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. )
(x ) Filed by the Registrant
( ) Filed by a Party other than the Registrant
Check the appropriate box:
(x ) Preliminary Proxy Statement
( ) Confidential, for Use of the Commission Only (as permitted by
Rule 14a-b(e)(2))
( ) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to (section mark)240.14a-11(c) or
(section mark)240.14a-12
FNB CORP.
(Name of Registrant as Specified In Its Charter)
FNB CORP.
(Name of Person(s) Filing Proxy Statement)
PAYMENT OF FILING FEE (Check the appropriate box):
( ) $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2).
( ) $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11: *
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
(Set forth the amount on which the filing fee is calculated and state how
it was determined)
( ) Fee previously paid 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:
<PAGE>
FNB CORP. PRELIMINARY
101 Sunset Avenue
Asheboro, North Carolina 27203
Proxy for Annual Meeting of Shareholders - May 9, 1995
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints R. Reynolds Neely, Jr. and J. M. Ramsay
III, or either of them, proxies with full power of substitution to vote all
shares of FNB Corp. (the "Corporation") standing in the name of the undersigned
at the above Annual Meeting of Shareholders, and all adjournments thereof:
1. PROPOSAL TO APPROVE BYLAW AMENDMENT PROVIDING FOR STAGGERED TERMS FOR
DIRECTORS AND INCREASING THE MINIMUM NUMBER OF DIRECTORS TO NINE.
FOR AGAINST ABSTAIN
2. ELECTION OF DIRECTORS: (If Proposal 1 is not approved, all directors will be
elected for a one-year term.)
Class I: (one-year term) James M. Culberson, Jr.
J. M. Ramsay III
Charles W. Stout, M.D.
Earlene V. Ward
Class II: (two-year term) W. L. Hancock
R. Reynolds Neely, Jr.
Richard K. Pugh
E. C. Watkins, Jr.
Class III: (three-year term) James M. Campbell, Jr.
Thomas A. Jordan
Michael C. Miller
_____ With authority to vote for all nominees listed above.
_____ Without authority to vote for all nominees listed above.
To withhold authority to vote for any individual nominee, write the
nominee's name in the space above.
3. PROPOSAL TO RATIFY SELECTION OF KPMG PEAT MARWICK as independent auditors.
FOR AGAINST ABSTAIN
4. With discretionary authority upon such other matters as may come before the
meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR AMENDMENT OF THE CORPORATION'S
BYLAWS, AUTHORIZATION TO VOTE FOR THE NOMINEES AND THE RATIFICATION OF THE
SELECTION OF AUDITORS. THE PROXY WILL BE VOTED ACCORDINGLY UNLESS OTHERWISE
SPECIFIED.
Dated: , 1995 Signature of Shareholder
Signature of Shareholder
When signing as attorney,
executor, administrator,
trustee or guardian,
please give full title. If
more than one trustee, all
should sign. All joint
owners must sign.
<PAGE>
PRELIMINARY
FNB CORP.
101 Sunset Avenue
Asheboro, North Carolina 27203
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
Notice is hereby given that the regular Annual Meeting of Shareholders of
FNB Corp. (the "Corporation") will be held at the AVS Banquet Centre, 2045
North Fayetteville Street, Asheboro, North Carolina, on Tuesday, the 9th day of
May, 1995, at one o'clock p.m., preceded by a buffet luncheon beginning at 12:15
p.m., for the following purposes:
1. To elect a Board of Directors for the ensuing year.
2. To consider amending the Corporation's bylaws to provide for
staggered terms for Directors and to increase the minimum number of
directors to nine.
3. To consider ratification of the selection of KPMG Peat Marwick,
Certified Public Accountants, as independent auditors of the Corporation
for the 1995 fiscal year.
4. To consider and act upon any other business as may come before the
meeting or any adjournment thereof.
All shareholders are invited to attend the meeting. Only those shareholders
of record at the close of business on March 30, 1995, shall be entitled to
notice of the meeting and to vote at the meeting.
Information relating to the activities and operations of FNB Corp. during
the fiscal year ended December 31, 1994, is contained in the Corporation's
Annual Report, which is enclosed.
