SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
First Bancorp.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than 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)(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 (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.
<PAGE>
[ ] 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>
First Bancorp
341 North Main Street
Troy, North Carolina 27371-0508
Telephone (910) 576-6171
- --------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD THURSDAY, APRIL 30, 1998
- --------------------------------------------------------------------------------
To Our Shareholders:
The annual meeting of shareholders of First Bancorp (the "Company") will
be held at the main office of First Bank, 341 North Main Street, Troy, North
Carolina on Thursday, April 30, 1998 at 3:00 p.m. local time, for the purpose of
considering and acting on the following matters:
1. A proposal to fix the number of directors to be elected at eleven
(11).
2. A proposal to elect eleven (11) nominees to the board of directors to
serve until the 1999 annual meeting of shareholders, or until their
successors are elected and qualified.
3. A proposal to amend the Company's Articles of Incorporation to provide
for cumulative voting in the election of directors.
4. A proposal to ratify the appointment of KPMG Peat Marwick LLP as the
independent auditors of the Company for the current fiscal year.
5. Such other business as may properly come before the meeting, or any
adjournment or adjournments thereof.
Only shareholders of record as of the close of business on March 16, 1998
are entitled to notice of and to vote at the annual meeting and any adjournments
thereof.
Whether or not you expect to be present at the annual meeting, please
complete, date and sign the enclosed form of proxy and return it promptly in the
enclosed envelope. If you attend the meeting, your proxy will be returned to you
upon request.
The proxy statement accompanying this notice sets forth further
information concerning the proposals to be considered at the annual meeting. You
are urged to study this information carefully.
The Annual Report of the Company is also enclosed.
By Order of the Board of Directors
/s/Anna G. Hollers
------------------
Anna G. Hollers
Secretary
<PAGE>
First Bancorp
341 North Main Street
Troy, North Carolina 27371-0508
Telephone (910) 576-6171
- --------------------------------------------------------------------------------
PROXY STATEMENT
- --------------------------------------------------------------------------------
INTRODUCTION
This proxy statement is furnished to the shareholders of First Bancorp
(hereinafter sometimes referred to as the "Company") by the board of directors
in connection with the solicitation of proxies for use at the annual meeting of
shareholders of the Company to be held on Thursday, April 30, 1998 at 3:00 p.m.
local time, at the Main Office of First Bank, 341 North Main Street, Troy, North
Carolina, and at any adjournment or adjournments thereof. Action will be taken
at the annual meeting on the items described in this proxy statement and on any
other business that properly comes before the meeting.
This proxy statement and accompanying form of proxy are being mailed to
shareholders on or about April 1, 1998.
Whether or not you expect to attend the annual meeting, please complete,
date and sign the enclosed form of proxy and return it promptly to ensure that
your shares are voted at the meeting.
Any shareholder giving a proxy may revoke it at any time before a vote is
taken (i) by duly executing a proxy bearing a later date; (ii) by executing a
notice of revocation in a written instrument filed with the secretary of the
Company; or (iii) by appearing at the meeting and notifying the secretary of the
intention to vote in person. Unless a contrary choice is specified, all shares
represented by valid proxies received pursuant to this solicitation, and not
revoked before they are exercised, will be voted as set forth in this proxy
statement. In addition, the proxy confers discretionary authority upon the
persons named therein, or their substitutes, with respect to any other business
that may properly come before the meeting.
The presence, in person or by proxy, of the holders of a majority of the
outstanding shares of the Company's common stock entitled to vote is necessary
to constitute a quorum at the annual meeting. If a quorum is not present or
represented at the annual meeting, the shareholders present and entitled to vote
have the power to adjourn the meeting from time to time, without notice other
than announcement at the meeting, until a quorum is present or represented. At
any such adjourned meeting at which a quorum is present or represented, any
business may be transacted that might have been transacted at the meeting as
originally notified. A shareholder abstaining from the vote on a particular
proposal and broker non-votes will be counted as present for purposes of
determining if a quorum is present, but will be counted as not having voted on
the proposal in question.
The Company will bear the entire cost of preparing this proxy statement
and of soliciting proxies. Proxies may be solicited by employees of the Company,
either personally, by special letter, or by telephone. The Company also will
request brokers and others to send solicitation material to beneficial owners of
stock and will reimburse them for this purpose.
<PAGE>
VOTING SECURITIES
Only shareholders of record as of the close of business on March 16, 1998
will be entitled to vote at the annual meeting or any adjournment or
adjournments thereof. The number of outstanding shares entitled to vote at the
shareholders meeting is 3,020,370. Shareholders are entitled to one vote for
each share of the Company's common stock.
The following table sets forth the number and percentage of outstanding
shares of the Company's common stock beneficially owned by (i) each person known
by the Company to own more than 5% of the outstanding common stock and (ii) all
officers and directors of the Company as a group, as of December 31, 1997.
<TABLE>
<CAPTION>
TABLE OF PRINCIPAL HOLDERS OF COMMON STOCK
Common Stock
Beneficially Owned (1)
----------------------------
Name and Address Percent of
Title of Class of Beneficial Owner Shares Class
-------------- ------------------- ------ -----
<S> <C> <C> <C>
Common Stock, $5 par George R. Perkins, Jr. 275,704 (2) 9.13%
P.O. Box 525
Sanford, NC 27331
Common Stock, $5 par John C. Willis 220,670 (3) 7.31%
626 E. Main Street
Troy, NC 27371
Common Stock, $5 par All directors and 963,236 31.89%
executive officers as a group
</TABLE>
Notes:
(1) Unless otherwise indicated, each individual has sole voting and investment
power with respect to all shares beneficially owned by such individual.
Also included are shares subject to options (exercisable as of December 31,
1997 or within 60 days after December 31, 1997) granted under the Company's
stock option plan.
(2) Includes exercisable options to purchase 2,000 shares.
(3) Includes 133,100 shares held by his spouse and exercisable options to
purchase 4,000 shares.
