be unable to serve.
The Board of Directors recommends that stockholders vote "FOR" the
election of Messrs. Jordan and Neese.
During the year ended September 30, 1996, Mobley L. Jeter and Ned
D. Farr retired from the Board of Directors. The Board of Directors elected
Mason G. Alexander and James W. Edwards to fill the vacancies created by their
retirement.
The following table sets forth certain information regarding the
nominees for election at the Meeting, as well as information regarding those
directors continuing in office after the Annual Meeting. Unless otherwise
indicated, the principal occupation for each person below has been his
occupation for the past five years.
Year First
Elected or
Appointed Term to
Name Age (a) Principal Occupation Director (b) Expire
BOARD NOMINEES
Louis M. Jordan 61 Major stockholder of Jordan's 1971 2000(c)
Ace Hardware, Inc., Union,
South Carolina
Dwight V. Neese 46 President and Chief Executive 1995 2000(c)
Officer of the Corporation and
the Savings Bank since September
1995. Former Executive Vice
President and Chief Operating
Officer of Home Federal Savings
Bank of South Carolina, from
February 1992 to September 1995.
Previously Senior Vice President/
Division President of First
Savings Bank, FSB, Greenville,
South Carolina
(table continued on following page)
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Year First
Elected or
Appointed Term to
Name Age (a) Principal Occupation Director (b) Expire
DIRECTORS CONTINUING IN OFFICE
David G. Russell 68 Self-employed accountant, 1978 1999
Union, South Carolina
Carl L. Mason 52 President of Cone Finishing, 1989 1999
a textile finishing company
William M. Graham 52 Sole owner and operator of 1990 1999
Graham's Flowers, Union, South
Carolina
Mason G. Alexander 64 Retired director of Mid-South 1996 1998
Management Company, Spartanburg,
South Carolina
James W. Edwards 60 Dean of Academics at the 1996 1998
University of South Carolina,
Union Campus, Union, South
Carolina
(a) At September 30, 1996.
(b) Includes prior service on the Board of Directors of the Savings Bank.
(c) Assuming the individual is re-elected.
Meetings and Committees of the Board of Directors
The Boards of Directors of the Corporation and the Savings Bank
conduct their business through meetings of the Boards and through their
committees. During the fiscal year ended September 30, 1996, the Board of
Directors of the Corporation held 12 meetings and the Board of Directors of
the Savings Bank held 12 meetings. No director of the Corporation or the
Savings Bank attended fewer than 75% of the total meetings of the Board of
Directors and committee meetings on which such Board member served during this
period.
The Savings Bank's Human Resource Committee, composed of Directors
Alexander (Chairman), Mason, and Russell, meets as needed to review the
employee wage and benefit package, hear employee grievances and prepare
employee job descriptions. This Committee met four times during the 1996
fiscal year.
The Corporation's Audit/Compliance Committee, composed of
Directors Russell (Chairman), Edwards and Jordan, meets as needed to select
and review the work performed by the independent public accountants. This
Committee met five times during the 1996 fiscal year.
The Corporation's Nominating Committee, composed of Directors
Russell (Chairman), Mason and Graham, selects nominees for election as
directors. This Committee met one time during fiscal year 1996 to appoint
nominees for director at the Meeting.
The Corporation and the Savings Bank also maintain Loan,
Asset/Liability, Long Range Planning and Strategic Planning Committees.
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DIRECTORS' COMPENSATION
The seven members of the Corporation's Board of Directors are the
same seven individuals who serve on the Savings Bank's Board of Directors.
Members of the Board of Directors of the Savings Bank receive a monthly fee of
$900. The Chairman of the Board of Directors receives an additional monthly
fee of $300. Committee members do not receive additional fees for committee
meetings attended. Currently, members of the Board of Directors of the
Corporation do not receive any fees.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following information is furnished for the Chief Executive
Officer of the Corporation. No other executive officer of the Corporation or
the Savings Bank received salary and bonuses in excess of $100,000 during the
fiscal year ended September 30, 1996.
Long-Term
Compensation
Name and Annual Compensation Securities
Other Annual Underlying
Position Year Salary($) Bonus($) Compensation($) Options(#)
Dwight V. Neese (1) 1996 $108,000 -- -- --
President and Chief 1995 9,000 -- -- 40,000
Executive Officer
All Other
Compensation($)
7,863 (2)
--
(1) Mr. Neese joined the Corporation in September 1995.
(2) Represents employer contribution to 401(k) plan.
