UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|_| Preliminary Proxy Statement
|_| Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to ss.240.14a-12
Wake Forest Bancshares, Inc.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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|_| Fee paid previously with preliminary materials.
|_| Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Wake Forest Bancshares, Inc.
January 21, 2005
Dear Shareholder:
You are cordially invited to attend the 2005 Annual Meeting of
Shareholders (the "Meeting") of Wake Forest Bancshares, Inc. (the "Company"),
which will be held on February 22, 2005 at 2:00 p.m., local time, at the Wake
Forest Police and Justice Center, 401 Elm Avenue, Wake Forest, North Carolina.
The attached Notice of the 2005 Annual Meeting of Shareholders and proxy
statement describe the formal business to be transacted at the Meeting.
Directors and officers of the Company, as well as a representative of Dixon
Hughes PLLC, the accounting firm appointed by the Board of Directors to be the
Company's independent certified public accountants for the fiscal year ending
September 30, 2005, will be present at the Meeting to respond to questions.
The Board of Directors of the Company has determined that an affirmative
vote on each matter to be considered at the Meeting is in the best interests of
the Company and its shareholders and unanimously recommends a vote "FOR" each of
these matters.
Please complete, sign and return the enclosed proxy card promptly whether
or not you plan to attend the Meeting. Your vote is important regardless of the
number of shares you own. Voting by proxy will not prevent you from voting in
person at the Meeting, but will assure that your vote is counted if you are
unable to attend. If you are a shareholder whose shares are not registered in
your own name, you will need additional documentation from your record holder to
attend and to vote personally at the Meeting. Examples of such documentation
include a broker's statement, letter or other document confirming your ownership
of shares of the Company.
On behalf of the Board of Directors and the employees of Wake Forest
Bancshares, Inc., we thank you for your interest.
Sincerely yours,
/s/ Robert C. White
Robert C. White
President and Chief Executive Officer
Wake Forest Bancshares, Inc.
302 S. Brooks Street, P.O. Box 1167
Wake Forest, North Carolina 27588-1167
(919) 556-5146
NOTICE OF THE 2005 ANNUAL MEETING OF SHAREHOLDERS
Date: Tuesday, February 22, 2005
Time: 2:00 p.m., local time
Place: Wake Forest Police and Justice Center
401 Elm Avenue, Wake Forest, North Carolina 27587
At your 2005 annual meeting, we will ask you to:
o Elect three directors, each of which would serve for a three-year
term expiring at the 2008 annual meeting.
o Howard L. Brown
o Robert C. White
o R.W. Wilkinson, III
o Ratify the appointment of Dixon Hughes PLLC, as independent
certified public accountants for the fiscal year ending September
30, 2005; and
o Transact any other business as may properly come before the annual
meeting.
You may vote at the annual meeting and at any adjournment or postponement
thereof if you were a shareholder of Wake Forest Bancshares, Inc. at the close
of business on December 31, 2004, the record date.
By Order of the Board of Directors,
/s/ Billy B. Faulkner
Billy B. Faulkner
Corporate Secretary
Wake Forest, North Carolina
January 21, 2005
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You are cordially invited to attend the 2005 annual meeting. It is important
that your shares be represented regardless of the number of shares you own. The
Board of Directors urges you to sign, date and mark the enclosed proxy card
promptly and return it in the enclosed envelope. Returning the proxy card will
not prevent you from voting in person if you attend the annual meeting.
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GENERAL INFORMATION
General
We have sent to the shareholders of Wake Forest Bancshares, Inc. (the
"Company") this proxy statement and enclosed proxy card because the Board of
Directors of the Company is soliciting your proxy to vote at the 2005 annual
meeting. You do not need to attend the annual meeting to vote your shares. You
may simply complete, sign and return the enclosed proxy card, and your votes
will be cast for you at the annual meeting.
We began mailing this proxy statement, the Notice of Annual Meeting and
the enclosed proxy card on or about January 21, 2005 to all shareholders
entitled to vote. If you owned shares of the Company's common stock at the close
of business on December 31, 2004, the record date, you are entitled to vote at
the annual meeting. On the record date, there were 1,154,676 shares of common
stock issued and outstanding.
Quorum Requirement
A quorum of shareholders is necessary to hold a valid meeting. The
presence, in person or by proxy, of holders of at least a majority of the total
number of votes eligible to be cast in election of directors generally by the
holders of the outstanding shares entitled to vote at the annual meeting is
necessary to constitute a quorum.
Voting Rights
You are entitled to one vote at the annual meeting for each share of the
Company's common stock that you owned of record at the close of business on
December 31, 2004. The number of shares you own (and may vote) is listed at the
top of the back of the proxy card.
You may vote your shares at the annual meeting in person or by proxy. To
vote in person, you must attend the annual meeting, and obtain and submit a
ballot, which we will provide to you at the annual meeting. To vote by proxy,
you must complete, sign and return the enclosed proxy card. If you properly
complete your proxy card and send it to us in time to vote, your "proxy" (one of
the individuals named on your proxy card) will vote your shares as you have
directed. If you sign the proxy card but do not specify how you want to vote
your shares, your proxy will vote your shares FOR the election of the nominees
for director and FOR the ratification of the appointment of the Company's
independent certified public accountants.
If any other matter is presented, your proxy will vote the shares
represented by all properly executed proxies on such matters as a majority of
the Board of Directors determines. As of the date of this proxy statement, we
know of no other matters that may be presented at the annual meeting, other than
those listed in this proxy statement.
-3-
Vote Required
Proposal 1: Elect The three nominees for director who receive the most votes
Three Directors will be elected. If you do not vote for a nominee, or you
indicate "withhold authority" for any nominee on your proxy
card, your vote will not count "for" or "against" the
nominee. You may not vote your shares cumulatively for the
election of directors.
Proposal 2: Ratify The affirmative vote of a majority of the shares present in
the Appointment of person or by proxy at the annual meeting and entitled to
Independent vote on this proposal is required to ratify the appointment
Certified Public of Dixon Hughes PLLC as the Company's independent certified
Accountants public accountants. So, if you "abstain" from voting, it
has the same effect as if you voted "against" this
proposal.
