SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential of Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
SHORE FINANCIAL CORPORATION
(Name of Registrant as Specified in Its Charter)
SHORE FINANCIAL CORPORATION
(Name of Person(s) Filing Proxy Statement)
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:*
------------------------------------------------------------------------
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: ___________________________________________________________
<PAGE>
SHORE FINANCIAL CORPORATION
25253 LANKFORD HIGHWAY
ONLEY, VIRGINIA 23418
April 29, 1998
Dear Shareholder:
You are cordially invited to attend the first Annual Meeting of
Shareholders of Shore Financial Corporation. The meeting will be held on
Thursday, May 28, 1998 at 1:00 p.m. at The Eastern Shore Chamber of Commerce
located on U.S. Route 13, Melfa, Virginia.
The primary business of the meeting will be the election of directors
to serve for a three-year term and the ratification of the Company's independent
auditors for the fiscal year 1998. We also will report to you on the condition
and performance of the Company and its subsidiary, Shore Bank, and you will have
ample opportunity to question management on matters that affect the interests of
all shareholders.
We hope you will be with us on May 28th for the meeting. Whether you
plan to attend or not, please complete, sign, date and return the enclosed proxy
as soon as possible in the postage-paid envelope provided.
We sincerely appreciate your support and look forward to seeing you at
the Annual Meeting.
Sincerely,
/s/ Scott C. Harvard
----------------------------------
Scott C. Harvard
President and Chief Executive Officer
<PAGE>
Shore Financial Corporation
- --------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
- --------------------------------------------------------------------------------
To be Held on May 28, 1998
The Annual Meeting of Shareholders of Shore Financial Corporation will
be held on May 28, 1998 at 1:00 p.m. at The Eastern Shore Chamber of Commerce
located on U.S. Route 13, Melfa, Virginia, for the following purposes:
1. To elect three (3) directors to serve for a three-year term;
2. To ratify the selection by the Board of Directors of Goodman &
Company, L.L.P., independent certified public accountants, as
auditors of the Company for fiscal 1998; and
3. To transact such other business as may properly come before
the meeting or any adjournments thereof.
The Board of Directors has fixed April 14, 1998, as the record date for
determination of shareholders entitled to notice of and to vote at the Annual
Meeting and any adjournments thereof.
By Order of the Board of Directors
/s/ Steven M. Belote
-------------------------------
Steven M. Belote
Corporate Secretary
Onley, Virginia
April 29, 1998
Please promptly complete, sign, date and return the enclosed proxy
whether or not you plan to attend the Annual Meeting. If you attend the meeting
in person, you may, if you desire, withdraw your proxy and vote your own shares.
25253 Lankford Highway, Onley, Virginia 23418
<PAGE>
SHORE FINANCIAL CORPORATION
--------------
PROXY STATEMENT
--------------
ANNUAL MEETING OF SHAREHOLDERS
MAY 28, 1998
GENERAL
The enclosed proxy is solicited by the Board of Directors of Shore
Financial Corporation (the "Company") for the first Annual Meeting of
Shareholders (the "Annual Meeting") of the Company to be held on Thursday, May
28, 1998, at the time and place and for the purposes set forth in the
accompanying Notice of Annual Meeting of Shareholders. The approximate mailing
date of this Proxy Statement and accompanying proxy is April 29, 1998.
Revocation and Voting of Proxies
Execution of a proxy will not affect a shareholder's right to attend
the Annual Meeting and to vote in person. Any shareholder who has executed and
returned a proxy may revoke it by attending the Annual Meeting and requesting to
vote in person. A shareholder may also revoke his proxy at any time before it is
exercised by filing a written notice with the Company or by submitting a proxy
bearing a later date. Proxies will extend to, and will be voted at, any
adjourned session of the Annual Meeting.
Voting Rights of Shareholders
Only shareholders of record at the close of business on April 14, 1998
(the "Record Date"), are entitled to notice of and to vote at the Annual Meeting
or any adjournment thereof. As of the close of business on the Record Date,
1,810,812 shares of the Company's common stock, par value $0.33 per share
("Common Stock"), were outstanding and entitled to vote at the Annual Meeting.
