SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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United Bancorporation of Alabama, Inc.
(Name of Registrant as Specified In Its Charter)
United Bancorporation of Alabama, Inc. (Board of Directors)
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
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UNITED BANCORPORATION OF ALABAMA, INC.
200 EAST NASHVILLE AVENUE
ATMORE, ALABAMA
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 7, 2003
NOTICE IS HEREBY GIVEN, that pursuant to call of its Board of
Directors, the Annual Meeting of Stockholders (the "Meeting") of United
Bancorporation of Alabama, Inc. (the "Corporation"), Atmore, Alabama, will be
held at the corporate offices of United Bank, 200 East Nashville Avenue, Atmore,
Alabama, on Wednesday, May 7, 2003, at 3:00 p.m., local time, for the purpose of
considering and voting upon the following matters:
1. Election of three persons as directors, each of whom is nominated
to serve until the 2006 Annual Meeting of Stockholders and until
his successor is elected and qualified.
2. Transaction of such business as may come properly before the
Meeting or any adjournments thereof.
You are cordially invited to attend the Meeting, and we hope you will
attend.
WHETHER OR NOT YOU PLAN TO ATTEND, PLEASE SIGN AND RETURN THE ENCLOSED PROXY IN
THE ENCLOSED POSTAGE-PAID ENVELOPE TO ASSURE THAT YOUR SHARES ARE REPRESENTED AT
THE MEETING.
Stockholders of record on March 31, 2003 are entitled to receive notice
of and to vote at the Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ H. Leon Esneul
---------------------
H. Leon Esneul
Chairman of the Board
ATMORE, ALABAMA
APRIL 11, 2003
UNITED BANCORPORATION OF ALABAMA, INC.
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON
MAY 7, 2003
INTRODUCTION
This Proxy Statement is furnished to the stockholders of United
Bancorporation of Alabama, Inc. (the "Corporation") in connection with the
solicitation of proxies by the Corporation's Board of Directors for use at the
Annual Meeting of Stockholders of the Corporation to be held on May 7, 2003, at
3:00 p.m., local time, and at any adjournments thereof (the "Meeting").
The matters to be considered at the Meeting include: (1) the election
of three directors, each of whom is nominated to serve until the 2006 Annual
Meeting of Stockholders, each to serve until his successor is elected and
qualified; and (2) the transaction of such other business as may come properly
before the Meeting.
The Corporation's executive offices are located at 200 East Nashville
Avenue, Atmore, Alabama 36502. This Proxy Statement is dated April 11, 2003,
and, together with a copy of the Corporation's 2002 Annual Report, is being
mailed to stockholders of the Corporation on or about April 16, 2003.
VOTING SECURITIES
As of March 31, 2003, the Corporation's only outstanding voting
security was its Class A Stock, of which 1,086,898 shares (excluding treasury
shares) were issued, outstanding, and entitled to vote. Those shares were held
by approximately 676 stockholders of record. Stockholders of record on March 31,
2003 are entitled to receive notice of and to vote at the Meeting.
Notwithstanding that date, the Corporation's stock transfer books will
not be closed, and stock may be transferred after the record date, although only
stockholders of record as of the record date may vote at the Meeting.
The directors, nominees for election as directors, and executive
officers of the Corporation as a group number nine persons and, as of March 31,
2003, beneficially owned 159,186 shares of Class A Stock, 14.66% of the total
shares of such stock outstanding. See "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT."
VOTES REQUIRED
The representation in person or by proxy of at least a majority of the
outstanding Class A Stock entitled to vote at the Meeting is necessary to
constitute a quorum for the transaction of business. Votes withheld from any
nominee, abstentions and broker "non-votes" are counted as
1
present or represented for purposes of determining the presence or absence of a
quorum for the Meeting. A "non-vote" occurs when a nominee holding shares for a
beneficial owner does not vote on a proposal because the nominee does not have
discretionary voting power with respect to the proposal and has not received
instructions from the beneficial owner.
The election of directors requires an affirmative vote of a plurality
of the shares present in person or represented by proxy at the Meeting. The
nominees receiving the highest number of affirmative votes of such shares will
be elected as directors. Accordingly, abstentions and broker non-votes will have
no effect on the outcome of the vote for directors. Although the Corporation is
not presently aware of any other matter to be acted upon at the Meeting, any
other matters that may be considered and acted upon by the stockholders at the
Meeting would require approval by the affirmative vote of at least a majority of
the shares entitled to vote and represented at the Meeting either in person or
by proxy. Abstentions would be treated as votes cast with respect to any such
matter and therefore will have the same effect as a vote against such matters.
Broker non-votes will not be counted as votes cast with respect to such matter
and therefore would have no effect on the outcome of the votes.
PROXIES
If the enclosed Proxy is executed and returned, it may be revoked at
any time before it has been exercised; if it is not revoked, the shares
represented thereby will be voted by the persons designated in such Proxy in
accordance with the instructions therein. IN THE ABSENCE OF INSTRUCTIONS, THE
PROXY WILL BE VOTED FOR ELECTION OF EACH OF THE DIRECTOR NOMINEES DESCRIBED IN
THIS PROXY STATEMENT, AND WITH DISCRETIONARY AUTHORITY ON ALL OTHER MATTERS THAT
MAY COME PROPERLY BEFORE THE MEETING.
ELECTION OF DIRECTORS
The following table sets forth the name of each nominee and each
director of the Corporation continuing in office after the Meeting, a
description of his or her position and offices, if any, with the Corporation and
its subsidiaries, a brief description of his or her principal occupation during
at least the last five years, and certain other information, including his or
her age. Each such director and each nominee is a director of United Bank (the
"Bank").
DIRECTOR DATE TERM AS PRINCIPAL OCCUPATION
NAME AND AGE SINCE DIRECTOR EXPIRES DURING PAST FIVE YEARS
------------ -------- ---------------- ------------------------------------
Dale M. Ash (43) 2002 May 2005 Controller of Pepsi-Cola Bottling
Company of Atmore and of South
Alabama Vending Company.
L. Walter Crim (57) 1997 May 2003* Owner, Central Farm Supply.
H. Leon Esneul (67) 1993 May 2003* Chairman of the Board of the
Corporation; pecan grower, managing
partner of the Doris Company Limited
Partnership.
