January 20, 2000
Dear Shareholder:
You are cordially invited to attend the 2000 Annual Meeting of
Shareholders (the "Meeting") of Wake Forest Bancshares, Inc. (the "Company"),
which will be held on February 22, 2000 at 2:00 p.m., local time, at the Wake
Forest Police and Justice Center, 401 Elm Avenue, Wake Forest, North Carolina.
The attached Notice of the 2000 Annual Meeting of Shareholders and
Proxy Statement describe the formal business to be transacted at the Meeting.
Directors and officers of the Company, as well as a representative of McGladrey
& Pullen, LLP, the accounting firm appointed by the Board of Directors to be the
Company's independent auditors for the fiscal year ending September 30, 2000,
will be present at the Meeting to respond to questions.
The Board of Directors of the Company has determined that an
affirmative vote on each matter to be considered at the Meeting is in the best
interests of the Company and its shareholders and unanimously recommends a vote
"FOR" each of these matters.
Please complete, sign and return the enclosed proxy card promptly
whether or not you plan to attend the Meeting. Your vote is important regardless
of the number of shares you own. Voting by proxy will not prevent you from
voting in person at the Meeting, but will assure that your vote is counted if
you are unable to attend. IF YOU ARE A SHAREHOLDER WHOSE SHARES ARE NOT
REGISTERED IN YOUR OWN NAME, YOU WILL NEED ADDITIONAL DOCUMENTATION FROM YOUR
RECORD HOLDER TO ATTEND AND TO VOTE PERSONALLY AT THE ANNUAL MEETING. EXAMPLES
OF SUCH DOCUMENTATION INCLUDE A BROKER'S STATEMENT, LETTER OR OTHER DOCUMENT
CONFIRMING YOUR OWNERSHIP OF SHARES OF THE COMPANY.
On behalf of the Board of Directors and the employees of Wake Forest
Bancshares, Inc., we thank you for your interest.
Sincerely yours,
Anna O. Sumerlin
President and Chief Executive Officer
<PAGE>
WAKE FOREST BANCSHARES, INC.
302 S. BROOKS STREET, P.O. BOX 1167
WAKE FOREST, NORTH CAROLINA 27588-1167
(919) 556-5146
NOTICE OF THE 2000 ANNUAL MEETING OF SHAREHOLDERS
DATE: TUESDAY, FEBRUARY 22, 2000
TIME: 2:00 P.M., LOCAL TIME
PLACE: WAKE FOREST POLICE AND JUSTICE CENTER
401 ELM AVENUE
WAKE FOREST, NORTH CAROLINA
At your 2000 Annual Meeting, we will ask you to:
o Elect three directors to serve for a three-year term expiring
at the 2003 annual meeting;
Anna O. Sumerlin Paul Brixhoff Harold R. Washington
o Ratify the appointment of McGladrey & Pullen, LLP as
independent public accountants for the fiscal year ending
September 30, 2000; and
o Transact any other business as may properly come before the
Annual Meeting.
You may vote at the Annual Meeting and at any adjournment or
postponement thereof if you were a shareholder of the Company at the close of
business on December 29, 1999, the record date.
By Order of the Board of Directors,
Carlton E. Chappell
Secretary
Wake Forest, North Carolina
January 20, 2000
================================================================================
You are cordially invited to attend the Annual Meeting. It is important that
your shares be represented regardless of the number of shares you own. The Board
of Directors urges you to sign, date and mark the enclosed proxy card promptly
and return it in the enclosed envelope. Returning the proxy card will not
prevent you from voting in person if you attend the Annual Meeting.
================================================================================
<PAGE>
GENERAL INFORMATION
GENERAL
We have sent to the shareholders of Wake Forest Bancshares, Inc. (the
"Company") this Proxy Statement and enclosed proxy card because the Board of
Directors of the Company is soliciting your proxy to vote at the Annual Meeting.
You do not need to attend the Annual Meeting to vote your shares. You may simply
complete, sign and return the enclosed proxy card, and your votes will be cast
for you at the Annual Meeting.
We began mailing this Proxy Statement, the Notice of Annual Meeting and
the enclosed proxy card on or about January 20, 2000 to all shareholders
entitled to vote. If you owned shares of the Company's common stock at the close
of business on December 29, 1999, the record date, you are entitled to vote at
the Annual Meeting. On the record date, there were 1,185,462 shares of common
stock issued and outstanding.
QUORUM REQUIREMENT
A quorum of shareholders is necessary to hold a valid meeting. The
presence, in person or by proxy, of holders of at least a majority of the total
number of votes eligible to be cast in election of directors generally by the
holders of the outstanding shares entitled to vote at the Annual Meeting is
necessary to constitute a quorum.
VOTING RIGHTS
You are entitled to one vote at the Annual Meeting for each share of
the Company's common stock that you owned of record at the close of business on
December 29, 1999. The number of shares you own (and may vote) is listed at the
top of the back of the proxy card.
You may vote your shares at the Annual Meeting in person or by proxy.
To vote in person, you must attend the Annual Meeting, and obtain and submit a
ballot, which we will provide to you at the Annual Meeting. To vote by proxy,
you must complete, sign and return the enclosed proxy card. If you properly
complete your proxy card and send it to us in time to vote, your "proxy" (one of
the individuals name on your proxy card) will vote your shares as you have
directed. IF YOU SIGN THE PROXY CARD BUT DO NOT SPECIFY HOW YOU WANT TO VOTE
YOUR SHARES, YOUR PROXY WILL VOTE YOUR SHARES FOR THE ELECTION OF THE NOMINEES
FOR DIRECTOR AND FOR THE RATIFICATION OF THE APPOINTMENT OF THE COMPANY'S
INDEPENDENT PUBLIC ACCOUNTANTS.
If any other matter is presented, your proxy will vote the shares
represented by all properly executed proxies on such matters as a majority of
the Board of Directors determines. As of the date of this Proxy Statement, we
know of no other matters that may be presented at the Annual Meeting, other than
those listed in this Proxy Statement.
-1-
<PAGE>
VOTE REQUIRED
PROPOSAL 1: The three nominees for director who receive the
Elect Three Directors most votes will be elected. So, if you do not
vote for a nominee, or you indicate "withhold
authority" for any nominee on your proxy card,
your vote will not count "for" or "against" the
nominee. You may not vote your shares
cumulatively for the election of directors.
