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
ECB BANCORP, INC.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fees (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>
ECB BANCORP, INC.
POST OFFICE BOX 337
ENGELHARD, NORTH CAROLINA 27824
----------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
----------------------------------------
NOTICE is hereby given that the 1999 Annual Meeting of Shareholders of
ECB Bancorp, Inc. ("Bancorp") will be held at The Lodge at Lake Mattamuskeet,
New Holland, North Carolina, at 11:00 a.m., on Wednesday, April 28, 1999. The
purposes of the meeting are:
1. ELECTION OF DIRECTORS. To elect four directors of Bancorp for terms of
three years or until their respective successors are duly elected and
qualified;
2. PROPOSAL TO RATIFY APPOINTMENT OF INDEPENDENT ACCOUNTANTS. To ratify the
appointment of KPMG LLP as Bancorp's independent public accountants for
1999; and,
3. OTHER BUSINESS. To transact any other business properly presented for
action at the Annual Meeting.
YOU ARE INVITED TO ATTEND THE ANNUAL MEETING IN PERSON. HOWEVER, EVEN IF
YOU PLAN TO ATTEND, YOU ARE REQUESTED TO COMPLETE, SIGN, AND DATE THE ENCLOSED
APPOINTMENT OF PROXY AND RETURN IT PROMPTLY IN THE ENVELOPE PROVIDED FOR THAT
PURPOSE TO ENSURE THAT A QUORUM IS PRESENT AT THE ANNUAL MEETING. THE GIVING OF
AN APPOINTMENT OF PROXY WILL NOT AFFECT YOUR RIGHT TO REVOKE IT OR TO ATTEND THE
ANNUAL MEETING AND VOTE IN PERSON.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ ARTHUR H. KEENEY, III
ARTHUR H. KEENEY, III
PRESIDENT AND CHIEF EXECUTIVE OFFICER
MARCH 29, 1999
<PAGE>
ECB BANCORP, INC.
POST OFFICE BOX 337
ENGELHARD, NORTH CAROLINA 27824
---------------
PROXY STATEMENT
---------------
ANNUAL MEETING OF SHAREHOLDERS
GENERAL
This Proxy Statement is being furnished in connection with the
solicitation by the Board of Directors of ECB Bancorp, Inc. ("Bancorp") of the
enclosed appointment of proxy for use at the Annual Meeting of Bancorp's
Shareholders (the "Annual Meeting") to be held on Wednesday, April 28, 1999, at
11:00 a.m., local time, at The Lodge at Lake Mattamuskeet, New Holland, North
Carolina, and at any adjournments thereof. This Proxy Statement is first being
mailed to Bancorp's shareholders on or about March 29, 1999.
VOTING OF APPOINTMENT OF PROXY
Persons named in the enclosed appointment of proxy to represent
shareholders at the Annual Meeting are Gary M. Adams, Arthur H. Keeney, III, and
J. Dorson White, III (the "Proxies"). Shares represented by each appointment of
proxy which is properly executed and returned, and not revoked, will be voted by
the Proxies in accordance with the directions contained therein. If no
directions are given, such shares will be voted by the Proxies "FOR" the
election of each of the nominees named herein as directors of Bancorp, and "FOR"
Proposal 2. If, at or before the time of the Annual Meeting, any nominee named
in Proposal 1 has become unable or unwilling to serve for any reason, the
Proxies will have the discretion to vote for a substitute nominee designated by
the Board of Directors. On any other matters that may properly come before the
Annual Meeting, the Proxies will be authorized to vote in accordance with their
best judgment.
REVOCATION OF APPOINTMENT OF PROXY
Any shareholder who executes an appointment of proxy has the right to
revoke it at any time before it is exercised by filing with Bancorp's Secretary
either a written instrument revoking it or a duly executed appointment of proxy
bearing a later date, or by attending the Annual Meeting and announcing his or
her intention to vote in person.