2
William C. Grissett (54) 1998 May 2004 Owner, Escambia Lawn & Rental Center,
Inc.; Vice President, Tiger-Sunbelt
Industries, Inc. 1998-1999;
President, Sunbelt Chemicals, Inc.,
1983-1998.
Robert R. Jones, III (51) 1992 May 2005 President of the Corporation since
May, 1993; President and Chief
Executive Officer of United Bank
since July, 1992.
William J. Justice (63) 1991 May 2003* Vice Chairman of the Board of the
Corporation; Vice Chairman of the
Board of United Bank; Pharmacist,
President and Chief Executive
Officer, Greenlawn Pharmacy.
David D. Swift (52) 1995 May 2004 Secretary of the Board of the
Corporation; Chairman of the Board of
United Bank; Vice President, Swift
Lumber, Inc.; President, Swift
Supply, Inc.; Partner, Palustris
Products, Ltd.
* nominee for election for a term expiring at the 2006 Annual Meeting
of Stockholders
The Bank is a wholly-owned subsidiary of the Corporation. None of the
other entities listed under the column "Principal Occupation During Past Five
Years" above is affiliated with the Corporation.
Each director of the Corporation continuing in office after the Meeting
attended at least 75% of the meetings of the Corporation's Board of Directors
and its committees held during 2002 while he or she served as a director. The
Corporation's Board of Directors held eight meetings in 2002.
The Corporation's Board of Directors does not have standing nominating
or compensation committees, or committees performing similar functions. However,
the Corporation's Bylaws do authorize the Board of Directors to designate such
committees. On January 21, 2003, the Corporation's Board of Directors formed an
audit committee comprised of independent directors. See "AUDIT COMMITTEE REPORT"
below. In addition, the Board of Directors of the Bank
3
has established audit and compensation committees. In connection with the
adoption of the United Bancorporation of Alabama, Inc. 1998 Stock Option Plan
(the "Stock Option Plan"), the Board designated four of its directors who were
not employees of the Corporation or the Bank to serve on the Stock Option
Committee of the Board, which committee acts as the Administrator of the Stock
Option Plan and as Administrator of the 1999 Employee Stock Purchase Plan of
United Bancorporation of Alabama, Inc.
It is intended that, unless "Withhold Authority" is noted, proxies in
the accompanying form will be voted at the Meeting for the election to the Board
of Directors of L. Walter Crim, H. Leon Esneul and William J. Justice to serve
until the 2006 Annual Meeting of Stockholders and until their respective
successors are elected and qualified. Each of the nominees is a member of the
Board of Directors. If any nominee is not a candidate when the election occurs
(which is not anticipated to be the case), it is intended that the proxies may
be voted, unless authorization is withheld, for any substitute nominee or
nominees recommended by the Board of Directors. The Board of Directors has no
reason to believe that any nominee will be unable to serve as a director if
elected.
No fees are paid to directors of the Corporation for their services as
such. Since all of the Corporation's directors also serve as directors of United
Bank, they are primarily compensated for their services to United Bank. See
"Executive Compensation" below for information regarding compensation paid to
executive officers of the Corporation.
During 2002 all current directors of the Corporation also served as
directors of United Bank. Each director of United Bank received a standard fee
for such service of $3,500 ($4,700 for United Bank Board Chairman David D.
Swift); $100 for each Board Meeting of United Bank attended; and $50 for each
additional committee meeting attended, with a maximum of $50 per day for
additional meetings. In 2002, United Bank's Board of Directors held a total of
15 meetings.
In connection with the Corporation's adoption of the Stock Option Plan
in 1998, each director of the Corporation was granted nonstatutory stock options
to purchase 2,000 shares of Class A Stock at an exercise price of $16 per share
(the number of shares and exercise price having been adjusted in accordance with
the Stock Option Plan to account for the 2-for-1 split of Class A Stock in May
1999), with two-fifths of such options being immediately exercisable and
additional one-fifth increments becoming exercisable in December of 1999 through
2001, respectively. In connection with her election to the Board of the
Corporation, in December 2002 Mrs. Ash was granted nonstatutory stock options to
purchase 1,000 shares of Class A Stock at an exercise price of $31.50 per share,
with one-fifth of such options being immediately exercisable and additional
one-fifth increments becoming exercisable in December of 2003 through 2006,
respectively.
THE BOARD OF DIRECTORS OF THE CORPORATION RECOMMENDS
A VOTE "FOR" ELECTION OF THE NOMINEES LISTED ABOVE.
EXECUTIVE OFFICERS
The following table lists the executive officers of the Corporation and
the respective positions held by them in the Corporation. Each is a director of
the Corporation, except for Mitchell D. Staples and Jamie M. Lipham, and
information regarding their other business experience during
4
the past five years and certain other information is set forth under the caption
"ELECTION OF DIRECTORS" above. Mr. Staples, age 41, has been the Controller and
Cashier, and now is Senior Vice President and Chief Financial Officer, of United
Bank from October 1992 to present. Mr. Lipham, age 36, has been Senior Vice
President, Retail Banking of United Bank from March 2002 to present. Mr. Lipham
served as Branch Administrator with a large holding company bank from May 1995
to February 2000 and as Senior Commercial Lender for a Georgia based community
bank from February 2000 to February 2002.
NAME POSITION
---- --------
Robert R. Jones, III President
H. Leon Esneul Chairman of the Board
William J. Justice Vice Chairman of the Board
Jamie M. Lipham Vice President
David D. Swift Secretary
Mitchell D. Staples Treasurer
The executive officers of the Corporation are elected annually at the
organizational meeting of the Board of Directors, which follows the annual
meeting of stockholders, to serve until the organizational meeting in the
subsequent year. Except as described under Agreements with Mr. Jones below,
there are no known arrangements or understandings between any executive officers
and any other person pursuant to which any of the above-named persons was
selected as an officer.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The table below sets forth, as of March 31, 2003, the number of shares
of the Corporation's Class A Stock held by each person who owns of record or, to
the knowledge of the Corporation, may be deemed to own beneficially, more than
5% of the outstanding shares of such Stock.
NAME AND ADDRESS AMOUNT AND NATURE OF PERCENT
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
------------------- -------------------- --------
Kent D. Sherrill 56,224(1) 5.17%
7861 Arthur Brown Road
Walnut Hill, FL 32568
----------
(1) Includes 810 shares owned by his wife; 6,504 shares owned jointly by his
wife and their children; 35,678 shares owned by other family members over which
Mr. Sherrill has voting and dispositive power; and 2,800 shares managed by a
trust for himself and other family members over which Mr. Sherrill has voting
and dispositive power. The foregoing is based on information provided to the
Corporation by Mr. Sherrill.
