UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrantx Filed by a Party other than the Registrant¨
Check the appropriate box:
x | Preliminary Proxy Statement |
¨ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
¨ | Definitive Proxy Statement |
¨ | Definitive Additional Materials |
¨ | Soliciting Material Pursuant to §240.14a-12 |
NEW CENTURY BANCORP, INC.
(Name of Registrant as Specified In Its Charter)
(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)(4) and 0-11. |
(1) | Title of each class of securities to which transaction applies: |
(2) | Aggregate number of securities to which transaction applies: |
(3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): |
(4) | Proposed maximum aggregate value of transaction: |
(5) | Total fee paid: |
¨ | Fee paid previously with preliminary materials. |
¨ | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
(1) | Amount Previously Paid: |
(2) | Form, Schedule or Registration Statement No.: |
(3) | Filing Party: |
(4) | Date Filed: |
NEW CENTURY BANCORP, INC.
700 West Cumberland Street
Dunn, North Carolina 28334
(910) 892-7080
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
NOTICE is hereby given that a Special Meeting of Shareholders of New Century Bancorp, Inc. (the “Company”) will be held as follows:
Place: | New Century Bank | |
700 West Cumberland Street | ||
Dunn, North Carolina 28334 | ||
Date: | December 18, 2008 | |
Time: | 10:00 a.m. |
The purposes of the meeting are:
1. | To consider a proposal to amend the Articles of Incorporation to authorize the issuance of up to 1,000,000 shares of preferred stock, no par value per share, to be issued in one or more series with such preferences, limitations and relative rights as shall be designated by the Board of Directors; and |
2. | To transact such other business as may properly be presented for action at the meeting. |
YOU ARE INVITED TO ATTEND THE SPECIAL MEETING IN PERSON. HOWEVER, EVEN IF YOU PLAN TO ATTEND, YOU ARE REQUESTED TO COMPLETE, SIGN AND DATE THE ENCLOSED APPOINTMENT OF PROXY AND RETURN IT PROMPTLY IN THE ENVELOPE PROVIDED FOR THAT PURPOSE TO ENSURE THAT A QUORUM IS PRESENT AT THE MEETING. THE GIVING OF AN APPOINTMENT OF PROXY WILL NOT AFFECT YOUR RIGHT TO REVOKE IT OR TO ATTEND THE MEETING AND VOTE IN PERSON.
By Order of the Board of Directors |
William L. Hedgepeth, II |
President and Chief Executive Officer |
November , 2008
NEW CENTURY BANCORP, INC.
700 West Cumberland Street
Dunn, North Carolina 28334
(910) 892-7080
PROXY STATEMENT
Mailing Date: On or About November , 2008
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 18, 2008
This Proxy Statement is being furnished in connection with the solicitation by the Board of Directors of New Century Bancorp, Inc. (the “Company”) of appointments of proxy for use at a special meeting of the Company’s shareholders (the “Special Meeting”) to be held on December 18, 2008, at 10:00 a.m., at New Century Bank, 700 West Cumberland Street, Dunn, North Carolina, and at any adjournments thereof. The Company’s proxy solicitation materials are being mailed to shareholders on or about November , 2008. In this Proxy Statement, the Company’s subsidiary bank, New Century Bank, is referred to as the “Bank.”
Voting of Proxies
Persons named in the enclosed appointment of proxy as proxies (the “Proxies”) to represent shareholders at the Special Meeting are J. Gary Ciccone, Oscar N. Harris and C. L. Tart, Jr. Shares represented by each appointment of proxy that is properly executed, returned and not revoked, will be voted in accordance with the directions contained therein. If no directions are given, such shares will be voted “FOR” Proposal 1. On such other matters as may come before the meeting, the Proxies will be authorized to vote in accordance with their best judgment. An appointment of proxy may be revoked by the shareholder giving it at any time before it is exercised by filing with Brenda B. Bonner, Secretary of the Company, a written instrument revoking it or a duly executed Appointment of Proxy bearing a later date, or by attending the Special Meeting and announcing his or her intention to vote in person.