RECORD DATE
The close of business on March 12, 1999, has been fixed as the record
date (the "Record Date") for the determination of shareholders entitled to
notice of and to vote at the Annual Meeting. Only shareholders of record on the
Record Date will be eligible to vote on the matters presented for action by
shareholders at the Annual Meeting.
<PAGE>
VOTING SECURITIES
Bancorp's voting securities are the shares of its common stock, $3.50
par value per share, of which 2,125,254 shares were outstanding on the Record
Date.
VOTING PROCEDURES; VOTES REQUIRED FOR APPROVAL
At the Annual Meeting, each shareholder will be entitled to one vote for
each share held of record on the Record Date on each matter submitted for voting
and for each director to be elected. In the election of directors, the four
nominees receiving the highest numbers of votes will be elected. The affirmative
vote of a majority of the shares of Bancorp's common stock represented in person
or by proxy and voting at the Annual Meeting is required for approval of
Proposal 2. As long as a quorum is present, abstentions and broker non-votes
will have no effect in the voting at the Annual Meeting. Shareholders may not
vote cumulatively in the election of directors.
EXPENSES OF SOLICITATION
Bancorp will pay all costs of the solicitation of appointments of proxy
for the Annual Meeting, including costs of preparing, assembling, and mailing
this Proxy Statement. In addition to solicitation by mail, appointments of proxy
may be solicited personally or by telephone by directors, officers, and
employees of Bancorp and its bank subsidiary, The East Carolina Bank (the
"Bank").
BENEFICIAL OWNERSHIP OF SECURITIES
The following table describes the beneficial ownership of the
outstanding shares of Bancorp's common stock as of the Record Date by Bancorp's
current directors, nominees for election as directors, and Chief Executive
Officer, individually, and by all directors, nominees, and executive officers as
a group. As of the Record Date, C. Gilbert Gibbs (who is included in the table)
was the only person known to management of Bancorp to beneficially own more than
5% of the outstanding shares of Bancorp's common stock.
NAME OF AMOUNT AND NATURE OF PERCENT
BENEFICIAL OWNER BENEFICIAL OWNERSHIP (1) OF CLASS
---------------- ------------------------ --------
George T. Davis, Jr. 22,044 1.04%
C. Gilbert Gibbs 480,666 (2) 22.62%
Gregory C. Gibbs 5,778 (2) .27%
John F. Hughes, Jr. 2,200 .10%
Arthur H. Keeney, III 3,000 .14%
J. Bryant Kittrell, III 4,850 .23%
Joseph T. Lamb, Jr. 13,983 .66%
B. Martelle Marshall 1,932 .09%
Robert L. Mitchell 2,526 .12%
R. S. Spencer, Jr. 72,963 3.43%
2
<PAGE>
NAME OF AMOUNT AND NATURE OF PERCENT
BENEFICIAL OWNER BENEFICIAL OWNERSHIP (1) OF CLASS
---------------- ------------------------ --------
Ray M. Spencer 7,923 .37%
All current directors and
executive officers as a group
(15 persons) 621,047 (2) 29.22%
- -------------------
(1) Except as otherwise noted, to the best knowledge of management of
Bancorp, the individuals named and included in the group exercise sole
voting and investment power with respect to all shares shown as
beneficially owned other than the following shares as to which such
powers are shared: Mr. Davis - 6,993 shares; Mr. C. Gilbert Gibbs -
74,835 shares; Mr. Gregory C. Gibbs - 828 shares; Mr. Kittrell - 850
shares; Mr. Lamb - 2,265 shares; Mr. Marshall - 741 shares; Mr. Mitchell
- 1,191 shares; Mr. R. S. Spencer, Jr. - 20,172 shares; and all current
directors and executive officers as a group - 107,875 shares.
(2) Includes 828 shares listed as beneficially owned by both Mr. Gregory C.