Effect of Broker Non-Votes
If your broker holds shares that you own in "street name," the broker may
vote your shares on Proposals 1 and 2 listed above even if the broker does not
receive instructions from you. If your broker does not vote on a proposal, this
will constitute a "broker non-vote." Here is the effect of a "broker non-vote."
o Proposal 1: Elect Three Directors. A broker non-vote would have no effect
on the outcome of this proposal because only a plurality of votes cast is
required to elect a director.
o Proposal 2: Ratify the Appointment of Independent Certified Public
Accountants. A broker non-vote would have no effect on the outcome of this
proposal.
Confidential Voting Policy
The Company maintains a policy of keeping stockholder votes confidential.
We only let our Inspectors of Election and our tabulating agent examine the
voting materials. We will not disclose your vote to management unless it is
necessary to meet legal requirements. We will, however, forward any written
comments that you may have to management.
Revoking Your Proxy
You may revoke your proxy at any time before it is exercised by:
o Filing with the Company a letter revoking the proxy;
o Submitting another signed proxy with a later date; or
o Attending the annual meeting and voting in person, if you file a written
revocation with the Secretary of the annual meeting prior to the voting of
the proxy.
If your shares are not registered in your own name, you will need
appropriate documentation from your stockholder of record to vote personally at
the annual meeting. Examples of such documentation include a valid proxy from
the registered holder of your shares confirming your ownership of shares of the
Company.
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Solicitation of Proxies
The Company will pay the costs of soliciting proxies from its
shareholders. Directors, officers or employees of the Company and Wake Forest
Federal Savings & Loan Association (the "Association") may solicit proxies by:
o mail;
o telephone; or
o other forms of communication.
We will reimburse banks, brokers, nominees and other fiduciaries for the
expenses they incur in forwarding the proxy materials to you.
Obtaining an Annual Report on Form 10-KSB
If you would like a copy of our Annual Report on Form 10-KSB for the year
ended September 30, 2004, which has been filed with the Securities and Exchange
Commission ("SEC"), we will send you one (without exhibits) free of charge.
Please write to:
Billy B. Faulkner
Corporate Secretary
Wake Forest Bancshares, Inc.
302 S. Brooks Street
Wake Forest, North Carolina 27587
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Principal Shareholders of the Company
The following table contains common stock ownership information for
persons known to the Company to "beneficially own" 5% or more of the Company's
common stock as of December 31, 2004. In general, beneficial ownership includes
those shares that a person has the power to vote, sell, or otherwise dispose.
Beneficial ownership also includes that number of shares which an individual has
the right to acquire within 60 days (such as stock options) after December 31,
2004. Two or more persons may be considered the beneficial owner of the same
shares. We obtained the information provided in the following table from filings
with the SEC and with the Company. In this proxy statement, "voting power" is
the power to vote or direct the voting of shares, and "investment power"
includes the power to dispose or direct the disposition of shares.
Name and Address of Amount and Nature of
Title of Class Beneficial Owner Beneficial Ownership Percent of Class
- -------------------- -------------------------------------- -------------------- ----------------
Common Stock, par Wake Forest Bancorp, M.H.C. 635,000 55.0%
value $.01 per share 302 S. Brooks Street, P.O. Box 1167
Wake Forest, North Carolina 27588-1167
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Security Ownership of Management
The following table shows the number of shares of the Company's common
stock beneficially owned by each director and each executive officer of the
Company and the Association, whose annual salary and bonus for 2004 was at least
$100,000 (the "named executive officers"), and all directors and executive
officers of the Company as a group, as of December 31, 2004. Except as otherwise
indicated, each person and each group shown in the table has sole voting and
investment power with respect to the shares of common stock listed next to their
name.
Amount and Nature Percent of
Position with of Beneficial Common Stock
Name the Company Ownership(1) Outstanding
- -------------------- ------------------------------- ----------------- ------------
Paul K. Brixhoff Director 7,767(2) *
Howard L. Brown Director, Chairman of the Board 8,269(3) *
John D. Lyon Director 28,548(4) 2.27%
Rodney M. Privette Director 1,262 *
Anna O. Sumerlin Director 14,652(5) *
Harold R. Washington Director 4,487(6) *
Robert C. White Director, President and Chief 6,337(7) *
Executive Officer
R.W. Wilkinson, III Director and Vice-Chairman 7,767(8) *
Leelan A. Woodlief Director 6,269(9) *
William S. Wooten Director 1,515(10) *
All directors and executive officers as a group (12 persons) 95,372 6.10%
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* Less than one percent
(1) See "Principal Shareholders of the Company" for a definition of
"beneficial ownership." All persons in the table have sole voting and
investment power, except as otherwise indicated.
(2) Includes options to purchase 2,314 shares of common stock at $12.75 per
share granted under Option Plan.
(3) Includes options to purchase 2,315 shares of common stock at $12.75 per
share granted under the Option Plan.
(4) Includes 19,695 shares as to which Mr. Lyon may be deemed to share voting
and investment power; and includes options to purchase 2,314 shares of
common stock at $12.75 per share granted under the Option Plan.
(5) Includes options to purchase 9,000 shares of common stock at $12.75 per
share option plan granted under the Wake Forest Federal Savings & Loan
Association 1997 Stock Option Plan (the "Option Plan"); and includes 2,316
shares of common stock held in Mrs. Sumerlin's individual retirement
account..
(6) Includes options to purchase 2,314 shares of common stock at $12.75 per
share granted under the Option Plan.
(7) Includes 4,237 shares of common stock allocated to Mr. White under the
ESOP as to which he has voting power, but no investment power except in
limited circumstances.
(8) Includes 900 shares as to which Mr. Wilkinson may be deemed to share
voting and investment power; and includes options to purchase 2,314 shares
of common stock at $12.75 per share granted under the Option Plan.
(9) Includes options to purchase 2,315 shares of common stock at $12.75 per
share granted under the Option Plan.
(10) Includes 675 shares as to which Mr. Wooten may be deemed to share voting
and investment power.
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---------------------------------
PROPOSAL 1
ELECTION OF DIRECTORS
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General
The Board has nominated three persons for election as directors at the
annual meeting. All three nominees are currently serving on the Company's Board
of Directors. If you elect the nominees, they will hold office until the annual
meeting in 2008, or until their successors have been elected.
We know of no reason why any nominee may be unable to serve as a director.
If any nominee is unable to serve, your proxy may vote for another nominee
proposed by the Board. If for any reason these nominees prove unable or
unwilling to stand for election, the Board will nominate alternates or reduce
the size of the Board of Directors to eliminate the vacancy. The Board has no
reason to believe that its nominees would prove unable to serve if elected.