By Order of the Board of Directors
Michael C. Miller
President
APRIL 10, 1995
YOUR BOARD OF DIRECTORS URGES YOU TO MARK, DATE, SIGN AND RETURN THE
ENCLOSED PROXY AS PROMPTLY AS POSSIBLE WHETHER OR NOT YOU PLAN TO ATTEND THE
MEETING IN PERSON. THE PROXY MAY BE REVOKED AT ANY TIME BY NOTIFYING THE
SECRETARY OF FNB CORP. IN WRITING PRIOR TO THE VOTING OF THE PROXY.
<PAGE>
PROXY STATEMENT
GENERAL INFORMATION
The following information is furnished in connection with the solicitation
of proxies by the Board of Directors of FNB Corp. (the "Corporation" or "FNB")
for use at the Annual Meeting of Shareholders to be held on May 9, 1995. The
principal executive offices of the Corporation are located at its wholly-owned
subsidiary, First National Bank and Trust Company (the "Bank"), 101 Sunset
Avenue, Asheboro, North Carolina 27203 (Telephone: 910-626-8300). This proxy
statement and the enclosed form of proxy were first sent to shareholders on or
about April 10, 1995.
A proxy may be revoked by the person giving it by delivering a written
notice to the Corporation prior to the meeting or by personally requesting that
it be returned. The shares represented by all properly executed proxies
received by the Corporation in time to be taken to the meeting will be voted;
and, if a choice is specified on the proxy, the shares represented thereby will
be voted in accordance with such specification. If a specification is not made,
the proxy will be voted for the proposals set forth in the Notice of Annual
Meeting of Shareholders.
Solicitation of proxies may be made in person or by mail or telephone by
directors, officers and regular employees of the Corporation or Bank without
additional compensation therefor. The Corporation may also request banking
institutions, brokerage firms, custodians, nominees and fiduciaries to forward
solicitation material to the beneficial owners of Corporation Common Stock held
of record by such person, and the Corporation will reimburse such forwarding
expenses. The Corporation will pay the costs of solicitation of proxies.
VOTING SECURITIES OUTSTANDING AND PRINCIPAL SHAREHOLDERS
Only holders of record of FNB Common Stock at the close of business on March
30, 1995 (the "Record Date"), are entitled to a notice of and to vote on matters
to come before the Annual Meeting or any adjournment thereof. On the Record
Date, there were 1,200,000 shares of FNB Common Stock issued and outstanding and
1,042 holders of record.
Each share is entitled to one vote on all matters. The presence, in person
or by proxy, of the holders of a majority of the outstanding shares of FNB
Common Stock entitled to vote is necessary to constitute a quorum.
As of March 30, 1995, Stella H. Neely, 703 Sunset Avenue, Asheboro, North
Carolina, owned of record 53,211 shares of FNB Common Stock (representing 4.4%
of the shares then outstanding). Mrs. Neely has executed a revocable power of
attorney that allows R. Reynolds Neely, Jr., 146 North Church Street, Asheboro,
North Carolina and Melody Neely Jackson, 929 Walton Court, Asheboro, North
Carolina, to jointly vote or dispose of such shares. Mr. Neely and Mrs. Jackson
are the children of Mrs. Neely and by reason of such power of attorney, may be
deemed the beneficial owners of the shares held by their mother. The 53,211
shares together with shares owned by Mr. Neely and his immediate family
aggregate 63,759 shares (5.3% of the outstanding shares of Common Stock) and
these 53,211 shares together with shares owned by Mrs. Jackson and her immediate
family aggregate 64,480 shares (5.4% of the outstanding shares of Common Stock).
1
<PAGE>
EXECUTIVE OFFICERS
The current executive officers of the Corporation and of the Bank are as
follows:
<TABLE>
<CAPTION>
NAME AGE POSITION IN CORPORATION POSITION IN BANK
<S> <C> <C> <C>
Michael C. Miller 44 President and Chief President and Chief
Executive Officer Executive Officer
Jerry A. Little 51 Treasurer and Secretary Senior Vice President,
Controller and Secretary
</TABLE>
The above officers have held executive positions with the Corporation or the
Bank for at least the past five years. Officers are elected annually by the
Board of Directors.