Gibbs and Mr. C. Gilbert Gibbs, which are counted only once in the total
shares beneficially owned by individuals included in the group.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Bancorp's directors and executive officers are required by Federal law
to file reports with the Securities and Exchange Commission regarding the amount
of and changes in their beneficial ownership of Bancorp's common stock. Through
oversight, reports of purchases of common stock from Bancorp in its public
offering during November 1998 by certain of Bancorp's directors (Messrs. G. T.
Davis, Jr., Gregory C. Gibbs, J. F. Hughes, Jr., A. H. Keeney, III, J. B.
Kittrell, III, R. L. Mitchell, and R. M. Spencer, Jr.) and executive officers
(Messrs. G. M. Adams, W. F. Plyler, II, and J. D. White, and Ms. S. M. Stephens)
were not filed until approximately ten days after their due date.
PROPOSAL 1: ELECTION OF DIRECTORS
Bancorp's bylaws provide for a Board of Directors composed of not less
than nine nor more than 15 members who are divided into three classes and
elected to staggered three-year terms. Each year, the terms of the directors in
one class expire and a number of persons equal to the number of members of that
class are elected as directors of Bancorp for new three-year terms. The number
of Bancorp's directors currently is set at eleven. The terms of four current
directors expire at the Annual Meeting and each of them has been nominated by
the Board of Directors for election at the Annual Meeting to new three-year
terms as directors. The following table contains information about the four
directors who have been nominated for reelection at the Annual Meeting.
<TABLE>
<CAPTION>
POSITION(S) YEAR FIRST PRINCIPAL OCCUPATION AND
NAME AND AGE WITH BANK ELECTED (1) BUSINESS EXPERIENCE DURING PAST FIVE YEARS
------------- ----------- ---------- --------------------------------------------
<S> <C> <C> <C>
C. Gilbert Gibbs (2) Director 1983 Owner, C. G. Gibbs Hardware (hardware store) and
(75) Darkwood Farms (farming operations), Engelhard, NC
J. Bryant Director 1990 President, Kittrell & Associates, Inc. (real
Kittrell, III estate development and sales), Greenville, NC
(47)
B. Martelle Director 1993 Owner, Martelle's Restaurant, Engelhard, NC;
Marshall previously conducted farming operations,
(49) Engelhard, NC
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
POSITION(S) YEAR FIRST PRINCIPAL OCCUPATION AND
NAME AND AGE WITH BANK ELECTED (1) BUSINESS EXPERIENCE DURING PAST FIVE YEARS
------------- ----------- ---------- --------------------------------------------
<S> <C> <C> <C>
R. S. Spencer, Jr. Chairman 1963 President, R. S. Spencer, Inc. (retail merchant),
(58) Engelhard, NC
-------------
</TABLE>
(1) Each person first became a director of Bancorp during 1998 in connection
with Bancorp's organization as the Bank's holding company and previously
had served as a director of the Bank. The term "year first elected"
refers to the year in which each individual first took office as a
director of the Bank.
(2) C. Gilbert Gibbs and Gregory C. Gibbs are father and son, respectively.
The following table contains information about the remaining eight
directors of Bancorp whose terms extend beyond the date of the Annual Meeting.
<TABLE>
<CAPTION>
YEAR FIRST
ELECTED/
POSITION(S) CURRENT TERM PRINCIPAL OCCUPATION AND
NAME AND AGE WITH BANK EXPIRES (1) BUSINESS EXPERIENCE DURING PAST FIVE YEARS
- --------------------- -------------- -------------- ------------------------------------------------
<S> <C> <C> <C>
George T. Davis, Jr. Vice 1979 / 2000 Attorney, Davis & Davis, Swan Quarter, NC
(2) Chairman
(44)
Gregory C. Gibbs (3) Director 1994 / 2000 Student, NC State University, Raleigh, NC;
(38) previously served as Manager, C. G. Gibbs
Hardware (hardware store), Engelhard, NC
John F. Hughes, Jr. Director 1996 / 2000 Regional Manager, North Carolina Power
(53) (utility company), Manteo, NC
Arthur H. Keeney, III President, 1995 / 2001 President and Chief Executive Officer of the
(55) Chief Bank since 1995; previously served as: Vice
Executive President and General Manager, OMG Co.
