<PAGE> 1
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the registrant /_/
Filed by a party other than the registrant /_/
Check the appropriate box:
/_/ Preliminary proxy statement
/X/ Definitive proxy statement
/_/ Definitive additional materials
/_/ Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
Union Financial Bancshares, Inc.
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(Name of Registrant as Specified in Its Charter)
Union Financial Bancshares, Inc.
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(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/X/ No fee required.
/_/ $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/_/ 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
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(2) Aggregate number of securities to which transactions applies:
N/A
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(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11:
N/A
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(4) Proposed maximum aggregate value of transaction:
N/A
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/_/ 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
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(2) Form, schedule or registration statement no.:
N/A
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(3) Filing party:
N/A
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(4) Date filed:
N/A
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<PAGE> 2
December 20, 1999
Dear Stockholder:
You are cordially invited to attend the annual meeting of stockholders of
Union Financial Bancshares, Inc. The meeting 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 19, 2000 at 2:00 p.m.,
local time.
The notice of annual meeting and proxy statement appearing 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 Company.
Directors and officers of the Company, as well as a representative of Elliott,
Davis & Company, LLP, the Company's independent auditors, 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,
/s/ Carl L. Mason
Carl L. Mason
CHAIRMAN OF THE BOARD
<PAGE> 3
UNION FINANCIAL BANCSHARES, INC.
203 WEST MAIN STREET
UNION, SOUTH CAROLINA 29379
(864) 427-9000
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
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The annual meeting of stockholders of Union Financial Bancshares, Inc.
("Company") 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 19, 2000, at 2:00 p.m., local time, for the
following purposes:
1. To elect three directors of the Company;
2. To ratify the appointment of Elliott, Davis & Company, LLP as
independent auditors for the Company for the fiscal year ending
September 30, 2000; and
3. To transact any other business that may properly come before the
meeting.
NOTE: The Board of Directors is not aware of any other business to come
before the meeting.
Stockholders of record at the close of business on December 1, 1999 are
entitled to receive notice of the meeting and to vote at the meeting and any
adjournment or postponement of the meeting.
Please complete and sign the enclosed form of proxy, which is solicited by
the Board of Directors, and 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
/s/ Wanda J. Wells
Wanda J. Wells
CORPORATE SECRETARY
Union, South Carolina
December 20, 1999
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES IN ORDER TO ENSURE A QUORUM. A SELF-ADDRESSED
ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED IN
THE UNITED STATES.
<PAGE> 4
- --------------------------------------------------------------------------------
PROXY STATEMENT
OF
UNION FINANCIAL BANCSHARES, INC.
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ANNUAL MEETING OF STOCKHOLDERS
JANUARY 19, 2000
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This proxy statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Union Financial Bancshares, Inc. ("Union
Financial" or the "Company") to be used at the annual meeting of stockholders of
the Company. The Company is the holding company for Provident Community Bank
("Provident"). The annual meeting 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 19, 2000, at 2:00 p.m.,
local time. This proxy statement and the enclosed proxy card are being first
mailed to stockholders on or about December 20, 1999.
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VOTING AND PROXY PROCEDURE
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WHO CAN VOTE AT THE MEETING
You are entitled to vote your Union Financial common stock if the records
of the Company showed that you held your shares as of the close of business on
December 1, 1999. As of the close of business on that date, a total of 1,887,573
shares of Union Financial common stock were outstanding. Each share of common
stock has one vote. As provided in the Company's Certificate of Incorporation,
record holders of the Company's common stock who beneficially own in excess of
10% of the Company's outstanding shares are entitled to cast only one-hundredth
of a vote in respect of the shares held in excess of the 10% limit.
ATTENDING THE MEETING
If you are a beneficial owner of Union Financial common stock held by a
broker, bank or other nominee (i.e., in "street name"), you will need proof of
ownership to be admitted to the meeting. A recent brokerage statement or letter
from a bank or broker are examples of proof of ownership. If you want to vote
your shares of Union Financial common stock held in street name in person at the
meeting, you will have to get a written proxy in your name from the broker, bank
or other nominee who holds your shares.