PROPOSAL 2: The affirmative vote of a majority of the
Ratify the shares present in person or by proxy at the
Appointment of Annual Meeting and entitled to vote on this
Independent Public proposal is required to ratify the appointment
Accountants of McGladrey & Pullen, LLP as the Company's
independent certified public accountants. So,
if you "abstain" from voting, it has the same
effect as if you voted "against" this proposal.
PROPOSAL 3: The affirmative vote of a majority of the
Authorize the Board shares present in person or by proxy at the
of Directors to Direct Annual Meeting and entitled to vote on this
the Vote of the proposal is required to authorize the board of
Proxies upon Such directors to direct the vote of the proxies
Other Matters as upon such other matters as may properly come
May Properly Come before the annual meeting. So, if you "abstain"
Before the Annual from voting, it has the same effect as if you
Meeting. voted "against" this proposal.
EFFECT OF BROKER NON-VOTES
If your broker holds shares that you own in "street name", the broker
may vote your shares on Proposal 1 and 2 listed above even if the broker does
not receive instructions from you. If your broker does not vote on a proposal,
this will constitute a "broker non-vote." Here is the effect of a "broker
non-vote."
o PROPOSAL 1: Elect Three Directors. A broker non-vote would have no
effect on the outcome of this proposal because only a plurality of
votes cast is required to elect a director.
o PROPOSAL 2: Ratify Appointment of Independent Public Accountants. A
broker non-vote would have no effect on the outcome of this proposal.
o PROPOSAL 3: Authorize the Board of Directors to Direct the Vote of the
Proxies upon Such Other Matters as May Properly Come Before the Annual
Meeting. A broker non-vote would have no effect on the outcome of this
proposal.
CONFIDENTIAL VOTING POLICY
The Company maintains a policy of keeping stockholder votes
confidential. We only let our Inspectors of Election and certain employees of
our independent tabulating agent examine the voting materials. We will not
disclose your vote to management unless it is necessary to meet legal
requirements. We will, however, forward any written comments that you may have
to management.
-2-
<PAGE>
REVOKING YOUR PROXY
You may revoke your proxy at any time before it is exercised by:
o Filing with the Company a letter revoking the proxy;
o Submitting another signed proxy with a later date; and
o Attending the Annual Meeting and voting in person, if you file a
written revocation with the Secretary of the Annual Meeting prior to
the voting of such proxy.
IF YOUR SHARES ARE NOT REGISTERED IN YOUR OWN NAME, YOU WILL NEED
APPROPRIATE DOCUMENTATION FROM YOUR STOCKHOLDER OF RECORD TO VOTE PERSONALLY AT
THE ANNUAL MEETING. Examples of such documentation include a valid proxy from
registered holder of your shares confirming your ownership of shares of the
Company.
SOLICITATION OF PROXIES
The Company will pay the costs of soliciting proxies from its
shareholders. Directors, officers or employees of the Company and the Bank may
solicit proxies by:
o mail;
o telephone; and
o other forms of communication.
We will reimburse banks, brokers, nominees and other fiduciaries for
the expenses they incur in forwarding the proxy materials to you.
OBTAINING AN ANNUAL REPORT ON FORM 10-KSB
If you would like a copy of our Annual Report on Form 10-KSB for the
year ended September 30, 1999, which will be filed with the Securities and
Exchange Commission ("SEC"), we will send you one (without exhibits) free of
charge. Please write to:
Carlton E. Chappell
Vice President, Secretary and Treasurer
Wake Forest Bancshares, Inc.
302 S. Brooks Street
Wake Forest, North Carolina 27587
-3-
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
PRINCIPAL SHAREHOLDERS OF THE COMPANY
The following table sets forth, as of December 29, 1999, certain
information as to common stock beneficially owned by persons owning in excess of
5% of the outstanding shares of common stock. Management knows of no person,
except as listed below, who beneficially owned more than 5% of the Company's
outstanding shares of common stock as of December 29, 1999. Except as otherwise
indicated, the information provided in the following table was obtained from
filings with the SEC and with the Company pursuant to the Securities Exchange
Act of 1934, as amended (the "Exchange Act"). Addresses provided are those
listed in the filings as the address of the person authorized to receive notices
and communications. For purposes of the table below and the table set forth
under "Security Ownership of Management," in accordance with Rule 13d-3 under
the Exchange Act, a person is deemed to be the beneficial owner, for purposes of
this table, of any shares of Common stock (1) over which he has or shares,
directly or indirectly, voting or investment power, or (2) of which he has the
right to acquire beneficial ownership at any time within 60 days after December
29, 1999. As used herein, "voting power" is the power to vote or direct the
voting of shares and "investment power" includes the power to dispose or direct
the disposition of such shares.
NAME AND ADDRESS OF AMOUNT AND NATURE OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP PERCENT
---------------- -------------------- -------
Wake Forest Bancorp, M.H.C. 635,000 53.6%
302 S. Brooks Street, P.O. Box 1167
Wake Forest, North Carolina 27588-1167
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information with respect to the shares
of common stock beneficially owned by each director of the Company, by each
named executive officer of the Company identified in the Summary Compensation
Table included elsewhere herein, and all directors and executive officers of the
Company as a group as of December 29, 1999. Except as otherwise indicated, each
person and each group shown in the table has sole voting and investment power
with respect to the shares of common stock indicated.
-4-
<PAGE>
<TABLE>
<CAPTION>
AMOUNT AND NATURE PERCENT OF
POSITION WITH OF BENEFICIAL COMMON STOCK
NAME THE COMPANY OWNERSHIP(1)(2) OUTSTANDING
---- ----------- --------------- -----------
<S> <C> <C> <C>
Anna O. Sumerlin Director, President and Chief 28,441(3) 2.39%
Executive Officer
Paul K. Brixhoff Director 6,461(4) *
John D. Lyon Director 21,056(5) 1.77%
Harold R. Washington Director 3,261(6) *
R.W. Wilkinson, III Director and Vice-Chairman 6,462(7) *
William S. Wooten Director 1,325(8) *
Howard L. Brown Director, Chairman of the 6,962(9) *
Board
Leelan A. Woodlief Director 4,961(10) *
Rodney M. Privette Director 300 *
All directors and executive officers as a group (11) persons 118,739 9.97%
</TABLE>
- ---------------------
* Less than one percent
(1) See "Principal Shareholders of the Association" for a definition of
"beneficial ownership." All persons in the table have sole voting and
investment power, except as otherwise indicated.
