SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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
[X]Definitive Proxy Statement Commission Only (as permitted
[ ]Definitive Additional Materials by Rule 14a-6(e)(2))
[ ]Soliciting Material under Rule 14a-12
COOPERATIVE BANKSHARES, INC.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1. Title of each class of securities to which transaction applies:
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2. Aggregate number of securities to which transaction applies:
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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):
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4. Proposed maximum aggregate value of transaction:
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5. Total fee paid:
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[ ] 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:
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2. Form, Schedule or Registration Statement No.:
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3. Filing Party:
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4. Date Filed:
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March 21, 2003
Dear Stockholder:
We invite you to attend the Annual Meeting of Stockholders of Cooperative
Bankshares, Inc. (the "Company") to be held at the Hilton Wilmington Riverside,
301 North Water Street, Wilmington, North Carolina, on Friday, April 25, 2003 at
11:00 a.m.
The attached Notice of Annual Meeting and Proxy Statement describe the
formal business to be transacted at the meeting. During the meeting, we will
also report on the operations of the Company. Directors and officers of the
Company as well as representatives of KPMG LLP, the Company's independent
auditors, will be present to respond to any questions the stockholders may have.
ON BEHALF OF THE BOARD OF DIRECTORS, WE URGE YOU TO SIGN, DATE AND RETURN
THE ENCLOSED PROXY CARD AS SOON AS POSSIBLE EVEN IF YOU CURRENTLY PLAN TO ATTEND
THE ANNUAL MEETING. This will not prevent you from voting in person but will
assure that your vote is counted if you are unable to attend the meeting. Your
vote is important, regardless of the number of shares you own.
Sincerely,
/s/ Frederick Willetts, III
Frederick Willetts, III
President and Chief
Executive Officer
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COOPERATIVE BANKSHARES, INC.
201 MARKET STREET
WILMINGTON, NORTH CAROLINA 28401
(910) 343-0181
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 25, 2003
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NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Meeting") of Cooperative Bankshares, Inc. (the "Company") will be held at the
Hilton Wilmington Riverside, 301 North Water Street, Wilmington, North Carolina,
on Friday, April 25, 2003 at 11:00 a.m.
A Proxy Card and a Proxy Statement for the Meeting are enclosed.
The Meeting is for the purpose of considering and acting upon:
1. The election of two directors of the Company for three year
terms; and
2. The transaction of such other matters as may properly come before
the Meeting or any adjournments thereof.
The Board of Directors is not aware of any other business to come before
the Meeting.
Any action may be taken on any of the foregoing proposals at the Meeting on
the date specified above or on any date or dates to which, by original or later
adjournment, the Meeting may be adjourned. Stockholders of record at the close
of business on March 5, 2003 are the stockholders entitled to vote at the
Meeting and any adjournments thereof.
You are requested to fill in and sign the enclosed form of proxy which is
solicited by the Board of Directors and to mail it promptly in the enclosed
envelope. The proxy will not be used if you attend and vote at the Meeting in
person.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Linda B. Garland
Linda B. Garland
Vice President and Secretary
Wilmington, North Carolina
March 21, 2003
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IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES IN ORDER TO ENSURE A QUORUM. A SELF-ADDRESSED
ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED IN
THE UNITED STATES.
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PROXY STATEMENT
OF
COOPERATIVE BANKSHARES, INC.
201 MARKET STREET
WILMINGTON, NORTH CAROLINA 28401
ANNUAL MEETING OF STOCKHOLDERS
APRIL 25, 2003
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GENERAL
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This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Cooperative Bankshares, Inc. (the
"Company"), holding company for Cooperative Bank to be used at the Annual
Meeting of Stockholders of the Company (the "Meeting") which will be held at the
Hilton Wilmington Riverside, 301 North Water Street, Wilmington, North Carolina,
on Friday, April 25, 2003 at 11:00 a.m. The accompanying Notice of Annual
Meeting and this Proxy Statement are being first mailed to stockholders on or
about March 24, 2003.
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VOTING AND REVOCABILITY OF PROXIES
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Proxies solicited by the Board of Directors of the Company will be voted in
accordance with the directions given therein. WHERE NO INSTRUCTIONS ARE
INDICATED, PROXIES WILL BE VOTED FOR THE NOMINEES FOR DIRECTORS SET FORTH BELOW.
The Bylaws of the Company provide that in the absence of stockholder direction,
a stockholder's proxy shall be voted as determined by a majority of the Board of
Directors. The proxy confers discretionary authority on the persons named
therein to vote with respect to the election of any person as a director where
the nominee is unable to serve or for good cause will not serve, and matters
incident to the conduct of the Meeting.
Stockholders who execute proxies retain the right to revoke them at any
time. Unless so revoked, the shares represented by such proxies will be voted at
the Meeting and all adjournments thereof. Proxies may be revoked by written
notice to Linda B. Garland, Secretary of the Company, at the address shown
above, by filing of a later dated proxy prior to a vote being taken on a
particular proposal at the Meeting, or by attending the Meeting and voting in
person.
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VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
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The securities entitled to vote at the Meeting consist of the Company's
common stock, par value $1.00 per share (the "Common Stock"). Stockholders of
record as of the close of business on March 5, 2003 (the "Record Date") are
entitled to one vote for each share of Common Stock then held. As of the Record
Date, the Company had 2,847,947 shares of Common Stock issued and outstanding.
The presence, in person or by proxy, of at least a majority of the total number
of shares of Common Stock outstanding and entitled to vote will be necessary to
constitute a quorum at the Meeting.
Persons and groups owning in excess of 5% of the Common Stock are required
to file certain reports regarding such ownership pursuant to the Securities
Exchange Act of 1934, as amended (the "1934 Act"). The following table sets
forth, as of the Record Date, certain information as to the Common Stock
beneficially owned by persons owning in excess of 5% of the Common Stock, by
each of the executive officers named in the Summary Compensation Table on page
7, and by all executive officers and directors of the Company as a group.
Management knows of no person, except as listed below, who owned more than 5% of
the Company's outstanding shares of the Common Stock as of the Record Date.
