April 18, 1997
Dear Shareholder:
On behalf of the Board of Directors, I cordially invite you to attend the
Annual Meeting of Shareholders of FNB Corporation. The meeting will be held
at 2:00 p.m., Tuesday, May 13, on the third floor of the new FNB Center. The
members of your Board of Directors look forward to personally welcoming you to
our new facility which was completed in February. You will be pleased with
the FNB Center, and we look forward to showing it to you.
Information about the business meeting and the list of nominees for election
as Directors are in the enclosed formal meeting notice and the proxy
statement. This year, you are requested to elect Directors and to ratify the
appointment of independent accountants.
We hope you will be able to attend. Please return your reception reservation
and proxy by Friday, May 2, in the enclosed postage-paid envelope.
Sincerely,
Samuel H. Tollison
President
Enclosures
<PAGE>
Notice of Annual Meeting of Shareholders
To Our Shareholders:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of FNB
Corporation (the "Corporation") will be held at the FNB Center, 105 Arbor
Drive, Christiansburg, Virginia, on May 13, 1997, at 2:00 p.m., for the
following purposes:
(1) To elect four (4) directors of the Corporation to fill the
vacancies created by the expiration of terms of the Directors of
Class I;
(2) To ratify the appointment of McLeod & Company, independent
certified public accountants, as auditors for 1997; and
(3) To transact any other business that may properly come before the
meeting or any adjournment thereof.
The record date for determining shareholders entitled to notice of, and
to vote at, the Annual Meeting has been fixed by the Board of Directors at the
close of business at 2:00 p.m., on March 31, 1997. The number of shares
outstanding and entitled to vote is 1,661,900 shares.
This notice and the accompanying proxy materials enclosed herewith are
sent to you by order of the Board of Directors. The Board of Directors of FNB
Corporation recommends that shareholders elect the nominated Directors of
Class I and ratify the appointment of McLeod & Company, independent certified
public accountants, as auditors for the Corporation for 1997.
Peter A. Seitz, Secretary
FNB Corporation
IMPORTANT: To assure that your shares will be voted at the meeting, you are
requested to complete and sign the enclosed proxy and return it in the
enclosed envelope as soon as possible. The giving of a proxy will not affect
your right to vote in person in the event you attend the meeting and elect
that right.
<PAGE>
Proxy Statement
Date, Time, and Place. The annual meeting of the shareholders of FNB
Corporation will be held at the FNB Center, 105 Arbor Drive, Christiansburg,
Virginia, on May 13, 1997, at 2:00 p.m.
Voting Securities and Principal Holders Thereof. The number of shares
outstanding and entitled to vote is 1,661,900 shares of common stock. There
are no other outstanding classes of Corporation stock. The record date for
shareholders entitled to notice of, and to vote at, the Annual Meeting has
been fixed as of the close of business, at 2:00 p.m., on March 31, 1997.
Cumulative Voting. Shareholders of the Corporation shall have no
cumulative voting rights.
Election of Directors. Four Directors of Class I are to be elected at
the Annual Meeting to serve until the Annual Meeting in 2000 and until their
respective successors are duly elected and qualified. A majority of shares
cast is required to approve the election of directors. Management proposes
that the four (4) nominees listed in this Proxy Statement as Directors of
Class I be elected. The nominees (Directors of Class I) for whom the persons
named as Proxy Holders intend to vote as directors, unless otherwise indicated
on the form of proxy, and all Directors of Class II and III, and certain
information with regard to their ownership of the common stock of the
Corporation is set forth below. The dates of service include years serving on
the Board of First National Bank (the "Bank"), the Corporation's only
subsidiary. Principal occupations of the members of the Board include
associations during the past five years.
<TABLE>
<CAPTION>
Directors of Class I to be elected for a term expiring in 2000
Amount of Common Stock Owned
Name, Principal Director Beneficially and Nature of Percent
Occupation and (Age) Since Ownership on February 28, of Class
1997
(A) (B)
<S> <C> <C> <C>
Joan H. Munford (63) 1994 2,395 *
Owner, Advisor,
HCMF Corporation
Blacksburg, Virginia
Robert J. Styne (69) 1967 13,663 *
Owner, Styne Forest Products
and S&S Farms; formerly,
Production Planning &
Scheduling, Hercules, Inc.
William M. Sterrett, Jr. (47) 1992 2,597 *
President,
Blacksburg Transfer &
Storage, Inc.