Director Term Position(s) Held with the
Nominees Age(1) Since (2) Expires Company
- -------------------- ------ --------- ------- ------------------------------------
Howard L. Brown 77 1986 2005 Director and Chairman of the Board
Robert C. White 48 2002 2005 President, Chief Executive Officer &
Chief Financial Officer
R.W. Wilkinson, III 76 1992 2005 Director and Vice-Chairman
Continuing Directors
- --------------------
Paul K. Brixhoff 83 1970 2006 Director
Anna O. Sumerlin 58 1993 2006 Director
Harold R. Washington 79 1969 2006 Director
John D. Lyon 67 1988 2007 Director
Rodney M. Privette 49 1997 2007 Director
Leelan A. Woodlief 78 1988 2007 Director
William S. Wooten 47 1997 2007 Director
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(1) As of September 30, 2004.
(2) Includes service on the Board of Directors of the Association.
The principal occupation and business experience of each nominee for
election as director and each continuing director are set forth below. Unless
otherwise indicated, each of the following persons has held his or her present
position for the last five years.
Biographical Information
The following information relates to the directors and executive officers
of the Company and the Association. Unless otherwise indicated, each director
and executive officer has held his or her current occupation for the last five
years.
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Nominees
Howard L. Brown has served as Chairman of the Board of Directors of the
Association since 1996 and the Company since 1999. He has been a director of the
Association since 1986 and the Company since its inception in 1999. He served as
Vice Chairman of the Board of Directors of the Association from 1992 to 1996.
Mr. Brown is the former owner of an oil distribution company and has been
retired since 1988.
Robert C. White has served as President and Chief Executive Officer of the
Company and the Association since April of 2002 and was appointed to the Board
of Directors of the Company in September of 2002. Mr. White has served as Chief
Financial Officer of the Association since December 1998 and of the Company
since its inception in 1999. Prior to that, Mr. White had served as Vice
President of the Company since 1999 and the Association since December 1998.
Prior to that, Mr. White served as Chief Financial Officer and Senior Vice
President of United Federal Savings Bank in Rocky Mount, North Carolina from
April 1997 to September 1998. In September of 1998, United Federal was acquired
in a merger transaction. Prior to his appointment with United Federal, Mr. White
was a partner in the CPA firm of McGladrey & Pullen, LLP in Raleigh, North
Carolina. He was with the CPA firm for nineteen years and was in charge of the
local office's financial institutions practice.
R.W. Wilkinson, III has served as a director of the Association since 1992
and the Company since 1999. From 1979 to 1988, Mr. Wilkinson served as Managing
Officer, Executive Vice President and Corporate Secretary-Treasurer of the
Association. From 1963 to 1979, Mr. Wilkinson served as Assistant Manager of the
Association. Mr. Wilkinson was elected Vice-Chairman of the Board of Directors
of the Association in 1997 and the Company since its inception in 1999.
Continuing Directors
Paul K. Brixhoff worked in the automotive parts supply business for over
29 years. He retired in 1982. He has served as a director of the Association
since 1970 and the Company since its inception in 1999.
Anna O. Sumerlin previously served as the Association's President and
Chief Executive Officer from 1995 to March of 2002 and the Company's President
and Chief Executive Officer from its inception in 1999 to March of 2002. Mrs.
Sumerlin also served as the Managing Officer, Executive Vice President,
Corporate Secretary and Treasurer from 1988 to 1995 and as the Assistant Manager
and Assistant Secretary-Treasurer beginning in 1979. She was elected to the
Board of Directors of the Association in 1993 and the Company since its
inception in 1999.
Harold R. Washington has served as a director of the Association since
1969 and the Company since its inception in 1999. He is the former owner of an
automobile distributorship and retired in 1980.
John D. Lyon has owned an independent state-certified appraisal company
for the past ten years although he currently does not perform appraisal
services. He also has owned and managed a real estate portfolio for over 30
years. Mr. Lyon also has close to 33 years of retail management experience. He
has served as a director of the Association since 1988 and the Company since its
inception in 1999.
Rodney M. Privette is President and a general agent of Privette Insurance
Company in Rolesville, North Carolina. Mr. Privette specializes in life
insurance, retirement planning, property and casualty insurance and has over 25
years experience in his field. Mr. Privette has served on the Rolesville Fire
Department since 1975 and as Fire Chief since 1992. Since 1997, he has served as
a director of the Association and the Company since its inception in 1999.
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Leelan A. Woodlief is in retail management and is semi-retired from
Woodlief Supply Company, a farming supply store. He has over 50 years experience
in the agriculture and insurance businesses. Mr. Woodlief has served as a
director of the Association since 1988 and the Company since its inception in
1999.
William S. Wooten has operated a successful dental practice in Wake
Forest, North Carolina from 1982 to 2003 and in Henderson, North Carolina since
2004. He has been a director of the Association since 1997 and the Company since
its inception in 1999.
Executive Officers Who are Not Directors
Billy B. Faulkner, age 56, has served as Secretary and Treasurer of the
Company and the Association since March 2002. He has served as a Vice President
of the Company and the Association since his employment with the Association on
October 1, 2000. Mr. Faulkner is the Association's Chief Lending Officer,
primarily responsible for construction and commercial lending.. Prior to joining
the Association, Mr. Faulkner was a Senior Vice President, Credit
Administration, with Triangle Bank from 1998 to 2000. Prior to that, Mr.
Faulkner was a Vice President with United Federal Savings Bank from 1982 to
1997, responsible for various lending activities.
Susan S. Carter, age 51, has served as Vice President of the Company and
the Association since February 2004. Ms. Carter previously served as Assistant
Vice President and Assistant Secretary from February 2003 until February 2004.
Ms. Carter is the Association's primary residential lending officer and also
serves as the Association's information technology officer. Ms. Carter has been
employed by the Association since 1983 in a variety of different capacities.
================================================================================
The Board of Directors unanimously recommends a vote "For" all of the nominees
for election as directors.
================================================================================
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---------------------------------
PROPOSAL 2
RATIFICATION OF APPOINTMENT OF
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
---------------------------------
General
The Board of Directors has appointed the firm of Dixon Hughes PLLC, to act
as independent certified public accountants for the Company for the fiscal year
ending September 30, 2005, and we are asking shareholders to ratify the
appointment. Representatives of Dixon Hughes PLLC, are expected to attend the
annual meeting. The representatives will have the opportunity to make a
statement if they desire to do so. It is expected that the representatives will
be available to respond to appropriate questions.