<PAGE>
PROPOSAL 1 - REDUCE THE BOARD OF DIRECTORS TO ELEVEN (11) MEMBERS
The Company's bylaws provide that the number of directors constituting the
board of directors shall be not less than three (3) nor more than thirteen (13)
as determined by the shareholders. The number of directors constituting the
entire board of directors is currently fixed at twelve (12).
One of the Company's current directors is retiring from the board of
directors when his current term expires at the 1998 annual meeting, and
therefore this director has not been nominated for re-election. The board of
directors does not believe it is in the best interests of the Company to
maintain a vacancy indefinitely on the board of directors. Therefore, the Board
is recommending to the shareholders that the number of directors serving on the
Board be reduced from twelve (12) to eleven (11).
It is therefore proposed that the following resolution be adopted by the
shareholders:
RESOLVED, that the number of directors constituting the entire board of
directors of First Bancorp shall be fixed at eleven (11).
The affirmative vote of the holders of a majority of shares of common
stock represented and voting at the meeting is required for approval of the
proposal. The board of directors recommends that shareholders vote "FOR"
Proposal 1. Proxies, unless indicated to the contrary, will be voted "FOR"
Proposal 1.
<PAGE>
PROPOSAL 2 - ELECTION OF DIRECTORS
Assuming that Proposal 1 above is approved by the shareholders, the number
of directors constituting the board of directors will be fixed at eleven (11).
In the absence of any specifications to the contrary, and assuming that
Proposal 1 above is approved by the shareholders, proxies will be voted for the
election of all eleven (11) of the nominees listed in the table below by casting
an equal number of votes for each such nominee. If Proposal 1 is not approved by
the shareholders, proxies will be voted to elect as many as possible of the
nominees listed below to fill the number of seats on the board as may be fixed
by the shareholders. If, at or before the time of the meeting, any of the
nominees listed below becomes unavailable for any reason, the proxyholders have
the discretion to vote for a substitute nominee or nominees. The board currently
knows of no reason why any nominee(s) listed below is likely to become
unavailable.
NOMINATIONS FOR DIRECTOR
Nominees for election to the board of directors are selected by the
incumbent board prior to each annual meeting, and the nominees listed below were
selected in that manner. Nominations from the shareholders may be made if made
in accordance with the Company's bylaws, which generally require such
nominations to be made in writing and within 60 to 90 days prior to the meeting
at which directors are to be elected and to include certain information about
the proposed nominee, in addition to other requirements. A complete copy of the
bylaw provision setting forth the procedure for shareholder nominations may be
obtained upon written request from the Company's corporate secretary at the
Company's main office.
DIRECTORS, NOMINEES AND EXECUTIVE OFFICERS
The following table sets forth certain information as of December 31, 1997
with respect to the eleven nominees for election to the board of directors and
the executive officers of the Company (all of these persons may be contacted at
341 North Main Street, Troy, North Carolina 27371):
<TABLE>
<CAPTION>
TABLE OF DIRECTORS, NOMINEES AND EXECUTIVE OFFICERS
Common Stock
Beneficially Owned (1)
Current Director (D), Director -------------------------
Nominee (N), or of Company Number of Percent
Name (Age) Position with Company Since Shares of Class
---------- --------------------- ----- ------ --------
<S> <C> <C> <C> <C>
Directors and Nominees
James H. Garner (68) President and CEO (D) (N) 1995 23,361 (2) 0.77%
Jack D. Briggs (58) (D) (N) 1983 29,430 (3) 0.97%
David L. Burns (59) (D) (N) 1988 20,084 (4) 0.66%
Jesse S. Capel (65) (D) (N) 1983 72,736 (5) 2.41%
George R. Perkins, Jr. (58) (D) (N) 1996 275,704 (6) 9.13%
G. T. Rabe, Jr. (73) (D) (N) 1987 5,862 (7) 0.19%
John J. Russell (76) (D) 1983 12,426 (8) 0.41%
Edward T. Taws (63) (D) (N) 1986 13,794 (9) 0.46%
Frederick H. Taylor (58) (D) (N) 1983 130,812 (10) 4.33%
Goldie H. Wallace (51) (D) (N) 1997 115,686 (11) 3.83%
A. Jordan Washburn (61) (D) (N) 1995 5,912 (12) 0.20%
John C. Willis (54) (D) (N) 1983 220,670 (13) 7.31%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Executive Officers
<S> <C> <C> <C> <C>
James H. Garner (68) President and Chief 1995 23,361 (2) 0.77%
Executive Officer (D) (N)
Anna G. Hollers (46) Executive Vice President n/a 23,514 (14) 0.78%
and Secretary
Teresa C. Nixon (40) Executive Vice President n/a 6,748 (15) 0.22%
and Compliance Officer, First Bank
David G. Grigg (47) President of Montgomery n/a 10,666 (16) 0.35%
Data Services, Inc.
Jerry M. Arnold (57) Senior Vice President n/a 3,681 (17) 0.12%
of Operations, First Bank
Eric P. Credle (29) Vice President and n/a 1,000 0.03%
Chief Financial Officer
Lee C. McLaurin (35) Vice President and Controller n/a 3,576 (18) 0.12%
</TABLE>
Notes to Table of Directors, Nominees and Executive Officers:
(1) Unless otherwise indicated, each individual has sole voting and investment
power with respect to all shares beneficially owned by such individual. The
executive officers' reported shares in the 401(k) defined contribution plan
represent an estimated number because the exact allocations are not
available and any difference between the actual holdings and the estimates
shown in this table would be immaterial and, in addition, all shares held
in said plan are voted by the plan trustee and not by the shareholder for
whom such shares are listed. Also included are shares subject to options
(exercisable as of December 31, 1997 or within 60 days after December 31,
1997) granted under the Company's stock option plan.
(2) Includes 2,151 shares held in Company's 401(k) defined contribution plan,
4,912 shares held jointly with his spouse and exercisable options to
purchase 16,000 shares.
