ThZeal - The Zeal

DEF 14A 1 def_14a.txt FOR PERIOD ENDING 12/31/01 SCHEDULE 14A (Rule 14a-101) INFORMATION REQUIRED IN PROXY STATEMENT SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 Filed by Registrant [X] Filed by a Party other than the Registrant [ ] Check the appropriate box: [ ] Preliminary Proxy Statement [X] Definitive Proxy Statement [ ] Definitive Additional Materials [ ] Soliciting Material Pursuant toss.240.14a-11(c) orss.240.14a-12 Enterprise Bancorp, Inc. -------------------------------------------------------------------------------- (Name of Registrant as Specified In Its Charter) -------------------------------------------------------------------------------- (Name of Person(s) Filing Proxy Statement, if other than the Registrant) Payment of Filing Fee (Check the appropriate box): [X] No fee required [ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(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: ____________________________________________________________ [logo] ENTERPRISE BANCORP, INC. 222 MERRIMACK STREET LOWELL, MASSACHUSETTS 01852 TELEPHONE: (978) 459-9000 March 27, 2002 Dear Stockholder: You are cordially invited to attend the 2002 Annual Meeting of stockholders (the "Annual Meeting") of Enterprise Bancorp, Inc. (the "Company"), the parent holding company of Enterprise Bank and Trust Company, to be held on Tuesday, May 7, 2002, at 4:00 p.m. local time, at the American Textile Museum, 491 Dutton Street, Lowell, Massachusetts. The Annual Meeting has been called for the following purposes: 1. To elect six Directors of the Company, each for a three-year term; 2. To ratify the Board of Directors' appointment of KPMG LLP as the Company's independent auditors for the fiscal year ending December 31, 2002; and 3. To transact such other business as may properly come before the meeting or any adjournments or postponements thereof. The accompanying proxy statement of the Company provides information concerning the matters to be voted on at the Annual Meeting. Also enclosed is the Company's 2001 annual report to stockholders, which contains additional information and results for the year ended December 31, 2001, including the Company's Annual Report on Form 10-K as filed with the Securities and Exchange Commission. It is important that your shares be represented at the Annual Meeting. Whether or not you plan to attend the Annual Meeting, you are requested to complete, date, sign and return the enclosed proxy card in the enclosed postage paid envelope. Thank you in advance for returning your proxy. We appreciate your continuing support of the Company. Sincerely, /s/ George L. Duncan ------------------------------------- George L. Duncan Chairman of the Board and Chief Executive Officer ENTERPRISE BANCORP, INC. 222 MERRIMACK STREET LOWELL, MASSACHUSETTS 01852 TELEPHONE: (978) 459-9000 --------------- NOTICE OF ANNUAL MEETING OF STOCKHOLDERS To Be Held at 4:00 p.m. on Tuesday, May 7, 2002 NOTICE IS HEREBY GIVEN that the Annual Meeting of stockholders (the "Annual Meeting") of Enterprise Bancorp, Inc. (the "Company") will be held at the American Textile Museum, 491 Dutton Street, Lowell, Massachusetts at 4:00 p.m. local time on Tuesday, May 7, 2002 for the following purposes: 1. To elect six Directors of the Company, each to serve for a three-year term (Proposal One); 2. To ratify the Board of Directors' appointment of KPMG LLP as the Company's independent auditors for the fiscal year ending December 31, 2002 (Proposal Two); and 3. To transact such other business as may properly come before the meeting or any adjournments or postponements thereof. The Board of Directors has fixed the close of business on March 8, 2002 as the record date for determination of stockholders entitled to notice of, and to vote at, the Annual Meeting and any adjournments or postponements thereof. Only holders of the Company's common stock of record at the close of business on that date will be entitled to notice of, and to vote at, the Annual Meeting and any adjournments or postponements thereof. In the event there are not sufficient votes to approve any of the foregoing proposals at the time of the Annual Meeting, the Annual Meeting may be adjourned in order to permit further solicitation of proxies by the Company. By Order of the Board of Directors /s/ Arnold S. Lerner ------------------------------------- Arnold S. Lerner Clerk 222 Merrimack Street Lowell, Massachusetts 01852 March 27, 2002 EVEN IF YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON, PLEASE COMPLETE, SIGN AND DATE THE ENCLOSED PROXY CARD 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. PROXY STATEMENT ENTERPRISE BANCORP, INC. 222 MERRIMACK STREET LOWELL, MASSACHUSETTS 01852 Telephone: (978) 459-9000 ANNUAL MEETING OF STOCKHOLDERS To Be Held on Tuesday, May 7, 2002 General This Proxy Statement is furnished in connection with the solicitation of proxies by the Board of Directors of Enterprise Bancorp, Inc. (the "Company"), the parent holding company of Enterprise Bank and Trust Company (the "Bank"), for the 2002 Annual Meeting of stockholders of the Company (the "Annual Meeting"), to be held on Tuesday, May 7, 2002 at 4:00 p.m. local time, at the American Textile Museum, 491 Dutton Street, Lowell, Massachusetts and at any adjournments or postponements thereof. This Proxy Statement, the accompanying Notice of Annual Meeting and the accompanying proxy card are first being mailed to stockholders on or about March 27, 2002. The Annual Meeting has been called for the following purposes: (1) to elect six Directors of the Company, each to serve for a three-year term; (2) to ratify the Board of Directors' appointment of KPMG LLP as the Company's independent auditors for the fiscal year ending December 31, 2002; and (3) to transact such other business as may properly come before the Annual Meeting or any adjournments or postponements thereof. The Company is a Massachusetts corporation and a registered bank holding company. All of the Company's material business activities are conducted through the Bank. Record Date The Board of Directors has fixed the close of business on March 8, 2002 as the Record Date for the determination of stockholders entitled to notice of, and to vote at, the Annual Meeting and any adjournments or postponements thereof. Only holders of record of the Company's 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 close of business on the Record Date, there were 3,462,349 shares of the Common Stock issued and outstanding and entitled to vote at the Annual Meeting and any adjournments or postponements thereof. As of such date there were approximately 625 holders of record of the Common Stock. The holders of shares of the Common Stock outstanding as of the close of business on the Record Date will be entitled to one vote for each share held of record upon each matter properly submitted to the Annual Meeting or any adjournments or postponements thereof. Proxies Holders of the Common Stock are requested to complete, date, sign and promptly return the accompanying proxy card in the enclosed envelope which requires no postage if mailed in the United States. If the enclosed form of proxy is properly executed and returned to the Company in time to be voted at the Annual Meeting, the shares represented thereby will, unless such proxy has previously been revoked, be voted in accordance with the instructions marked thereon. Properly executed proxies with no instructions indicated thereon will be voted (1) FOR the election of Kenneth S. Ansin, John R. Clementi, Carole A. Cowan, Eric W. Hanson, Arnold S. Lerner and Richard W. Main, the six nominees of the Board of Directors, as Directors of the Company, (2) FOR the ratification of the Board of Directors' appointment