<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
CAROLINA FINCORP, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
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Notes:
<PAGE>
CAROLINA FINCORP, INC.
115 SOUTH LAWRENCE STREET
POST OFFICE BOX 1597
ROCKINGHAM, NORTH CAROLINA 28380-1597
(910) 997-6245
NOTICE OF 1998 ANNUAL MEETING OF STOCKHOLDERS
To Be Held On November 18, 1998
NOTICE IS HEREBY GIVEN that the 1998 Annual Meeting of Stockholders (the
"Annual Meeting") of Carolina Fincorp, Inc. (the "Company") will be held on
November 18, 1998, at 1:00 p..m., Eastern Time, at the Calvin Little Room,
Thomas H. Leath Memorial Library, 412 E. Franklin Street, Rockingham, North
Carolina.
THE PURPOSES OF THE ANNUAL MEETING ARE:
1. To elect eight (8) persons who will serve as the directors of the
Company until the 1999 Annual Meeting of Stockholders or until their
successors are duly elected and qualify;
2. To ratify the selection of Dixon Odom PLLC as the independent auditor
for the Company for the fiscal year ending June 30, 1999;
3. To transact such other business as may properly come before the Annual
Meeting or any adjournments thereof. The Board of Directors is not aware
of any other business to be considered at the Annual Meeting.
The Board of Directors has established October 1, 1998, as the record date
for the determination of stockholders entitled to notice of and to vote at the
Annual Meeting and any adjournments thereof. Only record holders of the Common
Stock of the Company as of the close of business on that date will be entitled
to vote at the Annual Meeting or any adjournments thereof. In the event there
are not sufficient shares present in person or by proxy to constitute a quorum
at the time of the Annual Meeting, the Annual Meeting may be adjourned in order
to permit further solicitation of proxies by the Company.
By Order of the Board of Directors
/s/ Karen M. Rickett
Karen M. Rickett
Secretary
Rockingham, North Carolina
October 12, 1998
A form of proxy is enclosed to enable you to vote your shares at the Annual
Meeting. You are urged, regardless of the number of shares you hold, to
complete, sign, date and return the proxy promptly. A return envelope, which
requires no postage if mailed in the United States, is enclosed for your
convenience.
<PAGE>
CAROLINA FINCORP, INC.
PROXY STATEMENT
1998 ANNUAL MEETING OF STOCKHOLDERS
NOVEMBER 18, 1998
SOLICITATION, VOTING AND REVOCABILITY OF PROXIES
GENERAL
This Proxy Statement is being furnished to stockholders of Carolina
Fincorp, Inc. (the "Company") in connection with the solicitation by the board
of directors of the Company (the "Board of Directors" or "Board") of proxies to
be used at the 1998 Annual Meeting of Stockholders (the "Annual Meeting") to be
held on November 18, 1998, at 1:00 p..m., Eastern Time, at the Calvin Little
Room, Thomas H. Leath Memorial Library, 412 E. Franklin Street, Rockingham,
North Carolina, and at any adjournments thereof. This Proxy Statement and the
accompanying form of proxy were first mailed to stockholders on or about October
12, 1998.
Other than the matters listed on the attached Notice of 1998 Annual Meeting
of Stockholders, the Board of Directors knows of no matters that will be
presented for consideration at the Annual Meeting. Execution of a proxy,
however, confers on the designated proxy holders discretionary authority to vote
the shares in accordance with their best judgment on such other business, if
any, that may properly come before the Annual Meeting or any adjournments
thereof.
REVOCABILITY OF PROXY
A proxy may be revoked at any time prior to its exercise by the filing of a
written notice of revocation with the Secretary of the Company, by delivering to
the Company a duly executed proxy bearing a later date, or by attending the
Annual Meeting and voting in person. However, if you are a beneficial owner of
shares of the Company's common stock (the "Common Stock") that are not
registered in your own name, you will need appropriate documentation from the
holder of record of your shares to vote personally at the Annual Meeting.
SOLICITATION
The Company will pay the cost of preparing, assembling and mailing this
Proxy Statement and other proxy solicitation expenses, if any. In addition to
the use of the mail, proxies may be solicited personally or by telephone or
telegraph by directors, officers and regular employees of the Company and its
wholly-owned savings bank subsidiary, Richmond Savings Bank, Inc., SSB (the
"Bank"), without additional compensation therefor. Brokerage houses and
nominees have been requested to forward these proxy materials to the beneficial
owners of shares held of record by such persons and, upon request, the Company
will reimburse such persons for their reasonable out-of-pocket expenses in doing
so.
VOTING SECURITIES AND VOTE REQUIRED FOR APPROVAL
Regardless of the number of shares of Common Stock owned, it is important
that stockholders be present in person or represented by proxy at the Annual
Meeting. Stockholders are requested to vote by completing, signing, dating and
returning the enclosed proxy card in the enclosed postage-paid envelope. Any
stockholder may vote for, against, or abstain from voting on any matter to come
before the Annual Meeting. If the enclosed proxy is properly marked, signed,
dated and returned, and not revoked, it will be voted in accordance with the
instructions therein. If no instructions are given, the proxy will be voted FOR
---
the nominees for election to the Board of Directors named in this
2
<PAGE>
Proxy Statement and FOR the ratification of Dixon Odom PLLC as the Bank's
---
independent auditor for the fiscal year ending June 30, 1999. If instructions
are given with respect to one but not both proposals, such instructions as are
given will be followed, and the proxy will be voted FOR the proposals on which
---
no instructions are given.
The close of business on October 1, 1998 has been fixed by the Board of
Directors as the record date (the "Record Date") for the determination of
stockholders of record entitled to notice of and to vote at the Annual Meeting
and any adjournments thereof. As of the Record Date, the Company had
outstanding 1,905,545 shares of Common Stock. Each share of Common Stock
entitles its owner to one vote on each matter calling for a vote of stockholders
at the Annual Meeting.
