Beverly National PRE 14A Preliminary proxy

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 Registrant  x

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

Beverly National Corporation

(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)(1) 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:

BEVERLY NATIONAL CORPORATION

240 Cabot Street

Beverly, Massachusetts 01915

(978) 922-2100

NOTICE OF 2006 ANNUAL MEETING OF SHAREHOLDERS

To Be Held on April 25, 2006

NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Beverly National Corporation (the “Company”), will be held on Tuesday, April 25, 2006, at the Danvers office of Beverly National Bank, 107 High Street, Danvers, Massachusetts at 9:00 a.m., local time (together with any adjournments and postponements thereof, the “Annual Meeting”) for the following purposes:

1. To fix the number of directors who shall constitute the full Board of Directors at eleven.

2. To elect four Directors of the Company for a three-year term.

3. Ratification of the appointment of independent auditor.

4. To adopt an amendment to the Restated Articles of Organization to increase the authorized number of shares of Common Stock from 2,500,000 to 5,000,000.

5. To transact such other business as may properly come before the meeting and any postponements or adjournments thereof.

The Board of Directors of the Company has fixed the close of business on March __, 2006 as the record date (the “Record Date”) for determination of shareholders entitled to notice of and to vote at the Annual Meeting and any adjournments or postponements thereof. In the event that there are not sufficient votes to approve the foregoing proposals at the time of the Annual Meeting, the Annual Meeting may be adjourned or postponed in order to permit further solicitation of proxies by the Company.

The above matters are described in detail in the accompanying Proxy Statement.

By Order of the Board of Directors,

Paul J. Germano, Secretary

Beverly, Massachusetts

March    , 2006

Whether or not you plan to attend the Annual Meeting in person, please complete and sign the enclosed proxy and return it promptly in the enclosed envelope, which requires no postage if mailed in the United States. If you attend the Annual Meeting and desire to withdraw your proxy and vote in person, you may do so.

If your shares are in a brokerage or fiduciary account, your broker or bank will send you a voting instructions form instead of a proxy card. Please follow the instructions on that form to tell them how to vote your shares. We encourage you to use the telephone voting option provided with such forms. Please do not send the voting information form to us. If you wish to attend the meeting and vote your shares in person, you must follow the instructions on the voting information form to obtain a legal proxy from your broker or bank.

If you receive multiple Proxy or Voting Instruction Forms in a single mailing with this Proxy Statement and one copy of our Annual Report, your mailing may have been “householded” to cut down on duplication. If you want more copies of the Proxy Statement or Annual Report, please write or call Paul J. Germano, Secretary, Beverly National Corporation, 240 Cabot Street, Beverly, MA 01915 (978) 922-2100.

BEVERLY NATIONAL CORPORATION

240 Cabot Street

Beverly, Massachusetts 01915

(978) 922-2100

PROXY STATEMENT

THE COMPANY

Beverly National Corporation (the “Company”) is a bank holding company principally conducting business through Beverly National Bank (the “Bank”).

VOTING, REVOCATION AND SOLICITATION OF PROXIES

Annual Meeting

This Proxy Statement is furnished in connection with the solicitation of proxies by the Board of Directors of the Company for use at the 2006 Annual Meeting of Shareholders of the Company (the “Annual Meeting”) to be held at the Danvers office of Beverly National Bank, 107 High Street, Danvers, Massachusetts, at 9:00 a.m. local time on Tuesday, April 25, 2006, and together with any adjournments or postponements thereof, for the purposes set forth in this Proxy Statement.

At the Annual Meeting, our shareholders will be asked to consider and vote upon the following matters:

1. To fix the number of directors who shall constitute the full Board of Directors at eleven.

2. To elect four Directors of the Company for a three-year term.

3. To ratify the appointment of Shatswell, MacLeod & Company, P.C., as independent auditor for the Company for the fiscal year ended December 31, 2006.

4. To adopt an amendment to the Company’s Restated Articles of Organization to increase the authorized number of shares of Common Stock from 2,500,000 to 5,000,000.

5. To transact such other business as may properly come before the meeting and any postponements or adjournments thereof.

Record Date

We mailed this Proxy Statement and enclosed proxy card on or about March __, 2006 to all shareholders entitled to vote at the Annual Meeting. Our Board of Directors fixed the close of business on March __, 2006 as the Record Date. Only the holders of record of shares of our common stock (the “Common Stock”) at the close of business on the Record Date will be entitled to notice of and to vote at the Annual Meeting and any adjournments or postponements thereof. At the Record Date, 1,892,893 shares of Common Stock were outstanding and entitled to vote.

1

Proxies, Voting and Revocations

Shares represented by a properly executed proxy received prior to the vote at the Annual Meeting and not revoked will be voted at the Annual Meeting as directed in the proxy. If a proxy is submitted and no directions are given, the proxy will be voted for the approval and adoption of the proposals to be considered at the Annual Meeting.

A holder of record of Common Stock may revoke a proxy by filing an instrument of revocation with Paul J. Germano, Secretary of the Company, 240 Cabot Street, Beverly, Massachusetts 01915. Such shareholder may also revoke a proxy by filing a duly executed proxy bearing a later date, or by appearing at the Annual Meeting in person, notifying the Secretary, and voting by ballot at the Annual Meeting. Any shareholder of record attending the Annual Meeting may vote in person whether or not a proxy has been previously given, but the mere presence (without notifying the Secretary) of a shareholder at the Annual Meeting will not constitute revocation of a previously given proxy.

The presence in person or by proxy of at least a majority of the total number of issued and outstanding shares of Common Stock entitled to vote is necessary to constitute a quorum for the transaction of business at the Annual Meeting. A quorum being present, a plurality of the shares of Common Stock voting in person or represented by proxy at the Annual Meeting is necessary to elect each of the nominees for Director and a majority of the shares of Common Stock voting is necessary to decide all other matters. Each share of the Common Stock entitles the shareholder to one vote.

In accordance with applicable state law, abstentions, votes withheld for director nominees and broker non-votes (shares represented at the meeting which are held by a broker or other nominee and as to which (i) instructions have not been received from the beneficial owner or the person entitled to vote and (ii) the broker or nominee does not exercise voting power) shall be treated as shares that are present and entitled to vote for the purpose of determining whether a quorum is present. Abstentions and broker non-votes will not be counted as voting at the Annual Meeting and, therefore, will have no effect on the outcome of Proposals One, Two or Three. Abstentions and broker non-votes will have the effect of a vote against the approval of Proposal Four.

Solicitation and Other Expenses

We will bear the cost of soliciting proxies from its shareholders, including mailing costs and printing costs in connection with this Proxy Statement. In addition to the use of the mails, proxies may be solicited by our directors, officers and certain of our employees and by personal interview, telephone, or telegram. Such directors, officers, and employees will not receive additional compensation for such solicitation but may be reimbursed for reasonable out-of-pocket expenses incurred in connection therewith. We may also make arrangements with brokerage houses and other custodians, nominees and fiduciaries for the forwarding of solicitation material to the beneficial owners of Common Stock. We may reimburse such custodians, nominees, and fiduciaries for reasonable out-of-pocket expenses incurred in connection therewith.

2

PROPOSAL ONE

FIXING NUMBER OF DIRECTORS AT ELEVEN

The persons named as proxies intend to vote to fix the number of Directors for the ensuing year at eleven (11) and vote for the election of the individuals named below as nominees for election as Director. If any nominee should not be available for election at the time of the meeting, the persons named as proxies may vote for another person in their discretion or may vote to fix the number of Directors at less than eleven (11). Our Board of Directors does not anticipate that any nominee will be unavailable.

The Board of Directors recommends that shareholders vote “FOR” the Proposal fixing the number of directors at eleven (11). The affirmative vote of a majority of the shares voting in person or in proxy is required to approve Proposal One.

PROPOSAL TWO

ELECTION OF DIRECTORS

Our Board of Directors is divided into three (3) classes as nearly equal in number as possible. Classes of Directors serve for staggered three (3) year terms. A successor class is to be elected at each annual meeting of shareholders when the terms of office of the members of one class expire. Vacant directorships may be filled, unless and until filled by shareholders, by the vote of a majority of the Directors then in office.

