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As filed with the Securities and Exchange Commission on February 11, 2000
Registration No. 333-35319
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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POST EFFECTIVE AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
----------------
UNION FINANCIAL BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
Delaware 57-1001177
---------------- -------------------
(State or other jurisdiction of incorporation (IRS Employer Identification No.)
or organization)
203 West Main Street
Union, South Carolina 29379
(864) 427-9000
(Address, including zip code, and telephone number, including area
code, of registrant's principal executive offices)
Paul M. Aguggia, Esq.
Aaron M. Kaslow, Esq.
Muldoon, Murphy & Faucette LLP
5101 Wisconsin Avenue, N.W.
Washington, D.C. 20016
(202) 362-0840
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
CALCULATION OF REGISTRATION FEE: No additional securities are being registered.
Pursuant to 1933 Act Rule 429(b), 150,000 shares of the Union Financial's common
stock covered by the Prospectus forming a portion of this Registration Statement
were registered pursuant to the original registration statement filed on
September 10, 1997. The amount of shares registered was subsequently adjusted
pursuant to Rule 416(b) to cover a 3 for 2 split occurring in February 1998 and
a 5% stock dividend occurring in February 1999 resulting in a total adjustment
to 236,250 shares, of which 194,639 remain unsold and are being carried forward
to the Prospectus forming a portion of this Registration Statement. The total
registration fee, $1,017, was previously paid (File No.: 333-35319) and covers
the shares offered under this post effective amendment.
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[Union Financial letterhead]
Re: Dividend Reinvestment Plan
Dear Stockholder:
I am pleased to send you this prospectus describing the Dividend
Reinvestment Plan of Union Financial Bancshares, Inc. The Company has made
several changes to the Plan. The most significant change is that the option of
making additional purchases of Union Financial common stock through the Plan has
been eliminated. However, stockholders will still receive a 5% discount on
shares purchased through reinvested dividends. You pay no service charge or
brokerage commissions for shares acquired under the Plan.
Participants in the Plan will automatically reinvest all of the dividends
on their common stock in additional shares of Union Financial common stock. The
Plan is completely voluntary. You may terminate your participation at any time.
If you wish to participate in the Plan, return the enclosed Authorization Form.
If you decide not to participate in the Plan, you will continue to receive your
dividends, if and when declared, by check from Union Financial.
The accompanying material presents the details of the Plan in a simple
question-and-answer format. Also set forth is important information regarding
Union Financial. Please read this material carefully. It should answer most
questions you may have about the Plan. If you have additional questions, please
address them to Investor Relations, Union Financial Bancshares, Inc., 203 West
Main Street, Union, South Carolina 29379 (telephone number (864) 427-9000) or to
Registrar and Transfer Company, Dividend Reinvestment Plans, 10 Commerce Drive,
Cranford, New Jersey 07016 (telephone number (800) 368-5948).
Sincerely,
/s/ Dwight V. Neese
Dwight V. Neese
President and Chief Executive Officer
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PROSPECTUS
UNION FINANCIAL BANCSHARES, INC.
DIVIDEND REINVESTMENT PLAN
-----------------------
Common Stock
(Par Value $0.01 Per Share)
-----------------------
The Dividend Reinvestment Plan of Union Financial Bancshares, Inc.
provides holders of record of shares of Union Financial common stock with a
convenient and economical way to reinvest at no cost their cash dividends in
additional shares of Union Financial common stock. Any holder of record of
shares of Union Financial common stock is eligible to participate in the Plan.
Beneficial owners of Union Financial common stock whose only shares are
registered in names other than their own (e.g., held in street name in a
brokerage account) are not eligible until they become stockholders of record by
withdrawing the shares from their brokerage account and registering the shares
in their own name.
Participants in the Plan will have the cash dividends paid on their shares
of Union Financial common stock automatically reinvested in additional shares of
Union Financial common stock. Holders of Union Financial common stock who choose
not to participate in the Plan will continue to receive cash dividends on shares
of Union Financial common stock registered in their name, as declared.
Shares of Union Financial common stock purchased under the Plan will be
purchased either directly from Union Financial or in the open market. The
purchase price for each share of Union Financial common stock purchased with
reinvested dividends will be 95% of the market price for the relevant date of
investment. See Question 11.
This prospectus relates to 194,639 shares of common stock registered and
remaining for sale under the Plan. Such shares may be either authorized but
unissued shares or shares reacquired and held in Union Financial's treasury.
This prospectus also covers an indeterminate number of shares of Union
Financial's common stock as may become issuable as a result of stock splits,
stock dividends or similar transactions. PARTICIPANTS SHOULD RETAIN THIS
PROSPECTUS FOR FUTURE REFERENCE.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE SHARES OF UNION FINANCIAL'S COMMON STOCK ARE NOT SAVINGS ACCOUNTS, DEPOSITS
OR OTHER OBLIGATIONS OF A BANK OR SAVINGS ASSOCIATION AND ARE NOT INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT
AGENCY.
The date of this prospectus is February 11, 2000.
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WHERE YOU CAN FIND MORE INFORMATION
Union Financial files annual, quarterly and current reports, proxy
statements and other information with the Securities and Exchange Commission.
You may read and copy any reports, proxy statements or other information that
Union Financial files at the SEC's public reference rooms in Washington, D.C.,
New York, New York and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330
for further information on the public reference rooms. Union Financial's public
filings are also available on the Internet at the SEC's World Wide Web site at
http://www.sec.gov.