ELECTION OF DIRECTORS
The Board of Directors has proposed that the bylaws of the Corporation be
amended to establish staggered terms for directors and to increase the minimum
number of directors to nine. See iProposal to Amend Bylaws to Provide for
Staggered Terms for Directorsi. If this amendment is approved by shareholders,
directors who are elected at the Annual Meeting will be divided into three
classes. Class I would hold office for a term expiring at the 1996 Annual
Meeting. Class II would hold office for a term expiring at the 1997 Annual
Meeting. Class III would hold office for a term expiring at the 1998 Annual
Meeting. At each annual meeting of shareholders following this initial
classification and election, the successors to the class of directors whose
terms expire at that meeting would be elected for a term of office to expire at
the third succeeding annual meeting of shareholders after their election and
until their successors have been duly elected and qualified.
Both the existing bylaws and the proposed bylaw amendment provide that the
number of directors shall be fixed and determined from time to time by
resolution adopted by a majority of the full Board of Directors or by resolution
of the shareholders at any annual or special meeting thereof. The existing
bylaws provide that the number of directors shall not be less than five nor more
than twenty-five. The proposed bylaws provide that the number of directors
shall not be less than nine nor more than twenty-five. The Board of Directors
has set the number of directors to be elected at the 1995 Annual Meeting at 11.
The 11 nominees for the Board of Directors are set forth below in classes,
which are proposed by the Board of Directors. Each nominee is at present a
member of the Board of Directors and also serves as a director of the Bank.
It is intended that the persons named in the accompanying form of proxy
will vote for the 11 nominees listed below for directors, unless authority so to
vote is withheld. Each director will serve for the term indicated below, if the
bylaw amendment is approved by shareholders. If the bylaw amendment is not
approved by shareholders, each director will serve until the next Annual Meeting
of Shareholders or until a successor shall be elected and shall qualify.
Directors are elected by a plurality of the votes cast. Abstentions and broker
nonvotes will not affect the election results if a quorum is present.
The following information is furnished with respect to the nominees, as set
forth in the classes that will be established if the bylaw amendment is
approved.
2
<PAGE>
CLASS I DIRECTORS
NOMINEES FOR ELECTION AS DIRECTORS FOR ONE-YEAR TERMS
EXPIRING WITH THE ANNUAL MEETING IN 1996
<TABLE>
<CAPTION>
OCCUPATION DIRECTOR
NAME LAST FIVE YEARS SINCE AGE
<C> <S> <C> <C>
James M. Culberson, Jr. Chairman of the Board 1974 66
of the Corporation
(1984 - Present);
Chairman of the
Board of the Bank
(1974 - Present);
President of the
Corporation
(1984 - 1993);
Chief Executive Officer
of the Bank
(1991 - 1993);
President of the Bank
(1974 - 1991)
J. M. Ramsay III President, 1989 47
Elastic Therapy, Inc.
(1989 - Present)
Charles W. Stout, M.D. Family Physician, 1989 62
Sole Practice
(1962 - Present)
Earlene V. Ward Secretary 1976 63
(1991 - Present)
Vice President
(1963 - 1991),
Vestal Motor Co.;
Secretary and Treasurer
(1991 - Present)
Secretary
(1979 - 1991),
Mid-State Motors, Inc.
</TABLE>
3
<PAGE>
CLASS II DIRECTORS
NOMINEES FOR ELECTION AS DIRECTORS FOR TWO-YEAR TERMS
EXPIRING WITH THE ANNUAL MEETING IN 1997
<TABLE>
<CAPTION>
OCCUPATION DIRECTOR
NAME LAST FIVE YEARS SINCE AGE
<C> <S> <C> <C>
W. L. Hancock President and 1973 59
Treasurer, Hancock Farms, Inc.
(Purebred Cattle) (1987-Present)
R. Reynolds Neely, Jr. Planning Director 1980 41
(1989 - Present),
City of Asheboro
Planning Dept.
Richard K. Pugh Chairman of the Board 1988 60
(1990 - Present)
President and
Treasurer
(1982 - 1990),
Pugh Oil Company, Inc.
E. C. Watkins, Jr. Industrial and 1989 68
Commercial Developer
(1975 - Present)
</TABLE>
CLASS III DIRECTORS
NOMINEES FOR ELECTION AS DIRECTORS FOR THREE-YEAR TERMS
EXPIRING WITH THE ANNUAL MEETING IN 1998
<TABLE>
<CAPTION>
OCCUPATION DIRECTOR
NAME LAST FIVE YEARS SINCE AGE
<S> <C> <C> <C>
James M. Campbell, Jr. President and 1984 56
Treasurer, Sew
Special, Inc.