The Company has no other class of stock outstanding. A majority of the votes
entitled to be cast, represented in person or by proxy, will constitute a quorum
for the transaction of business.
Each share of Common Stock entitles the record holder thereof to one
vote upon each matter to be voted upon at the Annual Meeting. Shares for which
the holder has elected to abstain or to withhold the proxies' authority to vote
(including broker non-votes) on a matter will count toward a quorum, but will
not be included in determining the number of votes cast with respect to such
matter.
Solicitation of Proxies
The cost of solicitation of proxies will be borne by the Company.
Solicitation is being made by mail, and if necessary, may be made in person or
by telephone, or special letter by officers and employees of the Company or its
wholly owned subsidiary, Shore Bank (the "Bank"), acting without compensation
other than regular compensation.
<PAGE>
ELECTION OF DIRECTORS
(Proposal One)
Directors
The Articles of Incorporation of the Company provide that the Board of
Directors shall be divided into three classes (I, II and III) which are as
nearly equal in number as possible. The term of office for Class I directors
will expire at the Annual Meeting. The three persons named immediately below,
each of whom currently serves as a director of the Company, will be nominated to
serve as Class I directors. If elected, the three nominees will serve until the
Annual Meeting of Shareholders held in 2001. The persons named in the proxy will
vote for the election of the nominees named below unless authority is withheld.
If for any reason any of the persons named as nominees below should become
unavailable to serve, an event which management does not anticipate, proxies
will be voted for the remaining nominees and such other person or persons as the
Board of Directors may designate.
There are no family relationships among any of the directors or among
any directors and any officer. None of the directors serve as directors of other
publicly-held companies.
The tables below present information concerning the nominees for
director of the Company and each director whose term continues, including their
tenure as a director of the Bank.
The Board of Directors recommends that shareholders vote FOR the three
nominees set forth below. The three nominees receiving the greatest number of
affirmative votes cast at the Annual Meeting will be elected directors of the
Company.
<TABLE>
<CAPTION>
Served as Principal Occupation
Name (Age) Director Since (1) During Past Five Years
---------- ------------------ ----------------------
<S> <C>
Class I (Nominees):
Terrell E. Boothe (54) 1985 President, Terrell E. Boothe, Inc., an insurance
agency located in Chincoteague, Virginia.
D. Page Elmore (58) 1995 President and Chief Operating Officer, Shore Disposal, Inc.,
a waste management company based in Painter, Virginia;
President and Chief Operating Officer, James H. Hartman &
Sons, Inc., a trucking company headquartered in Pocomoke,
Maryland.
A. Jackson Mason (64) 1968 President, Mason-Davis Co., Inc., a diversified real
estate corporation based in Accomac, Virginia.
<PAGE>
Class II (Directors Serving Until the 1999 Annual Meeting):
Dr. Lloyd J. Kellam, III (43) 1992 Physician, Eastern Shore Physicians and Surgeons,
Nassawadox, Virginia.
Henry P. Custis, Jr. (52) 1987 Chairman of the Board of the Company and the Bank;
Partner, Custis, Lewis & Dix, a law firm located in
Accomac, Virginia.
L. Dixon Leatherbury (48) 1981 President and General Manager, Leatherbury Equipment
Co., Cheriton, Virginia; President, Wakefield
Equipment Co., Wakefield, Virginia.
Class III (Directors Serving Until the 2000 Annual Meeting):
Richard F. Hall, III (45) 1997 Owner, Loblolly Farms, Accomac, Virginia; Owner,
Seaside Produce, Accomac, Virginia.
Scott C. Harvard (43) 1985 President and Chief Executive Officer of the Company
and the Bank.
</TABLE>
- ------------------
(1) Includes service as a director of the Bank.