VOTE REQUIRED
The annual meeting will be held if a majority of the outstanding shares of
common stock entitled to vote is represented at the meeting. If you return valid
proxy instructions or attend the meeting in person, your shares will be counted
for purposes of determining whether there is a quorum, even if you abstain from
voting. Broker non-votes also will be counted for purposes for determining the
existence of a quorum. A broker non- vote occurs when a broker, bank or other
nominee holding shares for a beneficial owner does not vote on a particular
proposal because the nominee does not have discretionary voting power with
respect to that item and has not received voting instructions from the
beneficial owner.
<PAGE> 5
In voting on the election of directors, you may vote in favor of all
nominees, withhold votes as to all nominees, or withhold votes as to specific
nominees. There is no cumulative voting for the election of directors. Directors
must be elected by a plurality of the votes cast at the annual meeting. This
means that the nominees receiving the greatest number of votes will be elected.
Votes that are withheld and broker non-votes will have no effect on the outcome
of the election. In voting on the approval of the ratification of the
appointment of Elliott, Davis & Company, LLP as independent auditors, you may
vote in favor of the proposal, vote against the proposal or abstain from voting.
This matter will be decided by the affirmative vote of a majority of votes cast
by stockholders. Abstentions and broker non-votes will have no effect on the
outcome of the vote.
VOTING BY PROXY
This proxy statement is being sent to you by the Board of Directors of
Union Financial for the purpose of requesting that you allow your shares of
Union Financial common stock to be represented at the annual meeting by the
persons named in the enclosed proxy card. All shares of Union Financial common
stock represented at the meeting by properly executed proxies will be voted in
accordance with the instructions indicated on the proxy card. If you sign and
return a proxy card without giving voting instructions, your shares will be
voted as recommended by the Company's Board of Directors. The Board of Directors
recommends a vote "FOR" each of the nominees for director and "FOR" ratification
of Elliott, Davis & Company, LLP as independent auditors.
If you are a participant in the Company's Dividend Reinvestment and Stock
Purchase Plan, the proxy card covers the shares in your account under the Plan,
as well as shares registered in your name.
If any matters not described in this proxy statement are properly
presented at the annual meeting, the persons named in the proxy card will use
their own judgment to determine how to vote your shares. This includes a motion
to adjourn or postpone the meeting in order to solicit additional proxies. If
the annual meeting is postponed or adjourned, your Union Financial common stock
may be voted by the persons named in the proxy card on the new meeting date as
well, unless you have revoked your proxy. The Company does not know of any other
matters to be presented at the meeting.
You may revoke your proxy at any time before the vote is taken at the
meeting. To revoke your proxy you must either advise the Secretary of the
Company in writing before your shares have been voted at the annual meeting,
deliver a later dated proxy, or attend the meeting and vote your shares in
person. Attendance at the annual meeting will not in itself constitute
revocation of your proxy.
If your Union Financial common stock is held in street name, you will
receive instructions from your broker, bank or other nominee that you must
follow in order to have your shares voted. Your broker or bank may allow you to
deliver your voting instructions via the telephone or the Internet. Please see
the instruction form that accompanies this proxy statement.
2
<PAGE> 6
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STOCK OWNERSHIP
- --------------------------------------------------------------------------------
The following table provides information about the shares of Union
Financial common stock that may be considered to be owned by each director or
nominee for director of the Company, by the executive officers of the Company
named in the Summary Compensation Table and by all directors and executive
officers of the Company as a group as of December 1, 1999. A person may be
considered to beneficially own any shares of common stock over which he or she
has, directly or indirectly, sole or shared voting or investing power. Unless
otherwise indicated, each of the named individuals has sole voting power and
sole investment power with respect to the shares shown.