Daniel D. Hamrick (50) 1992 1,184 *
Attorney,
Daniel D. Hamrick, P.C.;
formerly, Attorney, Stone,
Hamrick, Harrison & Turk
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Directors of Class II to continue in office until 1998
Amount of Common Stock Owned
Name, Principal Director Beneficially and Nature of Percent
Occupation and (Age) Since Ownership on February 28, of Class
1997
(A) (B)
<S> <C> <C> <C>
W. N. Ridinger (76) 1957 23,949 1.4
Consultant Pharmacist,
Chairman, the Bank
and the Corporation Board
Kendall O. Clay (54) 1988 11,329 *
Attorney,
Kendall O. Clay, P.C.
Carl N. McNeil (57) 1971 12,342 *
Realtor & Owner,
McNeil Real Estate
Julian D. Hardy, Jr. (47) 1992 18,631 1.1
Executive Vice President,
the Corporation, and
Executive Vice President
and CEO, the Bank; formerly
Chief Administrative Officer,
the Bank
</TABLE>
<TABLE>
<CAPTION>
Directors of Class III to continue in office until 1999
Amount of Common Stock Owned
Name, Principal Director Beneficially and Nature of Percent
Occupation and (Age) Since Ownership on February 28, of Class
1997
(A) (B)
<S> <C> <C> <C>
Samuel H. Tollison (64) 1971 68,081 4.1
President and CEO, the
Corporation and President,
the Bank; formerly CEO,
the Bank
Nelson J. Wimmer (75) 1971 33,799 2.0
Vice President,
S.G. Wimmer & Son, Inc.
A.E. Cromer, Jr. (73) 1963 419 *
President, The Arcnel Corp.
James L. Hutton (64) 1985 4,623 *
Attorney, Gilmer, Sadler,
Ingram, Sutherland & Hutton,
L.L.P., Vice Chairman of the
Bank and the Corporation Board
Directors and Executive Officers
as a group (15 persons) 207,210 12.5
</TABLE>
* Less than one percent.
(A) Includes shares that may be deemed beneficially owned due to joint
<PAGE>
ownership, voting power or investment power; including shares owned by or held
for the benefit of a Board member's spouse or another immediate family
residing in the household of the Board member, which may be deemed
beneficially owned.
(B) Includes estimated 1996 Employee Stock Ownership Plan allocation.
Board of Directors and Committees of the Board. The Corporation was
incorporated on January 23, 1996 and became the sole shareholder of the Bank
on July 11, 1996 by virtue of regulatory approval of the Plan and Agreement of
Reorganization (the "Reorganization") approved by shareholders at the Bank's
annual meeting held June 11, 1996. The Board of Directors of the Corporation
took action by unanimous consent on three occasions during 1996. No director
attended fewer than 75% of the Corporation's Board or committee meetings
during the year. Directors of the Corporation receive no compensation for
serving on the Corporation's Board or any of its committees.
The Board of the Corporation appointed, on December 18, 1996, an
Administrative Committee consisting of Samuel H. Tollison, Archie E. Cromer,
Jr., Kendall O. Clay, Joan H. Munford, and James L. Hutton. The
Administrative Committee meets weekly, as needed, and exercises the authority
of the Corporation's Board between regularly scheduled meetings to transact
most Board matters. The Administrative Committee had one organizational
meeting during 1996.
The Corporation's full Board of Directors acts as a Nominating Committee
for the annual selection of its nominees for election as Directors. Since the
Reorganization occurred less than a year ago, the Corporation's Nominating
Committee did not meet during 1996. While the Corporation's Board will
consider nominees recommended by stockholders, it has not actively solicited
recommendations from the Corporation's shareholders for nominees, nor has it
established any procedures for this purpose.
The Board of Directors of the Bank held 13 meetings during 1996. All
directors attended more than 75% of Bank Board and committee meetings during
the year. Directors of the Bank receive a $500 monthly retainer, $600 per
Board meeting attended, and $150 per Committee meeting attended. In addition
to this compensation, the Chairman of the Bank Board receives an additional
$500 monthly retainer and an additional $150 per Board meeting attended. The
Bank Board has appointed an Executive Committee comprised of Directors
Ridinger, Cromer, Clay, Munford, and Hutton. The committee meets weekly, if
needed, and exercises the power of the Board of Directors of the Bank between
regular Board meetings, and has delegated authority to act for the Bank Board
in most matters. The Executive Committee held 38 meetings during 1996.
The Audit/Compliance Committee of the Bank Board meets to review reports
of the Bank's internal auditor, who reports directly to the Audit/Compliance
Committee and reviews the annual report of the Bank's independent auditors.
Members of the Audit/Compliance Committee are Directors Styne, Munford, and
Wimmer. During 1996, the Committee held four meetings.