Board of Directors and Committees
In 1997, the Board of Directors of the Company held an organizational
meeting in connection with the holding company reorganization of the Bank. The
Board of Directors of the Bank met 12 times in 1997. No incumbent director
attended less than 75% of the aggregate total number of meetings of the Board of
Directors and its committees on which he served in 1997.
The Board of Directors of the Bank has established various committees,
including Loan, Investment, Audit/Expense and Compensation. The full Board of
Directors of the Company serves as the Nominating Committee and the directors
who serve on the Audit/Expense Committee of the Bank also serve the Company in
such capacity.
Loan Committee. The Loan Committee considers new loan applications
which are in excess of individual officer limits and monitors (with management)
the Bank's loan portfolio. The Loan Committee consists of the President and one
additional director, with the directors rotating their service on this committee
on a monthly basis. The Loan Committee met weekly in 1997.
Investment Committee. The Investment Committee sets guidelines for the
Bank's investment policies and reviews and decides all investment decisions of
the Bank in excess of $1.0 million. The Investment Committee, which is comprised
of Messrs. Custis, Harvard, Belote and Mason, met twice during 1997.
Audit/Expense Committee. The Audit/Expense Committee is responsible for
receiving audit and examination reports of the internal accounting staff of the
Company and the Bank, the independent public accountants and the banking
examiners. The Audit/Expense Committee met twice in 1997. The present members of
the Audit/Expense Committee are Messrs. Hall, Harvard, Custis and Boothe.
<PAGE>
Compensation Committee. The Compensation Committee reviews senior
management's performance and compensation, and also reviews and sets guidelines
for compensation of all employees. The Compensation Committee, which is
comprised of Messrs. Kellam, Harvard, Custis and Boothe, met twice during 1997.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth, as of April 14, 1998, certain
information as to the Common Stock beneficially owned by (i) the only persons or
entities, including any "group" as that term is used in Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), who or which
was known to the Company to be the beneficial owner of more than 5% of the
issued and outstanding shares of Common Stock, (ii) the directors of the
Company, and (iii) all directors and executive officers of the Company as a
group.
Amount and
Nature of
Beneficial Percent
Name of Beneficial Owner Ownership (1) of Class
------------------------ ------------- --------
Richard F. Hall, Jr.
P. O. Box 6 165,000 (2) 8.9%
Accomac, Virginia 23301
Directors:
Terrell E. Boothe............................. 15,600 (3)
Henry P. Custis, Jr........................... 128,059 6.9%
D. Page Elmore................................ 1,877 (3)
Richard F. Hall, III.......................... 55,258 (2) 3.0%
Scott C. Harvard.............................. 62,279 (2)(4) 3.4%
Dr. Lloyd J. Kellam, III...................... 4,587 (2) (3)
L. Dixon Leatherbury.......................... 32,950 1.8%
A. Jackson Mason.............................. 48,000 (2) 2.6%
All directors and executive officers
as a group (9 persons)..................... 352,947 (4) 19.1%
- -----------------
(1) For purposes of this table, beneficial ownership has been determined in
accordance with the provisions of Rule 13d-3 of the Exchange Act under
which, in general, a person is deemed to be the beneficial owner of a
security if he has or shares the power to vote or direct the voting of the
security or the power to dispose of or direct the disposition of the
security, or if he has the right to acquire beneficial ownership of the
security within sixty days.
(2) Includes shares held by affiliated corporations, close relatives and minor
children, and shares held jointly with spouses or as custodians or
trustees, as follows: Mr. Hall, Jr., 48,000 shares, Mr. Hall III, 25,767
shares, Mr. Mason, 4,500 shares, Dr. Kellam, 60 shares, and Mr. Harvard,
6,508 shares.
(3) Represents less than 1% of Company Common Stock.
