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United Bank of Philadelphia
DR. EMMA C. CHAPPELL
Founder, Chairman, President
& Chief Executive Officer
URGENT
IMMEDIATE RESPONSE REQUESTED
April 16, 1998
Dear Shareholder:
On behalf of the Board of Directors and management, I am pleased to invite you
to the 1998 Annual Meeting of Shareholders of United Bancshares, Inc. which is
to be held on Monday, May 22, 1998, at 10:00 a.m. at the Federal Reserve Bank of
Philadelphia, 100 North 6th Street, Philadelphia, PA. Accompanying this letter
are a Notice of Meeting, a Proxy Statement and a proxy form.
I urge you to read the enclosed material carefully and to complete, sign and
mail promptly the proxy form contained with this letter so that your vote will
be counted. A self-addressed stamped envelope is enclosed for your convenience.
The officers, directors and staff of United Bank sincerely appreciate your
continuing support.
Sincerely,
/s/ Emma C. Chappell
- -------------------------
Dr. Emma C. Chappell
<PAGE>
UNITED BANCSHARES, INC.
714 Market Street
Philadelphia, PA 19106
--------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 22, 1998
--------------
Dear Shareholders,
The Annual Meeting of the Shareholders of United Bancshares, Inc. ("UBS") will
be held at 10:00 a.m., local time, on Friday, May 22, 1998 at the Federal
Reserve Bank of Philadelphia, 10 Independence Place, Philadelphia, Pennsylvania
19106, for the following purposes:
1. To elect three Class C directors to serve until the expiration of their
four year term.
2. To ratify the appointment of Grant Thornton LLP as
independent auditors for the 1997 fiscal year.
3. To transact such other
business as may properly come before the Annual Meeting and any
adjournment thereof.
By Order of the Board of Directors
WILLIAM B. MOORE, Secretary
April 21, 1998
<PAGE>
UNITED BANCSHARES, INC.
714 Market Street
Philadelphia, PA 19106
ANNUAL MEETING OF SHAREHOLDERS
MAY 22, 1998
-------------------
PROXY STATEMENT
-------------------
The enclosed proxy is solicited by and on behalf of the Board of Directors
of United Bancshares, Inc. ("UBS"). All costs of solicitation, (including
printing and mailing of this Proxy Statement, meeting notice and form of proxy,
as well as any necessary supplementary solicitations) will be paid by UBS. In
addition to the solicitation of proxies by mail, officers and employees of UBS
may solicit in person or by telephone. Persons holding shares as nominees will,
upon request, be reimbursed for their reasonable expenses in sending soliciting
materials to their principals.
All shareholders of UBS Common Stock of record as of the end of business
on April 15, 1998, are entitled to vote at the meeting or any adjourned session.
Each share is entitled to one vote. As of the date upon which the enclosed proxy
was mailed, there were issued and outstanding approximately 823,695 shares of
UBS Common Stock. This Proxy Statement was mailed to the shareholders of UBS on
or about April 24, 1998.
At the Annual Meeting, the shareholders of UBS are being asked to consider
and vote upon (i) the election of three Class C Directors to serve for a term of
four years and until their successors are elected and qualified, and (ii) the
ratification of independent auditors for UBS.
Shares represented by a properly executed proxy will be voted in
accordance with the instructions thereon, or if no specification is made, the
persons named as proxies will vote for management's slate of Directors, and all
proposals as recommended by the Board of Directors. Proxies may be revoked at
any time before they are exercised by the subsequent execution and submission of
a revised proxy, by written notice to the Secretary of UBS, or by voting in
person at the meeting. The mailing address of UBS is 714 Market Street,
Philadelphia, Pennsylvania 19106.
Shareholders who need directions to the location of the Annual Meeting
should call 215-829-2265 between the hours of 8:30 A.M. and 4:30 P.M., local
time, on any business day.
A copy of UBS's Annual Report for the year ended December 31, 1997,
including financial statements, is being distributed to each shareholder with
this Proxy Statement.