(2) The figures shown for Ms. Sumerlin do not include 20,600 shares held in
trust pursuant to the Employee Stock Ownership Plan of Wake Forest Federal
Savings & Loan Association ("ESOP") that have not been allocated to any
individual's account and as to which Ms. Sumerlin shares voting power with
other ESOP participants and the Association's Compensation Committee
(consisting of Messrs. Woodlief, Brown and Wilkinson (the "ESOP
Committee"). The figure shown for all directors and executive officers as a
group includes such 20,600 shares as to which the members of the ESOP
Committee may be deemed to have sole investment power, except in limited
circumstances, thereby causing each Committee member to be deemed a
beneficial owner of such shares. Each of the members of the ESOP Committee
disclaims beneficial ownership of such shares and, accordingly, such shares
are not attributed to the members of the ESOP Committee individually. See
"Compensation of Directors and Executive Officers - Benefits - Employee
Stock Ownership Plan and Trust."
(3) Includes 8,545 shares as to which Ms. Sumerlin may be deemed to share
voting and investment power; includes options to purchase 8,100 shares of
common stock at $12.75 per share option plan granted under the Wake Forest
Federal Savings & Loan Association 1997 Stock Option Plan ("Option Plan");
includes 3,339 shares of common stock granted under the Wake Forest Federal
Savings & Loan Association 1997 Recognition and Retention Plan ("RRP");
includes 6,276 shares of common stock allocated to Ms. Sumerlin under the
ESOP as to which she has voting power, but no investment power except in
limited circumstances; includes 2,181 shares of common stock held in Ms.
Sumerlin's IRA account.
(4) Includes options to purchase 1,388 shares of common stock at $12.75 per
share Option Plan granted under the Wake Forest Federal Savings & Loan
Association 1997 Stock Option Plan ('Option Plan") and 573 shares of common
stock granted under the RRP.
(5) Includes 12,295 shares as to which Mr. Lyon may be deemed to share voting
and investment power, includes options to purchase 1,388 shares of common
stock at $12.75 per share granted under the Option Plan and 573 shares of
common stock granted under the RRP.
(6) Includes options to purchase 1,388 shares of common stock at $12.75 per
share granted under the Option Plan and 573 shares of common stock granted
under the RRP.
(7) Includes 900 shares as to which Mr. Wilkinson may be deemed to share voting
and investment power, includes options to purchase 1,388 shares of common
stock at $12.75 per share granted under the Option Plan and 573 shares of
common stock granted under the RRP.
(8) Includes 675 shares as to which Mr. Wooten may be deemed to share voting
and investment power.
(9) Includes options to purchase 389 shares of common stock at $12.75 per share
granted under the Option Plan and 573 shares of common stock granted under
the RRP.
(10) Includes options to purchase 1,388 shares of common stock at $12.75 per
share granted under the Option Plan and 573 shares of common stock granted
under the RRP.
-5-
<PAGE>
--------------------------------------
PROPOSAL 1
ELECTION OF DIRECTORS
--------------------------------------
GENERAL
The Board has nominated three persons for election as directors at the
Annual Meeting. All three nominees are currently serving on the Company's Board
of Directors. If you elect the nominees, they will hold office until the Annual
Meeting in 2003, or until their successors have been elected.
We know of no reason why any nominee may be unable to serve as a
director. If any nominee is unable to serve, your proxy may vote for another
nominee proposed by the Board. If for any reason these nominees prove unable or
unwilling to stand for election, the Board will nominate alternates or reduce
the size of the Board of Directors to eliminate the vacancy. The Board has no
reason to believe that its nominees would prove unable to serve if elected.
<TABLE>
<CAPTION>
DIRECTOR TERM POSITION(S) HELD WITH THE
NOMINEES AGE(1) SINCE EXPIRES COMPANY
- -------- ------ ----- ------- -------
<S> <C> <C> <C> <C>
Anna O. Sumerlin.............. 53 1993 2003 Director, President and Chief
Executive Officer
Paul K. Brixhoff.............. 78 1970 2003 Director
Harold R. Washington.......... 74 1969 2003 Director
CONTINUING DIRECTORS
- --------------------
Howard L. Brown............... 72 1986 2002 Director and Chairman of the Board
John D. Lyon.................. 62 1988 2001 Director
Ronald M. Privette............ 44 1997 2001 Director
R.W. Wilkinson, III........... 71 1992 2002 Director and Vice-Chairman
Leelan A. Woodlief............ 73 1988 2001 Director
William S. Wooten............. 42 1997 2001 Director
</TABLE>
- ---------------------
(1) As of December 29, 1999.
(2) Includes terms served on the Board of Wake Forest Federal Savings &
Loan Association.
The principal occupation and business experience of each nominee for
election as Director and each Continuing Director are set forth below. Unless
otherwise indicated, each of the following persons has held his present position
for the last five years.
-6-
<PAGE>
BIOGRAPHICAL INFORMATION
The following information relates to the directors and executive
officers of the Company and the Association. Unless otherwise indicated, each
director and executive officer has held his current occupation for the last five
years.
NOMINEES
ANNA O. SUMERLIN has served as the Company's President and Chief
Executive Officer since 1995. Prior to that, Ms. Sumerlin served as the Managing
Officer, Executive Vice President, Corporate Secretary and Treasurer from 1988
to 1995 and as the Assistant Manager and Assistant Secretary-Treasurer beginning
in 1979. She was elected to the Board of Directors in 1993.
PAUL K. BRIXHOFF has served as a Director of the Company since 1970. He
retired from the automotive parts supply business in 1982.
HAROLD R. WASHINGTON has served as a Director of the Company since
1969. He is the former owner of an automobile distributorship and retired in
1980.
CONTINUING DIRECTORS
HOWARD L. BROWN has served as Chairman of the Board of Directors since
1996 and as a Director of the Company since 1986. He served as Vice Chairman of
the Board of Directors from 1992 to 1996. Mr. Brown is the former owner of an
oil distribution company and has been retired since 1988.
JOHN D. LYON has served as a Director of the Company since 1988. He has
owned an independent state-certified appraisal company for the past five years
and has owned and managed a real estate portfolio for over 27 years. Mr. Lyon
also has close to 32 years of retail management experience.