<PAGE>
(4) Includes 29,000 shares that may be acquired by Mr. Harvard, and 2,000
shares that may be acquired by Steven M. Belote, Vice President and Chief
Financial Officer of the Company, pursuant to currently exercisable options
granted under the Bank's Stock Option Plan.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Pursuant to Section 16(a) of the Exchange Act, directors and executive
officers of the Company are required to file reports with the Securities
Exchange Commission ("SEC") indicating their holdings of and transactions in the
Company's equity securities. To the Company's knowledge, based solely on a
review of the copies of such reports furnished to the Company and written
representations that no other reports were required, insiders of the Company
complied with all filing requirements during the fiscal year ended December 31,
1997. As the reorganization of the Bank into the holding company form of
organization did not take place until March 1998, all such filings were made
with the Bank's primary federal regulator, the Office of Thrift Supervision.
MANAGEMENT COMPENSATION
During 1997, the only executive officer of the Company who received
annual compensation in excess of $100,000 was Scott C. Harvard, the President
and Chief Executive Officer. The following table sets forth certain information
on the compensation awarded or paid to Mr. Harvard from the Bank during the
years indicated.
Summary Compensation Table
<TABLE>
<CAPTION>
Long-term
Compensation
------------
Annual Compensation(1) Securities
Name and -------------------------- Underlying All Other
Principal Position Year Salary Bonus Options(2) Compensation(3)
------------------ ---- ------ ----- ---------- ---------------
<S> <C>
Scott C. Harvard 1997 $ 110,000 $ 25,000 5,000 $11,700
President and Chief 1996 100,000 20,000 --- 10,800
Executive Officer 1995 92,500 10,000 12,000 9,100
</TABLE>
- ------------------
(1) Does not include certain perquisites and other personal benefits, the
amounts of which are not shown because the aggregate amount of such
compensation during the year did not exceed the lesser of $50,000 or
10% of total salary and bonus reported for such executive officer.
(2) Consists of awards granted pursuant to the Bank's 1992 Stock Option
Plan during the years indicated, as adjusted for the three-for-one
stock split effected on June 10, 1997, and the two-for-one stock split
effected in the form of a stock dividend on October 15, 1996. This plan
does not permit grants of restricted stock, and it is the only
stock-based long term compensation plan currently in effect.
(3) Represents contribution to the Bank's 401(k) profit sharing plan for
the named executive officer.
<PAGE>
Stock Option Grants in 1997
The following table sets forth certain information concerning stock
options granted pursuant to the Bank's 1992 Stock Option Plan to the President
and Chief Executive Officer of the Company during 1997.
Option Grants in 1997
<TABLE>
<CAPTION>
Percent of
Number of Total
Shares Options
Underlying Granted to Exercise
Options Employees Price per Expiration
Name Granted in 1997 Share(1) Date
---- ------- ------- -------- ----
<S> <C>
Scott C. Harvard 5,000 50.0% $8.25 8/15/2007
</TABLE>
- ---------------------
(1) The exercise price is based on the market value of a share of Common Stock
at the time the option was granted.
Stock Option Exercises in 1997 and Year-end Option Values
The following table shows certain information with respect to the
number and value of unexercised options at year-end. No stock options were
exercised during 1997 by Mr. Harvard.
<TABLE>
<CAPTION>
Number of Value of
Shares Underlying Unexercised
Number of Unexercised In-the-Money
Shares Acquired Value Options at Options at
Name on Exercise Realized December 31, 1997 December 31, 1997 (1)
---- ----------- -------- ----------------- ---------------------
<S> <C>
Scott C. Harvard --- --- 35,000 $352,200
</TABLE>
- ------------------------
1) Calculated by subtracting the exercise price from the fair market value of
the stock at December 31, 1997.
Compensation of Directors
The members of the Board of Directors of the Company, and committees
thereof, receive no fees for their services.
During 1997, each member of the Board of Directors of the Bank was paid
a monthly fee of $400 regardless of whether he attended meetings of the Board,
except for Richard F. Hall, Jr., who received a monthly fee of $800 as Chairman
of the Board of the Bank, and Mr. Harvard, who is not compensated for his
service as director. Each director was paid $50 for each committee meeting
attended, except for Mr. Harvard. Effective October 1, 1997, each director's
monthly fee was increased to $500, the Chairman's fee was increased to $1,000,
and committee member fees were increased to $100 per meeting.