of KPMG LLP as the Company's independent auditors for the fiscal year ending December 31, 2002; and (3) in such manner as management's proxy-holders shall decide on such other matters as may properly come before the Annual Meeting or any adjournments or postponements thereof. The presence of a stockholder at the Annual Meeting will not automatically revoke a stockholder's proxy. A stockholder may, however, revoke a proxy at any time prior to the voting thereof on any matter (without, however, affecting any vote taken prior to such revocation) by filing with the Clerk of the Company a written notice of revocation, or by delivering to the Company a duly executed proxy bearing a later date, or by attending the Annual Meeting and voting in person. All written notices of revocation and other communications with respect to revocation of proxies in connection with the Annual Meeting should be addressed as follows: Enterprise Bancorp, Inc., 222 Merrimack Street, Lowell, Massachusetts 01852, Attention: Arnold S. Lerner, Clerk. It is not anticipated that any matters other than those set forth in the foregoing proposals (1) and (2) contained in this Proxy Statement will be brought before the Annual Meeting. If any other matters properly come before the Annual Meeting, the persons named as proxies will vote upon such matters in their discretion in accordance with their best judgment. In addition to use of the mails, proxies may be solicited personally or by telephone, fax or telegraph by officers, Directors and employees of the Company who will not be specially compensated for such solicitation activities. Arrangements will also be made with brokerage houses and other custodians, nominees and fiduciaries for forwarding solicitation materials to the beneficial owners of shares held of record by such persons, and the Company will reimburse such persons for their reasonable out-of-pocket expenses incurred in that connection. The cost of soliciting proxies will be borne by the Company. Quorum; Vote Required The presence, in person or by proxy, of at least a majority of the total number of outstanding shares of the Common Stock is necessary to constitute a quorum at the Annual Meeting for the transaction of business. Abstentions and "broker non-votes" (as defined below) will be counted as present for purposes of determining the presence or absence of a quorum for the transaction of business at the Annual Meeting. A quorum being present, the affirmative vote of a plurality of the votes cast at the Annual Meeting is required for the election of Directors of the Company (Proposal One). Neither abstentions nor broker non-votes will be counted as "votes cast" for purposes of electing Directors of the Company and, therefore, they will not affect the election of Directors of the Company. The approval of the proposal to ratify the appointment of KPMG LLP as the Company's independent auditors for the fiscal year ending December 31, 2002 (Proposal Two) requires the affirmative vote of a majority of the shares present and voting, in person or by proxy, at the Annual Meeting. Neither abstentions nor broker non-votes will be included among the shares that are considered to be present and voting on this proposal and, therefore, they will have no effect on the voting for this proposal. A "broker non-vote" is a proxy from a broker or other nominee indicating that such person has not received instructions from the beneficial owner or other person entitled to vote the shares which are the subject of the proxy on a particular matter with respect to which the broker or other nominee does not have discretionary voting power. The Directors and executive officers of the Company have indicated that they intend to vote all shares of the Common Stock that they are entitled to vote in favor of each of proposals (1) and (2) presented herein. On the Record Date, the Directors and executive officers of the Company in the aggregate had the right to vote 1,027,450 shares of the Common Stock representing approximately 29.67% of the outstanding shares of the Common Stock as of such date. 2 PROPOSAL ONE ELECTION OF CLASS OF DIRECTORS The Company's By-Laws provide that the number of Directors shall be set by a majority vote of the entire Board of Directors. The number of Directors for the Company has been accordingly set at 16. Under the Company's Articles of Organization and By-Laws, this number shall be divided into three classes, as nearly equal in number as possible, with the Directors in each class serving a term of three years and until their respective successors are duly elected and qualified, or until his or her earlier resignation, death or removal. As the term of one class expires, a successor class is elected at the annual meeting of stockholders for that year. At the Annual Meeting, there are six Directors to be elected to serve until the 2005 annual meeting of stockholders and until their respective successors are duly elected and qualified, or until his or her earlier resignation, death or removal. The Board of Directors has nominated each of Kenneth S. Ansin, John R. Clementi, Carole A. Cowan, Eric W. Hanson, Arnold S. Lerner and Richard W. Main for election as a Director 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 as a Director of each of the nominees named above. The Board of Directors believes that all of the nominees will stand for election and will serve as a Director if elected. However, if any person nominated by the Board of Directors fails to stand for election or is unable or refuses to accept election, the proxies will be voted for the election of such other person or persons as the Board of Directors may recommend. Recommendation of Directors The Board of Directors recommends that the stockholders vote FOR the election of Kenneth S. Ansin, John R. Clementi, Carole A Cowan, Eric W. Hanson, Arnold S. Lerner and Richard W. Main, the six nominees proposed by the Board of Directors, as Directors of the Company to serve until the 2005 annual meeting of stockholders and until their successors are duly elected and qualified. Information Regarding Directors and Nominees The following table sets forth certain information for each of the six nominees for election as Directors at the Annual Meeting and for those continuing Directors whose terms expire at the annual meetings of the Company's stockholders in 2003 and 2004. Each individual has been engaged in his or her principal occupation for at least five years, except as otherwise indicated. Nominees (Term to Expire in 2005)

3 Continuing Directors (Term to Expire in 2003)

(Term to Expire in 2004)