<TABLE>
<CAPTION>
NUMBER OF SHARES
NUMBER OF THAT MAY BE ACQUIRED PERCENT OF
SHARES OWNED WITHIN 60 DAYS BY COMMON STOCK
NAME (EXCLUDING OPTIONS) EXERCISING OPTIONS OUTSTANDING(1)
------------------------- ------------------- -------------------- --------------
<S> <C> <C> <C>
Mason G. Alexander 10,355 2,275 0.7%
James W. Edwards 1,908 5,425 0.4
Richard H. Flake 9,745(2) 30,219 2.1
William M. Graham 11,484 5,425 0.9
Louis M. Jordan 55,591(3) 5,425 3.2
Carl L. Mason 5,502 5,425 0.6
Quay W. McMaster 35,503 -- 1.9
John S. McMeekin 5,000 -- 0.3
Dwight V. Neese 9,494 59,745 3.6
David G. Russell 14,646 3,325 1.0
Philip C. Wilkins 3,133 -- 0.2
All directors and executive
officers as a group (18 persons) 207,139 145,426 17.3
</TABLE>
- -----------------------------
(1)Based on 1,887,573 shares of Union Financial common stock outstanding and
entitled to vote as of December 1, 1999, plus the number of shares that may
be acquired within 60 days by each individual (or group of individuals) by
exercising stock options.
(2)Includes 949 shares owned by Mr. Flake's spouse.
(3)Includes 16,953 shares owned by Mr. Jordan's spouse and 14,789 shares held in
a trust for which Mr. Jordan serves as trustee.
3
<PAGE> 7
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PROPOSAL 1 -- ELECTION OF DIRECTORS
- --------------------------------------------------------------------------------
The Company's Board of Directors currently consists of nine members. Eight
of them are independent directors and one is a member of management. The Board
is divided into three classes with three-year staggered terms, with one-third of
the directors elected each year. Three directors will be elected at the annual
meeting to serve for a three-year term, or until their respective successors
have been elected and qualified. The nominees are Louis M. Jordan, Dwight V.
Neese and Philip C. Wilkins, all of whom are currently directors of the Company
and Provident.
In connection with the Company's acquisition of South Carolina Community
Bancshares, Inc. in November 1999, the Company expanded its Board of Directors
by three members and appointed three former directors of South Carolina
Community to fill the newly created vacancies. Philip C. Wilkins, Quay W.
McMaster and John S. McMeekin were appointed to terms of office expiring at the
annual meetings in 2000, 2001 and 2002, respectively. David G. Russell, a
director of the company since 1978, retired from the Board in December 1999.
Following his retirement the number of directors was reduced to nine.
It is intended that the proxies solicited by the Board of Directors will
be voted for the election of the nominees named above. If any nominee is unable
to serve, the persons named in the proxy card would vote your shares to approve
the election of any substitute proposed by the Board of Directors.
Alternatively, the Board of Directors may adopt a resolution to reduce the size
of the Board. At this time, the Board of Directors knows of no reason why any
nominee might be unable to serve.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF ALL OF THE
NOMINEES.
Information regarding the nominees and the directors continuing in office
is provided below. Unless otherwise stated, each individual has held his current
occupation for the last five years. The age indicated in each individual's
biography is as of September 30, 1999. The indicated period for service as a
director includes service as a director of Provident.
NOMINEES FOR ELECTION OF DIRECTORS
The directors standing for election are:
LOUIS M. JORDAN. Mr. Jordan is a major stockholder of Jordan's Ace
Hardware, Inc. located in Union South Carolina. Age 64. Director since 1971.
DWIGHT V. NEESE. Mr. Neese is the President and Chief Executive Officer of
the Company and Provident, positions he has held since September 1995. Mr. Neese
served as the Executive Vice President and Chief Operating Officer of Home
Federal Savings Bank of South Carolina from February 1992 to September 1995. Age
49. Director since 1995.
PHILIP C. WILKINS, DMD. Dr. Wilkins is a dentist with offices in
Winnsboro, South Carolina. Age 44. Director since 1999.
4
<PAGE> 8
DIRECTORS CONTINUING IN OFFICE
The following directors have terms ending in 2001:
MASON G. ALEXANDER. Mr. Alexander is a director of Mid-South Management
Company in Spartansburg, South Carolina. Age 67. Director since 1996.
JAMES W. EDWARDS. Mr. Edwards is the Dean of Academics at the University
of South Carolina, Union Campus located in Union, South Carolina. Age 63.
Director since 1996.
QUAY W. MCMASTER. Mr. McMaster is the owner, President and Chief Executive
Officer of Winnsboro Plywood Co., Inc. and Winnsboro Veneer Co., Inc. He has
also served as Mayor of Winnsboro since 1973. Mr. McMaster served as President
of Community Federal Savings Bank, Winnsboro, South Carolina from July 1992 to
December 1993 before being named Chairman of the Board. Mr. McMaster was also
Chairman of the Board of South Carolina Community Bancshares, Inc. Age 73.