The presence, in person or by proxy, of the holders of at least a majority
of shares of the Common Stock entitled to vote at the Annual Meeting is
necessary to constitute a quorum at the Annual Meeting. Since many of our
stockholders cannot attend the Annual Meeting, it is necessary that a large
number be represented by proxy. Accordingly, the Board of Directors has
designated proxies to represent those stockholders who cannot be present in
person and who desire to be so represented. In the event there are not
sufficient votes for a quorum or to approve or ratify any proposal at the time
of the Annual Meeting, the Annual Meeting may be adjourned in order to permit
the further solicitation of proxies.
In order to be elected to the Board of Directors, a nominee need only
receive a plurality of the votes cast in the election of directors. As a
result, those persons nominated who receive the largest number of votes will be
elected as directors. Accordingly, shares not voted for any reason respecting
any one or more nominees will not be counted as votes against such nominees.
The proposal to ratify the appointment of the Company's independent auditor
for the fiscal year ending June 30, 1999 will be ratified if the votes cast in
favor of the proposal exceed the votes cast in opposition.
Abstentions will be counted for purposes of determining whether a quorum is
present at the Annual Meeting. For purposes of all Proposals, abstentions will
not be counted in tabulating the votes cast on such proposals. Broker non-votes
will not be counted either for determining the existence of a quorum or for
tabulating votes cast on any proposal.
3
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The Securities Exchange Act of 1934, as amended (the "Exchange Act"),
requires that any person or group who acquires the beneficial ownership of more
than 5% of the Common Stock notify the Securities and Exchange Commission (the
"SEC") and the Company. Following is certain information, as of the Record
Date, regarding all persons or groups, as defined in the Exchange Act, who held
of record or who are known to the Company to own beneficially, more than 5% of
the Company's Common Stock.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF PERCENTAGE
BENEFICIAL OF
NAME AND ADDRESS OWNERSHIP/1/ CLASS /2/
- ---------------- ------------ ----------
<S> <C> <C>
Buena Vista Coggin 168,161/3/ 8.82%
511 Roberdel Road
Rockingham, NC 28379
Russell E. Bennett, Jr. 171,661/4/ 9.01%
P.O. Box 579
Rockingham, NC 28380
Joe M. McLaurin 160,861/5/ 8.44%
P.O. Box 848
Rockingham, NC 28380
</TABLE>
____________________________________
/1/ Unless otherwise noted, all shares are owned directly or indirectly by the
named individuals, by their spouses and minor children, or by other entities
controlled by the named individuals. Voting and investment power is not shared
unless otherwise indicated.
/2/ Based upon a total of 1,905,545 shares of Common Stock outstanding.
/3/ Includes 148,280 shares of the Company's Common Stock held by the Richmond
Savings Bank, Inc., SSB Employee Stock Ownership Plan (the "ESOP"). Mrs. Coggin
serves as a trustee of the ESOP. The trustees of such plan share certain voting
and investment power for such shares. Also includes 2,381 shares of the
Company's Common Stock awarded to Ms. Coggin on January 23, 1998 under the
Richmond Savings Bank Management Recognition Plan, 20% (476 shares) of which
vested immediately upon grant, and 20% of which shall vest on January 23, 1999
and each anniversary thereafter until all such shares are vested on January 23,
2002.
/4/ Includes 148,280 shares of the Company's Common Stock held by the ESOP. Mr.
Bennett serves as a trustee of the ESOP. The trustees of such plan share
certain voting and investment power for such shares. Also includes 2,381 shares
of the Company's Common Stock awarded to Mr. Bennett on January 23, 1998 under
the Richmond Savings Bank Management Recognition Plan, 20% (476 shares) of which
vested immediately upon grant, and 20% of which shall vest on January 23, 1999
and each anniversary thereafter until all such shares are vested on January 23,
2002. Also includes 20,000 shares held in two separate trusts established by Mr.
Bennett, for which Mr. Bennett has sole voting and investment power.
/5/ Includes 148,280 shares of the Company's Common Stock held by the ESOP. Mr.
McLaurin serves as a trustee of the ESOP. The trustees of such plan share
certain voting and investment power for such shares. Also includes 2,381 shares
of the Company's Common Stock awarded to Mr. McLaurin on January 23, 1998 under
the Richmond Savings Bank Management Recognition Plan, 20% (476 shares) of which
vested immediately upon grant, and 20% of which shall vest on January 23, 1999
and each anniversary thereafter until all such shares are vested on January 23,
2002.
Set forth below is certain information as of the Record Date regarding
beneficial ownership of the Common Stock by each of the members of the Board of
Directors, each of the nominees for election to the Board of Directors, each of
the members of the Board of Directors of the Bank, certain executive officers of
the Company and the Bank, and the directors and executive officers of the
Company and the Bank as a group.