At the Annual Meeting, four persons will be elected Directors of the Company to serve for a three-year term until the 2009 Annual Meeting of Shareholders and until their successors are elected and qualified. Our Board of Directors has nominated John N. Fisher, Alice B. Griffin and Robert W. Luscinski, whose terms expire in 2006, for reelection as Directors of the Company for three-year terms. Our Board of Directors has also nominated Pamela C. Scott for election as a Director of the Company for a three-year term.

Unless authority to do so has been withheld or limited in the proxy, it is the intention of the persons named in the proxy to vote the shares represented by each properly executed proxy “FOR” the election of each of the nominees named above as Directors of the Company. The Board of Directors believes that each of the nominees will stand for election and, if elected, will serve as a Director. However, if any nominee fails to stand for election or is unable to serve, the proxies will be voted for the election of such other person or persons as the Board of Directors may recommend.

The Board of Directors recommends that shareholders vote “FOR” the Proposal to elect each of the three (3) nominees to the Board of Directors for a term of three (3) years. A plurality of the shares voted in person or by proxy is required to elect each director.

DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth each of the Directors who will continue in office after the Annual Meeting, each nominee for election as Director, and the Executive Officers of the Company and of the Bank. Mr. James D. Wiltshire is also a Director whose term will expire at the 2006 Annual Meeting; Mr. Wiltshire is retiring and is not seeking reelection. Each Executive Officer

3

holds office until the first Directors’ meeting following the annual meeting of shareholders and thereafter until his or her successor is elected and qualified. Each Director of the Company is also a Director of the Bank.

NOMINEES FOR ELECTION AT THE ANNUAL MEETING FOR A 3-YEAR TERM

Name	Age	Director Since	Principal Occupation During Past 5 Years
John N. Fisher	65	1989	President, Fisher & George Electrical Co., Inc.
Alice B. Griffin	68	1992	Consultant
Robert W. Luscinski	64	1999	Consultant
Pamela C. Scott	__	____	President and Chief Executive Officer, LUCC, Inc., Consultants (since 2003); ____, State Street Corporation (1997 to 2003)
DIRECTORS WHO’S TERMS WILL EXPIRE AT THE 2007 ANNUAL MEETING
Name	Age	Director Since	Principal Occupation During Past 5 Years
Richard H. Booth	71	1993	Stockbroker – Retired
Suzanne S. Gruhl	59	2004	Chief Financial Officer, YWCA Boston (____ to ____); Partner, Parent McLaughlin & Nangle, CPAs (____ to ____)
Clark R. Smith	68	1994	Attorney, Family Foundation
Michael F. Tripoli	48	2004	Partner, Grandmaison Tripoli LLP, Certified Public Accountant
DIRECTORS WHO’S TERMS WILL EXPIRE AT THE 2008 ANNUAL MEETING
Name	Age	Director Since	Principal Occupation During Past 5 Years
Donat A. Fournier	57	2002	President & Chief Executive Officer of Company & Bank since 2002; Senior Vice President of Webster Bank (1999 to 2002)
Mark B. Glovsky	58	1996	Attorney, Partner of the Law Firm of Glovsky & Glovsky
Kevin M. Burke	59	2005	President, Burke and Mawn Consulting, LLC (____ to ____); Of Counsel, Gadsby Hannah, LLP (____ to ____); District Attorney, Essex County (____ to ____)

4

EXECUTIVE OFFICERS

(Other than Directors)

Name	Age	Position	Business Experience During Past 5 Years
John R. Putney	62	Vice President of Company; Executive Vice President & Senior Loan Officer of Bank	Vice President of Company and Executive Vice President & Senior Loan Officer of Bank since 2003; Regional President of Banknorth-Massachusetts North Shore region (2003); President & CEO of Warren Five Cents Savings Bank & Warren Bancorp (1998 to 2002)
John L. Good, III	63	Executive Vice President of Company and Bank	Executive Vice President of Company and Bank since 2004; Consultant, Good Consulting, LLC (2003 to 2004); Vice President, Northeast Health Systems (1978 to 2003)
Michael O. Gilles	__	Executive Vice President & Chief Financial Officer of Company and Bank	Executive Vice President & Chief Financial Officer of Company and Bank since August, 2005; Interim Chief Financial Officer of Company and Bank (2005); MG Consulting (2003 to 2005); Senior Vice President & Chief Financial Officer, Bay State Bancorp.
James E. Rich, Jr.	54	Vice President of Company; Senior Vice President & Senior Trust Officer of Bank	Vice President of Company; Senior Vice President & Senior Trust Officer of Bank
Paul J. Germano	47	Vice President & Secretary of Company; Senior Vice President, Chief Operations Officer & Secretary of Bank	Vice President & Secretary of Company; Senior Vice President, Chief Operations Officer & Secretary of Bank

THE BOARD OF DIRECTORS, ITS COMMITTEES, AND COMPENSATION

The Board of Directors of the Company met seventeen (17) times during 2005, and the Board of Directors of the Bank met seventeen (17) times during 2005. The Board has various committees. The members of the committees are elected by the Board of Directors based upon recommendations of the Governance and Nominating Committee of the Board of Directors.

During 2005, no Director attended fewer than 75% of the aggregate of (1) the total number of meetings of our Board of Directors that he/she was entitled to attend, and (2) the total number of meetings held by all committees of our Board of Directors on which he/she served.

The following is a description of the Governance and Nominating, Audit and Compensation and Benefits Committees of the Board of Directors.

5

Governance and Nominating Committee

The Board’s Governance and Nominating Committee (the “Nominating Committee”) is comprised of Directors Booth, Burke, Griffin and Luscinski. Ms. Griffin chairs the Nominating Committee. The Nominating Committee met seven (7) times during 2005. Each of the members of the Nominating Committee is independent in accordance with the standards of the American Stock Exchange (the “AMEX”).

The Nominating Committee recommends nominees to the Board for election or reelection as Directors. A current copy of the nominating committee’s charter is available on the Company’s website at www.beverlynational.com.

The Nominating Committee does not have a policy with regard to consideration of Director candidates recommended by shareholders. The Board of Directors considers the qualifications listed below as appropriate qualifications for Director candidates and believes that the Company and its shareholders would not benefit from policies that address nominations of Directors by shareholders.

The Governance and Nominating Committee seeks candidates who possess some or all of the following characteristics:

• Sound business judgment as necessary to understand the Company’s financial and operating performance, and to provide strategic guidance to management.

• Business management experience as required to carry out the Board’s responsibilities.

• Integrity, commitment, honesty and objectivity.

• An informed understanding about (i) banking principles, (ii) bank operations/technology, (iii) pertinent laws, policies and regulations, (iv) markets and trends affecting the financial services industry (and the Bank in particular) and (v) local economic and business opportunities.

• Communication skills to establish effective relationships with other Directors, officers of the Company, and, when appropriate, the general public regarding the Company.

• Where possible, candidates should not have relationships with the Company or the Bank that may compromise the candidate’s independent status.

• Where possible, the candidate should add to the diversity of the Board with respect to age, sex, race and ethnicity. The Board will not discriminate on the basis of sex, race, color, gender, national origin, religion or disability.

• Candidates should hold business or civic leadership positions.

• Skills in financial management, asset management and legal and business services.

• Geographic representation consistent with the Bank’s present and future branch locations.

The selection process for identifying and evaluating nominees for Director shall adhere to the following guidelines:

• Candidates will be identified by Board members and senior management.

• As needed, an outside consultant will be retained to identify candidates.

• The evaluation process will be conducted under the direction of the Governance and Nominating Committee based on the above criteria and will include interviews of the candidate by members of the Governance and Nominating Committee, other Directors and members of senior management. Background checks of candidates will also be included.

6

To date, no outside consultant has been retained to identify candidates.

Audit Committee

The Board’s Audit Committee is comprised of Directors Burke, Gruhl, Luscinski and Wiltshire. Ms. Gruhl chairs the Audit Committee. The Audit Committee met seven (7) times during 2005. Each of the members of the Audit Committee is independent in accordance with the standards of the AMEX and the rules of the Securities and Exchange Commission (the “SEC”).

The Audit Committee reviews the financial statements and scope of the annual audit, monitors internal financial and accounting controls, and appoints the independent certified public accountants.

The Board of Directors has adopted a written charter for the Audit Committee, which is included as Appendix A to this Proxy Statement.