AMOUNT AND PERCENT OF
NATURE OF SHARES OF
NAME AND ADDRESS BENEFICIAL COMMON STOCK
OF BENEFICIAL OWNER OWNERSHIP (1) OUTSTANDING
------------------- ------------- ------------
Frederick Willetts, III
201 Market Street
Wilmington, North Carolina 28401 493,666 (2) 17.33%
O.C. Burrell, Jr.
201 Market Street
Wilmington, North Carolina 28401 47,715 (3) 1.68%
Jeffrey L. Gendell
200 Park Avenue
New York, New York 10166 257,000 9.02%
Cooperative Bank
401(k) Supplemental Retirement Plan
201 Market Street
Wilmington, North Carolina 28401 203,626 7.15%
All executive officers and directors
as a group (11 persons) 776,512 (4) 27.27%
______________
(1) Includes stock held in joint tenancy; stock owned as tenants in common;
stock owned or held by a spouse or other member of the individual's
household; stock allocated through an employee benefit plan of the Company;
stock subject to options exercisable within 60 days; and stock owned by
businesses in which the officer or director is an officer or major
stockholder, or as a custodian or trustee, or by spouses as a custodian or
trustee, over which shares such officer or director effectively exercises
sole or shared voting and/or investment power, unless otherwise indicated.
(2) Includes 203,626 shares held by the Cooperative Bank 401(k) Supplemental
Retirement Plan (the "401(k)") over which Mr. Willetts has sole voting
power as the named fiduciary for such plan. Also includes shares of Common
Stock owned by Mr. Willetts' spouse and children, as well as shares held in
various family trusts of which Mr. Willetts serves as a trustee. Also
includes 72,061 shares for which Mr. Willetts may be deemed to share voting
and dispositive power due to his holding general powers of attorney for his
mother and sisters. Mr. Willetts disclaims beneficial ownership of these
shares.
(3) Includes 22,019 shares which Mr. Burrell has the right to purchase pursuant
to the exercise of stock options under the 1998 Option Plan and 10,426
shares allocated to Mr. Burrell's account under the 401(k) Plan.
(4) Includes shares which officers and directors as a group have the right to
purchase pursuant to the exercise of stock options under the 1998 Option
Plan.
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PROPOSAL I -- ELECTION OF DIRECTORS
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The Company's Board of Directors is currently composed of eight members.
Pursuant to the Company's Articles of Incorporation, the Board of Directors is
divided into three classes which shall be as nearly equal in number as possible.
The terms of only one class of directors expires at each annual meeting. The
Company's Articles of Incorporation generally provide that directors are to be
elected for terms of three years and until their successors are elected and
qualified.
Two directors will be elected at the Meeting to serve for a three-year
period, and until their respective successors have been elected and qualified.
The Board of Directors has nominated to serve as directors Frederick Willetts,
III and F. Peter Fensel, Jr. for three year terms. It is intended that the
persons named in the proxies solicited by the Board will vote for the election
of the named nominees. If any nominee is unable to serve, the shares represented
by all valid proxies which have not been revoked will be voted for the election
of such substitute
2
as the Board of Directors may recommend. At this time, the Board knows of no
reason why any nominee might be unavailable to serve.
Under the Company's Bylaws, directors shall be elected by a majority of
those votes cast by stockholders at the Meeting. Votes which are not cast at the
Meeting, either because of abstentions or broker non-votes, are not considered
in determining the number of votes which have been cast for or against the
election of a nominee.
The following table sets forth the names of the Board of Directors'
nominees for election as directors and of those directors who will continue to
serve as such after the Meeting. Also set forth is certain other information
with respect to each person's age, the year he first became a director of
Cooperative Bank, the expiration of his term as a director, and the number and
percentage of shares of the Common Stock beneficially owned. With the exception
of Mr. Rippy, who was appointed in 1997, and Mr. Carter who was appointed in
2001, all of the individuals were initially appointed as directors of the
Company in connection with the Company's incorporation in April 1994.
SHARES OF
YEAR FIRST COMMON STOCK
AGE AT ELECTED AS CURRENT BENEFICIALLY
DECEMBER 31, DIRECTOR OF TERM OWNED AT PERCENT
NAME 2002 COOPERATIVE BANK TO EXPIRE MARCH 5, 2003 (1) OF CLASS
---- -------- ---------------- --------- ----------------- --------
BOARD NOMINEES FOR TERM TO EXPIRE IN 2006
Frederick Willetts, III 53 1976 2003 493,666 (2) 17.33%
F. Peter Fensel, Jr. 53 1990 2003 24,395 (3) 0.86%
DIRECTORS CONTINUING IN OFFICE
James D. Hundley 61 1990 2004 32,543 (3) 1.14%
O. Richard Wright, Jr. 58 1992 2004 66,256 (3) 2.33%
Russell M. Carter 53 2001 2004 13,041 (3) 0.46%
Paul G. Burton 66 1992 2005 22,777 (3) 0.80%
H. Thompson King, III 60 1990 2005 23,536 (3) 0.83%
R. Allen Rippy 51 1997 2005 20,723 (3) 0.73%
_______________
(1) Includes stock held in joint tenancy; stock owned as tenants in common;
stock owned or held by a spouse or other member of the individual's
household; stock allocated through an employee benefit plan of the Company;
stock subject to options exercisable within 60 days; and stock owned by
businesses in which the director is an officer or major stockholder, or as
a custodian or trustee, or by spouses as a custodian or trustee, over which
shares the director effectively exercises sole or shared voting and/or
investment power, unless otherwise indicated.
(2) Includes 203,626 shares held by the Cooperative Bank 401 (k) Supplemental
Retirement Plan (the "401 (k)") over which Mr. Willetts has sole voting
power as the name fiduciary for such plan. Also includes shares of common
Stock owned by Mr. Willetts' spouse and children, as well as shares held in
various family trusts of which Mr. Willetts serves as a trustee. Also
includes 72,061 shares for which Mr. Willetts may be deemed to share voting
and dispositive power due to his holding general powers of attorney for his
mother and sisters. Mr. Willetts disclaims beneficial ownership of these
shares.