------------------------------ (1) All of the Directors are also Directors of the Bank. The years listed in the foregoing tables are the respective years in which each named individual first became a Director of the Company and/or the Bank. Meetings of Board of Directors and Committees of Enterprise Bancorp, Inc. There were two meetings of the Company's (i.e., Enterprise Bancorp, Inc.) Board of Directors during the calendar year ended December 31, 2001. During such period, each Director attended more than 75% in the aggregate of the total number of meetings of the Board of Directors and of each of the committees of the Board of Directors on which he or she served. The Company's (i.e., Enterprise Bancorp, Inc.) Board of Directors maintains three standing committees, an executive committee, an audit committee and a compensation committee. The executive committee, composed of Messrs. Duncan and Lerner, together with three additional members chosen to serve on a three-month rotating basis, is authorized to manage and transact the business of the Company. The executive committee did not meet in 2001. The audit committee, composed of Ms. Bradley, Ms. Cowan and Messrs. Hanson, Harrington and Spinelli, recommends to the Board of Directors the appointment of an independent certified public accounting firm to serve as independent auditors to the Company, oversees and reviews all internal audit examinations and reports, and reviews all audit reports of the Company prepared by the Company's independent auditors and all reports of examination of the Company prepared by regulatory authorities. The audit committee met five times in 2001. The compensation committee, composed of Messrs. Clementi, Conway, Hanson and Lerner, is responsible for setting the annual compensation of the Company's chief executive officer, reviewing and approving the annual compensation for the Company's remaining executive officers and overseeing the administration of the equity compensation programs of the Company. The compensation committee met six times in 2001. 4 Meetings of Board of Directors and Committees of Enterprise Bank The Bank's (i.e., Enterprise Bank and Trust Company) Board of Directors, which met ten times during the year ended December 31, 2001, has an executive committee, audit committee, compensation/personnel committee, investment and asset/liability committee, marketing committee, banking technology committee, trust committee, overdue loan review committee, business development committee, leasing/branch committee and construction lending committee. Executive Committee. The executive committee is authorized to manage and transact the business of the Bank. In addition, loans over certain amounts must be pre-approved by at least two members of the executive committee. Messrs. Duncan (chair of the committee) and Lerner serve as permanent members of the executive committee, while three additional members are chosen to serve on a three-month rotating basis from among the remaining members of the Board of Directors. The committee held nine meetings in 2001. Audit Committee. The audit committee oversees and reviews all internal audit examinations and reports and reviews all reports of examination of the Bank prepared by bank regulatory authorities. The current members of the committee are Ms. Bradley, Ms. Cowan and Messrs. Hanson, Harrington and Spinelli (chair of the committee). The committee held five meetings in 2001. Compensation/Personnel Committee. The compensation/personnel committee is responsible for overseeing the administration of the employee benefit and compensation programs of the Bank. Messrs. Clementi, Conway (chair of the committee), Hanson and Lerner serve on the committee. The committee held six meetings in 2001. Investment and Asset/Liability Committee. The investment and asset/liability committee is authorized to develop and refine the strategic investment and asset/liability portfolio and asset/liability objectives of the Bank to ensure that the Bank maintains a portfolio consistent with sound investment and banking practices. Messrs. Clementi, Conway, Duncan, Lerner (chair of the committee) and Main serve on the committee. Three additional members are chosen to serve on a three-month rotating basis from among the remaining members of the Bank's Board of Directors. The committee held nine meetings in 2001. Marketing Committee. The marketing committee reviews the Bank's marketing activities. The current members of the committee are Ms. Donahue (chair of the committee), Ms. Flynn and Messrs. Ansin, Armstrong, Duncan, Harrington, Lerner and Main. The committee held one meeting in 2001. Banking Technology Committee. The banking technology committee is responsible for overseeing the administration of the Bank's data processing function. The current members of the committee are Ms. Cowan and Messrs. Bousquet and Sarantos (chair of the committee). The committee held four meetings in 2001. Trust Committee. The trust committee is responsible for overseeing the Bank's trust activities, including administering trust policy and reviewing trust accounts. Messrs. Clementi, Conway, Duncan, Lerner (chair of the committee) and Main serve on the committee. The committee held twelve meetings in 2001. Overdue Loan Review Committee. The overdue loan review committee reviews and assesses all loan delinquencies. The current members of the committee are Ms. Bradley, Ms. Donahue and Messrs. Armstrong, Bousquet (chair of the committee), Harrington and Sarantos. The committee held four meetings in 2001. Business Development Committee. The business development committee reviews and monitors the Bank's business development activities. Ms. Bradley, Ms. Donahue and Messrs. Ansin, Armstrong, Duncan, Hanson (chair of the committee) and Main serve on the committee. The committee met two times in 2001. Leasing/Branch Committee. The leasing/branch committee is responsible for reviewing the Bank's facilities leases, facilities expansion and new branch opportunities. Messrs. Conway (chair of the committee) and Harrington and Ms. Bradley serve on the committee. The committee held one meeting in 2001. Construction Lending Committee. The construction lending committee reviews the Bank's construction lending activities. The current members of the committee are Messrs. Ansin, Harrington (chair of the committee), Main and Sarantos and Ms. Cowan. The committee met four times in 2001. 5 Information Regarding Executive Officers and Other Significant Employees Set forth below is certain information regarding the executive officers of the Company (including the Bank), other than those executive officers who are also Directors of the Company and for whom such information has been provided above. Each individual named below has held his or her position for at least five years, except as otherwise indicated. Name Age Position ---- --- -------- John P. Clancy, Jr. 44 Treasurer of the Company since its inception; since January 1, 2000, Executive Vice President, Chief Financial Officer, Treasurer and Chief Investment Officer of the Bank; prior thereto, Senior Vice President, Chief Financial Officer, Treasurer and (since December 1996) Chief Investment Officer of the Bank Robert R. Gilman 56 Executive Vice President, Administration, and Commer- cial Lender of the Bank since December 1996 Stephen J. Irish 47 Executive Vice President and Chief Information and Chief Operations Officer of the Bank since January 1, 2000; prior thereto, Senior Vice President and Chief Information and Chief Operations Officer of the Bank Executive Compensation Summary Compensation Table. The table on the following page sets forth the compensation paid by the Company (through the Bank) for services rendered in all capacities during the year ended December 31, 2001, to the chief executive officer and each of the four most highly compensated executive officers of the Bank (the "Named Executive Officers"). The Company does not employ any persons, other than through the Bank. 6 Summary Compensation Table