RODNEY M. PRIVETTE is President and a general agent of Privette
Insurance Company in Rolesville, North Carolina. Mr. Privette specializes in
life insurance, retirement planning, property and casualty insurance and has
over 23 years experience in his field. Mr. Privette has served on the Rolesville
Fire Department since 1975 and as Fire Chief since 1992.
R.W. WILKINSON, III has served as a Director of the Company since 1992.
From 1979 to 1988, he served as Managing Officer, Executive Vice President and
Corporate Secretary-Treasurer. From 1963 to 1979, Mr. Wilkinson served as
Assistant Manager of the Association. Mr. Wilkinson was elected Vice - Chairman
of the Board of Directors of the Company in 1997.
LEELAN A. WOODLIEF has served as a Director of the Company since 1988.
He is in retail management and is semi-retired from Woodlief Supply Company, a
farming supply store, and has over 49 years experience in the agriculture and
insurance businesses.
WILLIAM S. WOOTEN has served as a Director of the Company since 1997.
He has operated a successful dental practice in Wake Forest, North Carolina
since 1982. Mr. Wooten is a life-long resident of Wake Forest, North Carolina.
-7-
<PAGE>
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
CARLTON E. CHAPPELL has served as the Company's Vice President,
Secretary and Treasurer since 1996 and as the Company's Senior Vice President
from 1988 to 1996. Prior to 1988, Mr. Chappell served as a Director of the
Company for 15 years. Mr. Chappell has over 37 years of business sales
experience.
ROBERT C. WHITE began employment with the Company on December 1, 1998
as Chief Financial Officer and Vice President. Prior to joining the Company, Mr.
White served as CFO and Senior Vice President of United Federal Savings Bank in
Rocky Mount, North Carolina from April 1997 to September 1998. In September of
1998, United Federal was acquired in a merger transaction. Prior to his
appointment with United Federal, Mr. White was a partner in the CPA firm of
McGladrey & Pullen, LLP in Raleigh, North Carolina. He was with the CPA firm for
nineteen years and was in charge of the local office's financial institutions
practice.
================================================================================
The Board of Directors unanimously recommends a vote "For" all of the nominees
for election as directors.
================================================================================
-----------------------------------------------------------------
PROPOSAL 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
------------------------------------------------------------------
GENERAL
The Board of Directors has appointed the firm of McGladrey & Pullen,
LLP to act as independent public accountants for the Company for the fiscal year
ending September 30, 2000, and we are asking shareholders to ratify the
appointment. Representatives of McGladrey & Pullen, LLP, are expected to attend
the Annual Meeting.
================================================================================
The Board of Directors unanimously recommends a vote "For" the ratification of
the appointment of McGladrey & Pullen, LLP as independent auditors for the
Company.
================================================================================
-8-
<PAGE>
INFORMATION ABOUT BOARD OF DIRECTORS AND MANAGEMENT
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS OF THE COMPANY
The Company's Board of Directors currently consists of nine members.
The Company's Federal Stock Charter and Bylaws provide that the Board of
Directors shall be divided into three classes, as nearly equal in number as
possible. The terms of three directors expire at the Annual Meeting.
The Board of Directors oversees our business and monitors the
performance of our management. In accordance with our corporate governance
procedures, the Board of Directors does not involve itself in the day-to-day
operations of the Company. The Company's executive officers and management
oversee the day-to-day operations of the Company. Our directors fulfill their
duties and responsibilities by attending regular meetings of the Board which are
held on a monthly basis. Our directors also discuss business and other matters
with the Chairman and the President, other key executives, and our principal
external advisers (legal counsel, auditors, financial advisors and other
consultants).
The Board of Directors of the Company held 12 regular meetings during
the fiscal year ended September 30, 1999. Each incumbent director attended at
least 75% of the meetings of the Board of Directors plus committee meetings on
which that particular director served during this period.
COMMITTEES OF THE BOARD
The Board of Directors of the Company have established the following
committees:
NOMINATING The Nominating Committee for fiscal year 1999
COMMITTEE was chaired by Director Brown, with Directors
Wilkinson and Woodlief as members. This
committee nominates candidates for Board
membership. The Nominating Committee met once
in fiscal year 1999. In accordance with the
Company's Bylaws, no nominations for election
as director, except those made by the
Nominating Committee, shall be voted upon at
the Annual Meeting.
COMPENSATION The Compensation Committee is chaired by
COMMITTEE Director Woodlief, with Directors Brown and
Wilkinson as members. This committee
establishes the compensationof the Chief
Executive Officer, approves the compensation of
other officers and determines compensation and
benefits to be paid to employees of the Company
and the Association. It also sets directors'
fees and bonuses. The committee met two times
in 1999 as requested by the Board of Directors.
The Compensation Committee also acts as the
ESOP Committee, and meets to review the
Company's ESOP. The Compensation Committee is
currently acting as the Option Plan Committee
and the RRP Committee. Each member of the
Compensation Committee is a "disinterested
director" within the meaning of Section 162(m)
of the Internal Revenue Code of 1986 (the
"Code") and Rule 16b-3 promulgated under the
Exchange Act.
-9-
<PAGE>
EXECUTIVE The Executive Committee is chaired by Director
COMMITTEE Brown, with Directors Sumerlin, Wilkinson and
Woodlief as members. This committee meets as
requested by management, and pursuant to the
Bylaws of the Company, may act on behalf of the
Board except for such matters as declaration of
dividends, changes to the Company's Charter or
Bylaws, or other material issues as defined in
the Bylaws. All actions of this committee are
reviewed by the entire Board of Directors at
its next regular meeting. The committee took
three actions without a meeting by polling of
its members during 1999.
AUDIT The Company established an Audit Committee at
COMMITTEE its regular Board of Directors meeting in
December 1999. This Committee is chaired by
Director Lyon, with Directors Privette and
Brown as members. This committee will review
any internal audit findings reported by the
Company's outside internal audit function and
is responsible for reviewing and evaluating the
annual audit reports of the Company's
independent auditors. The Committee will report
its findings to the entire Board of Directors,
who previously performed such functions.