(3) Includes 10,000, 10,000, 10,000, 10,000, 10,000, and 15,424 shares which
Messrs. Fensel, Hundley, Wright, Burton, King and Rippy have the right to
purchase pursuant to the exercise of stock options under the 1998 Option
Plan.
The principal occupation of each director of the Company for the last five
years is set forth below.
3
FREDERICK WILLETTS, III has been employed by the Bank since 1972 and has
served as the Chief Executive Officer and President since June 1, 1991. He was
named to the additional position of Chairman of the Board during 1998. Mr.
Willetts is past Chairman of the North Carolina Bankers Association and served
on the Board of Directors of America's Community Bankers. He has served on the
Thrift Institutions Advisory Council to the Federal Reserve Board, as President
of the Southeastern Conference of the U.S. Savings and Loan League, the Greater
Wilmington Chamber of Commerce, the Foundation of the Episcopal Diocese of East
Carolina, Vice Chairman of the Foundation of the University of North Carolina at
Wilmington and as President of Wilmington Industrial Development (Committee of
100). Mr. Willetts was the recipient of the New Hanover Distinguished Service
Award in 1987, the "Five Outstanding Young North Carolinians" Award in 1988, the
Glen Troop Award for outstanding public service to the thrift industry in 1990
and the Wilmington Good Citizenship Award in 1994.
F. PETER FENSEL, JR. is President of F. P. Fensel Supply Company in
Wilmington, North Carolina. He has served as President of the North Carolina
Azalea Festival, the Cape Fear Sertoma Club, Wilmington Industrial Development
and the Brigade Boys Club. He was Vice President of the Greater Wilmington
Chamber of Commerce and has served as a board member of Plantation Village, Cape
Fear Area United Way, First Citizens Bank (Wilmington) Local Advisory Board,
Historic Wilmington Foundation, and Foundation of the University of North
Carolina at Wilmington. He currently serves as a board member of the Louise
Wells Cameron Art Museum and the Bellamy Mansion. He also serves on the National
Advisory Council for Bando America Corporation.
JAMES D. HUNDLEY, M.D. is the President of the Wilmington Orthopaedic
Group; past president of the North Carolina Orthopaedic Association, the UNC
Medical Alumni Association, the New Hanover-Pender Medical Society, the Cape
Fear Academy Board of Trustees, and the Wilmington Rotary Club; past Chief of
Staff of the New Hanover Regional Medical Center; past chairman of the New
Hanover Public Library Advisory Board; and was Athletic Team Physician for the
University of North Carolina at Wilmington for over twenty years. He is the
director of the Rotary/Orthopaedic Crippled Children's Clinic, a member of the
National Board for Certification of Orthopaedic Physician Assistants, a member
of the N.C. Osteoporosis Prevention Task Force, and is a Clinical Assistant
Professor in the Department of Orthopaedics at UNC Hospitals in Chapel Hill and
an adjunct professor at UNC-Wilmington. He received a Distinguished Service
Award from the UNC Medical Alumni Association in May of 2000 and was an invited
Orthopaedic Visiting Professor in January of 2001. Dr. Hundley was listed in
each issue of the BEST DOCTORS IN AMERICA, SOUTHEAST REGION 1996-2002.
O. RICHARD WRIGHT, JR. is the senior partner in the law firm of McGougan,
Wright, Worley, Harper and Bullard, established in Tabor City, North Carolina in
1932, and has been associated with the firm since 1971. Mr. Wright is the owner
of Flat Bay Farms and is co-owner of residential and commercial rental property
firms known as WSIC and FBIC. He and his wife, Jenny McKinnon Wright, also own
the River Inn located at 314 South Front Street in Wilmington. Mr. Wright served
in the North Carolina House of Representatives for seven terms during the years
1974 to 1988. He serves on the Board of Directors of a number of civic and
community organizations including the Tabor City Committee of 100, the
Southeastern Community College Foundation, the Lewis A. Sikes Foundation, the
Olive Battle Wright Scholarship Foundation, the Columbus County Committee of
100, the North Carolina Retail Merchants Association, the University of North
Carolina General Alumni Association and the Cape Fear Council Boy Scouts of
America. Mr. Wright has served as President of the Law Alumni Association of the
University of North Carolina at Chapel Hill, as President of the Tabor City
Civitan Club, as President of the Southeastern Genealogical Society and as
President of the Southeastern Community College Foundation. In January 2000 he
was named Outstanding Citizen of the Year by the Greater Tabor City Chamber of
Commerce.
RUSSELL M. CARTER is President of Atlantic Corporation, a converter and
distributor of industrial paper and packaging materials, with facilities in
Tabor City, Wilmington, Greensboro, Charlotte, Hickory and Greenville, South
Carolina. He has managed Atlantic for the past 25 years as the company has grown
from 30 employees to 400. Mr. Carter has served on numerous civic and community
boards including United Carolina Bank Holding Company and BB&T North Carolina
Board. He served as President of Cape Fear Academy and the Boy Scouts Executive
Committee. He currently serves on the Board of the Wilmington Industrial
Development Committee (Committee of 100), is on the Board of Trustees for
University of North Carolina-Chapel Hill, and the Journalism School Board of
Visitors and is an Elder in First Presbyterian Church of Wilmington.
4
PAUL G. BURTON is President of Burton Steel Company of Wilmington, North
Carolina. He is a native of Wilmington and a graduate of North Carolina State
University. Mr. Burton is active in the National Society of Professional
Engineers. He is a past President of the North Carolina Azalea Festival. He has
served on the Governor's Board for Travel and Tourism, the Mayor's Task Force on
Economic Development, the North Carolina Ports Railway Commission, the
Wilmington Industrial Development Commission and currently serves on the Airport
Authority Board.
H. THOMPSON KING, III was named President of Hanover Iron Works, Inc. in
1982. He joined the firm in 1973, representing a fourth generation succession of
the founders of the company. He holds an undergraduate degree in Economics from
North Carolina State University and a Masters Business Administration degree
from the University of North Carolina at Chapel Hill. Hanover Iron Works, Inc.
specializes in metal fabrication and roofing. Mr. King is a native of
Wilmington, North Carolina. He is a member of the Wilmington Rotary Club. He has
served as President of Carolina Roofing and Sheet Metal Contractors Association,
the New Hanover County Airport Authority and was Vice President of the
Wilmington Chamber of Commerce.