----------------- (1) Reflects the Bank's matching contribution on behalf of each Named Executive Officer to the Bank's existing 401(k) plan. (2) Includes, in addition to the 401(k) match described in note 1, for Messrs. Duncan, Main and Gilman in each of 1999, 2000 and 2001, the dollar value attributable to the portion of the annual premium related to term insurance coverage paid by the Bank under split-dollar life insurance policies (which equaled $10,209 in 2001, $9,574 in 2000, and $8,959 in 1999 for Mr. Duncan; $2,850 in 2001, $2,637 in 2000, and $2,425 in 1999 for Mr. Main; and $1,113 in 2001, $1,028 in 2000, and $950 in 1999 for Mr. Gilman) and the additional dollar value of the benefit to each of Messrs. Duncan, Main and Gilman of the remaining portion of the annual premium (unrelated to term insurance coverage) paid by the Bank under such split-dollar life insurance policies projected on an actuarial basis (which equaled $159,776 in 2001, $165,991 in 2000, and $171,966 in 1999 for Mr. Duncan; $67,593 in 2001, $69,133 in 2000, and $70,594 in 1999 for Mr. Main; and $23,554 in 2001, $24,186 in 2000, and $24,780 in 1999 for Mr. Gilman). The premiums paid by the Bank over the life of the policies will be fully recovered by the Bank. Director Compensation The Company pays no separate compensation to the Directors for their service as members of the Company's (i.e., Enterprise Bancorp, Inc.) Board of Directors. The Bank pays $200 to Directors for Board of Directors meetings, $200 to Directors for executive committee meetings, $150 to Directors for all other committee meetings, a $350 monthly retainer to all Directors and a $100 monthly retainer to executive committee members. The Bank also pays a $100 monthly retainer to the vice-chairman of the Board of Directors, a $200 monthly retainer to the Clerk of the Bank and $200 to the chairpersons of the investment and asset/liability, trust, banking technology, compensation/personnel, overdue loan review, audit and marketing committees for each meeting attended. Directors who are also full-time salaried officers of the Bank are not paid for attending Board of Directors or committee meetings. For the year 2001, Directors had the right to make an irrevocable election (by December 31, 2000) to receive shares of Common Stock in lieu of receiving an elected portion of cash fees. The number of shares issued to Directors pursuant to this election was based on the fair market value of the Common Stock, as determined by the Board of Directors on the basis of a valuation analysis, as of December 31, 2000. Pursuant to the terms of the election, shares were not considered earned, and were not issued to a Director, 7 until the Director had actually earned the cash fees in lieu of which the shares were to be issued. If a Director who had elected to receive shares of Common Stock in lieu of cash fees pursuant to this election had ceased to serve as a member of the Board of Directors for any reason prior to his or her having earned the fees in lieu of which shares were to be issued, the Director would have received a cash amount (and no shares) equal to the fees earned through the date on which he or she ceased to serve as a Director. For the year 2001, the Company issued a total of 8,412 shares of Common Stock to twelve Directors at a per share issuance price of $13.44, which reflects the Board of Directors' determination of the fair market value of the Common Stock at December 31, 2000, on the basis of a valuation analysis performed by an outsider financial advisor. For the year 2002, Directors have the same option to receive shares of Common Stock in lieu of cash fees at a per share issuance price of $16.98, which reflects the Board of Directors' determination of the fair market value of the Common Stock at December 31, 2001 based on a replication of the valuation analysis done by an outside financial advisor in June 2001 for dividend reinvestment purposes. The Company believes that giving Directors the option to receive stock in lieu of cash fees further aligns Directors' interests with those of the Company's shareholders. Agreements with Executive Officers The Company and the Bank are parties to employment agreements with each of Messrs. Duncan and Main and are parties to a change in control/noncompetition agreement with Mr. Gilman. The term of Mr. Duncan's agreement is a "rolling" three years until and unless terminated based on the occurrence of any of the following events: (i) 24 months after notice is given by the Company to Mr. Duncan that it no longer desires to extend the agreement; (ii) the retirement, resignation or death of Mr. Duncan; (iii) the termination of Mr. Duncan by the Company for cause (as defined in the agreement); (iv) 60 days after notice is given by Mr. Duncan to the Company at any time after the occurrence of a change of control (as defined in the agreement); (v) 60 days after notice is given by Mr. Duncan to the Company following the Board of Directors' failure to re-elect Mr. Duncan as chief executive officer or following any material change by the Board of Directors of the duties, functions or responsibilities of Mr. Duncan; and (vi) six months after notice is given by Mr. Duncan to the Company at any time other than after the occurrence of any of the events described in the foregoing clauses (iv) and (v). Mr. Duncan receives a minimum annual base salary under the agreement of $203,900, which is subject to annual review by the Compensation Committee and upward adjustment as determined by the Board of Directors. In addition to his base salary, Mr. Duncan is entitled to participate in all other benefit plans and otherwise receive all other fringe benefits that the Company from time to time makes available to its officers and employees. Following the occurrence of any change of control, Mr. Duncan has the option, upon 60 days advance written notice to the Company, to terminate the agreement, in which event the Company is obligated to pay Mr. Duncan three times his previous highest annual earnings (as defined in the agreement). If Mr. Duncan exercises the option to terminate under such circumstances, he is relieved of the non-competition restrictions that would otherwise apply upon his termination of the agreement. If the Board of Directors fails to re-elect Mr. Duncan chief executive officer or otherwise materially changes his duties, functions or responsibilities at any time during the period of the agreement, but prior to any change of control, then Mr. Duncan has the options, upon 60 days advance written notice to the Company to: (i) remain as a full-time employee; (ii) terminate the agreement; or (iii) serve as a consultant in lieu of serving in another capacity. In the event Mr. Duncan elects to terminate the agreement because the Board of Directors has not re-elected him chief executive officer or has otherwise materially changed his duties, functions or responsibilities, he shall be entitled to receive compensation from the Company for three years. This compensation shall equal on an annualized basis Mr. Duncan's previous highest annual earnings. During the period he is receiving such payments under the agreement and in consideration of such compensation to be paid to him, Mr. Duncan is prohibited from competing directly or indirectly with the Company. In the event Mr. Duncan elects to serve as a consultant, he would be required to devote approximately one-half of his time to the business and affairs of the Company and would receive as compensation an annual salary equal to one-half of his previous highest annual earnings. In addition, following the completion of any such consulting period, Mr. Duncan would be entitled to receive additional annual salary payments equal to one-half of his previous highest annual earnings, in consideration for remaining subject to the non-competition restrictions contained in the agreement, for an additional two-year period. 