5
The table below sets forth, as of March 31, 2003, the number of shares
of Class A Stock beneficially owned by each director and nominee and by all
executive officers and directors as a group.
PERCENTAGE
AMOUNT AND NATURE OF OF OUTSTANDING
NAME BENEFICIAL OWNERSHIP CLASS A STOCK
---- -------------------- --------------
Dale M. Ash 6,813(1) *
L. Walter Crim 5,443(2) *
H. Leon Esneul 51,228(3) 4.72%
William C. Grissett 19,781(4) 1.82%
Robert R. Jones, III 40,074(5) 3.69%
William J. Justice 13,751(6) 1.27%
David D. Swift 19,948(7) 1.84%
All executive officers 159,186(1)(2)(3)(4) 14.66%
and directors as a (5)(6)(7)
group (9 persons)
----------
* less than 1%
(1) Includes 1,176 shares owned jointly with her children and 200 shares which
may be acquired within 60 days upon exercise of options.
(2) Includes 1,091 shares owned jointly with his children.
(3) Includes 49,228 shares owned by The Doris Company Limited Partnership.
(4) Includes 6,490 shares owned jointly with his wife and 13,291 shares owned by
United Bank in his Individual Retirement Account.
(5) Includes 4,374 shares owned jointly with his wife; 140 shares owned jointly
with his son; 1,658 shares owned by United Bank in his Individual Retirement
Account; 1,122 shares owned by United Bank in an Individual Retirement Account
for his wife; 140 shares owned jointly by his wife and his daughter; and 32,640
shares which may be acquired within 60 days upon exercise of options.
(6) Includes 7,200 shares owned jointly with his wife; 2,196 shares owned by his
wife, as to which shares Mr. Justice disclaims beneficial ownership; 223 shares
owned by Mr. Justice for his granddaughter, as to which shares Mr. Justice
disclaims beneficial ownership.
(7) Includes 3,650 shares owned by his wife, 232 shares held by his wife as
trustee, as to all of which shares Mr. Swift disclaims beneficial ownership, and
800 shares which may be acquired within 60 days upon exercise of options.
6
EXECUTIVE COMPENSATION
Officers of the Corporation, and directors who also serve as directors
or officers of United Bank, are remunerated by United Bank. The following
Summary Compensation Table sets forth certain information concerning
compensation to Robert R. Jones, III, the only executive officer of the
Corporation who received total annual salary and bonus for 2002 exceeding
$100,000.
SUMMARY COMPENSATION TABLE
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
----------------------------- --------------------------
ALL
SECURITIES OTHER
SALARY BONUS UNDERLYING COMPEN-
NAME AND PRINCIPAL POSITION YEAR ($) ($) OPTIONS(#) SATION($)
--------------------------- ---- ------- ------ ---------- ----------
Robert R. Jones, III 2002 170,000 24,657 4,080 85,570(1)
President of the Corporation 2001 149,000 44,715 4,080 77,804(1)
President of the Bank 2000 145,000 43,031 4,080 45,900(1)
(1) Includes $25,212 paid on a life insurance contract owned by Mr. Jones and
related tax benefits pursuant to the 1993 Agreement described below in each of
2001 and 2000, and $27,082 paid in 2002 for such purposes pursuant to the 2001
Agreement described below: $608, $561 and $456 premium reimbursed by United Bank
on a long-term disability insurance policy for Mr. Jones in each of 2002, 2001
and 2000, respectively; $1,118, $738 and $722 contributed by United Bank for the
account of Mr. Jones pursuant to United Bank's 401(k) Employee Incentive Savings
Plan (the "401(k) Plan") in 2002, 2001 and 2000, respectively; $9,400, $5,850
and $5,550 in fees for attendance at meetings of United Bank's Board of
Directors in 2002, 2001 and 2000, respectively; $40,093 accrued in 2002 to
provide for certain post-employment benefits pursuant to the 2001 Agreement
described below; and $7,269, $6,733 and $6,322 in profit-sharing payments made
in 2002, 2001 and 2000 for services in 2001, 2000 and 1999.
Agreements with Mr. Jones. The Bank and Mr. Jones entered into an Executive
Compensation Agreement as of May 28, 1993 (the "1993 Agreement") which provides
for certain deferred compensation benefits, amounts of which paid for 2001 and
2000 are described under "All Other Compensation" in the Summary Compensation
Table above. The 1993 Agreement was replaced in 2001 by the Supplemental
Compensation and Amendment Agreement discussed below (the "2001 Agreement").
Following discussions in the latter part of 1997, the Bank entered into an
Employee Agreement with Mr. Jones dated as of January 1, 1998 (the "Agreement").
Pursuant to the Agreement, Mr. Jones has agreed to provide full-time
professional services to the Bank in the capacity of President and CEO of the
Bank, to the exclusion of other businesses or activities. The Agreement was for
an initial term
7
from January 1, 1998 through December 31, 2001, and unless terminated will
automatically renew on January 1 of each year for a three-year term. The
Agreement provides for a specified annual salary, together with
performance-based cash incentive compensation ("Bonus") determined by the Board
of the Bank at the time of its annual review of Mr. Jones' performance. The
Bonus under the Agreement is calculated as a percentage of Mr. Jones' salary,
ranging from zero to 45%, based on attainment of certain net income levels by
the Bank. Salary and Bonus paid to Mr. Jones for 2002 are reflected in the
Summary Compensation Table above. The Agreement specifies that Bonus awards are
intended to eventually be governed by an Executive Incentive Compensation Plan
applicable to certain officers of the Bank generally, as well as to the
President and CEO of the Bank. The Agreement also provides for Mr. Jones to
receive long-term incentives at the discretion of the Board; benefits provided
to employees of the Bank generally; reimbursement of reasonable and customary
business expenses incurred by him in connection with the performance of his
duties; payment or reimbursement of certain fees for professional and other
organizations in the Bank's market area; an automobile allowance; and vacation
time. As amended by the 2001 Agreement, the Agreement also provides for
supplemental compensation to be paid by the Bank to Mr. Jones upon retirement
and in certain other circumstances as set forth in the 2001 Agreement.