Union Financial has filed with the SEC a Registration Statement on Form
S-3 under the Securities Act of 1933 that registers the shares of Union
Financial common stock to be sold pursuant to the Plan. The Registration
Statement, including the exhibits, contains additional relevant information
about Union Financial and Union Financial common stock. The rules and
regulations of the SEC allow Union Financial to omit certain information
included in the Registration Statement from this prospectus.
The SEC allows Union Financial to "incorporate by reference" information
into this prospectus. This means that Union Financial can disclose important
information to you by referring you to another document filed separately with
the SEC. The information incorporated by reference is deemed to be part of this
document, except for any information superseded by information contained
directly in this document. This document incorporates by reference the other
documents which are listed below that Union Financial has previously filed with
the SEC. These documents contain important information about Union Financial's
financial condition.
The following documents filed by Union Financial with the SEC are
incorporated by reference: (1) Union Financial's Annual Report on Form 10-KSB
for its fiscal year ended September 30, 1999; (2) Union Financial's Current
Report on Form 8-K filed on November 15, 1999; and (3) Union Financial's Current
Report on Form 8-K/A filed on January 27, 2000.
Union Financial also incorporates by reference additional documents that
it might file with the SEC after the date of this Prospectus and before the
termination of the Plan. These include periodic reports, such as Annual Reports
on Form 10-KSB, Quarterly Reports on Form 10-QSB and Current Reports on Form
8-K, as well as proxy statements.
Union Financial will provide without charge to each person to whom this
prospectus has been delivered, a copy of any or all of the documents
incorporated by reference herein (other than exhibits to the documents unless
the exhibits are specifically incorporated in this prospectus by reference).
Your request should be directed to the Corporate Secretary, Union Financial
Bancshares, Inc., 203 West Main Street, Union, South
Carolina 29379 (telephone number is (864) 427-9000).
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UNION FINANCIAL BANCSHARES, INC.
Union Financial is the savings and loan holding company for Provident
Community Bank. Union Financial has engaged in no significant activity other
than holding the stock of Provident Community Bank and certain passive
investment activities.
Provident Community Bank conducts its operations through its main office,
which is located at 203 West Main Street, Union, South Carolina, and five
full-service banking centers, a mortgage banking center, and a lending and
investment center, all of which are located in the upstate area of South
Carolina. The Bank is a member of the Federal Home Loan Bank and its deposits
are insured up to applicable limits by the Savings Association Insurance Fund of
the Federal Deposit Insurance Corporation.
The business of Provident Community Bank consists primarily of attracting
deposits from the general public and originating mortgage loans on residential
properties located in South Carolina. The Bank also makes consumer and
commercial loans, commercial real estate loans, construction loans and invests
in federal government and agency obligations and purchases fixed and variable
rate mortgage participation certificates. The principal sources of funds for the
Bank's lending activities include deposits received from the general public,
interest and principal repayments on loans and, to a lesser extent, borrowings.
The Bank's primary source of income is interest earned on loans and investments.
The Bank's principal expense is interest paid on deposit accounts and borrowings
and expenses incurred in operating the Bank.
UNION FINANCIAL BANCSHARES, INC.
DIVIDEND REINVESTMENT PLAN
The Plan was adopted on May 20, 1997, and was amended effective February
1, 2000 and has been restated in its entirety. The amendments eliminate the
optional cash purchase feature and base the calculation of the purchase price on
the average of the high and low sales price on the Nasdaq National Market. The
Plan will be in effect until amended, altered or terminated. Union Financial has
reserved 236,250 shares of its common stock for issuance and sale under the Plan
pursuant to this prospectus. The Plan is set forth below as a series of
questions and answers explaining its significant aspects.
PURPOSE
1. WHAT IS THE PURPOSE OF THE PLAN?
The purpose of the Plan is to provide participants with a simple and
convenient method of reinvesting cash dividends paid on shares of common stock
of Union Financial. Shares of common stock purchased under the Plan by
participants will be issued by Union Financial. To the extent that such
additional shares are purchased directly from Union Financial, Union Financial
will receive additional funds to be used for general corporate
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purposes. Union Financial expects that generally all Plan purchases will be
directly from Union Financial.
2. WHAT ARE THE ADVANTAGES OF THE PLAN?
(a) The Plan provides participants with the opportunity to reinvest cash
dividends paid on all of their shares of common stock in additional shares of
common stock at a discount of 5% from the average of the high and low sales
prices of such shares on the investment date (see Question 11).
(b) No brokerage commissions or service charges are paid by participants
in connection with any purchase of shares made under the Plan.
(c) All cash dividends paid on participants' shares can be fully invested
in additional shares of Union Financial common stock because the Plan permits
fractional shares to be credited to Plan accounts. Dividends on such fractional
shares, as well as on whole shares, will also be reinvested in additional shares
which will be credited to Plan accounts.
(d) Periodic statements reflecting all current activity, including share
purchases and latest Plan account balance, simplify participants' record
keeping.
(e) The Plan Administrator provides for the safekeeping of stock
certificates for shares credited to each Plan account.
ADMINISTRATION
3. WHO ADMINISTERS THE PLAN FOR PARTICIPANTS?
Registrar and Transfer Company, Union Financial's stock transfer agent,
(the "Plan Administrator") administers the Plan for participants by maintaining
records, sending statements of account to participants and performing other
duties relating to the Plan. Shares of Union Financial common stock purchased
under the Plan are registered in the name of the Plan Administrator's nominee,
as agent for participants in the Plan, and are credited to the accounts of the
participants in the Plan. Union Financial may replace the Plan Administrator at
any time within its sole discretion.