DIRECTOR'S COMPENSATION
Fee Arrangements. Currently, each non-employee director of the Company
receives a fee of $500 per meeting attended except for the Chairman who receives
$600 per meeting attended. Directors are not compensated for attending committee
meetings. In addition, each non-employee director who has attended a minimum of
75% of the aggregate number of the Board and committee meetings of which he is a
member called during the respective calendar year, will receive an annual
retainer fee of $3,700, payable in December. The aggregate amount of fees paid
to such directors by the Company for the year ended September 30, 1999, was
approximately $32,650. Directors are also covered by the Option Plan and RRP.
See "- Benefits - Stock Option Plan, "and" - Recognition and Retention Plan."
Directors' Retirement Plan. The Company has adopted a nonqualified
Retirement Plan for Board Members of the Company (the "Directors' Retirement
Plan"), which will provide benefits to each eligible director commencing on his
or her termination of Board service at or after age 65. Each director who serves
or has agreed to serve as an director automatically becomes a participant in the
Directors' Retirement Plan. An eligible director retiring at or after age 65
will be paid an annual retirement benefit equal to the lesser of the amount of
the aggregate compensation for services as a director (excluding stock
compensation) paid to him for the 12-month period immediately prior to his
termination of Board service or $5,000, multiplied by a fraction, the numerator
of which is the number of his years of service as a director (including service
as a director or trustee of the Company or any predecessor) and the denominator
of which is 10. An individual who terminates Board service after having served
as a director for 10 years may elect to begin collecting benefits under the
Directors' Retirement Plan at or after attainment of age 50, but the annual
retirement benefits payable to him will be reduced pursuant to the Directors'
Retirement Plan's early retirement reduction formula to reflect the commencement
of benefit payments prior to age 65. Benefits are paid for a fixed period of 10
years. Upon a change in control, participants will receive an immediate lump sum
distribution of their benefit.
-10-
<PAGE>
Other Arrangements. Mr. Lyon's state-certified independent appraisal
company is one of the appraisers designated by the Company to perform
appraisals. A fee of $300 per appraisal is charged to the borrower. In the
fiscal year 1999, Mr. Lyon's appraisal company received $16,300 in appraisal
fees. Mr. Brown performs inspections on construction loans. A fee of $150 per
loan is paid to Mr. Brown, with the cost shared equally by the Association and
the borrower. In the fiscal year 1999, Mr. Brown received $26,550 in inspection
fees.
EXECUTIVE COMPENSATION
Cash Compensation. The following table sets forth the cash compensation
paid by the Company for services rendered in all capacities during the fiscal
years ended September 30, 1999, September 30, 1998 and September 30, 1997, to
the President and Chief Executive Officer of the Company. No other executive
officer of the Company had salary and bonus during the fiscal year ended
September 30, 1999 aggregating in excess of $100,000.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
--------------------------
LONG TERM COMPENSATION
----------------------
ANNUAL COMPENSATION(1) AWARDS
---------------------- ------
OTHER RESTRICTED
ANNUAL STOCK ALL OTHER
SALARY COMPENSATION AWARDS OPTIONS COMPENSATION
NAME AND PRINCIPAL POSITIONS YEAR ($)(1) BONUS($) ($)(2) ($)(3) (#) ($)(4)
---------------------------- ---- ------ -------- ------ ------ --- ------
<S> <C> <C> <C> <C> <C> <C>
Anna O. Sumerlin, President and Chief 1999 89,500 60,000 - - - $21,145
Executive Officer 1998 85,000 50,000 - - - $22,828
1997 79,000 30,000 - 70,915 13,500 $30,888
</TABLE>
- ----------
(1) Includes amounts, if any, deferred pursuant to Section 401(k) of the
Code under the Company's 401(k) Plan.
(2) For 1999, 1998 and 1997, there were no: (a) perquisites with an
aggregate value for any named individual in excess of the lesser of
$50,000 or 10% of the total of the individual's salary and bonus for
the year; (b) payments of above-market preferential earnings on
deferred compensation; (c) payments of earnings with respect to
long-term incentive plans prior to settlement or maturation; (d) tax
payment reimbursements; or (e) preferential discounts on stock.
(3) Pursuant to the Restricted Stock Plan, Ms. Sumerlin was awarded 5,562
shares of restricted stock effective as of January 22, 1997, which
vests in five annual installments commencing January 22, 1998.
Dividends attributable to such shares will be distributed with such
shares when they become vested. The dollar amount shown in the table
for 1997 is based on the fair market value per share on January 22,
1997 of $12.75. The value of the 3,337 shares that remained unvested on
September 30, 1999 was $47,135, based on the fair market value per
share on September 30, 1999 of $14.125.
(4) Includes (i) the dollar value of premiums, if any, paid by the Company
with respect to term life insurance (other than group term insurance
coverage under a plan available to substantially all salaried
employees) for the benefit of the executive officer and (ii) the fair
market value of 1,497, 1,756, and 1,716 shares allocated to the
executive officer under the ESOP during the fiscal years ended
September 30, 1999, 1998 and 1997, respectively, based on a closing
price of $14.125, $13.00 and $18.00, on September 30, 1999, 1998 and
1997 respectively. See "- Benefits - Employee Stock Ownership Plan and
Trust."
EMPLOYMENT AGREEMENTS
The Company, through the Association, is a party to an Employment
Agreement with each of Ms. Sumerlin, Mr. Chappell and Mr. White ("Senior
Executive(s)"). These Employment Agreements establish the respective duties and
compensation of the Senior Executives and are intended to ensure that the
Company will be able to maintain a stable and competent management base. The
continued success of the Company depends to a significant degree on the skills
and competence of the Senior Executives.