<PAGE>
Employment Agreement
On December 1, 1992, the Bank and Mr. Harvard entered into an
employment agreement regarding Mr. Harvard's services to the Bank (the
"Agreement"). The Agreement was initially in effect for a three-year period
which expired in 1995. The Bank has extended such agreement for one-year periods
since such expiration under terms substantially the same as those set forth in
the Agreement. The Agreement provides for an annual base salary to be paid to
Mr. Harvard, which the Board may increase upon its renewal thereof. Pursuant to
the Agreement, the Bank may terminate Mr. Harvard's employment at any time, but
any termination by the Bank other than "termination for cause" as such term is
defined in the Agreement, will not effect Mr. Harvard's right to receive
compensation and other benefits pursuant to the terms of the Agreement. If Mr.
Harvard was terminated for cause during the term of Agreement, he would have no
right to receive compensation or other benefits for any period after such
termination. In the event that Mr. Harvard is terminated without cause, he shall
receive his salary and certain benefits for a period of twelve months from the
date of such termination. The definition of "termination without cause" includes
termination of employment following the sale, liquidation or cessation of the
business of the Bank.
Benefits
401(k) Profit Sharing Plan. The Bank maintains a 401(k) profit sharing
plan (the "401(k) Plan"). The 401(k) Plan is designed to promote the future
economic welfare of the employees of the Bank and to encourage employee savings.
Employee deferrals of salary and employer contributions made under the 401(k)
Plan, together with the income thereon, are accumulated in individual accounts
maintained in trust on behalf of the employee participants, and is made
available to the employee participants upon retirement and under certain other
circumstances as provided in the Plan. Since employee deferrals of salary and
employer contributions made under the 401(k) Plan are made on a tax deferred
basis, employee participants are able to enjoy significant income tax savings by
participating in the 401(k) Plan.
An employee of the Bank becomes eligible to participate in the 401(k)
Plan on the entry date (January 1 or July 1) nearest the date he or she
completes a year of service (provided he or she is at least age 21). A year of
service is a 12 consecutive month period in which the employee works at least
1,000 hours for the Bank. Participants may elect to defer amounts between 2-10%
of their annual compensation to the 401(k) Plan, subject to certain limits
imposed by law. The Bank makes matching contributions equal to 100% of the first
3% of compensation deferred, 50% of the next 3%, and may make additional
discretionary matching contributions. The Bank may also make discretionary
profit sharing contributions, allocated to eligible employees on the basis of
relative compensation, or "qualified nonelective contributions" allocated on the
basis of relative compensation but only to eligible non-highly compensated
employees. During 1997, the Bank contributed $67,400 to the 401(k) Plan, $11,700
of which was for the benefit of Mr. Harvard.
Stock Option Plan. On December 21, 1992, the Board of Directors adopted
the Shore Savings Bank, F.S.B. 1992 Stock Option Plan (the "Stock Option Plan").
The Stock Option Plan is designed to attract and retain qualified personnel in
key positions, provide employees with a proprietary interest in the Bank as an
incentive to contribute to the success of the Bank and reward employees for
outstanding performance and the attainment of targeted goals. The Stock Option
Plan provides for the grant of incentive stock options intended to comply with
the requirements of Section 422 of the Internal Revenue Code of 1986, as amended
("incentive stock options"), and non-qualified stock options.
<PAGE>
The Stock Option Plan is administered and interpreted by a committee of
the Board of Directors ("Committee") which is "disinterested" pursuant to
applicable regulations under the Federal securities laws. Unless sooner
terminated, the Stock Option Plan is in effect for a period of ten years from
the date of adoption by the Board of Directors.