<PAGE>
1. ELECTION OF DIRECTORS.
The Board of Directors of UBS has nominated the three persons listed below
for election as Class C directors, each to hold office until the expiration of
their four year term and until his or her successor is elected and qualified:
<TABLE>
<CAPTION>
YEAR FIRST TERM
PRINCIPAL BECAME WILL
NAME AGE OCCUPATION DIRECTOR EXPIRE
---- --- ---------- -------- ------
<S> <C> <C> <C> <C>
James F. Bodine................ 76 Retired as Managing Partner, 1993 2002
Urban Affairs Partnership
Philadelphia, PA since 1987
William C. Green............... 73 Co-founder, 1993 2002
Ivy Leaf Middle School,
Philadelphia, PA
Verdaynea F. Eason............. 34 Founding Vice-President, 1997 2002
United Bank of Philadelphia
</TABLE>
If any such nominee is not available for election at the time of the
meeting, the persons named as proxies will vote for such substitute nominee as
the Board of Directors may recommend unless the number of directors serving on
the Board is reduced. All nominees are currently Directors of UBS. Messrs.
Bodine and Green have served as directors since UBS's inception. Ms. Eason has
served as a director of UBS since 1997. On April 15, 1998, the nominees owned
shares of UBS in the following amounts: James F. Bodine (10,833 shares); William
C. Green (13,833 shares); and Verdaynea F. Eason (100 shares). On April 15,
1998, all directors and officers of UBS, as a group, owned approximately 9.24%
of all of the outstanding shares of UBS.
In addition to the nominees proposed above, the following persons will
serve as Directors of UBS during the ensuing year:
<TABLE>
<CAPTION>
YEAR FIRST TERM
PRINCIPAL BECAME WILL
NAME AGE OCCUPATION DIRECTOR EXPIRE
---- --- ---------- -------- ------
<S> <C> <C> <C> <C>
S. Amos Brackeen............... 79 Founder and Pastor, 1993 1999
Philippian Baptist
Church of Phila., PA
Emma C. Chappell............... 54 Chairman of the Board, 1993 1999
President and CEO of
Registrant and United Bank
of Philadelphia, Prior to 1991,
Vice President, Continental Bank
Luis A. Cortes, Jr............. 40 Executive Director 1993 2000
of the Hispanic Clergy
of Philadelphia & Vicinity
Kemel G. Dawkins............... 74 President, Kemrodco 1993 2001
Development and
Construction Company, Inc.,
President, Kem-Her
Construction Company Inc.,
Philadelphia, PA
2
<PAGE>
YEAR FIRST TERM
PRINCIPAL BECAME WILL
NAME AGE OCCUPATION DIRECTOR EXPIRE
---- --- ---------- -------- ------
L. Armstead Edwards............ 55 Treasurer, 1993 2000
United Bancshares, Inc.
Owner and President,
P.A.Z., Inc.,
Philadelphia, PA
Marionette Y. Frazier.......... 53 Partner, 1996 2000
John Frazier, Inc.
Philadelphia, PA
Angela M. Huggins.............. 54 President, RMS Technologies 1993 2001
Foundation, Marlton, NJ
William B. Moore............... 55 Secretary, 1993 1999
United Bancshares, Inc.
Pastor, Tenth Memorial
Baptist Church,
Philadelphia, PA
Ernest L. Wright............... 69 Founder, President and 1993 2000
CEO of Ernest L. Wright
Construction Company
Philadelphia, PA
Elmer Young, Jr................ 72 Retired; Previously Vice President 1993 2001
Glenmede Trust Company;
Senior Vice President
First Pennsylvania Bank
</TABLE>
The proxy holders will have the right to vote cumulatively for any or all
of the named nominees within each class or their substitutes, as the proxy
holders deem best. If any nominee becomes unavailable for any reason, it is
intended that the proxies will be voted for a substitute nominee designated by
the Board of Directors. The Board of Directors has no reason to believe that any
of the nominees will be unable to serve if elected. Any vacancy occurring on the
Board of Directors for any reason may be filled by a majority of the Directors
remaining in office, though less than a quorum. Each Director so elected shall
remain a Director until his or her successor is elected by the shareholders at
the annual meeting of the shareholders at which members of the Directors' class
are elected, or at any special meeting prior thereto called for such purpose.