Record Date
The close of business on November 7, 2008 has been fixed as the record date (the “Record Date”) for the determination of shareholders entitled to notice of and to vote at the Special Meeting. Only those shareholders of record on that date will be eligible to vote on the proposals described herein.
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Voting Securities
The Company’s voting securities are the shares of its common stock, par value $1.00 per share, of which 6,829,149 shares were issued and outstanding on the Record Date. As of the Record Date, there were approximately 1,500 shareholders of record of the Company’s common stock.
Voting Procedures; Quorum; Votes Required for Approval
At the Special Meeting, each shareholder will be entitled to one vote for each share held of record on the Record Date on each matter submitted for voting.
A majority of the shares of the Company’s common stock issued and outstanding on the Record Date must be present in person or by proxy to constitute a quorum for the conduct of business at the Special Meeting.
Assuming a quorum is present, in the case of Proposal 1, for such proposal to be approved, the proposal must be approved by a majority of the votes cast. Abstentions and broker non-votes will have no effect.
Revocation of Appointment of Proxy
Any shareholder who executes an appointment of proxy has the right to revoke it at any time before it is exercised by filing, with the Secretary of the Company, either an instrument revoking it or a duly executed appointment of proxy bearing a later date, or by attending the Special Meeting and announcing his or her intention to vote in person.
Solicitation
The Company will pay the cost of preparing, assembling and mailing this Proxy Statement. Appointments of proxy also may be solicited personally or by telephone by the Company’s and the Bank’s directors, officers and employees without additional compensation. The Company will reimburse banks, brokers, and other custodians, nominees and fiduciaries for their costs in sending the proxy materials to the beneficial owners of the Company’s common stock.
Beneficial Ownership of Securities by Management
As of the Record Date, there were no shareholders known to management to own more than 5% of the Company’s common stock.
The following table lists the individual beneficial ownership of the Company’s common stock as of the Record Date, by the Company’s directors and executive officers, individually and as a group.
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NAME AND ADDRESS OF BENEFICIAL OWNER | AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP (1)(2) | PERCENT OF CLASS (3) | ||
Kevin S. Bunn Fayetteville, NC | 31628 | 0.46 | ||
Lisa F. Campbell(4) Lillington, NC | 28,104 | 0.41 | ||
J. Gary Ciccone(5) Fayetteville, NC | 99,431 | 1.45 | ||
T. Dixon Dickens(6) Fayetteville, NC | 38,915 | 0.57 | ||
Danny Fisher Dunn, NC | 3,614 | 0.05 | ||
T. C. Godwin, Jr.(7) Dunn, NC | 50,554 | 0.74 | ||
Oscar N. Harris(8)(9) Dunn, NC | 246,203 | 3.61 | ||
Gerald W. Hayes Dunn, NC | 96,467 | 1.41 | ||
William L. Hedgepeth, II Fayetteville, NC | 91,770 | 1.33 | ||
D. Ralph Huff III(10) Fayetteville, NC | 53,516 | 0.78 | ||
John W. McCauley Fayetteville, NC | 37,674 | 0.55 | ||
Carlie C. McLamb(11) Dunn, NC | 271,600 | 3.98 | ||
Michael S. McLamb(12) Dunn, NC | 51,597 | 0.76 | ||
Raymond L. Mulkey, Jr. Fayetteville, NC | 55,592 | 0.81 | ||
Anthony E. Rand(13) Fayetteville, NC | 74,791 | 1.09 | ||
James H. Smith Fayetteville, NC | 31,102 | 0.45 | ||
C. L. Tart, Jr.(14) Dunn, NC | 130,500 | 1.91 | ||
W. Lyndo Tippett Fayetteville, NC | 25,569 | 0.37 | ||