(3) Includes 458 shares held as custodian for his daughter, 19,750 shares held
jointly with his spouse and exercisable options to purchase 4,000 shares.
(4) Includes 12,388 shares held by Mr. Burns' business interests and
exercisable options to purchase 4,000 shares.
(5) Includes 24,736 shares held by Capel Inc. of which Mr. Capel is principal
owner and director and exercisable options to purchase 4,000 shares.
(6) Includes exercisable options to purchase 2,000 shares.
(7) Includes 1,330 shares held by his spouse and exercisable options to
purchase 4,000 shares.
(8) Includes exercisable options to purchase 3,000 shares.
(9) Includes 4,520 shares held by his spouse and exercisable options to
purchase 4,000 shares.
(10) Includes 51,826 shares held by Mr. Taylor's business interests, 74,254
shares held in trusts, 532 shares held by his spouse and exercisable
options to purchase 4,000 shares.
<PAGE>
(11) Includes exercisable options to purchase 1,000 shares and 100,686 shares
held by her spouse and exercisable options held by her spouse to purchase
2,000 shares.
(12) Includes exercisable options to purchase 3,000 shares.
(13) Includes 133,100 shares held by his spouse and exercisable options to
purchase 4,000 shares.
(14) Includes 525 shares held jointly with her daughters, 3,708 shares held in
the Company's 401(k) defined contribution plan, 1,100 shares held by her
spouse and exercisable options to purchase 9,000 shares.
(15) Includes 2,116 shares held in the Company's 401(k) defined contribution
plan and exercisable options to purchase 4,600 shares.
(16) Includes 104 shares held jointly with his daughters, 52 shares held jointly
with his son, 4,523 shares held jointly with his spouse, 1,826 shares held
in the Company's 401(k) defined contribution plan and exercisable options
to purchase 3,000 shares.
(17) Includes 942 shares held in the Company's 401(k) defined contribution plan
and exercisable options to purchase 2,400 shares.
(18) Includes 2,955 shares held in the Company's 401(k) defined contribution
plan and exercisable options to purchase 600 shares.
Directors and Nominees
James H. Garner became President and Chief Executive Officer and a director
of the Company and First Bank in 1995. Mr. Garner has been employed by First
Bank since 1969, serving as Executive Vice President from 1989 until 1995.
Jack D. Briggs is chairman of the board of directors and has been a
director of the Company since 1983 and a director of First Bank since 1976. Mr.
Briggs is President of Lanier Briggs, Inc., a funeral home business, and is also
a retail furniture merchant.
David L. Burns is President of Z. V. Pate, Inc., a holding company for
agricultural, timber, restaurants and retail sales. Mr. Burns has been a
director of the Company since 1988 and a director of First Bank since 1992.
Jesse S. Capel is Executive Director of Capel, Inc., a rug manufacturer,
importer and exporter. Mr. Capel has been a director of the Company since 1983
and a director of First Bank since 1959.
George R. Perkins, Jr. is President of Frontier Spinning Mills, LLC, a yarn
manufacturer, and has served in such capacity since 1996. In addition, Mr.
Perkins served as President of the Spun Yarn Division of Unifi, Inc. and as a
director of Unifi, Inc. (listed on the New York Stock Exchange) from August 1993
until June 1996. In 1988, Mr. Perkins founded Pioneer Yarn Mills where he served
as its President and Chief Executive Officer until it merged with Unifi, Inc. in
1993. Mr. Perkins has also served in the past as director of several publicly
traded companies in the retail, banking and financial services industries as
well as a college, a hospital and a trade association. Mr. Perkins has been a
director of the Company and First Bank since 1996.
<PAGE>
G. T. Rabe, Jr. is President of Albemarle Oil Co., a distributor of
petroleum products. Mr. Rabe has been a director of the Company since 1987 and a
director of First Bank since 1992.
John J. Russell is Chairman of Russell-Harvelle Hosiery Mill, Inc. Mr.
Russell has been a director of the Company since 1983 and a director of First
Bank since 1969. Mr. Russell is retiring from the board of directors when his
term expires at the 1998 Annual Meeting.
Edward T. Taws, Jr. is President of Fletcher Industries/Fletcher
International, a manufacturer of textile machinery. Mr. Taws has been a director
of the Company since 1986 and a director of First Bank since 1992.
Frederick H. Taylor is President of Troy Lumber Company. Mr. Taylor has
been a director of the Company since 1983 and a director of First Bank since
1978.
Goldie H. Wallace served as Executive Secretary for GVK America from 1991
to 1993. Ms. Wallace served as Executive Secretary of the Montgomery County
(North Carolina) Economic Development Corporation from 1990 to 1991. In 1987,
Ms. Wallace founded Tri-Star Corporate Temporaries based in Durham, North
Carolina, and served as Tri-Star's President until 1990. Ms. Wallace has been a
director of the Company and First Bank since 1997.
A. Jordan Washburn is a sales representative for Morrisette Paper Company,
where he has been employed for 32 years. Mr. Washburn has been a director of the
Company since 1995 and a director of First Bank since 1994.
John C. Willis is a private investor in restaurant and real estate
interests. Mr. Willis has been a director of the Company since 1983 and a
director of First Bank since 1980.
Executive Officers
In addition to Mr. Garner, the executive officers of the Company are as follows:
Anna G. Hollers is Executive Vice President and Secretary of the Company
and Executive Vice President and Secretary of First Bank. She has been employed
by the Company since 1983 and by First Bank since 1972.
Teresa C. Nixon is Executive Vice President - Loan Administration and
Compliance of First Bank. She has been employed by First Bank since 1989.
David G. Grigg has served as President of Montgomery Data Services, Inc.
since its formation in 1984. He was employed by First Bank from 1972 until 1984.
Jerry M. Arnold is Senior Vice President - Operations of First Bank. He has
been employed by First Bank since 1986.
Eric P. Credle is Vice President and Chief Financial Officer. He has been
employed by the Company since September, 1997. He was previously employed for
seven years by KPMG Peat Marwick LLP as an auditor concentrating in audits of
financial institutions.