Principal Accountant Fees and Services
During the fiscal years ended September 30, 2004 and September 30, 2003,
respectively, we retained and paid Dixon Hughes PLLC to provide audit and other
services as follows:
For the Fiscal Year Ended
Audit Fees September 30, 2004 September 30, 2003
---------- ------------------ ------------------
Audit $25,165 $25,200
Audit-Related Fees $ 0 $ 0
Tax Fees $ 3,000 $ 3,000
All Other Fees (reviews of SEC filings) $ 5,602 $ 4,579
------- -------
TOTAL $33,767 $32,779
======= =======
Audit Committee Preapproval Policy
Preapproval of Services. The Audit Committee shall preapprove all auditing
services and permitted non-audit services (including the fees and terms) to be
performed for the Company by its independent certified public accountants,
subject to the de minimis exception for non-audit services described below which
are approved by the Committee prior to completion of the audit.
Exception. The preapproval requirement set forth above, shall not be
applicable with respect to non-audit services if:
o The aggregate amount of all such services provided constitutes no
more than five percent of the total amount of revenues paid by the
Company to its public accountants during the fiscal year in which
the services are provided;
o Such services were not recognized by the Company at the time of the
engagement to be non-audit services; and
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o Such services are promptly brought to the attention of the Audit
Committee and approved prior to the completion of the audit by the
Committee or by one or more members of the Committee who are members
of the Board of Directors to whom authority to grant such approvals
has been delegated by the Committee.
Delegation. The Audit Committee may delegate to one or more designated
members of the Committee the authority to grant required preapprovals. The
decisions of any member to whom authority is delegated under this paragraph to
preapprove activities under this subsection shall be presented to the full
Committee at its next scheduled meeting.
The Audit Committee approved all services performed by Dixon Hughes PLLC
pursuant to the policies outlined above.
================================================================================
The Board of Directors unanimously recommends a vote "For" the ratification of
the appointment of Dixon Hughes PLLC, as independent certified public
accountants for the Company for the fiscal year ended September 30, 2005.
================================================================================
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INFORMATION ABOUT BOARD OF DIRECTORS AND MANAGEMENT
Meetings and Committees of the Board of Directors of the Company
The Company's Board of Directors currently consists of ten members. The
Company's federal stock charter and bylaws provide that the Board of Directors
shall be divided into three classes, as nearly equal in number as possible. The
terms of three directors expire at the annual meeting.
The Board of Directors oversees the Company's business and monitors the
performance of the Company's management. In accordance with our corporate
governance procedures, the Board of Directors does not involve itself in the
day-to-day operations of the Company. The Company's executive officers and
management oversee the day-to-day operations of the Company. Our directors
fulfill their duties and responsibilities by attending regular meetings of the
Board which are held on a monthly basis. Our directors also discuss business and
other matters with the Chairman and the President, other key executives, and our
principal external advisers (legal counsel, public accountants, financial
advisors and other consultants).
The Board of Directors of the Company held 12 regular meetings during the
fiscal year ended September 30, 2004. Each incumbent director attended at least
75% of the meetings of the Board of Directors plus committee meetings on which
that particular director served during this period.
Committees of the Board
The Board of Directors of the Company has established the following
standing committees:
NOMINATING/ The Nominating/Corporate Governance Committee is currently
CORPORATE chaired by Director Wooten, with Director Privette serving as a
GOVERNANCE member. The committee for fiscal year 2004 was chaired by
COMMITTEE Director Wilkinson, with Director Washington serving as a member,
and met once in fiscal year 2004. The Nominating/Corporate
Governance Committee formulates our corporate governance
guidelines and determines the qualification and independence of
directors and committee members. The committee is responsible for
nominating persons for election to the Board of Directors and
also reviews if any shareholder nominations comply with the
notice procedures set forth in the Company's bylaws and
summarized below. The Committee will consider nominees
recommended by shareholders. The Board of Directors of the
Company has not adopted a written charter for the
Nominating/Corporate Governance Committee. Directors Wooten and
Privette are independent as defined under the Nasdaq Stock Market
listing standards.
The Company's bylaws set forth a procedure for shareholders to
nominate directors by delivering written notification to the
Secretary of the Company at the Company's principal executive
offices at least five days prior to the date of the annual
meeting. The notice must set forth shall set forth (a) as to each
person whom the shareholder proposes to nominate for election or
reelection as a director, (i) the name, age, business address and
residence address of such person, (ii) the principal occupation
or employment of such person, and (iii) such person's written
consent to serve as a director, if elected; and (b) as to the
shareholder giving the notice, (i) the name and address of such
shareholder and (ii) the class and number of shares of the
Company which are owned of record by such shareholder. Upon
delivery, such nominations shall be posted in a
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conspicuous place in each office of the Company. Ballots bearing
the names of all the persons nominated by the
Nominating/Corporate Governance Committee and by shareholders
shall be provided for use at the annual meeting. However, if the
Nominating/Corporate Governance Committee shall fail or refuse to
act at least 20 days prior to the annual meeting, nominations for
directors may be made at the annual meeting by any shareholder
entitled to vote and shall be voted upon.
The Nominating/Corporate Governance Committee believes that a
nominee for the Company's Board of Directors must possess the
following minimum qualifications: reside, be employed, or
maintain real estate holdings in Wake Forest or the immediate
surrounding communities and hold more than 100 shares of the
Company's stock. The Committee also believes that individuals who
possess strong analytical skills, business experience, and the
ability to assist the Company in generating new business
opportunities would have qualities considered advantageous.
Each of Howard L. Brown, Robert C. White and R.W. Wilkinson, III
was recommended for election by the non-management directors,
Directors Wooten and Privette, serving on the
Nominating/Corporate Governance Committee. As of December 31,
2004, the Nominating/Corporate Governance Committee had not
received any nominee recommendations from any security holders
for the 2005 elections.
COMPENSATION The Compensation Committee is chaired by Director Woodlief, with
COMMITTEE Directors Brown, Sumerlin and Wilkinson as members. This
committee establishes the compensation of the Chief Executive
Officer, approves the compensation of other officers and
determines compensation and benefits to be paid to employees of
the Company and the Association. It also sets directors' fees.
The committee met twice in 2004. The Compensation Committee also
acts as the ESOP Committee, and meets to review the Company's
ESOP. The Compensation Committee is currently acting as the
"Option Plan Committee" and the "RRP Committee" in administering
the Option Plan and RRP, respectively.