8 If Mr. Duncan becomes disabled during the term of the agreement, then the Company may elect to replace Mr. Duncan as chief executive officer and stop paying him his regular annual earnings and, upon notice, pay Mr. Duncan during the period of his disability an amount equal to 75% of his previous highest annual earnings, less any amounts payable to him under any group disability plan. If Mr. Duncan dies while the agreement is in effect, then the Company will continue to provide health insurance coverage, under its group plan, to Mr. Duncan's spouse and children in accordance with certain conditions specified in the agreement. Under the terms of the agreement, Mr. Duncan is prohibited from competing directly or indirectly with the Company during the two-year period from the date on which the agreement is terminated for any reason, except as described above in the event of Mr. Duncan's termination of the agreement following a change of control or as otherwise provided in the event that Mr. Duncan terminates the agreement because the Board of Directors has not re-elected him chief executive officer or has otherwise materially changed his duties, functions or responsibilities. During each year of the two-year non-compete period, Mr. Duncan would be entitled to receive salary payments at least equal to 70% of his previous highest annual earnings. The terms of Mr. Main's employment agreement are substantially equivalent to those of Mr. Duncan's employment agreement, except that (i) the term of Mr. Main's agreement is for a "rolling" two years; (ii) Mr. Main's minimum annual base salary is $161,600; (iii) the office which the agreement contemplates will be held by Mr. Main is the office of president; (iv) Mr. Main's potential termination payment following a change of control is two times his previous highest annual earnings; and (v) in the event that Mr. Main elects to terminate the agreement prior to a change of control because the Board of Directors has not re-elected him president or has otherwise materially changed his duties, functions or responsibilities, he shall be entitled to receive compensation equal on an annualized basis to his previous highest annual earnings for a period of two years. Under the terms of the change in control/non-competition agreement among the Company, the Bank and Mr. Gilman, if Mr. Gilman's employment is terminated for any reason, whether at the initiative of the Company or of Mr. Gilman and whether or not for cause (as defined in the agreement), at any time prior to a change in control (as defined in the agreement), then Mr. Gilman shall be prohibited from competing directly or indirectly with the Company for a period of one year following the date of such termination (and assuming that no change in control occurs at any time during such one-year period). During any such non-compete period, if the termination of Mr. Gilman's employment was initiated by the Company for any reason other than for cause, Mr. Gilman shall receive severance payments equal in the aggregate on an annualized basis to 75% of the sum of (i) his annual base salary as of the date of termination, (ii) the amount of any commission or other compensation not otherwise included in base salary or other bonus amounts paid to Mr. Gilman with respect to the most recently completed fiscal year prior to the date of termination, and (iii) the amount of any annual incentive or other bonus paid to Mr. Gilman with respect to the most recently completed fiscal year prior to the date of termination. If Mr. Gilman's employment is terminated for any reason, whether at the initiative of the Company or of Mr. Gilman and whether or not for cause, within two years after the date of a change in control, then Mr. Gilman shall be entitled to receive severance payments over an 18-month period equal in the aggregate to 1.5 times his previous highest annual compensation (as defined in the agreement), together with certain other specified severance payments and benefits. If Mr. Gilman's employment is terminated for any reason within one year prior to the date on which a change in control occurs, other than for cause, then Mr. Gilman shall be entitled to receive all of the payments and benefits that he would have been entitled to receive if such termination had occurred within two years after the date of such change in control. 9 Option Grants in Last Fiscal Year The following table sets forth information concerning individual grants of stock options made during 2001 to each executive officer of the Company listed below.

------------------- (1) One-fourth of the total number of shares of Common Stock subject to the options granted becomes exercisable on an annual basis on January 8th of each year beginning in 2002 and ending in 2005. (2) The amounts shown as potential realizable values are based on arbitrarily assumed annualized rates of appreciation of five percent and ten percent of the Common Stock over the full seven year term of the options, as required by applicable Securities and Exchange Commission ("SEC") regulations. No gain for the optionee is possible without an increase in the price of the Common Stock, which will benefit all of the Company's shareholders proportionately. Actual gains on options exercised are dependent on the future performance of the Common Stock. There can be no assurance that the potential realizable values shown in this table will be achieved. Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values The following table shows each exercise of stock options by the Named Executive Officers during the year ended December 31, 2001 and the unexercised stock options held by such persons as of such date:

-------------------- (1) The dollar values of the unexercised options shown are based upon the difference between $16.98, which is the price that the Board of Directors has determined equaled the fair market value of the Common Stock as of December 31, 2001, and the per share exercise price of the options. There is no active trading market for the Common Stock. The Board of Directors receives periodic advice from outside financial advisors regarding the fair market value of the Common Stock in connection with the Company's equity compensation and dividend reinvestment plans. 10 Audit Committee Report The Audit Committee of the Company's Board of Directors (the "Audit Committee") is composed of five independent directors and operates under a written charter adopted by the Board of Directors. The Audit Committee recommends to the Board of Directors, subject to stockholder ratification, the selection of the Company's independent accountants. In determining the independence of the Audit Committee members, the Board of Directors has used the definition of independence contained in Sections 303.01(B)(2)(a) and 303.01(B)(3) of the New York Stock Exchange's listing standards and has applied this definition consistently to all members of the Audit Committee. Management is responsible for the Company's internal controls and the financial reporting process. The independent accountants are responsible for performing an independent audit of the Company's consolidated financial statements in accordance with auditing standards generally accepted in the United States of America and to issue a report thereon. The Audit Committee's responsibility is to monitor and oversee these processes. In this context, the Audit Committee has met and held discussions with management and the independent accountants. Management has represented to the Audit Committee that the Company's consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America, and the Audit Committee has reviewed and discussed the consolidated financial statements with management and the independent accountants. The Audit Committee has discussed with the independent accountants the matters required to be discussed by Statement on Auditing Standards No. 61 (Communication with Audit Committees). The Company's independent accountants have also provided to the Audit Committee the written disclosures and the letter required by Independence Standards Board Standard No. 1 (Independence Discussions with Audit Committees), and the Audit Committee has discussed with the independent accountants that firm's independence. Based upon the Audit Committee's discussions with management and the independent accountants and the Audit Committee's review of the