The Plan Administrator may be contacted by mail at:
Registrar and Transfer Company
Dividend Reinvestment Plans
10 Commerce Drive
Cranford, New Jersey 07016
(800) 368-5948
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PARTICIPATION
4. WHO IS ELIGIBLE TO PARTICIPATE?
All holders of record of Union Financial common stock are eligible to
participate in the Plan. If the shares you hold are in your own name, you may
participate directly in the Plan. If your stock is registered in another party's
name (e.g., in a broker's "street name" or in the name of a bank nominee), you
must become a stockholder of record by having the shares transferred into your
name. Stockholders who reside in jurisdictions in which it is unlawful for Union
Financial to permit their participation are not eligible to participate in the
Plan.
5. HOW DOES AN ELIGIBLE STOCKHOLDER PARTICIPATE?
To participate in the Plan, a stockholder must complete an Authorization
Form and return it to the Plan Administrator. An Authorization Form is enclosed
with this Prospectus. Additional copies of the Authorization Form will be
provided from time to time to the holders of Union Financial's common stock, and
may be obtained at any time by written request to Union Financial Bancshares,
Inc., 203 West Main Street, Union South Carolina 29379, or to the Plan
Administrator at the address set forth in Question 3.
6. WHEN MAY AN ELIGIBLE STOCKHOLDER JOIN THE PLAN?
An eligible stockholder may join the Plan at any time. If the
Authorization Form is received by the Plan Administrator on or before the record
date for a dividend payment, reinvestment of dividends will begin with that
dividend payment.
7. WHAT DOES THE AUTHORIZATION FORM PROVIDE?
The Authorization Form directs Union Financial to pay the Plan
Administrator for reinvestment in accordance with the Plan all the cash
dividends on all of the shares of Union Financial common stock then or
subsequently owned by participants.
Dividends will be reinvested on a cumulative basis on all the shares held
of record by the participant and on all Plan shares held in the Plan account,
until the participant specifies otherwise or withdraws from the Plan altogether,
or until the Plan is terminated.
The Authorization Form also appoints the Plan Administrator as agent for
each participant and directs the Plan Administrator to apply cash dividends to
the purchase of shares of common stock in accordance with the terms of the Plan.
8. MAY A STOCKHOLDER HAVE DIVIDENDS REINVESTED UNDER THE PLAN WITH RESPECT
TO LESS THAN ALL OF THE SHARES OF UNION FINANCIAL COMMON STOCK REGISTERED IN
THAT STOCKHOLDER'S NAME?
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No. Participants may only have dividends reinvested with respect to all of
the shares of Union Financial common stock registered in that stockholder's
name.
PURCHASES
9. WHEN WILL PURCHASES BE MADE?
The investment date for the regular dividend on the common stock is the
dividend payment date (the "Investment Date"). Dividends, when declared, are
generally paid on or about the 1st day of each May, August, November and
February. The corresponding record dates are generally about the middle of the
calendar month prior to the month in which the dividend is paid. In any case, if
an Investment Date falls on a day that is not a trading day, the Investment Date
will be the prior trading day.
10. HOW MANY SHARES OF UNION FINANCIAL COMMON STOCK WILL BE PURCHASED FOR
PARTICIPANTS?
The number of shares purchased for participants shall be determined by
dividing the amount of dividends in the account of each participant available
for investment on the Investment Date by the purchase price per share on such
date. If the funds available from participants are not sufficient to purchase an
exact number of shares, participants' plan accounts will be credited with
fractional shares computed to four decimal places, which will earn proportionate
dividends as declared. Participants may not specify the number of shares to be
purchased on a given Investment Date.
11. WHAT WILL BE THE PRICE OF SHARES OF UNION FINANCIAL COMMON STOCK PURCHASED
UNDER THE PLAN?
The price of shares of Union Financial common stock purchased by the Plan
Administrator from Union Financial for participants will be 95% of the average
of the high and low sales prices on the Nasdaq National Market on the Investment
Date, computed to three decimal places. If there is no trading in the shares of
common stock on any Investment Date, the purchase price will be based on the
average of the bid and ask prices on the Investment Date. Union Financial may
amend the Plan in the future to eliminate or reduce the discount. Union
Financial will bear all costs of administering the Plan, except as described
under Question 14.
12. MAY DIVIDENDS ON SHARES PURCHASED THROUGH THE PLAN BE SENT DIRECTLY TO THE
BENEFICIAL OWNER?
No. The purpose of the Plan is to have the dividends on shares of Union
Financial common stock reinvested. Accordingly, dividends paid on shares held in
the Plan will be automatically reinvested in additional shares of common stock
unless and until the participant elects to terminate participation in the Plan
as to any or all shares in the Plan as described below. See Questions 19 and 22.
In the event a stockholder withdraws a portion
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of his or her shares from the Plan, dividends will continue to be reinvested in
shares of common stock for the common stock remaining in the Plan.
13. WILL THE PLAN HAVE A DILUTIVE EFFECT ON UNION FINANCIAL'S BOOK VALUE PER
SHARE?