R. ALLEN RIPPY is Vice President of Rippy Automotive Company, managing
partner of Autopark Associates, co-dealer for Cadillac of Wilmington, retailer
for Wilmington Mitsubishi and Saturn of Wilmington. He is currently serving on
the University North Carolina-Wilmington Board of Trustees. He is a past member
of the YMCA Board of Directors, North Carolina Automobile Dealer Association
Board of Directors and a Deacon at First Presbyterian Church.
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MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
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The Board of Directors of the Company conducts business through meetings of
the Board and of its committees. During the fiscal year ended December 31, 2002,
the Board of Directors held 12 regular meetings. Russell M. Carter, director
attended fewer than 75% of the total meetings of the Board of Directors and
committee meetings on which such Board member served during this period.
The Company's Audit Committee consists of Directors Rippy, King and Fensel.
All members of the Audit Committee are deemed to be independent within the
meaning of Rule 4200(a)(15) of the National Association of Securities Dealers'
listing standards. This committee meets periodically on call by the Internal
Auditor for the purpose of reviewing the activities and findings of the Internal
Audit Department and the Independent Accountants. The Audit Committee met five
times during the fiscal year ended December 31, 2002.
The Personnel Committee, composed of Directors Hundley, Wright and Burton
meets periodically for the purpose of reviewing compensation of all employees
and officers and met two times during the fiscal year ended December 31, 2002
for this purpose.
The Nominating Committee is comprised of the non-employee directors. The
Nominating Committee selects nominees for election as directors.
5
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EXECUTIVE COMPENSATION
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BOARD PERSONNEL COMMITTEE REPORT ON EXECUTIVE COMPENSATION
GENERAL. The function of administering the Company's executive compensation
policies is currently performed by the Personnel Committee of the Board of
Directors of Cooperative Bank (the "Committee"), which is composed entirely of
outside directors. The Committee is responsible for developing and making
recommendations to the Board concerning compensation paid to the Chief Executive
Officer and each of the other executive officers, and for administering all
aspects of the Company's executive compensation program, including employee
benefit plans.
The Committee makes its recommendations to the Board concerning executive
compensation on the basis of its annual review and evaluation of the Company and
Cooperative Bank's corporate performance and the compensation of its executive
officers as compared with other companies similar in size and market
capitalization.
EXECUTIVE COMPENSATION PROGRAM. The Company's executive compensation
program, which was developed with the objective of attracting and retaining
highly qualified and motivated executives, and recognizing and rewarding
outstanding performance, has the following components: (i) base salaries
(subject to the terms of existing employment agreements), (ii) stock options,
(iii) Bonuses, and (iv) miscellaneous other fringe benefits. During the year
2002, the Company hired an independent third party to review compensation of the
executive officers.
Base salary increases are determined on the basis of a combination of cost
of living and individual and corporate performance. During the year ended
December 31, 2002, base salaries of executive officers were determined by a
review of peer group compensation. The compensation survey results of the
America's Community Bankers, and survey results of the North Carolina Bankers
Association and SNL Securities Executive Compensation Review were compared to
salaries of the Company's executive officers. Peer groups were compared to the
Company by asset range and geographic region. By comparison, salaries for the
Bank's executive officers were on the low to average end of the range for
comparable peer groups.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER. The base salary of the Chief
Executive Officer is established by the terms of the employment agreement
entered into between Mr. Willetts and Cooperative Bank in 1991 (see "Employment
and Severance Agreements" below). The Chief Executive Officer's base salary
under the agreement was determined on the basis of the Committee's review and
evaluation of the compensation of chief executives of other companies similar in
size and market capitalization to Cooperative Bank. The chief executive
officer's salary is compared to the same survey results as those of the other
executive officers. The geographic regions used for the surveys were North
Carolina financial institutions and the South Atlantic states financial
institutions. The survey asset range used by the America's Community Bankers was
$500 million to $1 billion and the asset range used by the North Carolina
Bankers Association was $200 million and above. The asset range for the SNL
Securities Executive Compensation Review was $500 million to $1 billion with 40
institutions reporting. The number of institutions reporting data for the
America's Community Bankers survey in the $500 million to $1 billion asset group
was 62 and the number reporting for the South Atlantic region was 59. The number
of institutions reporting for the North Carolina Bankers Association by assets
in excess of $400 million was 12.
INCENTIVE COMPENSATION OF EXECUTIVE OFFICERS. In the year 2002, a new
incentive plan to move toward compensation based on performance was instituted.
It is designed to stimulate and reward executives with meaningful bonuses based
on surpassing a set threshold of net earnings, maintaining a specific level of
asset quality, and the accomplishment of specific components of the Strategic
Plan. The incentive plan will be updated each year. For example, for the year
2003, weight will also be given to earnings per share. Actual distribution of
bonuses will not be made until the Audit Committee has received and approved the
year-end audit and before March 15 of the subsequent year.
PERSONNEL COMMITTEE OF THE BOARD OF DIRECTORS
Paul G. Burton
James D. Hundley
O. Richard Wright, Jr.
6
SUMMARY COMPENSATION TABLE. The following table sets forth the cash and
noncash compensation for each of the last three fiscal years awarded to or
earned by the Chief Executive Officer and the other executive officers whose
salary and bonus exceeded $100,000 (each, a "Named Executive Officer"). Except
as set forth below, no other executive officer received salary and bonuses in
excess of $100,000 during the year ended December 31, 2002.