Report of the Audit Committee

The Audit Committee has reviewed and discussed the Company’s audited financial statements for the fiscal year ended December 31, 2005 with the Company’s management. The Audit Committee has discussed with Shatswell, MacLeod & Co., P.C., the Company’s independent auditor, the matters required to be discussed by Statement on Auditing Standards No. 61. The Audit Committee has received the written disclosures and the letter from Shatswell, MacLeod & Co., P.C. required by Independence Standards Board Standard No. 1 (Independent Discussions with Audit Committees) and has discussed with Shatswell, MacLeod & Co., P.C. its independence. Based on the review and discussions described above, the Audit Committee recommended to the Board of Directors that the Company’s audited financial statements be included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2005.

Beverly National Corporation Audit Committee:

            Suzanne S. Gruhl, Chair

            Alice B. Griffin

            Robert W. Luscinski

            James D. Wiltshire

Compensation and Benefits Committee

The current members of the Board’s Compensation and Benefits Committee (the “Compensation Committee”) are Directors Griffin, Luscinski, Smith and Tripoli; Mr. Luscinski chairs the Compensation Committee. The members of the Compensation Committee also serve as the Bank’s Compensation Committee. The Compensation Committee met seven (7) times during 2005.

The Compensation Committee reviews and approves compensation levels for the Bank’s executive officers and oversees and administers the Company’s executive compensation programs. The Company currently pays no direct compensation to any of its officers because the Company’s officers are compensated as officers of the Bank.

7

Report of the Compensation and Benefits Committee

The Bank endeavors to pay competitive base salaries to its employees and subscribes to various surveys of the compensation paid for various positions by other banks of similar size in order to determine appropriate salary levels. In addition, the Bank has historically used the payment of bonuses to reward above-average performance. Bonuses are based on an assessment of various factors including financial performance, the attainment of corporate goals and individual performance. In establishing levels of remuneration, the Compensation Committee endeavors to take into consideration an individual’s performance, level of expertise, responsibilities, length of service to the Bank and comparable levels of remuneration paid to executives of other companies of comparable size and development within the industry. No individual executive participates in the review, discussion or decisions of the Compensation Committee regarding his or her remuneration.

In addition to base salary and bonuses paid by the Bank, the Company has adopted 2005 Restricted Stock Plan to enable it to utilize long-term equity based compensation as a means of compensating and incentivizing its executive officers.

The Fournier Employment Agreement provides Mr. Fournier annual grants of 500 shares of Common Stock for five (5) years.

The Company has entered into agreements with each of the Named Executive Officers, which provide, in the event of certain change-in-control transactions, for the acceleration of options held by such officers whereby each such option shall become exercisable to the extent of the number of shares that would otherwise vest if the officer remained employed by the Company or its successor for two (2) years after the effective date of the transaction, subject to certain conditions.

The Committee reviews the Chief Executive Officer’s performance annually and adjusts his compensation based on the previously mentioned factors, the Bank’s performance and a comparison of the Chief Executive Officer’s salary and the salaries paid to chief executive officers of various other institutions. The Board of Directors has historically used the payment of bonus to reward the Chief Executive Officer’s performance. The bonus is based on an assessment of various factors including financial performance, attainment of goals, and individual performance. In establishing levels of remuneration, the Compensation Committee endeavors to take into consideration the Chief Executive Officer’s performance, level of expertise, responsibilities, experience, and comparable levels of remuneration paid to executives of other companies of comparable size within the industry. The Chief Executive Officer does not participate in the review, discussion, or decision of the Compensation Committee regarding his remuneration.

Beverly National Corporation Compensation Committee:

            Robert W. Luscinski, Chair

            Alice B. Griffin

            Richard H. Booth

            Clark R. Smith

            Michael F. Tripoli

8

Board of Directors Compensation

The Company pays no cash compensation to its Directors for their services as Directors. Directors of the Bank are paid an annual fee of $18,000. The Lead Director, currently Alice B. Griffin, is paid an annual fee of $20,000. Any Director serving on a committee is compensated at the rate of $400 per committee meeting; committee Chairs are compensated at $600 per committee meeting.

Board of Directors’ Communications with Shareholders

The process the Board provides for shareholders to send communications to the Board is through the Company’s address at 240 Cabot Street, Beverly, Massachusetts, 01915. If the document is individually addressed for a Board member, it is held sealed until the member accepts receipt. If the communication is not individually addressed, the Chairman or Lead Director will accept receipt.

It is the Company’s policy to strongly recommend to members of the Board the importance of attendance at the Company’s annual meeting. All of the Directors attended last years’ annual meeting, except Mr. Fisher.

OWNERSHIP BY MANAGEMENT AND OTHER SHAREHOLDERS

The following table and related notes set forth certain information regarding stock owned by each of the Directors and Executive Officers of the Company and Bank and by all Executive Officers and Directors of the Company as a group at March 15, 2006. The percentages are based upon the 1,892,893 shares of Common Stock outstanding on March __, 2006.

OWNERSHIP OF DIRECTORS, NOMINEES AND EXECUTIVE OFFICERS

Name of Owner(1)	Number of Shares Beneficially Owned(2)(3)		Percentage of Outstanding Shares
Richard H. Booth	23,188	(4)(5)	__.__	%
Kevin M. Burke	100			*
John N. Fisher	19,303	(4)(7)	__.__	%
Donat A. Fournier	6,500			*
Mark B. Glovsky	6,564	(4)		*
Alice B. Griffin	20,059	(4)	__.__	%
Suzanne S. Gruhl	100			*
Robert W. Luscinski	3,654	(4)		*
Pamela C. Scott (Nominee)	___		_____
Clark R. Smith	13,824	(4)		*
Michael F. Tripoli	100			*
James D. Wiltshire	21,924	(4)(6)	__.__	%

9

ADDITIONAL EXECUTIVE OFFICERS

Paul J. Germano	15,895	(4)(9)		*
Michael O. Gilles	0			*
John L. Good, III	25,463		__.__	%
John R. Putney	500			*
James E. Rich, Jr.	8,220	(4)(8)		*
All current Directors and Executive Officers as a group (16 persons)	166,825	(4)	__.__	%

* Less than 1%.

⁽¹⁾ The individuals listed can be contacted through the Company (Beverly National Corporation, 240 Cabot Street, Beverly, MA 01915).

⁽²⁾ Based upon information provided to the Company by the indicated persons. The number of shares that each individual has the option to purchase has been added to the number of shares actually outstanding for the purpose of calculating the percentage of such person’s ownership.

⁽³⁾ Under regulations of the SEC, a person is treated as the beneficial owner of a security if the person, directly or indirectly (through contract, arrangement, understanding, relationship or otherwise) has or shares (a) voting power, including the power to vote or to direct the voting, of such security, or (b) investment power with respect to such security, including the power to dispose or direct the disposition of such security. A person is also deemed to have beneficial ownership of any security that such person has the right to acquire within 60 days. Unless indicated in another footnote to this tabulation, a person has sole voting and investment power with respect to the shares set forth opposite his or her name. The table does not reflect shares held by the Company’s Employee Stock Ownership Plan, as to which Messrs. Fournier, Good and Germano serve as trustees, but does include shares allocated to individual Executive Officers.

⁽⁴⁾ Includes stock options to purchase shares which were exercisable as of March 15, 2006, or within 60 days thereafter, as follows: Richard H. Booth, 6,269; John N. Fisher, 1,217; Mark B. Glovsky, 1,806; Alice B. Griffin, 945; Robert W. Luscinski, 2,772; Clark R. Smith, 2,869; James D. Wiltshire, 430; James E. Rich Jr. 4,095; Paul R. Germano 7,353 and Directors and Executive Officers (as a group), 31,846.

⁽⁵⁾ Includes 16,919 shares held in trust.

⁽⁶⁾ Mr. Wiltshire will retire as a Director of the Company and of the Bank at the Annual Meeting.

10

⁽⁷⁾ Includes 3,189 shares owned jointly by Mr. Fisher and Mr. Fisher’s spouse and 14,897 shares held in trust.

⁽⁸⁾ Includes 4,125 shares owned jointly by Mr. Rich and Mr. Rich’s spouse.

⁽⁹⁾ Includes 567 shares owned jointly by Mr. Germano and Mr. Germano’s spouse.