The Agreement also provides generally that, in the event of Mr. Jones'
death, the Bank will pay to his estate one quarter of his then-current annual
salary plus a prorata portion of the Bonus otherwise payable to him; that, in
the event of his disability, the Bank will pay his salary and a prorata portion
of Bonus until the earlier of twelve months after the date of disability or such
time as disability benefits commence under a Bank-provided disability insurance
policy; and that the Bank will pay Mr. Jones an amount equal to monthly salary,
benefits and prorata Bonus for twelve months after termination of his employment
if such termination is not for cause or a result of material change in Mr.
Jones' duties and responsibilities.
Under the Agreement, Mr. Jones has agreed that, during the term of his
employment and for two years thereafter, he will not engage in any business
similar of that of the Bank or any of its affiliates or solicit any employee of
the Bank or any of its affiliates to leave their employment with the Bank (the
"Noncompetition Agreements"). The Agreement also provides generally that, if a
change of control of the Bank occurs and within 36 months thereafter his
employment by the Bank is terminated, the Bank will pay him a severance payment
equal to two times the greater of the total cash compensation paid to him for
the fiscal year most recently completed before the termination or his annual
salary at the time of termination, and that, in such event, the Noncompetition
Agreements would no longer apply.
In a Supplemental Agreement with Mr. Jones dated as of March 9, 1999
(the "Supplemental Agreement"), the Corporation and the Bank agreed that,
subject to his continued employment by the Bank at such times, in each year
beginning in 1999 and ending in 2002, the Corporation would grant an incentive
stock option ("ISO") covering 4,080 shares of stock (the number of shares having
been adjusted to account for the 2-for-1 split of Class A Stock in May, 1999) to
Mr. Jones, exercisable at the then-current fair market value of Class A Stock,
with each such ISO being exercisable in five equal installments, the first of
which vested on the date of the grant. The last grant of options pursuant to the
Supplemental Agreement, made in 2002, is reflected under "OPTION GRANTS IN LAST
FISCAL YEAR" below.
8
The 2001 Agreement, which became effective as of January 1, 2001,
provides for annual payments on a life insurance contract ("Insurance Payments")
in lieu of comparable payments previously required under the 1993 Agreement. In
addition to the benefits under the Agreement and in lieu of post-employment
payments previously specified in the 1993 Agreement, the 2001 Agreement provides
for a normal retirement benefit of $102,000 per year to be paid to Mr. Jones for
20 years if he remains employed by the Bank until normal retirement age; lump
sum payment to his beneficiary in the event of his earlier death; and proration
of the annual payment amount if his employment by the Bank is terminated before
normal retirement age for reasons other than his death, total and permanent
disability, cause, or his voluntary termination without required notice, with
the prorated annual payment amount increasing by 5% annual increments from 50%
of the normal retirement benefit in 2001 to 100% in 2011 and thereafter. The
2001 Agreement also provides that if Mr. Jones' employment by the Bank is
terminated within 180 days after a change of control of the Corporation, as
defined in the Agreement, he will receive a lump sum payment equal to (a) the
discounted present value of the normal retirement benefit, plus (b) the
discounted present value of the Insurance Payments for the lesser of ten years
or the number of years until he would reach the age of 65.
BOARD REPORT ON EXECUTIVE COMPENSATION
The Board of Directors of the Corporation has not appointed a separate
committee for determination of executive compensation generally. The Stock
Option Administration Committee of the Corporation's Board of Directors has been
appointed as administrator of the Stock Option Plan and the Employee Stock
Purchase Plan.
Each non-director executive officer of the Corporation is also an
officer of the Bank, and receives compensation for services to the Bank.
Executive compensation decisions made by the Bank are reviewed by the entire
Board, with the exception of determinations made with respect to Mr. Jones, in
which he does not participate.
The Board of Directors of the Bank makes compensation determinations
with respect to the employees of the Bank, including those who are executive
officers of the Corporation, based on the recommendations of the Compensation
Committee of the Bank's Board of Directors (the "Compensation Committee"). For
executives other than the Chief Executive Officer, the Compensation Committee
acts on compensation recommendations made by the Chief Executive Officer, with
the objective of providing compensation competitive with that provided by
comparable financial institutions.
At present, compensation for executive officers other than the Chief
Executive Officer consists of annual base salary and annual cash bonuses
determined by the Compensation Committee, primarily on the recommendation of the
Chief Executive Officer. Base salary is determined at hiring and is reviewed
annually for increases based upon performance evaluations made by the Chief
Executive Officer. Annual cash bonuses are generally awarded as a percentage of
base salary. The bonus is based on the individual's compensation, salary grade
and individual performance and the performance of the Bank.
9
The compensation of the Chief Executive Officer, Mr. Jones, is
determined by the Compensation Committee in accordance with the provision of Mr.
Jones' employment agreement. See Agreements with Mr. Jones above. Mr. Jones'
compensation consists of a specified annual salary, performance-based annual
cash incentive compensation, long-term incentives in the form of stock options,
and other benefits. The Committee based its determination of Mr. Jones'
compensation package as reflected in the Agreement on the advice and
recommendation of a compensation consultant specializing in the banking
industry, with the intent of providing a compensation package designed to retain
Mr. Jones' services and motivate him to perform to the best of his abilities.
The increase in Mr. Jones' 2002 base salary reflects the Board's determination
of the salary level necessary to meet this objective. The Bonus paid to Mr.
Jones in 2002, approximately 15% of his 2002 salary, was based on attainment of
predetermined net income levels by the Bank. Under the Agreement, depending on
the level of net income of the Bank, the bonus could have ranged from zero to
45%. As described above, long-term incentives in the form of incentive stock
options granted to Mr. Jones in 2002 were granted in accordance with the
Agreement as supplemented in 1999.
This report is submitted by Dale M. Ash, L. Walter Crim, H. Leon
Esneul, William C. Grissett, Robert R. Jones, III, William J. Justice, and David
D. Swift, being all of the members of the Board of Directors during the 2002
fiscal year.
OPTIONS GRANTS IN LAST FISCAL YEAR
The following table and notes provide information on option grants made in 2002
under the Stock Option Plan to Mr. Jones, the only executive officer named in
the Summary Compensation Table above.