BOARD MEETINGS AND COMMITTEES
The Board of Directors of UBS, during the year ended December 31, 1997,
held ten meetings. The following Directors attended less than seventy-five
percent (75%) of the board meetings of UBS held: NONE.
The Board of UBS has a standing Human Resources Committee which is composed
of the following Directors, a majority of whom are not "interested persons" of
UBS:
S. Amos Brackeen Kemel G. Dawkins
James F. Bodine William C. Green
Emma C. Chappell Verdaynea F. Eason
3
<PAGE>
During the year ended December 31, 1997, the UBS Human Resources Committee
held two meetings. The Committee is responsible principally for: (1) evaluating
the performance of UBS's executive officers, and developing and approving the
executive compensation plan (including base salary, customary insurance and
other benefits, and incentives) for such officers; and (2) interviewing,
evaluating and recommending to shareholders candidates for election to UBS's
Board of Directors.
The Committee will consider Director nominations recommended by
shareholders. Such nominations can be made by submitting a written request for
consideration of a candidate, including a resume, to Reverend S. Amos Brackeen,
Chairman of the Human Resources Committee.
The Board of UBS also has a standing audit committee for the purpose of
interfacing with UBS's independent auditors and reviewing the internal controls
of UBS consisting of the following board members: William B. Moore is the
Chairman of the Committee.
James F. Bodine Kemel G. Dawkins
Luis A. Cortes, Jr. William B. Moore
Emma C. Chappell
PRINCIPAL EXECUTIVE OFFICERS
NAME AGE OFFICE
- ---- --- ------
Emma C. Chappell (1)........... 54 Chairman, President and
Chief Executive Officer
James F. Bodine................ 76 Vice Chairman
Reverend William B. Moore...... 55 Secretary
L. Armstead Edwards............ 55 Treasurer
REMUNERATION OF DIRECTORS AND EXECUTIVE OFFICERS
COMPENSATION TABLE
1997 Salary 1997 Cash Bonus
----------- ---------------
Emma C. Chappell Chairman, President $162,000 $0
Chief Executive Officer
1996 Salary 1996 Cash Bonus
----------- ---------------
$162,000 $0
1995 Salary 1995 Cash Bonus
----------- ---------------
$150,000 $23,285
Directors of the Bank are compensated for each meeting attended in the
amount of three hundred dollars fifty ($350) per Board meeting attended and one
hundred fifty dollars ($150) for each committee meeting attended. Directors who
are also salaried officers of the Bank receive no remuneration for their
services as Directors. During the year ended December 31, 1996, the Bank paid
Directors' fees to its "non-interested" Directors totalling $20,900. UBS has
paid no director fees since its inception.
4
<PAGE>
At a Board of Directors meeting of the Bank held November 16, 1996 the
Board voted to reduce the fees paid for Board and committee meetings to $175 for
each Board meeting attended and $75 for each committee meeting attended. This
reduced amount was paid until the Bank achieved consistent profitability.
Beginning January 1, 1998 the fees in place prior to November 16, 1996 were
reinstated.
Dr. Emma C. Chappell, Chairman of the Board and Chief Executive Officer of
the Bank and Registrant since its formation, receives a minimum annual salary of
$150,000.