Officer, and (manufacturer of electronic and
Director telecommunications training devices),
Baltimore, Md. (1994-1995); Recruiting
Consultant, Don Richards and Associates, Inc.
(executive recruiters), Baltimore, Md.
(1993-1994); Executive Director, American
Foundation for Urologic Disease, Baltimore,
Md. (1991-1993); and Executive Vice President,
Signet Bank, Richmond, Va (1983-1991)
Joseph T. Lamb, Jr. Director 1981 / 2001 President, Joe Lamb, Jr. & Associates, Inc.
(65) (real estate sales and rentals), Nags Head, NC
Robert L. Mitchell Director 1981 / 2000 Owner, Mitchell's Barber Shop, Columbia, NC
(82)
Ray M. Spencer Director 1974 / 2001 Retired farmer, Scranton, NC
(76)
- --------------------
</TABLE>
- --------------------
(1) Each person first became a director of Bancorp during 1998 in connection
with Bancorp's organization as the Bank's holding company and previously
had served as a director of the Bank. The term "year first elected"
refers to the year in which each individual first took office as a
director of the Bank.
(2) Mr. Davis provided certain legal services to Bancorp and the Bank during
1998 and is expected to continue to do so during 1999.
(3) C. Gilbert Gibbs and Gregory C. Gibbs are father and son, respectively.
4
<PAGE>
Bancorp's bylaws authorize the Board of Directors to set and change the
number of directors from time to time (within the minimum and maximum numbers
described above). An increase in the number of directors will result in a
vacancy on the Board of Directors which may be filled by the Board without
shareholder approval. However, any person appointed by the Board to fill a
vacancy could serve as a director only until the next meeting of shareholders at
which directors are to be elected, and his or her continued service as a
director would be subject to reelection by shareholders at that meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" EACH OF
THE FOUR NOMINEES FOR DIRECTOR NAMED ABOVE. IN THE ELECTION OF DIRECTORS, THE
FOUR NOMINEES RECEIVING THE HIGHEST NUMBERS OF VOTES WILL BE ELECTED.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
Bancorp's Board of Directors met five times during 1998. Each director
attended 75% or more of the aggregate number of meetings of the Board of
Directors and any committees on which he served. Bancorp's Board of Directors
has several standing committees, including an Executive Committee (which also
serves as a nominating committee), an Audit Committee, and a
Compensation/Incentive Committee.
The Executive Committee may act, between meetings of the Board of
Directors, with all the authority of the full Board, and also acts as a
nominating committee by making recommendations to the Board of Directors
regarding nominees for election as directors. The Board of Directors makes all
final determinations regarding the selection of nominees. The current members of
the committee are Messrs. A. H. Keeney, III - Chairman, G. T. Davis, Jr.,
C. Gilbert Gibbs, J. B. Kittrell, III, and R. S. Spencer, Jr. The committee met
once during 1998 in its capacity as a nominating committee. In making its
recommendations to the Board of Directors, the committee will consider
candidates recommended by shareholders. Any such recommendation should be made
in writing and include a statement of the candidate's qualifications to serve as
a director.
The Audit Committee reviews reports of annual audits by the Bank's
independent auditors and examinations of the Bank by its regulators, and
monitors the results of the Bank's internal audit programs. The current members
of the committee are Messrs. J. B. Kittrell, III - Chairman, Gregory C. Gibbs,
J. F. Hughes, Jr., B. M. Marshall, and R. S. Spencer, Jr. The committee met
seven times during 1998.
