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As filed with the Securities and Exchange Commission on September 1, 2004
Registration No. 333-35319
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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POST EFFECTIVE AMENDMENT NO. 2 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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UNION FINANCIAL BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
Delaware 57-1001177
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(State or other jurisdiction of (IRS. Employer Identification No.)
incorporation 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 & Aguggia 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 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 137,287 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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PROSPECTUS
UNION FINANCIAL BANCSHARES, INC.
DIVIDEND REINVESTMENT PLAN
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Common Stock
(Par Value $0.01 Per Share)
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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 equal to the closing market price for the relevant
date of investment. See Question 11.
This prospectus relates to 137,287 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 September 1, 2004.
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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 that 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, 2003; (2) Union Financial's Quarterly
Report on Form 10-QSB filed on February 9, 2004; (3) Union Financial's Quarterly
Report on Form 10-QSB filed on May 6, 2004; and (4) Union Financial's Quarterly
Report on Form 10-QSB filed on August 5, 2004.
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 bank holding company for Provident Community Bank,
National Association. 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 six
full-service banking centers, 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 loans to consumers and
businesses. The Bank also maintains a portfolio of investment securities. 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 August 17, 2004 and has been restated in its entirety. The
amendments eliminate the optional cash purchase feature, base the calculation of
the purchase price on the average of the high and low sales price on the Nasdaq
National Market and eliminate the 5% discount on shares purchased through
reinvested dividends. 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 purposes. Union
Financial expects that generally all Plan purchases will be directly from Union
Financial.
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2. WHAT ARE THE ADVANTAGES OF THE PLAN?
(a) No brokerage commissions or service charges are paid by participants
in connection with any purchase of shares made under the Plan.
(b) 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.
(c) Periodic statements reflecting all current activity, including share
purchases and latest Plan account balance, simplify participants' record
keeping.
(d) 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
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
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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?
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
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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 equal to the closing
market price 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 closing market
price on the Investment Date. 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.
If a stockholder withdraws a portion 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.
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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.
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. If 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.
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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 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 stockholder of record, you cease to be eligible to
participate in the Plan. Periodically, the Plan Administrator will review
nonrecord-stockholder Plan
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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 your stock certificates to the Plan Administrator at 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 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.
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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.
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.
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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.
DESCRIPTION OF CAPITAL STOCK
Union Financial is authorized to issue 5,000,000 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 may
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.
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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 that 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 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 & Aguggia LLP, special
counsel for Union Financial.
EXPERTS
The consolidated balance sheets of Union Financial as of September 30,
2003 and 2002, and the related consolidated statements of income, shareholders'
equity and comprehensive income and cash flows for the three years ended
September 30, 2003, incorporated in this prospectus by reference to the Union
Financial's Annual Report on Form
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10-KSB for the year ended September 30, 2003, have been so incorporated in
reliance upon the report of Elliott Davis, LLC, 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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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............................................... 11
Use of Proceeds............................................................ 12
Legal Opinions............................................................. 12
Experts.................................................................... 12
Indemnification............................................................ 13
UNION FINANCIAL
BANCSHARES, INC.
Common Stock
($0.01 Par Value)
DIVIDEND REINVESTMENT
PLAN
PROSPECTUS
September 1, 2004
16
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 that they may incur in their
capacities:
SECTION 145 INDEMNIFICATION OF OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS;
INSURANCE.--(a) A corporation shall have power to 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 the person 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 the person in connection with such action, suit or proceeding if the
person acted in good faith and in a manner the person 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 the
person's 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 the person 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 the
person's conduct was unlawful.
(b) A corporation shall have power to 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 the person 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
the person in connection with the defense or settlement of such action or suit
if the person acted in good faith and in a manner the person 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 present or former director or officer 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 of any claim, issue or matter therein, such person shall
be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by such person in connection therewith.
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(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 present or
former director, officer, employee or agent is proper in the circumstances
because the person has met the applicable standard of conduct set forth in
subsections (a) and (b) of this section. Such determination shall be made, with
respect to a person who is a director or officer at the time of such
determination, (1) by a majority vote of the directors who were not parties to
such action, suit or proceeding, even though less than a quorum, or (2) by a
committee of such directors designated by a majority vote of such directors,
even though less than a quorum, or (3) if there are no such directors, or if
such directors so direct, by independent legal counsel in a written opinion, or
(4) by the stockholders.
(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 such person is not entitled to be
indemnified by the corporation as authorized in this section. Such expenses
(including attorneys' fees) incurred by former directors and officers or other
employees and agents may be so paid upon such terms and conditions, if any, as
the corporation 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
stockholders or disinterested directors or otherwise, both as to action in such
person's 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 such
person or incurred by such person in any such capacity, or arising out of such
person's status as such, whether or not the corporation would have the power to
indemnify such person 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 such person 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 such person
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.
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Item 16. Exhibits
5. Opinion of Muldoon Murphy Faucette & Aguggia LLP
23.1 Consent of Muldoon Murphy Faucette & Aguggia LLP (contained in
its opinion)
23.2 Consent of Elliott Davis, LLC
24. Power of attorney (previously filed)
99. Authorization card
Item 17. Undertakings.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in the registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment 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.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
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.
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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 1st day of September, 2004.
UNION FINANCIAL BANCSHARES, INC.
By: /s/ Dwight V. Neese
----------------------------------------
Dwight V. Neese
President and Chief Executive Officer
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 September 1, 2004
---------------------------------
Dwight V. Neese
President, Chief Executive Officer
and Director (Principal Executive Officer)
By: /s/ Richard H. Flake September 1, 2004
---------------------------------
Richard H. Flake
Executive Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
By: *
---------------------------------
Carl L. Mason
Director
By: *
---------------------------------
William M. Graham
Director
By: *
---------------------------------
James W. Edwards
Director
By: *
---------------------------------
Louis M. Jordan
Director
By: *
---------------------------------
Philip C. Wilkins
Director
* Pursuant to the Power of Attorney filed in the Post-Effective Amendment No. 1
to the Form S-3 on February 11, 2000.
/s/ Dwight V. Neese President, Chief Executive September 1, 2004
- ----------------------- Officer and Director
Dwight V. Neese
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