PRINCIPAL SHAREHOLDERS

The following table and related notes set forth certain information as of March 15, 2006 with respect to all persons known to the Company to be the beneficial owner of more than 5% of the Company’s outstanding common stock:

Name and Address of Owner	Number of Shares Directly and Beneficially Owned		Percentage of Outstanding Shares(1)
Banc Fund V, L.P.	144,885	(2)	7.7	%
Banc Fund VI, L.P.
Banc Fund VII, L.P.
208 South LaSalle Street
Suite 1680
Chicago, IL 60604
Harold C. Booth Revocable Trust	120,410	(3)	6.4	%
c/o Beverly National Bank
240 Cabot Street
Beverly, MA 01915
Beverly National Corporation	105,622	(4)	5.6	%
Employee Stock Ownership Plan
240 Cabot Street
Beverly, MA 01915

⁽¹⁾ The percentages above are based on 1,892,893 shares of common stock outstanding as of March __, 2006.

⁽²⁾ As disclosed in Schedule 13G filed with the SEC on January 27, 2006. Banc Fund V, L.P. (72,050 shares), Banc Fund VI, L.P. (67,900 shares) and Banc Fund VII, L.P. (4,935 shares) are managed by Charles J. Moore, who has voting and dispositive power over the shares held by each of these entities.

⁽³⁾ As disclosed in Schedule 13G filed with the SEC on March _, 2006. Includes 97,057 shares owned by Mr. Booth’s trust and 30,813 owned by Mr. Booth’s spouse’s trust, for both of which the Bank is a trustee and shares investment and voting power.

⁽⁴⁾ As disclosed in Schedule 13G filed with the SEC on March 1, 2006. Messrs. Fournier, Good and Germano serve as trustees of the Employee Stock Ownership Plan.

11

EXECUTIVE COMPENSATION

Executive Officers of the Company currently receive no compensation in their capacities as Executive Officers of the Company but are compensated as Executive Officers of the Bank.

Summary Compensation Table

The following table sets forth information concerning the compensation for services rendered in all capacities during the last three fiscal years through 2005 earned by the President and Chief Executive Officer, the four next most highly compensated Executive Officers and the Executive Vice President and Chief Financial Officer of the Company and the Bank (the “Named Executive Officers”). The Executive Officers of the Company are also Executive Officers of the Bank.

Summary Compensation Table

	Year	Annual Compensation		Other Annual Comp.($)(1)	All Other Compensation ($)(4)
Name and Principal Position		Salary ($)	Bonus ($)
Donat A. Fournier President & Chief Executive Officer	2005 2004 2003	225,000 215,000 206,000	65,000 24,000 35,000	3,954 4,024	84,334 40,506	(5) (5)
John R. Putney(2) Executive Vice President & Senior Loan Officer	2005 2004 2003	140,000 135,000 32,884	50,000 20,000 0	8,262 0	2,051 1,695	(6) (6)
Jack L. Good, III(3) Executive Vice President	2005 2004	139,700 75,288	35,000 0	0		(7)
James E. Rich, Jr. Senior Vice President & Senior Trust Officer	2005 2004 2003	132,800 128,300 124,600	22,000 10,000 22,000	576 375	7,219 7,127	(8) (8)
Paul J. Germano Senior Vice President, Secretary & Chief Operations Officer	2005 2004 2003	115,950 112,050 108,750	28,000 10,000 22,000	195 71	6,248 6,394	(9) (9)
Michael O. Gilles Executive Vice President & Chief Financial Officer	2005	115,950	28,000

⁽¹⁾ Included in other annual compensation are automobile allowances for Messrs. Fournier, Putney and Good; 500 shares of Common Stock awarded to Mr. Fournier in accordance with the Fournier Employment Agreement; and Excess Group Life Insurance for Messrs. Fournier, Putney, Good, Rich and Germano.

⁽²⁾ Mr. Putney was appointed Senior Vice President and Senior Loan Officer on October 10, 2003.

⁽³⁾ Mr. Good was appointed Executive Vice President on June 1, 2004.

12

⁽⁴⁾ Mr. Gilles was appointed Executive Vice President and Chief Financial Officer on August 29, 2005.

⁽⁵⁾ On June 18, 2004, the Bank entered into a Group Term Insurance Carve-Out Plan (the “Carve-Out Plan”) through which the Bank will divide the death proceeds of certain Bank-owned life insurance policies which insure the lives of certain Bank executives who elected to participate in the Carve-Out Plan. Carve-Out Plan participants signed a split-dollar policy which provides both the Bank and the individual with life insurance benefits which increase with vesting and years of service to a maximum benefit of $300,000. The policies were paid with a single premium. Policy cash values will earn interest and policy mortality costs will be charged against the cash value.

⁽⁶⁾ In 2005, amount includes $___ attributable to Life Insurance paid for the Bank for the benefit of Mr. Fournier and $9,450 attributable to the 401(k) Plan Contribution . Amount also includes $78,870 of accrued expense for a supplemental employee retirement plan for the benefit of Mr. Fournier, which is designed to provide additional retirement benefit of up to $100,000 annually for twenty years upon retirement, and $910 of income attributable to the Carve-Out Plan. In 2004, amount includes $397 attributable to Life Insurance paid for the Bank for the benefit of Mr. Fournier; $9,000 attributable to the 401(k) Plan Contribution; $74,268 of accrued expense for the supplemental employee retirement plan for the benefit of Mr. Fournier: and $669 of income attributable to the Carve-Out Plan. In 2003, amount includes $552 attributable to Life Insurance paid for the Bank for the benefit of Mr. Fournier; $2,820 attributable to the 401(k) Plan Contribution; and $37,134 of accrued expense for the supplemental employee retirement plan for the benefit of Mr. Fournier.

⁽⁷⁾ In 2005, amount includes $____ attributable to Life Insurance paid for by the Bank for the benefit of Mr. Putney; $2,250 attributable to the 401(k) Plan Contribution; and $716 of income attributable to the Carve-Out Plan. In 2004, amount includes $342 attributable to Life Insurance paid for by the Bank for the benefit of Mr. Putney; $979 attributable to the 401(k) Plan Contribution; and $730 of income attributable to the Carve-Out Plan. In 2003, amount was attributable to Health Insurance reimbursement by the Bank for the benefit of Mr. Putney.

⁽⁸⁾ In 2005, amount includes $____ attributable to Life Insurance paid for by the Bank for the benefit of Mr. Good; $_____ attributable to the 401(k) Plan Contribution; and $___ of income attributable to the Carve-Out Plan. In 2004, amount includes $___ attributable to Life Insurance paid for by the Bank for the benefit of Mr. Good; $____ attributable to the 401(k) Plan Contribution; and $____ of income attributable to the Carve-Out Plan.

⁽⁹⁾ In 2005, amount includes $____ attributable to Life Insurance paid for by the Bank for the benefit of Mr. Rich; $5,976 attributable to the 401(k) Plan Contribution; and $690 of income attributable to the Carve-Out Plan. In 2004, amount includes $520 attributable to Life Insurance paid for by the Bank for the benefit of Mr. Rich; $6,223 attributable to the 401(k) Plan Contribution; and $476 of income attributable to the Carve-Out Plan. In 2003, amount includes $513 attributable to Life Insurance paid for by the Bank for the benefit of Mr. Rich and $6,614 attributable to the 401(k) Plan Contribution.

⁽¹⁰⁾ In 2005, amount includes $____ attributable to Life Insurance paid for by the Bank for the benefit of Mr. Germano; $6,478 attributable to the 401(k) Plan Contribution; and $304 of income attributable to the Carve-Out Plan. In 2004, amount includes $419 attributable to Life Insurance paid for by the Bank for the benefit of Mr. Germano; $5,492 attributable to the 401(k) Plan

13

Contribution; and $337 of income attributable to the Carve-Out Plan. In 2003, amount includes $510 attributable to Life Insurance paid for by the Bank for the benefit of Mr. Germano and $5,884 attributable to the 401(k) Plan Contribution.

⁽¹¹⁾ In 2005, amount includes $____ attributable to Life Insurance paid for by the Bank for the benefit of Mr. Gilles; $6,478 attributable to the 401(k) Plan Contribution; and $304 of income attributable to the Carve-Out Plan.

Stock Options Granted in Fiscal Year 2005

No stock options were granted during 2005 to the Named Executive Officers of the Company and Bank.

Option Exercises and Year-End Value Table

The following table sets forth information concerning the number of options exercised during 2005 by each of the Named Executive Officers, the number of exercisable options and unexercisable options they held at December 31, 2005, and the value of unexercised in-the-money options they held as of such date.

