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:
[x] Preliminary Proxy Statement
[ ] Confidential, for use of the Commission only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to [section. mark]240.14a-11(c) or
[section. mark]240.14a-12
TRIANGLE BANCORP INC.
(Name of Registrant as Specified In Its Charter)
__________________________________________________________________________
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fees (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:*
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 paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Dated Filed:
<PAGE>
PRELIMINARY PROXY MATERIAL
TRIANGLE BANCORP, INC.
4300 GLENWOOD AVENUE
RALEIGH, NORTH CAROLINA 27612
(919) 881-0455
------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 28, 1997
NOTICE is hereby given that the Annual Meeting of Shareholders of Triangle
Bancorp, Inc. (the "Corporation") will be held as follows:
PLACE: Greenville Hilton
207 Southwest Greenville Boulevard
Greenville, North Carolina 27834
DATE: Monday, April 28, 1997
TIME: 3:00 P.M.
THE PURPOSES OF THE ANNUAL MEETING ARE:
1. To consider and act upon a proposal to amend
Article III, Section 2 of the Corporation's Bylaws to increase the
maximum number of directors of the Corporation from 24 to 26.
2. To elect 13 members of the Board of Directors.
3. To consider a proposal to approve the Triangle Bancorp, Inc. Employee
Stock Purchase Plan, as amended and restated.
4. To consider and act upon a proposal to ratify the appointment of
Coopers & Lybrand L.L.P. as independent public accountants of the
Corporation for 1997.
5. To consider and act on any other matters that may properly come before
the Annual Meeting.
The record date for the determination of shareholders entitled to notice of and
to vote at the Annual Meeting has been set as of the close of business on March
10, 1997.
EVEN IF YOU EXPECT TO ATTEND THE ANNUAL MEETING IN PERSON, YOU ARE REQUESTED TO
MARK, DATE AND SIGN THE ENCLOSED APPOINTMENT OF PROXY AND RETURN IT IN THE
ENCLOSED ENVELOPE. IF YOU ATTEND THE ANNUAL MEETING, YOU MAY REVOKE YOUR
APPOINTMENT OF PROXY AND VOTE YOUR SHARES IN PERSON.
Sincerely,
Susan C. Gilbert, Secretary
March __, 1997
<PAGE>
PRELIMINARY PROXY MATERIAL
TRIANGLE BANCORP, INC.
4300 GLENWOOD AVENUE
RALEIGH, NORTH CAROLINA 27612
PROXY STATEMENT
MAILING DATE: ON OR ABOUT MARCH __, 1997
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 28, 1997
GENERAL
This Proxy Statement is being distributed in connection with the
solicitation by the Board of Directors of Triangle Bancorp, Inc. (the
"Corporation") of appointments of proxy in the form enclosed herewith for the
1997 Annual Meeting of Shareholders of the Corporation and any adjournments
thereof. The meeting will be held on Monday, April 28, 1997, beginning at 3:00
P.M., at the Greenville Hilton, 207 Southwest Greenville Boulevard, Greenville,
North Carolina.
As used in this Proxy Statement, the term "Triangle" or the "Bank"
refers to the Corporation's commercial bank subsidiary, Triangle Bank.
VOTING OF APPOINTMENTS OF PROXIES; REVOCATION
Persons named in the enclosed appointment of proxy as proxies for
shareholders at the Annual Meeting are Steven R. Ogburn, Debra L. Lee and
William V. Leaming, Jr. Shares represented by each appointment of proxy which is
properly executed, returned and not revoked, will be voted in accordance with
the directions contained therein. If no directions are given, those shares will
be voted "FOR" the election of each of the 13 nominees for director named in
Proposal 2 below and "FOR" each of the other proposals described herein. If, at
or before the time of the Annual Meeting, any nominee named in Proposal 2 has
become unavailable for any reason, the proxies will be authorized to vote for a
substitute nominee. On such other matters as may properly come before the
meeting, the proxies will be authorized to vote shares represented by
appointments of proxy in accordance with their best judgment.
A shareholder may revoke an appointment of proxy at any time before the
shares represented by it have been voted by filing with Susan C. Gilbert,
Secretary of the Corporation, an instrument revoking it or a properly executed
appointment of proxy bearing a later date, or by attending the Annual Meeting
and announcing his or her intention to vote in person.
EXPENSES OF SOLICITATION
The Corporation will pay the cost of preparing, assembling and mailing
this Proxy Statement and other proxy solicitation expenses. In addition to the
use of the mail, appointments of proxy may be solicited in person or by
telephone by officers, directors or employees of the Corporation and its
subsidiaries without additional compensation.
1
<PAGE>
RECORD DATE
The Board of Directors has set March 10, 1997, as the record date (the
"Record Date") for the determination of shareholders entitled to notice of and
to vote at the Annual Meeting. Only shareholders of record on that date will be
entitled to vote at the Annual Meeting.
VOTING SECURITIES
The voting securities of the Corporation are the shares of its no par
value common stock (the "Common Stock"), of which 20,000,000 shares were
authorized and 10,468,036 shares were outstanding on December 31, 1996. As of
December 31, 1996, there were approximately 7,000 holders of record of the
Corporation's Common Stock.
VOTING PROCEDURES; VOTES REQUIRED FOR APPROVAL
At the Annual Meeting, each shareholder will be entitled to cast one
vote for each share of Common Stock held of record on the Record Date for each
matter submitted for voting and, in the election of directors, for each director
to be elected. In accordance with North Carolina law, shareholders are not
entitled to vote cumulatively in the election of directors. Abstentions and
broker nonvotes will have no effect.
In the case of Proposal 1 below, for such proposal to be approved, at
least 75% of all shares of Common Stock voted at the Annual Meeting must be
voted in favor of the proposal.
In the case of Proposal 2 below, the 13 directors receiving the
greatest number of votes shall be elected.
In the case of Proposal 3 below, for such proposal to be approved, the
number of votes cast for approval must exceed the number of votes cast against
the proposal.
In the case of Proposal 4 below, for such proposal to be approved, the
number of votes cast for approval must exceed the number of votes cast against
the proposal.
BENEFICIAL OWNERSHIP OF VOTING SECURITIES
There are no persons who were known to management of the Corporation to
beneficially own more than 5% of the Corporation's Common Stock as of February
28, 1997.
Set forth below is information as of February 28, 1997 regarding the
beneficial ownership of the Corporation's Common Stock by its current directors,
nominees for director, and certain named executive officers individually, and by
all current directors, nominees for director, and executive officers of the
Corporation as a group.
AMOUNT AND NATURE
NAME OF OF BENEFICIAL OWNERSHIP PERCENT OF
BENEFICIAL OWNER OF STOCK (1) CLASS (2)
Carole S. Anders 28,340 0.27%
Charles H. Ashford, Jr. 25,512 0.24
H. Leigh Ballance, Jr. 23,347 0.22
Edwin B. Borden 23,694 0.23
Robert E. Bryan, Jr. 15,523 0.15
David T. Clancy 72,631 0.69
2
<PAGE>
AMOUNT AND NATURE
NAME OF OF BENEFICIAL OWNERSHIP PERCENT OF
BENEFICIAL OWNER OF STOCK (1) CLASS (2)
N. Leo Daughtry 55,595 0.53
Syd W. Dunn, Jr. 22,727 0.22
Willie S. Edwards 18,767 0.18
James P. Godwin, Sr. 121,405 1.16
Robert L. Guthrie 31,002 0.30
John B. Harris, Jr. 26,394 0.25
George W. Holt 78,749 0.75
Earl Johnson, Jr. 48,116 0.46
Debra L. Lee 26,813 0.26
Edythe P. Lumsden 32,796 0.31
J. L. Maxwell, Jr. 113,643 1.06
Michael A. Maxwell 14,903 0.14
Wendell H. Murphy 38,953 0.37
Steven R. Ogburn 21,122 0.20
Michael S. Patterson 81,027 0.77
Patrick H. Pope 66,606(3) 0.64
William R. Pope 42,210 0.40
Billy N. Quick, Sr. 41,782 0.40
J. Dal Snipes 31,721 0.30
N. Johnson Tilghman 86,244(3) 0.82
Sydnor M. White, Jr. 38,468 0.37
J. Blount Williams 37,842 0.36
------
All Executive Officers,
Directors and Director Nominees
as a Group (28 persons) 1,240,654 11.65%
- -----------------
(1) Each director and executive officer has sole voting and investment power
over the issued and outstanding shares beneficially owned by such
individual, except for the following shares over which the directors and
executive officers indicated, and the group, share voting and/or investment
power: Ms. Anders - 3,000 shares; Dr. Ashford - 1,946 shares; Mr. Ballance
- 3,724 shares; Mr. Clancy - 63,290 shares; Mr. Daughtry - 400 shares; Mr.