Director since 1999.
The following directors have terms ending in 2002:
CARL L. MASON. Mr. Mason is the Chairman of the Board of the Company and
Provident. He is the retired President of Cone Mills Corporation, a textile
finishing company. Age 55. Director since 1989.
WILLIAM M. GRAHAM. Mr. Graham is the sole owner and operator of Graham's
Flowers in Union, South Carolina. Age 55. Director since 1990.
JOHN S. MCMEEKIN. Mr. McMeekin is the President of Winnsboro Furniture
Company located in Winnsboro, South Carolina. Age 45. Director since 1999.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The business of the Company and Provident is conducted through meetings
and activities of their Boards of Directors and their committees. During the
fiscal year ended September 30, 1999, the Board of Directors of the Company held
thirteen meetings and the Board of Directors of Provident held twelve meetings.
No director attended fewer than 75% of the total meetings of the Boards of
Directors and committees on which such director served.
The Audit/Compliance Committee, consisting of Directors McMeekin
(Chairman), Edwards and Graham, meets as needed to select and review the work
performed by the independent auditors. This Committee met five times during the
year ended September 30, 1999.
Provident's Human Resources Committee, composed of Directors Alexander
(Chairman), Mason and Wilkins 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 year ended September 30, 1999.
The Company's Governance Committee, composed of Directors Jordan
(Chairman), Mason, McMaster and Alexander, selects nominees for election as
directors. This Committee met three times during the year ended September 30,
1999.
5
<PAGE> 9
The Company and Provident also maintain Loan, Asset/Liability, Long Range
Planning and Strategic Planning Committees.
DIRECTORS' COMPENSATION
The members of Union Financial's Board of Directors are the same
individuals who serve on Provident's Board of Directors. Members of the Board of
Directors of Provident 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,
directors receive a fee of $500 per quarter for service on the Company's Board
of Directors.
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EXECUTIVE COMPENSATION
- --------------------------------------------------------------------------------
SUMMARY COMPENSATION TABLE
The following information is furnished for Messrs. Neese and Flake. No
other executive officer of Union Financial received salary and bonus of $100,000
or more during the year ended September 30, 1999.
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------------------
ANNUAL COMPENSATION AWARDS
---------------------------------- ------------------------
OTHER RESTRICTED SECURITIES
ANNUAL STOCK UNDERLYING ALL OTHER
NAME AND PRINCIPAL FISCAL COMPENSATION AWARDS OPTIONS COMPENSATION
POSITIONS YEAR SALARY($) BONUS($) ($)(1) ($) (#) ($)
- ------------------------ ------ --------- -------- ------------ ----------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Dwight V. Neese 1999 $126,000 $58,000 $ -- $ -- -- $21,780(2)
President and Chief 1998 120,000 38,319 -- -- 7,250 20,713
Executive Officer 1997 115,000 27,000 -- -- -- 18,132
Richard H. Flake 1999 $80,500 $32,125 $ -- $ -- -- $13,474(3)
Executive Vice President 1998 77,500 22,360 -- -- 4,450 11,709
and Chief Financial 1997 70,500 17,625 -- -- -- 9,934
- ----------------------
(1) Does not include the aggregate amount of perquisites and other personal
benefits, which was less than 10% of the total annual salary and bonus
reported.
(2) Consists of employer contribution to Provident's 401(k) plan of $9,200 and
contribution to money purchase pension plan of $12,580.
(3) Consists of employer contribution to Provident's 401(k) plan of $5,631 and
contribution to money purchase pension plan of $7,843.
</TABLE>
6
<PAGE> 10
OPTION VALUE AT FISCAL YEAR END
The following table provides information regarding unexercised stock
options for Messrs. Neese and Flake as of September 30, 1999. Messrs. Neese and
Flake did not exercise any stock options during the year ended September 30,
1999.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS IN-THE-MONEY OPTIONS
NAME AT FISCAL YEAR-END (#) AT FISCAL YEAR-END ($)(1)
- ----------------------- ---------------------------- ---------------------------
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Dwight V. Neese 59,745 10,868 $295,407 $32,823
Richard H. Flake 30,219 7,529 147,703 24,617
</TABLE>
- ------------------------
(1)Value of unexercised in-the-money stock options equals the market value of
shares covered by in-the-money options on September 30, 1999 less the option
exercise price. Options are in-the-money if the market value of shares
covered by the options is greater than the exercise price.