Lee C. McLaurin is Vice President and Controller. He has been employed by
the Company since 1987.
<PAGE>
BOARD COMMITTEES, ATTENDANCE AND COMPENSATION
Executive Committee
The Executive Committee is authorized, between meetings of the board of
directors, to perform all duties and exercise all authority of the board of
directors, except those duties and authorities exclusively reserved to the board
of directors, by the Company's bylaws or by statute. The 1997 members of the
Committee were Mr. Briggs, Mr. Capel, Mr. Garner, Mr. Taylor and Mr. Willis. The
Executive committee held 13 meetings during 1997.
Audit Committee
The Audit Committee is responsible for reviewing and presenting to the
board of directors information regarding the Company's policies and procedures
with respect to auditing, accounting, internal accounting controls and financial
reporting. The Committee meets with and reviews reports of the Company's
internal auditor and independent public accountants and makes reports and
recommendations to the board of directors. The 1997 members of the Committee
were Mr. Briggs, Mr. Burns, Mr. Capel and Mr. Willis. The Audit Committee held 8
meetings during 1997.
Compensation Committee
The Compensation Committee is responsible for reviewing the compensation
policies and benefit plans of the Company and for making recommendations
regarding the compensation of its executive officers. The Committee also
administers the Company's stock option plan. The 1997 members of the Committee
are Mr. Briggs, Mr. Rabe, Mr. Taws and Mr. Willis. The Compensation Committee
held 3 meetings during 1997.
Long Range Planning Committee
The role of the Long Range Planning Committee is to act upon strategic
matters that involve the allocation of the Company's resources and the growth
and marketability of the Company's products and services. The 1997 members of
the Committee are Mr. Briggs, Mr. Burns, Mr. Capel, Mr. Garner, Mr. Perkins, Mr.
Rabe, Mr. Taylor and Mr. Willis. The Long Range Planning Committee held 6
meetings during 1997.
Attendance
The board of directors held 12 meetings during 1997. In 1997, all of the
directors and nominees attended at least 75% of the aggregate of the meetings of
the board of directors and the committees described above on which they served
during the period they were directors and members of such committees.
Compensation of Directors
Directors of the Company receive compensation of $225 per month during
their terms of office, plus $200 for each monthly meeting attended. In addition,
directors of First Bank receive $200 for each meeting attended. Such directors
who serve on the Executive Committee, Audit Committee, Compensation Committee or
Long Range Planning Committee receive $200 for each committee meeting attended.
All of the directors of the Company are members of the First Bank board of
directors.
<PAGE>
Non-employee directors of the Company also participate in the Company's
Stock Option Plan. The non-employee director portion of the Stock Option Plan
provides that on June 1 of each year for a five-year period that began June 1,
1994, each non-employee director of the Company receives an option to acquire
1,000 shares of the Company's Common Stock over a 10 year term at an exercise
price equal to the average of the high and low sales prices of such stock on the
date of grant. At December 31, 1997, the eleven directors who were not employees
of the Company held aggregate options to purchase 37,000 shares at exercise
prices ranging from $10.00 to $23.00.
COMPENSATION OF EXECUTIVE OFFICERS
Summary Table of Executive Compensation. The following table sets forth
compensation paid by the Company in the forms specified therein for the years
ended December 31, 1997, 1996 and 1995 to (i) the chief executive officer of the
Company and (ii) the Company's other executive officers who earned in excess of
$100,000 in salary and bonus during 1997.
<TABLE>
<CAPTION>
SUMMARY TABLE OF EXECUTIVE COMPENSATION
Long Term Compensation
--------------------------------------
Annual Compensation Awards Payouts
---------------------------------- ---------------------------------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other Securities All
Annual Restricted Underlying Other
Name, Compen- Stock Options/ LTIP Compen-
Principal Salary Bonus (1) sation Award (s) SARs Payouts sation (2)
Position Year ($) ($) ($) ($) (# sh) ($) ($)
- -------- ---- --- --- --- --- ------ --- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C>
James H. Garner, 1997 $160,000 $ 50,119 $ - $ - $ - $ - $ 9,255
President and Chief 1996 115,000 86,944 - - - - 8,614
Executive Officer 1995 101,217 35,381 - - - - 8,048
Anna G. Hollers, 1997 $ 99,790 $ 30,000 $ - $ - $ - $ - 4,899
Executive Vice 1996 90,000 9,900 - - - - 4,602
President and 1995 85,834 9,800 - - - - 4,141
Secretary
Teresa C. Nixon, 1997 $ 98,500 $ 30,000 $ - $ - $ - $ - 4,855
Executive Vice 1996 83,167 20,000 - - 5,000 - 4,245
President and 1995 75,833 15,000 - - - - 2,455
Compliance Officer
</TABLE>
Notes:
(1) Amounts shown represent actual incentive cash bonuses accrued during
the year indicated.
(2) Amounts shown include Company contributions to the Company's defined
contribution plan under Section 401(k) of the Internal Revenue Code that covers
all Company employees and the value of certain split-dollar life insurance plan
premiums paid for the indicated executives, based on the term insurance value of
such payments as calculated under the Internal Revenue Code P.S. 58 rates or
those of the insurer, if higher.
<PAGE>
<TABLE>
<CAPTION>
Defined Split-Dollar
Contribution Insurance
Plan Plan
---- ----
<S> <C> <C> <C>
James H. Garner 1997 $ 4,750 $ 4,505
1996 4,109 4,505
1995 4,620 3,428
Anna G. Hollers 1997 $ 3,291 $ 1,608
1996 2,994 1,608
1995 2,935 1,206
Teresa C. Nixon 1997 $ 3,555 $ 1,300
1996 2,945 1,300
1995 2,455 -
</TABLE>
Option/SAR Grants in Last Fiscal Year
There were no options or stock appreciation rights granted to the executive
officers listed in the Summary Table of Executive Compensation above during
1997.