Dunn - 5,616 shares; Mr. Godwin - 103,974 shares; Mr. Guthrie - 10,400
shares; Mr. Harris - 9,111 shares; Mr. Holt - 8,736 shares; Mr. Johnson -
23,275 shares; Ms. Lee - 1,500 shares; Ms. Lumsden - 26,433 shares; Mr.
Michael A. Maxwell - 13,748 shares; Mr. Murphy - 28,490 shares; Mr.
Patterson - 3,485 shares; Mr. Ogburn - 1,520 shares; Mr. Patrick H. Pope -
30,000 shares; Mr. William R. Pope - 281 shares; Mr. Billy N. Quick, Sr. -
1,688 shares; Mr. J. Dal Snipes - 14,311 shares; Mr. White - 19,643 shares;
Mr. Williams - 22,041 shares; and members of the group - 396,612 shares.
3
<PAGE>
This column includes certain shares owned by certain related parties of
directors and executive officers as to which shares those directors and
executive officers have disclaimed beneficial ownership, as follows: Dr.
Ashford - 9,400 shares; Mr. Guthrie - 824 shares; Mr. J. L. Maxwell, Jr. -
2,750 shares; Mr. Tilghman - 45,008 shares; and members of the group -
57,982 shares.
This column includes the number of shares for which the director or
executive officer indicated, and the directors and the four current
executive officers of the Corporation as a group, hold options to purchase,
pursuant to the Corporation's 1988 Qualified or Non-Qualified Stock Option
Plans, to the extent such options are vested, and are immediately
exercisable as follows: Ms. Anders - 4,103 shares; Dr. Ashford - 1,799
shares; Mr. Ballance - 4,851 shares; Mr. Borden - 3,399 shares; Mr. Bryan -
1,748 shares; Mr. Clancy - 5,668 shares; Mr. Daughtry - 5,741 shares; Mr.
Dunn - 1,764 shares; Mr. Edwards - 71 shares; Mr. Godwin - 24 shares; Mr.
Guthrie - 5,175 shares; Mr. Harris - 11,674 shares; Mr. Holt - 2,000
shares; Mr. Johnson - 128 shares; Ms. Lee - 12,152 shares; Ms. Lumsden -
4,072 shares; Mr. J. L. Maxwell, Jr. - 3,468 shares; Mr. Michael A. Maxwell
- 50 shares; Mr. Murphy - 1,695 shares; Mr. Ogburn - 14,516 shares; Mr.
Patterson - 49,385 shares; Mr. Patrick H. Pope - 6,222 shares; Mr. William
R. Pope - 7,464 shares; Mr. Billy N. Quick, Sr. - 15,246 shares; Mr. J. Dal
Snipes - 2,361 shares; Mr. Tilghman - 13,526 shares; Mr. White - 100
shares; Mr. Williams - 4,126 shares; and members of the group - 182,528
shares.
(2) Based on a total of 10,468,036 shares actually outstanding as of December
31, 1996, and with respect to each director or executive officer, the
shares that would be outstanding if the director exercised his or her
options to purchase shares of Common Stock of the Corporation (to the
extent vested) or, with respect to directors and the four current executive
officers of the Corporation as a group, the shares that would be
outstanding if each such individual exercised his or her options to
purchase shares of the Common Stock (to the extent vested).
(3) Included in the beneficial ownership of Mr. Patrick H. Pope and Mr.
Tilghman are 25,278 shares held by a trust in which both Mr. Pope and Mr.
Tilghman have an interest. These shares are reflected separately in the
beneficial ownership of each individual, but are included only once in the
beneficial ownership shown for the group.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Directors and executive officers of the Corporation are required by
federal law to file reports with the Securities and Exchange Commission
regarding their initial ownership and the amount of and changes in their
beneficial ownership of the Corporation's Common Stock. Based on the
Corporation's review of reports furnished to it, all such reports were timely
filed except as follows: N. Leo Daughtry inadvertently failed to report the
purchase of 700 shares on November 8, 1995 for which the required report was
filed in December 1996; Edythe P. Lumsden inadvertently failed to report the
purchase of 1,000 shares on November 30, 1995 for which the required report was
filed in January 1997; and David T. Clancy inadvertently failed to report the
purchase of 1,200 shares on September 25, 1996 for which the required report was
filed in December 1996.
PROPOSAL 1. APPROVAL OF AMENDMENT TO ARTICLE III, SECTION 2
OF THE CORPORATION'S BYLAWS
The Board of Directors of the Corporation has voted to recommend to
the shareholders a proposed amendment to Article III, Section 2(a) of the
Corporation's Amended and Restated Bylaws to increase the maximum number of
directors from 24 to 26. Under the current Bylaws, the number of directors may
be between 10 and 24 with the number within that range to be set by the Board of
Directors. Until September 1996, the number of directors of the Corporation was
22. In September 1996, two directors resigned, leaving two vacancies. In filling
those two vacancies, the Board of Directors of the Corporation turned to
individuals serving as directors of Triangle Bank, but who did not also serve on
the Board of Directors of the Corporation. Effective February 1, 1997, those two
vacancies were filled by Carole S. Anders and William R. Pope. Also, effective
February 1, 1997, the Board of Directors of the Corporation, as allowed by the
Bylaws, increased the number of directors of the Corporation to 24 and elected
two members of the Board of Directors of Triangle Bank, Patrick H. Pope and J.
Dal Snipes, to fill the two newly created vacancies. Further, the Board of
Directors of the Corporation determined that it would be in the best interests
of the Corporation and Triangle Bank to have their respective Boards of
Directors be identical in composition. The Board of Directors of Triangle Bank
4
<PAGE>
consists of 26 individuals, two of whom do not serve on the Board of Directors
of the Corporation. These two individuals are Michael A. Maxwell and Billy N.
Quick, Sr. In order to accommodate these two individuals on the Board of
Directors of the Corporation, the maximum number of directors of the
Corporation, as set forth in the Corporation's Bylaws, must be increased to 26.
The Board of Directors of the Corporation recommends that its shareholders adopt
the proposed amendment to the Bylaws to increase the maximum number of directors
authorized in the Corporation's Bylaws. The text of Article III, Section 2(a) of
the Corporation's Bylaws, as proposed to be amended, is as follows:
"The number of directors constituting the Board of Directors of
the corporation shall be not less than ten nor more than twenty-six as
from time to time may be fixed or changed within the said minimum and
maximum by the affirmative vote of a majority of Directors present at
any regular or special meeting of the Board of Directors at which a
quorum is present. Such minimum and maximum may not be changed by the
Board of Directors, but only by the affirmative vote of 75% of all
eligible votes present, in person or by proxy, at a meeting of
shareholders at which a quorum is present. Such minimum and maximum may
not be changed at a meeting of shareholders unless the notice of the
meeting states that the purpose, or one of the purposes, of the meeting
is to change the number of directors of the corporation."
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR"
PROPOSAL 1.