One hundred thousand shares of the Bank's Common Stock are subject to a
Long Term Incentive Compensation Plan (the "Plan") under which options to
purchase the Bank's Common Stock may be granted to key employees of a price not
less than the fair market value thereof at the date of the grant ("Options"),
and Common Stock may be awarded as Restricted Stock, subject for a period of
time to substantial risk of forfeiture and restrictions on disposition as
determined by the Compensation Committee as of the date of the grant
("Restricted Stock"). Pursuant to the Plan, options are granted in tandem with
Stock Appreciation Rights allowing the holder of an Option to surrender the
Option and receive an amount equal to the appreciation in market value of a
fixed number of shares of Common Stock from the date of the grant of the Option
("SARs"). SARs may be payable in Common Stock or cash or a combination of both.
The Plan also allows the Compensation Committee to grant Performance Shares,
which are contingent rights to receive, when certain performance criteria have
been attained, amounts of Common Stock and cash determined by the Compensation
Committee for such an award. Such rights are subject to forfeiture or reduction
if performance goals specified are not met during the performance period. No
such options, restricted stock or SARs were granted for 1997 performance.
No deferred compensation, incentive compensation or any further
compensation pursuant to any plan has been paid by the Bank, or will be paid by
the Bank based on services rendered to the Bank to the date of this Proxy
Statement.
2. INDEPENDENT AUDITORS
The Board of Directors has selected Grant Thornton LLP as independent
auditors to audit and certify consolidated financial statements of UBS for the
year ending December 31, 1997 and to provide certain accounting services to UBS
during 1998. Grant Thornton LLP has served in this capacity since October, 1997.
A representative of Grant Thornton LLP will be present at the meeting if
requested by a shareholder (either by telephone or in writing) in advance of the
meeting. Such requests should be directed to the Secretary of UBS.
REQUIRED VOTE
An affirmative vote of a majority of the shares of UBS represented at the
meeting will be required to ratify this appointment. The Board of Directors
recommends a vote for this proposal.
5
<PAGE>
3. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
OFFICERS AND DIRECTORS OF UNITED BANK OF PHILADELPHIA
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION YEAR FIRST
NAME AGE AND OTHER DIRECTORSHIPS BECAME DIRECTOR
---- --- ----------------------- ---------------
<S> <C> <C> <C>
James F. Bodine.............. 76 Retired as Managing Partner, 1992
Urban Affairs Partnership
Philadelphia, PA since 1987
S. Amos Brackeen............. 79 Founder and Pastor, Philippian 1992
Baptist Church of Philadelphia, PA
Emma C. Chappell............. 54 Founder, Chairman of the Board, 1991
President and CEO of the Bank
and Registrant. Prior to 1991,
Vice President, Continental Bank
Luis A. Cortes, Jr........... 40 Executive Director of the Hispanic 1992
Clergy of Philadelphia & Vicinity
Kemel G. Dawkins............. 74 President, Kemrodco Development 1992
and Construction Company, Inc.,
President, Kem-Her Construction
Company Inc., Philadelphia, PA
Verdaynea F. Eason........... 34 Founding Vice-President, 1997
United Bank of Philadelphia
L. Armstead Edwards.......... 55 Owner and President, P.A.Z., Inc., 1992
Philadelphia, PA
Marionette Y. Frazier........ 53 Partner, John Frazier, Inc. 1996
Philadelphia, PA
William C. Green............. 73 Co-Founder, Ivy Leaf Middle School, 1992
Philadelphia, PA
Angela M. Huggins............ 57 President, RMS Technologies 1992
Foundation Marlton, NJ
William B. Moore............. 55 Pastor, Tenth Memorial Baptist Church, 1992
Philadelphia, PA
Ernest L. Wright............. 69 Founder, President and CEO of 1992
Ernest L. Wright Construction Company,
Philadelphia, PA
Elmer Young, Jr.............. 73 Retired, Previously Vice President 1992
Glenmede Trust Company;
Senior Vice President
First Pennsylvania Bank
</TABLE>
Each of these officers and directors are also officers and directors of
UBS. See "Election of Directors."