Individual Grants Grant Date Value(1)
----------------------------- -----------------------
% of Total
Number of Options
Securities Granted to
Underlying Employees Exercise or Grant Date
Options in Fiscal Base Price Expiration Present
Name Granted Year Per Share Date Value
---- ---------- ---------- ----------- ---------- ----------
Robert R. Jones, III 4,080(2) 29% $31.50 12/22/2010 $24,439
(1) The Corporation has used the Black-Scholes Option Valuation model adjusted
for dividends to determine grant date present value of the options. The
Corporation does not advocate or necessarily agree that the Black-Scholes model
properly reflects the value of an option. The assumptions used in calculating
the option value are as follows: a risk-free interest rate of 2.78%, the rate
applicable to a five-year treasury security at the time of the award; a dividend
yield of 2.24%, the yield at the time the option award was made; volatility of
12.09%, calculated using daily stock returns for the twelve month period
preceding the option award; a stock price at date of grant of $31.50; and a
ten-year stock option term. No adjustments were made for forfeitures or vesting
restrictions on exercise.
(2) Options were granted with an exercise price equal to market value on the
date of the grant and are exercisable in an initial 20% increment at the date of
grant and in cumulative 20% increments at the end of each of the four years
following the date of grant, subject to the condition that no option may be
exercised later than ten years after the date of the grant.
10
The following table and notes provide information on the value at
December 31, 2002 of unexercised options held by Mr. Jones, the only executive
officer named in the Summary Compensation Table above.
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR(1)
AND 2002 FISCAL YEAR-END OPTION VALUES
Number of Securities
Underlying Unexercised Value of Unexercised in-the-
Name and Position Options at 12/31/02 Money Options at 12/31/02($)(2)
----------------- ------------------------------ -----------------------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
Robert R. Jones, III 32,640 8,160 $387,714.24 $7,882.56
(1) No options were exercised by Mr. Jones during the 2002 fiscal year.
(2) The ultimate realization of value on the exercise of such options is
dependent upon the market price of Common Stock at the time of exercise.
Calculations are based on the $32.00 price of the last sale of Class A Stock
reported to the Corporation during the fiscal year.
The following table sets forth certain information at December 31, 2002
with respect to the Corporation's equity compensation plans that provide for the
issuance of options, warrants or rights to purchase the Corporation's
securities.
Number of Securities
Remaining Available
Number of Securities Weighted Average for Future Issuance under
to be issued upon Exercise Exercise Price of Equity Compensation
of Outstanding Options, Outstanding Options Plan (excluding securities
Plan Category Warrants and Rights* Warrants and Rights reflected in the first column)*
------------- -------------------------- -------------------- -------------------------------
Equity Compensation 71,800 $24.14 82,200
Plans Approved by
Security Holders
Equity Compensation -0- -0- -0-
Plans Not Approved
by Security Holders
*adjusted to account for 2-for-1 split of Class A Stock in May 1999
AUDIT COMMITTEE REPORT
In January 2003, the Corporation established an Audit Committee of the Board of
Directors of the Corporation composed of six directors determined to be
independent by the Corporation's Board by reference to the listing standards of
the NASD. The members of the Audit Committee are Dale M. Ash, L. Walter Crim, H.
Leon Esneul, William C. Grissett, William J. Justice and David D. Swift.
11
The Audit Committee is responsible for the appointment, compensation
and oversight of the Corporation's independent auditors. The Audit Committee is
required to pre-approve audit and certain non-audit services performed by the
independent auditors. The Committee also assists the Board in providing
oversight over the integrity of the Corporation's financial statements, the
Corporation's compliance with applicable legal and regulatory requirements and
the performance of the Corporation's internal audit function. The Committee also
meets periodically with the Corporation's independent auditors and the
Corporation's internal auditors outside of the presence of the Corporation's
management, and possesses the authority to retain professionals to assist it
with meeting its responsibilities without consulting with management. The
Committee is also responsible for receiving and retaining complaints and
concerns relating to accounting and auditing matters. Because it was not
established until 2003, the Audit Committee did not meet in 2002.
The Audit Committee is governed by a written charter adopted by the Board of
Directors in January 2003, which is attached hereto as Appendix A.
Management is responsible for the preparation of financial statements and the
integrity of the reporting process, including the system of internal and
disclosure controls. The independent auditors are responsible for expressing an
opinion on the conformity of those audited financial statements with accounting
principles generally accepted in the United States. The primary responsibility
of the Audit Committee is to oversee the Corporation's financial reporting
process on behalf of the Board. In so doing the Audit Committee is entitled
under its charter to rely on reports and other information from sources it in
good faith believes to be reliable, including the Audit Committee of the Board
of Directors of the Bank.
The Audit Committee has reviewed and discussed the audited financial
statements of the Corporation with management; has discussed with the
independent auditor of the Corporation, KPMG LLP ("KPMG"), the matters required
to be discussed by SAS 61 (Codification of Statements on Auditing Standards, AU
Section 380); and has received the written disclosures and the letter from KPMG
required by Independence Standards Board Standard No. 1 (Independence
Discussions with Audit Committees) and discussed with KPMG their independence.
Based on the review and discussion described above, the Audit Committee
recommended to the Board of Directors of the Corporation that the audited
financial statements should be included in the Corporation's Annual Report on
Form 10-K for the fiscal year ended December 31, 2002 for filing with the SEC.
Dale M. Ash L. Walter Crim H. Leon Esneul
William C. Grissett William J. Justice David D. Swift
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER INFORMATION
The SEC requires certain information to be provided under the foregoing
caption. As reported above, the Board of Directors has no compensation
committee. Each member of the Board of Directors is a member of the board of
directors of the Bank, and two directors of the Corporation during fiscal year
2002, Messrs. Grissett and Justice, are members of the Compensation Committee
12
of the board of directors of the Bank. The Board of Directors of the Corporation
includes Messrs. Jones, Esneul, Justice and Swift, each of whom may be deemed to
be an executive officer of the Corporation. None of Messrs. Esneul, Justice and
Swift receives compensation from the Corporation for services as an officer of
the Corporation, and Mr. Jones does not participate in the Board's deliberations
with respect to his compensation.