PROPOSAL 2. ELECTION OF DIRECTORS
Assuming the Bylaw amendment set forth in Proposal 1 is approved, and
the maximum allowable number of directors of the Corporation is 26, the Board of
Directors previously has set the number of directors of the Corporation at 26,
subject to approval of the Bylaw amendment. The Bylaws of the Corporation
provide that directors be divided into three classes, approximately equal in
number, elected to staggered three-year terms. The 11 directors whose terms
expire at the Annual Meeting have been re-nominated to the Board for three-year
terms, and two other individuals, Michael A. Maxwell and Billy N. Quick, Sr.,
both of whom currently serve as directors of the Bank, have been nominated to
the Board for the terms noted below, in order to evenly stagger the terms among
each class of directors as required by the Bylaws. If the shareholders do not
approve the Bylaw amendment set forth in Proposal 1, the number of directors of
the Corporation has been set by the Board of Directors at 24 and Michael A.
Maxwell and Billy N. Quick, Sr. will not be nominees for director and only the
11 individuals whose terms expire at the Annual Meeting will be nominees for the
terms set forth below.
<TABLE>
<CAPTION>
NAME AND AGE DIRECTOR SINCE (1) BUSINESS EXPERIENCE DURING PAST FIVE YEARS
------------ ------------------ ------------------------------------------
<S> <C> <C>
ONE-YEAR TERM:
Carole S. Anders 1997 Civic leader, Raleigh, North Carolina
(52)
Michael A. Maxwell New Nominee Senior Scientist since November 1995, Branch Chief from December
(58) 1974 to November 1995, U.S. Environmental Protection Agency,
Research Triangle Park, North Carolina
Patrick H. Pope 1997 Partner, Pope, Tilghman & Tart (attorneys-at-law), Dunn, North
(52) Carolina
TWO-YEAR TERM:
William R. Pope 1997 President and Chairman of the Board, Pope Enterprises, Inc.
(61 ) (operator of True-Value Hardware and Variety Stores), Coats,
North Carolina
Billy N. Quick, Sr. New Nominee Executive Vice President, Triangle Bank since October 1996;
(56 ) previously President and Chief Executive Officer, Granville
United Bank, Oxford, North Carolina
5
<PAGE>
NAME AND AGE DIRECTOR SINCE (1) BUSINESS EXPERIENCE DURING PAST FIVE YEARS
------------ ------------------ ------------------------------------------
THREE-YEAR TERM:
H. Leigh Ballance, Jr. 1995 Executive Vice President, Triangle Bancorp, Inc. and Triangle
(51) Bank since March 1995; previously President and Chief Executive
Officer, Atlantic Community Bancorp, Inc.
James P. Godwin, Sr. 1995 President, Godwin Manufacturing Co., Inc., Dunn, North Carolina,
(55) and Godwin and Gonzalez Specialty Equipment, Inc., Puerto Rico
(truck body manufacturers)
Wendell H. Murphy 1993 President, Murphy Family Farms (swine production) and Murphy
(58) Milling Co. (feed production), Rose Hill, North Carolina;
Director of Smithfield Foods
Michael S. Patterson 1990 Chairman of the Board, Triangle Bancorp, Inc. and Triangle Bank
(50) since February 1997; President since 1990 and Chief Executive
Officer since 1991, Triangle Bank; President and Chief Executive
Officer, Triangle Bancorp, Inc. since August 1992
J. Dal Snipes 1997 President, Snipes Insurance Service, Inc., Dunn, North Carolina
(44)
N. Johnson Tilghman 1988 Partner, Pope, Tilghman & Tart (attorneys-at-Law), Dunn, North
(54) Carolina
Sydnor M. White, Jr. 1991 President, CJS, Inc. (automotive parts distributor), Raleigh,
(48) North Carolina
J. Blount Williams 1988 President, Alfred Williams & Co., Raleigh, North Carolina
(43) (office furniture and supplies)
</TABLE>
- -------------------
(1) Refers to the year in which a person first was elected or became a
director of the Corporation or, if prior to the Corporation's
organization in August 1992, the year in which such person first was
elected a director of the Bank.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" EACH OF
THE 13 NOMINEES NAMED ABOVE.
INCUMBENT DIRECTORS
The Corporation's current Board of Directors includes the following
directors whose terms will continue after the Annual Meeting. Certain
information regarding those directors is set forth in the following table:
<TABLE>
<CAPTION>
DIRECTOR TERM
NAME AND AGE SINCE (1) BUSINESS EXPERIENCE DURING PAST FIVE YEARS EXPIRES
<S> <C> <C>
Charles H. Ashford, 1993 Vice President of Medical Affairs, Craven Regional 1998
Jr. Medical Authority since 1991; previously surgeon with
(61) Coastal Surgical Specialists, P.A., New Bern, North
Carolina
Edwin B. Borden 1993 President, The Borden Manufacturing Company, Goldsboro, 1998
(63) North Carolina (textile manufacturing); Director of
Carolina Power & Light Company; Director
6
<PAGE>
TERM
NAME AND AGE DIRECTOR SINCE (1) BUSINESS EXPERIENCE DURING PAST FIVE YEARS EXPIRES
------------ ----------------- of Jefferson-Pilot Corporation; Director of Ruddick Corp.;
Director of Winston Hotels
Robert E. Bryan, Jr. 1993 Vice President, Express Stop Stores, Fayetteville, North 1998
(62) Carolina; President, Bryan Oil Co.
N. Leo Daughtry 1988 Attorney, Daughtry, Woodard, Lawrence & Starling, 1998
(56) L.L.P., Smithfield, North Carolina
George W. Holt 1995 Executive Vice President, Triangle Bank since February 1998
(66) 1995; President, Columbus National Bank from 1973 to
February 1995
Edythe P. Lumsden 1988 President, Capital Land Investment Company, Raleigh, 1998
(44) North Carolina
David T. Clancy 1988 President, Clancy & Theys Construction Company, Raleigh, 1999
(47) North Carolina
Syd W. Dunn, Jr. 1993 President, Hannah & Dunn, Inc., Greenville, North 1999
(71) Carolina (wine and spirits broker)
Willie S. Edwards 1995 General Partner in L & B Associates, Rocky Mount, North 1999
(64) Carolina (wholesale liquor distributor)
Robert L. Guthrie 1988 President and Chief Executive Officer, Associated 1999
(61) Insurers, Inc., Raleigh, North Carolina
John B. Harris, Jr. 1991 Chairman of the Board, Triangle Bank 1991 to January 1999
(67) 1997; President, John B. Harris, Jr. and Associates
(consulting), 1985-1991; President, Winston Hospitality,
Inc. (hotel management) since 1991; President and Chief
Executive Officer, Enterprise Bancorp and Enterprise
Bank, 1990 to 1991
Earl Johnson, Jr. 1991 Contractor, Southern Industrial Constructors, Inc., 1999
(65) 1962-1992; Contractor, Carolina Crane Corp., Raleigh,
North Carolina, 1992 to date
J. L. Maxwell, Jr. 1993 Chairman of the Board of Directors, Goldsboro Milling 1999
(70) Co. (turkey and hog producer), Goldsboro, North
Carolina; Director, Atlantic & East Carolina Railway
</TABLE>
- -------------------
(1) Refers to the year in which a person first was elected or became a
director of the Corporation or, if prior to the Corporation's
organization in August 1992, the year in which such person first was
elected a director of the Bank.
DIRECTOR RELATIONSHIPS
No director, director nominee or executive officer is related to
another director or executive officer of the Corporation except for Patrick H.
Pope and William R. Pope, who are third cousins, and Patrick H. Pope and N.
Johnson Tilghman who are brothers-in-law.
7
Except for Mr. Borden who is a director of Carolina Power & Light
Company, Jefferson-Pilot Corporation, Winston Hotels and Ruddick Corp., and Mr.