EXECUTIVE The Executive Committee is chaired by Director Brown, with
COMMITTEE Directors Sumerlin, Wilkinson and Woodlief as members. This
committee meets as requested by management, and pursuant to the
bylaws of the Company, may act on behalf of the Board except for
such matters as declaration of dividends, changes to the
Company's charter or bylaws, or other material issues as defined
in the bylaws. All actions of this committee are reviewed by the
entire Board of Directors at its next regular meeting. The
Executive Committee met 5 times and was polled 26 other times
during fiscal 2004.
-14-
AUDIT The Audit Committee is a separately-designated, standing
COMMITTEE committee established in accordance with section 3(a)(58)(A) of
the Securities Exchange Act of 1934, as amended. The Audit
Committee is chaired by Director Lyon, with Directors Privette,
Sumerlin and Wooten as members. The Audit Committee oversees and
monitors our financial reporting process and internal control
system, reviews and evaluates the audit performed by our outside
public accountants and reports any substantive issues found
during the audit to the Board. The Audit Committee is directly
responsible for the appointment, compensation and oversight of
the work of our independent certified public accountants. The
committee will also review and approve all transactions with
affiliated parties. The Board of Directors of the Company has
adopted a written charter for the Audit Committee, which is
attached as Appendix A. With the exception of Director Sumerlin,
all members of the Audit Committee are independent directors as
defined under the Nasdaq Stock Market listing standards. Because
Director Sumerlin worked for the Company, as President, within
the last three years, she is not "independent" as defined by the
Nasdaq Stock Market listing standards. The Board does not believe
any of its audit committee members qualify as an "Audit Committee
Financial Expert" as that term is defined by applicable SEC
rules. The Company has been unable to secure such an individual
to serve on the Audit Committee, but is continuing its search.
While not independent, Director White is a certified public
accountant and advises the Audit Committee members on accounting
and financial reporting matters. The committee met four times in
the 2004 fiscal year.
-15-
Audit Committee Report
Wake Forest Bancshares, Inc. Audit Committee Report
The following Audit Committee Report is provided in accordance with the
rules and regulations of the SEC. Pursuant to such rules and regulations, this
report shall not be deemed "soliciting materials," filed with the SEC, subject
to Regulation 14A or 14C of the SEC or subject to the liabilities of section 18
of the Securities Exchange Act of 1934, as amended.
The Audit Committee has reviewed and discussed the audited financial
statements with management. The committee has also reviewed and discussed with
Dixon Hughes PLLC ("Dixon Hughes"), their independent certified public
accountants, the matters required to be discussed by SAS 61, as may be modified
or supplemented.
The Audit Committee also has received the written disclosures and the
letter from the independent accountants required by Independence Standards Board
Standard No. 1 (Independence Standards Board Standard No.1, Independence
Discussions with Audit Committee), as may be modified or supplemented, and has
discussed with Dixon Hughes its independence.
Based on the foregoing discussions, the Audit Committee recommended to the
Board of Directors of Wake Forest Bancshares, Inc. that the audited financial
statements be included in Wake Forest Bancshares, Inc.'s Annual Report on Form
10-KSB for the year ended September 30, 2004.
Audit Committee of Wake Forest Bancshares, Inc.
John D. Lyon, Chairman
Rodney M. Privette
Anna O. Sumerlin
William S. Wooten
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Director's Compensation
Fee Arrangements. Currently, each non-employee director of the Company
receives a fee of $700 per meeting attended except for the Chairman who receives
$1,000 per meeting attended. Directors are not currently compensated for
attending committee meetings but will be paid $100 for each committee meeting
attended beginning in January 2005. In addition, each non-employee director who
has attended a minimum of 75% of the aggregate number of the Board and committee
meetings of which he or she is a member called during the respective calendar
year, will receive an annual retainer fee of $3,700, payable in December. The
aggregate amount of fees paid to such directors by the Company for the year
ended September 30, 2004, was approximately $108,800. Directors are also covered
by the Option Plan and RRP. See "- Benefits - Stock Option Plan," and "-
Recognition and Retention Plan."
Directors' Retirement Plan. The Company has adopted a nonqualified
Retirement Plan for Board Members of the Company (the "Directors' Retirement
Plan"), which provides benefits to each eligible director commencing on his or
her termination of Board service at or after age 65. Each director who serves or
has agreed to serve as a director automatically becomes a participant in the
Directors' Retirement Plan. An eligible director retiring at or after age 65
will be paid an annual retirement benefit equal to the lesser of the amount of
the aggregate compensation for services as a director (excluding stock
compensation) paid to him or her for the 12-month period immediately prior to
his or her termination of Board service or $5,000, multiplied by a fraction, the
numerator of which is the number of his or her years of service as a director
(including service as a director or trustee of the Company or any predecessor)
and the denominator of which is 10. An individual who terminates Board service
after having served as a director for 10 years may elect to begin collecting
benefits under the Directors' Retirement Plan at or after attainment of age 50,
but the annual retirement benefits payable to him or her will be reduced
pursuant to the Directors' Retirement Plan's early retirement reduction formula
to reflect the commencement of benefit payments prior to age 65. Benefits may be
paid in an immediate lump sum distribution or paid for a fixed period of 10
years. Upon a change in control, participants will receive an immediate lump sum
distribution of their benefit.
Other Arrangements. Mr. Brown performs inspections on collateral
associated with construction loans that are originated by the Association. In
fiscal year 2004, Mr. Brown received $38,475 for such inspection fees.
Executive Compensation
Cash Compensation. The following table sets forth the cash compensation
paid by the Company for services rendered in all capacities during the fiscal
years ended September 30, 2004, 2003, and 2002, to Mr. White. No other executive
officer earned salary plus bonus in excess of $100,000 during the fiscal year
ended September 30, 2004.
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Summary Compensation Table
--------------------------------------------
Long Term Compensation
------------------------------------
Annual Compensation Awards
-------------------------------------------- -------------------
Other Restricted
Annual Stock All Other
Salary Compensation Awards Options Compensation
Name and Principal Positions Year ($)(1) Bonus($) ($)(2) ($)(3) (#) ($)(4)
- ------------------------------ ---- ------- -------- ------------ ---------- ------- ------------
Robert C. White, President and 2004 101,500 27,000 -- -- -- 9,572
Chief Executive Officer 2003 98,000 26,000 -- -- -- 16,103
2002 94,100 25,000 -- 1,700 -- 19,936
- ----------
(1) Includes amounts, if any, deferred pursuant to Section 401(k) of the Code
under the Company's 401(k) Plan.