Aggregated Option/SAR Exercises in Last Fiscal Year and FY-End Option/SAR Values

Name	Shares Acquired on Exercise (#)	Value Realized ($)	Number of Shares Underlying Unexercised stock Options as of year-end ($) Exercisable/Unexercisable	Value (4) of Unexercised In-the-Money Stock Options as of year-end ($) Exercisable/Unexercisable
Donat A. Fournier	—	—	—	—
John R. Putney	—	—	—	—
Jack L. Good, III	—	—	—	—
James E. Rich, Jr.	—	—	4,095/1,365	43,126/15,282
Paul J. Germano	3,482	56,674	6,178/1,365	75,764/15,282
Michael O. Gilles	—	—	—	—

Employment, Change in Control, Disability Agreements

Donat A. Fournier

The Company entered into an Employment Agreement with Donat A. Fournier in July 2002 (the “Fournier Employment Agreement”). The Fournier Employment Agreement provides for Mr. Fournier’s employment as President and Chief Executive Officer of Beverly National Corporation and Beverly National Bank. By its terms, the Fournier Employment Agreement continued in effect through July 31, 2005, at which time the term of the Employment Agreement shall automatically be extended for one additional year, each year until age 66 or normal retirement age, whichever is earlier unless, not later than the preceding January 31^st, either party notifies the other by written notice of his or its intent not to extend the same. The Fournier Employment Agreement provides that Mr. Fournier is to receive a base annual salary in the amount of $200,000, which may be adjusted upward from time to time in the discretion of the

14

Company; annual grants of 500 shares of Common Stock for five (5) years; club membership; five (5) weeks paid vacation; an automobile allowance; excess group life insurance; a supplemental employee retirement plan which provides, at normal retirement age (65 years), an annual amount of $100,000, to be paid monthly; and eligibility to participate in other benefit plans of the Bank. The Fournier Employment Agreement also provides that during its term and for one year afterward, Mr. Fournier may not compete with the Company and its subsidiaries within their market area.

The Company also entered into a Change in Control Agreement (the “Fournier Change in Control Agreement”) with Mr. Fournier in July 2002. The Fournier Change in Control Agreement provides that in the event of a change in control of the Company, if Mr. Fournier’s employment is terminated other than for cause as defined in the agreement, disability or retirement within two years after the change in control, then he shall be entitled to a lump sum payment from the Company approximately equal to three times his average annual compensation for the previous five years, less $100.00, plus legal fees. The Fournier Change in Control Agreement additionally calls for the Company to pay, to the extent not paid by the Bank, an amount equal to Mr. Fournier’s full base salary at the rate then in effect during any period that he fails to perform his duties as a result of incapacity due to physical or mental illness until the date of termination.

Other Named Executive Officers

The Company entered into Employment Agreements with James E. Rich Jr. and Paul J. Germano in February 2000 (the “Employment Agreements”). The Employment Agreements provide the Executive Officers employment as Company and Bank Officers. In connection with their employment, the Company will pay each an annual base salary, which annual salary shall be adjusted upward from time to time at the sole discretion of the Company. Pursuant to the Employment Agreements, the Company has agreed to provide each with fringe benefits consistent with those provided to Senior Officers of the Company and the Bank.

The Employment Agreements contain a non-compete clause pursuant to which each has agreed that while employed by the Company and for a period of one year thereafter, they may not in any capacity compete with the Company or the Bank. By their terms, the Employment Agreements continued in effect through December 31, 2004. At that time, the term of the Employment Agreements shall automatically be extended for two (2) years unless, no later than November 30, 2006, either party notifies the other by written notice of his intent not to extend unless the Employment Agreements are terminated due to the officer’s termination, death, disability, or if the officer is terminated for cause as defined therein. If the officer becomes disabled during the term of the Employment Agreements, the officer shall be entitled to receive all benefits payable to him under the Bank’s long-term disability income plan. If the officer is terminated for cause as defined in the Employment Agreements, he will receive all accrued and unpaid compensation through the date of such termination. The Company will maintain at the Company’s sole expense all group insurance and other employment benefit plans, programs or arrangements (other than the Bank’s retirement plan, the Bank’s profit sharing plan, 401(k) plan, and the Company’s stock option plan in which the employee was participating at any time during the twelve (12) months preceding the date of such termination).

The Company entered into Change in Control Agreements (the “Change in Control Agreements”) with James E. Rich Jr. and Paul J. Germano in February 2000. These Change in Control Agreements provide that in the event of a change in control of the Company, if the

15

officer’s employment is terminated other than for cause as defined in the Change in Control Agreements, disability or retirement, within two (2) years after the change in control, then he or she shall be entitled to a lump sum amount from the Company approximately equal to the product of the average of his annual compensation for the five (5) preceding years multiplied by two.

The Company entered into an Employment Agreement with John R. Putney in October 2003 (the “Putney Employment Agreement”). The Putney Employment Agreement provides for Mr. Putney’s employment as Senior Vice President and Senior Loan Officer of Beverly National Bank. By its terms, the Putney Employment Agreement continued in effect through October 6, 2004, at which time the term of the Employment Agreement shall automatically be extended for one additional year, each year until age 66 or normal retirement age, whichever is earlier unless, not later than the preceding September 6th, either party notifies the other by written notice of his or its intent not to extend the same. The Putney Employment Agreement provides that Mr. Putney is to receive a base annual salary in the amount of $135,000, which may be adjusted upward from time to time in the discretion of the Company; five (5) weeks paid vacation; an automobile allowance; excess group life insurance; and eligibility to participate in other benefit plans of the Bank. The Putney Employment Agreement also provides that during its term and for one year afterward, Mr. Putney may not compete with the Company and its subsidiaries within their market area.

The Company also entered into a Change in Control Agreement with Mr. Putney in October 2003 (the “Putney Change in Control Agreement”). The Putney Change in Control Agreement provides that in the event of a change in control of the Company, if Mr. Putney’s employment is terminated other than for cause as defined in the Putney Change in Control Agreement, disability or retirement within two years after the change in control, then he shall be entitled to a lump sum payment from the Company approximately equal to two times his average annual compensation for the previous five years, less $100.00, plus legal fees. The Putney Change in Control Agreement additionally calls for the Company to pay, to the extent not paid by the Bank, an amount equal to Mr. Putney’s full base salary at the rate then in effect during any period that he fails to perform his duties as a result of incapacity due to physical or mental illness until the date of termination.

The Company entered into an Employment Agreement with John L. Good, III in June 2004 (the “Good Employment Agreement”). The Good Employment Agreement provides for Mr. Good’s employment as Executive Vice President of Beverly National Bank. By its terms, the Good Employment Agreement continued in effect through June 13, 2005, at which time the term of the Good Employment Agreement shall automatically be extended for one additional year, each year until age 66 or normal retirement age, whichever is earlier unless, not later than thirty (30) days prior thereto, either party notifies the other by written notice of his or its intent not to extend the same. The Good Employment Agreement provides that Mr. Good is to receive a base annual salary in the amount of $135,000, which may be adjusted upward from time to time in the discretion of the Company; five (5) weeks paid vacation; excess group life insurance; and eligibility to participate in other benefit plans of the Bank. The Good Employment Agreement also provides that during its term and for one year afterward, Mr. Good may not compete with the Company and its subsidiaries within their market area.

The Company also entered into a Change in Control Agreement with Mr. Good in June 2004 (the “Good Change in Control Agreement”). The Good Change in Control Agreement provides that in the event of a change in control of the Company, if Mr. Good’s employment is terminated

16

other than for cause as defined in the Good Change in Control Agreement, disability or retirement within two years after the change in control, then he shall be entitled to a lump sum payment from the Company approximately equal to two times his average annual compensation for the previous five years, less $100.00, plus legal fees. The Good Change in Control Agreement additionally calls for the Company to pay, to the extent not paid by the Bank, an amount equal to Mr. Good’s full base salary at the rate then in effect during any period that he fails to perform his duties as a result of incapacity due to physical or mental illness until the date of termination.

The Company entered into an Employment Agreement with Michael O. Gilles in August 2005 (the “Gilles Employment Agreement”). The Gilles Employment Agreement provides for Mr. Gilles’ employment as Executive Vice President and Chief Financial Officer of the Bank. By its terms, the Gilles Employment Agreement continued in effect through August 28, 2006, at which time the term of the Employment Agreement shall automatically be extended for one additional year, each year until age 66 or normal retirement age, whichever is earlier unless, not later than the preceding July 28th, either party notifies the other by written notice of his or its intent not to extend the same. The Putney Employment Agreement provides that Mr. Putney is to receive a base annual salary in the amount of $162,500, which may be adjusted upward from time to time in the discretion of the Company; five (5) weeks paid vacation; an automobile allowance; excess group life insurance; and eligibility to participate in other benefit plans of the Bank. The Gilles Employment Agreement also provides that during its term and for one year afterward, Mr. Gilles may not compete with the Company and its subsidiaries within their market area.