Murphy who is a director of Smithfield Foods, no director is a director in any
company with a class of securities registered pursuant to Section 12 of the
Securities Exchange Act of 1934 (the "Exchange Act") or subject to the
requirements of Section 15(d) of the Exchange Act, or any company registered as
an investment company under the Investment Company Act of 1940.
DIRECTOR COMPENSATION
BOARD FEES. During 1996, directors who are not employees of the
Corporation received 45 shares of Common Stock of the Corporation for each Board
meeting attended, 30 shares for each Executive Committee meeting attended, 15
shares for each other committee meeting attended, and an annual retainer of 100
shares. In 1997, the annual retainer amount will remain at 100 shares, but
directors will receive 60 shares for each Board meeting attended, 30 shares for
each committee meeting attended, and each committee chairman will receive an
additional 10 shares for each meeting attended.
DIRECTORS' DEFERRED COMPENSATION PLAN. The Corporation maintains a
Deferred Compensation Plan for outside directors for cash compensation paid to
directors through 1994. Since January 1, 1995, directors of the Corporation are
paid in shares of Common Stock. Only individuals who were members of the Board
of Directors but who were not employees of the Corporation were eligible to
participate in the plan. Directors who elected to participate in the plan could
elect to defer a minimum of $500 of their compensation for their service as such
pursuant to the plan during each year they participated and could elect to defer
up to the full amount of directors' compensation they would receive in $100
increments. Deferred compensation was converted into stock units by dividing the
compensation deferred under the plan by the then current value of a share of the
Corporation's Common Stock. Dividends paid to holders of the Corporation's
Common Stock are credited to holders of stock units and are converted into
additional stock units on the same basis as compensation deferred under the
plan. Within 60 days after the death, disability or retirement of a director,
the director or his or her estate is entitled to be issued one share of the
Corporation's Common Stock for each stock unit and cash for fractional stock
units. As of December 31, 1996, 49,868 stock units were outstanding under the
plan.
1988 NON-QUALIFIED STOCK OPTION PLAN. The Corporation has adopted and
the shareholders have approved the 1988 Non-Qualified Stock Option Plan (the
"Non-Qualified Plan") pursuant to which options on 388,002 shares of the
Corporation's Common Stock were available for issuance to members of the
Corporation's Board of Directors and to members of Boards of Directors and
members of local boards of directors of any subsidiary of the Corporation. The
duration of the options is ten years from the date of grant. As of December 31,
1996, after giving effect to the exercise and forfeiture of options, options on
208,764 shares of Common Stock were issued and outstanding and 149,889 shares of
Common Stock are available under the Non-Qualified Plan for further issuance.
Pursuant to the terms of the Non-Qualified Plan: (i) the option price
may not be less than the fair market value of the Corporation's Common Stock on
the date of grant of the options; and (ii) options vest 20% per year from the
date of grant and are exercisable as they vest. If the option holder ceases to
perform services as a director or local director of the Corporation or its
subsidiaries for any reason during the five-year period, he or she has one year
from such cessation to exercise his or her vested options.
BOARD OF DIRECTORS' MEETINGS AND COMMITTEES
The Board of Directors of the Corporation held six regular meetings
during 1996 and one special meeting. All incumbent directors attended more than
75% of the total number of meetings of the Board of Directors and its committees
during 1996 except for Directors Daughtry, Godwin, J. Louis Maxwell, Jr. and
Murphy due to other business commitments.
The Board of Directors has several standing committees, including an
Audit Committee and a Compensation Committee. The voting members of these
committees are appointed by the Board of Directors annually from among its
members.
8
<PAGE>
The current members of the Audit Committee are Directors Ashford,
Daughtry, Murphy, William R. Pope, Tilghman and Williams (Chairman), and
Director Nominee Michael A. Maxwell, who is a director of the Bank. The Audit
Committee serves as the Audit Committee for both the Corporation and the Bank.
The primary functions of the Audit Committee are to give additional assurance
regarding the integrity of financial information used by the Board of Directors
and distributed to the public by the Corporation, and to oversee and monitor the
activities of the Corporation's internal and external audit processes. The Audit
Committee met four times during 1996.
The Compensation Committee administers the Corporation's compensation
program and has responsibility for matters involving the compensation of
executive officers of the Corporation and the Bank. The current members of the
Compensation Committee are Directors Borden (Chairman), Clancy, Godwin, Johnson,
Lumsden and Patrick H. Pope. The Compensation Committee met one time during
1996.
The Board of Directors does not have a standing nominating committee.
EXECUTIVE OFFICERS
The Corporation has the following executive officers:
<TABLE>
<CAPTION>
OFFICER POSITIONS WITH THE CORPORATION AND THE BANK;
AGE SINCE BUSINESS EXPERIENCE DURING PAST FIVE YEARS
NAME
<S> <C> <C> <C>
Michael S. Patterson 50 1990 Chairman of the Board of Triangle Bancorp, Inc. and Triangle
Bank since February 1997; President since 1990 and Chief
Executive Officer since 1991, Triangle Bank; President and
Chief Executive Officer, Triangle Bancorp, Inc. since August
1992
H. Leigh Ballance, Jr. 51 1995 Executive Vice President, Triangle Bancorp, Inc. and Triangle
Bank as of March 1995; President and Chief Executive Officer,
Atlantic Community Bancorp, Inc. and Unity Bank & Trust Company
from September 1989 to March 1995.
Steven R. Ogburn 46 1993 Executive Vice President, Triangle Bancorp, Inc. and Triangle
Bank since 1996; Senior Vice President, Triangle Bancorp, Inc.
and Senior Vice President - Credit Administration, Triangle
Bank, 1993 to 1996; Senior Vice President, Centura Bank,
1986-1993
Debra L. Lee 40 1991 Executive Vice President and Chief Financial Officer, Triangle
Bancorp, Inc. and Triangle Bank since 1996; Senior Vice
President and Chief Financial Officer, Triangle Bancorp, Inc.
and Triangle Bank, 1992 to 1996; Vice President/Finance,
Triangle Bank, 1991-1992
</TABLE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The current members of the Compensation Committee are Charles H.
Ashford, Jr., Edwin B. Borden, John B. Harris, Jr., N. Johnson Tilghman, and
Sydnor M. White, Jr. These same individuals comprised the Compensation Committee
in 1996.
John B. Harris, Jr. is a director of the Corporation, and in 1996
served as the Chairman of the Board of Triangle and an employee of Triangle.
Effective January 1, 1997, Mr. Harris ceased being an employee of the Bank and
effective February 1, 1997, Mr. Harris ceased being the Chairman of the Bank.
Mr. Harris abstained from
9
<PAGE>
participation in both the discussion of and voting on
matters related to his compensation as an officer of the Bank in 1996. Michael
S. Patterson, President and Chief Executive Officer of the Corporation, though
not a member of the Compensation Committee, advised the Compensation Committee
during 1996 on the compensation to be paid to executive officers, other than
himself, and to employees of the Corporation.
COMPENSATION COMMITTEE REPORT
It is the policy of the Compensation Committee to provide a fully
competitive, performance-based compensation program such as will enable the
Corporation and the Bank to attract, motivate and retain qualified senior
officers. With regard to all senior officers' compensation, the Compensation
Committee's policy is that salary levels will be established and increases will
be given commensurate with the individual officer's levels of responsibility and
performance and with the general status of the local economy, and the overall
profit performance of the Bank as it relates to attainment of budgeted goals for
profitability and return on average assets. The Corporation's executive
compensation program includes (A) annual compensation consisting of base
salaries, (B) the potential for cash incentive bonuses based on the
Corporation's financial performance, (C) long-term incentive compensation
consisting of periodic stock options, and (D) contributions to the individual
accounts of all participating employees (including executive officers) under
Triangle's Section 401(k) salary deferral plan. In addition, the Corporation
provides other employee benefits and welfare plans customary for companies of
its size.