4
<PAGE>
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE OF PERCENTAGE OF CLASS/3/
- ---------------- ----------------------- ----------------------
BENEFICIAL OWNERSHIP /1,2/
--------------------------
<S> <C> <C>
J. Stanley Vetter, Chairman of the Board of Directors 23,663/4/ 1.24%
of the Bank and the Company, Nominee for Re-election
1424 Cumberland Circle
Rockingham, North Carolina 28379
John T. Page, Jr., Vice Chairman of the Board of 12,381/4/ 0.65%
Directors of the Bank and the Company, Nominee for
Re-election
723 Stanley Avenue
Rockingham, North Carolina 28379
Russell E. Bennett, Jr., Director of the Bank and the 171,661/4,5,6/ 9.01%
Company, Nominee for Re-election
P.O. Box 579
Rockingham, North Carolina 28380
R. Larry Campbell, President and Chief Executive 33,416/7/ 1.75%
Officer and Director of the Bank and the Company,
Nominee for Re-election
P.O. Box 1597
Rockingham, North Carolina 28380
Buena Vista Coggin, Director of the Bank and the 168,161/4,6/ 8.82%
Company, Nominee for Re-election
511 Roberdel Road
Rockingham, North Carolina 28379
Joe M. McLaurin, Director of the Bank and the 160,861/4,6/ 8.44%
Company, Nominee for Re-election
P.O. Box 848
Rockingham, North Carolina 28380
W. Jesse Spencer, Director of the Bank and the 4,563/4/ 0.24%
Company, Nominee for Re-election
720 Scotland Avenue
Rockingham, North Carolina 28379
E.E. Vuncannon, Jr., Director of the Bank and the 15,721/4/ 0.83%
Company, Nominee for Re-election
P.O. Box 56
Ellerbe, North Carolina 28338
John W. Bullard, Executive Vice President and Chief 22,752/8/ 1.19%
Operations Officer of the Bank and the Company
13210 Andrew Jackson Hwy.
Laurinburg, NC 28352
</TABLE>
5
<PAGE>
<TABLE>
<S> <C> <C>
Winston G. Dwyer, Treasurer and Chief Financial 3,050/9/ 0.16%
Officer of the Bank and the Company
4721 Main Street
Gibson, North Carolina 28343
- -------------------------------------- -------------- ---------
Directors and all Executive Officers as a group 319,669/10/ 16.78%
(10 Persons)
</TABLE>
/1/ Voting and investment power is not shared unless otherwise indicated.
/2/ Unless otherwise noted, all shares are owned directly or indirectly by the
named individuals, by their spouses or minor children, or by other entities
controlled by the named individuals.
/3/ Based upon a total of 1,905,545 shares of Common Stock outstanding at the
Record Date.
/4/ Includes 2,381 shares of Common Stock awarded to the named beneficial owner
on January 23, 1998 under the Richmond Savings Bank, Inc., SSB Management
Recognition Plan, 20% (476 shares) of which vested immediately upon grant and
20% of which will vest on January 23, 1999 and on each anniversary thereafter
until all such shares are vested on January 23, 2002.
/5/ Includes 20,000 shares held in two separate trusts established by Mr.
Bennett. Mr. Bennett has sole voting and investment power over all shares in
the trusts.
/6/ Includes 148,280 allocated and unallocated shares of Common Stock held by
the ESOP. Mrs. Coggin and Messrs.. Bennett and McLaurin are trustees of such
Plan and share certain voting and investment power over such shares.
/7/ Includes 10,978 shares awarded to Mr. Campbell on January 23, 1998 under the
Richmond Savings Bank, Inc., SSB Management Recognition Plan, 20% (2,195 shares)
of which vested immediately upon grant and 20% of which will vest on January 23,
1999 and each anniversary thereafter until all such shares are vested on January
23, 2002. Also includes 1,899 shares of Common Stock allocated to Mr. Campbell
under the ESOP.
/8/ Includes 5,000 shares awarded to Mr. Bullard on January 23, 1998 under the
Richmond Savings Bank, Inc., SSB Management Recognition Plan, 20% (1000 shares)
of which vested immediately upon grant and 20% of which will vest on January 23,
1999 and each anniversary thereafter until all such shares are vested on January
23, 2002. Also includes 1,235 shares of Common Stock allocated to Mr. Bullard
under the ESOP.
/9/ Includes 2,000 shares awarded Ms. Dwyer on January 23, 1998 under the
Richmond Savings Bank, Inc., SSB Management Recognition Plan, 20% (400 shares)
of which vested immediately upon grant and 20% of which will vest on January 23,
1999 and each anniversary thereafter until all such shares are vested on January
23, 2002. Also includes 410 shares of Common Stock allocated to Ms. Dwyer under
the ESOP.
/10/ Includes 148,280 allocated and unallocated shares of Common Stock held by
the ESOP. All allocated shares were calculated only once in determining the
beneficial ownership of the Directors and Executive Officers as a group, even
though such shares may have been attributed to more than one of the Officers and
Directors.
6
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's executive officers
and directors, and persons who own more than ten percent of the Common Stock, to
file reports of ownership and changes in ownership with the SEC. Executive
officers, directors and greater than ten percent beneficial owners are required
by SEC regulations to furnish the Company with copies of all Section 16(a) forms
they file.
Based solely on a review of the copies of such forms furnished to the
Company and written representations from the Company's executive officers and
directors, the Company believes that during the fiscal year ended June 30, 1998,
all of its executive officers and directors and greater than ten percent
beneficial owners complied with all applicable Section 16(a) filing
requirements.
PROPOSAL 1
ELECTION OF DIRECTORS
GENERAL
The Bylaws of the Company provide that the number of directors of the
Company shall not be less than five (5) nor more than fifteen (15). The exact
number of directors shall be fixed or changed from time to time by the Board of
Directors. The Board of Directors has currently fixed the size of the Board at
eight (8) members.
The Articles of Incorporation and Bylaws provide that, at all times that
the number of directors is less than nine (9), each director shall be elected to
a term ending as of the next succeeding annual meeting of shareholders or until
his or her earlier death, resignation, retirement, removal or disqualification
or until his or her successor shall be elected and shall qualify.
The Board of Directors has nominated the eight (8) persons named below for
election as directors for the term specified or until their earlier death,
resignation, retirement, removal or disqualification or until their successors
are elected and qualify. All nominees currently serve as Directors of the
Company.
The persons named in the accompanying form of proxy intend to vote any
shares of the Common Stock represented by valid proxies received by them to
elect the eight (8) nominees listed below as directors for the term expiring at
the 1998 Annual Meeting of the shareholders, unless authority to vote is
withheld or such proxies are revoked. In the event that any of the nominees
should become unavailable to accept nomination or election, it is intended that
the proxy holders will vote to elect in his stead such other person as the
present Board of Directors may recommend. The present Board of Directors has no
reason to believe that any of the nominees named herein will be unable to serve
if elected to office. In order to be elected as a director, a nominee need only
receive a plurality of the votes cast. As a result, those eight (8) nominees
who receive the largest number of votes will be elected as directors of the
Company until the next annual meeting of the shareholder or until their
successors are elected and qualified. Accordingly, shares not voted for any
reason respecting any one or more nominees will not be counted as votes against
such nominees. No stockholder has the right to cumulatively vote his or her
shares in the election of directors.
7
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL OF THE FOLLOWING NOMINEES
---
FOR ELECTION AS DIRECTORS.