The Bank's Executive Committee serves as the Budget and Salary Committee
for the Bank's Board of Directors. The Executive Committee reviews senior
management's budget and compensation projections for the ensuing year. As
part of this process, the Committee also recommends the annual compensation of
the Bank's President and Chief Executive Officer. For 1996, the Committee
recommended and the Bank Board approved an increase in President Tollison's
annual salary, to $164,000 and CEO Hardy's annual salary, to $125,000. In
addition, the Bank has adopted an Employee Stock Ownership Plan, which
provides retirement benefits for all eligible employees. The estimated value
of the 1996 allocation for Mr. Tollison and Mr. Hardy is $30,000 each.
<PAGE>
Factors taken into consideration by the Committee in their recommendation
for such executive compensation were:
a. Review of peer bank executive compensation as presented in a
report prepared by the Virginia Bankers Association;
b. Net earnings of the Bank during the prior year;
c. Status of criticized loans and assets;
d. Overall performance of the Bank during the prior year.
As further evaluation of performance, qualitative factors considered
include the quality of the strategic plan, organization and management
development progress, and civic involvement. The Committee met one time
during 1996.
The Chairman of the Corporation and Bank's Board, President, and
Executive Vice President serve as ex-officio members of the above committees,
with voting rights, except the President and Executive Vice President are not
voting members of the Audit/Compliance Committee.
Executive Officers of the Corporation. Samuel H. Tollison, President and
CEO; Julian D. Hardy, Jr., Executive Vice President; and Perry D. Taylor,
Chief Financial Officer; have been named as Executive Officers of the
Corporation. These officers serve at the pleasure of the Corporation's Board.
They have served the Bank in comparable capacities over the past five years.
Executive Compensation. The following table provides information
concerning those officers of the Corporation and Bank whose compensation
exceeded $100,000 for the year ended December 31, 1996.
<TABLE>
<CAPTION>
Summary Compensation Table
Annual Compensation
Name and
Principal All Other
Position Year Salary($) Bonus($) Compensation($)(A)
<S> <C> <C> <C> <C>
Samuel H. Tollison 1996 164,000 60,000 43,200
President and CEO, the 1995 158,441 50,000 38,297
Corporation, and
President, the 1994 152,351 None 39,239
Bank; formerly CEO,
the Bank
Julian D. Hardy, Jr. 1996 125,000 40,000 43,200
Executive Vice President, 1995 109,301 30,000 39,251
the Corporation, and 1994 104,698 None 30,924
Executive Vice President
and CEO, the Bank;
formerly CAO, the Bank
</TABLE>
(A) All other compensation for 1996 consists of an estimated contribution by
the Bank to the ESOP for Mr. Tollison and for Mr. Hardy of $30,000,
respectively. Directors fees were $13,200 for Mr. Tollison and for Mr. Hardy,
respectively. In prior years, all other compensation consists of actual
contributions to the ESOP and director fees earned.
Performance Graph. The following graph compares the cumulative total
return of the Corporation's common stock over a five-year period to the
returns of the Standard & Poor's 500stock index and to the returns of an
Independent Peer Bank index. For periods prior to the Reorganization, the
<PAGE>
graph represents the performance of the Bank's common stock.
[Following is the performance data presented in tabular form. The proxy
statement as sent to shareholders contains the information in both tabular
and graphical form.]
<TABLE>
<CAPTION>
1991 1992 1993 1994 1995 1996
<S> <C> <C> <C> <C> <C> <C>
FNB Corporation 100 127 170 251 261 281
Independent Bank Index 100 130 163 197 268 313
S&P 500 Index 100 108 118 120 165 203
</TABLE>
Transactions with Management. Directors and officers of the Bank and the
Corporation, and persons with whom they are associated, have had, and expect
to have in the future, banking transactions with the Bank and the Corporation
in the ordinary course of their businesses. In the opinion of management of
the Bank and the Corporation, all such loans and commitments for loans were
made on substantially the same terms, including interest rates, collateral,
and repayment terms, as those prevailing at the same time for comparable
transactions with other persons, were made in the ordinary course of business;
and do not involve more than a normal risk of collectibility or present
unfavorable features. As of December 31, 1996, there were direct loans to
officers and directors of the Corporation and the Bank of $4,121,000. During
1996, new direct loans to such officers and directors amounted to $1,294,000,
and repayments amounted to $257,000. In addition, there were loans of
$7,184,000 at December 31, 1996 which were endorsed by such directors or had
been made to companies in which such directors had an equity interest.
Principal Security Holders. The Corporation knows of no person or group
acting in concert that beneficially owned more than five percent of the
outstanding shares of the Corporation's common stock as of February 28, 1997.