Option Exercise/Value Table
The following information with respect to options exercised during
the fiscal year ended September 30, 1996 and remaining unexercised at the end
of the fiscal year, is presented for Mr. Neese.
Shares Number of Securities
Acquired on Value Underlying Unexercised Options
Name Exercise (#) Realized($) Exercisable Unexercisable
Dwight V. Neese -- -- 10,950 29,050
Value of Unexercised
In-the-Money Options
at Fiscal Year End($)
Exercisable Unexercisable
$61,539 $163,261
Employment Agreement
Effective September 5, 1995, the Corporation and the Savings Bank
entered into a three-year employment agreement ("Agreement") with Dwight V.
Neese, President and Chief Executive Officer. The term of the Agreement may
be extended for an additional 12 full calendar months by action of the Board
of Directors on the anniversary date of the Agreement. Mr. Neese's base
salary for the 1997 fiscal year is $115,000. The Agreement may be terminated
at any time by the Board of Directors for "cause," as defined in the
Agreement. In the event that Mr. Neese's employment is terminated without
"cause," the Agreement provides that Mr. Neese's current salary and benefits
would be continued through the remaining term of the Agreement. The Agreement
provides for severance payments if employment is terminated following a change
in control (as defined in the Agreement), equal to 2.99 times the average
annual compensation paid to Mr. Neese during the five years immediately
preceding the change in control and continuation of other employee benefits
for three years. The sum would be paid promptly after any change in control.
Based upon the 1996 compensation level of Mr. Neese, the aggregate payment
that would be
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payable should a change in control occur in 1997 under the terms of the
Agreement would be approximately $343,850. Section 280G of the Internal
Revenue Code of 1986, as amended ("Code"), states that severance payments that
equal or exceed three times the base compensation of the individual are deemed
to be "excess parachute payments" if they are contingent upon a change in
control. Individuals receiving excess parachute payments are subject to a 20%
excise tax on the amount of such excess payments, and the Corporation is not
entitled to deduct such excess payments. The Agreement might have an
anti-takeover effect since it could make an acquisition of the Corporation
more costly for a potential acquiror.
TRANSACTIONS WITH MANAGEMENT
As required by federal regulations, all loans or extensions of
credit to executive officers and directors are made on substantially the same
terms, including interest rates and collateral, as those prevailing at the
time for comparable transactions with other persons and do not involve more
than the normal risk of repayment or present other unfavorable features. In
addition, loans made by the Savings Bank to a director or executive officer in
an amount that, when aggregated with the amount of all other loans by the
Savings Bank to such person and his or her related interests, are in excess of
the greater of $25,000 or 5% of the Savings Bank's capital and surplus (up to
a maximum of $500,000) are subject to approval in advance by a majority of the
disinterested members of the Board of Directors.
PROPOSAL 2 --
AMENDMENT TO THE CORPORATION'S CERTIFICATE OF INCORPORATION
On October 24, 1996, the Board authorized an amendment of the
Corporation's Certificate of Incorporation to increase the number of
authorized shares of Common Stock from 1,500,000 to 2,500,000. The
stockholders are being asked to approve this proposed amendment. As of
November 30, 1996, 814,286 shares of Common Stock were issued and outstanding
and 120,191 shares were reserved for issuance under the Corporation's stock
option plans.
The Board of Directors believes that the proposed increase is
desirable so that, as the need may arise, the Corporation will have more
flexibility to issue shares of Common Stock, without the expense and delay of
a special stockholders' meeting, in connection with possible future stock
dividends or stock splits, equity financings, future opportunities for
expanding the business through acquisitions, management incentive and employee
benefit plans and for other general corporate purposes. The Corporation has
no current plans to issue shares for any purpose other than shares issued upon
exercise of stock options granted to directors, officers and employees under
the Corporation's stock option plans.
Authorized but unissued shares of the Corporation's Common Stock
may be issued at such times, for such purposes and for such consideration as
the Board of Directors may determine to be appropriate without further
authority from the Corporation's stockholders, except as otherwise required by
applicable law or regulations.
The increase in authorized Common Stock will not have any immediate
effect on the rights of existing stockholders. However, the Board will have
the authority to issue authorized Common Stock without requiring future
stockholder approval of such issuances, except as may be required by
applicable law or regulations. To the extent that the additional authorized
shares are issued in the future, they will decrease the existing stockholders'
percentage equity ownership and, depending upon the price at which they are
issued, could be dilutive to the existing stockholders. The holders of Common
Stock have no preemptive rights.