The Company also entered into a Change in Control Agreement with Mr. Gilles in August 2005 (the “Gilles Change in Control Agreement”). The Gilles Change in Control Agreement provides that in the event of a change in control of the Company, if Mr. Gilles’ employment is terminated other than for cause as defined in the Gilles Change in Control Agreement, disability or retirement within two years after the change in control, then he shall be entitled to a lump sum payment from the Company approximately equal to two times his average annual compensation for the previous five years, less $100.00, plus legal fees. The Gilles Change in Control Agreement additionally calls for the Company to pay, to the extent not paid by the Bank, an amount equal to Mr. Gilles’ full base salary at the rate then in effect during any period that he fails to perform his duties as a result of incapacity due to physical or mental illness until the date of termination.

RELATIONSHIPS AND TRANSACTIONS WITH THE COMPANY

The Company, through its wholly-owned subsidiary, the Bank, has had, currently has, and expects to continue to have in the future, banking (including loans and extensions of credit) transactions in the ordinary course of its business with its Directors, Executive Officers, members of their family, and their associates. Such banking transactions have been and are on substantially the same terms, including interest rates, collateral and repayment conditions, as those prevailing at the same time for comparable transactions with others and do not involve more than the normal risk of collectibility or present other unfavorable features.

As of December 31, 2005 and 2004, the Bank had outstanding $______ and $327,497, respectively, in loans to Directors, Executive Officers, members of their family and their associates, which represents _.__% and 1.17%, respectively of capital. Federal banking laws and regulations limit the aggregate amount of indebtedness that banks may extend to bank insiders. Pursuant to such laws, the Bank may extend credit to Executive Officers, Directors, Principal

17

Shareholders or any related interest if the amount of all outstanding extensions of credit to such individual, does not exceed the Bank’s unimpaired capital and unimpaired surplus. As of December 31, 2005, the aggregate amount of extensions of credit to insiders was below this limit.

The Bank and the Company from time to time do business with Directors of the Bank and the Company. In 2005, the Bank did business with Fisher and George Electrical Co., Inc., of which Director Fisher is the sole shareholder. The work was related to general electrical work in the amount of $            . In 2005, the Bank did business with the law firm of Glovsky & Glovsky of which Director Glovsky is a partner, for legal work in the amount of $            .

Mr. Gilles was engaged as a consultant as Interim Chief Financial Officer from May 2005 until he was employed on August 29, 2005. During that period, he was paid $            .

PERFORMANCE GRAPH

Set forth below is a line graph comparing the yearly percentage change in the cumulative total shareholder return on the Company’s Common Stock, based on the market price of the Company’s Common Stock with the total return of companies within the Russell 2000, and the SNL $250M-$500M Bank Index. The calculation of total cumulative return assumes a $100 investment made on December 31, 2000 in each of the Company’s Common Stock, the Russell 2000, and the SNL $250M-$500M Bank Index and reflects the total return on such investments through December 31, 2005.

18

	As of
Index	12/31/00		12/31/01		12/31/02		12/31/03		12/31/04		12/31/05
Beverly National Corporation	$	100.00	$	114.72	$	157.82	$	200.63	$	211.98	$	205.06
Russell 2000		100.00		102.49		81.49		120.00		142.00		148.46
SNL $250M-$500M Bank Index		100.00		142.07		183.20		264.70		300.43		318.97

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Pursuant to Section 16(a) of the Securities Exchange Act of 1934 and Regulations of the SEC, the Company’s Executive Officers and Directors must file reports of ownership and changes in ownership with the SEC. To the Company’s knowledge, based solely on review of the copies of such reports furnished to the Company, the following Executive Officers and Directors of the Company failed to file any such reports: Mr. Gilles failed to [timely] file a report Form 3 upon becoming an Executive Officer and Director Booth failed to [timely] file a report on Form 5 upon the acquisition of shares by gift.

PROPOSAL THREE

RATIFICATION OF THE APPOINTMENT

OF INDEPENDENT AUDITOR

Shareholders are asked to consider and ratify the appointment of Shatswell, MacLeod & Company, P.C. as independent auditor to audit the consolidated financial statements of the Company for the fiscal year ending December 31, 2006. If shareholders do not ratify the appointment of Shatswell, MacLeod & Company, P.C., the Audit Committee will consider the vote of shareholders in selecting the independent auditor in the future. Shatswell, MacLeod & Company, P.C. has served as the independent auditor for the Company for the fiscal year ended December 31, 2005. It is anticipated that representatives of the firm Shatswell, MacLeod & Company, P.C. will be present at the Annual Meeting and will be provided an opportunity to make a statement if they desire to do so, and will be available to respond to appropriate questions.

1. Audit Fees

The aggregate fees billed by Shatswell, MacLeod & Company, P.C. for professional services rendered for the audit of the Company’s annual financial statements for the year ended December 31, 2005 and reviews of the financial statements included in the Company’s Forms 10-Qs for the years ended December 31, 2005 and December 31, 2004 were $__,___ and $72,405, respectively.

The nature of services consisted of the annual audit and certification of the financial statements of the Company and all subsidiaries.

2. Audit-Related Fees

There were no fees billed in each of the last two (2) years for assurance and related services by Shatswell, MacLeod & Company, P.C. that are reasonably related to performance of the audit or review of Company’s financial statements that are not reported under “Audit Fees.”

19

3. Tax Fees

The aggregate fees billed in each of the last two (2) years for professional services rendered by Shatswell, MacLeod & Company, P.C. for tax compliance, tax advice and tax planning for the fiscal years ended December 31, 2005 and December 31, 2004 were $_,___ and $9,550, respectively.

4. All Other Fees

The aggregate fees billed for services rendered by Shatswell, MacLeod & Company, P.C., other than the services covered above for the fiscal years ended December 31, 2005 and December 31, 2004 were $____ and $0, respectively.

Policy on Audit Committee Pre-Approval of Audit and Non-Audit Services of Independent Auditor

The Audit Committee’s policy is to pre-approve all audit and non-audit services provided by the independent auditor, other than those listed under the de minimus exception. These services may include audit services, audit-related services, tax services and other services. Pre-approval is detailed as to a particular service or category of services and is generally subject to a specific budget. The Audit Committee has not delegated pre-approval authority. The independent auditor and management are required to report to the full Audit Committee regarding the extent of services provided by the independent auditor in accordance with this pre-approval, and the fees for the services performed to date. None of the audited-related fees, tax fees or other fees paid in 2004 and 2003 were approved per the Audit Committee’s pre-approval policies.

The Audit Committee has considered and determined that the provision of services rendered by Shatswell, MacLeod & Company, P.C. relating to matters 2 through 4 above is compatible with maintaining the independence of such accountants.

The Board of Directors recommends a vote “FOR” the approval of Proposal Three. Proxies solicited by the Board of Directors will be so voted unless shareholders specify a contrary choice on the proxy card. The proposal to ratify the appointment of Shatswell, MacLeod & Company, P.C. will be approved if a majority of the shares present or represented by proxy and voting on the proposal vote in favor of ratification.

PROPOSAL FOUR

ADOPTION OF AN AMENDMENT TO OUR RESTATED ARTICLES OF

ORGANIZATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF

COMMON STOCK FROM 2,500,000 TO 5,000,000

On March __, 2006, the Board adopted a resolution approving and declaring it to be advisable that shareholders approve an amendment to Company’s Restated Articles of Organization (the “Amendment”) and has directed that the Amendment be submitted to the requisite shareholder vote at the Annual Meeting for your approval.

Reasons for the Amendment

We are currently authorized to issue 2,500,000 shares of our Common Stock and 300,000 shares of preferred stock. As of March __, 2006, there were 1,892,893 shares of our Common Stock

20

outstanding. After giving effect to the issuance of shares of our Common Stock upon the exercise of our currently existing stock options and the possible award of 37,000 shares of Common Stock reserved under the 2005 Restricted Stock Plan, _______ shares of our Common Stock are authorized and remain available for issuance. The Company does not plan to grant any additional options under its option plans. There are no shares of preferred stock outstanding.