LONG-TERM COMPENSATION
AWARDS
ANNUAL COMPENSATION -----------------------
NAME AND PRINCIPAL ------------------------- SECURITIES ALL OTHER
POSITION YEAR SALARY BONUS UNDERLYING OPTIONS COMPENSATION
------------------ ---- ------ ----- ----------------------- ------------
Frederick Willetts, III 2002 $215,000 $ -- -- $ 84,039 (1)
Chairman, President and 2001 200,000 40,000 8,000 46,202
Chief Executive Officer 2000 180,000 35,000 -- 25,200
O.C. Burrell, Jr. 2002 $140,000 $ -- 3,000 38,146 (1)
Chief Operating Officer 2001 130,000 10,000 -- 12,031
2000 125,000 10,000 4,815 --
_______________
(1) For Mr. Willetts, All Other Compensation consists of directors' fees
($25,200) and expense associated with indexed retirement agreement
($58,839). For Mr. Burrell, All Other Compensation consists solely of
expense associated with indexed retirement agreement.
OPTION GRANTS IN FISCAL YEAR 2002. The following table contains information
concerning the grant of stock options during the year ended December 31, 2002 to
the Chief Operating Officer. No options were awarded during 2002 to the Chief
Executive Officer.
PERCENT POTENTIAL REALIZABLE
OF TOTAL VALUE AT ASSUMED
NUMBER OF OPTIONS ANNUAL RATES OF STOCK
SECURITIES GRANTED TO PRICE APPRECIATION
UNDERLYING EMPLOYEES FOR OPTION TERM (1)
OPTIONS IN FISCAL EXERCISE EXPIRATION ---------------------
NAME GRANTED YEAR PRICE DATE 5% 10%
---- ------- ---------- ----- ---------- ------- -------
O.C. Burrell, Jr. 3,000 11.7% $10.85 1/01/12 $20,471 $51,876
-----------------
(1) Represents the difference between the aggregate exercise price of the
options and the aggregate value of the underlying Common Stock at the
expiration date assuming the indicated annual rate of appreciation in the
value of the Common Stock as of the respective date of grant.
OPTION YEAR-END VALUE TABLE. The following table sets forth information
regarding the number and value of options held by each of the Named Executive
Officers at the end of 2002.
NUMBER OF VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
AT FISCAL YEAR-END AT FISCAL YEAR-END
NAME (ALL IMMEDIATELY EXERCISABLE) (ALL IMMEDIATELY EXERCISABLE)(1)
---- ----------------------------- --------------------------------
Frederick Willetts, III 17,000 $ 80,520
O. C. Burrell, Jr. 22,019 $123,456
____________
(1) Based on the difference between (i) the reported closing sale price per
share on the Nasdaq National Market at fiscal year-end ($15.94 per share)
and (ii) the option exercise price per share, as adjusted.
7
PENSION PLAN. The following table indicates the annual retirement benefit
that would be payable under the plan upon retirement at age 65 to a participant
electing to receive his retirement benefit in the standard form of benefit,
assuming various specified levels of plan compensation and various specified
years of credited service.
HIGH-5 BENEFIT YEARS OF SERVICE
AVERAGE -----------------------------------------------------------------------------------------
SALARY 5 10 15 20 25 30 35 40
-------------- ---------- ----------- ---------- ---------- ----------- ---------- ----------- ---------
$10,000 $ 600 $ 1,300 $1,900 $ 2,500 $ 3,100 $ 3,800 $ 4,400 $ 5,300
30,000 1,900 3,800 5,600 7,500 9,400 11,300 13,100 15,800
60,000 4,300 8,500 12,800 17,100 21,300 25,600 29,800 35,100
90,000 6,900 13,800 20,700 27,600 34,400 41,300 48,200 56,100
120,000 9,500 19,000 28,500 38,100 47,600 57,100 66,600 77,100
150,000 12,100 24,300 36,400 48,600 60,700 72,800 85,000 98,100
160,000 13,000 26,000 39,000 52,100 66,100 78,100 91,100 105,100
170,000 13,900 27,800 41,700 55,600 69,400 83,300 97,200 112,100
200,000 16,500 33,000 49,500 66,100 82,600 99,100 115,600 133,100
230,000 19,100 38,300 57,400 76,600 95,700 114,800 134,000 154,100
As of December 31, 2002, Messrs. Willetts, III and Burrell, Jr. had 30 and
10 years, respectively, of service under the Pension Plan.
EMPLOYMENT AND SEVERANCE AGREEMENTS. Cooperative Bank maintains an
employment agreement with Frederick Willetts, III, Chairman, President and Chief
Executive Officer. The agreement has a term of five years, and provides for a
current annual base salary of $215,000. The employment agreement provides for a
salary review by the Board of Directors not less often than annually with
increases to be made in the Board's sole discretion, and also provides for
inclusion in any customary fringe benefits and vacation and sick leave. The
agreement is terminable upon death, and is terminable by Cooperative Bank for
"just cause" as defined in the agreement. If Cooperative Bank terminates Mr.
Willetts' employment without just cause, he will be entitled to a continuation
of his salary and other benefits from the date of termination through the
remaining term of the agreement. Mr. Willetts is able to terminate his agreement
by providing written notice to the Board of Directors.
Mr. Willetts' employment agreement contains a provision stating that in the
event of the voluntary or involuntary termination of employment in connection
with, or within one year after, any change in control of the Company or
Cooperative Bank, Mr. Willetts will be paid a sum equal to 2.99 times the
average annual compensation he received during the five taxable years
immediately prior to the date of change in control. "Control" generally refers
to the ownership, holding or power to vote more than 25% of the Company's or
Cooperative Bank's voting stock, the control of the election of a majority of
directors or the exercise of a controlling influence over the management or
policies of the Company or Cooperative Bank by any person or group.
The Bank also maintains a severance agreement with O.C. Burrell, Jr., Chief
Operating Officer of the Bank. This agreement provides that in the event of the
involuntary termination of his employment with the Bank in connection with, or
within one year after, any change in control of the Bank, he shall be paid an
amount equal to 2.99 times the total cash compensation paid to him during the 12
month period preceding such termination. "Control" is defined in the same way as
under Mr. Willetts' employment agreement. Mr. Burrell may also be entitled to
receive the foregoing termination payment in the event of his voluntary
termination of his employment in connection with a change of control under the
following circumstances: (1) if he would be required to relocate outside the
metropolitan area of Wilmington, North Carolina, (2) if in the organizational
structure of the Bank he would be required to report to persons other than the
President, (3) if the Bank fails to maintain employee benefit plans at
pre-change in control levels, (4) if the officer would be assigned duties and
responsibilities other than those normally associated with his position as
Executive Vice President and Chief Operating Officer, and (5) if the officer's
responsibilities or authority have in any way been diminished.