The Compensation/Incentive Committee evaluates and makes recommendations
to the Board of Directors with respect to the compensation and benefits of the
Bank's officers and employees. The Committee also administers Bancorp's Omnibus
Stock Ownership and Long Tern Incentive Plan. The current members of the
committee are Messrs. G. T. Davis, Jr. - Chairman, C. Gilbert Gibbs, J. B.
Kittrell, III, and R. S. Spencer, Jr. The committee met three times during 1998.
DIRECTOR COMPENSATION
The members of Bancorp's and the Bank's Boards of Directors are the
same. During 1998, the Bank paid each of its directors a fee of $350 for each
Board meeting attended, and members of committees of the Board of Directors
received a fee for each committee meeting attended ($350 for the Executive
Committee and $200 for each other committee). Directors are reimbursed for
travel expenses incurred in attending Board and committee meetings. Directors
who also are employees of the Bank do not receive
5
<PAGE>
any fees for their services as directors. For 1999, attendance fees have been
increased to $500 for each Board meeting attended, $400 for each Executive
Committee meeting attended, and $250 for each meeting of another committee
attended. Additionally, beginning in 1999, the Chairman will receive an annual
retainer of $3,000. Directors do not receive any additional compensation for
their service as members of Bancorp's Board of Directors.
EXECUTIVE OFFICERS
ARTHUR H. KEENEY, III, age 55, serves as President and Chief Executive
Officer of Bancorp and the Bank and has been employed by the Bank since 1995. A
listing of previous positions held by Mr. Keeney is contained above in his
listing as a director.
J. DORSON WHITE, JR., age 48, serves as Executive Vice President and
Branch Administrator of the Bank. He has been employed by the Bank since 1989.
GARY M. ADAMS, age 45, serves as Senior Vice President and Chief
Financial Officer of Bancorp and the Bank. He has been employed by the Bank
since 1981.
WILLIAM F. PLYLER, II, age 55, serves as Senior Vice President and Chief
Credit Officer and has been employed by the Bank since 1995. Mr. Plyler
previously served as Vice President in the Credit Policy Division for Southern
National Bank, Winston-Salem, North Carolina, from 1993 to 1995, and held
various positions in Lending and Credit Administration with Wachovia Bank of
North Carolina, N.A., from 1966 to 1993.
SARAH M. STEPHENS, age 41, serves as Senior Vice President and Director
of Human Resources of the Bank. She has been employed by the Bank since 1988.
EXECUTIVE COMPENSATION
The following table shows the cash and certain other compensation paid
to or received or deferred by Bancorp's Chief Executive Officer for 1998, 1997,
and 1996. All compensation was paid by the Bank.
SUMMARY COMPENSATION TABLE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
-------------------------------------------
NAME AND SALARY BONUS OTHER ANNUAL ALL OTHER
PRINCIPAL POSITION YEAR ($)(1) ($)(2) COMPENSATION ($)(3) COMPENSATION ($)(4)
- ------------------------- ---- --------- -------- ------------------- -------------------
<S> <C> <C> <C> <C> <C>
Arthur H. Keeney, III, 1998 112,001 28,000 780 15,558
President and Chief
Executive Officer (5) 1997 103,599 26,880 780 14,939
1996 95,646 33,000 780 19,402
- ---------------------------
</TABLE>
(1) Includes amounts deferred at Mr. Keeney's election pursuant to the
Bank's Section 401(k) salary deferral plan.
(2) The Bank maintains an annual incentive bonus plan (the "Incentive Plan")
under which cash bonus awards may be paid each year to executive
officers and other officers and employees of the Bank based on the
extent to which the Bank and the participant achieve specific
performance goals. The Bank's Chief Executive Officer each year approves
a list of eligible employees to participate in the Incentive Plan and
participants are assigned to one of seven tiers based upon job titles
and responsibilities. Each tier is assigned
6
<PAGE>
performance goals and bonuses are awarded based upon the extent to which
such goals are achieved. Performance goals under the Incentive Plan are
stated each year as various levels of return on average assets, return
on average equity, operating expenses as a percentage of average assets,
branch performance criteria, and department operating criteria.