representation of management and the report of the independent accountants to the Audit Committee, the Audit Committee recommended that the Board of Directors include the audited consolidated financial statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2001 as filed with the SEC. Michael A. Spinelli (Chairperson) Kathleen M. Bradley Carole A. Cowan Eric W. Hanson John P. Harrington Compensation Committee Report on Executive Compensation Introduction ------------ The Compensation Committee of the Board of Directors (the "Compensation Committee") is comprised entirely of non-employee members of the Board of Directors. It is the responsibility of the Compensation Committee to review the performance and set the compensation of the Company's chief executive officer, and to review and approve all compensation arrangements for the Company's remaining executive officers, including annual cash compensation (base salary plus annual incentive bonus), equity compensation (stock options) and other benefits, where applicable. All actions by the Compensation Committee are reported to, and considered for ratification by, the full Board of Directors. During 2001, the Board of Directors did not modify or reject any proposed action or recommendation presented by the Compensation Committee. Key Principles -------------- The Compensation Committee has adopted the following principles to use for guidance in setting executive compensation: Pay Competitively ----------------- o The Compensation Committee maintains a philosophy that total annual cash compensation should be competitive relative to 11 that found in other commercial banks of comparable asset size and performance. The Compensation Committee believes that this is necessary to attract, motivate and retain highly qualified executives, who in turn are essential to the Company's achieving the financial goals set by the Board of Directors and sustaining long-term value for shareholders. o Consistent with this philosophy, the Compensation Committee obtains information regarding compensation levels in the Company's industry through various sources, including compensation surveys conducted by banking industry associations and independent compensation consultants. o The Compensation Committee generally attempts to set total attainable cash compensation at or above the midpoint range of peer compensation (subject to individual and Company financial performance). Tie Incentive Compensation to Company Financial Performance ----------------------------------------------------------- The Committee supports a "pay for performance" philosophy, which is intended to enhance long-term shareholder value. Total incentive compensation paid to the Company's executive officers is calculated using incentive models. Through the use of incentive models, the compensation structure for employees in management positions includes a significant "risk/reward" component. The Compensation Committee believes that when performance targets are achieved, total compensation earned by executive officers will reach a level competitive with the total compensation paid to executive officers with similar responsibilities at other comparable commercial banks. All employees, including executive officers, are eligible to receive an annual incentive bonus based upon the attainment of various predetermined financial performance goals. This plan is referred to in this summary as the "stakeholder plan" and is based upon a methodology provided to the Company by an independent, outside consultant. In addition to their inclusion in the stakeholder plan, Messrs. Duncan and Main, whose base salaries are set well below those of their peers, are eligible to receive an additional annual incentive bonus based solely upon the attainment of predetermined net income levels. This additional bonus plan is referred to in this summary as the "supplemental plan". Through the use of a much lower than peer base salary and a substantial incentive cash bonus opportunity, which is paid only if the Company attains predetermined financial performance goals, the compensation structure for Mr. Duncan and Mr. Main further emphasizes a significant "risk / reward" structure. Grant Stock Options ------------------- The Committee aligns the interests of the Company's executives with the long-term interests of stockholders through the granting of stock options at fair market value. Stock options were granted in January 2001. In summary, executive compensation is composed of base salary, annual incentive cash bonuses and long-term equity compensation in the form of stock options. 2001 Executive Compensation Program ----------------------------------- Executive Officers ------------------ In determining total 2001 compensation (including base salary, incentive cash bonus and stock option grants), the Compensation Committee reviewed compensation data for other commercial banks of similar size, markets and in areas in which the Company competes for talent. Specific bank officers are "matched" as closely as possible with officers from the other commercial banks with similar functional responsibilities. In 2001, the Company exceeded its targets under the stakeholder plan and all executive officers received annual incentive bonuses in excess of their targeted amounts under the plan, resulting in total cash compensation comparable to peers. Chief Executive Officer ----------------------- At the beginning of the year, the Compensation Committee set Mr. Duncan's total compensation plan for 2001. Mr. Duncan's 2001 total compensation is comprised of base salary, annual incentive cash bonus and a supplemental retirement benefit. Mr. Duncan's base salary, which was increased on January 1, 2000, had not been previously adjusted since 1992, and remains significantly 12 lower than the base salaries paid to chief executives at other comparable commercial banks. Mr. Duncan's total incentive cash bonus in 2001 was $224,465, as compared to $44,000 in 2000, the change being directly related to net income growth in 2001 of 36%. The incentive cash bonus paid to Mr. Duncan in 2000 was significantly lower than the cash bonuses paid for that year to chief executives at other comparable commercial banks and lower than that paid to Mr. Duncan in 1999. The Company's net income was negatively impacted in 2000 by the expenses incurred in connection with several strategic initiatives undertaken to maximize the Company's long-term earnings and shareholder value. Closing ------- The Compensation Committee believes that the Executive Compensation Program for 2001 successfully linked executive compensation to the Company's financial performance. This report has been submitted by the Compensation Committee: James F. Conway III (Chairperson) John R. Clementi Eric W. Hanson Arnold S. Lerner Compensation Committee Interlocks and Insider Participation The Company's chairman and chief executive officer, George Duncan, serves as a non-paid member of the board of directors of D.J. Reardon Company, Inc. Eric Hanson, a member of the Company's Board of Directors and of the Compensation Committee, serves as the chairman and president of D.J. Reardon Company, Inc. Mr. Hanson excuses himself from all Compensation Committee deliberations involving the compensation of Mr. Duncan and does not otherwise participate on any basis in any compensation decision of either the Compensation Committee or the Company's full Board of Directors affecting Mr. Duncan. Mr. Duncan excuses himself from all deliberations of the board of directors of D.J. Reardon Company, Inc. involving the compensation of Mr. Hanson or any other officer or employee of such company and does not otherwise participate on any basis in any compensation decision of such board