Appointment of Auditors. KPMG Peat Marwick LLP ("KPMG") served as the
Bank's independent auditors for the calendar year 1994. After reviewing
competitive bids, the Audit/Compliance Committee recommended and the Board of
Directors approved the appointment of McLeod & Company to serve as the Bank's
independent auditors for calendar year 1995, subject to ratification by the
Bank's shareholders. KPMG's opinion on the Bank's 1994 consolidated financial
statements was unqualified. There was no disagreement with the former
auditors concerning matters of accounting principles or practices, financial
statement disclosure or auditing scope or procedure, which disagreements, if
not resolved to the satisfaction of KPMG, would have caused the firm to make
reference to such disagreements in their report. McLeod & Company served as
the Bank's auditors for 1995 and the Corporation's auditors for 1996 and have
been appointed to serve as the Corporation's auditors for 1997.
The appointment of the auditors must be ratified by a majority of the
votes cast by the stockholders of the Corporation at the Meeting. A
representative of McLeod & Company is anticipated to be present at the
Shareholder's meeting. This representative will be prepared to answer any
appropriate questions and, while not anticipated, will have the opportunity to
make a statement, if he or she so chooses.
<PAGE>
Other Matters. The Board of Directors is not aware of any business to
come before the Meeting other than those matters described above. However, if
any other matters should properly come before the Meeting, it is intended that
proxies in the accompanying form will be voted in respect thereof, in
accordance with the judgment of the person or persons voting the proxies.
Proxy. The accompanying proxy is solicited on behalf of the Board of
Directors of the Corporation with related costs to be borne by the
Corporation. A proxy may be revoked at any time before the stock to which it
relates is voted, either by written notice (which may be in the form of a
substitute proxy delivered to the Secretary of the Meeting) or by attending
the Meeting and voting in person.
Shareholder Proposals. In order to be eligible for inclusion in the
Corporation's proxy materials for next year's Annual Meeting of Shareholders,
any shareholder proposal to take action at such meeting must be received at
the Corporation's main office, at 105 Arbor Drive, Christiansburg, Virginia,
no later than December 13, 1997. Any such proposal shall be subject to the
requirements of the proxy rules adopted under the Securities Exchange Act of
1934, as amended.
BY ORDER OF THE BOARD OF DIRECTORS
Peter A. Seitz
Secretary
Christiansburg, Virginia
April 18, 1997
IMPORTANT: A copy of the Corporation's Annual Report on Form 10-K, including
the Financial Statements for the year ended 1996, required to be filed with
the Securities Exchange Commission in Washington, D.C., and related schedules
thereto, shall be provided by the Corporation without charge to each
shareholder upon his written request to Perry D. Taylor, Chief Financial
Officer, FNB Corporation, 105 Arbor Drive, P.O. Box 600, Christiansburg,
Virginia 24073.
FNB CORPORATION
Solicited on Behalf of the Board of Directors
JAMES L. HUTTON, NELSON J. WIMMER, and _______________________________
or any of them (the "Proxy Holders"), with power of substitution
to each, are hereby authorized to represent the undersigned and vote all
shares of FNB Corporation (the "Corporation") standing in the name of the
undersigned at the Annual Meeting of Shareholders of the Corporation to be
held at the FNB Center, 105 Arbor Drive, Christiansburg, Virginia, on Tuesday,
May 13, 1997, at 2:00 p.m., or any adjournment thereof, on each of the
following matters. With respect to any adjournment recommended by management
for the purpose of soliciting additional votes on a matter, only proxies
indicating a vote in favor of that matter will be considered a vote in favor
of such adjournment.
1. This proxy will be voted for the election of the nominees to the Board
of Directors of the Corporation listed below, unless the word "no" is
inserted at the end of this sentence.___________________. You may
withhold authority to vote for any nominee by lining through or
otherwise striking out his or her name below.
Class I Directors
William M. Sterrett, Jr.
Robert J. Styne
Daniel D. Hamrick
Joan H. Munford
2. To vote FOR__________, AGAINST__________, or ABSTAIN__________ from
voting on the appointment of McLeod & Company, independent certified
public accountants, as auditors for the year 1997.
3. The transaction of any other business which may properly come before the
Meeting. Management at present knows of no other business to be
presented at the Meeting.
This proxy, when properly executed, will be voted in the manner directed
by the undersigned shareholder. If no direction is made, this proxy will be
voted FOR the directors listed in Item 1, FOR the appointment of accountants
in Item 2, and as the Proxy Holders see fit in any matters that may come up in
Item 3.
When signing as attorney, executor, administrator, trustee, or guardian,
please give full title. If more than one fiduciary, all should sign. All
joint owners MUST sign.
Date:_____________________
_________________________________ __________________________
Signature Title, if any Signature, if held jointly
PLEASE MARK, DATE, SIGN AND PROMPTLY RETURN