The following table sets forth as to each nominee, his name, age, principal
occupation during the last five years and the year he was first elected as a
director of the Bank.
<TABLE>
<CAPTION>
DIRECTOR
AGE ON OF
JUNE 30, PRINCIPAL OCCUPATION BANK
NAME 1998 DURING LAST FIVE YEARS SINCE
- ---- -------- ---------------------- ---------
<S> <C> <C> <C>
J. Stanley Vetter 70 Physician in Rockingham, North 1970
Carolina
John T. Page, Jr. 74 Retired; formerly an attorney in 1975
Rockingham, North Carolina
Russell E. Bennett, Jr. 72 Retired; formerly owner and 1982/(1)/
president of Russell Bennett
Chevrolet-Buick-Mazda, Inc. in
Rockingham, North Carolina
R. Larry Campbell 54 President and Chief Executive 1990
Officer of the Bank and the
Company
Buena Vista Coggin 70 Retired; former President of the 1978
Bank
Joe M. McLaurin 71 Retired 1978
W. Jesse Spencer 77 Certified Public Accountant in 1988
Rockingham, North Carolina
E.E. Vuncannon, Jr. 69 President of E.E. Vuncannon, Inc. 1969
Ellerbe, North Carolina, supplier of
farm chemicals, feed and fertilizer
</TABLE>
/1/Mr. Bennett also served as a director from 1967 through 1970.
BOARD OF DIRECTORS OF THE BANK
The Bank also has an eight (8) member board of directors which is currently
comprised of the same persons who are currently directors of the Company.
MEETINGS OF THE BOARD AND COMMITTEES OF THE BOARD
The Company was organized in June 1996 by the board of directors of the
Bank to acquire the capital stock of the Bank issued in connection with the
conversion of the Bank from a North Carolina chartered mutual savings bank to a
North Carolina chartered stock savings bank (the "Conversion"). The Company
did not actively engage in any business until after consummation of the
Conversion on November 22, 1996. The Board of Directors is scheduled to
8
<PAGE>
meet on a quarterly basis or as needed. During fiscal 1998, the Board of
Directors held ten (10) meetings. The Bank's board of directors consists of the
same members as the Board of Directors. The Bank's board of directors is
scheduled to meet on a monthly basis. During fiscal 1998, the Bank's board of
directors held thirteen (13) meetings. All directors attended at least 75% of
the aggregate number of meetings of the Board of Directors, the Bank's board of
directors and committees of both boards on which they served during the year
ended June 30, 1998.
The Board of Directors has one standing committee -- the Audit Committee.
The Audit Committee of the Board consists of directors Spencer, Chairman; Page
and Coggin. This committee is scheduled to meet annually to review and discuss
the annual audit report from the Company's and the Bank's independent auditor,
and it also meets on an as-needed basis. The Committee met one time during the
fiscal year ended June 30, 1998. It is responsible for meeting with and
retaining internal auditors, overseeing the adequacy of internal control, and
ensuring compliance with the Bank's policies and procedures and with generally
accepted accounting principles.
The Bank's board of directors has appointed five standing committees to
which certain responsibilities have been delegated -- the Audit Committee,
Executive Committee, the Investment Committee, the CRA committee and the Capital
Planning Committee. The members of the Company's Audit Committee also serve on
the Bank's Audit Committee. The Bank's Audit Committee meets on an as-needed
basis and performs similar functions as the Company's Audit Committee. The
committee met two (2) times during the fiscal year ended June 30, 1998. One of
the Committee's meetings was a joint meeting with the Company's Audit Committee.
The Executive Committee is composed of directors Vetter, Chairman, Bennett,
Campbell and Vuncannon. The Executive Committee makes recommendation to the
full board of directors and acts on policies adopted by the full board of
directors in the absence of a meeting of the entire board of directors. This
committee meets on an as needed basis, and during the fiscal year ended June 30,
1998, the Executive Committee met five (5) times.
The Investment Committee is composed of directors McLaurin, Chairman,
Bennett and Campbell. The Investment Committee is responsible for overseeing
the implementation of the investment policy adopted by the Board and meets on an
as needed basis. The Investment Committee met one time during the fiscal year
ended June 30, 1998.
The CRA Committee is composed of directors Coggin, Chairman, Page and
Campbell. In addition, John W. Bullard, Executive Vice President, is a member
of this committee. The CRA Committee is responsible for monitoring the Bank's
compliance with the CRA and assessing community credit and deposit needs. This
committee meets as needed and did not meet during the fiscal year ended June 30,
1998.
The Capital Planning Committee is composed of directors Spencer, Chairman,
Bennett, Vetter, McLaurin and Campbell. The Capital Planning Committee is
responsible for determining the capital needs of the Bank and making
recommendations regarding how those needs may be satisfied. This committee
meets on an as needed basis and met two (2) times during the fiscal year ended
June 30, 1998.
DIRECTORS' COMPENSATION
DIRECTORS' FEES. Members of the Board of Directors receive no fees or
compensation for their service. However, all members of the Board of Directors
are also directors of the Bank and are compensated for that service. For their
service on the Bank's board of directors, all non-employee members of the Bank's
board of directors receive $1,000 per month. The Chairman of the Bank's board
receives an additional $500 per month for serving as Chairman. In addition, all
non-employee directors who serve on the Bank's board of directors receive $75
per committee meeting for their service. The fees for serving on the Bank's
board of directors are subject to adjustment annually. In addition,
9
<PAGE>
during fiscal 1998, all non-employee board members received compensation of $150
for the only additional special board meeting. Larry Campbell, the sole employee
member of the Board of Directors and the Bank's board of directors does not
receive additional fees or compensation for serving on both boards.
The Bank has entered into deferred compensation agreements with its non-
employee directors. Under the arrangements, such directors waive immediate
receipt of their directors' fees for various periods of time in exchange for the
Bank's agreement to pay to the director amounts over a specified period of time
beginning at a date set forth in the agreements. Benefits are also payable to
designated beneficiaries upon the director's death. The Bank has purchased life
insurance policies of which it is the beneficiary in order to fund the deferred
compensation benefits. The total expense related to the directors' deferred
compensation arrangements was approximately $100,155 in the fiscal year ended
June 30, 1998.