The basis for the executive officer compensation reported in 1996 was
the salary range of various positions set in conjunction with an outside
consultant during the fall of 1994 which reviewed comparable salaries being paid
within North Carolina and the southeastern United States based upon comparable
sized banking institutions. The cash incentive compensation for 1996 was based
upon the formula within the management incentive compensation plan which plan
was approved by the Board during January 1994. A bonus pool is established in
which an executive officer will be eligible to participate if the Corporation
meets at least 80% of its defined short-term goals, which goals are set by the
Board.
In 1996, long-term incentive compensation was based upon a formula
established within the long-term incentive plan which plan was approved by the
Board during January 1995. Compensation under the plan consists of stock options
and restricted stock awards. A pool of stock options and restricted stock awards
is established in which an executive officer will be eligible to participate if
the Corporation meets at least 80% of its defined long-term goals, which goals
are set by the Board.
During January 1996 the Compensation Committee made recommendations to
the Board of Directors (and the Board of Directors made final decisions)
regarding the amounts of the 1996 salaries for Michael S. Patterson and the
Corporation's other executive officers, and during January 1997 the Compensation
Committee made recommendations to the Board of Directors (and the Board of
Directors made final decisions) regarding the amounts of the 1996 bonuses for
Michael S. Patterson and the Corporation's other executive officers. The amount
of bonus compensation in 1996 was directly tied to the attainment of the
Corporation's financial plan for 1996.
10
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION. The table below
indicates the cash compensation paid by the Corporation as well as other
compensation paid or accrued to the President and Chief Executive Officer and
each other executive officer whose salary and bonus was in excess of $100,000
during 1996 (the "Named Executive Officers") for services rendered in all
capacities during fiscal years 1996, 1995 and 1994, respectively.
<PAGE>
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
ANNUAL AWARDS PAYOUTS
COMPENSATION(1)
RESTRICTED SECURITIES
OTHER STOCK UNDERLYING LTIP ALL OTHER
Name and SALARY BONUS ANNUAL AWARD(S) OPTIONS/SARS PAYOUTS COMPENSATION
Principal YEAR COMPENSATION
Position ($) ($) ($) (#) ($) ($)(3)
--------- ---- ---- ------- ---- ---- ---- ------
($)(2)
<S> <C> <C> <C> <C> <C> <C>
Michael S. 1996 199,799 132,440 -0- -0- 14,483 -0- 9,500
Patterson, 1995 178,230 98,900 -0- -0- 17,500 -0- 10,041
President and 1994 14,811 78,800(4) -0- -0- -0- -0- 8,442
Chief Executive
Officer
H. Leigh Ballance, 1996 121,504 58,982 -0- -0- 9,256 -0- 10,629
Jr, Executive Vice 1995 116,000 50,600 -0- -0- 15,000 -0- 5,853
President 1994 -0- -0- -0- -0- -0- -0- -0-
Howard B. 1996 79,068 -0- -0- -0- -0- -0- 4,685
Montgomery, Jr. 1995 100,000 43,600 -0- -0- 10,000 -0- 5,522
Executive Vice 1994 100,000 25,000 -0- -0- 9,675 -0- 5,000
President (5)
Steven R. Ogburn, 1996 98,857 47,481 -0- -0- 7,581 -0- 8,045
Executive Vice 1995 96,957 42,400 -0- -0- 10,000 -0- 5,553
President 1994 91,092 26,600 -0- -0- 10,000 -0- 4,889
Debra L. Lee, 1996 102,925 47,481 -0- -0- 7,062 -0- 7,148
Executive Vice 1995 92,425 38,600 -0- -0- 10,000 -0- 4,706
President and 1994 80,027 23,000 -0- -0- -0- -0- 4,970
Chief Financial
Officer
</TABLE>
----------------------
(1) Amounts shown in the table include amounts paid to the Named Executive
Officers as executive officers of the Bank. The Bank was reorganized as a
wholly-owned subsidiary of the Corporation in August 1992. Also includes
amounts deferred at the election of the Named Executive Officers under
Section 401(k) of the Internal Revenue Code and under existing deferred
compensation agreements between the Named Executive Officer and the
Corporation. The amount of that compensation for the Named Executive
Officers for 1994, 1995 and 1996 under the 401(k) plan was based on a
formula contained in the terms of that plan and was not related to the
Corporation's or the officer's performance for the year.
(2) Perquisites and personal benefits awarded to the Named Executive Officers
did not exceed 10% of the total annual salary and bonus in any year
reported.
(3) The amounts disclosed represent the Corporation's annual contribution on
behalf of the Named Executive Officers to match pre-tax elective deferral
contributions (included under Salary) made by the Named Executive Officers
under Section 401(k) of the Internal Revenue Code, and insurance premiums
paid on behalf of the Named Executive Officer.
(4) Bonus consists of $59,300 in cash and 2,000 shares of the Corporation's
Common Stock with a market value when awarded of $9.75 per share or $19,500
in the aggregate.
(5) Mr. Montgomery resigned as an officer of the Corporation and the Bank,
effective September 30, 1996.
STOCK OPTIONS. The following table sets forth information with regard
to grants of stock options during the fiscal year ended December 31, 1996, to
the Named Executive Officers. All such grants were made under the 1988 Incentive
Stock Option Plan.
<TABLE>
<CAPTION>
STOCK OPTION GRANTS IN 1996
INDIVIDUAL GRANTS
% of Total Potential Realizable
Number of Options Value (2) at Assumed
Securities Granted to Exercise or Annual Rates of Stock
Name Underlying Employees in Base Price ($) Expiration Price Appreciation for
Options Fiscal Per Share Date Option Term ($)(at)
Granted (#) Year
(1) 5%
10%
<S> <C> <C> <C> <C> <C> <C>
Michael S. Patterson 14,483 15.4 15.00 1/30/06 136,624 346,233
H. Leigh Ballance, Jr. 9,256 9.8 15.00 1/30/06 87,316 221,275
Howard B. Montgomery, 7,980 8.5 15.00 1/30/06 -0- -0-
Jr.(3)
Steven R. Ogburn 7,581 8.1 15.00 1/30/06 71,515 181,232
Debra L. Lee 7,062 7.5 15.00 1/30/06 66,619 168,825
11
</TABLE>
<PAGE>
- ------------------
(1) One-fifth of the options vest and become exercisable in each of the five
years beginning January 1, 1997, assuming the Named Executive Officer
remains employed by the Bank. If the Named Executive Officer's employment
terminates before the end of the vesting period, the Named Executive
Officer may exercise vested options for varying periods after termination
(depending on the manner of termination) in accordance with the plan.
(2) Potential Realizable Value represents the difference between an assumed
stock price and the exercise price for the number of options granted. The
assumed stock price equals the market value of the stock on the grant date
appreciating at the indicated rate over the term of the options.
(3) Mr. Montgomery resigned as an officer of the Corporation and the Bank,
effective September 30, 1996. All options granted to Mr. Montgomery in 1996
were forfeited upon his resignation.
The following table sets forth information with regard to exercises of
stock options during the fiscal year ended December 31, 1996, by the Named
Executive Officers and the 1996 fiscal year-end value of all unexercised options
held by them.
AGGREGATED OPTION EXERCISES IN FISCAL 1996
AND FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
SHARES ACQUIRED VALUE REALIZED NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS AT
NAME ON EXERCISE (#) ($) OPTIONS AT FY-END (#) FY-END ($) (1)
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
<S> <C> <C> <C> <C> <C> <C>
Michael S. Patterson -0- -0- 42,989 41,334 408,005 230,781
H. Leigh Ballance, Jr. -0- -0- 3,000 21,256 20,235 93,667
Howard B. Montgomery, 5,870 41,493 -0- -0- -0- -0-
Jr.(2)
Steven R. Ogburn -0- -0- 9,000 23,581 70,125 128,424
Debra L. Lee -0- -0- 13,914 20,482 121,830 108,464
</TABLE>
- -------------------
(1) Closing price of the Corporation's Common Stock at December 31, 1996 was
$16.375.