Aggregated Option/SAR Exercises in Last Fiscal Year and Fiscal Year-End
Option/SAR Values
Set forth below is information concerning the exercise of stock options
during the fiscal year and year-end value of exercised options by the executive
officers listed in the table above. No stock appreciation rights have been
granted to the executive officers listed.
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL
YEAR AND FISCAL YEAR-END OPTION/SAR VALUES
Number of Securities Value of Unexercised
Shares Underlying Unexercised In-the-Money
Acquired Options/SARs at Options/SARs at
at Exercise Value Fiscal Year End (# sh) Fiscal Year End ($)
---------------------------- ------------------------------
Name (# sh) Realized Exercisable Unexercisable Exercisable Unexercisable
---- ------ -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
James H. Garner - $ 16,000 - $ 390,000 $ -
Anna G. Hollers - - 9,000 6,000 219,375 146,250
Teresa C. Nixon - - 4,600 6,400 105,125 128,000
</TABLE>
Retirement Plans
Retirement Plan. The following table sets forth the estimated annual
pension benefits payable at normal retirement age of 65 to a participant in the
Company's noncontributory defined benefit retirement plan (the "Retirement
Plan").
<PAGE>
<TABLE>
<CAPTION>
TABLE OF ANNUAL BENEFITS PAYABLE ON RETIREMENT
UNDER THE RETIREMENT PLAN
Final
Average Years of Service
Annual -------------------------------------------------------------------------------
Compensation 15 20 25 30 35
------------ --------- ---------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
$ 50,000 $ 7,500 $ 10,000 $ 12,400 $ 14,900 $ 17,400
75,000 12,700 17,000 21,200 25,400 29,700
100,000 18,000 24,000 29,900 35,900 41,900
125,000 23,200 31,000 38,700 46,400 54,200
150,000 28,500 38,000 47,400 56,900 66,400
175,000 30,600 40,800 50,900 61,100 71,300
200,000 30,600 40,800 50,900 61,100 71,300
</TABLE>
Final Average Annual Compensation is the average of the 5 highest
consecutive calendar years earnings out of the 10 calendar years of employment
preceding retirement. Benefits shown are estimated on the basis of "life
annuity" amounts, although participants in the Retirement Plan may choose from a
variety of benefit payment options. For executive officers, current annual
compensation for the purposes of the Retirement Plan may be estimated as the sum
of the "Salary" and "Bonus" amounts in the "Summary Table of Executive
Compensation" under "Compensation of Executive Officers" above. The Company's
executive officers appearing in the compensation table above who are
participants in the Retirement Plan and their respective credited years of
service are: Mr. Garner, 28 years; Ms. Hollers, 25 years; and Ms. Nixon, 8
years.
Supplemental Executive Retirement Plan. The following table sets forth the
estimated annual pension benefits payable at normal retirement age of 65 to
executive officers in the Company's Supplemental Executive Retirement Plan (the
"SERP Plan").
<TABLE>
<CAPTION>
TABLE OF ANNUAL BENEFITS PAYABLE ON RETIREMENT
UNDER THE SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
Final
Average Years of Service
Annual --------------------------------------------------
Compensation 10 15 20 or more
------------ --------- --------- ----------
<S> <C> <C> <C>
$ 50,000 $ 15,000 $ 22,500 $ 30,000
75,000 22,500 33,750 45,000
100,000 30,000 45,000 60,000
125,000 37,500 56,250 75,000
150,000 45,000 67,500 90,000
175,000 52,500 78,750 105,000
200,000 60,000 90,000 120,000
</TABLE>
<PAGE>
Final Average Annual Compensation is the average of the 5 highest
consecutive calendar years earnings out of the 10 calendar years of employment
preceding retirement. Benefits shown are estimated on the basis of "life
annuity" amounts, although participants in the SERP Plan may choose from a
variety of benefit payment options. For executive officers, current annual
compensation for the purposes of the SERP Plan may be estimated as the sum of
the "Salary" and "Bonus" amounts in the "Summary Table of Executive
Compensation" under "Compensation of Executive Officers" above. Benefits shown
in the table are prior to deductions for 50% of social security benefits and
benefits paid under the Retirement Plan. The Company's executive officers
appearing in the compensation table above who are participants in the SERP Plan
and their respective credited years of service are: Mr. Garner, 20 years (the
maximum allowed); Ms. Hollers, 20 years; and Ms. Nixon, 8 years.
REPORT OF THE COMPENSATION COMMITTEE
The fundamental philosophy of the Company's compensation program is to
offer compensation arrangements that are (i) commensurate with individual
contributions to the performance of the Company and (ii) competitive with
publicly owned financial institutions of similar size and performance.
Compensation is designed to attract and retain individuals possessing the
specialized talents required by the Company to remain competitive in the
financial services industry.
In applying this philosophy, the Company's Compensation Committee (the
Committee"), comprised entirely of non-employee directors, develops compensation
recommendations to be considered by the entire board of directors. The Committee
directly determines the recommendation regarding the compensation of the Chief
Executive Officer (the "CEO"). In addition, the Committee also sets forth
recommendations involving (i) compensation policies, (ii) incentive
compensation, (iii) long-term equity participation and (iv) benefit plans. The
Committee also delegates to the CEO the responsibility to determine appropriate
levels of salaries and incentive bonuses for the other executive officers of the
Company. Executive officers are those officers who, in the estimation of the
Committee, are considered to have major policy input and/or are in a position to
have a major impact on the Company's performance. Additional consideration is
given by both the Committee (with regard to the CEO) and the CEO (with regard to
the other executive officers) to the demonstration of the leadership skills
needed to enable the Company to achieve the business objectives set forth by the
board of directors.
The process of assessing the appropriateness of compensation arrangements
also involves the use of peer data to determine the extent to which the
Company's compensation arrangements are competitive within both the Company's
industry and geographical area. As a part of this assessment, the Committee
(with regard to the CEO) and the CEO (with regard to the other executive
officers) compares the Company's arrangements, both in whole and in part, with
those of other financial institutions of similar size and performance both
within the state and nationally. This peer group is a subset of the broader peer
group to which the Company compares its total returns to shareholders in the
discussion captioned "Shareholder Return Performance" below.