(2) For fiscal 2004, 2003, and 2002, there were no: (a) perquisites with an
aggregate value for any named individual in excess of the lesser of
$50,000 or 10% of the total of the individual's salary and bonus for the
year; (b) payments of above-market preferential earnings on deferred
compensation; (c) payments of earnings with respect to long-term incentive
plans prior to settlement or maturation; (d) tax payment reimbursements;
or (e) preferential discounts on stock.
(3) The value of the restricted stock award reflected in the table above
reflects the value of the award as of the date granted. This award is
fully vested and dividends on these shares are distributed to Mr. White.
The aggregate fair market value of this award was $2,200 on September 30,
2004 based on a closing price of $22.00 per share.
(4) Includes $9,572 in employer matching contributions associated with the
Association's 401(k) plan for the fiscal year 2004.
Employment Agreements
The Company, through the Association, is a party to an employment
agreement with both Mr. White and Mr. Faulkner ("Senior Executives"). These
employment agreements establish the respective duties and compensation of the
Senior Executives and are intended to ensure that the Company will be able to
maintain a stable and competent management base. The continued success of the
Company depends to a significant degree on the skills and competence of the
Senior Executives.
The employment agreements provide for three-year terms. They provide that,
commencing on the first anniversary date of the employment agreements and
continuing each anniversary date thereafter, the Board of Directors may, with
the Senior Executive's concurrence, extend the employment agreements for an
additional year, so that the remaining terms shall be three years, after
conducting a performance evaluation of the Senior Executive. The employment
agreements provide that the Senior Executive's base salary will be reviewed
annually by the Compensation Committee of the Board. The employment agreements
provide that each of the Senior Executive's base salary may be increased on the
basis of his job performance and the overall performance of the Company. The
base salaries for Mr. White and Mr. Faulkner as of September 30, 2004 were
$101,500 and $73,500, respectively. Each Senior Executive may receive a bonus
based upon achievement of prescribed performance criteria. In addition to base
salary, the employment agreements provide for, among other things, entitlement
to participation in stock, retirement and welfare benefit plans and eligibility
for fringe benefits applicable to executive personnel such as fees for club and
organization memberships deemed appropriate by the Company and the Senior
Executive. The employment agreements provide for termination by the Company at
any time for cause as defined in the employment agreements. In the event the
Company chooses to terminate the Senior Executive's employment for reasons other
than for cause, or in the event of the Senior Executive's resignation from the
Company upon: (i) failure to re-appoint, elect or re-elect the Senior Executive
to his current offices; (ii) a material change in the Senior Executive's
functions, duties or responsibilities; (iii) a relocation of the Senior
Executive's principal place of employment outside Wake County without the Senior
Executive's consent; (iv) liquidation or dissolution of the Company; (v) a
change of control of the
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Company; or (vi) a breach of the employment agreement by the Company, the Senior
Executive or, in the event of death, his beneficiary, is entitled to a lump sum
cash payment in an amount equal to three times the Senior Executive's highest
rate of annual salary, including bonuses and stock awards included as W-2 wages
achieved during the employment period, and the additional contributions or
benefits under any employee benefit plans of the Company or the Association that
the Senior Executive would have earned assuming such executive was fully vested
in the plans. The Company would also continue the Senior Executive's life,
health and disability insurance coverage for three years.
The employment agreements restrict the dollar amount of compensation and
benefits payable to a Senior Executive in the event of termination following a
"change in control" to three times the Senior Executive's average annual
compensation for the previous five calendar years. In general, for purposes of
the employment agreements and the plans maintained by the Company, a "change in
control" will generally be deemed to occur when a person or group of persons
acting in concert acquires beneficial ownership of 25% or more of any class of
equity security, such as common stock of the Company, or in the event of a
tender offer, exchange offer, merger or other form of business combination, sale
of assets or contested election of directors which results in a change in
control of the majority of the Board of Directors of the Company. The Senior
Executives are entitled to reimbursement of certain costs incurred in
negotiating, interpreting or enforcing the employment agreements. Each
employment agreement also provides for the Company to indemnify the Senior
Executive to the fullest extent allowable under federal law.
Cash and benefits paid to a Senior Executive under the employment
agreements together with payments under other benefit plans following a "change
in control" of the Company may constitute an "excess parachute" payment under
Section 280G of the Internal Revenue Code of 1986, as amended, resulting in the
imposition of a 20% excise tax on the recipient and the denial of the deduction
for such excess amounts to the Company. Compensation payable to the Senior
Executive shall be reduced if such reduction would avoid the assessment of the
excise tax.
Benefits
Employee Stock Ownership Plan and Trust. This plan is a tax-qualified plan
that covers substantially all salaried employees of the Association. All
contributions by the Association to the ESOP are discretionary. Shares are
allocated among the accounts of participants in the ESOP on the basis of the
participant's compensation for the year of allocation.
The ESOP committee, which is currently comprised of members of the
Compensation Committee, may instruct the trustee regarding investment of funds
contributed to the ESOP. The ESOP trustee, subject to its fiduciary duty, must
vote all allocated shares held in the ESOP in accordance with the instructions
of the participating employees. Under the ESOP, any unallocated shares will be
voted in a manner calculated to most accurately reflect the instructions it has
received from participants regarding the allocated stock as long as such vote is
in accordance with the provisions of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"). The ESOP may purchase additional shares of common
stock in the future.
Stock Option Plan. The Company has an Option Plan in effect, which was
approved by shareholders at the 1997 annual meeting of shareholders. The Company
reserved 54,000 shares of common stock for issuance upon the exercise of options
granted under the Option Plan. The members of the Board's Compensation Committee
who are disinterested directors ("Option Committee") administer the Option Plan.
The Option Plan is not subject to ERISA and is not a tax-qualified plan.
-19-
Recognition and Retention Plan. The RRP was adopted by the Company and
approved by its shareholders at the 1997 annual meeting of shareholders. The
Company has established a trust ("RRP Trust") to purchase up to 22,248 shares of
the Company's common stock which may be used for awards granted under the RRP.
Any employee of the Company or any affiliate approved by the Board of
Directors who is selected by the RRP Committee is eligible to participate in the
RRP as an "eligible individual." Members of the Board of Directors of the
Company or any affiliate approved by the Board of Directors who are not
employees or officers of the Company or such affiliate are eligible to
participate as an "eligible director."