-11-
<PAGE>
The Employment Agreements provide for three-year terms. The Employment
Agreements provide that, commencing on the first anniversary date and continuing
each anniversary date thereafter, the Board of Directors may, with the Senior
Executive's concurrence, extend the Employment Agreements for an additional
year, so that the remaining terms shall be three years, after conducting a
performance evaluation of the Senior Executive. The Employment Agreements
provide that the Senior Executive's base salary will be reviewed annually. It is
anticipated that this review will be performed by the Compensation Committee of
the Board and the Senior Executive's base salary may be increased on the basis
of her or his job performance and the overall performance of the Company. The
base salaries for Ms. Sumerlin, Mr. Chappell and Mr. White as of September 30,
1999 were $89,500, $62,000 and $75,000, respectively. Each Senior Executive may
receive a bonus based upon achievement of prescribed performance criteria. In
addition to base salary, the Employment Agreements provide for, among other
things, entitlement to participation in stock, retirement and welfare benefit
plans and eligibility for fringe benefits applicable to executive personnel such
as fees for club and organization memberships deemed appropriate by the Company
and the Senior Executive. The Employment Agreements provide for termination by
the Company at any time for cause as defined in the Employment Agreements. In
the event the Company chooses to terminate the Senior Executive's employment for
reasons other than for cause, or in the event of the Senior Executive's
resignation from the Company upon: (i) failure to re-appoint, elect or re-elect
the Senior Executive to her or his current offices; (ii) a material change in
the Senior Executive's functions, duties or responsibilities; (iii) a relocation
of the Senior Executive's principal place of employment outside Wake County
without the Senior Executive's consent; (iv) liquidation or dissolution of the
Company; (v) a change of control of the Company; or (vi) a breach of the
Employment Agreement by the Company, the Senior Executive or, in the event of
death, her or his beneficiary, is entitled to a lump sum cash payment in an
amount equal to three (3) times the Senior Executive's highest rate of annual
salary, including bonuses and stock awards included as W-2 wages achieved during
the employment period, and the additional contributions or benefits under any
employee benefit plans of the Company or the Association that the Senior
Executive would have earned assuming such Executive was fully vested in the
plans. The Company would also continue the Senior Executive's life, health and
disability insurance coverage for three (3) years.
The Company's Employment Agreements restrict the dollar amount of
compensation and benefits payable to a Senior Executive in the event of
termination following a "change in control" to three times the Senior
Executive's average annual compensation for the previous five calendar years. In
general, for purposes of the Employment Agreements and the plans maintained by
the Company, a "change in control" will generally be deemed to occur when a
person or group of persons acting in concert acquires beneficial ownership of
25% or more of any class of equity security, such as common stock of the
Company, or in the event of a tender offer, exchange offer, merger or other form
of business combination, sale of assets or contested election of directors which
results in a change in control of the majority of the Board of Directors of the
Company. The Senior Executives are entitled to reimbursement of certain costs
incurred in negotiating, interpreting or enforcing the Employment Agreements.
Each Employment Agreement also provides for the Company to indemnify the Senior
Executive to the fullest extent allowable under federal law.
Cash and benefits paid to a Senior Executive under the Employment
Agreements together with payments under other benefit plans following a "change
in control" of the Company may constitute an "excess parachute" payment under
Section 280G of the Code, resulting in the imposition of a 20% excise tax on the
recipient and the denial of the deduction for such excess amounts to the
Company. Compensation payable to the Senior Executive shall be reduced if such
reduction would avoid the assessment of the excise tax.
-12-
<PAGE>
BENEFITS
Employee Stock Ownership Plan and Trust. The Company has established
and adopted, for the benefit of eligible employees, an ESOP and related trust.
All salaried employees of the Association are eligible to become participants in
the ESOP. The ESOP purchased 41,200 shares of common stock issued in connection
with the reorganization and offering. In order to fund the ESOP's purchase of
such common stock, the ESOP borrowed funds from an unaffiliated lender equal to
the balance of the aggregate purchase price of the common stock. Although
contributions to the ESOP are discretionary, the Company intends to make annual
contributions to the ESOP in an aggregate amount at least equal to the principal
and interest requirement on the debt. This loan is for a term of seven years,
bears interest at the prime rate, and calls for level annual payments of
principal plus accrued interest designed to amortize the loan over its term.
Prepayments are also permitted. The loan due from the ESOP is reflected on the
Company's balance sheet.
Shares purchased by the ESOP were pledged as collateral for the loan,
and are held in a suspense account until released for allocation among
participants in the ESOP as the loan is repaid. The pledged shares will be
released annually from the suspense account in an amount proportional to the
repayment of the ESOP loan for each plan year. The released shares will be
allocated among the accounts of participants on the basis of the participant's
compensation for the year of allocation. Benefits generally become 100% vested
after three years of service; prior to such time, benefits are 0% vested.
Participants also become immediately vested upon termination of employment due
to death, retirement at age 65, permanent disability or upon the occurrence of a
change in control. Forfeitures will be reallocated among remaining participating
employees, in the same proportion as contributions. Vested benefits may be paid
in a single sum or installment payments and are payable upon death, retirement
at age 65, disability or separation from service.
The ESOP Committee, which is currently comprised of members of the
Compensation Committee, may instruct the trustee regarding investment of funds
contributed to the ESOP. The ESOP trustee, subject to its fiduciary duty, must
vote all allocated shares held in the ESOP in accordance with the instructions
of the participating employees. Under the ESOP, unallocated shares will be voted
in a manner calculated to most accurately reflect the instructions it has
received from participants regarding the allocated stock as long as such vote is
in accordance with the provisions of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"). The ESOP may purchase additional shares of Common
stock in the future.
Stock Option Plan. The Wake Forest Federal Savings & Loan Association
1997 Stock Option Plan ("Option Plan") was adopted by the Association and
approved by its shareholders at the 1997 Annual Meeting. The Company reserved
54,000 shares of common stock ("Option Shares") for issuance upon the exercise
of options and, as of the Record Date, options have been granted to eligible
executives and directors with respect to such Option Shares. Option Shares may
be authorized and unissued shares or shares previously issued and reacquired by
the Company. Any Option Shares subject to grants under the Option Plan which
expire or are terminated, forfeited or canceled without having been exercised or
vested in full, shall again be available for purposes of the Option Plan.
Any employee of the Company or any affiliate approved by the Board who
is selected by the Option Committee is eligible to participate in the Option
Plan as an "Eligible Individual." Members of the Board of Directors of the
Company or any affiliate approved by the Board who are not employees or officers
of the Company or such affiliate are eligible to participate as an "Eligible
Director."