All Directors and Executive Officers as a group (19 persons) | 1,441,458 | 20.46 |
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(1) | Except as otherwise noted, to the best knowledge of the Corporation’s management, the above individuals and group exercise sole voting and investment power with respect to all shares shown as beneficially owned other than the following shares as to which such powers are shared: Mr. Fisher – 3,614 shares; Mr. Harris – 91,694 shares; Mr. C. McLamb – 108,950 shares; Ms. Patterson – 957 shares; and Mr. Tart – 18,783 shares. |
(2) | Included in the beneficial ownership tabulations are the following options to purchase shares of common stock of the Corporation: Mr. Bunn – 27,450 shares; Ms. Campbell – 25,979 shares; Mr. Ciccone – 14,485 shares; Mr. Dickens – 8,746 shares; Mr. Godwin – 12,346 shares; Mr. Hedgepeth – 68,120 shares; Mr. Huff – 12,482 shares; Mr. McCauley – 2,839 shares; Ms. Patterson – 14,674; Mr. Rand – 13,992 shares; Mr. Smith – 7,195 shares; Mr. Tart – 3,346 shares; and Mr. Tippett – 6,116 shares and for all directors and executive officers as a group – 227,770 shares. |
(3) | The calculation of the percentage of class beneficially owned by each individual and the group is based on the sum of (i) a total of 6,829,149 shares of common stock outstanding as of November 7, 2008, and (ii) options to purchase shares of common stock which are exercisable within 60 days of November 7, 2008. |
(4) | Includes 325 shares held in the IRA of Ms. Campbell’s spouse. |
(5) | Includes 720 shares owned by Mr. Ciccone’s spouse and 2,987 shares held in the IRA of Mr. Ciccone’s spouse. |
(6) | Includes 3,264 shares held by Mr. Dickens as custodian for minor children and 3,932 shares held in the IRA of Mr. Dickens’s spouse. |
(7) | Includes 1,196 shares owned by Mr. Godwin’s spouse. |
(8) | Includes 40,218 shares owned by Mr. Harris’ business and 2,395 shares owned by Mr. Harris’ spouse. |
(9) | Includes 39,930 shares pledged as collateral. |
(10) | Includes 14,700 shares owned by Mr. Huff’s business and 3,632 shares owned by Mr. Huff’s spouse. |
(11) | Includes 59,894 shares owned by Mr. C. McLamb’s business. |
(12) | Includes 2,874 shares owned by Mr. M. McLamb’s spouse. |
(13) | Includes 9,298 shares owned by Senator Rand’s spouse. |
(14) | Includes 76,785 shares owned by Mr. Tart’s business, 4,633 shares owned by Mr. Tart’s spouse, and 3,415 shares held in the IRA of Mr. Tart’s spouse. |
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PROPOSAL 1
AMENDMENT OF THE ARTICLES OF INCORPORATION
The Proposed Amendment
The Board of Directors of the Company has approved and recommends that the shareholders approve Proposal 1, which provides for the amendment of the Articles of Incorporation of the Company by amending Article II to authorize the issuance of up to 1,000,000 shares of preferred stock. The proposed amendment to Article II of the Company’s Articles of Incorporation is attached to this Proxy Statement in its entirety asExhibit A.
Reasons for the Amendment
It is the Company’s intention to finance its operations and continued growth through, among other things, the issuance from time to time of various equity securities. Furthermore, the Board of Directors believes it is in the best interests of the Company and its shareholders to permit the Company to issue preferred stock with such dividend rates, conversion prices, voting rights, redemption prices, maturity dates, rights, privileges and preferences as may be determined by the Board of Directors from time to time. Accordingly, the proposed amendment is necessary to provide the Company with the flexibility to take advantage of such opportunities in the future.