of directors affecting Mr. Hanson or any other officer or employee of D.J. Reardon Company, Inc. In addition to serving as a member of the Compensation Committee, Arnold Lerner serves as the Vice Chairman and the Clerk of both the Company and the Bank. As described in further detail below, under the heading "Transactions with Certain Related Persons", the members of the Compensation Committee, as well as businesses and other entities with which they may be affiliated, are customers of the Bank and/or have entered into loan transactions with the Bank in the ordinary course of business. Comparative Performance Graph Under applicable rules of the SEC, the Company is required to present a chart comparing the cumulative total return (which assumes the reinvestment of all dividends) on the Common Stock with the cumulative total return of (i) a broad based equity market index and (ii) a published industry index or peer group. The following graph shows the changes over the five-year period ended on December 31, 2001 in the value of $100 invested in (i) the Common Stock, (ii) the Standard & Poors 500 Index and (iii) the NASDAQ Bank Index. There is no active trading market for the Common Stock, although shares are traded periodically on a privately negotiated basis. The increase in the value of the Common Stock over the five-year period shown on the following performance graph is based on the actual prices known to the Company at which shares of the Common Stock were traded as of the most recent date prior to December 31 of each of the years shown. The most recent trade between two private, unaffiliated parties involving the Common Stock prior to December 31, 2001, of which the Company is aware, was completed at a price of $19.00 per share. For purposes of the graph, the reinvestment of dividends paid since the inception of the Company's dividend reinvestment plan is based upon an annual valuation analysis of the Common Stock undertaken pursuant to the plan in connection with the Company's payment of such dividends; for dividends paid prior to inception of the plan, the reinvestment is based upon the actual prices known to the Company at which shares of the Common Stock were traded as of the most recent date prior to the Company's payment of such dividends. 13 [GRAPHIC OMITTED]

Transactions with Certain Related Persons The Bank leases its headquarters from First Holding Trust. Mr. Duncan is a trustee of First Holding Trust and is a general partner of Old City Hall Limited Partnership which is, in turn, the beneficiary of First Holding Trust. Mr. Armstrong is a limited partner of Old City Hall Limited Partnership. During a portion of the year ended December 31, 2001, Messrs. Main, Gilman and Clancy were also limited partners of Old City Hall Limited Partnership. As of December 31, 2001, Mr. Duncan has a 17% ownership interest and Mr. Armstrong, has a 5% ownership interest in Old City Hall Limited Partnership. Under the terms of the Bank's lease with First Holding Trust, the Bank paid $171,340 in rent, parking fees, taxes and maintenance for the year ended December 31, 2001. The Bank also leases space from Merrimack Realty Trust. Messrs. Duncan, Lerner, Bousquet and Armstrong are general partners of Merrimack Street Associates, which is the beneficiary of Merrimack Realty Trust. During a portion of the year ended December 31, 2001, Messrs. Main and Gilman were also general partners of Merrimack Street Associates. As of December 31, 2001, Mr. Duncan has a 23% ownership interest, Messrs. Lerner and Bousquet each have a 5% ownership interest and Mr. Armstrong has a 3% ownership interest, in Merrimack Street Associates. Under the terms of the Bank's lease with Merrimack Realty Trust, the Bank paid $292,117 in rent, parking fees, taxes and maintenance for the year ended December 31, 2001. The leases between the Bank and each of First Holding Trust and Merrimack Realty Trust, respectively, were reviewed and approved by the Bank's Leasing/Branch Committee, which is composed exclusively of outside directors of the Bank, none of whom hold any interest in any of First Holding Trust, Merrimack Realty Trust, Old City Hall Limited Partnership or Merrimack Street Associates, prior to the Bank's entering into such leases. The Company's Board of Directors believes that the terms of each of these leases, including lease rates, are substantially similar to such terms as would be included in comparable lease transactions entered into at the time of such leases with persons who are not affiliated with the Bank. Certain Directors and executive officers of the Company are also customers of the Bank and have entered into loan transactions with the Bank in the ordinary course of business. In addition, certain Directors are also directors, officers or stockholders of corporations, non-profit entities or members of partnerships which are customers of the Bank and which enter into loan and other transactions with the Bank in the ordinary course of business. Such loan transactions with Directors and executive officers of the Bank and with such corporations and partnerships are on such terms, including interest rates, repayment terms and collateral, as those prevailing at the time for comparable transactions with persons who are not affiliated with the Bank and do not involve more than a normal risk of collectibility or present other features unfavorable to the Bank. SECURITIES OWNERSHIP OF MANAGEMENT AND PRINCIPAL STOCKHOLDERS The following table sets forth stock ownership information with respect to Directors, Named Executive Officers, all Directors and executive officers as a group and all other persons known to the Company who are the beneficial owners of more than 5% of the Common Stock. All such information is as of March 8, 2002. This information includes the total number of shares of the Common Stock known by the Company to be beneficially owned by each such person and group and the percentage of the Common Stock each such person and group beneficially owns. All shares are owned of record and beneficially, and each person and group identified has sole voting and investment power with respect to such shares, except as otherwise noted. 14

--------------------- * Named individual beneficially owns less than 1% of total Common Stock. (footnotes continued on following page) 15 (1) The information as to the Common Stock beneficially owned has been furnished by each such stockholder. All persons have sole voting and investment power over the shares, unless otherwise indicated. (2) Includes shares subject to options exercisable within sixty days as follows: Mr. Ansin, 1,560; Mr. Bousquet, 1,160; Ms. Bradley, 1,160; Mr. Clementi, 1,160; Mr. Conway, 1,160; Ms. Donahue, 1,160; Mr. Duncan, 47,000; Mr. Hanson, 1,160; Mr. Harrington, 1,160; Mr. Lerner, 1,160; Mr. Main, 23,500; Mr. Sarantos, 1,160; Mr. Spinelli, 1,160; Mr. Gilman, 11,625; Mr. Clancy, 11,250; Mr. Irish, 11,250; and all directors and executive officers as a group, 117,785. (3) Includes 6,166 shares owned jointly with Mr. Ansin's wife and 1,000 shares owned by Mr. Ansin's children. (4) Includes 70,316 shares owned jointly with Mr. Armstrong's wife. (5) Includes 938 shares owned jointly with Mr. Conway's wife. (6) Includes 6,000 shares owned by Mr. Duncan's wife and 7,287 shares owned jointly with Mr. Duncan's adult children. (7) Includes 2,000 shares owned by Ms. Flynn's husband. (8) Includes 122,822 shares owned jointly with Mr. Hanson's wife. (9) Includes 420 shares owned jointly with Mr. Harrington's wife. (10) Includes 105,752 shares owned by Mr. Lerner's wife. (11) Includes 68,500 shares owned jointly with Mr. Main's wife. (12) Includes 9,206 shares owned jointly with Mr. Sarantos' wife and 2,000 shares owned