-13-
<PAGE>
The Option Plan provides for the grant of options which qualify for
favorable federal income tax treatment as "incentive stock options" ("ISOs"),
and non-qualified stock options which do not so qualify ("NQSOs"). ISOs are
subject to certain restrictions under the Code. Unless otherwise designated by
the Option Committee, Options granted under the Option Plan will be NQSOs, will
be exercisable at a price per share equal to the fair market value of a share of
common stock on the date of the Option grant and will be exercisable for a
period of ten years after the date of grant (or for a shorter period ending
three months after the option holder's termination of employment for reasons
other than death, disability or retirement or discharge for cause, one year
after termination of service due to death, disability or retirement, or
immediately upon termination for cause). In no event may an Option be granted
with an exercise price per share that is less than fair market value of a share
of Common stock when the Option is granted. On January 22, 1998 and on each
anniversary thereof until all Option Shares subject to the grant are
exercisable, the Option will become exercisable as to 20% of the Option Shares
as to which the outstanding Option has been granted. An option holder's right to
exercise Options is suspended during any period when the option holder is the
subject of a pending proceeding to terminate his or her employment for cause. If
an option expires during such suspension, the Company will, upon the employee's
reinstatement, pay damages equal to the value of the expired Options less the
exercise price.
Upon the exercise of an Option, the exercise price must be paid in
full. Payment may be made in cash or in such other consideration as the Option
Committee deems appropriate, including, but not limited to, Common stock already
owned by the option holder or Option Shares to be acquired by the option holder
upon exercise of the Option.
STOCK OPTIONS
The following table provides certain information with respect to the
number of shares of common stock represented by outstanding options held by the
Named Executive Officers as of September 30, 1999. Also reported are the values
for "in-the-money" options which represent the positive spread between the
exercise price of any such existing stock options and the fiscal year-end price
of common stock, which was $14.125 per share.
FISCAL YEAR END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS AT FISCAL
AT FISCAL YEAR END (#) YEAR END ($)(1)
---------------------- ---------------
SHARES ACQUIRED VALUE
ON EXERCISE REALIZED
NAME (#) ($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- --- --- ------------------------- -------------------------
<S> <C> <C> <C> <C> <C> <C>
Anna O. Sumerlin, - - 5,400/8,100 7,425/11,138
President and Chief
Executive Officer
</TABLE>
- ----------
(1) Mrs. Sumerlin has 13,500 options exercisable at $12.75 per share. As of
September 30, 1999, the closing price of the common stock as reported on the
OTC Bulletin Board was $14.125. Ms. Sumerlin did not exercise any of her
options during the fiscal year ended September 30, 1999.
-14-
<PAGE>
Recognition and Retention Plan. The Wake Forest Bancshares, Inc. 1997
Recognition and Retention Plan was adopted by the Company and approved by its
shareholders at the 1997 Annual Meeting. The Company has established a trust
("Trust") to purchase up to 22,248 shares of the Company's common stock which
may be used for awards granted under the RRP.
Any employee of the Company or any affiliate approved by the Board who
is selected by the RRP Committee is eligible to participate in the RRP as an
"Eligible Individual." Members of the Board of Directors of the Company or any
affiliate approved by the Board who are not employees or officers of the Company
or such affiliate are eligible to participate as an "Eligible Director."
Stock subject to awards is held in trust pursuant to the RRP until
vested. An individual to whom an award is granted is credited with cash
dividends with respect to stock subject to Awards granted to him whether or not
vested. Awards generally vest at a rate of 20% over a five year period. However,
any shares covered by the award will become 100% vested as of the date of the
recipient's death or disability. If an individual covered by an award ceases to
be an employee, a director, an advisory director or director emeritus for
reasons other than death or disability, the individual forfeits all rights to
his unvested shares remaining in the RRP Trust. Individuals may designate a
beneficiary to receive distributions on account of death. The RRP Committee will
exercise voting rights with respect to shares in the Trust in a manner that
reflects the votes or responses of all other shareholders and will respond to
any tender offer, exchange offer or other offer made to shareholders.
TRANSACTIONS WITH CERTAIN RELATED PERSONS
The Company's authority to engage in transactions with its "affiliates"
is limited by OTS regulations and by Sections 23A and 23B of the Federal Reserve
Act (the "FRA"). This authority is derived from 12 U.S.C.ss.1468 of the Home
Owners Loan Act ("HOLA"). Section 23A of the FRA limits the aggregate amount of
transactions with any individual affiliate to 10% of the capital and surplus of
the savings association and limits the aggregate amount of transactions with all
affiliates to 20% of the savings association's capital and surplus.
The Company's authority to extend credit to directors, executive
officers, and 10% shareholders, as well as entities controlled by such persons,
is currently governed by the requirements of Sections 22(g) and 22(h) of the FRB
and Regulation O of the FRB thereunder. Among other things, these provisions
require that extensions of credit to insiders (a) be made on terms that are
substantially the same as, follows credit underwriting procedures that are not
less stringent than those prevailing for comparable transactions with
unaffiliated persons and that not involve more than the normal risk of repayment
or present other unfavorable features and (b) do not exceed certain limitations
on the amount of credit extended to such persons, individually and in aggregate,
which limits are based, in part, on the amount of the Company's capital. The
Company intends that any transactions in the future between the Company and its
executive officers, directors, holders of 10% or more of the shares of any class
of its common stock and affiliates thereof, will contain terms no less favorable
to the Company than could have been obtained by it in arm's-length negotiations
with unaffiliated persons and will be approved by a majority of independent
outside directors of the Company not having any interest in the transaction.
The Company has made loans or extended credit to its executive officers
and directors and also to certain persons related to executive officers and
directors. All such loans were made by the Company in the ordinary course of
business and were not made more favorable terms, nor did they involve more than
the
-15-
<PAGE>
normal risk of collectibility or present unfavorable features. The outstanding
principal balance of such loans to directors, executive officers and their
associates totaled $296,250 or 2.20% of the Company's total equity at September
30, 1999.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's executive
officers and directors, and persons who own more than 10% of common stock to
file with the SEC reports of ownership and changes of ownership. Officers,
directors and greater than 10% shareholders are required by the regulations to
furnish the Company with copies of all Section 16(a) forms they file. The
Company knows of no other person other than Wake Forest Bancorp, M.H.C. that
owns 10% or more of the Company's common stock.
Based solely on its review of the copies of such forms received by it,
or written representations from certain reporting persons, the Company believes
that all filing requirements applicable to its executive officers, directors and
greater than 10% beneficial owners were complied with, as of September 30, 1999.