(3) In addition to compensation paid in cash, Mr. Keeney receives certain
personal benefits, including the use of a vehicle owned by the Bank. The
value of such non-cash benefits received by Mr. Keeney during each year
did not exceed 10% of his cash compensation for that year.
(4) The amount reported for 1998 consists of $7,466 attributable to premiums
paid by the Bank on an insurance policy used to fund a supplemental
retirement plan established by the Bank and $8,092 in contributions by
the Bank to the Section 401(k) salary deferral plan for Mr. Keeney's
account.
(5) Mr. Keeney's employment with the Bank commenced during 1995. He
currently serves as President and Chief Executive Officer of the Bank
pursuant to an employment agreement which provides for a term of three
years. At the end of each year, the term automatically will be extended
for one additional year, subject to the Bank's option that the agreement
not be so extended. The agreement may be terminated by the Bank for
conduct constituting "cause" (as such term is defined in the agreement).
Mr. Keeney's annual base salary for 1999 under the agreement has been
set at $130,000 by the Bank's Board of Directors, he is entitled to
discretionary bonuses as may be determined by the Board of Directors
from time to time, and he has agreed not to compete with the Bank in the
areas in which it does business following the termination of his
employment. In the event that, following a "change in control" of the
Bank, Mr. Keeney's employment is terminated without cause or his duties
are substantially reduced relative to his position prior to such
transaction, he will be entitled to receive payment of an amount equal
to 2.99 times the average of his salary, cash bonus, and incentive
payments during the preceding three years.
STOCK OPTIONS
During January 1998, the Bank's Board of Directors adopted an Omnibus
Stock Ownership and Long Term Incentive Plan (the "Omnibus Plan"), which was
approved by the Bank's shareholders at the May 13, 1998 annual meeting, and
awarded to certain officers of the Bank options to purchase an aggregate of
9,516 shares of the Bank's common stock at a price of $12.50 per share (as such
number of shares and purchase price have been adjusted in accordance with the
terms of the Omnibus Plan to reflect the three-for-one split in the Bank's
common stock which was effective July 22, 1998). Upon consummation of Bancorp's
acquisition of the Bank during July 1998, Bancorp assumed the Omnibus Plan as
its own, and all then outstanding options previously granted by the Bank under
the Omnibus Plan were converted, in accordance with their terms and the Omnibus
Plan, into options to purchase shares of Bancorp's common stock. The following
tables contain certain information regarding options granted to and currently
held by Bancorp's Chief Executive Officer under the Omnibus Plan.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM
- --------------------------------------------------------------------------- --------------------------
NO. OF % OF TOTAL
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO
OPTIONS/SARS EMPLOYEES IN EXERCISE OR
GRANTED FISCAL BASE PRICE EXPIRATION
NAME (#)(1) YEAR ($/SHARE)(1) DATE 5% ($) 10%($)
----- ------------ ------------ ---------- ---------- ------ ------
<S> <C> <C> <C> <C> <C> <C>
Arthur H. Keeney, III 4,422 46.5% $12.50 01/21/08 $39,264 $102,431
</TABLE>
- -------------
(1) Options become exercisable as to one-third of the covered shares on
January 21 each year, beginning January 21, 2001, and expire ten years
following the date of grant. The number of shares granted and exercise
price have been adjusted in accordance with the terms of the Omnibus
Plan to reflect the effect of the three-for-one stock split in the
Bank's common stock which was effective on July 22, 1998.
7
<PAGE>
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT FY-END (1) OPTIONS/SARS AT FY-END (2)
----------------------------- --------------------------
SHARES
ACQUIRED VALUE
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- --------------------- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Arthur H. Keeney, III -0- $ -0- -0- 4,422 $ -0- $ 13,841
</TABLE>
- ---------------
(1) The number of shares and exercise price have been adjusted in accordance
with the terms of the Omnibus Plan to give effect to the three-for-one
stock split which was effective on July 22, 1998.