The Board does not believe that this limited number of shares gives it sufficient flexibility to issue shares for appropriate corporate purposes. If shareholders approve the Amendment, we will have 5,000,000 authorized shares of our Common Stock and ________ shares of Common Stock would remain available for future issuance, in addition to those reserved for the exercise of options and the grant of restricted stock. These shares of Common Stock could be issued for various purposes, including, but not limited to, future stock dividends or stock splits, capital-raising transactions through Common Stock offerings, issuing Common Stock in mergers or acquisitions or other strategic transactions, funding future employee benefit plan obligations and permitting the issuance of convertible preferred stock. Adoption of the Amendment would give the Board the flexibility to issue the shares without the delay and expense required to hold a special meeting of shareholders to approve an increase in the authorized number of shares of Common Stock.

Our Board has determined that additional capital would be prudent to provide the flexibility necessary to take advantage of growth opportunities as they present themselves. Therefore, we may seek to raise up to $15 million in new capital through the offer and sale of additional shares of our Common Stock in the next three to six months. The Company currently intends to use a portion of the net proceeds of any offering for general corporate purposes and to contribute a portion of the net proceeds of any offering to the Bank to fund growth opportunities as they present themselves. If we make an offer of our Common Stock, our shareholders will have preemptive rights to purchase shares, as discussed below. It may not be possible to raise that amount of new capital through the issuance of Common Stock if the Amendment is not approved.

Effects of the Amendment

If you approve the Amendment, then the Company will have greatly increased our authorized shares.

Until issued, the increase in the number of authorized shares of Common Stock will not have any immediate effect on your rights as an existing shareholder.

If and when issued, the additional shares of Common Stock authorized by the Amendment will have the same rights and privileges as the shares of our Common Stock currently authorized, issued and outstanding. Our Board of Directors may authorize the issuance of such shares of our Common Stock without further vote or action by you, except as may be required by applicable laws or the rules of any national securities exchange or market on which shares of our Common Stock are then listed. Holders of our Common Stock have preemptive rights providing them a preferential right to purchase any of the additional shares of our Common Stock when such shares are offered for sale. The sale of additional shares of Common Stock could, depending on the price at which they are sold, dilute the earnings and book value of each outstanding share and, to the extent that shareholders do not exercise their preemptive rights, dilute their ownership and voting power.

21

The additional authorized shares of our Common Stock could also create impediments to an attempt to affect a takeover or change in control of our Company. Authorized and unissued shares of our Common Stock could be issued in one or more transactions that would make a change in control of our Company more difficult, and therefore less likely. Any such issuance of additional stock could be used to dilute the stock ownership or voting rights of persons seeking to obtain control of our Company or to increase the potential cost to acquire control of the Company. Accordingly, the increase in the number of authorized shares of our Common Stock may deter a future takeover attempt which holders of our Common Stock may deem to be in their best interest or in which holders of our Common Stock may be offered a premium for their shares over the then current market price. The Amendment was not approved by our Board of Directors in response to any threatened or perceived takeover threat, and we have no knowledge of such a threat as of the date of this Proxy Statement.

If approved by shareholders, the Amendment will become effective upon the filing of Articles of Amendment with the Massachusetts Secretary of State. However, our Board retains discretion not to implement the Amendment, in which case the number of authorized shares of Common Stock would remain unchanged.

The Board of Directors recommends that you vote “FOR” the approval of Proposal Four. The affirmative vote of a majority of all shares of Common Stock outstanding, voting in person or by proxy, is required to approve Proposal Four.

THE DISCUSSION OF PROPOSAL FOUR DOES NOT CONSTITUTE AN OFFER OF ANY SECURITIES FOR SALE, WHICH OFFER MAY BE MADE ONLY AFTER A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 RELATING THERETO HAS BEEN FILED WITH THE SEC.

22

OTHER MATTERS

At the time of the preparation of this proxy material, the Board of Directors of the Company does not know of any other matter to be presented for action at the Annual Meeting. If any other matters should properly come before the meeting, proxy holders shall have discretionary authority to vote their shares according to their best judgment.

SHAREHOLDER PROPOSALS

Any proposal that a shareholder wishes to have included in the Company’s Proxy Statement and form of Proxy relating to the Company’s 2007 Annual Meeting of Shareholders under Rule 14a-8 of the SEC must be received by the Company’s Secretary, Paul J. Germano, 240 Cabot Street, Beverly, MA 01915 by ____ __, 2006. Nothing in this paragraph shall be deemed to require the Company to include in its Proxy Statement and form of Proxy for such meeting any shareholder proposal that does not meet the requirements of the SEC in effect at the time.

AMENDMENTS TO BYLAWS

In accordance with recent developments in the law regarding corporate governance and procedures, as well as emerging trends in corporate governance, the Board of Directors has made various amendments to the Company’s Bylaws, including provisions regarding the Annual Meeting Date and Director qualifications and the Board’s committee structure. A copy of the Company’s Bylaws, as amended, may be obtained without charge by any shareholder upon written request to:

Paul J. Germano, Secretary

Beverly National Corporation

240 Cabot Street

Beverly, Massachusetts 01915

SHAREHOLDER INFORMATION

The Company’s Annual Report on Form 10-K for the year ended December 31, 2005 is filed with the SEC and may be obtained without charge by any shareholder upon written request to:

Michael O. Gilles, Chief Financial Officer

Beverly National Corporation

240 Cabot Street

Beverly, Massachusetts 01915

The Company’s 2005 Annual Report accompanies this document and is not incorporated by reference.

By Order of the Board of Directors

Paul J. Germano

Secretary

Beverly, Massachusetts

March __, 2006

23

Appendix A

BEVERLY NATIONAL CORPORATION

Audit Committee Charter

Audit Committee Responsibilities

The primary function of the Audit Committee (the “Committee”) is to assist the Board of Directors in fulfilling its financial oversight responsibilities to the shareholders, potential shareholders and investment community. The Committee shall review the quality and integrity of the company’s financial reports and other financial information; the Company’s systems of internal controls and ethics policies that management and the Board have established; and the Company’s auditing, accounting and financial reporting process. The Committee will maintain open communications between the directors, the independent auditor, the internal auditor, and financial management of the Corporation. Consistent with this function, the Committee should foster adherence to, and should encourage continuous improvement of, the Company’s policies, procedures and practices. The Committee’s primary duties and responsibilities are to:

• Review and reassess the adequacy of this Charter on an annual basis. The Board of Directors will approve this Charter initially, as amended, and at least annually.

• Serve as an independent and objective party to monitor the Company’s financial reporting process and internal control system.

• Pre-approve all auditing services and non-audit services, other than those that are listed under the de minimus exception, that the independent auditor provides to the Corporation. The Committee must document all non-audit services performed by the independent auditor that the Committee pre-approves. The Committee may delegate to one or more of its members the authority to grant such required pre-approvals. The decisions of any member to whom authority is delegated to pre-approve an activity requiring pre-approval shall be presented to the full Committee at each of its meetings.

• Review and discuss with management and the independent auditor any changes in accounting principles.

• Review the Company’s annual financial statements rendered by the independent auditor. The Committee shall review with management and the independent auditor the financial statements to be included in the Corporation’s Annual Report on Form 10-K. Also, the Committee shall discuss the results of the annual audit and any other matters required to be communicated to the Committee by the independent auditor under generally accepted auditing standards to ensure the independent auditor is satisfied with the disclosure and content of the financial statements to be presented to the shareholders.

• Be responsible for obtaining a formal written statement detailing all relationships between the independent auditor and the Corporation and its subsidiaries and affiliates consistent with Independence Standards Board Standard Number 1, Independence Discussions with Audit Committees.

• Be responsible for actively engaging in a dialogue with respect to any disclosed relationships or services that may impact the objectivity and independence of the independent auditor and for taking or recommending that the full Board take appropriate action to oversee the independence of the independent auditor.

1

• Provide an open avenue of communication among the independent auditor, financial and senior management, and the Board of Directors.

• Establish a budget on an annual basis. The Committee shall determine the appropriate funding to be provided by the Corporation for payment of compensation to the independent auditor employed by the Corporation for purposes of rendering an audit report. The Committee may hire outside consultants, as it deems necessary, and the Corporation shall provide funding for the payment of compensation to such consultants.