Stock subject to awards is held in trust pursuant to the RRP until vested.
An individual to whom an award is granted is credited with cash dividends with
respect to stock subject to awards granted to him or her whether or not vested.
Awards generally vest at a rate of 20% over a five year period. However, any
shares covered by the award will become 100% vested as of the date of the
recipient's death, disability, retirement or on a change of control of the
Association. If an individual covered by an award ceases to be an employee, a
director, an advisory director or director emeritus for reasons other than
death, disability retirement or after a change of control of the Association,
the individual forfeits all rights to his or her unvested shares remaining in
the RRP Trust. Individuals may designate a beneficiary to receive distributions
on account of death. The RRP Committee will exercise voting rights with respect
to shares in the RRP Trust in a manner that reflects the votes or responses of
all other shareholders and will respond to any tender offer, exchange offer or
other offer made to shareholders.
Transactions with Certain Related Persons
The Association has made loans or extended credit to executive officers
and directors and also to certain persons related to executive officers and
directors. All such loans were made by the Association in the ordinary course of
business, on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable transactions with the
general public, such loans did not involve more than the normal risk of
collectibility or present other unfavorable features. The outstanding principal
balance of such loans to directors, executive officers and their associates
totaled $96,350 or 0.59% of the Association's total equity at September 30,
2004.
The Company intends that all transactions in the future between the
Company and its executive officers, directors, holders of 10% or more of the
shares of any class of its common stock and affiliates thereof, will contain
terms no less favorable to the Company than could have been obtained by it in
arm's-length negotiations with unaffiliated persons and will be approved by a
majority of independent outside directors of the Company not having any interest
in the transaction.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires the Company's executive
officers and directors, and persons who own more than 10% of common stock to
file with the SEC reports of ownership and changes of ownership.
Officers, directors and greater than 10% shareholders are required by the
regulations to furnish the Company with copies of all Section 16(a) forms they
file. The Company knows of no other person other than Wake Forest Bancorp,
M.H.C. that owns 10% or more of the Company's common stock.
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons, the Company believes
that all filing requirements applicable to its
-20-
executive officers, directors and greater than 10% beneficial owners were
complied with, as of September 30, 2004.
Code of Ethics
We have adopted the Wake Forest Federal Ethics Policy (the "Ethics
Policy"), which applies to all employees, officers and directors of the Company,
the MHC and the Association. The Ethics Policy meets the requirement of a "code
of ethics" as defined by Item 406 of Regulation S-B, and applies to our Chief
Executive Officer (who is our principal executive and accounting officer). The
Ethics Code was filed with the SEC as an Exhibit to our report on Form 10-KSB
for the fiscal year ended September 30, 2004.
ADDITIONAL INFORMATION
Stockholder Communications with the Board of Directors
Stockholders may communicate in writing with the Board of Directors or any
individual director(s) by sending such written communication to the following
address:
Billy B. Faulkner
Corporate Secretary
Wake Forest Bancshares, Inc.
302 S. Brooks Street
Wake Forest, North Carolina 27587
Any written communications received by Mr. Faulkner will be forwarded to
the Board or the appropriate director(s).
Information About Shareholder Proposals
Any shareholder proposal intended for inclusion in the Company's proxy
statement and proxy card relating to the Company's 2006 Annual Meeting of
Shareholders must be received by the Company by September 23, 2005, pursuant to
the proxy soliciting regulations of the SEC. Nothing in this paragraph shall be
deemed to require the Company to include in its proxy statement and proxy card
for such meeting any shareholder proposal which does not meet the requirements
of the SEC in effect at the time. Any such proposal will be subject to 17 C.F.R.
ss. 240.14a-8 of the Rules and Regulations promulgated by the SEC under the
Exchange Act. In addition, under the Company's bylaws, if you wish to nominate a
director or bring other business before an annual meeting:
o You must be a shareholder of record and have given timely notice in
writing to the Secretary of the Company; and
o Your notice must contain specific information required in our
bylaws.
By Order of the Board of Directors,
/s/ Billy B. Faulkner
Billy B. Faulkner
Corporate Secretary
Wake Forest, North Carolina
January 21, 2005
-21-
Appendix A
WAKE FOREST BANCSHARES, INC.
WAKE FOREST FEDERAL SAVINGS AND LOAN ASSN.
AUDIT COMMITTEE CHARTER
I. Appointment
There shall be an Audit Committee consisting of not less than three (3)
independent members of the Board of Directors. Management of the Company
(collectively "Wake Forest Bancshares, Inc." and its wholly owned subsidiary,
"Wake Forest Federal Savings & Loan Association") will not be eligible to serve,
nor will any Director who receives any type of remuneration (other than fees or
compensation in their capacity as Board members) be permitted to serve on the
Committee. Members of the Committee must not be an affiliated person of the
Company. Upon implementation of the provisions of the Sarbanes-Oxley Act of
2002, all Committee members shall be financially literate, and at least one
member shall be a "financial expert" as defined by SEC regulations, or the
Company will disclose in its annual proxy that it is unable to secure such
financial expert. The members of said Committee shall be appointed by the Board
of Directors each February and shall continue to act until their successors are
appointed, but shall be subject to removal at any time by the majority of the
entire Board. Any such vacancy shall be filled by the Board.
II. Powers
The Audit Committee shall: (a) assist the Board of Directors in discharging its
statutory and fiduciary responsibilities with regard to the integrity of the
books and records of the Company and the monitoring of its accounting and
financial reporting practices; (b) carry on appropriate oversight to determine
that the Company has adequate administrative and internal accounting controls
and that they are operating in accordance with prescribed procedures and codes
of conduct; and (c) independently review the Company's financial information
that is distributed to shareholders and the general public.
In discharging its oversight role, the Committee is empowered to investigate any
matter brought to its attention with full access to all books, records,
facilities, and personnel of the Company, and the authority to engage
independent counsel and other advisors as it determines necessary to carry out
its duties.
III. Meetings
The Audit Committee shall meet at least quarterly and at such other times as
determined by the Chairman of the Committee. Two (2) members of the Committee
shall constitute a quorum for the transaction of business.
IV. Duties and Responsibilities
The Committee, in carrying out its responsibilities, believes its policies,
procedures and actions should set the overall corporate tone for quality
financial reporting, sound business risk practices, and ethical behavior. The
following shall be the principal duties and responsibilities of the Audit
Committee:
1. Recommend to the Board of Directors the appointment of the
independent auditors; such recommendation shall reflect
consideration of:
a. Independence, professional capability and fees.