(2) Mr. Montgomery resigned as an officer of the Corporation and the Bank,
effective September 30, 1996.
EXECUTIVE DEFERRED COMPENSATION AGREEMENTS. Michael S. Patterson,
President and Chief Executive Officer of the Corporation and the Bank, entered
into a Deferred Compensation Agreement dated March 1, 1992, with the Bank,
pursuant to which Mr. Patterson may elect annually to defer up to $30,000 of
compensation, to be recorded in an interest-bearing deferred compensation
account maintained in his name. Such account shall be paid to Mr. Patterson in
approximately equal installments over a ten-year period, with the first
installment to be made on or before 30 days following June 30, 2002. Under
certain circumstances, Mr. Patterson may elect to postpone such first
installment payment until a subsequent date. The Bank may terminate such
deferred compensation plan for Mr. Patterson at any time.
Debra L. Lee, Executive Vice President of the Corporation and the Bank,
entered into a Deferred Compensation Agreement dated June 9, 1994, with the
Bank, pursuant to which Ms. Lee may elect annually to defer up to $30,000 of
compensation, to be recorded in an interest-bearing deferred compensation
account maintained in her name. Such account shall be paid to Ms. Lee, at her
discretion, upon her voluntary termination of employment or her retirement
either in one lump sum after such termination or retirement or in approximately
equal installments over a ten-year period, with the first installment to be made
on or before 30 days following June 30, 2012. Under certain circumstances, Ms.
Lee may elect to postpone such first installment payment until a subsequent
date, provided the Bank concurs in such postponement. The Bank may terminate
such deferred compensation plan for Ms. Lee at any time.
The Bank has established a trust to administer and fund the deferred
compensation plans for Mr. Patterson and Ms. Lee, and, accordingly, contributes
periodically to the trust to fund the plans.
12
<PAGE>
SUPPLEMENTAL EARLY RETIREMENT PLAN. In January 1996, a Supplemental
Early Retirement Plan (the "SERP") was approved by the Board of Directors of the
Corporation for the benefit of Michael S. Patterson, President and Chief
Executive Officer of the Corporation and the Bank. The SERP is a benefit plan
which will provide retirement income for Mr. Patterson, in conjunction with the
Bank's 401(k) Plan and Social Security benefits, at an amount equal to 60% of
his projected final pay at retirement. The SERP provides for payment by the
Corporation of the premiums on a life insurance policy insuring Mr. Patterson's
life, which policy will be owned by Mr. Patterson, subject to a collateral
assignment to the Corporation to secure repayment of its interest in the cash
value of the policy. The SERP includes a deferred compensation arrangement, by
which Mr. Patterson will receive a vested interest in 10% of the policy's cash
value for each year of service with the Corporation. The SERP took into
consideration the five years of service completed by Mr. Patterson on the date
of the SERP's implementation, so upon implementation Mr. Patterson immediately
was vested in 50% of the policy's cash value. If Mr. Patterson completes four
additional years of service with the Corporation, he will be eligible to receive
all of the cash value, even if his employment is terminated prior to his
retirement. If Mr. Patterson's employment is terminated before completion of
four additional years of service due to a change in control of the Corporation,
he automatically will become fully vested in 100% of the policy's cash value.
The SERP also has the benefit of providing key man coverage on Mr. Patterson.
EXECUTIVE EMPLOYMENT AGREEMENTS AND CHANGE IN CONTROL AGREEMENTS. Mr.
Patterson, the Corporation's President and Chief Executive Officer, entered into
an employment agreement with the Corporation and the Bank in December 1993. The
agreement continues until December 31, 1996, and provides for a base monthly
salary as is determined from time to time by the Bank but not less than $10,479,
together with certain fringe benefits. In the event of the involuntary
termination of his employment by the Corporation without cause, Mr. Patterson is
entitled to continue to receive, on a monthly basis for the remainder of the
term of the Agreement or 12 months after the date of such termination, whichever
is longer, his base monthly salary, all fringe benefits, and an amount equal to
the average bonus paid to Mr. Patterson over the prior three years. The Bank's
obligation to make such salary payments and to provide such fringe benefits
terminates upon Mr. Patterson's death or disability. Mr. Patterson's employment
agreement provides for certain payments to him in the event there is a change in
control of the Corporation. Specifically, upon a change in control, the term of
the agreement is set at three years from the date of the change in control.
Further, Mr. Patterson may terminate the agreement upon a change in control of
the Corporation if, after one year from the date of such change in control, he
determines that he has not been assigned duties commensurate with his duties
prior to the change in control under terms or conditions satisfactory to him. If
Mr. Patterson so terminates the agreement, the agreement provides that the
Corporation will pay to him for the remainder of the term of the agreement an
amount equal to 100% of his then base monthly salary, fringe benefits, and an
annual amount equal to the average of the bonus paid to Mr. Patterson over the
prior three years. The agreement further provides that, unless terminated by the
other party, the term automatically is extended for an additional year on the
same terms and conditions set forth in the agreement. Consequently, the
agreement's term automatically was extended to December 31, 1997.
H. Leigh Ballance, Jr., an Executive Vice President of the Corporation,
entered into an employment agreement with the Corporation and the Bank on April
1, 1995. The agreement continues until April 1, 1998, and provides for a base
annual salary as is determined from time to time by the Bank but not less than
$116,000, together with certain fringe benefits. In the event of the involuntary
termination of his employment by the Corporation without cause, Mr. Ballance is
entitled to continue to receive, on a monthly basis for the remainder of the
term of the Agreement, his base salary and health and disability insurance
coverage. The Bank's obligation to make such salary payments and to provide such
fringe benefits terminates upon Mr. Ballance's death or disability. Mr.
Ballance's employment agreement provides for certain payments to him in the
event there is a change in control of the Corporation. Specifically, upon a
change in control, the term of the agreement is set at three years from the date
of the change in control. Further, Mr. Ballance may terminate the agreement upon
a change in control of the Corporation if, after one year from the date of such
change in control, he determines that he has not been assigned duties
commensurate with his duties prior to the change in control under terms or
conditions satisfactory to him. If Mr. Ballance so terminates the agreement, the
agreement provides that the Corporation will pay to him for the remainder of the
term of the agreement an amount equal to 100% of his then base monthly salary,
fringe benefits, and an annual amount equal to the average of the bonus paid to
Mr. Ballance over the prior
13
<PAGE>
three years. The agreement further provides that, unless terminated by the
other party, the term automatically is extended for an additional year on the
same terms and conditions set forth in the agreement.
Steven R. Ogburn, an Executive Vice President of the Corporation, and
Debra L. Lee, Executive Vice President and Chief Financial Officer of the
Corporation, each entered into a Change of Control Agreement with the
Corporation and the Bank on June 18, 1996. Each agreement continues until June
18, 1998. Each agreement provides that in the event of a termination of the
officer's employment in connection with, or within 24 months after, a change of
control of the Corporation or the Bank, for reasons other than cause, the
officer shall receive an amount equal to two times (i) his or her then current
salary plus (ii) the average of the cash bonus paid to the officer by the Bank
under the Bank's cash bonus plan during the immediately preceding two years.
Further, in such event, the officer shall continue to receive for a period of
two years after his or her termination all benefits the officer was receiving
and entitled to on his or her termination date, or the officer may elect to
receive the dollar equivalent of such benefits. The officer may elect to receive
all such payments either in one lump sum or in 24 equal monthly payments. In
addition, the officer may terminate the agreement upon a change of control of
the Corporation if, within 24 months of such change of control, the officer is
assigned duties inconsistent with his or her duties at the time of the change of
control, his or her annual base salary is reduced below the amount in effect
prior to the change of control, the officer's benefits are reduced below the
level prior to the change of control (unless benefits are reduced for all
employees), or the officer is transferred to a location more than 50 miles from
Raleigh without the officer's consent. Each agreement further provides that,
unless terminated by the Corporation and the Bank, notice of which must be given
at least 13 months prior to the next anniversary date, the term automatically is
extended for an additional two years on the same terms and conditions set forth
in the agreement.