The increase in the authorized number of shares of Common Stock and
the subsequent issuance of such shares could have the effect of delaying or
preventing a change in control of the Corporation without further action by
the stockholders. Shares of authorized and unissued Common Stock could
(within the limits imposed by
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applicable law) be issued in one or more transactions which would make a
change in control of the Corporation more difficult, and, therefore, less
likely. Any such issuance of additional stock could have the effect of
diluting the earnings per share and book value per share of outstanding shares
of Common Stock, and such additional shares could be used to dilute the stock
ownership or voting rights of a person seeking to obtain control of the
Corporation.
The Board of Directors believes that the amendment is in the best
interests of the Corporation and its stockholders and, consequently,
recommends a vote "FOR" approval of the amendment to the Corporation's
Certificate of Incorporation.
PROPOSAL 3 -- RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors has appointed Elliott, Davis & Company, LLP
to be its auditors for the 1997 fiscal year, subject to the ratification by
stockholders. A representative of Elliott, Davis & Company, LLP is expected
to be present at the Meeting to respond to appropriate questions from
stockholders and will have the opportunity to make a statement should he or
she desire to do so.
The Corporation's former independent public accountants were
dismissed by the Corporation on November 29, 1995. The former accountants'
report on the financial statements of the Corporation for the past two years
did not contain an adverse opinion, and was not qualified or modified as to
uncertainty, audit scope or accounting principles. The decision to change
accountants was recommended by the Corporation's Audit Committee and approved
by the Corporation's Board of Directors. The Corporation's Board of Directors
approved the engagement of Elliott, Davis & Company, LLP on November 29, 1995
and entered into an engagement letter with Elliott, Davis & Company, LLP on
December 1, 1995. In connection with the audits of the two most recent fiscal
years preceding the engagement of Elliott, Davis & Company, LLP, there were no
disagreements with the former accountants on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope or
procedure which, if not resolved to the satisfaction of the former
accountants, would have caused it to make reference to the subject matter of
the disagreement in connection with its report.
If the ratification of the appointment of the auditors is not
approved by a majority of the votes cast by stockholders at the Meeting, other
independent public accountants will be considered by the Board of Directors.
The Board of Directors recommends that stockholders vote "FOR" the
ratification of the appointment of auditors.
OTHER MATTERS
The Board of Directors is not aware of any business to come before
the Annual Meeting other than those matters described above in this Proxy
Statement. However, if any other matters should properly come before the
Annual Meeting, it is intended that proxies in the accompanying form will be
voted in respect thereof in accordance with the judgment of the person or
persons voting the proxies.
MISCELLANEOUS
The cost of solicitation of proxies will be borne by the
Corporation. The Corporation will reimburse brokerage firms and other
custodians, nominees and fiduciaries for reasonable expenses incurred by them
in sending proxy materials to the beneficial owners of the Common Stock. In
addition to solicitations by mail, directors, officers, and regular employees
of the Corporation may solicit proxies personally or by telecopier or
telephone without additional compensation.
The Corporation's Annual Report to Stockholders has been mailed to
all stockholders of record as of the close of business on November 30, 1996.
Any stockholder who has not received a copy of such Annual Report may
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obtain a copy by writing the Corporation. The Annual Report is not to be
treated as a part of the proxy solicitation material or as having been
incorporated herein by reference.
A copy of the Corporation's Form 10-KSB for the fiscal year ended
September 30, 1996, as filed with the Securities and Exchange Commission, will
be furnished without charge to stockholders as of the record date upon written
request to the Corporate Secretary, Union Financial Bancshares, Inc., 203 West
Main Street, Union, South Carolina 29379.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act requires the Corporation's
executive officers and directors, and persons who beneficially own more than
10% of any registered class of the Corporation's equity securities, to file
reports of ownership and changes in ownership with the SEC. Executive
officers, directors and greater than 10% shareholders are required by
regulation to furnish the Corporation with copies of all Section 16(a) forms
they file.
Based solely on its review of the copies of such forms it has
received and written representations provided to the Corporation by the above
referenced persons, the Corporation believes that during the fiscal year ended
September 30, 1996 its reporting officers, directors and greater than 10%
shareholders properly and timely complied with all applicable filing
requirements.
STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the
Corporation's annual meeting to be held in 1998 must be received by the
Corporation no later then August 15, 1997 to be considered for inclusion in
the proxy materials and form of proxy relating to such meeting. Any such
proposals shall be subject to the requirements of the proxy rules adopted
under the Exchange Act.