EXECUTIVE OFFICERS
The following table sets forth certain information with respect to the
persons who are executive officers of either the Company or the Bank or both.
<TABLE>
<CAPTION>
EMPLOYED BY
THE BANK OR
AGE ON POSITIONS AND OCCUPATIONS THE
NAME JUNE 30, 1998 DURING LAST FIVE YEARS COMPANY SINCE
- ---- ------------- ---------------------- -------------
<S> <C> <C> <C>
R. Larry Campbell 54 President and Chief Executive Officer 1984
of the Company and the Bank
John W. Bullard 47 Executive Vice President and Chief 1988
Operations Officer of the Company
and the Bank
Winston G. Dwyer 40 Treasurer and Chief Financial Officer 1996
of the Company and the Bank since
January 1996; previously employed as
C.P.A. from September 1993 to
December 1995 with G.B. Baines &
Associates in Laurinburg, North
Carolina; and as a C.P.A. with Marvin
Weaver, C.P.A. in Bennettsville,
South Carolina from April 1993 to
September 1993.
</TABLE>
EXECUTIVE COMPENSATION
The executive officers of the Company are not paid any cash compensation by
the Company. However, the executive officers of the Company also are executive
officers of the Bank and receive cash compensation from the Bank.
The following table sets forth certain information as to the cash
compensation received by, and the amounts accrued for the benefit of, the
President of the Bank for the fiscal years indicated in such table. No other
executive officer of the Bank had cash compensation during the years ended June
30, 1998, 1997, and 1996 that exceeded $100,000 in any such year for services
rendered in all capacities to the Bank.
10
<PAGE>
<TABLE>
<CAPTION>
Long Term
Annual Compensation Compensation Awards
------------------------------------------ -----------------------------
Other Annual Restricted Security
Name and Year Ending Compensation Stock Options/ All Other
Principal Position June 30 Salary Bonus ($)/(1)/ Awards SARs Compensation
- ------------------ ------- ------ ----- ------------ ------ ---- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
R. Larry Campbell, 1998 $95,400 $41,559/(2)/ -- $160,290/(3)/ 0 $40,305/(4)/
President and Chief
Executive Officer
1997 $95,400 $ 9,977/(5)/ -- 0 0 $27,170/(6)/
1996 $96,888/(7)/ $ 1,000/(8)/ -- 0 0 $18,282/(9)/
</TABLE>
/1/ Under the "Other Annual Compensation" category, perquisites for Mr. Campbell
for the fiscal years listed did not exceed the lesser of $50,000 or 10% of
salary and bonus as reported for Mr. Campbell and Mr. Bullard, respectively.
/2/ Of this amount (i) $7,909 represents a bonus applicable to performance
during the fiscal year ended June 30, 1998, which amount was not paid out until
after such fiscal year end, (ii) $1,500.00 represents a Christmas bonus, and
(iii) $40,058.75 represents 2,195 of the 10,978 shares of the Common Stock
awarded to Mr. Campbell on January 23, 1998 under the Richmond Savings Bank,
Inc. SSB Management Recognition Plan, which vested immediately upon grant and
had a market value of $18.25 per share on the date of grant.
/3/ Represents 8,783 shares of the Common Stock of the 10,978 shares awarded to
Mr. Campbell under the Bank's Management Recognition Plan, which have not yet
vested under the Plan. The shares of the Common Stock had a market value of
$18.25 per share on the date of grant (January 23, 1998) and $10.50 per share as
of June 30, 1998, or a total value of $92,221.50 on June 30, 1998. The non-
vested shares of the Common Stock will vest 25% on January 23, 1999, and 25% on
each year thereafter until all such shares are vested on January 23, 2002. Mr.
Campbell has rights of ownership with respect to the shares granted, including
the right to receive certain dividends.
/4/ Includes (a) $2,805 contributed to the Bank's 401(k) retirement plan for Mr.
Campbell during fiscal 1998; (b) $6,605 accrued under a supplemental retirement
plan established for the benefit of Mr. Campbell during fiscal 1998; and (c)
$30,895 contributed to the Bank's ESOP in connection with Mr. Campbell's share
allocation under the ESOP during fiscal 1998. A total of 1,291 shares of Common
Stock of the Company with a market value of $12,910 or $10.00 per share as of
June 30, 1998, were allocated to Mr. Campbell under the ESOP during the year.
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/5/ Of this amount, (i) $8,977 represents a bonus applicable to performance
during the fiscal year ended June 30, 1996, which amount was not paid until
after the end of such fiscal year and (ii) $1,000 represents a Christmas bonus.
/6/ Includes (a) $3,027 contributed to the Bank's target benefit retirement plan
for Mr. Campbell during fiscal 1997, which was terminated by the Bank on October
18, 1996; (b) $2,906 contributed to the Bank's 401(k) retirement plan for Mr.
Campbell during fiscal 1997; (c) $7,112 accrued under a supplemental retirement
plan established for the benefit of Mr. Campbell during fiscal 1997; and (d)
$14,125 contributed to the Bank's ESOP in connection with Mr. Campbell's share
allocation under the ESOP for fiscal 1997. A total of 609 shares of Common Stock
of the Company with a market value of $9,363.38 or $15.375 per share as of June
30, 1997, were allocated to Mr. Campbell under the ESOP during the year.
/7/ Includes $1,835 for unused sick days and $1,731 for unused vacation days.
/8/ Represents a $1,000 Christmas bonus.
/9/Includes (a) $10,114 contributed to the Bank's target benefit retirement plan
for Mr. Campbell during fiscal 1996, which was terminated by the Bank on October
18, 1996; (b) $2,892 contributed to the Bank's 401(k) retirement plan for Mr.
Campbell during fiscal 1996; and (c) $5,276 accrued under a supplemental
retirement plan established for the benefit of Mr. Campbell during fiscal 1996.