REPORTS UNDER SECTION 16 OF THE SECURITIES AND EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 ("Exchange Act")
requires the Corporation's executive officers and directors, and any persons who
own more than 10% of the Class A Stock, to file reports of ownership and changes
in ownership with the Security and Exchange Commission ("SEC"). The Corporation
believes that all requirements under Section 16(a) of the Exchange Act
applicable to directors and executive officers of the Corporation were complied
with by such persons during the last fiscal year. In making this disclosure, the
Corporation has relied on written representations by or on behalf of its
directors and executive officers and copies of reports filed.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Some Corporation and United Bank directors, officers, and principal
stockholders, and their associates and immediate families were customers of, or
had transactions with, subsidiaries of the Corporation in the ordinary course of
business during 2002. In addition, some Corporation and United Bank directors
are directors, officers, trustees, or principal security holders of corporations
or other organizations that were customers of, or had transactions with, the
Corporation or its subsidiaries in the ordinary course of business during 2002.
All outstanding loans and other transactions with the Corporation's, and its
subsidiary's, directors, officers, and principal stockholders, and their
associates and immediate families, were made in the ordinary course of business
on substantially the same terms, including interest rates and collateral, as
those prevailing at the time for comparable transactions with other persons, and
when made did not involve more than the normal risk of collectibility or present
other unfavorable features. In addition to banking and financial transactions,
the Corporation and its subsidiaries may have had additional transactions with,
or may have used products or services of, various organizations of which
directors of the Corporation or its subsidiaries are directors, officers, or
principal stockholders. Such transactions were on terms comparable to those
which would have been recorded with unaffiliated parties, and the amounts
involved in such noncredit transactions have in no case been material in
relation to the business of the Corporation and its subsidiaries or to such
other organizations.
AUDITORS
KPMG LLP or its predecessor, Peat Marwick Main & Co. (collectively,
"KPMG"), independent certified public accountants, was selected as the
Corporation's auditor on September 26, 1984, and has served as such since then.
A representative of KPMG is expected to be present at the Meeting and will have
the opportunity to make a statement if he so desires. The KPMG representative
also is expected to be available to respond to appropriate questions.
13
Audit Fees. KPMG billed the Corporation aggregate fees totaling $67,200 for
professional services rendered for the audit of the Corporation's annual
financial statements for 2002 and the reviews of the financial statements
included in the Corporation's Forms 10-Q for 2002.
Financial Information Systems Design and Implementation Fees. KPMG did not
perform any financial information systems design or implementation services for
the Corporation in 2002.
All Other Fees. The aggregate fees for all services rendered by KPMG to the
Corporation for 2002, other than those described in the two immediately
preceding paragraphs, totaled $19,245.
Independence. The Audit Committee of the Board of Directors has considered
whether the provision by KPMG of the services covered by the fees other than the
audit fees is compatible with maintaining KPMG's independence and believes that
it is compatible.
OTHER BUSINESS
Management currently knows of no other business to be brought before
the Meeting. If other business is brought properly before the Meeting, the
accompanying Proxy will be voted in the discretion of the persons designated in
such Proxy, unless the "Authority Withheld" box has been checked.
EXPENSES OF SOLICITATION
The cost of soliciting proxies in the accompanying form will be borne
by the Corporation. In addition to the use of the mails, proxies may be
solicited by directors, officers, or other employees of the Corporation or its
subsidiaries personally, by telephone, or by telefacsimile. The Corporation does
not expect to pay any compensation for the solicitation of proxies, but will
reimburse brokers, custodians, or other persons holding stock in their names or
in the names of nominees, for their reasonable expenses in sending proxy
materials to principals and obtaining their instructions.
STOCKHOLDER PROPOSALS
Stockholders are entitled to submit proposals on matters appropriate
for stockholder action consistent with regulations of the SEC. In order to be
included in the Corporation's proxy statement and form of proxy relating to its
2004 Annual Meeting pursuant to Rule 14a-8 promulgated by the SEC ("Rule
14a-8"), proposals from stockholders to be presented at the 2004 Annual Meeting
must be received by the Secretary of the Corporation no later than December 15,
2003. The date after which notice of a shareholder proposal submitted outside of
the processes of Rule 14a-8 will be considered untimely is February 16, 2004. If
notice of such a shareholder proposal is received by the Corporation after
February 16, 2004, then the Corporation's proxy for the 2004 Annual Meeting may
confer discretionary authority to vote on such matter without discussion of such
matter in the proxy statement for the 2004 Annual Meeting.
14
ANNUAL REPORT ON FORM 10-K
The Corporation will furnish to any shareholder upon written request,
without charge, a copy of the Corporation's Annual Report on Form 10-K,
including the financial statements and schedules thereto, required to be filed
with the SEC. Requests for the above information should be directed to:
Stockholder Relations Department, United Bancorporation of Alabama, Inc., P. O.
Box 8, Atmore, Alabama 36504.
COMPARATIVE PERFORMANCE GRAPH
The Securities and Exchange Commission ("SEC") requires the Corporation
to include in this Proxy Statement a graph which compares the yearly percentage
change in cumulative total shareholder return on the Class A Stock with (i) the
performance of a broad equity market indicator, and (ii) the performance of a
published industry index or peer group. Set forth below is a graph comparing the
yearly percentage change in the cumulative total stockholder return on the Class
A Stock against the cumulative total return of the S&P 500 Index and the Nasdaq
Bank Index for the five-year period from December 31, 1997 to December 31, 2002.
The Nasdaq Bank Index is a broad-based capitalization-weighted index of domestic
and foreign common stocks of banks that are traded on the Nasdaq National Market
System (Nasdaq/NMS) as well as the SmallCap Market. The Class A Stock is not
traded on a recognized market, and the price for the Class A Stock on the dates
represented in the graph are based on the most recent sales prices reported to
the Corporation on or prior to each such date.
Period Ending
-----------------------------------------------------------------------------
12/31/97 12/31/98 12/31/99 12/31/00 12/31/01 12/31/02
-------- -------- -------- -------- -------- --------
United Bancorporation 100.00 230.50 292.48 350.45 324.96 352.59
Of Alabama, Inc.
S&P 500 100.00 128.34 155.14 141.13 124.41 97.08
Nasdaq Bank Index 100.00 89.84 84.70 99.27 111.71 119.50
(PERFORMANCE GRAPH)
15
APPENDIX A
UNITED BANCORPORATION OF ALABAMA, INC.
AUDIT COMMITTEE CHARTER
I. GENERAL STATEMENT OF PURPOSE
The Audit Committee of the Board of Directors (the "Committee") of
United Bancorporation of Alabama, Inc. (the "Company") shall assist the Board of
Directors in monitoring (1) the integrity of the financial statements of the
Company, (2) the independent auditors qualifications and independence, (3) the
performance of the Company's internal audit function and independent auditors,
and (4) compliance by the Company with legal and regulatory requirements.