(1979 - Present)
Thomas A. Jordan President, Michael 1984 55
Thomas Furniture
Company
(1983 - Present)
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
OCCUPATION DIRECTOR
NAME LAST FIVE YEARS SINCE AGE
<C> <S> <C> <C>
Michael C. Miller President and Chief 1992 44
Executive Officer of
the Corporation
(1994 - Present);
Chief Executive Officer
of the Bank
(1994 - Present);
President of the Bank
(1991 - Present);
Vice President, Treasurer
and Secretary of the
Corporation
(1986 - 1993);
Executive Vice President
and Secretary of the Bank
(1986 - 1991)
</TABLE>
In the event that any nominee should not be available to serve for any
reason (which is not anticipated), it is intended that the persons acting under
the proxy will vote for the election, in his stead, of such other persons as the
Board of Directors of the Corporation may recommend.
COMMITTEES OF THE BOARD
The Board of Directors holds regular monthly meetings to conduct the normal
business of the Corporation and meets on other occasions when required for
special circumstances. In addition, certain board members serve on standing
committees. Among these committees are the Audit and Compliance, Compensation
and Nominating Committees, whose members and principal functions are as follows:
AUDIT AND COMPLIANCE COMMITTEE. The Audit and Compliance Committee reviews
significant audit and accounting principles, policies and practices and meets
with the audit/compliance manager relative to internal audit functions and with
the Independent Auditors to review the performance of the audit/compliance
manager and internal controls and accounting procedures. The committee also
reviews significant regulatory compliance matters and meets with the
audit/compliance manager relative to the compliance management function.
Additionally, the committee reviews regulatory reports filed with the Federal
Reserve Board and Comptroller of the Currency. Members of this committee are
Directors Neely, Hancock, Ramsay and Watkins. The Audit and Compliance Committee
met six times during the 1994 fiscal year.
COMPENSATION COMMITTEE. The Compensation Committee deals in broad terms
with personnel matters and reviews the compensation of the senior officers of
the Corporation and Bank. Members of this committee are Directors Campbell,
Culberson, Neely, Pugh and Ward. The Compensation Committee met twice during
the 1994 fiscal year.
5
<PAGE>
NOMINATING COMMITTEE. The Board of Directors, as a group, serves as the
Nominating Committee and in that capacity recommends nominees for election to
the Board. Qualified candidates recommended by shareholders will be considered
by the Board. In order for a candidate recommended by a shareholder to be
considered as a nominee at the next annual meeting, the name of such candidate,
together with a written description of the candidate's qualifications must be
received by the Secretary of FNB Corp., 101 Sunset Avenue, Asheboro, North
Carolina 27203, no later than January 15, 1996.
During the fiscal year ended December 31, 1994, the Board of Directors held
a total of 12 meetings. Each Director attended 75% or more of the total number
of meetings of the Board and of the committees of the Board on which he or she
served.
EXECUTIVE COMPENSATION
The following table shows, for the fiscal years ended December 31, 1994,
1993 and 1992, the cash and certain other compensation paid to or received or
deferred by persons who were at December 31, 1994 the chief executive officer of
the Corporation and the other officers of the Corporation whose total salary and
bonus exceeded $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION
SECURITIES
UNDERLYING
NAME AND PRINCIPAL POSITION STOCK OPTIONS ALL OTHER
ON DECEMBER 31, 1994 YEAR SALARY BONUS (#) COMPENSATION
<S> <C> <C> <C> <C> <C>
Michael C. Miller, President and 1994 $125,000 $35,000 5,000 $ 4,768 (1)
Chief Executive Officer of the 1993 82,929 27,000 - 4,669
Corporation and Bank (1) 1992 78,392 30,000 - 4,623
</TABLE>
(1) Amount shown consists of $52 paid by the Bank pursuant to a Split Dollar
Insurance Program for executives, $96 which is an estimated personal benefit to
Mr. Miller under the Split Dollar Insurance Program and $4,620 contributed by
the Corporation to a 401(k) plan.
STOCK OPTIONS
The following table provides details regarding stock options granted to the
Named Executive Officers in the 1994 fiscal year.
6
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
% OF
TOTAL
NUMBER OF OPTIONS
SECURITIES GRANTED
UNDERLYING TO EXERCISE
OPTIONS EMPLOYEES OR BASE
GRANTED IN FISCAL PRICE EXPIRATION
NAME (#) (1) YEAR ($/SH) DATE .