6
<PAGE>
LOANS TO OFFICERS AND DIRECTORS
As of December 31, 1997, the Bank had loans to certain officers and
directors and their affiliated interests in aggregate dollar amount of
approximately $886,000 and held deposits of certain officers and directors of
$458,000. Such transactions are made on substantially the same terms, including
interest rate and collateral, as those prevailing at the time for other
non-related party transactions.
4. OTHER INFORMATION.
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth certain information regarding UBS's Common
Stock owned by: (i) each person who is known by the Board of Directors of UBS to
be the beneficial owner of more than 5% of UBS's outstanding Common Stock; (ii)
each of UBS's Directors, nominees for Director and principal officers of UBS as
a group:
Shareholders Owning in Excess of Five Percent of Registrant's Common Stock
Amount of UBS Percentage
Shareholders Beneficial Ownership Common Stock
- ------------ -------------------- ------------
CoreStates Bank, N.A. 50,000 6.12%
Broad and Chestnut Streets
Philadelphia, PA 19101
Greater Philadelphia Urban Affairs Coalition 47,500 5.82%
121 North Broad Street
Philadelphia, PA 19107
Philadelphia Municipal Retirement System 71,667 8.70%
2000 Two Penn Center
Philadelphia, PA 19102
Directors and Officers of the Bank
Shares of Registrant's Common Stock
-----------------------------------
Name Beneficially Owned Percentage
- ---- ------------------ ----------
James F. Bodine.................... 10,833 1.33%
S. Amos Brackeen................... 5,000 .61%
Emma C. Chappell (1)............... 7,000 .86%
Luis A. Cortes, Jr................. 500 .06%
Kemel G. Dawkins................... 8,333 1.02%
Verdaynea F. Eason................. 100 .01%
L. Armstead Edwards................ 10,833 1.33%
Marionette Y. Frazier.............. 9,350 1.14%
William C. Green (2)............... 13,833 1.69%
Angela M. Huggins.................. 4,200 .51%
William B. Moore................... 1,000 .12%
Ernest L. Wright................... 5,000 .62%
Elmer Young, Jr.................... 100 .01%
------ -----
TOTAL....................... 76,082 9.24%
====== ====
- ----------
(1) Dr. Chappell also acts as Trustee of a voting trust agreement pursuant to
which Fahnstock, Inc deposited 5,209 shares of Common Stock of UBS with Dr.
Chappell as Trustee, to be voted by Dr. Chappell pursuant to the terms of
the Voting Trust. The term of the Voting Trust is ten years.
7
<PAGE>
Dr. Chappell acts as Trustee of a voting trust agreement pursuant to which
NationsBank Corporation deposited 33,500 shares of Common Stock of UBS with
Dr. Chappell as Trustee, to be voted by Dr. Chappell pursuant to the terms
of the Voting Trust. The term of the Voting Trust is ten years.
Dr. Chappell also owns options to purchase up to 29,694 shares of the
common stock of UBS at a purchase price of $8.54 per share. This option was
awarded on September 15, 1993 and remains in effect for a term of five
years from that date.
(2) Owned jointly with Liller B. Green, his wife.
LITIGATION
No other material claims have been instituted or threatened by or against
UBS or its affiliates other than in the normal course of business.
ADJOURNMENT
If sufficient votes in favor of any of the proposals set forth herein are
not received by the time scheduled for the meeting, the persons named as proxies
may propose one or more adjournments of the meeting for a period or periods of
not more than 60 days in the aggregate to permit further solicitation of proxies
with respect to any such proposal. Any adjournment will require the affirmative
vote of a majority of the votes cast on the question in person or by proxy at
the session of the meeting to be adjourned. The persons named as proxies will
vote in favor of such adjournment those proxies which they are entitled to vote
in favor of such proposals. They will vote against any such adjournment those
proxies required to be voted against any such proposals. The Bank pays the costs
of any additional solicitation and of any adjourned session.