It is not the role of the Committee to duplicate the work of internal
and independent auditors; rather, its role is that of oversight. Management is
responsible for preparing the Company's financial statements and related
disclosures and the Company's independent auditors are responsible for auditing
those financial statements. It is not the duty of the Committee to plan or
conduct audits or to determine that the Company's financial statements are
complete and accurate and in accordance with GAAP.
The Committee, and each member of the Committee in his or her capacity
as such, shall be entitled to rely, in good faith, on information, opinions,
reports or statements prepared or presented to them by (i) the audit committee
of the Company's subsidiary, United Bank (the "Bank"), (ii) officers and other
employees of the Company or the Bank, whom such member believes to be reliable
and competent in the matters presented, and (iii) counsel, public accountants or
others persons as to matters which the member believes to be within the
professional competence of such person.
II. AUDIT COMMITTEE COMPOSITION
The Committee shall consist of the independent members of the Board of
Directors of the Company. In order to be considered independent, a member of the
Committee may not, other than in his or her capacity as a member of the
Committee, the Board of Directors, or any other Board committee (i) accept any
consulting, advisory, or other compensatory fee from the Company; (ii) be an
officer or employee of the Company or the Bank; or (iii) own five percent or
more of the voting securities of the Company or the Bank. The Board of Directors
shall designate one member of the Committee to be the Chairman of the Committee.
All members of the Committee shall have sufficient financial experience and
ability to enable them to discharge their responsibilities.
III. MEETINGS
The Committee shall meet as often as it determines, but not less frequently than
quarterly. Minutes of each meeting will be compiled by the Company's Corporate
Secretary who shall act as Secretary to the Committee, or in the absence of the
Corporate Secretary, by an Assistant Corporate Secretary of the Company or any
other person designated by the Committee.
IV. AUTHORITY AND RESPONSIBILITIES
The Committee shall generally be responsible for the following:
A. RETENTION OF INDEPENDENT AUDITOR. The Committee shall be directly responsible
for the appointment, compensation, oversight, evaluation and termination of any
independent auditor employed by the Company (including resolving disagreements
between management and the auditor regarding financial reporting) for the
purpose of preparing or issuing an audit report and related work. The Committee
shall affirm an understanding with the independent auditor that they must report
directly to the Committee.
B. PREAPPROVAL OF SERVICES. All auditing services (which may entail providing
comfort letters in connection with securities underwritings) and all non-audit
services provided to the Company by the Company's auditors which are not
prohibited by law shall be preapproved by the Committee pursuant to such
processes as are determined to be advisable. Preapproved shall include blanket
preapproval of non-prohibited services for limited dollar amounts which the
Committee, in its business judgment, does not believe possess the potential for
abuse or conflict.
The preapproval requirement set forth above, shall not be applicable with
respect to the provision of non-audit services, if:
(i) the aggregate amount of all such non-audit services provided to the
Company constitutes not more than 5 percent of the total amount of
revenues paid by the Company to its auditor during the fiscal year in
which the non-audit services are provided;
(ii) such services were not recognized by the Company at the time of the
engagement to be non-audit services; and
(iii)such services are promptly brought to the attention of the Committee
and approved prior to the completion of the audit by the Committee or by
one or more members of the Committee to whom authority to grant such
approvals has been delegated by the Committee.
A-1
The Committee may delegate to one or more designated members of the Committee
the authority to grant required preapprovals. The decisions of any member to
whom authority is delegated under this paragraph to preapprove an activity under
this subsection shall be presented to the full Committee at its next scheduled
meetings.
C. PROCEDURES FOR COMPLAINTS. The Committee shall establish procedures to
facilitate:
(i) the receipt, retention, and treatment of complaints received
by the Company from third parties regarding accounting,
internal accounting controls, or auditing matters; and
(ii) the confidential, anonymous submission by employees of the
Company of concerns regarding questionable accounting or
auditing matters.
D. FINANCIAL STATEMENT AND DISCLOSURE MATTERS. The Committee, to the
extent it deems necessary or appropriate, shall:
o Review and discuss with management and the independent auditor the annual
audited financial statements, including disclosures made in management's
discussion and analysis of financial condition and results of operations,
and recommend to the Board whether the audited financial statements should
be included in the Company's Form 10-K.
o Review and discuss with management and the independent auditor the
Company's quarterly financial statements, including the disclosures made in
management's discussion and analysis of financial condition and results of
operations prior to the filing of the Company's Form 10-Q, including the
results of the independent auditors' reviews of the quarterly financial
statements.
o Discuss with management and the independent auditor significant financial
reporting issues and judgments made in connection with the preparation of
the Company's financial statements, including (i) any significant changes
in the Company's selection or application of accounting principles, (ii)
any major issues as to the adequacy of the Company's internal controls,
(iii) the development, selection and disclosure of critical accounting
estimates, (iv) analyses of the effect of alternative assumptions,
estimates or GAAP methods on the Company's financial statements, (v)
analyses and disclosure of financial trends, and (vi) presentation of the
financial statements and notes thereto.
o Discuss with management the Company's earnings press releases, including
the use of "pro forma", "adjusted" or other non-GAAP information, as well
as financial information and earnings guidance provided to analysts and
rating agencies.
o Discuss with management and the independent auditor the effect of
accounting initiatives as well as off-balance sheet structures on the
Company's financial statements.
o Discuss with management and the internal auditors the effect of
regulatory initiatives on the Company's financial statements.
o Discuss with management the Company's major financial risk exposures and
the steps management has taken to monitor and control such exposures,
including the Company's risk assessment and risk management policies.
o Discuss with the independent auditor the matters required to be
discussed by Statement on Auditing Standards No. 61 relating to the
conduct of the audit including (i) the adoption of, or changes to, the
Company's significant auditing and accounting principles and practices,
(ii) the management letter provided by the independent auditor and the
Company's response to that letter, and (iii) any difficulties
encountered in the course of the audit work, including any restrictions
on the scope of activities or access to requested information, or
personnel and any significant disagreements with management.