<S> <C> <C> <C> <C>
Michael C. Miller 5,000 15.2% $24.41 December
</TABLE>
14, 2004
(1) Incentive Stock Options exercisable one year after the grant date
(December 15, 1995), with 20% of the shares covered thereby becoming exercisable
at that time and an additional 20% of the option shares becoming exercisable on
each successive anniversary date. The price for shares that may be purchased
pursuant to the options is equal to the fair market value of the Corporation's
Common Stock on the date of grant.
PENSION PLAN
The Bank maintains a Pension Plan for its employees. The aggregate amount
set aside or accrued during the year ended December 31, 1994, for all benefits
to be paid under the Plan in the event of retirement with respect to all
employees, as a group, was $185,354. The contributions to the Plan are based on
actuarial assumptions covering all employees, as a group, and the contributions
attributable to officers as a group are not determinable. No outside director
is included in the Pension Plan. As of January 1, 1995, the individual named in
the Summary Compensation Table, Mr. Miller, had 9 credited years of service
under such plan. The approximate annual retirement benefits beginning at the
normal retirement age of 65 to plan participants with salaries in the
classifications indicated are listed in the table below. The benefit amounts
listed in the following table reflect a straight life annuity. The benefit
amounts listed in the table are subject to certain adjustments for participants
who accrued benefits under the Plan prior to January 1, 1989.
<TABLE>
<CAPTION>
APPROXIMATE ANNUAL BENEFIT UPON RETIREMENT
ASSUMED AVERAGE FOR YEARS OF SERVICE INDICATED
COMPENSATION FOR
FINAL TEN YEARS 15 Years 20 Years 25 Years 30 Years 35 Years 40 Years
<S> <C> <C> <C> <C> <C> <C>
$100,000 17,130 22,839 28,549 34,259 39,969 43,219
125,000 22,005 29,339 36,674 44,009 51,344 55,407
150,000 26,880 35,839 44,799 53,759 62,719 67,594
175,000 31,755 42,339 52,924 63,509 74,094 79,782
200,000 36,630 48,839 61,049 73,259 85,469 91,969
225,000 41,505 55,339 69,174 83,009 96,844 104,157
</TABLE>
7
<PAGE>
DIRECTOR COMPENSATION
Directors, other than the Chairman of the Board, who are not also employees
of the Corporation or Bank are paid $300 for each Board meeting they attend and
receive an additional $100 for each committee meeting attended. In addition,
each nonemployee director, other than the Chairman of the Board, is paid a
monthly retainer of $325. The Chairman of the Board receives an annual fee of
$25,000. Directors may elect to defer receipt of their fees and monthly
retainers until their retirement from the Board. Any deferred fees and
retainers become a general obligation of the Corporation to be credited with
interest at the Bank's deposit rate applied to individual retirement accounts
with a two-year term and priced on a monthly variable-rate basis, subject to a
minimum rate of 5.5% per annum.
INDEBTEDNESS OF OFFICERS AND DIRECTORS
Certain of the directors and officers of the Corporation and Bank and
companies with which they are affiliated were customers of and borrowers from
the Bank in the ordinary course of business in 1994. Similar banking
transactions are expected to take place in the future. In the opinion of
management, all outstanding loans and commitments included in such transactions
were made substantially on the same terms, including rate and collateral, as
those prevailing at the time in comparable transactions with other customers and
did not involve more than normal risk of collectibility or contain other
unfavorable features.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth as of March 10, 1995, certain information
with respect to the beneficial ownership of FNB Common Stock by directors and by
directors and executive officers as a group.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP PERCENT
NAME AND ADDRESS MARCH 10, 1995(1) OF CLASS
<S> <C> <C>
James M. Campbell, Jr. 12,905 1.08
Randleman, NC
James M. Culberson, Jr. 12,508 1.04
Asheboro, NC
W. L. Hancock 7,748 0.65
Franklinville, NC
Thomas A. Jordan 59,424 4.95
Liberty, NC
Michael C. Miller 2,492 0.21
Asheboro, NC
R. Reynolds Neely, Jr. 63,759 (2) 5.31
Asheboro, NC
Richard K. Pugh 1,000 0.08
Asheboro, NC
8
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP PERCENT
NAME AND ADDRESS MARCH 10, 1995(1) OF CLASS
<S> <C> <C>
J. M. Ramsay III 4,785 0.40
Asheboro, NC
Charles W. Stout, M.D. 7,580 0.63
Asheboro, NC
Earlene V. Ward 7,204 0.60
Asheboro, NC
E. C. Watkins, Jr. 1,100 0.09
Ramseur, NC
Directors and officers as 180,713 (2) 15.06
a group (12 persons)
</TABLE>
(1) Includes directors' qualifying shares and shares held by directors' and
officers' immediate families, including spouse and/or children residing in same
household. Does not include 1,540 shares owned by the Ferree Educational and
Welfare Fund, of which Mr. Miller is a trustee and treasurer and Mr. Culberson
is assistant treasurer.