8
The aggregate payment to Messrs. Willetts and Burrell, assuming the
termination of employment or other triggering events under the foregoing
circumstances at December 31, 2002, would be $658,495 and $431,916,
respectively.
The provisions of these agreements may have the effect of discouraging a
future takeover attempt in which stockholders of the Company otherwise might
receive a premium for their shares over then-current market prices.
EXECUTIVE INDEXED RETIREMENT AGREEMENTS. Cooperative Bank entered into
Executive Indexed Retirement Agreements with each of Messrs. Willetts and
Burrell. The purpose of these agreements is to help retain qualified management
for certain key positions by offering a benefit that rewards key officers of the
Company and Cooperative Bank for their years of service. The agreements with the
executives establish pre-retirement accounts for the benefit of each of them
which are increased or decreased each year by an amount equal to the difference
between the after-tax earnings on specified adjustable life insurance contracts
less that year's premium expense and less the Bank's cost of funds expense on
premiums paid to date (the "Index Retirement Benefit"). If the executives remain
in the employment of the Bank until age 65, they will be entitled to receive the
balance in their pre-retirement account as of the Plan Year ending immediately
preceding the attainment of age 65 in 288 equal monthly installments (the
"Primary Normal Retirement Benefit"). In addition, within 60 days following the
end of the Plan Year following the executive's termination of employment and
continuing until his death, the Bank shall pay a "Secondary Normal Retirement
Benefit" in an amount based upon the return on the increase in the cash
surrender value of certain insurance policies used to fund these agreements. In
the event of disability, the executives will become 100% vested in their
accounts and entitled to immediately begin receiving their retirement benefits.
In the event of the executive's death, the remaining unpaid balance of their
account shall be paid in a lump sum to their designated beneficiaries. If the
executives voluntarily resign before reaching age 65, they will not be entitled
to receive any payment, If the executives are involuntarily terminated prior to
age 65 (other than for cause, due to disability or as a result of a Change in
Control) they will be entitled to receive in a lump sum the value of their
retirement accounts as of the end of the last plan year. In the event the
executives are terminated within 12 months following a change in control, they
will be entitled to receive their benefits at age 65 as if they had been
continuously employed until age 65. For purposes of the agreements, a change in
control will occur if any corporation, person or group acquires more than 25% of
the voting stock of the Company or the Bank. At December 31, 2002, the balances
in the pre-retirement accounts of Messrs. Willetts and Burrell were $73,114 and
$47,830, respectively.
In order to fund the benefits payable under the Executive Indexed
Retirement Agreements, the Bank has purchased life insurance policies on Messrs.
Willetts and Burrell. The policies are designed to offset the program's costs
during the lifetime of the participant and to provide complete recovery of all
the program's costs at their death. The Bank is the sole owner of these policies
and has exclusive rights to the cash surrender value. The Company has entered
into split dollar agreements with the executives similar to those entered into
with directors.
--------------------------------------------------------------------------------
DIRECTORS' COMPENSATION
--------------------------------------------------------------------------------
Members of the Board of Directors and committees of the Board of Directors
receive $1,100 per month for Cooperative Bank and $500 per month for Cooperative
Bankshares.. No additional fees are paid for committee membership or meetings.
The Chairman of the Board receives an additional fee of $1,000 per month. New
directors are eligible to receive stock options to purchase 10,000 shares under
the 1998 Stock Option and Incentive Plan. During the year ended December 31,
2002, no options were granted to any non-employee director.
DIRECTOR RETIREMENT AGREEMENTS. In order to provide retirement benefits for
non-employee directors, the Bank entered into Director Retirement Agreements
with each of the non-employee directors of the Bank. Each Director Retirement
Agreement provides for a benefit of $19,200 annually for retirement on or after
reaching the normal retirement age of 72. The Director Retirement Agreements
provide for a reduced lump sum payment in the event of termination, with the
amount varying depending on the reason for the early termination. No benefit is
payable in the event of termination for cause. In the event of the director's
death, a lump sum payment shall be paid to the director's designated
beneficiaries.
9
In order to fund the benefits payable under the Director Retirement
Agreements, the Bank has purchased life insurance policies on each director. The
policies are designed to offset the program's costs during the lifetime of the
participant and to provide complete recovery of all the program's costs at their
death.
DIRECTOR DEFERRED FEE AGREEMENTS. Each of the Company and Bank entered into
Director Deferred Fee Agreements with each of the Directors (other than Director
Willetts). Pursuant to the terms of the Deferred Fee Agreements, each director
may elect to defer up to 100% of the fees he would otherwise be entitled to
receive for serving as director. The directors are entitled to change the
election amount annually. Interest on the amount deferred is credited at a rate
of 10%. Commencing one month after retirement at or after age 72, the director
will be entitled to receive the balance in his deferral account in 120 monthly
installments. In the event of termination of service prior to reaching age 72
for reasons other than death or change of control, the director will be entitled
to receive the balance in his deferral account in a lump sum payment. In the
event of a change in control, pursuant to the terms of the Director Deferred Fee
Agreements with the Bank, a director will be entitled to receive a lump sum
payment in the amount of the greater of such director's deferral account or
$169,748. The Deferred Fee Agreements between the directors and the Company
provide for a lump sum payment upon a change of control in the amount of the
greater of the director's deferral account and $77,158. In the event of the
death of a director, whether before or after termination of service but before
payments have commenced, the director's beneficiary will be entitled to receive
in a lump sum the director's deferral account balance. In the event of the death
of the director after payments have commenced, such beneficiary will be entitled
to receive the remaining payments due to him at the same time and in the same
amounts as the director was receiving at the time of death.