-16-
<PAGE>
- --------------------------------------------------------------------------------
PROPOSAL 3
AUTHORIZATION OF THE BOARD OF DIRECTORS, IN ITS DISCRETION, TO
DIRECT THE VOTE OF THE PROXIES UPON SUCH OTHER MATTERS AS MAY
PROPERLY COME BEFORE THE ANNUAL MEETING, AND ANY ADJOURNMENT OR
POSTPONEMENT THEREOF, INCLUDING, WITHOUT LIMITATION,
A MOTION TO ADJOURN THE ANNUAL MEETING
- --------------------------------------------------------------------------------
GENERAL
The Board of Directors is not aware of any other business that may
properly come before the Annual Meeting. The Board seeks the authorization of
the shareholders of the Company, in the event matters properly come before the
meeting, including, but not limited to, the consideration of whether to adjourn
the Annual Meeting once called to order and to direct the manner in which those
shares represented at the Annual Meeting by proxies solicited pursuant to this
Proxy Statement shall be voted. As to all such matters, the Board intends that
it would direct the voting of such shares in the manner determined by the Board,
in its discretion, and in the exercise of its duties and responsibilities, to be
in the best interests of the Company and its shareholders, taken as a whole.
VOTE REQUIRED
The authorization of the Board of Directors, in its discretion, to vote
upon such other business as may properly come before the Annual Meeting
("Proposal 3") requires the affirmative vote of the holders of a majority of the
outstanding shares of common stock represented in person or by proxy at the
Annual Meeting and entitled to vote thereon. Accordingly, shares as to which the
"ABSTAIN" box has been selected on the Proxy Card will be counted as present and
entitled to vote and will have the effect of a vote against Proposal 3. Shares
underlying broker non-votes will not be counted as having been voted in person
or by proxy and will have no effect on the vote for Proposal 3. The Company
intends to vote for the authorization of the Board of Directors to vote upon
such other business as may properly come before the Annual Meeting thereby
ensuring a quorum and the likelihood of the approval of Proposal 3.
================================================================================
The Board of Directors unanimously recommends that shareholders vote "For"
authorization of the Board of Directors, in its discretion, to direct the vote
of the proxies upon such matters as may properly come before the Annual Meeting,
and any adjournment or postponement thereof, including, without limitation, a
motion to adjourn the Annual Meeting.
================================================================================
-17-
<PAGE>
ADDITIONAL INFORMATION
INFORMATION ABOUT SHAREHOLDER PROPOSALS
Any shareholder proposal intended for inclusion in the Company's proxy
statement and proxy card relating to the Company's 2001 Annual Meeting of
Shareholders must be received by the Company by September 16, 2000, pursuant to
the proxy soliciting regulations of the SEC. Nothing in this paragraph shall be
deemed to require the Company to include in its proxy statement and proxy card
for such meeting any shareholder proposal which does not meet the requirements
of the SEC in effect at the time. Any such proposal will be subject to 17 C.F.R.
ss. 240.14a-8 of the Rules and Regulations promulgated by the SEC under the
Exchange Act.
In addition, under the Company's Bylaws, if you wish to nominate a
director or bring other business before an annual meeting:
o You must be a shareholder of record and have given timely
notice in writing to the Secretary of the Company.
o Your notice must contain specific information required in our
Bylaws.
By Order of the Board of Directors,
Carlton E. Chappell
Vice President, Secretary and Treasurer
Wake Forest, North Carolina
January 20, 2000
-18-
<PAGE>
REVOCABLE PROXY
WAKE FOREST BANCSHARES, INC.
302 SOUTH BROOKS STREET
WAKE FOREST, NORTH CAROLINA 27587
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF WAKE FOREST
BANCSHARES, INC. FOR THE ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD ON FEBRUARY 22, 2000.
The undersigned shareholder of Wake Forest Bancshares, Inc. hereby
appoints Howard L. Brown and John D. Lyon, III, or any of them, with full powers
of substitution, to represent and to vote as proxy, as designated, all shares of
common stock of Wake Forest Bancshares, Inc. held of record by the undersigned
on December 29, 1999 at the 2000 Annual Meeting of Shareholders (the "Annual
Meeting") to be held at 2:00 p.m. on February 22, 2000 or at any adjournment or
postponement thereof, upon the matters described in the accompanying Notice of
the 2000 Annual Meeting of Shareholders and Proxy Statement, dated January 14,
2000, and upon such other matters as may properly come before the Annual
Meeting. The undersigned hereby revokes all prior proxies.
This Proxy, when properly executed, will be voted in the manner
directed herein by the undersigned shareholder. IF NO DIRECTION IS GIVEN, THIS
PROXY WILL BE VOTED FOR THE ELECTION OF ALL NOMINEES LISTED IN ITEM 1 AND FOR
THE PROPOSALS LISTED IN ITEMS 2 AND 3.
PLEASE MARK, SIGN AND DATE THIS PROXY ON THE REVERSE
SIDE AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE.
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
The Board of Directors unanimously recommends a vote "FOR" all of the nominees Please mark your
named in Item 1 and a vote "FOR" each of the proposals in Items 2 and 3. vote as indicated in [ ]
this example
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Election of three Directors for terms of FOR
three years each. NOMINEES: Anna O. All nominees
Sumerlin, Paul Brixhoff, and Harold R. (except as WITHHOLD 2. Ratification of the appointment of
Washington. otherwise for all McGladrey & Pullen LLP as independent FOR AGAINST ABSTAIN
indicated) nominees auditors for the fiscal year ending [ ] [ ] [ ]
[ ] [ ] September 30, 2000.
INSTRUCTION: TO WITHHOLD AUTHORITY to vote 3. Authorization of the Board of
for any individual nominee, write that Directors, in its discretion, to
nominee's name in the space provided: direct the vote of proxies upon such
- ------------------------------------------- matters as may properly come before FOR AGAINST ABSTAIN
the Annual Meeting, and any [ ] [ ] [ ]
adjournment or postponement thereof,
including, without limitation, a
motion to adjourn the Annual Meeting.
The undersigned hereby acknowledges receipt of the Notice of the
2000 Annual Meeting of Shareholders and the Proxy Statement,
dated January 14, 2000 for the Annual Meeting.
----------------------------------------------------------------
----------------------------------------------------------------
Signature(s)
Dated: , 2000
---------------------------------------------------
Please sign exactly as your name appears on this proxy. Joint
owners should each sign personally. If signing as attorney,
executor, administrator, trustee or guardian, please include
your full title. Corporate or partnership proxies should be
signed by an authorized officer.
</TABLE>