(2) Reflects the difference between the aggregate market value and the
aggregate exercise price of the underlying shares on December 31, 1998.
The market price of the underlying shares is based on the $15.63 closing
sale price of Bancorp's common stock on the Nasdaq Small Cap Market on
December 31, 1998. The closing sale price of Bancorp's common stock on
March 1, 1999, was $14.00, and the value of the unexercised options on
that date was $7,208.
TRANSACTIONS WITH MANAGEMENT
The Bank has had, and expects to have in the future, banking
transactions in the ordinary course of business with certain of its directors,
executive officers, and their associates. All loans included in such
transactions were made on substantially the same terms, including interest
rates, repayment terms, and collateral, as those prevailing at the time such
loans were made for comparable transactions with other persons, and do not
involve more than the normal risk of collectibility or present other unfavorable
features.
PROPOSAL 2: RATIFICATION OF APPOINTMENT OF ACCOUNTANTS
The certified public accounting firm of KPMG LLP has been appointed by
the Board of Directors to serve as Bancorp's independent accountants for 1999,
and a proposal to ratify that appointment will be submitted for voting by
shareholders at the Annual Meeting. Representatives of KPMG LLP are expected to
attend the Annual Meeting and be available to respond to appropriate questions,
and they will have the opportunity to make a statement if they desire to do so.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" PROPOSAL 2.
THE FAVORABLE VOTE OF A MAJORITY OF THE SHARES VOTING IN PERSON OR BY PROXY
AT THE ANNUAL MEETING IS REQUIRED FOR APPROVAL.
OTHER MATTERS
The Board of Directors knows of no other business that will be brought
before the Annual Meeting. However, should other matters properly be presented
for action at the Annual Meeting, the Proxies, or their substitutes, will be
authorized to vote shares represented by appointments of proxy according to
their best judgment.
8
<PAGE>
PROPOSALS OF SHAREHOLDERS
Any proposal (other than nominations for director) of a shareholder
which is intended to be presented for action at the 2000 Annual Meeting must be
received by Bancorp at its main office in Engelhard, North Carolina, no later
than November 30, 1999, to be considered timely received for inclusion in the
proxy statement and form of appointment of proxy issued in connection with that
meeting. In order for such a proposal to be included in Bancorp's proxy
statement and form of appointment of proxy, the person submitting it must own,
beneficially or of record, at least 1% or $1,000 in market value of shares of
Bancorp's common stock entitled to be voted on that proposal at the meeting and
must have held those shares for a period of at least one year and continue to
hold them through the date of the meeting.
ADDITIONAL INFORMATION
Bancorp is subject to the reporting requirements of the Securities
Exchange Act of 1934 and, in accordance therewith, files reports and other
information with the Securities and Exchange Commission, including without
limitation proxy statements, annual reports, and quarterly reports.
A COPY OF THE BANCORP'S 1998 ANNUAL REPORT ON FORM 10-KSB AS FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION WILL BE PROVIDED WITHOUT CHARGE UPON THE
WRITTEN REQUEST OF ANY SHAREHOLDER ENTITLED TO VOTE AT THE ANNUAL MEETING.
REQUESTS FOR COPIES SHOULD BE DIRECTED TO GARY M. ADAMS, CHIEF FINANCIAL
OFFICER, ECB BANCORP, INC., POST OFFICE BOX 337, ENGELHARD, NORTH CAROLINA
27824.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ ARTHUR H. KEENEY, III
ARTHUR H. KEENEY, III
PRESIDENT AND CHIEF EXECUTIVE OFFICER
MARCH 29, 1999
9
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ECB BANCORP, INC.
P.O. BOX 337
ENGELHARD, N.C. 27824
APPOINTMENT OF PROXY SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints Arthur H. Keeney, III, Gary M. Adams and
J. Dorson White, Jr., or any of them, as proxies, with full power of
substitution, to vote the shares of the common stock of ECB Bancorp, Inc.