Possibly. The issuance of common stock purchased with reinvested cash
dividends will have a dilutive effect on the book value per share of Union
Financial's common stock if such shares are issued at a price below the then
prevailing book value of Union Financial common stock. The exact amount of such
dilution will depend upon the number of shares issued under the Plan and the
issue price of such shares.
COSTS
14. ARE THERE ANY EXPENSES TO PARTICIPANTS IN CONNECTION WITH PURCHASES OF
COMMON STOCK FROM UNION FINANCIAL UNDER THE PLAN?
All costs or expenses arising out of the purchase of shares pursuant to
the Plan, including the Plan Administrator's fees, will be paid by Union
Financial. There will be no brokerage fees for shares purchased under the Plan.
All administrative costs of the Plan will be paid by Union Financial.
REPORTS TO PARTICIPANTS
15. HOW WILL PARTICIPANTS BE ADVISED OF THEIR PURCHASES OF STOCK?
As soon as practicable after each purchase, participants will receive a
statement of his or her account from the Plan Administrator. These statements
are participants' continuing record of the cost of shares purchased and the
number of shares acquired, and should be retained for tax purposes.
CASH DIVIDENDS
16. WILL PARTICIPANTS BE CREDITED WITH DIVIDENDS ON SHARES HELD IN THEIR
ACCOUNT UNDER THE PLAN?
Yes. Participants' accounts will be credited with dividends on shares held
in their accounts. The Plan Administrator will reinvest the dividends in
additional shares of Union Financial common stock.
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STOCK SPLITS, STOCK DIVIDENDS, AND RIGHTS OFFERINGS
17. WHAT IS THE EFFECT OF A STOCK SPLIT, STOCK DIVIDEND OR RIGHTS OFFERING BY
UNION FINANCIAL UNDER THE PLAN?
Any stock dividend or stock split declared by Union Financial on shares
held by the Plan Administrator for participants will be credited to
participants' accounts without charge. In the event that Union Financial makes
available to its stockholders the right to purchase additional shares,
debentures or other securities, such rights accruing on the shares held by the
Plan Administrator for participants will be sold and the proceeds of the sale
will be promptly applied to the purchase of additional shares of Union Financial
for participants' accounts. If, however, participants wish to exercise such
rights, they may, by written request received by the Plan Administrator prior to
the record date for such rights, obtain a certificate for the full shares in
their accounts so that such rights to purchase additional shares accruing to
those certificates will flow directly to the participants.
STOCK CERTIFICATES
18. WILL STOCK CERTIFICATES BE ISSUED FOR SHARES OF UNION FINANCIAL COMMON
STOCK PURCHASED?
No. Certificates for Union Financial common stock purchased under the Plan
will not be issued to participants. This service protects against the loss,
theft and destruction of stock certificates evidencing shares of Union
Financial's common stock. However, stock certificates will be issued to
participants upon specific written request. See Question 19. The number of
shares credited to an account under the Plan will be shown on the participant's
statement of account.
Participants' rights under the Plan and shares credited to the accounts of
participants under the Plan may not be pledged. Participants who wish to pledge
such shares must request that certificates for such shares be issued in their
name.
Accounts under the Plan are maintained in the names in which the
certificates of participants were registered at the time they entered the Plan.
Consequently, certificates for whole shares will be similarly registered when
issued.
WITHDRAWAL OF SHARES FROM THE PLAN
19. HOW MAY PARTICIPANTS WITHDRAW SHARES PREVIOUSLY PURCHASED UNDER THE PLAN?
A stockholder who has previously purchased shares under the Plan may
withdraw all or a portion of such shares from their Plan account by notifying
the Plan Administrator in writing to that effect and specifying in the notice
the number of shares to be withdrawn. Certificates for whole shares so withdrawn
will be registered in the name of and issued to the participant. Certificates
representing fractional interests will not be issued. Whether or
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not shares have been withdrawn, dividends will continue to be reinvested and
shares will be credited to the participant's account if the participant has not
withdrawn from the Plan.
20. WHAT HAPPENS TO ANY FRACTIONAL INTEREST WHEN PARTICIPANTS WITHDRAW FROM
THE PLAN?
Any fractional interest withdrawn will be liquidated at the then current
market value and a cash payment made promptly from the proceeds less brokerage
commissions and transfer taxes, if any. The current market value will be
determined in the same manner as the price for shares purchased through the
Plan. See Question 11. The net sales proceeds for any fractional interest
together with certificates for whole shares will be mailed to the withdrawing
participant by the Plan Administrator.
21. WHAT HAPPENS TO PARTICIPANTS' PLAN ACCOUNTS IF ALL SHARES HELD IN THE PLAN
BY THE PARTICIPANT ARE TRANSFERRED OR SOLD?
If you cease to be a record stockholder, you cease to be eligible to
participate in the Plan. Periodically, the Plan Administrator will review
nonrecord-stockholder Plan accounts and may issue a certificate for whole shares
and a cash payment for any fractional share (as described above) to close each
such account.
TERMINATION OF PARTICIPATION
22. HOW MAY PARTICIPATION IN THE PLAN BE TERMINATED?
Participants may terminate participation in the Plan at any time by
notifying the Plan Administrator in writing. Any notice of termination received
by the Plan Administrator less than five business days before the next dividend
record date will not be effective until dividends paid for such record date have
been reinvested and the shares credited to the participant's account.
Upon termination of participation in the Plan, the Plan Administrator will
send the participant a stock certificate for the number of whole shares in the
participant's account and a check in the amount equal to the value of any
fractional share, based upon the market price of Union Financial common stock.
