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
SHORE FINANCIAL CORPORATION
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than 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:
<PAGE>
[Shore Financial Corporation Letterhead]
March 17, 1999
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders of
Shore Financial Corporation (the "Company"). The meeting will be held on
Tuesday, April 20, 1999 at 10:00 a.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 1999. 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 April 20th for the meeting. Whether you
plan to attend or not, please complete, sign, date and return the enclosed proxy
card 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 April 20, 1999
The Annual Meeting of Shareholders of Shore Financial Corporation (the
"Company") will be held on April 20, 1999 at 10:00 a.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 the fiscal year 1999; and
3. To transact such other business as may properly come before the
meeting or any adjournments thereof.
The Board of Directors has fixed March 1, 1999, 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
March 15, 1999
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
APRIL 20, 1999
GENERAL
The enclosed proxy is solicited by the Board of Directors of Shore
Financial Corporation (the "Company") for the Annual Meeting of Shareholders
(the "Annual Meeting") of the Company to be held on Tuesday, April 20, 1999, 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 March 17, 1999.
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 March 1, 1999 (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 II 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 II directors. If elected, the three nominees will serve until the
Annual Meeting of Shareholders held in 2002. 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 executive 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
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> <C>
Class II (Nominees):
Dr. Lloyd J. Kellam, III (44) 1992 Physician, Eastern Shore Physicians
and Surgeons, Nassawadox, Virginia.
Henry P. Custis, Jr. (53) 1987 Chairman of the Board of the Company
and the Bank; Partner, Custis, Lewis &
Dix, a law firm in Accomac, Virginia.
L. Dixon Leatherbury (49) 1981 President and General Manager,
Leatherbury Equipment Co., Cheriton,
Virginia; President, Wakefield
Equipment Co., Wakefield, Virginia.
<PAGE>
Class III (Directors Serving Until the 2000 Annual Meeting):
Richard F. Hall, III (46) 1997 Owner, Loblolly Farms, Accomac,
Virginia; Owner, Seaside Produce,
Accomac, Virginia.
Scott C. Harvard (44) 1985 President and Chief Executive Officer
of the Company and the Bank.
Class I (Directors Serving Until the 2001 Annual Meeting):
Terrell E. Boothe (55) 1985 President, Terrell E. Boothe, Inc.,
Chincoteague, Virginia.
D. Page Elmore (59) 1995 President and Chief Operating Officer,
Shore Disposal, Inc., Painter, Virginia (until
1998); President and Chief Operating Officer,
James H. Hartman & Sons, Inc.,
Pocomoke, Maryland.
A. Jackson Mason (65) 1968 President, Mason-Davis Co., Inc.,
Accomac, Virginia (until 1998).
</TABLE>
- ------------------
(1) Includes service as a director of the Bank.
Board of Directors and Committees
There were 12 meetings of the Board of Directors of the Bank in 1998. 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
1998.
The Board of Directors of the Bank and its subsidiary has established
various committees, including Loan, Investment, Audit/Expense, and Compensation.
The full Board of Directors 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 1998.
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 during 1998.
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 four times in 1998. 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. Hall, Harvard, Custis and Boothe, met during 1998.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth, as of March 1, 1999, 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. 127,059 (2) 6.8%
D. Page Elmore 6,877 (3)
Richard F. Hall, III 49,191 (2) 2.6%
Scott C. Harvard 68,279(2)(4) 3.7%
Dr. Lloyd J. Kellam, III 4,587 (2) (3)
L. Dixon Leatherbury 32,950 1.8%
A. Jackson Mason 44,600 (2) 2.4%
All directors and executive officers
as a group (13 persons) 371,825 (4) 20.0%
- -----------------------
(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. Custis Jr. 2,512 shares, Mr. Hall Jr., 60,000
shares, Mr. Hall III, 19,700 shares, Mr. Mason, 10,000 shares, Dr. Kellam,
64 shares, and Mr. Harvard, 6,508 shares.
(3) Represents less than 1% of Company Common Stock.
(4) Includes 35,000 shares that may be acquired by Mr. Harvard and 15,000
shares that may be acquired by other executive officers of the Bank
pursuant to currently exercisable options granted under the Bank's Stock
Option Plan.
<PAGE>
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,
1998.