<PAGE>
Annual compensation for the Company's CEO and other executive officers
primarily consists of four areas of compensation as set forth below:
* Base salary;
* Annual incentive bonus that is directly linked to corporate earnings
and individual performance;
* Long-term equity participation, through the periodic issuance of stock
options under the Company's stock option plan, in an effort to more
closely align the interests of the executive officers with those of
the Company's shareholders; and
* Benefit plans for executive officers.
BASE SALARY. For the Company's executive officers, including the CEO, base
salaries are targeted to approximate average salaries for individuals in similar
positions with similar levels of responsibilities who are employed by other
publicly owned banking organizations of similar size and performance. The
Company frequently participates in salary/compensation surveys and has access to
other published salary/compensation data. The results of such surveys are used
by the Committee (with regard to the CEO) and the CEO (with regard to the other
executive officers) in developing the appropriate levels of base salaries for
executive officers.
Effective on January 1, 1997, the Committee adjusted the CEO's salary and
annual incentive bonus to provide for a higher portion of total compensation
coming from base salary, with less reliance on annual incentive bonus (see
below) in order to more closely align the CEO's base salary with those of his
peers. Consistent with this change, the Committee adjusted the CEO's base
salary, effective January 1, 1998, to $170,000.
Regarding the other executive officers, the changes in base salary for 1997
were in the range of 9% to 10% in an effort to more closely align the executive
officers' base salaries with those of their peers.
ANNUAL INCENTIVE BONUS. For the Company's executive officers, including the
CEO, annual incentive bonuses are directly and indirectly linked to the
Company's earnings and to the executive officer's individual performance as it
relates to enabling the Company to achieve its performance goals.
For 1997, as in prior years, the Committee set the CEO's annual incentive
bonus as a percentage of the net income earned by the Company. Such percentage
for 1997 was 1% of net income. The 1997 percentage was a decrease from the 2% of
net income formula that was in effect in 1996. The decrease in percentage in
1997 was effected in conjunction with an increase in base salary, as discussed
above.
For the other executive officers, the 1997 annual incentive bonus was based
on a combination of (i) a percentage, as determined by the CEO, of base salary
related to the Company's achievement of predetermined earnings targets and (ii)
additional amounts, at the discretion of the CEO, related to the executive
officer's individual contribution to the overall achievement of Company-wide
earnings targets. Because of the level of Company earnings in 1997, the
salary-based portion of the 1997 incentive bonus for all other executive
officers ranged from 17.4% to 30% of the respective base salary.
<PAGE>
LONG-TERM EQUITY PARTICIPATION. For the Company's CEO, executive officers
and other key employees, stock options may be granted each year at the
discretion of the board of directors. While no formal system is employed in
determining the number of options granted, both in the aggregate or to any one
individual, the Board does consider the Company's current financial performance,
the individual's level of responsibility and the number of previously granted
stock options. Options are not intended to be an on-going component of annual
compensation, but instead are typically granted to attract and retain new
employees, as well as to recognize changes in responsibilities of existing
employees. Consistent with these intentions, the only options granted in the
last three years to the executive officers listed in the Summary Table of
Executive Compensation above were 5,000 options that were granted to Ms. Nixon
in 1996 as a result of her assumption of new responsibilities within the Company
and promotion to Executive Vice President.
BENEFIT PLANS FOR EXECUTIVE OFFICERS. In addition to the aforementioned
methods of compensating executive officers, the Company provides the same
benefits that are afforded to all Company employees, including matching
contributions under the Company's defined contribution plan, retirement benefits
under the Company's pension plan and group insurance covering health, life and
disability. Also, executive officers participate in the Company's Supplemental
Executive Retirement Plan and Split-dollar Life Insurance Plan.
This report is provided as a summary of current practice regarding CEO and
executive officer compensation matters considered by the Committee. Because CEO
and executive officer salaries are not currently (or in the foreseeable future)
expected to exceed those limitations provided under Section 162(m) of the
Internal Revenue Code, the Committee has no specific policy which addresses the
deductibility for income tax purposes of "qualified compensation" under said
code section.
RESPECTFULLY SUBMITTED BY THE COMPENSATION COMMITTEE OF
THE BOARD OF DIRECTORS:
Jack D. Briggs Edward T. Taws, Jr.
G. T. Rabe, Jr. John C. Willis
<PAGE>
SHAREHOLDER RETURN PERFORMANCE
The performance graph shown below compares the Company's cumulative total return
to shareholders for the five-year period commencing December 31, 1992 and ending
December 31, 1997, with cumulative total return of both the Standard & Poor 500
Index (reflecting overall stock market performance) and an index of banks with
less than $500 million in assets as constructed by SNL Securities, LP
(reflecting changes in banking industry stocks). The graph and table assume that
$100 was invested on December 31, 1992 in each of the Company's Common Stock,
the Standard & Poor's 500 Stock Index and the index of banks with less than $500
million in assets and that all dividends were reinvested. All data was provided
by SNL Securities, LP.
First Bancorp
Comparison of Five-Year Total Return Performances (1)
Five Years Ending December 31, 1997
[GRAPHIC-GRAPH PLOTTED TO POINTS LISTED BELOW]
<TABLE>
<CAPTION>
Total Return Index Values (1)
December 31,
-------------------------------------------------------------------------------
1992 1993 1994 1995 1996 1997
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
First Bancorp (2) $ 100.00 $ 142.26 $ 147.02 $ 183.92 $ 274.59 $ 529.85
Index-S&P 500 (2) 100.00 110.08 111.53 153.44 188.52 251.44
Index-Banks less than 500
million (2) 100.00 130.56 140.42 192.09 247.24 421.47
</TABLE>
Notes:
(1) Total return indices were provided from an independent source as indicated
and assume initial investment of $100 on December 31, 1992, reinvestment of
dividends, and changes in market values. Total return index numerical
values used in this example are for illustrative purposes only.