See Question 11.
ADDITIONAL SERVICES
23. SAFEKEEPING OF SHARES
As an additional service to the Plan participants, you may deposit
certificates for shares of Union Financial common stock held by you with the
Plan Administrator for safekeeping. If you wish to use this service, you should
send to the Plan Administrator the certificate or certificates to the address
set forth in Question 3. Delivery of certificates is at the risk of the
stockholder and, for delivery by mail, insured registered mail with return
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receipt requested is recommended. The receipt of any shares delivered for
safekeeping will be shown on your account statement. Participating shareholders
may withdraw their shares from the Plan Administrator's custody at any time by
requesting in writing that a certificate be issued for some or all of the full
shares held by it.
OTHER INFORMATION
24. WHAT HAPPENS WHEN PARTICIPANTS SELL OR TRANSFER ALL OF THE SHARES
REGISTERED IN THEIR NAME?
If participants dispose of all shares of Union Financial common stock
registered in their name (other than shares credited to their account under the
Plan), the Plan Administrator will continue to reinvest the dividends on the
shares credited to their account under the Plan until the participant withdraws
from the Plan; provided, however, that if following such a disposition of stock
the participant's account under the Plan contains less than five shares of
common stock, then at Union Financial's election, a certificate will be issued
for the full shares in the account, any fractional shares in the account will be
sold and the proceeds paid to the participant, and the account will be
terminated.
25. HOW WILL PARTICIPANTS' SHARES HELD UNDER THE PLAN BE VOTED AT MEETINGS OF
STOCKHOLDERS?
Shares credited to the account of participants under the Plan (other than
fractional shares) will be automatically added to the shares covered by the
proxy sent to the stockholder with respect to their other shares in Union
Financial and may be voted by such holder pursuant to such proxy.
26. WHAT ARE THE INCOME TAX CONSEQUENCES OF PARTICIPATION IN THE PLAN?
In general, participants in the Plan have the same federal and state
income tax obligations with respect to dividends credited to their accounts
under the Plan as other holders of shares of Union Financial common stock who
elect to receive cash dividends directly. Participants are treated for income
tax purposes as having received, on the dividend payment date, a dividend in an
amount equal to the fair market value of the Union Financial common stock
credited to their account under the Plan, even though that amount was not
actually received by the participant in cash but, instead, was applied to the
purchase of additional shares for their account.
The basis of each share credited to participants' accounts pursuant to the
dividend reinvestment aspect of the Plan is the fair market value of the common
stock, and the holding period for such shares begins on the day following the
dividend payment date. The difference between the fair market value of the
common stock and the cash payment for those shares, will be taxable to the
stockholder as ordinary income.
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The receipt by participants of certificates representing whole shares
previously credited to their account under the Plan upon withdrawal from the
Plan or pursuant to the request of the participant will not result in the
recognition of taxable income. Participants will recognize a gain or loss when
fractional shares are sold on behalf of the participant upon withdrawal from the
Plan or when the participant sells shares after the participant's withdrawal
from the Plan.
Each stockholder should consult his or her own tax adviser regarding the
income tax effect of participation in the Plan.
27. WHAT ARE THE RESPONSIBILITIES OF UNION FINANCIAL UNDER THE PLAN?
Union Financial and the Plan Administrator in administering the Plan will
not be liable for any act done in good faith or for the good faith omission to
act, including, without limitation, any claim of liability arising out of
failure to terminate participants' accounts upon the participant's death or
judicially declared incompetency prior to receipt by the Plan Administrator of
notice in writing of such death or incompetency or with respect to the prices at
which shares are purchased for the participant's account, and the times when
such purchases are made, or with respect to any loss or fluctuation in the
market value after purchase of shares.
28. WHO BEARS THE RISK OF MARKET PRICE FLUCTUATIONS IN THE COMMON STOCK?
Participants' investments in shares acquired under the Plan are no
different from direct investments in shares of Union Financial. The participant
bears the risk of loss and realizes the benefits of any gain from market price
changes with respect to all such shares held in the Plan, or otherwise.
29. MAY THE PLAN BE CHANGED OR DISCONTINUED?
The Plan may be amended, suspended, modified or terminated at any time by
the Board of Directors of Union Financial without the approval of the
participants. Notice of any such suspension or termination or material amendment
or modification will be sent to all participants, who shall at all times have
the right to withdraw from the Plan.
Union Financial or the Plan Administrator may terminate a stockholder's
individual participation in the Plan at any time by written notice to the
stockholder. In such event, the Plan Administrator will request instructions
from the participant for disposition of the shares in the account. If the Plan
Administrator does not receive instructions from the participant, it will send
the participant a certificate for the number of full shares held for the
participant under the Plan and a check for any fractional share.
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DESCRIPTION OF CAPITAL STOCK
Union Financial is authorized to issue 2,500,000 shares of common stock
and 500,000 shares of preferred stock, par value $0.01 per share. Each share of
common stock has the same relative rights and is identical in all respects with
every other share of common stock. The following summary does not purport to be
a complete description of the applicable provisions of Union Financial's
Certificate of Incorporation and Bylaws or of applicable statutory or other law.
See "WHERE YOU CAN FIND MORE INFORMATION."
COMMON STOCK
VOTING RIGHTS. The holders of common stock possess exclusive voting rights
in Union Financial. Each holder of common stock is entitled to one vote for each
share held of record on all matters submitted to a vote of holders of common
stock. Holders of shares of common stock are not entitled to cumulate votes for
the election of directors.