Under the Stock Option Plan, the Committee determines which employees
will be granted options, whether such options will be incentive or non-qualified
options, the number of shares subject to each option, whether such options may
be exercised by delivering other shares of Common Stock and when such options
become exercisable. In general, the per share exercise price of an incentive
stock option shall be at least equal to the fair market value of a share of
Common Stock on the date the option is granted. The per share exercise price of
a non-qualified stock option shall be not less than 50% of the fair market value
of a share of Common Stock on the date the option is granted.
Stock options shall become vested and exercisable in the manner
specified by the Committee. In general, each stock option or portion thereof
shall be exercisable at any time on or after it vests and is exercisable until
ten years after its date of grant. Stock options are nontransferable except by
will or the laws of descent and distribution.
CERTAIN TRANSACTIONS
Certain directors and executive officers of the Company and the Bank,
members of their immediate families, and corporations, partnerships and other
entities with which such persons are associated, are customers of the Bank. In
the ordinary course of business, the Bank makes loans available to such parties
which are made on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable transactions with
other borrowers, except that the Bank reduces the interest rate by one
percentage point on primary residential mortgage loans made to full-time
employees. It is the belief of management that these loans neither involve more
than the normal risk of collectibility nor present other unfavorable features.
The Bank has a lease agreement with Richard F. Hall, Jr., the former
Chairman of the Bank and the father of Richard F. Hall, III, a director, with
respect to the real property on which its main office is located. The lease
payment is $1,200 per month for 12 years with four five-year renewals. Each
renewal will be at the option of the Bank and the renewal leases will be based
on the previous lease rate after being adjusted for changes in the consumer
price index.
In August 1997, the Bank entered into an agreement with a Maryland
general partnership, of which D. Page Elmore, a director, is a general partner,
to lease the building which houses the Bank's new Salisbury, Maryland branch
location. The lease term began on September 1, 1997 and expires in August 2002.
The agreement provides for three five-year renewal periods at the Bank's option.
Monthly lease payments during the term of the lease are $2,250 and range from
$2,643 to $3,650 monthly during the renewal periods.
<PAGE>
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
(Proposal Two)
The Board of Directors, upon recommendation of the Audit/Personnel
Committee, has appointed Goodman & Company, L.L.P., as the Company's independent
public accountants for the year ending December 31, 1998, and has further
directed that management submit the selection of independent public accountants
for ratification by the shareholders at the Annual Meeting.
The engagement of BDO Seidman, LLP as the Bank's independent auditors
was terminated in March 1997, and Goodman & Company, L.L.P. was engaged in March
1997, and remains as the independent auditors of the Company and the Bank. The
decision to change auditors was approved by the Board of Directors of the Bank.
During 1995 and 1996, the independent auditor's report with respect to
the Company's financial statements neither contained an adverse opinion or a
disclaimer of opinion, nor were such reports qualified or modified as to
uncertainty, audit-scope or accounting principles. During 1995 and 1996, and up
to the date of the discontinuation of services of BDO Seidman, LLP, there were
no disagreements with BDO Seidman, LLP on any matter of accounting principles or
practices, financial statement disclosure or auditing scope or procedure which,
if not resolved to the satisfaction of BDO Seidman, LLP, would have caused it to
make a reference to the subject matter of the disagreement in connection with
its report. During that period, the Bank did not consult with Goodman & Company,
L.L.P. regarding either (i) the application of accounting principles to a
specific transaction, either completed or proposed, or the type of audit opinion
that might be rendered on the Company's financial statements or (ii) any other
matter that would be required to be reported herein.
Goodman & Company, L.L.P. has advised the Company that neither the firm
nor any member of the firm now has, or has held since the Company's inception in
September 1997, any direct or indirect financial interest in the Company.
Representatives of the firm are expected to be present at the Annual Meeting and
will be given an opportunity to make a statement if they desire to do so and
will be available to respond to appropriate questions.
The Board of Directors recommends that you vote FOR the ratification of
the appointment of Goodman & Company, L.L.P. as independent auditors for the
fiscal year ending December 31, 1998.