EMPLOYMENT AGREEMENT
Effective September 5, 1995, the Company and Provident entered into
three-year employment agreements with Dwight V. Neese, President and Chief
Executive Officer, and Richard H. Flake, Senior Vice President and Chief
Financial Officer. The term of the agreements may be extended for an additional
12 full calendar months by action of the Board of Directors on the anniversary
date of the agreements. Mr. Neese's base salary for the 2000 fiscal year is
$131,040. Mr. Flake's base salary for the 2000 fiscal year is $83,760. The
agreements may be terminated at any time by the Board of Directors for "cause,"
as defined in the agreements. In the event that the executive's employment is
terminated without "cause," the agreements provide that the executive's current
salary and benefits would be continued through the remaining term of the
agreements. The agreements provide for severance payments if employment is
terminated following a change in control (as defined in the agreements), equal
to 2.99 times the average annual compensation paid to the executive 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. Section 280G of the Internal Revenue Code states that
severance payments that equal or exceed three times the base amount 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 the payments in excess
of their base amount compensation, and the Company is not entitled to deduct
such amounts.
- --------------------------------------------------------------------------------
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
- --------------------------------------------------------------------------------
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officers and directors, and persons who own more than 10% of
any registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the SEC. Executive officers, directors
and greater than 10% stockholders are required by regulation to furnish the
Company with copies of all Section 16(a) reports they file.
7
<PAGE> 11
Based solely on its review of the copies of the reports it has received
and written representations provided to the Company from the individuals
required to file the reports, the Company believes that each of the Company's
executive officers and directors has complied with applicable reporting
requirements for transactions in Union Financial common stock during the fiscal
year ended September 30, 1999.
- --------------------------------------------------------------------------------
TRANSACTIONS WITH MANAGEMENT
- --------------------------------------------------------------------------------
Federal regulations require that all loans or extensions of credit to
executive officers and directors of insured financial institutions must be made
on substantially the same terms, including interest rates and collateral, as
those prevailing at the time for comparable transactions with other persons,
except for loans made pursuant to programs generally available to all employees,
and must not involve more than the normal risk of repayment or present other
unfavorable features. Union Financial is therefore prohibited from making any
new loans or extensions of credit to executive officers and directors at
different rates or terms than those offered to the general public, except for
loans made pursuant to programs generally available to all employees, and has
adopted a policy to this effect. In addition, loans made to a director or
executive officer in an amount that, when aggregated with the amount of all
other loans to such person and his or her related interests, are in excess of
the greater of $25,000 or 5% of the institution's capital and surplus (up to a
maximum of $500,000) must be approved in advance by a majority of the
disinterested members of the Board of Directors. The Company's policy is to not
make any new loans or extensions of credit to executive officers and directors
at different rates or terms than those offered to the general public and to have
the Board of Directors approve all loans to executive officers and directors.
The aggregate amount of loans made by Union Financial to its directors and
executive officers was approximately $2.3 million at September 30, 1999.
- --------------------------------------------------------------------------------
PROPOSAL 2 -- RATIFICATION OF AUDITORS
- --------------------------------------------------------------------------------
The Board of Directors has appointed Elliott, Davis & Company, LLP to be
its auditors for the 2000 fiscal year, subject to the ratification by
stockholders. A representative of Elliott, Davis & Company, LLP is expected to
be present at the annual 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.
If the ratification of the appointment of the auditors is not approved by
a majority of the votes cast by stockholders at the annual 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.
8
<PAGE> 12
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MISCELLANEOUS
- --------------------------------------------------------------------------------
The Company will pay the cost of this proxy solicitation. The Company 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 Union Financial common stock. In addition to soliciting
proxies by mail, directors, officers and regular employees of the Company may
solicit proxies personally or by telephone. None of these persons will receive
additional compensation for these activities.