DIVIDENDS. The holders of common stock are entitled to such dividends as
the Board of Directors may declare from time to time out of funds legally
available for the payment of dividends. Dividends from Union Financial depend
upon the receipt by Union Financial of dividends from Provident Community Bank
because Union Financial generally has no source of income other than dividends
from the Bank.
LIQUIDATION. In the event of liquidation, dissolution or winding up of
Union Financial, the holders of shares of common stock are entitled to share
ratably in all assets remaining after payment of all debts and other liabilities
of Union Financial.
OTHER CHARACTERISTICS. Holders of common stock do not have any preemptive,
conversion or other subscription rights with respect to any additional shares of
common stock which may be issued. Therefore, the Board of Directors may
authorize the issuance and sale of shares of capital stock of Union Financial
without first offering them to existing shareholders of Union Financial. The
common stock is not subject to any redemption or sinking fund provisions.
PREFERRED STOCK
Union Financial's Certificate of Incorporation authorizes the Board of
Directors to issue from time to time one or more series of preferred stock with
such designations and preferences, relative, participating, optional and other
special rights and qualifications, limitations and restrictions thereon, as
permitted by law and as fixed from time to time by resolution of the Board of
Directors. Because of its broad discretion with respect to the creation and
issuance of any series of preferred stock without stockholder approval, the
Board of Directors could adversely affect the voting power of the holders of
common stock, and by issuing shares of preferred stock with certain voting,
conversion and/or redemption
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<PAGE> 15
rights, could discourage any attempt to obtain control of Union Financial in any
transaction not approved by the Board of Directors.
USE OF PROCEEDS
Union Financial does not know the number of shares of common stock that
ultimately will be sold under the Plan, or the prices of those shares, but Union
Financial intends to use the net proceeds from the sale of common stock offered
pursuant to the Plan for general corporate purposes, including increased
lending.
LEGAL OPINIONS
The validity of the shares of common stock offered hereby have been passed
upon for Union Financial by Muldoon, Murphy & Faucette LLP, special counsel for
Union Financial.
EXPERTS
The consolidated financial statements of Union Financial as of September
30, 1999, and the related consolidated statements of income, stockholders'
equity and cash flows for the three years then ended, incorporated in this
Prospectus by reference to the Union Financial's Annual Report on Form 10-KSB
for the year ended September 30, 1999, have been so incorporated in reliance
upon the report of Elliott, Davis & Company, LLP, independent accountants, given
on the authority of that firm as experts in auditing and accounting.
INDEMNIFICATION
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended, may be permitted to directors, officers or persons
controlling Union Financial pursuant to the foregoing provisions, Union
Financial has been informed that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in such
Act and is therefore unenforceable.
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<PAGE> 16
You should rely only on the information contained in this prospectus. Union
Financial Bancshares, Inc. has not authorized anyone to provide you with
different information.
This prospectus does not constitute an offer to sell or a solicitation of an
offer to buy any of the securities offered by this prospectus in any
jurisdiction in which, or to any person to whom, such offer or solicitation
would be unlawful. Neither the delivery of this Prospectus nor any sale
hereunder shall under any circumstances create any implication that there has
been no change in the affairs of Union Financial since any of the dates as of
which information is furnished in this prospectus or since the date of this
prospectus.
Table of Contents Page
----
Where You Can Find
More Information...................... 2
Union Financial Bancshares, Inc..........3
Union Financial Bancshares,
Inc. Dividend Reinvestment
Plan................................. 3
Description of Capital Stock............12
Use of Proceeds.........................13
Legal Opinions..........................13
Experts.................................13
Indemnification.........................13
UNION FINANCIAL
BANCSHARES, INC.
Common Stock
($0.01 Par Value)
DIVIDEND REINVESTMENT
PLAN
PROSPECTUS
February 11, 2000
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<PAGE> 17
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other expenses of Issuance and Distribution.
Estimated expenses are expected to be minimal and will be paid by Union
Financial.
Item 15. Indemnification of Directors and Officers.
Article XVI of the Holding Company's Certificate of Incorporation provides
for indemnification of the directors, officers, employees and agents of the
Holding Company for expenses (including attorney's fees) actually and reasonably
incurred in connection with the defense or settlement of any threatened, pending
or completed action or suit if such director is successful on the merits or
otherwise, or acted in good faith and in a manner he reasonably believed to be
in, or not opposed to, the best interest of the Holding Company and, with
respect to any criminal action or proceeding, had no reasonable cause to believe
his conduct was unlawful.
Section 145 of the Delaware General Corporation Law sets forth circumstances
under which directors, officers, employees and agents may be insured or
indemnified against liability which they may incur in their capacities:
145 INDEMNIFICATION OF OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS;
INSURANCE.--(a) A corporation may indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that he or she is or 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 corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him or her in connection with such action, suit or proceeding if he
or she acted in good faith and in a manner he or she reasonably believed to be
in or not opposed to the best interests of the corporation, and, with respect to
any criminal action or proceeding, had no reasonable cause to believe his or her
conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that the person did
not act in good faith and in a manner which he or she reasonably believed to be
in or not opposed to the best interests of the corporation, and, with respect to
any criminal action or proceeding, had reasonable cause to believe that his or
her conduct was unlawful.