PERFORMANCE GRAPH
The following line graph illustrates the cumulative total shareholder
return on the Corporation's Common Stock over the five-year period ending
December 31, 1996 and the cumulative total return over the same period of the
indexes listed below. Each graph assumes $100 originally invested on December
31, 1991. No dividends were paid by the Bank prior to its holding company
reorganization. The Corporation paid a quarterly cash dividend of $.04 per share
from the third quarter of 1994 through the second quarter of 1995, a quarterly
cash dividend of $.06 per share in the third and fourth quarter of 1995, a
quarterly cash dividend of $.07 in the first quarter of 1996, a quarterly cash
dividend of $.08 in the second and third quarters of 1996, and a quarterly cash
dividend of $.10 in the fourth quarter of 1996. The numbers in the graph assume
that all cash dividends were reinvested.
The graph reflects the Nasdaq U.S. Index, the Standard & Poors 500
Index and a regional peer group index based on the common equity securities of a
group of financial institutions in the southeastern United States, which index
was prepared by an entity not affiliated with the Corporation.
14
<PAGE>
TRIANGLE BANCORP, INC.
PERFORMANCE GRAPH
1991 1992 1993 1994 1995 1996
---- ---- ---- ---- ---- ----
TRIANGLE BANCORP, INC. 100 123 136 170 247 290
NASDAQ INDEX 100 116 134 131 185 227
S & P 500 INDEX 100 108 118 120 165 203
REGIONAL PEER GROUP 100 156 179 202 272 332
INDEX(1)
- ----------------
(1) Includes the following financial institutions: Bank of Granite
Corporation, Carolina First Corporation, CCB Financial Corporation,
Centura Banks, Inc., Century South Banks, Inc., F & M National
Corporation, First Bancorp, First Charter Corporation, Jefferson
Bankshares, Inc., LSB Bancshares, Inc., and MainStreet BankGroup, Inc.
Allied Bankshares, Inc., First National Bancorp, Premier Bankshares
Corporation and United Carolina Bancshares Corporation have been
removed from the group as they all have been or are in the process of
being acquired. Sources: Fact Set Data Systems, Inc., Center for
Research in Security Prices.
15
<PAGE>
INDEBTEDNESS OF MANAGEMENT
The Corporation has had, and expects to have in the future, banking
transactions, including loans, in the ordinary course of business with its and
the Bank's directors, executive officers and their associates. In the opinion of
management of the Corporation, the outstanding indebtedness and commitments to
such individuals were made in the ordinary course of business and on
substantially the same terms, including interest rates, collateral, and payment
terms, as those prevailing at the same time for comparable transactions with
other persons, and do not involve more than the normal risk of collectability or
present other unfavorable features. At December 31, 1996, indebtedness of
directors and executive officers of the Corporation to Triangle totaled an
aggregate of $4,008,000 or 4.6% of shareholders' equity.
TRANSACTIONS WITH MANAGEMENT
In 1996, the Corporation purchased insurance through Associated
Insurers, Inc. ("Associated") as an agent. Robert L. Guthrie, a director of the
Corporation, is the President and Chief Executive Officer of Associated. The
Corporation paid premiums to Associated in 1996 in the amount of $231,000. Also
in 1996, the Corporation paid Clancy & Theys Construction Company $1,760,000 for
construction projects for the Corporation's headquarters building and various
branch offices. David T. Clancy, a director of the Corporation, is President of
Clancy & Theys Construction Company. Office furniture for various of the Bank's
offices and the Corporation's headquarters building were purchased from Alfred
Williams & Co. for an aggregate price of $284,000 in 1996. J. Blount Williams, a
director of the Corporation, is President of Alfred Williams & Co.
Management of the Corporation believes that the terms of these
transactions were at least as favorable to the Corporation as those available
from other sources.
PROPOSAL 3. APPROVAL OF EMPLOYEE STOCK PURCHASE PLAN,
AS AMENDED AND RESTATED
In 1995, the Corporation's Board of Directors adopted the Triangle
Bancorp, Inc. Employee Stock Purchase Plan (the "Stock Purchase Plan"). Pursuant
to the Plan, eligible employees of the Corporation and its subsidiaries may
elect to have the Corporation deduct a certain percentage of their salary to be
held in trust and periodically used to purchase Common Stock of the Corporation
in the open market at market prices. The purpose of the Stock Purchase Plan
generally is to encourage the continued service of employees of the Company and
its subsidiaries by giving them an opportunity to become shareholders, or to
increase their shareholdings, and to share in the benefit of potential increases
in the value of the Common Stock.
During January 1997, the Corporation's Board of Directors approved,
subject to shareholder approval, an amendment and restatement of the Stock
Purchase Plan to allow the Stock Purchase Plan to qualify as a stock purchase
plan under Section 423 of the Code. As a stock purchase plan qualified under
Section 423 of the Code, eligible employees will receive a tax benefit, as
described below. A discussion of the Stock Purchase Plan, as proposed to be
amended and restated, follows.
Persons eligible to participate in the Stock Purchase Plan
("Participants") are all those active employees of the Corporation and its
subsidiaries, except persons whose customary employment is 20 hours or less per
week. At January 31, 1997, there were a total of 353 employees of the
Corporation and its subsidiaries who would be eligible as Participants based on
the above criteria.
The Stock Purchase Plan allows each Participant to specify a dollar
amount of compensation to be deducted by the Corporation from the Participant's
periodic payment of salary or wages, provided that such deduction does not
exceed 10% of a Participant's compensation. Compensation includes salary,
bonuses and fringe benefits, and deferred compensation. After deduction, the
amount is held in trust by Wachovia Bank & Trust Company (the "Trustee") in an
account for the Participant. Deducted amounts will be held in an account with
the Trustee for the employee and will be applied toward the purchase of Common
Stock. Beginning in July 1997, and every July and January thereafter, the
Trustee will purchase as many whole shares of Common Stock as possible with the
money held in each Participant's
16
<PAGE>
account. The Common Stock purchased will be newly issued shares of Common Stock.
No employee may purchase during any calendar year shares having a fair market
value in excess of $25,000. Further, no Participant may purchase shares if the
purchase would make the Participant the owner of 5% or more of the outstanding
shares of Common Stock.
Purchases of Common Stock will be made by the Trustee every six months
on June 30 and December 31. The purchase price per share (the "Purchase Price")
of Common Stock will be 85% of the lesser of the "fair market value" of a share
of Common Stock on January 1 or June 30, if the purchase is made on June 30, or
85% of the lesser of the "fair marker value" of a share of Common Stock on July
1 or December 31, if the purchase is made on December 31. Thus, Participants
will receive a 15% discount on the then market price of the Common Stock. For
purposes of the Stock Purchase Plan, the "fair market value" of a share will be
the closing price of a share of Common Stock on the Nasdaq National Market
System on the purchase date. Shares of Common Stock purchased will be held by
the Trustee in the Participant's account until such time as the Participant
elects to withdraw the shares. While held in the account by the Trustee, a
Participant will be entitled to vote all such shares and receive cash and stock
dividends thereon. Additionally, while held in the account, any cash dividends
paid on the Common Stock held in the account will automatically be reinvested in
newly issued whole shares of Common Stock.
Under the Code, no taxable income is realized by a Participant for the
15% discount on the purchase price of the Common Stock. No tax deduction may be
taken by the Corporation for the discount, however. The Board of Directors
believes that this tax advantage will further encourage employees of the
Corporation and its subsidiaries to purchase Common Stock of the Corporation,
and therefore believes that the proposed amendment to the Stock Purchase Plan is
in the best interest of the Corporation and its shareholders.