SHAREHOLDER PROPOSALS
Any proposal which a shareholder wishes to have included in the proxy
materials of the Company relating to the next annual meeting of shareholders of
the Company, which is scheduled to be held in April 1999, must be received by
the Company's Corporate Secretary, Steven M. Belote, Shore Financial
Corporation, 25253 Lankford Highway, Onley, Virginia 23418, on or before
December 29, 1998. If such proposal is in compliance with all of the
requirements of Rule 14a-8 under the Exchange Act, it will be included in the
proxy statement and set forth on the form of proxy issued for such annual
meeting of shareholders. It is urged that any such proposals be sent by
certified mail, return receipt requested.
Shareholder proposals which are not submitted for inclusion in the
Company's proxy materials pursuant to Rule 14a-8 under the Exchange Act may be
brought before an annual meeting pursuant to Article I, Section 8 of the
Company's Bylaws, which provides that business at an annual meeting of
shareholders must be (a) specified in the notice of meeting (or any supplement
thereto) given by or at the direction of the Board of Directors, (b) otherwise
properly brought before the meeting by or at the direction of the Board of
Directors, or (c) otherwise properly brought before the meeting by a
shareholder. For business to be properly brought before an annual meeting by a
shareholder, the shareholder must have given timely notice thereof in writing to
the Secretary of the Company. To be timely, a shareholder's notice must be
delivered to or mailed and received by the Secretary of the Company not later
than 90 days in advance of the annual meeting. A shareholder's notice to the
Secretary shall set forth as to each matter the shareholder proposes to bring
before the annual meeting: (a) a brief description of the business desired to be
<PAGE>
brought before the annual meeting (including the specific proposal to be
presented) and the reasons for conducting such business at the annual meeting,
(b) the name and record address of the shareholder proposing such business, (c)
the class and number of shares of the Company which are beneficially owned by
the shareholder, and (d) any material interest of the shareholder in such
business.
ANNUAL REPORT
A copy of the Company's Annual Report on Form 10-KSB for 1997,
excluding exhibits, (reflecting the transitional six month period ended December
31, 1997) filed with the Securities and Exchange Commission on March 31, 1998,
can be obtained without charge by writing to Steven M. Belote, Vice President,
Corporate Secretary and Chief Financial Officer, 25253 Lankford Highway 23418.
<PAGE>
PROXY
SHORE FINANCIAL CORPORATION
This Proxy is solicited on behalf of the Board of Directors
The undersigned hereby appoints Henry P. Custis, Jr., Scott C. Harvard,
and Dr. Lloyd J. Kellam, III, jointly and severally, proxies, with full power to
act alone and with full power of substitution, to represent the undersigned and
vote all shares of the Company standing in the name of the undersigned at the
Annual Meeting of Shareholders of Shore Financial Corporation to be held on
Thursday, May 28, 1998 at 1:00 p.m. at The Eastern Shore Chamber of Commerce,
Melfa, Virginia, or any adjournment thereof, on each of the following matters:
1. To elect three Class I directors to serve until the Annual Meeting of
Shareholders in 2001.
[ ] FOR all Nominees listed below [ ] WITHHOLD AUTHORITY TO VOTE FOR THOSE
INDICATED BELOW
Terrell E. Boothe D. Page Elmore A. Jackson Mason
NOTE: You may line through the name of any individual nominee for whom
you wish to withhold your vote.
2. To ratify the selection by the Board of Directors of Goodman & Company,
L.L.P., independent certified public accountants, as auditors of the
Company for 1998.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. The transaction of any other business which may properly come before the
Meeting. Management at present knows of no other business to be presented
at the Meeting.
This proxy, when properly executed, will be voted in the manner
directed by the undersigned shareholder. If no direction is made, this proxy
will be voted FOR each proposal.
When signing as attorney, executor, administrator, trustee or guardian,
please give full title. If more than one fiduciary, all should sign. All joint
owners MUST sign.
Date: ___________________, 1998 _____________________________________
Signature
_____________________________________
Signature if held jointly