(b) A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that he or she is or 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 corporation, partnership,
joint venture, trust or other enterprise against expenses (including attorneys'
fees) actually and reasonably incurred by him or her in connection with the
defense or settlement of such action or suit if he or she acted in good faith
and in a manner he or she reasonably believed to be in or not opposed to the
best interests of the corporation and except that no indemnification shall be
made in respect of any claim, issue or matter as to which such person shall have
been adjudged to be liable to the corporation unless and only to the extent that
the Court of Chancery or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of liability but
in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which the Court of Chancery
or such other court shall deem proper.
(c) To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections (a) and (b) of this
section, or in defense
II-1
<PAGE> 18
of any claim, issue or matter therein, he or she shall be indemnified against
expenses (including attorneys' fees) actually and reasonably incurred by him or
her in connection therewith.
(d) Any indemnification under subsections (a) and (b) of this section (unless
ordered by a court) shall be made by the corporation only as authorized in the
specific case upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances because he or she has
met the applicable standard of conduct set forth in subsections (a) and (b) of
this section. Such determination shall be made (1) by the board of directors by
a majority vote of a quorum consisting of directors who were not parties to such
action, suit or proceeding, or (2) if such a quorum is not obtainable, or, even
if obtainable a quorum of disinterested directors so directs, by independent
legal counsel in a written opinion, or (3) by the shareholders.
(e) Expenses (including attorneys' fees) incurred by an officer or director
in defending any civil, criminal, administrative or investigative action, suit
or proceeding may be paid by the corporation in advance of the final disposition
of such action, suit or proceeding upon receipt of an undertaking by or on
behalf of such director or officer to repay such amount if it shall ultimately
be determined that he or she is not entitled to be indemnified by the
corporation as authorized in this section. Such expenses (including attorneys'
fees) incurred by other employees and agents may be so paid upon such terms and
conditions, if any, as the board of directors deems appropriate.
(f) The indemnification and advancement of expenses provided by, or granted
pursuant to, the other subsections of this section shall not be deemed exclusive
of any other rights to which those seeking indemnification or advancement of
expenses may be entitled under any bylaw, agreement, vote of shareholders or
disinterested directors or otherwise, both as to action in his or her official
capacity and as to action in another capacity while holding such office.
(g) A corporation shall have power to purchase and maintain insurance on
behalf of any person who is or 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 corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against him or
her or incurred by him or her any such capacity, or arising out of his or her
status as such, whether or not the corporation would have the power to indemnify
him or her against such liability under this section.
(h) For purposes of this section, references to "the corporation" shall
include, in addition to the resulting corporation, any constituent corporation
(including any constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would have had power and
authority to indemnify its directors, officers, and employees or agents, so that
any person who is or was a director, officer, employee or agent of such
constituent corporation, or is or was serving at the request of such constituent
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, shall stand in the same
position under this section with respect to the resulting or surviving
corporation as he or she would have with respect to such constituent corporation
if its separate existence had continued.
(i) For purposes of this section, references to "other enterprises" shall
include employee benefit plans; references to "fines" shall include any excise
taxes assessed on a person with respect to any employee benefit plan; and
references to "serving at the request of the corporation" shall include any
service as a director, officer, employee or agent of the corporation which
imposes duties on, or involves services by, such director, officer, employee, or
agent with respect to an employee benefit plan, its participants or
beneficiaries; and a person who acted in good faith and in a manner he or she
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the corporation" as referred to in this
section.
(j) The indemnification and advancement of expenses provided by, or granted
pursuant to, this section shall, unless otherwise provided when authorized or
ratified, continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such a person.
II-2
<PAGE> 19
Item 16. Exhibits
5. Opinion of Muldoon, Murphy & Faucette LLP
23.1 Consent of Muldoon, Murphy & Faucette LLP (contained in its opinion)
23.2 Consent of Elliott, Davis & Company, LLP
24. Power of attorney (contained in signature page)
99. Authorization card
Item 17. Undertakings.
The undersigned hereby undertakes that, for the purpose of determining any
liability under the Securities Act of 1933, each filing of the registrant's
annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act
of 1934 that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
II-3
<PAGE> 20
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Post-Effective
Amendment to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Union, State of South
Carolina, on the 11th day of February 2000.
UNION FINANCIAL BANCSHARES, INC.
By:/s/ Dwight V. Neese
--------------------------------------
Dwight V. Neese
President and Chief Executive Officer
POWER OF ATTORNEY
We, the undersigned directors and officers of Union Financial Bancshares,
Inc. (the "Corporation") do hereby severally constitute and appoint Dwight V.
Neese and Richard H. Flake true and lawful attorneys and agents to do any and
all things and acts in our names in the capacities indicated below and to
execute any and all instruments for us and in our names in the capacities
indicated below which said Dwight V. Neese and Richard H. Flake may deem
necessary or advisable to enable Union Financial to comply with the Securities
Act of 1933 in connection with the Registration Statement on Form S-3 relating
to the offering of Union Financial's common stock, including specifically, but
not limited to, power and authority to sign for us or any of us in our names in
the capacities indicated below the Registration Statement and any and all
amendments (including post-effective amendments) thereto; and we hereby ratify
and confirm all that said Dwight V. Neese and Richard H. Flake shall do or cause
to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.