10
--------------------------------------------------------------------------------
COMPARATIVE STOCK PERFORMANCE GRAPH
--------------------------------------------------------------------------------
The graph and table which follow show the cumulative total return on the
Common Stock of the Company for the five years ended December 31, 2002, compared
with the cumulative total return of the NASDAQ Stock Market Index for U.S.
Companies and the NASDAQ Bank Stocks Index over the same period. Cumulative
total return on the stock or the index equals the total increase in value since
January 1, 1997 assuming reinvestment of all dividends paid into the stock or
the index, respectively.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL SHAREHOLDER
RETURN* FOR THE COMPANY AND SELECTED INDICES
[Line graph appears here depicting the cumulative total shareholder return of
$100 invested in the Common Stock as compared to $100 invested in all companies
whose equity securities are traded on the NASDAQ Stock Market and banking
companies traded on the NASDAQ market. Line graph plots the cumulative total
return from December 31, 1997 to December 31, 2002. Plot points are provided
below.]
* $100 INVESTED ON 12/31/97 in stock or index-including reinvestment of
dividends. Fiscal Year Ending December 31.
12/97 12/98 12/99 12/00 12/01 12/02
----- ----- ----- ----- ----- -----
Cooperative Bancshares, Inc. 100 48.47 44.90 40.88 45.79 68.56
NASDAQ Stock Market (U.S.) 100 140.99 261.48 157.40 124.87 86.38
NASDAQ Bank 100 99.36 95.51 108.95 117.97 120.91
Source: Research Data Group, Inc.
11
--------------------------------------------------------------------------------
AUDIT COMMITTEE REPORT
--------------------------------------------------------------------------------
The Audit Committee has reviewed and discussed the audited consolidated
financial statements of the Company with management and KPMG LLP, the Company's
independent auditors. In addition, the Audit Committee has discussed the matters
required to be discussed under Statement on Auditing Standards No. 61 ("SAS
61"). In addition, the Audit Committee has received from KPMG LLP the written
disclosures and the letter required to be delivered by KPMG LLP under
Independence Standards Board Standard No. 1 ("ISB Standard No. 1") addressing
all relationships between the auditors and the Company that might bear on the
auditors' independence. The Audit Committee has reviewed the materials received
from KPMG LLP and has met with representatives of KPMG LLP to discuss the
independence of the auditing firm.
The Audit Committee has reviewed the non-audit services currently provided
by the Company's independent auditor and has considered whether the provision of
such services is compatible with maintaining the independence of the Company's
independent auditors.
Based on the Audit Committee's review of the consolidated financial
statements, its discussion with KPMG LLP regarding SAS 61, and the written
materials provided by KPMG LLP under ISB Standard No. 1 and the related
discussion with KPMG LLP of their independence, the Audit Committee has
recommended to the Board of Directors that the audited consolidated financial
statements of the Company be included in its Annual Report on Form 10-K for the
year ended December 31, 2002, for filing with the Securities and Exchange
Commission.
THE AUDIT COMMITTEE
H. Allen Rippy
H. Thompson King, III
F. Peter Fensel, Jr.
--------------------------------------------------------------------------------
RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS
--------------------------------------------------------------------------------
KPMG LLP served as the Company's independent certified public accountants
for the fiscal year ended December 31, 2002. A representative of KPMG LLP is
expected to be present at the Meeting to respond to appropriate questions and to
make a statement, if so desired.
--------------------------------------------------------------------------------
AUDIT AND OTHER FEES PAID TO INDEPENDENT ACCOUNTANT
--------------------------------------------------------------------------------
AUDIT FEES
During the fiscal year ended December 31, 2002, the aggregate fees for
professional services rendered by KPMG LLP for the audit of the Company's annual
consolidated financial statements and the reviews of the condensed consolidated
financial statements included in the Company's Quarterly Reports on Forms 10-Q
filed during the fiscal year ended December 31, 2002 were $64,700.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
The Company did not engage KPMG LLP to provide advice to the Company
regarding financial information systems design and implementation during the
fiscal year ended December 31, 2002.
12
ALL OTHER FEES
For the fiscal year ended December 31, 2002, the aggregate fees paid for
all other services rendered (other than audit services and financial information
systems design and implementation services) by KPMG LLP during 2002, were
$225,397. These other services consisted primarily of facilitation of strategic
planning, assistance with due diligence and tax services.
--------------------------------------------------------------------------------
TRANSACTIONS WITH MANAGEMENT
--------------------------------------------------------------------------------
In the normal course of its business the Company makes loans to its
directors and executive officers. Any such extension of credit must be made on
substantially the same terms as, and following credit underwriting procedures
that are not less stringent than, those prevailing at the time for comparable
transactions with non-affiliated parties. Cooperative Bank will make executive
officers extensions of credit with favorable features, such as reduced interest
rates and reduced or waived fees, if the loan program is widely available to all
other employees and does not give preference to executive officers over other
employees.
--------------------------------------------------------------------------------
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
--------------------------------------------------------------------------------
Pursuant to regulations promulgated under the 1934 Act, the Company's
officers, directors and persons who own more than ten percent of the outstanding
Common Stock (collectively, the "Reporting Persons") are required to file
reports detailing their ownership and changes of ownership in such Common Stock,
and to furnish the Company with copies of all such reports. Based solely on its
review of the copies of such reports received during or with respect to the
fiscal year ended December 31, 2002, the Company believes that during the year
ended December 31, 2002, all of its Reporting Persons have complied with the
reporting requirements.
--------------------------------------------------------------------------------
OTHER MATTERS
--------------------------------------------------------------------------------
The Board of Directors is not aware of any business to come before the
Meeting other than those matters described above in this Proxy Statement.
However, if any other matters should properly come before the Meeting, it is
intended that proxies in the accompanying form will be voted in respect thereof
in accordance with the judgment of the person or persons voting the proxies.
--------------------------------------------------------------------------------
MISCELLANEOUS
--------------------------------------------------------------------------------
The cost of soliciting proxies will be borne by the Company. In addition to
the solicitation of proxies by mail, Morrow & Co., a proxy soliciting firm, will
assist the Company in soliciting proxies for the meeting and will be paid a fee
of approximately $4,000 plus reimbursement for out-of-pocket expenses. Proxies
may also be solicited personally or by telephone or telegraph by directors,
officers and regular employees of the Company and the Bank, without additional
compensation therefor. The Company will also request persons, firms and
corporations holding shares in their names, or in the name of their nominees,
which are beneficially owned by others, to send proxy materials to and obtain
proxies from such beneficial owners, and will reimburse such holders for their
reasonable expenses in doing so.