OTHER MATTERS
The Board of Directors knows of no other business to be brought before the
meeting. However, if any other matters come before the meeting, it is the
intention that the proxies which do not contain specific restrictions to the
contrary will be voted on such matters in accordance with the judgment of the
persons named on the enclosed form of proxy.
5. FINANCIAL STATEMENTS
The consolidated financial statements of UBS are not set forth in this
Proxy Statement. However, they are distributed herewith in the Annual Report of
UBS for the year ended December 31, 1997.
YOUR VOTE IS IMPORTANT
NO MATTER HOW MANY SHARES YOU OWN
Please indicate your voting instructions on the enclosed Proxy Form, date
and sign it, and return it in the envelope provided, which is addressed for your
convenience and needs no postage, if mailed in the United States. In order to
avoid additional expense to UBS or further solicitation, we ask your cooperation
in mailing your Proxy Form promptly.
<PAGE>
PROXY CARD
PLEASE SIGN, DATE AND MAIL THE PROXY CARD BELOW.
UNITED BANCSHARES, INC.
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MAY 22, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
VOTE THIS PROXY FORM TODAY!
YOUR PROMPT RESPONSE WILL SAVE THE BANK THE EXPENSE OF ADDITIONAL MEETINGS.
The undersigned hereby constitutes and appoints Emma C. Chappell and James
F. Bodine, or either of them, proxy of the undersigned with full power of
substitution to vote all of the shares of United Bancshares, Inc. that the
undersigned may be entitled to vote at the Annual Meeting of Shareholders of
United Bancshares, Inc. to be held at the Federal Reserve Bank of Philadelphia,
10 Independence Mall, Philadelphia, PA 19106 on May 22, 1998 at 10:00 A.M.,
prevailing time, and any adjournments thereof. All powers may be exercised by a
majority of said proxy holders or substitutes voting or acting or, if only one
votes and acts, then by that one. This Proxy shall be voted on the proposals
described in the Proxy Statement as specified below. Receipt of the Notice of
the Meeting and the accompanying Proxy Statement is hereby acknowledged.
Please refer to the Proxy Statement discussion of each of these matters. IF
NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE PROPOSALS. As to any
other matters, said attorneys shall vote in accordance with their best judgment.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING.
1. PROPOSAL FOR ELECTION OF CLASS C DIRECTORS. To elect the three nominees
listed below:
James F. Bodine [ ] FOR [ ] AGAINST [ ] ABSTAIN
William C. Green [ ] FOR [ ] AGAINST [ ] ABSTAIN
Verdaynea F. Eason [ ] FOR [ ] AGAINST [ ] ABSTAIN
2. PROPOSAL FOR RATIFICATION OF INDEPENDENT AUDITORS.
To ratify the selection of Grant Thornton LLP as independent auditors for
1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the Annual Meeting and any adjournment
thereof.
(Continued and to be Signed on the Other Side.)
- --------------------------------------------------------------------------------
(Please Date and Sign Below.)
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR PROPOSALS 1-3.
THIS PROXY SHOULD BE DATED, SIGNED BY THE SHAREHOLDER EXACTLY AS HIS OR HER
NAME APPEARS ON HIS OR HER STOCK CERTIFICATE AND RETURNED PROMPTLY TO THE BANK
IN THE ENCLOSED ENVELOPE. PERSONS SIGNING IN A FIDUCIARY CAPACITY SHOULD SO
INDICATE.
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME APPEARS ON THIS PROXY. WHEN SIGNING IN A
FIDUCIARY CAPACITY, SUCH AS EXECUTOR, ADMINISTRATOR, TRUSTEE, ATTORNEY,
GUARDIAN, ETC., PLEASE SO INDICATE. CORPORATE AND PARTNERSHIP PROXIES
SHOULD BE SIGNED BY AN AUTHORIZED PERSON INDICATING THE PERSON'S TITLE.
Dated: ________________________ , 1998
______________________________________
______________________________________
Signature(s) (Title(s), if applicable)
______________________________________
Please print name
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