By: /s/ Dwight V. Neese Date: February 11, 2000
-------------------------------------------
Dwight V. Neese
President, Chief Executive Officer
and Director (Principal Executive Officer)
By: /s/ Richard H. Flake Date: February 11, 2000
--------------------------------------------
Richard H. Flake
Senior Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
By: /s/ Carl L. Mason Date: February 11, 2000
--------------------------------------------
Carl L. Mason
Chairman of the Board
II-4
<PAGE> 21
By: /s/ William M. Graham Date: February 11, 2000
------------------------------------------
William M. Graham
Vice Chairman of the Board
By: /s/ Mason G. Alexander Date: February 11, 2000
-------------------------------------------
Mason G. Alexander
Director
By: /s/ James W. Edwards Date: February 11, 2000
-------------------------------------------
James W. Edwards
Director
By: /s/ Louis M. Jordan Date: February 11, 2000
-------------------------------------------
Louis M. Jordan
Director
By: Date: _______________
-------------------------------------------
Quay W. McMaster
Director
By: /s/ John S. McMeekin Date: February 11, 2000
-------------------------------------------
John S. McMeekin
Director
By: /s/ David G. Russell Date: February 11, 2000
-------------------------------------------
David G. Russell
Director
By: /s/ Philip C. Wilkins Date: February 11, 2000
-------------------------------------------
Philip C. Wilkins
Director
II-5
<PAGE> 1
EXHIBIT 5
OPINION OF MULDOON, MURPHY & FAUCETTE LLP
<PAGE> 2
[MULDOON, MURPHY & FAUCETTE LLP LETTERHEAD]
February 11, 2000
Board of Directors
Union Financial Bancshares, Inc.
203 W. Main Street
Union, South Carolina 29379
Re: Union Financial Bancshares, Inc. Dividend Reinvestment Plan
Registration Statement on Form S-3,
Post-Effective Amendment No.1
SEC File No. 333-35319
Gentlemen:
We have acted as counsel for Union Financial Bancshares, Inc. (the
"Company") in connection with the offer and sale by the Company of 194,639
shares of the Company's Common Stock, par value $0.01 per share (the "Shares").
The shares are being offered under the Securities Act of 1933, as amended, under
a Registration Statement on Form S-3 initially filed with the Securities and
Exchange Commission (the "SEC") on September 10, 1997 and amended on the date
hereof (the "Registration Statement"). The offer and sale of an additional 41,
611 shares covered under the Company's Dividend Reinvestment Plan have been
issued and are covered by our legal opinion dated September 10, 1997 as filed in
the Registration Statement.
We have reviewed the Company's corporate records, including its
Certificate of Incorporation, as amended, and Bylaws as of the date hereof, and
such other documents as we considered necessary as a basis for the opinion
hereinafter expressed.
Based upon the foregoing, we are of the opinion that the Shares have been
duly and validly authorized, and that when the Shares are from time to time
issued in accordance with the terms and conditions set forth in the prospectus
contained in the Registration Statement, the Shares will be validly issued,
fully paid and nonassessable.
We hereby consent to the inclusion of this opinion in Post-effective
Amendment No. 1 to the Registration Statement and to the reference to our firm
therein and in the Prospectus forming a part thereof.
Very truly yours,
/s/ Muldoon, Murphy & Faucette LLP
MULDOON, MURPHY & FAUCETTE LLP
<PAGE> 1
EXHIBIT 23.2
CONSENT OF ELLIOTT, DAVIS & COMPANY, LLP
<PAGE> 2
[ELLIOTT, DAVIS & COMPANY, LLP LETTERHEAD]
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the incorporation by reference, in the Registration
Statement on Form S-3 pertaining to the Dividend Reinvestment Plan of Union
Financial Bancshares, Inc., of our report dated October 29, 1999, with respect
to the consolidated financial statements of Union Financial Bancshares and
subsidiary incorporated by reference in the Annual Report on Form 10-KSB for the
year ended September 30, 1999.
/s/ Elliott, Davis & Company, LLP
February 10, 2000
Greenville, South Carolina
<PAGE> 1
EXHIBIT 99
AUTHORIZATION CARD
<PAGE> 2
Dividend Reinvestment Plan
Authorization Form
UNION FINANCIAL BANCSHARES, INC.
- -----------------------------
203 West Main Street
Union, South Carolina 29379
Please sign the authorization located on the reverse side of this form and
complete the information below only if it has changed.
Name 1
- ----------------------------
Name 2
- ----------------------------
Street Address
- ----------------------------
City/State/Zip Code
- ----------------------------
Home Telephone Number
( )
- ----------------------------
Business Telephone Number
( )
- ----------------------------
<PAGE> 3
NOTE: THIS IS NOT A PROXY
Completion and return of this Authorization Form authorizes your enrollment in
the Union Financial Bancshares, Inc. Dividend Reinvestment Plan. Do not return
this form unless you wish to participate in the Plan.
If you sign and return this form, you authorize the purchase of additional
shares of common stock with the cash dividends on all shares of common stock
currently or subsequently registered in your name, as well as on the shares of
common stock credited to your Plan account.
Please return this Authorization Form in the envelope provided to: Registrar and
Transfer Company, 10 Commerce Drive, Cranford, New Jersey 07016.
If you wish to reinvest dividends on your common stock, check the following:
[ ] FULL COMMON STOCK DIVIDEND REINVESTMENT.
Sign here exactly as name(s) appear on stock certificate(s). If shares are held
jointly, all holders must sign.
Stockholder X Date Stockholder X Date
---------------------- ----- --------------- -----