E. OVERSIGHT OF THE COMPANY'S RELATIONSHIP WITH THE INDEPENDENT AUDITOR.
o Review the experience and qualifications of the senior members of the
independent auditor team.
o Obtain and review a written report from the independent auditor at least
annually regarding (i) the auditor's internal quality-control procedures,
(ii) any material issues raised by the most recent quality-control review,
or peer review, of the firm, or by any inquiry or investigation by
governmental or professional authorities within the preceding five years
concerning one or more independent audits carried out by the firm, (iii)
any steps taken to deal with any such issues, and (iv) all relationships,
both direct and indirect, between the independent auditor and the Company.
Evaluate the qualifications, performance and independence of the
independent auditor, including considering whether the auditor's quality
controls are adequate and the provision of non-audit services is compatible
with maintaining the auditor's independence, and taking into account the
opinions of management and the internal auditor. The Committee shall
present its conclusions to the Board and, if so determined by the
Committee, recommend that the Board take additional action to satisfy
itself of the qualifications, performance and independence of the auditor.
o Consider whether, in order to assure continuing auditor independence, it is
appropriate to adopt a policy of rotating the lead audit partner or even
the independent auditing firm itself on a regular basis.
o Recommend to the Board policies for the Company's hiring of employees
or former employees of the independent auditor who were engaged on the
Company's account.
A-2
o Discuss with the independent auditor issues on which the independent
auditor communicated with its national office regarding auditing or
accounting issues.
o Meet with the independent auditor prior to the audit to discuss the
planning and staffing of the audit.
F. OVERSIGHT OF THE COMPANY'S INTERNAL AUDIT FUNCTION.
o Review the appointment and replacement of the senior internal auditing
executive.
o Review the significant reports to management prepared by the internal
auditing department and management's responses.
o Discuss with the independent auditor the internal audit department
responsibilities, budget and staffing and any recommended changes in the
planned scope of the internal audit.
G. COMPLIANCE OVERSIGHT.
o Obtain from the independent auditor such assurance as it deems adequate
that such auditor has fulfilled its responsibilities under Section 10A of
the Securities Exchange Act of 1934.
o Obtain reports from management and the Company's senior internal auditing
executive relating to the Company's conformity with applicable legal and
regulatory requirements. Review reports and disclosures of insider and
affiliated party transactions.
o Review with management and the Company's internal auditors compliance with
laws and regulations. Advise the Board with respect to the Company's
compliance with applicable laws and regulations.
o Review with the Company's counsel pending material litigation and
compliance matters.
o The Committee will address and take any action, as it deems necessary or
appropriate, with respect to any issues relating to inquiries or
investigations regarding the quality of financial reports filed by the
Company with the SEC or otherwise distributed to the public.
H. MISCELLANEOUS POWERS AND RESPONSIBILITIES.
o The Committee shall have the power to investigate any matter brought to
its attention within the scope of its duties, with the power to retain
outside counsel for this purpose if, in its judgment, that is
appropriate.
o The Committee shall have the responsibility to submit the minutes of
all meetings of the Committee to the Board of Directors.
o The Committee shall have the responsibility of reviewing and assessing
the adequacy of this Charter at least annually.
o The Committee shall be responsible for the oversight of the Company's
Code of Ethics; however, the Committee is not responsible for assuring
compliance with the Company's Code of Ethics.
o The Committee shall have the responsibility to prepare the report
required to be included in the Company's annual proxy statement by the
rules of the Securities and Exchange Commission.
o The Committee shall have the power to access the Company's counsel
without the approval of management, as it determines necessary to carry
out its duties.
o The Committee shall also have the authority without the consent of
management or the Board, at the Company's expense, to the extent it deems
necessary or appropriate, to retain special independent legal, accounting
or other consultants to advise the Committee in connection with fulfilling
its obligations hereunder.
o The Committee shall have the responsibility of discussing with management
and the independent auditor any significant or material correspondence with
regulators or governmental agencies, including all examination reports
received from the various supervisory authorities, and any employee
complaints or published reports that raise material issues regarding the
Company's financial statements or accounting policies and review
management's replies to such correspondence, complaints, or reports.
o The Committee shall have the responsibility to discuss with the Company's
counsel legal matters that may have a material impact on the financial
statements or the Company's compliance policies.
A-3
UNITED BANCORPORATION OF ALABAMA, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
The undersigned stockholder of United Bancorporation of Alabama, Inc.
(the "Corporation"), Atmore, Alabama, hereby constitutes and appoints Dale M.
Ash, L. Walter Crim, H. Leon Esneul, William C. Grissett, Robert R. Jones, III,
William J. Justice, and David D. Swift and any of them, with full power of
substitution, proxies to vote the number of shares of Corporation common stock
that the undersigned is entitled to vote at the Annual Meeting of Stockholders
to be held at the corporate offices of United Bank, 200 East Nashville Avenue,
Atmore, Alabama, on May 7, 2003, at 3:00 p.m., local time, or at any
adjournments thereof (the "Meeting"), upon the proposal described in the Proxy
Statement and Notice of Annual Meeting of Stockholders, both dated April 11,
2003, receipt of which is hereby acknowledged, in the manner specified below.
Proposal. Election as director to serve until the 2006 Annual Meeting of
Stockholders and until his successor is elected and qualified:
L. Walter Crim, H. Leon Esneul and William J. Justice
[ ] FOR all nominees listed (except as indicated below).
To withhold authority for any individual nominee, write that
nominee's name in the space provided _______________________________
[ ] VOTE WITHHELD from all nominees.
In their sole discretion, the proxies are authorized to vote upon such other
business as may come properly before the Meeting or any adjournment thereof.
[ ] AUTHORIZED [ ] AUTHORITY WITHHELD
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED FOR ELECTION OF THE ABOVE-NAMED NOMINEES AS DIRECTORS AND
WITH DISCRETIONARY AUTHORITY ON ALL OTHER MATTERS THAT MAY COME PROPERLY BEFORE
THE MEETING.
Please sign exactly as your name appears on your stock certificate and
date. Where shares are held jointly, each stockholder should sign. When signing
as executor, administrator, trustee, or guardian, please give full title as
such. If a corporation, please sign in full corporate name by president or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
Dated: _______________, 2003 -------------------------------------
Month Day Signature of Stockholder
-------------------------------------
Signature of Other Stockholder
(If held jointly)
THIS PROXY IS SOLICITED ON BEHALF OF THE CORPORATION'S BOARD OF DIRECTORS AND
MAY BE REVOKED BY THE STOCKHOLDER(S) PRIOR TO ITS EXERCISE.