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BONUS COMPENSATION. In July, 1997, the Bank's Board of Directors
approved a Management Incentive Program pursuant to which selected officers of
the Bank could receive bonus compensation of up to 10% of their salaries if
certain performance goals were achieved during the fiscal year 1998. As a
result of certain performance goals being met during fiscal year 1998, $27,500
was accrued during the fiscal year 1998, and $23,225 of such accrued amount was
actually paid to the officers of the Bank as bonuses in August, 1998. A similar
Management Incentive Program was adopted in June 1995 for the purpose of
reaching certain performance goals in fiscal year 1996. As a result of those
performance goals being met, $17,843 was accrued in fiscal year 1996 and paid to
the officers of the Bank during fiscal year 1997 as bonuses. As a result of the
Conversion, no similar Management Incentive Program was adopted by the Bank's
Board of Directors for fiscal 1997, and therefore, no bonuses were accrued or
paid to the officers as a result of the Bank's fiscal year 1997 performance.
401(K) PROFIT SHARING PLAN. The Bank has established a contributory
savings plan for its employees, which meets the requirements of section 401(k)
of the Code. All employees who are at least 21 and who have completed one year
of service may elect to contribute a percentage of their compensation to the
plan each year, subject to certain maximums imposed by federal law. The Bank
will match 50% of each participant's contribution, up to a maximum employer
contribution of 3% of the participant's compensation. For purposes of the
401(k) plan, compensation means a participant's total compensation received from
the employer.
Participants are fully vested in amounts they contribute to the plan.
Participants are fully vested in amounts contributed to the plan on their behalf
by the Bank as employer matching contributions and as profit sharing
contributions after seven years of service as follows: 1 year, 0%; 2 years, 0%;
3 years, 20%; 4 years, 40%; 5 years, 60%; 6 years, 80%; 7 or more years, 100%.
Benefits under the plan are payable in the event of the participant's
retirement, death, disability, or termination of employment. Normal retirement
age under the plan is 65 years of age with at least five years of participation
in the plan. The plan also provides for early retirement within five years of
the participant's normal retirement age. The total amount contributed by the
Bank to the 401(k) plan during fiscal 1998 was $21,273.
RETIREMENT PLANS. The Bank has adopted non-qualified supplemental
retirement plans for the benefit of R. Larry Campbell, President, and John W.
Bullard, Executive Vice President. Mr. Campbell's retirement plan provides a
retirement benefit of $30,000 per year payable for ten years to Mr. Campbell
and/or his family upon Mr. Campbell's retirement on or after age 65. The plan
also provides a $30,000 per year disability benefit until age 65 and a death
benefit of $300,000 to Mr. Campbell's family if he should die prior to
retirement. Mr. Bullard's retirement plan provides a retirement benefit of
$10,000 per year for ten years to Mr. Bullard and/or his family upon Mr.
Bullard's retirement on or after age 65. Mr. Bullard's plan provides a $10,000
per year disability benefit until age 65 and a death benefit of $100,000 to Mr.
Bullard's family if he should die prior to retirement. These plans are funded
by insurance. The Bank's accrual for Mr. Campbell and Mr. Bullard's plans in
fiscal year 1998 totaled $7,867.
OTHER BENEFITS. The Bank provides its employees with group medical,
dental, life and disability insurance benefits. Employees are also provided
with vacation, holiday and sick leave.
EMPLOYEE STOCK OWNERSHIP PLAN. In connection with the Conversion, the Bank
established the ESOP for eligible employees of the Bank. Employees with one
year of service with the Bank and who have attained age 21 are eligible to
participate. As part of the Conversion, the ESOP borrowed funds from the
Company and used the funds to purchase shares of the Common Stock, and
additional shares of the Common Stock have been bought since the Conversion. As
of September 15, 1998, the ESOP has purchased 148,280 shares of the Common
Stock. Collateral
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for the loan is the Common Stock purchased by the ESOP. It is expected that the
loan will be repaid principally from the Bank's discretionary contributions to
the ESOP over a period of 15 years or less. Dividends paid on shares held by the
ESOP may also be used to reduce the loan. The loan has not been guaranteed by
the Bank. Common Stock purchased by the ESOP and pledged as security for the
loan is held in a suspense account for allocation among participants as the loan
is repaid.
The special return of capital dividend paid during fiscal 1998 on the
unallocated ESOP shares was deposited into a separate suspense account at the
time of payment. Such funds received from the return of capital will be used to
purchase additional shares of the Company's Common Stock. As a result, the ESOP
may own and control a larger percentage of the Company's outstanding Common
Stock than was originally anticipated at the time of the Conversion.
Contributions to the ESOP and shares released from the suspense account in
an amount proportional to the repayment of the ESOP loan are allocated among
ESOP participants on the basis of relative compensation in the year of
allocation. Benefits vest in full upon seven years of service with credit given
for years of service prior to the Conversion. Benefits are payable upon death
or disability. The Bank's contributions to the ESOP are not fixed, so benefits
payable under the ESOP cannot be estimated.
The Bank has established a committee of the board of directors to
administer the ESOP. The ESOP committee may instruct the trustees regarding
investment of funds contributed to the ESOP. Participating employees may
instruct the trustees as to the voting of all shares allocated to their
respective ESOP accounts. The unallocated shares held in the suspense account,
and all allocated shares for which voting instructions are not received, will be
voted by the trustees in their discretion, subject to the provisions of the
Employee Retirement Income Security Act of 1974, as amended.
STOCK OPTION PLAN. Pursuant to the Carolina Fincorp, Inc. Stock Option
Plan, 181,150 shares of the Common Stock have been reserved for issuance upon
exercise of the options which could be granted under the Stock Option Plan. At
this time, no options to purchase shares of the Common Stock have been granted
under the Stock Option Plan.
The Stock Option Plan is administered by a committee of the Company's Board
of Directors (the "Stock Option Plan Committee"). All directors, officers and
employees of the Company, the Bank, and any of the Bank's subsidiaries are
eligible to participate in the Stock Option Plan. The Stock Option Plan
Committee, in its sole discretion, determines who will participate in the Stock
Option Plan. Options granted pursuant to the Stock Option Plan shall vest in
accordance with each optionee's Stock Option and Grant Agreement executed by
such optionee and the Company. Options become 100% vested upon death,
disability, retirement or termination of employment for any reason upon a change
in control, as provided in the Stock Option Plan, if earlier.