Pursuant to North Carolina law, authorized and unissued shares (other than those shares reserved for specific purposes) are available for issuance by the Company to such investors and for such consideration as the Board of Directors may determine from time to time. Shareholders may not be given the opportunity to vote on such matters, unless shareholder approval is required by applicable law or unless the Board of Directors, in its judgment, recommends shareholder approval. Shareholders have no preemptive rights to subscribe for newly issued shares. Because there are no preemptive rights, the issuance of additional shares could dilute the interests of existing shareholders.
The Board of Directors believes that the proposed increase in the number of authorized shares of capital stock and authorization of the future issuance of up to 1,000,000 shares of preferred stock will provide flexibility needed to meet corporate objectives and is in the best interests of the Company and its shareholders. If the proposal is approved, officers of the Company will promptly make the appropriate filings with the Department of the North Carolina Secretary of State and take any other action necessary to implement the amendment.
Potential Issuance of Preferred Stock Pursuant to the Department of the Treasury Capital Purchase Program
The Company is currently evaluating participation in the Department of the Treasury Capital Purchase Program. In the event the Company participates, it is anticipated that the Company would issue perpetual preferred stock with the terms described below (“TCPP Preferred Stock”).
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Price and Liquidation Preference
• | Issuance price of $1,000 per share |
• | $1,000 liquidation preference per share |
Rank
The TCPP Preferred Stock would, with respect to the priority of the payment of dividends and the priority of payments upon liquidation, winding up and dissolution, rank:
• | senior to all classes of common stock and all equity securities issued by the Company the terms of which specifically provide that such equity securities will rank junior to the TCPP Preferred Stock |
• | equally with any equity securities issued by the Company the terms of which specifically provide that such equity securities will rank equally with the TCPP Preferred Stock |
• | junior to all equity securities issued by the Company the terms of which specifically provide that such equity securities will rank senior to the TCPP Preferred Stock |
Dividends
• | 5% annual dividend, payable quarterly on the 15th day of February, May, August and November of each year, increasing to 9% upon the fifth anniversary of issuance, when, as and if declared by the Company’s Board of Directors |
Redemption
• | The TCPP Preferred Stock would be non-redeemable for a minimum period of three years, except in special circumstances |
Voting Rights
• | Holders of the TCPP Preferred Stock will have no voting rights except as otherwise required by law, the rules of any securities exchange on which such preferred stock may be listed or our Articles of Incorporation |
• | If dividends on the TCPP Preferred Stock are not paid in full for six dividend periods, whether or not consecutive, the TCPP Preferred Stock will have the right to elect two directors to the Company’s board of directors |
Warrants
• | Any issuance of the TCPP Preferred Stock must be accompanied by warrants to purchase a number of shares of the Company’s common stock equal to 15% of the aggregate liquidation preference of the TCPP Preferred Stock issued, subject to adjustment in certain circumstances |
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• | The exercise price of the warrants would be based on a 20-day trading average of the Company’s common stock, subject to customary anti-dilution adjustments |
• | In the event that the Company issues qualifying equity securities on or before December 31, 2009 yielding proceeds greater than or equal to the aggregate issue price of all TCPP Preferred Stock issued to the Department of the Treasury, the number of warrants outstanding will be decreased by 50% |
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE “FOR” THE AMENDMENT OF THE ARTICLES OF INCORPORATION OF THE COMPANY.
OTHER MATTERS
The Board of Directors knows of no other business that will be brought before the Special Meeting. Should other matters be properly presented for action at the Special Meeting, the Proxies, or their substitutes will be authorized to vote shares represented by appointments of proxy according to their best judgment.
PROPOSALS FOR 2009 ANNUAL MEETING
It is anticipated that the 2009 Annual Meeting will be held on a date during May 2009. Any proposal of a shareholder which is intended to be presented at the 2009 Annual Meeting must be received by the Company at its main office in Dunn, North Carolina no later than December 19, 2008, in order that any such proposal be timely received for inclusion in the proxy statement and appointment of proxy to be issued in connection with that meeting. If a proposal for the 2009 Annual Meeting is not expected to be included in the proxy statement for that meeting, the proposal must be received by the Company by February 13, 2009 for it to be timely received for consideration. The proxy holders will use their discretionary authority for any proposals received thereafter.