-22-
b. Accessibility to the full Board.
c. Loyalty to the full Board of Directors, as the shareholders'
representative.
d. The independent auditors' internal quality control procedures,
including any material issues raised by recent quality control
reviews or governmental and professional investigations within
the preceding five years.
2. Review and approve the auditors' annual audit plan and scope
including a description of key functions to be audited. Ascertain
that resources are reasonably allocated as to risk and exposure. The
Committee shall pre-approve all audit and non-audit services and
shall not engage the independent auditors to perform any specific
non-audit services prohibited by law or regulation. The Committee
shall set clear hiring policies for employees or former employees of
the independent auditors that meet SEC regulations.
3. Determine that management places no restrictions on the scope of the
audits or examinations. Management representatives shall be excused
during these discussions as appropriate.
4. Review the results of the audits prepared by the auditors. The
Committee shall review with the independent auditors any audit
problems or difficulties and management's response.
5. The Committee shall review the annual financial statements and
annual report on Form 10-KSB prior to filing with the SEC. The
Committee shall also review the interim financial statements and
disclosures on Form 10-QSB prior to filing. The Committee shall
discuss the results of the quarterly review and the annual audit and
any other matters required to be communicated to the Committee by
the independent auditors under generally accepted auditing
standards. The Committee shall question Management and the
independent auditors about the quality, not just the acceptability,
of the Company's accounting principles, and the reasonableness of
significant judgments and the clarity of the disclosures in the
financial statements.
6. Review with Management and the auditors, their assessment of the
adequacy of internal controls and the resolution of any identified
material weaknesses and reportable conditions. Upon implementation
of the Sarbanes-Oxley Act of 2002, the Committee shall review
Management's assertion on its assessment of the effectiveness of the
Company's internal controls for the period in question, and the
independent auditors' report on management's assertion, if
applicable.
7. The Committee shall review press releases on earnings, as well as
other releases containing financial information. The Committee shall
review the quarterly Form 8k filings which accompany the Company's
earnings release.
8. The Committee shall receive regular reports from the independent
auditors on the critical policies and practices of the Company, and
all alternative treatments of financial reporting within generally
accepted accounting principles that have been discussed with
Management.
9. The Committee shall establish procedures for handling confidential
or anonymous complaints regarding accounting, auditing, or internal
accounting control matters of the Company.
-23-
10. The Committee shall be receptive to receiving corporate attorneys'
reports of material security laws violations or breaches of
fiduciary duties by the Company.
11. Reassess and review the Audit Committee Charter at least annually.
B. Periodically:
1. Review any changes in accounting policies or principles and
ascertain the reasons for the changes. Discussions should include
auditor and management qualitative judgments about the
appropriateness of the changes.
V. Reporting
The audit committee will submit periodic reports of the Committee's work and
findings to the full Board. Said reports will contain recommendations for
appropriate Board action. The Committee will annually present to the Board a
review and recommendation for approval of the annual report and Form 10-KSB and
the selection of independent auditors.
IV. Management Support
To assist the Audit Committee in fulfilling its duties, management will provide
the Committee with information and reports as needed and requested.
-24-
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE Please
ELECTION OF ALL THE NOMINEES NAMED IN ITEM 1 AND A Mark Here
VOTE "FOR" THE PROPOSAL IN ITEM 2. for Address |_|
Change or
Comments
SEE REVERSE SIDE
1. Election of three Directors (01 Howard L. Brown, 02 Robert C. White and 03
R. W. Wilkinson, III) for terms of three years each.
FOR All nominees (except WITHHOLD for all
as otherwise indicated) nominees
|_| |_|
Nominees: 01 Howard L. Brown
02 Robert C. White
03 R. W. Wilkinson, III
Instruction: TO WITHHOLD AUTHORITY to vote for any individual nominee, write
that nominees name in the space provided:
________________________________________________________________________________
2. Ratification of the appointment of Dixon Hughes PLLC as independent
auditors for the fiscal year ending September 30, 2005.
FOR AGAINST ABSTAIN
|_| |_| |_|
The undersigned hereby acknowledges receipt of the Notice of the 2005 Annual
Meeting of Shareholders and the proxy statement, dated January 21, 2005 for the
Annual Meeting.
Dated:____________________________________________________________________, 2005
________________________________________________________________________________
Signature
________________________________________________________________________________
Signature if held jointly
Please sign exactly as your name appears on this proxy. Joint owners should each
sign personally. If signing as attorney, executor, administrator, trustee or
guardian, please include your full title. Corporate or partnership proxies
should be signed by an authorized officer.
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^ FOLD AND DETACH HERE ^
REVOCABLE PROXY
Wake Forest Bancshares, Inc.
302 South Brooks Street
Wake Forest, North Carolina 27587
This Proxy is solicited on behalf of the Board of Directors of Wake Forest
Bancshares, Inc. for the Annual Meeting of Shareholders to be held on February
22, 2005.
The undersigned shareholder of Wake Forest Bancshares, Inc. hereby
appoints Anna O. Sumerlin and Rodney M. Privette, or any of them, with full
powers of substitution, to represent and to vote as proxy, as designated, all
shares of common stock of Wake Forest Bancshares, Inc. held of record by the
undersigned on December 31, 2004 at the 2005 Annual Meeting of Shareholders (the
"Annual Meeting") to be held at 2:00 p.m. on February 22, 2005, or at any
adjournment or postponement thereof, upon the matters described in the
accompanying Notice of the 2005 Annual Meeting of Shareholders and Proxy
Statement, dated January 21, 2005, and upon such other matters as may properly
come before the Annual Meeting. The undersigned hereby revokes all prior
proxies.
This proxy, when properly executed, will be voted in the manner directed
herein by the undersigned shareholder. If no direction is given, this Proxy will
be voted FOR the election of all nominees listed in Item 1 and for the proposal
listed in Item 2.
PLEASE MARK, SIGN AND DATE THIS PROXY ON THE REVERSE SIDE AND RETURN IT PROMPTLY
IN THE ENCLOSED ENVELOPE.
________________________________________________________________________________
Address Change/Comments (Mark the corresponding box on the reverse side)
________________________________________________________________________________
________________________________________________________________________________
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^ FOLD AND DETACH HERE ^