The Company's Annual Report to Stockholders for the year ended December 31,
2002, including financial statements, is being mailed to all stockholders of
record as of the Record Date. Any stockholder who has not received a copy of
such Annual Report may obtain a copy by writing to the Secretary of the Company.
Such Annual Report is not to be treated as a part of the proxy solicitation
material nor as having been incorporated herein by reference.
13
HOUSEHOLDING OF PROXY MATERIAL
It is our policy to "Household" Annual Reports, Proxy materials and similar
documents. Only one Annual Report to Stockholders and one Proxy Statement is
being sent to multiple shareholders sharing a single address, unless the Company
has received instructions to the contrary. We will continue to separately mail a
proxy card for each registered stockholder account. You may request (in writing)
for additional copies of proxy material to: Investor Relations Department,
Cooperative Bankshares, Inc., P.O. Box 600, Wilmington, NC 28402, telephone
number 1-910-343-0181.
--------------------------------------------------------------------------------
STOCKHOLDER PROPOSALS
--------------------------------------------------------------------------------
In order to be eligible for inclusion in the Company's proxy materials for
next year's Annual Meeting of Stockholders, any stockholder proposal to take
action at such meeting must be received at the Company's main office at 201
Market Street, Wilmington, North Carolina 28401, no later than November 19,
2003. Any such proposal shall be subject to the requirements of the proxy rules
adopted under the 1934 Act.
Stockholder proposals to be considered at the Annual Meeting, other than
those submitted pursuant to the Exchange Act, must be stated in writing and
filed with the Secretary of the Company, not less than twenty days prior to the
date of the Annual Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
/S/ Linda B. Garland
Linda B. Garland
Vice President and Secretary
Wilmington, North Carolina
March 21, 2003
--------------------------------------------------------------------------------
ANNUAL REPORT ON FORM 10-K
--------------------------------------------------------------------------------
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR
ENDED DECEMBER 31, 2002 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
WILL BE FURNISHED WITHOUT CHARGE TO STOCKHOLDERS AS OF THE RECORD DATE UPON
WRITTEN REQUEST TO THE SECRETARY, COOPERATIVE BANKSHARES, INC., P.O. BOX 600,
WILMINGTON, NORTH CAROLINA 28402.
--------------------------------------------------------------------------------
14
REVOCABLE PROXY
COOPERATIVE BANKSHARES, INC.
WILMINGTON, NORTH CAROLINA
--------------------------------------------------------------------------------
ANNUAL MEETING OF STOCKHOLDERS
APRIL 25, 2003
--------------------------------------------------------------------------------
The undersigned hereby appoints Paul G. Burton, H. Thompson King, III and
R. Allen Rippy of Cooperative Bankshares, Inc. (the "Company") with full powers
of substitution, to act as proxies for the undersigned to vote all shares of the
Company's common stock, $1.00 par value, which the undersigned is entitled to
vote at the Annual Meeting of Stockholders to be held at the Hilton Wilmington
Riverside, 301 North Water Street, Wilmington, North Carolina, on Friday, April
25, 2003 at 11:00 a.m., and at any and all adjournments thereof, as follows:
VOTE
FOR WITHHELD
--- --------
1. The election as directors of the
nominees listed below (except as [ ] [ ]
marked to the contrary below).
Frederick Willetts, III
F. Peter Fensel, Jr.
INSTRUCTION: TO WITHHOLD YOUR VOTE FOR ANY INDIVIDUAL
NOMINEE, INSERT THAT NOMINEE'S NAME ON THE LINE
PROVIDED BELOW.
________________________
The Board of Directors recommends a vote "FOR" nominees listed above.
--------------------------------------------------------------------------------
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS
PROXY SHALL BE VOTED FOR EACH OF THE NOMINEES LISTED ABOVE. IF ANY OTHER
BUSINESS IS PRESENTED AT THE MEETING, THIS PROXY WILL BE VOTED BY THOSE NAMED IN
THIS PROXY AS DETERMINED BY A MAJORITY OF THE BOARD OF DIRECTORS. AT THE PRESENT
TIME, THE BOARD OF DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE
MEETING. THIS PROXY CONFERS DISCRETIONARY AUTHORITY ON THE HOLDERS THEREOF TO
VOTE WITH RESPECT TO THE ELECTION OF ANY PERSON AS DIRECTOR WHERE THE NOMINEE IS
UNABLE TO SERVE OR FOR GOOD CAUSE WILL NOT SERVE AND MATTERS INCIDENT TO THE
CONDUCT OF THE 2003 ANNUAL MEETING.
--------------------------------------------------------------------------------
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
Should the undersigned be present and elect to vote at the Meeting or at
any adjournment thereof and after notification to the Secretary of the Company
at the Meeting of the stockholder's decision to terminate this proxy, then the
power of said attorneys and proxies shall be deemed terminated and of no further
force and effect.
The undersigned acknowledges receipt from the Company prior to the
execution of this proxy of the Notice of Annual Meeting, the Proxy Statement,
and the Company's Annual Report to Stockholders for the Fiscal Year Ended
December 31, 2002. The undersigned hereby revokes any and all proxies heretofore
given with respect to the undersigned's shares of the Company's Common Stock.
Dated: ________________________, 2003
-------------------------------------- -------------------------------------
PRINT NAME OF STOCKHOLDER PRINT NAME OF STOCKHOLDER
-------------------------------------- -------------------------------------
SIGNATURE OF STOCKHOLDER SIGNATURE OF STOCKHOLDER
Please sign exactly as your name appears on the envelope in which this card was
mailed. When signing as attorney, executor, administrator, trustee or guardian,
please give your full title. If shares are held jointly, each holder should
sign.
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED
POSTAGE-PREPAID ENVELOPE.