SHAREHOLDER COMMUNICATIONS
The Company does not currently have a formal policy regarding shareholder communications with the Board of Directors, however, any shareholder may submit written communications to Brenda B. Bonner, Secretary, New Century Bancorp, Inc., 700 West Cumberland Street, Dunn, North Carolina 28334, whereupon such communications will be forwarded to the Board of Directors if addressed to the Board of Directors as a group or to the individual director or directors addressed.
.
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EXHIBIT A
ARTICLE II
The Corporation shall have authority to issue a total of 11,000,000 shares of capital stock. The capital stock shall consist of 10,000,000 shares of Common Stock, $1.00 par value per share, each with one vote per share and 1,000,000 shares of Preferred Stock, no par value. The preferences, limitations and relative rights of the shares of Preferred Stock shall be designated by the Board of Directors and may be issued in one or more series.
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REVOCABLE PROXY
NEW CENTURY BANCORP, INC.
700 West Cumberland Street
Dunn, North Carolina 28334
APPOINTMENT OF PROXY
SOLICITED BY BOARD OF DIRECTORS
The undersigned hereby appoints J. Gary Ciccone, Oscar N. Harris and C. L. Tart, Jr., or any of them, as attorneys and proxies, with full power of substitution, to vote all shares of the common stock of New Century Bancorp, Inc. (the “Company”) held of record by the undersigned on November 7, 2008, at the Special Meeting of Shareholders of the Company to be held at New Century Bank, 700 West Cumberland Street, Dunn, North Carolina, at 10:00 a.m. on December 18, 2008, and at any adjournments thereof. The undersigned hereby directs that the shares represented by this appointment of proxy be voted as follows on the proposals listed below:
1. | AMENDMENT OF ARTICLES OF INCORPORATION: Proposal to amend the Articles of Incorporation to authorize the issuance of up to 1,000,000 shares of preferred stock. |
¨ FOR | ¨AGAINST | ¨ABSTAIN |
2. | OTHER BUSINESS: On such other matters as may properly come before the Special Meeting, the proxies are authorized to vote the shares represented by this appointment of proxy in accordance with their best judgment. |
THE SHARES REPRESENTED BY THIS APPOINTMENT OF PROXY WILL BE VOTED AS DIRECTED ABOVE. IN THE ABSENCE OF ANY DIRECTION, SUCH SHARES WILL BE VOTEDFOR PROPOSAL 1. THIS APPOINTMENT OF PROXY MAY BE REVOKED BY THE HOLDER OF THE SHARES TO WHICH IT RELATES AT ANY TIME BEFORE IT IS EXERCISED BY FILING WITH THE SECRETARY OF THE COMPANY A WRITTEN INSTRUMENT REVOKING IT OR A DULY EXECUTED APPOINTMENT OF PROXY BEARING A LATER DATE OR BY ATTENDING THE SPECIAL MEETING AND ANNOUNCING HIS OR HER INTENTION TO VOTE IN PERSON.
Dated: ________________________________________, 2008 | ||
___________________________________________________ | ||
Signature | ||
___________________________________________________ | ||
Signature if held jointly | ||
Instruction: Please sign aboveexactly as your name appears on this appointment of proxy. Joint owners of shares shouldboth sign. Fiduciaries or other persons signing in a representative capacity should indicate the capacity in which they are signing. |
IMPORTANT: TO ENSURE THAT A QUORUM IS PRESENT, PLEASE SEND IN YOUR APPOINTMENT OF PROXY WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING. EVEN IF YOU SEND IN YOUR APPOINTMENT OF PROXY, YOU WILL BE ABLE TO VOTE IN PERSON AT THE MEETING IF YOU SO DESIRE.