("Bancorp") held of record by the undersigned on March 12, 1999, at the Annual
Meeting of Shareholders of Bancorp (the "Annual Meeting") to be held at The
Lodge at Lake Mattamuskeet, New Holland, North Carolina, at 11:00 a.m. on
Wednesday, April 28, 1999, and at any adjournments thereof. The undersigned
hereby directs that the shares represented by this appointment of proxy be voted
as follows on the proposals listed below:
1. ELECTION OF DIRECTORS: Proposal to elect four directors of Bancorp for
three-year terms or until their successors are duly elected and
qualified.
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY to
(except as indicated otherwise vote for all
on the line below) nominees listed below
NOMINEES: C. Gilbert Gibbs; J. Bryant Kittrell, III; B. Martelle
Marshall; and R.S. Spencer, Jr.
INSTRUCTIONS: To withhold authority to vote for any individual
nominee(s), write the nominee's name(s) on the line below.
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2. PROPOSAL TO RATIFY APPOINTMENT OF INDEPENDENT ACCOUNTANTS: Proposal to
ratify the appointment of KPMG LLP as Bancorp's independent accountants
for 1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. OTHER BUSINESS: On such other matters as may properly come before the
meeting, the persons named herein as proxies are authorized to vote the
shares represented by this appointment of proxy in accordance with their
best judgment.
PLEASE DATE AND SIGN THIS APPOINTMENT OF PROXY ON THE REVERSE
SIDE AND RETURN IT TO BANCORP IN THE ENVELOPE PROVIDED.
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THE SHARES REPRESENTED BY THIS APPOINTMENT OF PROXY WILL BE VOTED AS
DIRECTED ABOVE. IN THE ABSENCE OF ANY DIRECTION, THE PROXIES WILL VOTE THE
SHARES REPRESENTED BY THIS APPOINTMENT OF PROXY FOR THE ELECTION OF EACH NOMINEE
NAMED IN PROPOSAL 1 AND FOR PROPOSAL 2. IF, AT OR BEFORE THE TIME OF THE ANNUAL
MEETING, ANY NOMINEE LISTED IN PROPOSAL 1 HAS BECOME UNABLE OR UNWILLING TO
SERVE FOR ANY REASON, THE PROXIES ARE AUTHORIZED TO VOTE FOR A SUBSTITUTE
NOMINEE DESIGNATED BY THE BOARD OF DIRECTORS. THIS APPOINTMENT OF PROXY MAY BE
REVOKED BY THE HOLDER OF THE SHARES TO WHICH IT RELATES AT ANY TIME BEFORE IT IS
EXERCISED BY FILING WITH THE SECRETARY OF BANCORP A WRITTEN INSTRUMENT REVOKING
IT OR A DULY EXECUTED APPOINTMENT OF PROXY BEARING A LATER DATE, OR BY ATTENDING
THE ANNUAL MEETING AND ANNOUNCING HIS OR HER INTENTION TO VOTE IN PERSON.
DATED:___________________________, 1999
_______________________________________
SIGNATURE
____________________________________________
JOINT SIGNATURE (IF SHARES ARE HELD JOINTLY)
Instruction: Please sign above exactly as
your name appears on this appointment of
proxy. Joint owners of shares should both
sign. Fiduciaries or other persons signing in
a representative capacity should indicate the
capacity in which they are signing.
IMPORTANT: TO INSURE THAT A QUORUM IS PRESENT AT THE ANNUAL MEETING, PLEASE SEND
IN YOUR APPOINTMENT OF PROXY WHETHER OR NOT YOU PLAN TO ATTEND. EVEN IF YOU SEND
IN YOUR APPOINTMENT OF PROXY, YOU WILL BE ABLE TO VOTE IN PERSON AT THE ANNUAL
MEETING IF YOU SO DESIRE.