(2) Includes 53,211 shares held of record by Mr. Neely's mother and over
which Mr. Neely and his sister have joint voting and dispository control
pursuant to a revocable power of attorney.
Under the securities laws of the United States, the Corporation's
directors, its executive officers, and any persons holding more than 10 percent
of the Corporation's stock are required to report their ownership of the
Corporation's stock and any changes in that ownership to the Securities and
Exchange Commission. Specific due dates for these reports have been established
and the Corporation is required to report in this proxy statement any failure to
file by these dates during 1994. All of these filing requirements were
satisfied by its directors, officers and 10 percent holders, except that
the directors and officers of the Corporation inadvertantly failed to file on a
timely basis one report relating to one transaction involving the grant of stock
options during 1994. In making these statements, the Corporation has relied on
the written representations of its directors, officers and 10 percent holders
and copies of the reports that they have filed with the Commission.
PROPOSAL TO AMEND BYLAWS
TO PROVIDE FOR STAGGERED TERMS FOR DIRECTORS
The Board of Directors has proposed and recommends that shareholders approve
an amendment to the Corporation's bylaws that would establish staggered terms
for directors of the Corporation and would provide that the number of directors
of the Corporation not be less than nine nor more than twenty-five, with the
exact number to be fixed from time to time by resolution of a majority of the
full Board of Directors or by resolution of the shareholders at any annual or
special meeting of shareholders. A complete copy of the bylaw amendment is set
forth on Exhibit A hereto.
Currently, the Corporation's bylaws provide that each director of the
Corporation is elected for a one-year term at the annual meeting of shareholders
and that the number of directors shall be not less than five nor more than
twenty-five, with the exact number to be fixed from time to time by resolution
of a majority of the full Board of Directors or by resolution of the
shareholders at any annual or special meeting of shareholders.
9
<PAGE>
Under the proposed bylaw amendment, after an initial transition period,
directors will be classified into three classes, as nearly equal in number as
possible. One class would hold office initially for a term expiring at the 1996
Annual Meeting, a second class would hold office initially for a term expiring
at the 1997 Annual Meeting, and a third class would hold office initially for a
term expiring at the 1998 Annual Meeting. At each annual meeting of
shareholders following this initial classification and election, the successors
to the class of directors whose terms expire at that meeting would be elected
for a term of office to expire at the third succeeding annual meeting of
shareholders after their election and until their successors have been duly
elected and qualified. Under North Carolina law, a corporation that has a
staggered board must have a minimum of nine directors. See "Election of
Directors".
The Board believes a classified board helps to assure continuity in the
affairs and business strategies of a corporation and provides a board of
directors with a greater opportunity to protect the interests of shareholders as
a whole. Although there has been no problem in the past with the continuity or
stability of the Board, the Board believes that the longer time period required
to elect a majority of a classified board will help to assure the continued
continuity and stability of the Corporation's affairs and policies in the
future.
The proposed amendment could, if adopted, reduce the possibility that a
third party could effect a change in control of the Board of Directors without
the support of the incumbent directors and thereby could encourage a third party
seeking to acquire control of the Corporation to consult first with the
Corporation's management regarding any proposed business combination or other
transaction involving the Corporation. However, North Carolina Law provides that
the Corporation's shareholders may, by vote of the majority of the outstanding
voting shares, remove the entire Board and elect a new Board. The Board
believes that, in a situation where a third party seeks managementis
cooperation, the Board of Directors will be in a better position to negotiate
the terms of such an acquisition on behalf of the shareholders and to promote
consideration of a broader range of relevant factors, such as the structuring
of a proposed transaction and its tax consequences, the underlying value and
prospects of the Corporation and the impact on the Corporation's employees,
depositors and customers of a proposed transaction.