No cash consideration will be paid for the options. Options will have an
option exercise price equal to the fair market value of the Common Stock on the
date of the grant. The exercise price may be paid in cash or by the delivery of
shares of Common Stock with a market value equal to the exercise price.
MANAGEMENT RECOGNITION PLAN. Pursuant to the Richmond Savings Bank, Inc.
SSB Management Recognition Plan (the "MRP"), 74,060 shares of the Common Stock
have been reserved for issuance pursuant to the terms of the MRP. The MRP is
administered by a committee of the Bank's Board of Directors (the "MRP
Committee"). All directors, officers and employees of the Company, the Bank,
and any of the Bank's subsidiaries
14
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are eligible for participation in the MRP. The MRP Committee, in its sole
discretion, determines who will participate in the MRP.
At this time, 24 directors, officers and employees are eligible to
participate in the MRP, and that group was awarded a total of 54,045 restricted
and unrestricted shares of the Common Stock on January 23, 1998. No cash
consideration was paid for the shares awarded, which had a market value of
$18.25 per share of the Common Stock at the time of the award. Twenty percent
(20%) of the shares which were granted vested immediately. The remaining shares
which have been awarded will vest at a rate of twenty percent (20%) of the total
shares granted on January 23, 1999 and each anniversary date thereafter, so that
all shares currently awarded will have vested on January 23, 2002. Grants of the
Common Stock under the MRP immediately vest upon the disability, death,
retirement or termination of employment with the Bank upon the change of control
of the participant, as provided in the MRP. The awards are not forfeitable upon
vesting.
EMPLOYMENT AGREEMENTS. In connection with the Conversion, the Bank entered
into employment agreements with R. Larry Campbell and John W. Bullard, in order
to establish their duties and compensation and to provide for their continued
employment with the Bank. The agreements provide for an initial annual base
salary of $95,400 and $63,600, respectively. The agreements also provide for an
initial term of employment of three years. Commencing at the end of the initial
three year term and continuing on each anniversary date thereafter, following a
performance evaluation of the employee, each agreement may be extended for an
additional year. The agreements provide that the base salary shall be reviewed
by the Bank's board of directors not less often than annually. In addition, the
employment agreements provide for participation in bonus compensation plans
established for the officers' positions and participation in all other pension,
profit-sharing or retirement plans maintained by the Bank or the Company for
employees of the Bank, as well as fringe benefits normally associated with such
employee's office. The employment agreements also provide that they may be
terminated by the Bank upon the payment of twelve months compensation and
without affecting the other benefits to which the officers are entitled under
the agreements. The agreements may also be terminated by the officers upon
sixty days written notice.
The employment agreements provide that the nature of the employees'
compensation, duties or benefits may not be diminished following a change in
control of the Bank or the Company. For purposes of the employment agreements,
a change in control generally will occur if (i) after the effective date of the
employment agreements, any "person" (as such term is defined in Sections 3(a)(9)
and 13(d)(3) of the Exchange Act) directly or indirectly, acquires beneficial
ownership of voting stock, or acquires irrevocable proxies or any combination of
voting stock and irrevocable proxies, representing 25% or more of any class of
voting securities of either the Company or the Bank, or acquires in any manner
control of the election of a majority of the directors of either the Company or
the Bank, (ii) either the Company or the Bank consolidates or merges with or
into another corporation, association or entity, or is otherwise reorganized,
where neither the Company nor the Bank is the surviving corporation in such
transaction, or (iii) all or substantially all of the assets of either the
Company or the Bank are sold or otherwise transferred to, or are acquired by,
any other entity or group.
SEVERANCE PLAN. In connection with the Conversion, the Bank's board of
directors adopted a Severance Plan for the benefit of its employees. The
Severance Plan provides that in the event there is a "change in control" of the
Bank or the Company (as defined in the Severance Plan) and (i) the Bank or any
successor of the Bank terminates the employment of any full time employee of the
Bank in connection with, or within 24 months after the change in control, other
than for "cause" (as defined in the Severance Plan), or (ii) an employee
terminates his or her employment with the Bank or any successor following a
decrease in the level of such employee's annual base salary rate or a transfer
of such employee to a location more than forty miles distant for the employee's
primary work station within 24 months after a change in control, the employee
shall be entitled to a severance benefit equal to the greater of (a) an amount
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<PAGE>
equal to two weeks' salary at the employee's existing salary rate multiplied
times the employee's number of complete years of service as a Bank employee; or
(b) the amount of one month's salary at the employee's salary rate at the time
of termination, subject to a maximum payment equal to one half of an employee's
annual salary. Officers of the Bank who, at the time of a "change in control,"
are parties to employment agreements having a remaining term of more than two
years are not covered by the Severance Plan.
CERTAIN INDEBTEDNESS AND TRANSACTIONS OF MANAGEMENT
The Bank makes loans to its executive officers and directors in the
ordinary course of its business. These loans are currently made on the same
terms, including interest rates and collateral, as those then prevailing for
comparable transactions with nonaffiliated persons, and do not involve more than
the normal risk of collectibility or present any other unfavorable features.
Applicable regulations prohibit the Bank from making loans to its executive
officers and directors on terms more favorable than could be obtained by persons
not affiliated with the Bank. The Bank's policy concerning loans to executive
officers and directors currently complies with such regulations.
In addition, director John T. Page, Jr. was a partner of Page, Page & Webb,
a law firm which performed legal services for the Bank during the previous
fiscal year.
PROPOSAL 2
RATIFICATION OF SELECTION OF INDEPENDENT AUDITOR
Dixon Odom PLLC, the Company's and the Bank's independent auditor for the
year ended June 30, 1998 has been selected as the Company's and the Bank's
independent auditor for the 1998 fiscal year. Such selection is being submitted
to the Company's stockholders for ratification. A representative of Dixon Odom
PLLC is expected to attend the Annual Meeting and will be afforded an
opportunity to make a statement, if he/she so desires, and to respond to
appropriate questions from stockholders.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THIS
---
PROPOSAL.