(2) Source: SNL Securities LP, Charlottesville, VA.
Shareholders should recognize that corporations often use a number of other
performance benchmarks (in addition to shareholder return) to set various levels
of executive officer compensation. Shareholders should thus consider other
relevant performance indicators in assessing performance, such as growth in
earnings per share, growth in book value per share, growth in cash dividends per
share, and other performance measures such as return on assets and return on
shareholders' equity.
<PAGE>
Certain Transactions
Certain of the directors, nominees, principal shareholders and officers
(and their associates) of the Company have deposit accounts and other
transactions with First Bank, including loans in the ordinary course of
business. All loans or other extensions of credit made by First Bank to
directors, nominees, principal shareholders and officers of the Company and to
associates of such persons were made in the ordinary course of business on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with independent third
parties and did not involve more than the normal risk of collectibility. At
December 31, 1997, the aggregate principal amount of loans to directors,
nominees, principal shareholders and officers of the Company and to associates
of such persons was approximately $6,276,000. The Company expects to continue to
enter into transactions in the ordinary course of business on similar terms with
directors, nominees, principal shareholders and officers (and their associates)
of the Company.
Section 16(a) Beneficial Ownership Reporting Compliance
Under the securities laws of the United States, the Company's directors,
its executive officers, and any persons holding more than ten percent of the
Company's common stock are required to report their ownership of the Company's
common stock and any changes in that ownership to the Securities and Exchange
Commission and the National Association of Securities Dealers Automated
Quotation System. Specific due dates for these reports have been established,
and the Company is required to report in this proxy statement any failure to
file by these dates during 1997. All of these filing requirements were satisfied
by the Company's directors and officers and ten percent holders during 1997.
The nominees who receive the highest number of votes cast, up to the number
of directors to be elected, shall be elected as directors. The board of
directors recommends that shareholders vote "FOR" Proposal 2 to elect the eleven
nominees as directors. Proxies, unless indicated to the contrary, will be voted
"FOR" the eleven nominees listed above.
<PAGE>
PROPOSAL 3 - A PROPOSAL TO AMEND THE COMPANY'S ARTICLES OF INCORPORATION TO
PROVIDE FOR CUMULATIVE VOTING IN THE ELECTION OF DIRECTORS.
The Company's Articles of Incorporation contain no provision with regard to
the method for counting votes in the election of directors. Under current law,
this means that directors are elected under a "straight voting" method, with the
nominees who receive the highest number of votes being elected, up to the number
of nominees equal to the number of directors to be elected. Each shareholder can
cast the number of votes to which his shares are normally entitled for each
directorship to be filled. For example, if 12 directors are to be elected, a
shareholder who owns 1,000 shares with one vote per share can cast 1,000 votes
to each of his chosen candidates. If he does not wish to vote for 12 candidates,
he can still cast only 1,000 votes for such fewer number of candidates as he may
choose to support. Under straight voting, a majority of the voting shares can
elect all of the directors because such shares can outvote the remaining shares
on each directorship.
Another method of electing directors is known as "cumulative voting". Under
cumulative voting, each shareholder calculates the number of votes available to
him by multiplying the number of votes to which his shares are normally entitled
by the number of directors for whom he is entitled to vote. He can then cast the
product of the multiplication for a single candidate or can distribute it in any
manner among any number of candidates. For example, if 12 directors are to be
elected, a shareholder who owns 1,000 shares with one vote per share will have
12,000 votes. This shareholder can cast all of these votes for one candidate, or
1,000 for 12 candidates, or 6,000 for each of two candidates, or any other
mathematically possible combination.
The Company has proposed that its Articles of Incorporation be amended to
provide that, if any shareholder calls for cumulative voting at a meeting where
directors are to be elected, then shareholders will be entitled to cumulate
their votes for directors at such meeting. The text of the proposed amendment is
set for the below:
Article X is added to the Articles of Incorporation and provides as
follows:
Every shareholder entitled to vote at an election of directors is
entitled to multiply the number of votes he is entitled to cast by the
number of directors for whom he is entitled to vote and cast the
product for a single candidate or distribute the product among two or
more candidates. This right of cumulative voting shall not be exercised
unless (i) the meeting notice or proxy statement accompanying the
notice states conspicuously that cumulative voting is authorized; or
(ii) some shareholder or proxy holder announces in open meeting, before
the voting for directors starts, his intention so to vote cumulatively;
and if such announcement is made, the chair shall declare that all
shares entitled to vote have the right to vote cumulatively and shall
thereupon grant a recess of not less than two (2) days, nor more than
seven (7) days, as he shall determine, or of such other period of time
as is unanimously agreed upon.
Prior to 1991, shareholders of the Company had cumulative voting rights
under the North Carolina Business Corporation Act ("the Corporation Act"). In
the early 1990's, the Corporation Act was amended several times, with the net
result being that a corporation such as the Company that is a public corporation
(with securities registered under the federal securities laws) does not have
<PAGE>
cumulative voting unless its Articles of Incorporation contain a provision
providing for cumulative voting. Prior to these changes in the law, the
shareholders of the Company had the right to call for cumulative voting for
directors even though the Company's Articles of Incorporation did not provide
for cumulative voting.
The purpose of cumulative voting is to preserve the right of minority
shareholders, or a group of shareholders acting together, to obtain
representation on the board of directors that is roughly proportional to their
ownership interest in the corporation. The Company's board of directors believes
that the minority representation guaranteed by cumulative voting is an
appropriate feature of corporate democracy and is not likely to cause harmful
fractionalism on the board.