Conversely, the amendment could have the effect of deterring a third party
from making a merger proposal, a tender offer for or otherwise acquiring
significant blocks of the Corporation's stock, or conducting a proxy contest,
and could make a unilateral acquisition proposal more difficult, even though
such an action might increase, at least temporarily, market prices of the
Corporation's shares and shareholders of the Corporation might be willing to
sell their shares at the price offered.
The Board has no knowledge of any present effort to gain control of the
Corporation whether through the acquisition of Common Stock or the conduct
of a proxy contest.
The bylaw amendment would apply to every election of directors
regardless of whether a change in the composition of the Board would be
beneficial and whether the holders of the Corporation's stock having
a majority of the voting power believe that such a change would be
desirable. After approval of the proposed amendments, persons who do not
favor the policies of the Board would generally require at least two annual
meetings of shareholders to replace a majority of the Board whereas under the
current provisions, any or all could be replaced at any annual or special
meeting of shareholders.
10
<PAGE>
If a quorum exists, the bylaw amendment will be approved if the votes cast
favoring the amendment exceed the votes cast opposing the amendment.
Abstentions and broker nonvotes will not affect the results. The Board of
Directors recommends that shareholders vote "FOR" the amendment. Proxies,
unless indicated to the contrary, will be voted "FOR" the amendment.
INDEPENDENT AUDITORS
The firm of KPMG Peat Marwick, independent certified public accountants,
has been selected by the Board of Directors as independent auditors for the 1995
fiscal year. This selection is being presented to the shareholders for
ratification at the Annual Meeting.
A representative of KPMG Peat Marwick is expected to be present at the
Annual Meeting of Shareholders and will be given an opportunity to make a
statement if he desires to do so. Such representative will be available to
respond to questions relating to the 1994 audit of the Corporation's financial
statements.
SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the next Annual
Meeting of Shareholders must be received by the Secretary of FNB Corp., 101
Sunset Avenue, Asheboro, North Carolina 27203, no later than December 12, 1995.
OTHER MATTERS
There is no business other than as set forth, so far as now known, to be
presented for action by the shareholders at the meeting. It is intended that
the proxies will be exercised by the persons named therein upon matters that may
properly come before the meeting or any adjournment thereof, in accordance with
the recommendations of management.
By Order of the Board of Directors:
Michael C. Miller
President
Date: April 10, 1995
11
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Exhibit A
PROPOSED AMENDMENT TO BYLAWS
The bylaws of the Corporation are proposed to be amended to include a new
Section 2 of Article III to read in its entirety as follows:
ARTICLE III
DIRECTORS
2. Number, Term and Qualifications. The number of directors of the
corporation shall be not less than nine (9) nor more than twenty-five (25), the
exact number of directors within such minimum and maximum limits to be fixed and
determined from time to time by resolution by a majority of the full Board of
Directors or by resolution of the shareholders at any annual or special meeting
thereof.
The Board of Directors shall be divided into three classes, which shall be
as nearly equal in number as possible. In the event of a change in the number
of directors, the Board of Directors shall determine the class or classes to
which the increased or decreased number of directors shall be apportioned;
provided, however, that no decrease in the number of directors shall affect the
term of any director then in office. The directors elected at the 1995 Annual
Meeting of Shareholders shall be designated as Class I Directors, Class II
Directors and Class III Directors at the time of their election and shall have
terms of office as follows: the term of office of Class I Directors shall expire
at the 1996 Annual Meeting of Shareholders, the term of office of Class II
Directors shall expire at the 1997 Annual Meeting of Shareholders, and the term
of office of Class III Directors shall expire at the 1998 Annual Meeting of
Shareholders, with the members of each class of directors to hold office until
their successors are elected and qualified. At each Annual Meeting of
Shareholders subsequent to the 1995 Annual Meeting of Shareholders, directors
elected to succeed those whose terms are expiring shall be elected for a term of
office to expire at the third succeeding Annual Meeting of Shareholders and when
their respective successors are elected and qualified.
Directors need not be residents of the State of North Carolina or
shareholders of the corporation, except insofar as such requirements are imposed
by national banking laws or by regulations of the Federal Reserve and/or the
U.S. Comptroller of the Currency.
A-1
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