A total of 250,000 shares of Common Stock are reserved for purchase
under the Stock Purchase Plan. In the event of increases, decreases or changes
in the Corporation's outstanding Common Stock resulting from a stock dividend,
recapitalization, reclassification, stock split, consolidation, combination or
similar event, or resulting from an exchange of shares or merger or other
reorganization in which the Corporation is the surviving entity, an appropriate
adjustment will be made in the aggregate number of shares which are reserved
under the Stock Purchase Plan and in the Purchase Price. In the event of the
merger or consolidation or similar reorganization or transaction in which the
Corporation is not the surviving entity, shares of the successor entity shall be
substituted for shares of Common Stock.
If the amended and restated Stock Purchase Plan is approved, it will be
effective as of July 1, 1997 and Participants may begin deductions under the
amended and restated Stock Purchase Plan at that time. Unless earlier terminated
by the Board of Directors of the Corporation, the Stock Purchase Plan will
terminate on December 31, 2006. A Participant may withdraw from the Stock
Participation Plan at any time. Termination of a Participant's employment with
the Corporation or its subsidiaries will result in the automatic withdrawal of
the Participant from the Stock Purchase Plan.
The Stock Purchase Plan will be administered by a committee (the
"Committee") appointed by and consisting of two or more members of the
Corporation's Board of Directors who are not employees of the Corporation or any
of its subsidiaries and who are otherwise "disinterested directors" as such term
is defined in Rule 16b-3 promulgated under the Exchange Act. Among other things,
the Committee is authorized to interpret and establish rules and to make all
determinations and take all other actions relating to and reasonable or
advisable in administering the Stock Purchase Plan. To the extent permitted by
applicable law, members of the Committee will be indemnified by the Corporation
for legal expenses and liability incurred in connection with the administration
of the Stock Purchase Plan, except for actions or inactions which are not in
good faith or which constitute willful misconduct.
The Board of Directors, upon recommendation of the Committee, may, from
time to time, amend, modify, suspend, terminate or discontinue the Stock
Purchase Plan without notice. Any modification or amendment of the Stock
Purchase Plan that (I) increases the aggregate number of shares of Common Stock
reserved under the Stock Purchase Plan, (II) changes the method of determining
the Purchase Price, or (III) materially changes the eligibility requirements for
participation in the Stock Purchase Plan shall be subject to the approval of the
Corporation's shareholders.
17
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Approval by the shareholders of the Stock Purchase Plan, as amended and
restated, is required under the Code. If the Stock Purchase Plan, as amended and
restated, is not approved by the shareholders, the Stock Purchase Plan, as it
currently exists will remain in effect.
THE BOARD OF DIRECTORS RECOMMENDS THE SHAREHOLDERS VOTE "FOR" PROPOSAL 3.
PROPOSAL 4. RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The firm of Coopers & Lybrand L.L.P., Certified Public Accountants, has
been appointed by the Board of Directors to serve as the Corporation's
independent accountants for 1997, and a proposal to ratify that appointment will
be introduced at the Annual Meeting. If shareholders do not approve this
proposal, the Board of Directors will reconsider the appointment.
Representatives of Coopers & Lybrand are expected to be present at the
Annual Meeting and will have an opportunity to make a statement if they desire
to do so.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" PROPOSAL 4.
PROPOSALS OF SHAREHOLDERS
It currently is expected that the 1998 Annual Meeting will be held
during April 1998. Any proposal of a shareholder which is intended to be
presented at the 1998 Annual Meeting must be received by the Corporation at its
principal executive office in Raleigh, North Carolina, not later than November
28, 1997, in order to be included in the Corporation's proxy statement and form
of appointment of proxy to be issued in connection with that meeting.
March __, 1997
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APPENDIX
PRELIMINARY PROXY MATERIAL
REVOCABLE APPOINTMENT OF PROXY
TRIANGLE BANCORP, INC.
ANNUAL MEETING OF SHAREHOLDERS
APRIL 28, 1997
Appointment of Proxy Solicited by Board of Directors
The undersigned hereby appoints Steven R. Ogburn, Debra L. Lee and William V.
Leaming, Jr., or either of them, with full powers of substitution, to act as
attorneys and proxies to vote all shares of common stock of Triangle Bancorp,
Inc. (the "Corporation") held of record by the undersigned on March 10, 1997 at
the Annual Meeting of Shareholders to be held at the Greenville Hilton, 207
Southwest Greenville Boulevard, Greenville, North Carolina, on Monday, April 28,
1997, at 3:00 P.M., and at any adjournments thereof, as follows:
1. Approval of an amendment to Article III, Section 2 of the Corporation's
Bylaws to increase the maximum number of directors of the Corporation from
24 to 26.
[ ] [ ] [ ]
FOR AGAINST ABSTAIN
2. Election of directors:
[ ] [ ]
FOR ALL NOMINEES WITHHOLD AUTHORITY TO VOTE
LISTED BELOW FOR ALL NOMINEES
LISTED BELOW
For One-Year Terms: Carole S. Anders, Michael A. Maxwell and Patrick H.
Pope For Two-Year Terms: William R. Pope and Billy N. Quick, Sr.
For Three-Year Terms: H. Leigh Ballance, Jr., James P. Godwin, Sr.,
Wendell H. Murphy, Michael S. Patterson, J. Dal Snipes, N. Johnson
Tilghman, Sydnor M. White, Jr., and J. Blount Williams
Instruction: To withhold your vote for one or more nominees, write the
name(s) of such nominee(s) on the line below.
3. Approval of Triangle Bancorp, Inc. Employee Stock Purchase Plan , as
amended and restated.
[ ] [ ] [ ]
FOR AGAINST ABSTAIN
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4. Ratification of appointment of Coopers & Lybrand L.L.P., as independent
public accountants for fiscal 1997:
[ ] [ ] [ ]
FOR AGAINST ABSTAIN
5. Transaction of any other business that may properly come before the
meeting.
The Board of Directors recommends a vote FOR each of the listed proposals.
THIS APPOINTMENT OF PROXY WILL BE VOTED AS DIRECTED. IF NO INSTRUCTIONS ARE
GIVEN, THIS APPOINTMENT OF PROXY WILL BE VOTED FOR PROPOSALS 1, 3 AND 4, AND, IN
THE ELECTION OF DIRECTORS, BY CASTING AN EQUAL NUMBER OF VOTES FOR EACH NOMINEE
LISTED UNDER PROPOSAL 2. IF, AT OR BEFORE THE TIME OF THE MEETING, ANY NOMINEE
LISTED UNDER PROPOSAL 2 HAS BECOME UNAVAILABLE FOR ANY REASON, THE PROXIES HAVE
THE DISCRETION TO VOTE FOR A SUBSTITUTE NOMINEE.
This appointment of proxy may be revoked at any time before it is exercised by
filing with the Secretary of the Corporation either an instrument revoking it or
a duly executed appointment of proxy bearing a subsequent date or by attending
the Annual Meeting and voting in person.
The undersigned acknowledges receipt from the Corporation, prior to the
execution of this appointment of proxy, of the Notice of Annual Meeting, a Proxy
Statement dated March __, 1997, and the 1996 Annual Report to Shareholders.
Dated:
Print Name of Shareholder
Signature of Shareholder
Please date and sign your name exactly as your name appears on this appointment
of proxy. If shares are held by joint tenants, both should sign. When signing as
attorney, executor, administrator, trustee or guardian, please give full title.
If shareholder is a corporation, please sign in full corporate name by the
president or other authorized officer. If shareholder is a partnership, please
sign in partnership name by authorized person.
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS APPOINTMENT OF PROXY
IN THE ENCLOSED POSTAGE PREPAID ENVELOPE