MANAGEMENT COMPENSATION
During 1998, 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
-----------
Securities
Name and Annual Compensation(1) Underlying All Other
Principal Position Year Salary Bonus Options(2) Compensation(3)
- ------------------ ---- ------ ----- ---------- ---------------
<S> <C> <C> <C> <C> <C>
Scott C. Harvard 1998 $110,000 $ 0 6,000 $23,900
President and Chief 1997 $110,000 $25,000 5,000 $11,700
Executive Officer 1996 $100,000 $20,000 ------ $10,800
</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 and life
insurance policy for the named executive officer.
<PAGE>
Stock Option Grants in 1998
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 1998.
Option Grants in 1998
Percent of
Number of Total
Shares Options
Underlying Granted to Exercise
Options Employees Price per Expiration
Name Granted in 1998 Share(1) Date
---- --------- ---------- -------- -----
Scott C. Harvard 6,000 37.5% $ 10.00 10/1/2008
- --------------------
(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 1998 and Year-end Option Values
The following table shows certain information with respect to the number
and value of unexercised options at year-end. During 1998, Mr. Harvard exercised
stock options as indicated in the following table.
<TABLE>
<CAPTION>
Number of Value of
Number of Shares Underlying Unexercised
Shares Unexercised In-the-Money
Acquired Value Options at Options at
Name or Exercised Realized December 31, 1998 December 31, 1998 (1)
----- ------------ -------- ----------------- ---------------------
<S> <C> <C> <C> <C>
Scott C. Harvard 6,000 $49,710 35,000 $178,445
</TABLE>
- ----------------------------
(1) Calculated by subtracting the exercise price from the fair market value
of the stock at December 31, 1998
Compensation of Directors
The members of the Board of Directors of the Company, and committees
thereof, receive no fees for their services.
During 1998, each member of the Board of Directors of the Bank was paid a
monthly fee of $500 regardless of whether he attended meetings of the Board,
except for Henry P. Custis, Jr., who received a monthly fee of $1,000 as
Chairman of the Board of the Bank, and Mr. Harvard, who is not compensated for
his service as director. Each director was paid $100 per each committee meeting
attended, except for Mr. Harvard.
<PAGE>
Employment Agreement
On December 1, 1992, the Bank and Mr. Harvard entered into a 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 calendar year 1998, the Bank contributed $33,700 to the 401(k) Plan,
$4,950 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 are
nontransferable except by will or the laws of descent and distribution.
[GRAPH]
SHBK PEER NASDAQ
100 100 100
107.316 110.226 103.358
139.023 125.095 96.918
121.95 132.243 113.401
120.731 129.716 116.685
97.56 109.403 105.636
108.536 123.907 136.242
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 downtown 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.
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, 1999, and has further directed that management submit the selection
of independent public accountants for ratification by the shareholders at the
Annual Meeting.
<PAGE>
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
and by a majority of shareholders at the May 28, 1998 Annual Meeting of
Shareholders.
During 1996 and 1997, the independent auditor's report with respect to the
Company's and the Bank'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 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, 1999.
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 2000, must be received by
the Company's Corporate Secretary, Steven M. Belote, Shore Financial
Corporation, P.O. Box 920, 25253 Lankford Highway, Onley, Virginia 23418, on or
before November 15, 1999. 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
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.
<PAGE>
ANNUAL REPORT
A copy of the Company's Annual Report on Form 10-KSB for 1998, excluding
exhibits, (reflecting the transitional six month period ended December 31, 1997)
filed with the Securities and Exchange Commission on or before March 31, 1999,
can be obtained without charge by writing to Steven M. Belote, Vice President,
Corporate Secretary and Chief Financial Officer, P.O. Box 920, 25253 Lankford
Highway, Onley, Virginia 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. and Scott C. Harvard,
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 Tuesday, April 20, 1999 at 10:00 a.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 II directors to serve until the Annual Meeting of
Shareholders in 2002.
[ ] FOR ALL NOMINEES [ ] WITHHOLD AUTHORITY TO
LISTED BELOW VOTE FOR THOSE INDICATED
BELOW
Dr. Lloyd J. Kellam, III Henry P. Custis, Jr. L. Dixon Leatherbury
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 1999.
[ ] 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: ___________, 1999 _____________________________________
Signature
_____________________________________
Signature if held jointly