jointly by Mr. Sarantos' wife and daughter. (13) Includes 7,000 shares owned jointly with Mr. Gilman's wife. (14) Includes 2,538 shares owned by Mr. Clancy's children and 6,100 shares owned jointly with Mr. Clancy's wife. 16 PROPOSAL TWO RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS The Board of Directors has appointed KPMG LLP to serve as independent auditors of the Company for the fiscal year ending December 31, 2002. The Company is not required to submit the ratification and approval of the Board of Directors' appointment of independent auditors to a vote of stockholders. In the event a majority of the votes cast are against the appointment of KPMG LLP, the Board of Directors may consider the vote and the reasons therefor in future decisions on its appointment of independent auditors. Representatives of KPMG LLP are expected to attend the annual meeting at which time they will have an opportunity to make a statement if they wish to do so and will be available to answer any appropriate questions from stockholders. Audit Fees The aggregate fees billed by KPMG LLP for professional services rendered for the audit of the Company's annual consolidated financial statements for the year ended December 31, 2001 and the review of the consolidated financial statements included in the Company's quarterly reports on Form 10-Q as filed with the SEC during the year ended December 31, 2001 totaled $73,000. Financial Information Systems Design and Implementation Fees There were no fees billed by KPMG LLP to the Company for financial systems design and implementation fees (as such fees are described in Paragraph (c)(4)(ii) of the SEC's Regulation S-X) for the year ended December 31, 2001. All Other Fees In addition to the $73,000 in audit fees billed by KPMG LLP, as referred to above, the aggregate fees billed to the Company for all other services rendered by KPMG LLP for the year ended December 31, 2001, totaled $92,558, which included $80,058 of audit-related fees and $12,500 for tax return preparation services. The Audit Committee has determined that the provision of other services by KPMG LLP in addition to the services described above under the heading "Audit Fees" is compatible with maintaining the independence of KPMG LLP. Recommendation of Directors The Board of Directors recommends that the stockholders vote FOR the ratification of the Board of Directors' appointment of KPMG LLP as independent auditors of the Company for the fiscal year ending December 31, 2002. 17 STOCKHOLDER PROPOSALS Under applicable rules of the SEC, proposals of stockholders of the Company intended to be presented at the Company's 2003 annual meeting of stockholders must be received by the Company no later than November 27, 2002 to be included in the Company's proxy statement and form of proxy relating to that meeting. If the 2003 annual meeting of stockholders is advanced or delayed by more than 30 days from the date of the Annual Meeting, the date by which stockholder proposals to be presented at the 2003 meeting must be received by the Company to be included in the Company's proxy statement and form of proxy relating to that meeting will change from the date indicated in the preceding sentence. If this occurs, the Company will inform stockholders of such change by including a notice to such effect in its earliest possible quarterly report on Form 10-Q as filed by the Company with the SEC. In addition to the foregoing SEC rules, pursuant to the Company's articles of organization and by-laws, any stockholder wishing to have any Director nomination or stockholder proposal considered at the Annual Meeting (although not otherwise included in this Proxy Statement) must provide written notice of such nomination or proposal to the Clerk of the Company in accordance with the requirements of the articles of organization and by-laws of the Company at its principal executive offices by no later than April 6, 2002. SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Section 16(a) of the Exchange Act requires that the Company's Directors and executive officers and any other persons who own more than 10% of the outstanding shares of the Common Stock file with the SEC initial reports of ownership and subsequent reports of changes of ownership with respect to their beneficial ownership of the Common Stock. Such persons are required by SEC regulations to furnish the Company with copies of all such Section 16(a) reports that they may be required to file. To the Company's knowledge, based solely on information furnished to the Company for the year ended December 31, 2001, all such persons have complied with the applicable Section 16(a) reporting requirements for such year. OTHER MATTERS Shares represented by proxies in the enclosed form will be voted as stockholders direct. Properly executed proxies that contain no directions to the contrary will be voted (1) FOR the election of the six nominees to serve as Directors of the Company and (2) FOR the ratification of the appointment of KPMG LLP as the Company's independent auditors for the fiscal year ending December 31, 2002. At the time of preparation of this Proxy Statement, the Board of Directors knows of no other matters to be presented for action at the Annual Meeting. As stated in the accompanying proxy card, if any other business should properly come before the Annual Meeting, the proxies named therein have discretionary authority to vote the shares according to their best judgment. ANNUAL REPORT ON FORM 10-K The Company's Annual Report on Form 10-K (without exhibits) is included with the Company's Annual Report to Stockholders, and is being furnished to shareholders of record together with this Proxy Statement. Requests for additional copies may be directed to: Enterprise Bancorp, Inc., 222 Merrimack Street, Lowell, Massachusetts 01852, Attention: Arnold S. Lerner, Clerk. WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE COMPLETE, SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. IF YOU ATTEND THE MEETING, YOU MAY WITHDRAW ANY PROXY GIVEN BY YOU AND VOTE YOUR SHARES IN PERSON. March 27, 2002 18 ENTERPRISE BANCORP, INC. PROXY This proxy is solicited on behalf of the Board of Directors of Enterprise Bancorp, Inc. The Board of Directors recommends a vote FOR Proposals 1 and 2. This proxy, when properly executed, will be voted in the manner directed herein by the undersigned. If no direction is given, this proxy, if otherwise properly executed, will be voted FOR Proposals 1 and 2. The label attached directly below lists your account number/number of shares owned and then your name and address. [X] Please mark your votes this way. The undersigned, a stockholder of Enterprise Bancorp, Inc. (the "Company"), revoking all prior proxies, hereby appoint(s) Richard W. Main and Arnold S. Lerner, and each of them with full power of substitution, the attorneys, agents and proxies of the undersigned to represent and vote all shares of stock of the Company which the undersigned would be entitled to vote if personally present at the Annual Meeting of stockholders of the Company and any adjournments or postponements thereof, to be held at the American Textile Museum, 491 Dutton Street, Lowell, Massachusetts, on Tuesday, May 7, 2002, at 4:00 P.M. as specified herein as to each of the proposals 1 and 2 below:

Please date and sign exactly as name appears herein and return in the enclosed envelope. When shares are held by joint owners, both should sign. Executors, administrators, trustees and others signing in a representative capacity should give their full title as such. If a corporation, please sign in full corporate name by president or other authorized officer. If a partnership, please sign in partnership name by authorized person.