PROPOSALS FOR 1999 ANNUAL STOCKHOLDERS' MEETING
It is presently anticipated that the 1999 Annual Meeting of Stockholders
will be held in November of 1999. In order for shareholder proposals to be
included in the proxy materials for that meeting, such proposals must be
received by the Secretary of the Company at the Company's executive office not
later than June 8, 1999, and meet all other applicable requirements for
inclusion therein.
The Company's bylaws provide that, in order to be eligible for
consideration at the annual meeting of stockholders, all nominations of
directors, other than those made by the Company's Board of Directors, must be
made in writing and must be delivered to the Secretary of the Company not less
than 50 days nor more than 90 days prior to the meeting at which such
nominations will be made; provided, however, if less than 21 days notice of the
meeting is given to stockholders, such nominations must be delivered to the
Secretary of the Company not later than the close of business on the seventh day
following the day on which the notice of meeting was mailed.
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OTHER MATTERS
Management knows of no other matters to be presented for consideration at
the Annual Meeting or any adjournments thereof. If any other matters shall
properly come before the Annual Meeting, it is intended that the proxy holders
named in the enclosed form of proxy will vote the shares represented thereby in
accordance with their judgment, pursuant to the discretionary authority granted
therein.
MISCELLANEOUS
The Annual Report of the Company for the year ended June 30, 1998, which
includes financial statements audited and reported upon by the Company's
independent auditor, is being mailed along with this Proxy Statement; however,
it is not intended that the Annual Report be a part of this Proxy Statement or a
solicitation of proxies.
THE FORM 10-KSB FILED BY THE COMPANY WITH THE SEC, INCLUDING THE FINANCIAL
STATEMENTS AND SCHEDULES THERETO, WILL BE PROVIDED FREE OF CHARGE TO ANY OF THE
COMPANY'S STOCKHOLDERS UPON WRITTEN REQUEST DIRECTED TO: CAROLINA FINCORP, INC.,
115 SOUTH LAWRENCE STREET, POST OFFICE BOX 1597, ROCKINGHAM, NORTH CAROLINA
28380-1597, ATTENTION: KAREN M. RICKETT.
By Order of the Board of Directors,
/s/ Karen M. Rickett
Karen M. Rickett
Secretary
Rockingham, North Carolina
October 12, 1998
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REVOCABLE PROXY
CAROLINA FINCORP, INC.
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
Annual Meeting of Stockholders
November 18, 1998 -- 1:00 p.m.
(Solicited on behalf of the Board of Directors)
The undersigned holder of Common Stock of Carolina Fincorp, Inc. (the
"Company"), revoking all proxies heretofore given, hereby constitutes and
appoints the official proxy committee of the Company, comprised of all of the
members of the Board of Directors of the Company, each with full power of
substitution, for the undersigned and in the name, place and stead of the
undersigned to vote all of the undersigned's shares of said stock, according to
the number of votes and with all the powers the undersigned would possess if
personally present, at the 1998 Annual Meeting of Shareholders of Carolina
Fincorp, Inc., to be held at the Calvin Little Room, Thomas H. Leath Memorial
Library, 412 E. Franklin Street, Rockingham, North Carolina, on November 18,
1998 at 1:00 P.M., Eastern Daylight Time, and at any adjournments or
postponements thereof.
-------------------------------------------
Please be sure to sign and date Date
this Proxy in the box below.
- --------------------------------------------------------------------------------
- ---Shareholder sign above-----Co-holder (if any) sign above---------------------
With- For All
For hold Except
1. The approval of the election of the
following named directors: [ ] [ ] [ ]
J. Stanley Velter, John T. Page, Jr., Russell E. Bennett Jr., R. Larry Campbell,
Buena Vista Coggin, Joe M McLaurin, W. Jesse Spencer, and E.E. Vuncannon, Jr.
who will serve as directors until the 1989 Annual Meeting of Stockholders or
until their successors are duly elected and qualified.
INSTRUCTION: To withhold authority to vote for any individual nominee, mark "For
All Except" and write that nominee's name in the space provided below.
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For Against Abstain
2. The ratification and approval of the [ ] [ ] [ ]
appointment of Dixon Odom PLLC,
as the Company and Bank's Inde-
pendent auditor for the fiscal year
ending June 30, 1999.
3. The Proxies are authorized to vote in their discretion upon such other
matters as may properly come before the meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE LISTED PROPOSALS.
The shares represented by this Proxy will be voted in the manner directed. In
the absence of any direction, the shares will be voted FOR each nominee listed
above. FOR the ratification and approval of the appointment of Dixon Odom PLLC
as the Company's Independent auditors for the fiscal year ending June 30, 1999,
and in accordance with their discretion on such other matters as may properly
come before the Meeting. If instructions are given with respect to one but not
all proposals, such instructions as are given will be followed and the proxy
will be voted as indicated above on the proposal(s), for which no instructions
are given.
Signature(s) should conform to names as registered. For jointly owned shares,
each owner should sign. When signing as attorney executor, administrator,
trustee, guardian or officer of a corporation, please give full title.
- --------------------------------------------------------------------------------
Detach above card, sign date and mail in postage paid envelope provided.
CAROLINA FINCORP, INC.
- --------------------------------------------------------------------------------
The above signed hereby acknowledges receipt of the Notice of Meeting and
Proxy Statement dated October 13, 1998, relating to the Meeting and hereby
revokes any proxy or proxies heretofore given.
Each properly executed Proxy will be voted in accordance with the
specifications made above and in the discretion of the Proxies on any other
matter that may come before the meeting. Where no choice is specified, this
Proxy will be voted (i) FOR all listed nominees to serve as directors and (ii)
FOR the ratification and approval of the appointment of Dixon Odom PLLC, as the
Company's Independent auditors for the fiscal year ending June 30, 1999 and in
accordance with their discretion on such other matters as may properly come
before the Meeting.
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
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