The Company's Annual Report to Stockholders has been mailed to
stockholders as of the close of business on December 1, 1999. Any stockholder
who has not received a copy of the Annual Report may obtain a copy by writing to
the Secretary of the Company. The Annual Report is not to be treated as part of
the proxy solicitation material or as having been incorporated herein by
reference.
A COPY OF THE COMPANY'S FORM 10-KSB FOR THE FISCAL YEAR ENDED SEPTEMBER
30, 1999, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, WILL BE
FURNISHED WITHOUT CHARGE TO STOCKHOLDERS AS OF THE CLOSE OF BUSINESS ON DECEMBER
1, 1999 UPON WRITTEN REQUEST TO CORPORATE SECRETARY, UNION FINANCIAL BANCSHARES,
INC., 203 WEST MAIN STREET, UNION, SOUTH CAROLINA 29379.
- --------------------------------------------------------------------------------
STOCKHOLDER PROPOSALS
- --------------------------------------------------------------------------------
Proposals that stockholders seek to have included in the proxy statement
for the Company's next annual meeting must be received by the Company no later
than August 22, 2000. Any such proposals will be subject to the requirements of
the proxy rules adopted by the Securities and Exchange Commission.
The Company'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. A copy of
the Certificate of Incorporation may be obtained from the Company.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Wanda J. Wells
Wanda J. Wells
CORPORATE SECRETARY
Union, South Carolina
December 20, 1999
9
<PAGE> 13
UNION FINANCIAL BANCSHARES, INC.
ANNUAL MEETING OF STOCKHOLDERS
JANUARY 19, 2000
-------------------------------
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints the Board of Directors, with full power of
substitution, to act as proxy for the undersigned, and to vote all shares of
common stock of Union Financial Bancshares, Inc. (the "Company") owned of record
by the undersigned at the Annual Meeting of Stockholders, to be held on January
19, 2000, at 2:00 p.m., local time, in the Community Room of the University of
South Carolina, Union Campus at Academy and North Mountain Streets, Union, South
Carolina, and at any and all adjournments thereof, as designated below with
respect to the matters set forth below and described in the accompanying Proxy
Statement and, in their discretion, for the election of a person to the Board of
Directors if any nominee named herein becomes unable to serve or for good cause
will not serve and with respect to any other business that may properly come
before the meeting. Any prior proxy or voting instructions are hereby revoked.
1. The election as directors of all nominees listed (except as marked
to the contrary below).
Louis M. Jordan Dwight V. Neese Philip C. Wilkins
FOR ALL
FOR VOTE WITHHELD EXCEPT
--- ------------- ------
|_| |_| |_|
INSTRUCTION: To withhold your vote for any individual nominee, mark "FOR ALL
EXCEPT" and write that nominee's name in the space provided below.
- --------------------------------------------------------------------------------
2. The ratification of the appointment of Elliott, Davis & Company, LLP
as independent auditors for the Company for the fiscal year ending
September 30, 2000.
FOR AGAINST ABSTAIN
--- ------- -------
|_| |_| |_|
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
EACH OF THE LISTED PROPOSALS.
<PAGE> 14
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE
SPECIFIED, THIS PROXY WILL BE VOTED "FOR" EACH OF THE PROPOSALS LISTED. IF ANY
OTHER BUSINESS IS PRESENTED AT THE MEETING, INCLUDING WHETHER OR NOT TO ADJOURN
THE MEETING, THIS PROXY WILL BE VOTED BY THE PROXIES IN THEIR BEST JUDGMENT. AT
THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE
PRESENTED AT THE ANNUAL MEETING.
The above-signed acknowledges receipt from the Company prior to the
execution of this proxy of a Notice of Annual Meeting of Stockholders, a Proxy
Statement dated December 20, 1999 and the Annual Report to Stockholders.
Please sign exactly as your name appears on this card. When signing as
attorney, executor, administrator, trustee or guardian, please give your full
title. If shares are held jointly, each holder may sign but only one signature
is required.
Dated:
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STOCKHOLDER SIGN ABOVE
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CO-HOLDER (IF ANY) SIGN ABOVE
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PLEASE COMPLETE, DATE, SIGN AND PROMPTLY MAIL THIS PROXY
IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