If the amendment is approved, Mr. George R. Perkins Jr., a director of the
Company, would have the ability to elect one director of the Company under
cumulative voting procedures, based upon the number of shares of the Company's
stock owned by Mr. Perkins and the total number of outstanding shares of such
stock as of December 31, 1997. As disclosed elsewhere in this proxy statement,
Mr. Perkins beneficially owned 275,704 shares of the Company's stock (9.13% of
the outstanding shares) as of December 31, 1997. In addition, adoption of
cumulative voting would allow the officers and directors of the Company, acting
as a group, to elect three directors using cumulative voting, based on the
number of shares owned by that group and the number of total outstanding shares
as of December 31, 1997. The securities laws impose certain restrictions and
requirements upon shareholders acting in concert with respect to the voting of
their shares, but if these requirements are complied with any group of
shareholders could, by using the cumulative voting method, act together to elect
a number of representatives to the board of directors roughly proportional to
the percentage of the Company's outstanding shares controlled by such group.
The board of directors recommends that the Company's Articles of
Incorporation be amended by providing for cumulative voting in the election of
directors, as set forth above.
The affirmative vote of the holders of a majority of shares of common stock
represented and voting at the meeting is required for approval of the proposal
to amend the company's articles of incorporation. The board of directors
recommends that shareholders vote "FOR" Proposal 3. Proxies, unless indicated to
the contrary, will be voted "FOR" Proposal 3.
<PAGE>
PROPOSAL 4 - RATIFICATION OF INDEPENDENT AUDITORS
Your directors and management recommend that the shareholders ratify the
appointment of KPMG Peat Marwick LLP to serve as the independent auditors for
the Company for the year ending December 31, 1998. KPMG Peat Marwick LLP has
served as the independent auditors for the Company since April 1991 and has
audited the Company's financial statements for each of the years in the
three-year period ended December 31, 1997. If the appointment of KPMG Peat
Marwick LLP is not ratified by the shareholders, the board of directors will
reconsider the appointment of auditors for the current fiscal year.
Representatives of KPMG Peat Marwick LLP are expected to be present at the
annual meeting to respond to appropriate questions and will be given an
opportunity to make any statement they consider appropriate.
The affirmative vote of the holders of a majority of shares of common stock
represented and voting at the meeting is required for approval of the proposal.
The board of directors recommends that shareholders vote "FOR" Proposal 4.
Proxies, unless indicated to the contrary, will be voted "FOR" Proposal 4.
<PAGE>
SHAREHOLDERS PROPOSALS FOR 1999 MEETING
Shareholders may submit proposals appropriate for shareholder action at the
Company's 1999 annual meeting consistent with the regulations of the Securities
and Exchange Commission. For proposals to be considered for inclusion in the
proxy statement for the 1999 annual meeting, they must be received by the
Company no later than December 30, 1998. Such proposals should be directed to
First Bancorp, Attn. Anna G. Hollers, 341 North Main Street, Troy, North
Carolina 27371-0508.
By Order of the Board of Directors,
Anna G. Hollers
Secretary
-----------------------------------
THE COMPANY WILL FURNISH WITHOUT CHARGE TO EACH PERSON WHOSE PROXY IS
SOLICITED, AND TO EACH PERSON REPRESENTING THAT AS OF THE RECORD DATE FOR THE
MEETING HE OR SHE WAS A BENEFICIAL OWNER OF SHARES ENTITLED TO BE VOTED AT THE
MEETING, ON WRITTEN REQUEST, A COPY OF THE COMPANY'S 1997 ANNUAL REPORT ON FORM
10-K AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, INCLUDING THE
FINANCIAL STATEMENTS AND SCHEDULES THERETO, BUT EXCLUDING EXHIBITS. SUCH WRITTEN
REQUEST SHOULD BE DIRECTED TO:
First Bancorp
Attention: Anna G. Hollers
341 North Main Street
Troy, North Carolina 27371-0508
-------------------------------
<PAGE>
First Bancorp
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints James H. Garner and Anna G. Hollers, and
each of them, attorneys and proxies with full power of substitution, to act and
vote as designated below the shares of common stock of First Bancorp held of
record by the undersigned on March 16, 1998, at the annual meeting of
shareholders to be held on April 30, 1998, or any adjournment or adjournments
thereof.
1. PROPOSAL to fix the number of directors at eleven (11).
[ ] FOR [ ] AGAINST [ ] ABSTAIN
2. PROPOSAL to elect eleven (11) nominees to the board of directors to
serve until the 1999 Annual Meeting of Shareholders, or until their
successors are elected and qualified.
[ ] FOR the 11 nominees listed below
(except as marked to the contrary
below).
[ ] WITHHOLD AUTHORITY
to vote for the 11 nominees below.
(Instruction: To withhold authority to vote for any individual nominee,
strike a line through the nominee's name in the list below).
Jack D. Briggs George R. Perkins, Jr. Goldie H. Wallace
David L. Burns G. T. Rabe, Jr. A. Jordan Washburn
Jesse S. Capel Edward T. Taws, Jr. John C. Willis
James H. Garner Frederick H. Taylor
3. PROPOSAL to amend the Company's Articles of Incorporation to provide for
cumulative voting in the election of directors.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. PROPOSAL to ratify the appointment of KPMG Peat Marwick LLP as the
independent auditors of the Company for the current fiscal year.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. In their discretion, the proxies are authorized to vote on any other
business that may properly come before the meeting.
<PAGE>
This proxy when properly executed will be voted as directed herein. If no
direction is made, this proxy will be voted for approval of Proposals 1, 2, 3,
and 4. If , at or before the time of the meeting , any of the nominees listed
above has become unavailable for any reason, the proxies have the discretion to
vote for a substitute nominee or nominees.
_________________________________________
Date
_________________________________________
Stockholder sign above
_________________________________________
Signature (if jointly held)
(Please sign exactly as the name appears on this proxy. If signing as
attorney, administrator, executor, guardian, or trustee, please give title as
such. If a corporation, please sign in full corporate name by the President or
other authorized officers. If a partnership, please sign in partnership name by
authorized person.)
PLEASE MARK, SIGN, DATE AND RETURN PROMPTLY IN THE ENVELOPE PROVIDED. IF
YOU ATTEND THE MEETING, YOU MAY WITHDRAW YOUR PROXY AND VOTE IN PERSON.