The Corporation's Certificate of Incorporation provides that in
order for a stockholder to make nominations for the election of directors or
proposals for business to be brought before the Annual Meeting, a stockholder
must deliver notice of such nominations and/or proposals to the Secretary not
less than 30 nor more than 60 days prior to the date of the Annual Meeting;
provided that if less than 31 days' notice of the Annual Meeting is given to
stockholders, such notice must be delivered not later than the close of the
tenth day following the day on which notice of the Annual Meeting was mailed
to stockholders. As specified in the Certificate of Incorporation, the notice
with respect to nominations for election of directors must set forth certain
information regarding each nominee for election as director, including such
person's written consent to being named in the proxy statement as a nominee
and to serving as a director, if elected, and certain information regarding
the stockholder giving such notice. The notice with respect to business
proposals to be brought before the Annual Meeting must state the stockholder's
name, address and number of shares of Common Stock held, and briefly discuss
the business to be brought before the Annual Meeting, the reasons for
conducting such business at the Annual Meeting and any interest of the
stockholder in the proposal.
BY ORDER OF THE BOARD OF DIRECTORS
WANDA J. WELLS
CORPORATE SECRETARY
Union, South Carolina
December 13, 1996
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REVOCABLE PROXY
UNION FINANCIAL BANCSHARES, INC.
ANNUAL MEETING OF STOCKHOLDERS
January 22, 1997
The undersigned hereby appoints the Board of Directors as the
official proxy committee with full powers of substitution to act as attorneys
and proxies for the undersigned, to vote all shares of Common Stock of Union
Financial Bancshares, Inc. (the "Corporation") which the undersigned is
entitled to vote at the Annual Meeting of Stockholders, to be held at the
Community Room of the University of South Carolina, Union Campus, Academy and
North Mountain Streets, Union, South Carolina, on Wednesday, January 22, 1997
at 2:00 p.m., local time, and at any and all adjournments thereof, as follows:
VOTE
FOR WITHHELD
1. The election as directors of all
nominees listed below (except as
marked to the contrary below) or
until their successors have been
elected and qualify.
Louis M. Jordan
Dwight V. Neese
INSTRUCTION: To withhold your
vote for any individual nominee,
write the nominee's name on the
line below.
FOR AGAINST ABSTAIN
2. To approve an amendment to the [ ] [ ] [ ]
Corporation's Certificate of
Incorporation increasing the
number of authorized shares
of the Corporation's Common
Stock from 1,500,000 to 2,500,000
shares.
3. The ratification of the appointment [ ] [ ] [ ]
of Elliot, Davis & Company, LLP as
auditors for the Corporation for
the 1997 fiscal year.
4. In their discretion, upon such other
matters as may properly come before
the meeting.
The Board of Directors recommends a vote "FOR" each of the listed
propositions.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED
THIS PROXY WILL BE VOTED FOR EACH OF THE PROPOSITIONS STATED. IF ANY OTHER
BUSINESS IS PRESENTED AT THE MEETING, THIS PROXY WILL BE VOTED BY THE BOARD OF
DIRECTORS IN ITS BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD OF DIRECTORS
KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE MEETING. THIS PROXY ALSO
CONFERS DISCRETIONARY AUTHORITY ON THE OFFICIAL PROXY COMMITTEE TO VOTE WITH
RESPECT TO APPROVAL OF THE MINUTES OF THE PRIOR MEETING OF STOCKHOLDERS, THE
ELECTION OF ANY PERSON AS DIRECTOR WHERE THE NOMINEE IS UNABLE TO SERVE OR FOR
GOOD CAUSE WILL NOT SERVE, AND MATTERS INCIDENT TO THE CONDUCT OF THE ANNUAL
MEETING.
PAGE
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THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
Should the undersigned be present and elect to vote at the Annual
Meeting or at any adjournment thereof and after notification to the Secretary
of the Corporation at the Annual Meeting of the stockholder's decision to
terminate this proxy, then the power of said attorneys and proxies shall be
deemed terminated and of no further force and effect.
The undersigned acknowledges receipt from the Corporation prior to
the execution of this proxy of Notice of the Annual Meeting of Stockholders, a
Proxy Statement dated December 13, 1996 and an Annual Report.
Dated: , 199_
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PRINT NAME OF STOCKHOLDER PRINT NAME OF STOCKHOLDER
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SIGNATURE OF STOCKHOLDER SIGNATURE OF STOCKHOLDER
Please sign exactly as your name appears on the envelope in which this card
was mailed. When signing as attorney, executor, administrator, trustee or
guardian, please give your full title. If shares are held jointly, each
holder should sign.
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.
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