• Establish procedures for employees to approach the Committee with confidential anonymous submission regarding any accounting concerns, irregularities, or auditing matters and maintain documentation pertaining to the concerns noted.

• Investigate any matter brought to its attention with full access to all books, records, facilities, and personnel of the Company. The Committee shall have access to legal counsel and have the authority and funding to engage independent counsel and any other advisors as the Committee may determine to be necessary to carry out its duties and responsibilities.

• Submit the minutes of all meetings of the Committee to the Board of Directors.

Membership

The Committee shall be comprised of three or more directors as determined by the Board, each of whom shall be independent directors, and free from any relationship that, in the opinion of the Board, would interfere with the exercise of his or her independent judgment as a member of the Committee. Members may not accept any consulting, advisory, or other compensatory fee from the Corporation or any of its subsidiaries. Committee members are also prohibited from being an affiliated person of the Corporation or any of its subsidiaries. Independence will be determined by reference to the Listing Standards and Rules of the American Stock Exchange and Section 10A(m)(3) of the Securities Exchange Act of 1934 (the “Exchange Act”) as amended by the Sarbanes-Oxley Act of 2002. The Committee shall certify that all members of the Committee are financially literate and shall have a working familiarity with basic finance practices. At least one member of the Committee shall have past employment experience in finance or accounting, requisite professional certification in accounting, or other comparable experience or background, including current or past service as a chief executive, chief financial or other senior officer with financial oversight responsibilities, accounting or related financial management expertise. The Committee will appropriately document whether any of its members is a “Financial Expert” as defined by Item 401 of Regulation S-K of the Securities and Exchange Commission’s Regulations.

Meetings

The Committee shall meet at least four times annually, or more frequently as circumstances dictate. As part of its job to foster open communication, the Committee should meet at least annually with management, the independent auditor, and the internal auditor in separate executive sessions to discuss any matters that the Committee or each of these groups believe should be discussed privately. Among the items to be discussed in these meetings are the independent auditor’s evaluation of the Corporation’s financial, accounting, and auditing personnel, and the cooperation that the independent auditor received during the course of the audit.

2

Independent Auditor

The Committee shall meet with the independent auditor and financial management of the Corporation to review the scope of the proposed audit for the current year and the audit procedures to be utilized, and at the conclusion review such audit, including any comments or recommendations of the independent auditor.

The Committee in its capacity as a committee of the Board of Directors shall be directly responsible for the appointment, compensation and oversight of the work of the independent auditor employed by the Company (including resolution of disagreements between management and the independent auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or related work, and each such independent auditor shall report directly to the Committee.

The Committee will review the performance of the independent auditor and approve any proposed discharge of the independent auditor by management.

The Committee will periodically consult with the independent auditor out of the presence of management about internal controls and the fullness and accuracy of the Company’s financial statements.

Internal Auditor

The Committee will oversee the internal audit function, including approval of any outsourcing or co-sourcing arrangements and verify that the internal controls are in place and being adhered to. The Committee will meet on a quarterly basis to discuss all internal audits and Management’s responses to those audits completed in the previous quarter. The Committee will review the status of in process exams and any fraud investigations. The Committee will review the Internal Audit program annually.

The Committee shall review the independence and authority of its reporting obligations; the proposed audit plans for the coming year, and the coordination of such plans with the independent auditor. Progress on the proposed internal audit plan will be reviewed, with explanations for any deviations from the original plan.

The Committee is responsible for the appointment and approval of the director of internal audit or equivalent position. The Committee will evaluate the Internal Auditor’s performance on an annual basis.

Financial Reporting Process

The Committee will review the integrity of the Company’s financial reporting process. The Committee shall review the adequacy and effectiveness of the accounting and financial controls of the Corporation, and elicit any recommendations for the improvement of such internal control procedures or particular areas where new of more detailed controls or procedures are desirable. Emphasis should be given to the adequacy of such internal controls to expose any payments, transactions, or procedures that might be deemed illegal or otherwise improper. The Committee should periodically review Company policy statements to determine their adherence to the code of conduct.

3

The Committee will consider the independent auditor’s judgments about the quality and appropriateness of the Company’s accounting principles as applied in its financial reporting.

Following completion of the annual audit, the Committee will review separately with management and the independent auditor any significant difficulties encountered during the course of the audit, including any restrictions on the scope of work or access to required information.

The Committee will review, with management, annual and quarterly financial statements.

The Committee will review any significant disagreement among management and the independent auditor in connection with the preparation of the financial statements.

Reports of the Committee

The Committee shall prepare a report suitable for appropriate disclosure as may be required in the Corporation’s annual meeting proxy statement concerning the Committee’s review of the Corporation’s financial statements and disclosing whether the Committee recommended to the Board of Directors that the audited financial statements be included in the Corporation’s annual report and addressing such other issues as may be required by the Amex Rules or the Securities Exchange Act of 1934, as amended, as well as the Regulations of the Securities Exchange Commission promulgated pursuant thereto.

The Committee shall report to the Board of Directors which will make appropriate disclosures regarding whether each member of the Committee is an independent director within the meaning of the Amex Rules, whether each member is financially literate and whether any member is a “Financial Expert”.

Compliance With Laws and Regulations

The Committee, in consultation with the Risk Management Committee, will review management policies and procedures for monitoring compliance.

The Committee will oversee the performance of the Company’s commitments resulting from regulatory exams.

The Committee will perform such other activities consistent with this Charter, the Company’s By-laws and governing law, as the Committee or the Board deems necessary or appropriate.

Board Approved February 22, 2005

4

BEVERLY NATIONAL CORPORATION

PROXY FOR ANNUAL MEETING OF SHAREHOLDERS

April 25, 2006

KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned shareholder of BEVERLY NATIONAL CORPORATION hereby nominates, constitutes and appoints __________________ and __________ (each of them with full power to act alone) true and lawful attorneys, agents and proxies, with power of substitution to each, to attend the 2006 Annual Meeting of the Shareholders of said Company to be held at the Danvers office of Beverly National Bank, 107 High Street, Danvers, Massachusetts, on April 25, 2006 at 9:00 a.m., local time, and any adjournments thereof, and thereat to vote or otherwise act in respect of all the shares of Common Stock of said Corporation that the undersigned shall be entitled to vote, with all powers the undersigned would possess if personally present, upon the following matters:

			FOR	AGAINST	ABSTAIN
A.	1.	Fixing the number of directors who shall constitute the full Board of Directors at eleven.	(    )	(    )	(    )
	2.	Election of the following individuals as directors of the Company, who, together with the directors whose terms of office do not expire at this meeting, will constitute the full Board of Directors. a.      John N. Fisher	(    )	(    )	(    )
		b.      Alice B. Griffin	(    )	(    )	(    )
		c.      Robert W. Luscinski	(    )	(    )	(    )
		d.      Pamela C. Scott	(    )	(    )	(    )
	3.	Ratification of the appointment of Shatswell, MacLeod & Company, P.C. as independent auditors of the Company for the fiscal year ending December 31, 2006.	(    )	(    )	(    )
	4.	Adopt an amendment to the Restated Articles of Organization to increase the authorized number of shares of Common Stock from 2,500,000 to 5,000,000.	(    )	(    )	(    )
	5.	Whatever other business may be brought before said meeting or any adjournment thereof.	(    )	(    )	(    )
B.		IF ANY OF THE INDIVIDUALS LISTED AS A NOMINEE FOR DIRECTOR IN THE PROXY STATEMENT DATED MARCH __, 2006 AND THE ACCOMPANYING NOTICE OF SAID MEETING IS UNAVAILABLE AS A CANDIDATE OR ANY OTHER NOMINATION IS MADE OR IF ANY OTHER BUSINESS IS PRESENTED AT SAID MEETING, THIS PROXY SHALL BE VOTED IN ACCORDANCE WITH THE JUDGEMENT OF THE PERSON OR PERSONS ACTING HEREUNDER UNLESS EITHER “AGAINST” OR “ABSTAIN” IS INDICATED IN RESPONSE TO ITEM A.5 ABOVE.
		THIS PROXY IS SOLICITED ON BEHALF OF MANAGEMENT. Dated: March    , 2006

(Signature of Shareholder)

(Signature of Shareholder)

When acting as attorney, executor,

administrator, trustee or guardian,

please give full title. If more than

one trustee, all should sign.

No. of Shares: