341 North Main Street
| o | Preliminary Proxy Statement |
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341 North Main Street
Troy, North Carolina 27371-0508
Telephone (910) 576-6171
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD THURSDAY, MAY 13, 2010
To Our Shareholders:
The annual meeting of shareholders of First Bancorp (the “Company”) will be held at the James H. Garner Conference Center, 211 Burnette Street, Troy, North Carolina (see map on outside back cover) on Thursday, May 13, 20109, 2013 at 3:00 p.m. local time, for the purpose of considering and acting on the following matters:
| 1. | A proposal to elect |
| A proposal to ratify the appointment of Elliott Davis, PLLC as the independent auditors of the Company for |
| 3. | To approve, on a non-binding advisory basis, the compensation paid to the Company’s named executive |
| 4. | Such other business as may properly come before the meeting, or any adjournment thereof. |
Only shareholders of record as of the close of business on March 23, 201020, 2013 are entitled to notice of and to vote at the annual meeting and any adjournment 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. You may also vote by telephone or on the Internet, as described in the proxy statement and on the proxy card.
Please note that the attached form of proxy includes a request from the Company to indicate whether or not you plan to attend the annual meeting. For planning purposes, management of the Company would appreciate you filling in the appropriate box indicating whether or not you plan to attend the annual meeting. If you initially indicate that you are not planning to attend and later want to, or do not indicate one way or the other, you are still welcome and invited to attend the meeting.
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.
Included in this package, in compliance with applicable regulations, is the Company’s 20092012 Annual Report, onwhich includes a letter from the president, and the Company’s Form 10-K. The Form 10-K which includes the Company’s financial statements and other required disclosures. Also included in the package is a 2009 Summary Annual Report, which includes a financial overview, the president’s letter, and other general information about the Company.
| By Order of the Board of Directors | ||
| Anna G. Hollers | ||
| April | Secretary |
Important notice regarding the availability of proxy materials
for the shareholder meeting to be held on May 13, 2010.
The Proxy Statement 2009and 2012 Annual Report on Form 10-K and 2009 Summary Annual Report
are also available at www.cfpproxy.com/3958.
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 its solicitation of proxies for use at the annual meeting of shareholders of the Company to be held on Thursday, May 13, 20109, 2013 at 3:00 p.m. local time, at the James H. Garner Conference Center, 211 Burnette Street, Troy, North Carolina (see map on outside back cover), and at any adjournment 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 first being mailed to shareholders on or about April 8, 2010.
The accompanying proxy is for use at the 20102013 Annual Meeting if a shareholder either will be unable to attend in person or will attend but wishes to vote by proxy. Most shareholders have a choice of voting by completing the enclosed proxy card and mailing it in the postage-paid envelope provided, voting over the Internet or using a toll-free number. Shareholders should refer to the proxy card or the information forwarded by the shareholder’s bank, broker or other holder of record to see which voting options are available. Shareholders who vote over the Internet may incur costs, such as telephone and Internet access charges, for which the shareholder is responsible. The Internet and telephone voting facilities for eligible shareholders of record will close at 3:00 a.m.11:59 p.m. Eastern Daylight Time on May 13, 2010.8, 2013. Specific instructions to be followed by any eligible shareholder interested in voting via the Internet or telephone are shown on the enclosed proxy card. The Internet and telephone voting procedures are designed to authenticate the shareholder’s identity and to allow shareholders to vote their shares and confirm that their instructions have been properly recorded. In the event that the proxy card does not reference Internet or telephone voting information because the recipient is not the registered owner of the shares, the proxy card must be completed and returned in the self-addressed, postage-paid envelope provided.
If you hold your shares in street name, it is critical that you cast your vote if you want it to count in the election of our director nominees (Proposal 1 of this Proxy Statement). In the past,Until recently, if you held your shares in street name and you did not indicate how you wanted your shares voted in the election of directors, your bank or broker was allowed to vote those shares on your behalf in the election of directors as they felt appropriate. Recent changes in regulationregulations were made to take away the ability of your bank or broker to vote your uninstructed shares in the election of directors on a discretionary basis. Thus, if you hold your shares in street name and you do not instruct your bank or broker how to vote in the election of directors, no votes will be cast on your behalf.
Any shareholder giving a proxy may revoke it at any time before a vote is taken by (i) duly executing a proxy bearing a later date; (ii) executing a notice of revocation in a written instrument filed with the secretary of the Company; or (iii) appearing at the meeting and notifying the secretary of the shareholder’s 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
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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. Employees will not receive additional compensation for the solicitation of proxies. The Company also will request brokers and others to send solicitation material to beneficial owners of stock and will reimburse their costs for this purpose.
Only shareholders of record as of the close of business on March 23, 201020, 2013 (the “Record Date”) will be entitled to vote at the annual meeting or any adjournment thereof. The number of outstanding shares of the Company’s common stock entitled to vote at the annual meeting is 16,736,730.19,671,775. Shareholders are entitled to one vote for each share of the Company’s common stock.
PRINCIPAL HOLDERS OF VOTING SECURITIES
The Company knowsSecurities Exchange Act of no1934, as amended (the “Exchange Act”) , requires that any person or group who beneficially ownsacquires the beneficial ownership of more than five percent of the Company’s common stock notify the Securities and Exchange Commission (the “SEC”) and the Company. Following is certain information, as of the Record Date, regarding those persons or groups who held of record, or who are known to the Company to own beneficially, more than five percent of the Company’s outstanding common stock of the Company.
Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Class |
Wellington Management Company, LLP 280 Congress Street Boston, MA 02210 | 1,692,500 shares of common stock | 8.60% |
PROPOSAL 1 - ELECTION OF DIRECTORS
Section 3.02 of the Company’s bylaws provides that the number of directors on the Board of Directors of the Company will be not less than three nor more than 18, as may be fixed by resolution duly adopted by the Board of Directors at or prior to the annual meeting at which such directors are to be elected. In accordance with the bylaws, the size of the board has beenwas previously fixed by the Board of Directors at 1817 members until May 9, 2013. Effective with the Annual Meeting of Shareholders on May 9, 2013, the size of the board has been fixed at 13 members.
In the absence of any specifications to the contrary, proxies will be voted for the election of all 1813 of the nominees listed in the table below by casting an equal number of votes for each such nominee. 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 listed below is likely to become unavailable. The 1813 nominees receiving a plurality of votes cast shall be elected. This means that the 1813 nominees with the most votes will be elected. Only votes “FOR” a nominee will affect the outcome.
The Company’s Articles of Incorporation provide that, if cumulative voting applies, each shareholder 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.” Cumulative voting procedures will not be followed at the annual meeting unless a shareholder calls for cumulative voting as provided in the Company’s Articles of Incorporation, by announcing at the meeting before the voting for directors starts, his or her intention to vote cumulatively. If cumulative voting is properly invoked by a shareholder, 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 days, nor more than seven days, as the chair shall determine, or of such other period of time as is unanimously agreed upon. If cumulative voting applies, the proxyholders may, in their discretion, vote the shares to which such proxies relate on a basis other than equally for each of the nominees named below and for less than all such nominees, but the proxyholders will cast such votes in a manner that would tend to elect the greatest number of such nominees (or any substitutes therefor in the case of unavailability) as the number of votes cast by them would permit.
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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 shareholders must be made in accordance with the Company’s bylaws, which generally require such nominations to be made in writing and not less than 60 nor more than 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 copy of the bylaw provision setting forth the complete procedure for shareholder nominations of directors may be obtained upon written request to First Bancorp, Post Office Box 508, 341 North Main Street, Troy, North Carolina 27371-0508, Attention: Anna G. Hollers, Secretary.
The Company’s bylaws state that no individual may be elected to, or may serve on, the Board of Directors any time after his or her 75th birthday, except that if a director is elected to the Board of Directors prior to his or her 75th birthday and reaches the age of 75 while serving as a director, such director’s term shall continue until the next annual meeting of shareholders, at which time the director shall retire. The bylaws allow the Board of Directors to make exceptions to this limitation in connection with mergers or acquisitions. The bylaws also state that the foregoing provisions do not apply to any individual during the time such individual is serving as chief executive officer of the Company.
See also “Director Nomination Process” included in the section entitled “Corporate Governance Policies and Practices” below.
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DIRECTORS, NOMINEES AND EXECUTIVE OFFICERS
The following table sets forth certain information as of December 31, 2009,2012, with respect to the 18Company's current directors, the 13 nominees for election to the Board of Directors and the executive officers of the Company (all of these persons may be contacted at Post Office Box 508, 341 North Main Street, Troy, North Carolina 27371). The 1813 nominees are all current directors. Except for Daniel T. Blue, Jr., R. Winston Dozier, and Richard H. Moore, eachEach of the nominees havehas served on the Board of Directors since the 20092012 Annual Meeting. Daniel T. Blue, Jr.,R. Walton Brown, John F. Burns, R. Winston Dozier, and Richard H. Moore were appointedJerry L. Ocheltree, each of whom is currently serving as a director, are not standing for re-election. The Board has not named nominees to succeed these directors, on March 23, 2010. and pursuant to the Company’s bylaws, the Board of Directors has adopted a resolution reducing the size of the Board to 13 effective upon the date of the 2013 Annual Meeting. Accordingly, only 13 directors may be elected at the Annual Meeting.
Each nomineeof the 13 nominees has indicated a willingness to serve if elected. The Board of Directors recommends a vote “FOR” the election of these nominees.
TABLE OF DIRECTORS, NOMINEES AND EXECUTIVE OFFICERS
| Common Stock Beneficially Owned (1) | ||||||||||||||||
| Name (Age)** | Current Director (D), Nominee (N), or Position with Company | Number of Shares Owned (excluding options) | Number of Shares That May Be Acquired within 60 Days by Exercising Options | Total Number of Shares Beneficially Owned | Percent of Class | |||||||||||
| Directors and Nominees | ||||||||||||||||
| Richard H. Moore (52) | President and CEO (D) (N) | 56,636 | (2) | — | 56,636 | * | ||||||||||
| Daniel T. Blue, Jr. (64) | (D) (N) | 6,382 | — | 6,382 | * | |||||||||||
| Jack D. Briggs (73) | (D) (N) | 130,987 | (3) | 15,750 | 146,737 | * | ||||||||||
| R. Walton Brown (60) | Exec. Vice President (D) | 22,387 | 18,460 | 40,847 | * | |||||||||||
| David L. Burns (74) | (D) (N) | 39,271 | 15,750 | 55,021 | * | |||||||||||
| John F. Burns (65) | Exec. Vice President (D) | 78,683 | (4) | 4,043 | 82,726 | * | ||||||||||
| Mary Clara Capel (54) | (D) (N) | 7,609 | 11,250 | 18,859 | * | |||||||||||
| James C. Crawford, III (56) | (D) (N) | 61,845 | (5) | 4,500 | 66,345 | * | ||||||||||
| R. Winston Dozier (56) | (D) | 29,108 | — | 29,108 | * | |||||||||||
| James G. Hudson, Jr. (73) | (D) (N) | 92,733 | (6) | 4,500 | 97,233 | * | ||||||||||
| Jerry L. Ocheltree (53) | President of First Bank (D) | 24,937 | (7) | 19,602 | 44,539 | * | ||||||||||
| George R. Perkins, Jr. (73) | (D) (N) | 494,023 | 15,750 | 509,773 | 2.59% | |||||||||||
| Thomas F. Phillips (67) | (D) (N) | 75,673 | (8) | 15,750 | 91,423 | * | ||||||||||
| Frederick L. Taylor, II (43) | (D) (N) | 17,963 | 11,250 | 29,213 | * | |||||||||||
| Virginia C. Thomasson (61) | (D) (N) | 17,336 | 15,750 | 33,086 | * | |||||||||||
| Dennis A. Wicker (60) | (D) (N) | 10,714 | 15,750 | 26,464 | * | |||||||||||
| John C. Willis (70) | (D) (N) | 311,290 | (9) | 15,750 | 327,040 | 1.66% | ||||||||||
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| Common Stock Beneficially Owned (1) | ||||||||||||||||
| Name (Age)** | Current Director (D), Nominee (N), or Position with Company | Number of Shares Owned (excluding options) | Number of Shares That May Be Acquired within 60 Days by Exercising Options | Total Number of Shares Beneficially Owned | Percent of Class | |||||||||||
| Non-Director Executive Officers | ||||||||||||||||
| Eric P. Credle (44) | Executive Vice President & Chief Financial Officer | 22,905 | (10) | 9,270 | 32,175 | * | ||||||||||
| Anna G. Hollers (62) | Executive Vice President, Chief Operating Officer & Secretary | 125,957 | (11) | 16,775 | 142,732 | * | ||||||||||
| Timothy S. Maples (52) | Executive Vice President & Assistant Secretary; Chief Investment Officer of First Bank | 32,316 | (12) | 2,559 | 34,875 | * | ||||||||||
| Lee C. McLaurin (51) | Executive Vice President & Controller | 15,800 | (13) | 5,559 | 21,359 | * | ||||||||||
| Robert T. Patterson (47) | Executive Vice President & Co-Chief Credit Officer of First Bank | 9,461 | (14) | ― | 9,461 | * | ||||||||||
| Rex M. Scott (57) | Senior Vice President & Chief Information Officer of First Bank | 10,670 | (15) | ― | 10,670 | * | ||||||||||
| Edward F. Soccorso (40) | Executive Vice President & Co-Chief Credit Officer of First Bank | ― | ― | ― | * | |||||||||||
| J. Dorson White, Jr. (62) | Executive Vice President & Chief Retail Banking Officer | 1,132 | (16) | ― | 1,132 | * | ||||||||||
| Directors/Nominees and Non-Director Executive Officers as a Group (25 persons) | 1,695,818 | (17) | 218,018 | 1,913,836 | 9.73% | |||||||||||
| * | Indicates beneficial ownership of less than 1%. |
| ** | Age information is as of April 2, 2013. |
Common Stock Beneficially Owned (1) | ||||||||||||||||||
Name (Age) | Current Director (D), Nominee (N), or Position with Company | Number of Shares Owned (excluding options) | Number of Shares That May Be Acquired within 60 Days by Exercising Options | Total Number of Shares Beneficially Owned | Percent of Class | |||||||||||||
| Directors and Nominees | ||||||||||||||||||
| Jerry L. Ocheltree (50) | President & CEO (D) (N) | 29,577 | (2) | 3,000 | 32,577 | * | ||||||||||||
| Daniel T. Blue, Jr. (61) | (D) (N) | − | (3) | − | − | * | ||||||||||||
| Jack D. Briggs (70) | (D) (N) | 115,748 | (4) | 19,000 | 134,748 | * | ||||||||||||
| R. Walton Brown (57) | Exec. Vice President (D) (N) | 23,688 | (5) | 15,000 | 38,688 | * | ||||||||||||
| David L. Burns (71) | (D) (N) | 79,583 | (6) | 15,750 | 95,333 | * | ||||||||||||
| John F. Burns (62) | Exec. Vice President (D) (N) | 76,664 | (7) | 1,667 | 78,331 | * | ||||||||||||
| Mary Clara Capel (51) | (D) (N) | 3,058 | 11,250 | 14,308 | * | |||||||||||||
| James C. Crawford, III (53) | (D) (N) | 52,474 | (8) | 4,500 | 56,974 | * | ||||||||||||
| R. Winston Dozier (53) | (D) (N) | 752 | − | 752 | * | |||||||||||||
| James G. Hudson, Jr. (70) | (D) (N) | 78,785 | (9) | 4,500 | 83,285 | * | ||||||||||||
| Richard H. Moore (49) | (D) (N) | − | (10) | − | − | * | ||||||||||||
| George R. Perkins, Jr. (70) | (D) (N) | 487,197 | 22,500 | 509,697 | 3.05 | % | ||||||||||||
| Thomas F. Phillips (64) | (D) (N) | 71,403 | (11) | 20,250 | 91,653 | * | ||||||||||||
| Frederick L. Taylor II (40) | (D) (N) | 13,692 | 11,250 | 24,942 | * | |||||||||||||
| Virginia C. Thomasson (58) | (D) (N) | 13,065 | 20,250 | 33,315 | * | |||||||||||||
| Goldie H. Wallace (63) | (D) (N) | 132,632 | 22,500 | 155,132 | * | |||||||||||||
| Dennis A. Wicker (57) | (D) (N) | 5,949 | 20,250 | 26,199 | * | |||||||||||||
| John C. Willis (67) | (D) (N) | 324,623 | (12) | 22,500 | 347,123 | 2.07 | % | |||||||||||
| Non-Director Executive Officers | ||||||||||||||||||
| Anna G. Hollers (59) | Executive Vice President, Chief Operating Officer & Secretary | 109,215 | (13) | 9,001 | 118,216 | * | ||||||||||||
| Teresa C. Nixon (52) | Executive Vice President & Chief Lending Officer of First Bank | 44,396 | (14) | 15,000 | 59,396 | * | ||||||||||||
| David G. Grigg (59) | President of Montgomery Data Services, Inc. | 52,456 | (15) | 8,808 | 61,264 | * | ||||||||||||
| Eric P. Credle (41) | Executive Vice President & Chief Financial Officer | 17,576 | (16) | 18,000 | 35,576 | * | ||||||||||||
| Timothy S. Maples (49) | Senior Vice President & Investment Officer | 29,092 | (17) | − | 29,092 | * | ||||||||||||
| Lee C. McLaurin (47) | Senior Vice President & Controller | 10,645 | (18) | 9,000 | 19,645 | * | ||||||||||||
| Directors/Nominees and Non-Director Executive Officers as a Group (24 persons) | 1,772,270 | (19) | 273,976 | 2,046,246 | 12.23 | % | ||||||||||||
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 “Number of Shares Owned” in the table above includes executive officers’ reported shares in the 401(k) defined contribution plan, which are voted by the plan trustee and not by the shareholder for whom such shares are listed. |
| (2) | Mr. |
| (3) | Mr. Briggs’ shares include 1,663 shares held as custodian for his daughter, 1,645 shares held as custodian for his grandchildren, and 41,375 shares held by his spouse. |
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| (4) | Mr. J. Burns’ shares include 9,363 shares held in the Company’s 401(k) defined contribution plan. |
| (5) |
| Mr. Crawford’s shares include 6,325 shares held by his spouse and |
| (6) | Mr. Hudson’s shares include |
| (7) | Mr. |
| (8) | Mr. Phillips’ shares include 1,965 shares held by his spouse and 186 shares that his spouse owns jointly with two of their children. |
| (9) | Mr. Willis’ shares include |
| (10) | Mr. Credle’s shares include 8,261 shares held in the Company’s 401(k) defined contribution plan. |
| (11) | Ms. Hollers’ shares include |
| (13) | Mr. |
| (14) | Mr. |
| (15) | Mr. |
| (16) | Mr. White’s shares include 132 shares held in the Company’s 401(k) defined contribution plan. |
| (17) | The number of shares held by directors, nominees, and non-director executive officers includes |
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Director Nominees
Daniel T. Blue,
Jr.,Mr. Blue has an extensive background in law and public service, and has skills related to executive decision making, as well as oversight, governance and management of large organizations.
Jack D. Briggs
,Mr. Briggs brings entrepreneurial and business-building skills and experience to the Company, having successfully founded and acquired several businesses. Additionally, as owner and operator of a company, Mr. Briggs has over 4043 years of experience overseeing the preparation of financial statements and the review of accounting matters.
David L. Burns
,During his long tenure as a board member, Mr. Burns has developed knowledge of the Company’s business, history, organization, and executive management that has enhanced his ability as a director. Mr. Burns also brings executive decision making skills and business acumen resulting from his work history with Z.V. Pate. He has also has demonstrated his leadership skills with his involvement in numerous professional and civic organizations.
Mary Clara Capel
,Ms. Capel brings business executive decision making and oversight skills as a result of her 2832 years of experience with a third generationthird-generation family business, which has grown from its rug manufacturing operation in Troy, North Carolina to importing and exporting rugs worldwide.
James C. Crawford, III
,Mr. Crawford brings extensive experience with accounting and finance, as well as oversight and management of multiple businesses.
James G. Hudson, Jr.
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Mr. Hudson has over 3740 years of banking experience and brings both financial services and corporate governance perspectives as a result of his work history.
Richard H. Moore 49
Mr. Moore’s career has provided him with extensive financial and accounting experience and gives him keen insight with respect to budget and audit matters, as well as the oversight, governance and management of larger organizations.
George R. Perkins, Jr.
,Mr. Perkins brings executive decision making skills and business acumen to the Company as a result of his professional experience in the textile industry.
Thomas F. Phillips
,Mr. Phillips brings over 2528 years of financial experience gained during his director terms with First Savings Bancorp and the Company. Mr. Phillips has extensive skills in accounting, and finance and risk management.
Frederick L. Taylor, II
,Mr. Taylor brings business-building skills and experience to First Bancorp.the Company. Additionally, Mr. Taylor has experience in overseeing the preparation of financial statements and review of accounting matters.
Virginia Thomasson
,Ms. Thomasson brings to the Company experience and skills in public accounting and over 1215 years of financial industry experience. She has been a director of the Company and First Bank since 2000.
Dennis A. Wicker
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Mr. Wicker has an extensive background in law and public service and brings to the Company executive decision making, as well as, governance and risk assessment skills.
John C. Willis
,During his long tenure as a board member, Mr. Willis has developed knowledge of the Company’s business, history, organization, and executive management that has enhanced his ability as a director.
Executive Officers
In addition to Mr. Brown, Mr. J. Burns, and Mr. Ocheltree,Moore, the executive officers of the Company and First Bank are as follows:
R. Walton Brown, 60, is an Executive Vice President of the Company and First Bank and has served in those positions since joining the Company in 2003. Mr. Brown was the chairman of the Board of Directors, President, and Chief Executive Officer of Carolina Community Bancshares, Inc., a bank holding company headquartered in Latta, South Carolina, from its inception in 1995 until its acquisition by the Company in January 2003. He served as the president of Carolina Community Bank, the bank subsidiary of Carolina Community Bancshares, and its predecessors from 1979 until January 2003. Mr. Brown served as a director of the Company from 2003 to 2013. Mr. Brown has been a director of First Bank since 2000 and continues to serve in that role.
John F. Burns, 65, is an Executive Vice President of the Company and First Bank and has served in those positions since joining the Company in 2000. Mr. Burns served as a director and President and Chief Executive Officer of First Savings Bancorp, Inc. when First Savings merged with the Company in 2000, having been employed by First Savings since 1972. Mr. Burns served as director of the Company from 2000 until 2013. Mr. Burns has been a director of First Bank since 2000 and continues to serve in that role.
Eric P. Credle, 44, is an Executive Vice President of the Company and First Bank and has served as the Chief Financial Officer of the Company and First Bank since joining the Company in 1997.
Anna G. Hollers
,Timothy S. Maples, 52, is Chief Lending Officer, Executive Vice President of First Bank. She has served as Chief Lending Officer since joining First Bank in 1989 and as Executive Vice President of First Bank since 1994.
Lee C. McLaurin
,Jerry L. Ocheltree, 53, is the President of First Bank, a position he has held since September 2005. Mr. Ocheltree joined First Bank in 1998, serving as a Senior Vice President – Regional Executive until his election as President. Mr. Ocheltree served as the President and Chief Executive Officer of the Company from 2007 until June 2012 and served as a director of the Company from 2006 until 2013. Mr. Ocheltree has been a director of First Bank since 2005 and continues to serve in that role.
Robert T. Patterson, 47, is an Executive Vice President of First Bank and serves as the Co-Chief Credit Officer of First Bank. Mr. Patterson has served in this position since April 2012. Prior to April 2012, Mr. Patterson served as a Senior Vice President in First Bank’s credit administration department beginning in January 2009, after having been a branch officer since joining First Bank in 1997.
Rex M. Scott, 57, is a Senior Vice President of First Bank and serves as the Chief Information Officer of First Bank. Mr. Scott was named Chief Information Officer of First Bank in October 2012 after joining First Bank in October 2011 as an information technology officer. Prior to joining First Bank, Mr. Scott served as the Chief Operating Officer for CapStone Bank, a community bank headquartered in Raleigh, North Carolina.
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Edward F. Soccorso, 40, is an Executive Vice President of First Bank and serves as the Co- Chief Credit Officer of First Bank. Mr. Soccorso joined the Company in 2012. Prior to joining First Bank, Mr. Soccorso was Director at Piedmont Investment Advisors, LLC where he managed the team dedicated to advising the U.S. Treasury on bank investments made under the Troubled Asset Relief Program (TARP). Prior to joining Piedmont in 2009, Mr. Soccorso was a Senior Vice President at Four Corners Capital Management, LLC, a Registered Investment Advisor that managed asset backed and fixed income portfolios for institutional investors.
J. Dorson White, Jr., 62, is an Executive Vice President of First Bank and has served as the Chief Retail Banking Officer of First Bank since joining the Company in July 2011. Prior to joining First Bank, Mr. White served as the Chief Operating Officer of East Carolina Bank, a community bank headquartered in Engelhard, North Carolina.
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BOARD COMMITTEES AND ATTENDANCE
The Board of Directors has established four standing committees: the Executive Committee, the Audit Committee, the Compensation Committee, and the Nominating and Corporate Governance Committee. In addition, the Board of Directors may establish other committees from time to time for specific purposes. The following table presents the 20102013 membership of the committees that are described below. The chair of each committee is noted with a “(c)”. Following the table is additional information regarding each committee.
Executive and Loan | Audit Committee | Compensation Committee | Nominating and Corporate Governance Committee | |
| Daniel T. Blue, Jr. | X | X | X | X |
| Jack D. Briggs | X | X | X | |
| X | ||||
| David L. Burns | X | X | X | X |
| Mary Clara Capel | X (c) | X | X (c) | X (c) |
| James C. Crawford, III | X | X | X | X |
| James | ||||
| X | ||||
| Richard H. Moore | ||||
| X | ||||
| George R. Perkins, Jr. | X | X | X | |
| Thomas F. Phillips | X | X | X | X |
| Frederick L. Taylor, II | X | X | X | X |
| Virginia C. Thomasson | X | X (c) | X | X |
| Dennis A. Wicker | X | |||
| John C. Willis | X | X | X | X |
Executive and Loan Committee
The Executive and Loan 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 Executive and Loan Committee also serves as Loan Committee for First Bank. The Executive and Loan Committee held 12 meetings during 2009.
Audit Committee
The Audit Committee is responsible for the appointment, compensation and oversight of the Company’s independent auditors, and must approve in advance all audit fees and the terms of all non-audit services provided by the independent auditors. The Audit Committee also reviews and presents to the Board of Directors information regarding the effectiveness of the Company’s policies and procedures with respect to auditing, accounting, and internal controls. The Audit Committee also reviews the Company’s financial reporting process on behalf of the Board of Directors. All of the current members of the Audit Committee are independent, as defined by the Nasdaq Stock Market (“NASDAQ”) and the Securities Exchange Act.Act, as well as the Company’s Corporate Governance Guidelines. The Audit Committee held 1210 meetings during 2009.
The Board of Directors has determined that Ms. Thomasson is an “audit committee financial expert” within the meaning of SEC rules and regulations. The Audit Committee reviews and ratifies its charter on an annual basis. The Audit Committee charter is available on the Company’s website at www.firstbancorp.comwww.FirstBancorp.com under the tab “Investor Relations – Corporate Governance.Governance Documents.”
Compensation Committee
Generally, 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 Compensation Committee also administers the Company’s equity compensation plans. The Compensation Committee has the authority to delegate any of its responsibilities to subcommittees. Each of the current members of this committee are independent under the rules and regulations of NASDAQ. The Compensation Committee held six meetings during 2009.2012. The Compensation Committee operates under a charter that has been approved by the Board of Directors. The Compensation Committee reviews and ratifies its charter on an annual basis, and the charter is available on the Company’s website at www.FirstBancorp.com under the tab “Investor Relations – Governance Documents.”
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Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committee is responsible for i) identifying qualified individuals to become Board members, ii) determining the composition of the Board and its committees, and iii) developing and implementing the Company’s corporate governance guidelines. The Nominating and Corporate Governance Committee will consider shareholder nominees for Board membership. Any shareholder wishing to nominate a candidate for director must follow the procedures described in the section “Nominations For Director” above. The section below entitled “Corporate Governance Policies and Practices - Director Nomination Process” describes the process utilized by the Nominating and Corporate Governance Committee for identifying and evaluating candidates to be nominated as directors. The Nominating and Corporate Governance Committee reviews and ratifies its charter on an annual basis, and the charter is available on the Company’s website at www.firstbancorp.comwww.FirstBancorp.com under the tab “Investor Relations – Corporate Governance.Governance Documents.” Each of the current members of this committee are independent as defined by NASDAQ rules.rules and the Company’s Corporate Governance Guidelines. The Nominating and Corporate Governance Committee held fivethree meetings during 2009.
Attendance
The Board of Directors held 1619 meetings during 2009. In 2009, all2012. All of the directors and nominees for re-election 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.
CORPORATE GOVERNANCE POLICIES AND PRACTICES
The Company has developed, and operates under, corporate governance principles and practices that are designed to maximize long-term shareholder value, align the interests of the board and management with those of the Company’s shareholders, and promote the highest ethical conduct among the Company’s directors and employees. Highlights of the Company’s corporate governance policies, practices and procedures are described below.
Director Independence
The Board of Directors believes that a substantial majority of the board should consist of directors who are independent under rules set forth by NASDAQ.NASDAQ and as defined in our Corporate Governance Guidelines. The Board of Directors makes an annual determination regarding the independence of each of the Company’s directors. The Board last made these determinations for each member of the board in February 2010,March 2013, based on the review of director questionnaires designed to elicit information regarding independence. The Board has determined that 1412 of its 1817 current directors are independent as contemplated by NASDAQ. The fourfive individuals who are not independent are Mr. Brown, Mr. J. Burns, Mr. Hudson,Moore, Mr. Ocheltree, and Mr. Ocheltree.Wicker. Mr. Brown, Mr. J. Burns, Mr. Moore and Mr. Ocheltree are not independent because they are current employees of the Company. Mr. HudsonWicker is not considered independent because he was employeddue to payments made by the Company until May 2008.
Annual Director Re-Election
Since the Company’s inception, its bylaws have required that directors must stand for re-election to the Board of Directors at each annual shareholders’ meeting. The Board of Directors believes that this policy makes it easier for shareholders to hold directors more directly accountable for corporate performance compared to the staggered-board structure in use at many public companies, which permits directors to hold their positions for several years.
Separation of the Offices of Chairman and Chief Executive Officer
The Board of Directors believes that one of its main purposes is to protect shareholders’ interests by providing independent oversight of management, including the Chief Executive Officer. Although not required by the Company’s bylaws, the Board of Directors has historically believed, and continues to believe, that this objective is facilitated by having an independent director serve as Chairman, thereby separating the offices of Chairman of the Board of Directors and Chief Executive Officer. The Chairman of the Board is responsible for approving meeting schedules and agendas, as well as acting as a liaison between the Chief Executive Officer and the independent directors.
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The Board’s Role in Risk Oversight
The Board of Directors believes that each member in his or her fiduciary capacity has a responsibility to monitor and manage risks faced by the Company. At a minimum, this requires the members of our Board of Directors to be actively engaged in board discussions, review materials provided to them, and know when it is appropriate to request further information from management and/or engage the assistance of outside advisors. Furthermore, because the banking industry is highly regulated, certain risks to the Company are monitored by the Board of Directors and the Audit Committee through its review of the Company’s compliance with regulations set forth by its regulatory authorities, including the FDIC, and recommendations contained in regulatory examinations.
Because we believe risk oversight is a responsibility for each member of the Board of Directors, we do not concentrate the Board’s responsibility for risk oversight in a single committee. Instead, each of our committees concentrates on specific risks for which they have an expertise, and each committee is required to regularly report to the Board of Directors on its findings. For example, the Audit Committee regularly monitors the Company’s exposure to fraud and internal control risk. Our Compensation Committee’s role in monitoring the risks related to our compensation structure is discussed in further detail below.
Executive Sessions
The Board of Directors has adopted a resolution requiring that the independent directors of the Company meet at least twice a year in executive session with no non-independent directors or employees of the Company present. At these meetings, the independent directors discuss strategic or other key issues regarding the Company. Two of these executive sessions were held in 2009.
Director Nomination Process
The Nominating and Corporate Governance Committee is responsible for identifying individuals qualified to become Board members and recommending to the Board the individuals for nomination as members of the Board. The goal of the Nominating and Corporate Governance Committee is to create a Board that will demonstrate objectivity and the highest degree of integrity on an individual and collective basis. In evaluating current members and new candidates, the Nominating and Corporate Governance Committee considers the needs of the Board and the Company in light of the current mix of director skills and attributes. In addition to requiring that each director possess the highest integrity and character, the Nominating and Corporate Governance Committee’s evaluation of director candidates includes an assessment of issues and factors regarding an individual’s familiarity with the Company’s geographic market area, independence as defined by the various regulatory authorities, business experience, accounting and financial expertise, diversity, and awareness of the Company’s responsibilities to its customers, employees, regulatory bodies, and the communities in which it operates. The Nominating and Corporate Governance Committee also takes into consideration the Board’s established policies relating to the Board’s retirement policy and the ability of directors to devote adequate time to Board and committee matters. When the Nominating and Corporate Governance Committee is considering current Board members for nomination for re-election, the Committee also considers prior Board contributions and performance, as well as meeting attendance records.
The Nominating and Corporate Governance Committee does not have any formal guidelines regarding how it should consider diversity in identifying nominees for director. However, the Committee values the diversity on our current board and is generally cognizant of the benefits of a diverse board.
The Nominating and Corporate Governance Committee may seek the input of the other members of the Board and management in identifying and attracting director candidates that are consistent with the criteria outlined above. In addition, the Committee may use the services of consultants or a search firm, although it has not done so in the past. The Nominating and Corporate Governance Committee also will consider recommendations by Company shareholders of qualified director candidates for possible nomination to the Board. Shareholders may recommend qualified director candidates by writing to the Company’s Corporate Secretary at 341 North Main Street, Troy, North Carolina 27371. Submissions should include information regarding a candidate’s background, qualifications, experience, and willingness to serve as a director. Based on a preliminary assessment of a candidate’s qualifications, the Nominating and Corporate Governance Committee may conduct interviews with the candidate and request additional information from the candidate. The Committee uses the same process for evaluating all nominees, including those recommended by shareholders.
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In addition, the Company’s bylaws contain specific conditions under which persons may be nominated directly by shareholders as directors at an annual meeting of shareholders. The provisions include the condition that shareholders comply with the advance notice time-frame requirements described under the section entitled “Nominations for Director” above.
Stock Ownership Requirements
The Company’s Board of Directors has adopted a common stock ownership policy for members of the Board. This policy requires that any candidate for the Board must either own, or commit to acquire, common stock of the Company with a monetary value of at least $50,000. Newly elected directors have one year from the date of their election to acquire the necessary stock. Once the $50,000 ownership requirement is met, the Board member is deemed to have satisfied this requirement even if subsequent decreases in the Company’s stock price cause the value of the member’s holdings to fall below $50,000. All directors are currently in compliance with this policy. The Board believes that this stock ownership policy substantially enhances shareholder value by materially aligning the Board’s interestinterests with those of the shareholders.
Mandatory Retirement
The Company’s bylaws state that no individual may be elected to, or may serve on, the Board of Directors any time after his or her 75th birthday, except that if a director is elected to the Board prior to his or her 75th birthday and reaches the age of 75 while serving as a director, such director’s term shall continue until the next annual meeting of shareholders, at which time the director shall retire. The bylaws allow for the Board to make exceptions to this limitation in connection with mergers or acquisitions. The bylaws also state that the foregoing provisions do not apply to any individual during the time such individual is serving as chief executive officer of the Company.
Communications with Directors
The Board of Directors believes that it is important that a direct and open line of communication exist between the Board and the shareholders and other interested parties. Any shareholder or other interested party who desires to contact one or more of the Company’s directors may send a letter to the following address:
First Bancorp Board of Directors
PO Box 417
Troy, North Carolina 27371
In addition, any shareholder or other interested party who has any concerns or complaints relating to accounting, internal controls or auditing matters may contact the Audit Committee by writing to the following address:
First Bancorp Audit Committee
PO Box 417
Troy, North Carolina 27371
All such communications will be forwarded to the appropriate party as soon as practicable without being screened.
Annual Meeting Policy
Directors are expected to attend the Company’s annual meeting of shareholders. Except for Mr. Perkins and Mr. Taylor II, allAll members of the 20092012 Board attended the Company’s 20092012 annual meeting of shareholders.
Cumulative Voting
The Company’s bylaws provide for the availability of “cumulative voting” in the election of directors. Under cumulative voting, each shareholder calculates the number of votes available to such shareholder by multiplying the number of votes to which his or her shares are normally entitled by the number of directors for whom the shareholder is entitled to vote. The shareholder can then cast the sum for a single candidate or can distribute it in any manner among any number of candidates. For example, if 1813 directors are to be elected, a shareholder who owns 1,000 shares will have 18,00013,000 votes. This shareholder can cast all of these votes for one candidate, or 1,000 for 1813 candidates, or 3,0002,166 for each of six candidates, or any other mathematically possible combination.
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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 factionalism on the board.
Cumulative voting procedures will not be followed at the annual meeting unless a shareholder calls for cumulative voting as provided in the Company’s Articles of Incorporation, by announcing at the meeting before the voting for directors starts, his or her intention to vote cumulatively. See the third paragraph under “Proposal 1- Election of Directors” above for additional information regarding cumulative voting.
Code of Conduct
The Board of Directors has adopted a Code of ConductEthics that applies to the Company’s directors and employees, including the Chief Executive Officer, Chief Financial Officer and Principal Accounting Officer. The Code includes guidelines relating to ethical handling of actual or potential conflicts of interest, compliance with laws, accurate financial reporting, and procedures for promoting compliance with, and reporting violations of, the Code of Conduct.Ethics. The Code of Conduct canEthics is available on the Company’s websiteat www.FirstBancorp.com under the tab “Investor Relations-Governance Documents.” Any amendments or waivers to the Code of Ethics will be obtained by sending a request to: First Bancorp, Attention: Anna Hollers, P.O. Box 508, Troy, North Carolina 27371.
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” the proposal to elect the 1813 nominees as directors. Unless indicated to the contrary, proxies will be voted “FOR” the 1813 nominees listed above.
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EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
In this section, we discuss our compensation program as it pertains to our principal executive officer, our principal financial officer and our three other most highly compensated executive officers in 2009. We refer2012 (NEOs). As discussed below, the compensation policies relating to these five persons throughoutour current Chief Executive Officer, who joined our company in June 2012, are discussed separately in cases where they differ materially from those for our other four named executive officers (Other NEOs, which include Mr. Ocheltree, who served as the “named executive officers” (NEOs)Chief Executive Officer until June 2012). Our discussion focuses on compensation and practices relating to 2009,2012, our most recently completed fiscal year.
Structure and Role of the Compensation Committee
The Compensation Committee of our Board of Directors consists entirely of independent directors. It operates under a written charter that the board has adopted.
The Compensation Committee is primarily responsible for the following:
| · | reviewing the Company’s overall compensation practices as they relate to the Company’s risks; |
| · | reviewing the performance of our chief executive officer, or CEO; |
| · | determining, or recommending |
| · | reviewing and approving the CEO’s recommendations about the compensation of our other executive officers; |
| · | recommending to the board the performance targets for our annual incentive bonus plan; |
| · | periodically reviewing our equity-based and other incentive plans and recommending any revisions to the board of directors; |
| · | recommending to the board any discretionary 401(k) contributions; |
| · | recommending director compensation to the board; |
| · | approving any equity compensation |
| · | approving employment or other agreements with the Company’s executive officers; and |
| · | reviewing the Company’s compliance with legal and regulatory requirements related to compensation arrangements or practices. |
Compensation Philosophy and Objectives
The objectives of our executive compensation programs are:
| · | fairly compensating executives for their efforts; |
| · | attracting and retaining quality executive leadership; |
| · | rewarding the achievement of annual corporate performance targets; and |
| · | aligning officers’ long-term interests with those of our shareholders. |
The committee’s general philosophy is that we should compensate our executive officers at approximately the same average level as corresponding officers at similarly situated peer financial service companies.
Because the committee bases its compensation decisions on the objectives and philosophy described above, it does not take into account an individual’s net worth or the wealth the individual has accumulated from prior compensation.
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Competitive Positioning
Periodically, the committee engages outside compensation consultants to evaluate whether our compensation practices are consistent with meeting our objectives. In these engagements, the outside consultant typically compares our compensation practices and compensation levels to those of a peer group of similarly situated financial service companies. The consultant then provides the committee with analysis and recommendations. See additional discussion below.
Executive Compensation Program Overview
The five primary components of our executive compensation program are:
| · | Base salary |
| · | Annual cash incentives |
| · | Equity grants |
| · | Benefits |
| · | Post-termination compensation |
In the information that follows, we discuss the compensation of our Chief Executive Officer and then we discuss the compensation of our Other NEOs.
Compensation of Richard H. Moore, Chief Executive Officer
On May 25, 2012, Richard H. Moore was named by the board of directors to replace Jerry L. Ocheltree as President and Chief Executive Officer of the Company effective June 11, 2012. Mr. Moore had been a director of the Company since 2010. Upon his hiring, Mr. Moore and the Compensation Committee agreed that the Company would temporarily pay Mr. Moore a salary of $40,000 per month, plus reimbursement of expenses, until a formal employment agreement was negotiated. It was also agreed that Mr. Moore would continue to be employed by another company until the employment agreement was executed and Mr. Moore could arrange an orderly transition for his other employer. From June to August 2012, the Compensation Committee met three times with Blanchard Consulting Group in order to review and study possible compensation arrangements for Mr. Moore. As part of the review, Blanchard Consulting Group prepared a peer analysis using the same 25 peer bank holding companies noted on page 19. This review included salary levels, annual bonus structures, and long term incentive compensation practices at the peer banks.
Based on the review of the aforementioned analysis and discussions with Mr. Moore, the following terms were negotiated as part of Mr. Moore’s employment agreement:
Base Salary - Mr. Moore’s initial annual base salary was set at $475,000, which Blanchard Consulting Group concluded was slightly below the estimated average of the peer group. As an offset to the below-market salary and as an inducement to Mr. Moore to enter into an employment agreement with the Company and resign from his other employment, it was agreed that Mr. Moore would have the opportunity to earn annual bonuses and long-term incentive compensation at levels at, or above, the peer group if the Company achieved significantly improved performance.
Annual Incentive Plan – Annually, beginning January 1, 2013, Mr. Moore has the opportunity to earn an annual bonus with a value of between $150,000 and $600,000 based on the Company’s attainment of an annual earnings goal established by the Committee for that year (discussed below). This equates to between 32% and 126% of Mr. Moore’s current annual salary of $475,000. Based on their review of an analysis provided by Blanchard Consulting Group, the Committee concluded that the annual incentive bonus percentages were in approximately the 75th percentile when compared to the peer group, which, as noted above, was contemplated when determining Mr. Moore’s base salary.
Any bonus earned is paid 50% in cash and 50% in restricted stock, with the stock vesting in one-third increments at each of the following three year ends. If the actual earnings for a year are at the “Threshold” level, Mr. Moore will earn a bonus with a value of $150,000; if they are at the “Target” level, he will earn a bonus with a value of $300,000; and if they are at the “Maximum” level, he will earn a bonus with a value of $600,000. The amount payable where performance is greater than Threshold but less than Target or greater than Target but less than Maximum are to be determined on the basis of straight line interpolation between points. The payment of the bonus is conditioned on the Company having achieved a satisfactory regulatory review as of such date as determined by the board of directors.
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As noted above, the bonus is based on the Company’s attainment of an earnings goal. The earnings goal for 2013 has been defined by the Compensation Committee to be measured in a manner consistent with generally accepted accounting principles, except that it excludes certain items of income and expense that are volatile, unpredictable and generally relate to actions taken by the Company that occurred prior to Mr. Moore’s employment and are almost entirely out of his control. Accordingly, loan discount accretion related to two-failed bank transactions, provisions for loan losses, securities gains/losses, foreclosed property write-downs, indemnification asset income/expense and other gains/losses are all excluded from the measurement. For 2013, the Compensation Committee established a threshold goal that the Compensation Committee believed was an appropriate estimate of earnings (as adjusted) for 2013. The target goal was set at a level 10% higher than the threshold and the maximum goal represented an additional 10% improvement over the target goal.
Long-Term Incentive Compensation – Mr. Moore was granted 75,000 options to buy Company stock at an exercise price of $9.76 per share, which was the price of the Company’s common stock on the date of grant, and 40,000 shares of restricted stock of the Company. The 75,000 options will vest on December 31, 2014 if the Company achieves an earnings goal in 2014 (calculated the same as described above), which the Committee estimated would be a 30% improvement from the Company’s approximate level of performance at the time the award was granted. The 40,000 shares of restricted stock will vest on December 31, 2015 if the Company achieves an earnings goal in 2015 (calculated the same as described above) that would be a 50% improvement from the approximate level of performance at the time the award was granted. Assuming the awards vest, the option grant was estimated to have a value of approximately $274,000, which was approximately 58% of Mr. Moore’s base salary, while the restricted stock grant was valued at $394,000, or approximately 83% of base salary. The Compensation Committee determined that the value of the awards was at or near the top of the range compared to summary database statistics provided by Blanchard Consulting Group for banks across the nation with between $1-$5 billion in assets as it relates to long-term incentive plan opportunity levels. The database statistics were used instead of the peer group listed on page 19 because it was believed by Blanchard Consulting Group to have more complete data for incentive-based long-term equity compensation grants. Based on the below market base salary accepted by Mr. Moore and the fact that the Compensation Committee believed that the earnings targets were very challenging, the Compensation Committee determined these elements of long-term incentive compensation to be appropriate.
In addition to the financial terms discussed above, other provisions of Mr. Moore’s employment agreement include the following:
| · | One year term, automatically renews unless either party gives written notice of non-renewal. |
| · | Mr. Moore is entitled to participate in Company benefit plans made available to other employees – see discussion of these benefits in the “Other NEO” compensation discussion below. |
| · | Reimbursement of the costs of participation in the North Carolina State Health Plan. |
| · | Upon termination upon the occurrence of certain adverse conditions for Mr. Moore within twelve months of a change in control, Mr. Moore would be entitled to two times his base salary, continuation of health insurance reimbursements for twelve months, and his long term incentive compensation awards vest in full. |
| · | In the event Mr. Moore is terminated by the Company without cause, Mr. Moore’s long term incentive compensation awards vest in full. |
| · | For twelve months following termination of employment, Mr. Moore is subject to non-competition and non-solicitation obligations. |
The Company and Mr. Moore executed an employment agreement on the above terms on August 28, 2012 and the Company compensated Mr. Moore in accordance with the agreement for the remainder of 2012, except that the Compensation Committee granted Mr. Moore a discretionary bonus of $300,000 for the year, which was paid to Mr. Moore in March 2013. The Compensation Committee granted Mr. Moore this bonus primarily in recognition of his efforts in the Company’s capital raise that occurred in December 2012 and the Company’s loan sale, which was substantially completed during that same period and became final on January 23, 2013.
Mr. Moore’s base salary remains at $475,000 for 2013.
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Except as otherwise described, the following section discusses the compensation of our Other NEOs.
| 1. | Base Salary |
We pay each officer a base salary because it provides a minimum level of compensation and is necessary for recruitment and retention. The Compensation Committee intends that our Other NEOs’ base salaries will provide them with a competitive baseline level of compensation based on their individual experience, performance and scope of responsibility. An important aspect of base salary is the ability of the Compensation Committee, the board and the CEO (in the case of other officers’ salaries) to use annual base salary adjustments to reflect an individual’s performance or changed responsibilities.
Base salary levels are also important because we generally tie the amount of incentive compensation and retirement benefits to an officer’s base salary. For example, awards under our annual bonus plan, the Annual Incentive Plan, are denominated as a percentage of base salary.
In 2008,order to set salaries for our Other NEOs in 2012, the Compensation Committee engaged Grant Thornton, a nationally recognized compensation expert,Blanchard Consulting Group to provide analysis and recommendations regarding 2009 compensation for our NEOs.recommendations. In November 2008, Grant Thorntonand December 2011, Blanchard Consulting Group presented the committee with its findings, which it based on a study of 20072010 proxy data (the most recent data then available).
The Grant ThorntonBlanchard Consulting Group analysis compared the compensation of our NEOs to a representative sample of 1825 publicly traded financial institutions located primarilythat were comparable to the Company in the Southeast based principally oneither location and asset size.size or in performance measures. This peer group consisted of the following companies:
| · | Ameris Bancorp | · | Home Bancshares, Inc. | |
| · | BancTrust Financial Group, Inc. | · | Pinnacle Financial Partners, Inc. | |
| · | Bank of the Ozarks, Inc. | · | Renasant Corporation | |
| · | BNC Bancorp | · | Republic Bancorp | |
| · | Capital City Bank Group, Inc. | · | SCBT Financial Corporation | |
| · | Cardinal Financial Corporation | · | Simmons First National Corp | |
| · | Carter Bank & Trust | · | State Bank Financial Corporation | |
· | CenterState Banks, Inc. | · | StellarOne Corporation | |
| · | City Holding Company | · | TowneBank | |
| · | Community Trust Bancorp, Inc. | · | Union First Market Bankshares Corp. | |
| · | Fidelity Southern Corporation | · | Virginia Commerce Bancorp, Inc. | |
| · | First Community Bancshares, Inc. | · | Yadkin Valley Financial Corporation | |
· | ||||
The Blanchard Consulting Group analysis indicated that the Company’s performance measures ranked within a wide range of percentiles compared to the peer group, with certain performance measures near or above the 75th percentile and other performance measures being near or below the 25th percentile. Overall, Blanchard Consulting Group concluded that the Company’s performance was comparable to that of its peers. This same analysis indicated that the salaries paid to our NEO’s were generally comparable to the 75th percentile of peers. The Compensation Committee discussed that in recent years, it had targeted NEO salaries to be in the 50th to 75th percentile compared to peers. Based on ourits review of the Grant ThorntonBlanchard Consulting Group analysis, wethe Compensation Committee concluded that each of our NEOs hadthe Other NEO salaries that were at or near the market averages, excepttop of the range they had targeted, and accordingly, the Compensation Committee concluded that NEO salaries would remain the same in 2012 as they were in 2011.
In setting salaries for 2013, the Compensation Committee decided that salaries for our CEO, whose salary was lower thanOther NEOs would remain the market average. Accordingly,same in November 2008, we increased our CEO’s salary from $340,0002013 as they were in 2008 to $390,0002012 for 2009, which we believed was at or near the market average. We increasedfollowing reasons:
| · | The Company’s net loss in 2012. |
| · | Based on the prior year analysis performed by Blanchard Consulting Group, the base salaries for the Other NEOs had been at the top of the range that the Compensation Committee had targeted and that it would be appropriate to keep them unchanged for another year. |
The following table presents the salaries of each of our otherOther NEOs by approximately 2%-5% for 2009. As discussed in more detail below, we rescinded the salary increases in March 2009 and then made upward adjustmentsduring 2012, with those same salaries also being applicable to NEO salaries effective August 1, 2009.2013:
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Named Executive Officer | Salary for 2012 and 2013 ($) |
| Jerry L. Ocheltree | 511,704 |
| Anna G. Hollers | 325,029 |
| Eric P. Credle | 283,868 |
| John F. Burns | 224,100 |
| 2. | Annual Cash Incentive |
The committee designed our Annual Incentive Plan to provide our Other NEOs with the opportunity to earn an annual cash bonus of 25%35% to 50% of their base salary if we achieved targeted levels of financial performance, with the opportunity for each officer to earn up to twice the target percentage if certain goals were met. The committeeCompensation Committee and the board believe that a meaningful, but not overwhelming, amount of each of our Other NEO’s annual direct compensation should be tied to achieving corporate performance targets. The committeeCompensation Committee believes this structure reflects a proper balance of direct compensation that provides our officers with a baseline level of financial stability (in the form of base salary), while also providing an appropriate incentive for achieving annual targets that drive our corporate performance. In 2009, because of the restrictions imposed by the Stimulus Act, no cash bonuses were awarded to our NEOs.
Our Annual Incentive Plan are denominated as a percentage of base salary.
Named Executive Officer | Salary from January 1, 2009 to February 28, 2010 | Salary from March 1, 2009 to July 31, 2009 | Salary from August 1, 2009 to December 31, 2009 | Salary for 2010 | ||||||||
| Jerry L. Ocheltree | $ | 390,000 | 340,000 | 486,800 | 496,800 | |||||||
| Anna G. Hollers | 275,970 | 265,356 | 297,700 | 315,562 | ||||||||
| Teresa C. Nixon | 258,000 | 245,676 | 285,000 | 305,000 | ||||||||
| Eric P. Credle | 222,560 | 214,000 | 260,000 | 275,600 | ||||||||
| John F. Burns | 211,167 | 207,027 | 211,167 | 217,502 | ||||||||
Prior to 2012, the Compensation Committee recommended, and the board approved, the following target bonuses for our Other NEOs. In order to determine each officer’s cash bonus, the percentage listed below is multiplied by the officer’s base salary, which is then multiplied by the sum of the performance percentages earned that are described above. Based on the challenging economic conditions facing the banking industry and the Company’s low levels of expected profitability in 2012 compared to prior years, the Compensation Committee decided early in 2012 that every participant’s target bonus percentage would be reduced to one-third of its established level. Accordingly, each NEO’s target bonus was reduced as reflected in the table below.
Named Executive Officer | Target Bonus Percentage - Initial | Target Bonus Percentage - Reduced |
| Jerry L. Ocheltree | 50% | 16.7% |
| Anna G. Hollers | 40% | 13.3% |
| Eric P. Credle | 40% | 13.3% |
| John F. Burns | 25% | 8.3% |
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The Compensation Committee recommended to the board that the 2012 performance goals and weightings for the Company’s officers (other than those classified as regional or branch officers) would be as follows:
Measurement | Threshold | Target | Maximum | Weight | |
| 1 | Diluted Earnings Per Share | 80% of Budget | Budget | 200% of Budget | 25% |
| 2 | Total Stock Return | 40th Percentile of Peer | 50th Percentile of Peer | 100th Percentile of Peer | 25% |
| 3 | Nonperforming Assets to Total Assets | 4.30% | 3.50% | 2.00% | 20% |
| 4 | Loan Growth (noncovered) | 1.00% | 4.00% | 8.00% | 15% |
| 5 | Core Deposit Growth | 1.00% | 4.00% | 8.00% | 15% |
100% |
The reasons that we selected each of the above goals are as follows:
| 1) | Diluted Earnings Per Share – A direct profitability measure. |
| 2) | Total Stock Return – Aligns bonuses earned by our officers with stock appreciation realized by our shareholders. |
| 3) | Nonperforming Assets to Total Assets (noncovered) – Asset quality has a significant impact on the safety and profitability of the Company. |
| 4) | Loan Growth (noncovered) – Impacts the profitability of the Company. |
| 5) | Core Deposit Growth – Funds future growth and impacts the profitability of the Company |
The term “noncovered” noted above means that we exclude from the calculation assets assumed in two failed-bank acquisitions that are covered by loss-share agreements with the FDIC. We believed it was appropriate to exclude those assets from the measurement criteria due to their unique characteristics.
In addition to the goals noted above, the Compensation Committee also set two triggers that the Company had to meet for any of the above-described bonuses to be paid. In other words, if the Company did not achieve both triggers, no bonuses would be paid to our Other NEOs no matter what the results were for the five goals noted above. The two triggers were:
| · | The Compensation Committee’s conclusion that the results of the annual safety and soundness exam performed by regulatory authorities were satisfactory. |
| · | The Company’s diluted earnings per share must exceed $0.32, which was the amount of dividends the Company expected to pay to its common shareholders. |
Our actual results for 2012 resulted in the Company achieving at least the “Threshold” level of performance for three of the five goals – nonperforming assets to total assets, loan growth and core deposit growth. However, the Company did not meet the diluted earnings per share trigger of $0.32 and therefore, no bonuses were paid to our Other NEOs under the Annual Incentive Plan.
Although no bonus payments were made under the Annual Incentive Plan for 2012, the Compensation Committee granted Mr. Credle a discretionary bonus of $40,000 primarily in recognition of his efforts in the Company’s capital raise that occurred in December 2012 and the Company’s loan sale, which was substantially completed during that same period and became final on January 23, 2013.
| 3. | Equity Grants |
As previously discussed, during 2012 we made equity grants to our Chief Executive Officer.
Due to restrictions imposed by the Stimulus Act and the Treasury related toas a result of our participation in the CPP, we were prohibited from paying any cash bonus to our NEOs for 2009 performance.
| Page 21 |
The following table shows the thresholds, targets, and maximums for each grantedgoal under the Annual Incentive Plan, along with the actual results for 2011 and the performance percentages that resulted from the actual results. As previously discussed, the earnings per share goal was weighted at 50% and the other two goals were assigned a weight of 25% each.
Performance Goal |
Threshold |
Target |
Maximum |
Actual for 2011 | Performance Percentage |
| Earnings per share - basic | $ 0.73 | $ 0.83 | $ 1.66 | $ 0.44 | 0.0% |
| Core deposit growth | 4% | 7% | 18% | 4.93% | 16.4% |
| Efficiency ratio | 62.85% | 58.02% | 49.42% | 60.08% | 19.7% |
| Total payout percentage | 36.1% |
As shown above, the total payout percentage according to the terms of the Annual Incentive Plan was 36.1%. Accordingly, the following table illustrates how each officer’s incentive bonus for 2011 would have been calculated, had each NEO been eligible to participate in the Annual Incentive Plan:
Named Executive | (A)
2011 Salary ($) | (B)
Target Bonus | (C)
Performance | (A times B times C)
Amount of Incentive |
| Jerry L. Ocheltree | 511,704 | 16.7% | 36.1% | 30,765 |
| Anna G. Hollers | 325,029 | 13.3% | 36.1% | 15,629 |
| Eric P. Credle | 283,868 | 13.3% | 36.1% | 13,645 |
(1) As previously discussed, due to challenging economic conditions facing the banking industry and the Company’s low levels of expected profitability in 2011 compared to prior years, the Compensation Committee decided early in 2011 that every officer’s target bonus percentage would be reduced to one-third of its established level. See pages 19 and 20 for additional discussion.
Based on this review, we decided to award these three NEOs restricted stock with a value that was equal to 20%the amounts shown above based upon the Company’s closing stock price on February 23, 2012. Our Company’s closing stock price on February 23, 2012 was $10.96 and accordingly the following number of their base 2010 salary andrestricted shares were granted: Mr. Ocheltree was granted restricted stock equal to 35% of his base 2010 salary.– 2,807, Ms. Hollers- 1,426 , Mr. Credle – 1,245. These awards were granted in amounts and terms that arewere permitted by Stimulus Act and Treasury rulesapplicable regulations for companies participating in the CPP. Accordingly, the shares of restricted stock do not exceed one-third of total compensation and the awards generally vest based on the later of 1) the Company’s repayment of the CPP financial assistance, and 2) two years from the date of grant. After two years from the grant date, for each 25% of total financial assistance repaid, 25% of the total long-term restricted stock may become transferrable. The number of restricted stock shares granted and the corresponding grant-date fair values are presented in the section below entitled “Grants of Plan-Based Awards.”
| Page 22 |
| 4. | Benefits |
We provide a competitive benefits program for our NEOs.NEOs, including our Chief Executive Officer. We provide these benefits in order to retain and attract an appropriate caliber of talent and recognize that other companies with which we compete for talent provide similar benefits to their executive officers.
The following table lists our current benefit programs and shows, for each, the employees eligible for each benefit:
| Benefit Plan | Named Executive Officers | Certain Managers and Individual Contributors | All Full-Time Employees | |||
| Supplemental Executive Retirement Plan | (1) | X | ||||
| Perquisites | X | X | ||||
| 401(k) Plan | X | X | X | |||
| Defined Benefit Pension Plan | (2) | (2) | (2) | |||
| Health Insurance | X | X | X | |||
| Life Insurance (3) | X | X | X | |||
| Bank-Owned Life Insurance (4) | (4) | X | ||||
| Disability Insurance | X | X | X |
(1) Our Chief Executive Officer is not a participant in the Supplemental Executive Retirement Plan, which is discussed below. Our Other NEOs are participants. We froze the benefits of our Supplemental Executive Retirement Plan as of December 31, 2012 for all participants.
(2) Our defined benefit pension plan covers all full-time employees hired on or before June 11, 2009.
(3) The Company provides life insurance for each of its employees amounting to two times the employees’ salary, subject to a cap of $300,000.
(4) In 2012, the Company purchased single-premium bank-owned life insurance policies that insure the lives of approximately 25 officers of the Company. For participating employees, life insurance benefits are two times the employee’s salary with no cap. In the event of death, all proceeds from the life insurance that exceed two times the employee’s salary are payable to the Company. These policies were purchased prior to Mr. Moore joining the Company, and thus he is not currently a participant in this benefit.
Supplemental Executive Retirement Plan
We sponsor a supplemental executive retirement plan, or SERP, for the benefit of certain members of our senior management, including each of the NEOs.our Other NEOs (our Chief Executive Officer is not a participant). The purpose of the SERP is to provide additional monthly pension benefits to ensure that each participant will receive lifetime pension benefits beyond the amounts that we can pay under our qualified pension plan. The SERP generally provides participants with an annual benefit at retirement equal to 3% of final average compensation multiplied by years of service, up to a maximum of 60% of final average compensation. The amount of a participant’s SERP benefit is reduced by (1) the amount payable under our qualified pension plan, and (2) 50% of the participant’s primary Social Security benefit.
We set the benefits payable under the SERP in 1993 at the inception of the plan, in consultation with an employee benefits consultant who assisted us with plan design. At that time, the employee benefits consultant provided peer information and gave his expert opinion that the benefits payable under this plan were reasonable and would further our objectives of attracting and retaining senior management executives. The committee believes these reasons are still valid.
During 2012, we decided that we wanted to offer a uniform set of retirement benefits that would be applicable to all employees and not just those that were hired after June 11, 2009 or those that had achieved a certain level within the Company. Accordingly, effective December 31, 2012, in addition to freezing the qualified defined benefit pension plan (as noted above), we also froze our SERP, which means that the participants of that plan will not earn future benefits under the plan.
| Page 23 |
Perquisites
We provide only very limited perquisites. During 2009,2012, the only perquisites provided to any of the NEOs were as follows:
| · | We paid country club dues amounting to |
| · | We paid civic club dues amounting to $580 on behalf of Mr. |
| · | We have a home loan program that all of our employees are eligible to participate in that allows employees to borrow money for a loan on their primary residence, subject to our normal credit underwriting standards, at an interest rate that is 1% less than the interest rate offered to non-employees. The estimated benefit of this program to our NEOs in 2012 was as follows: Mr. Moore - $0, Mr. Ocheltree - $7,780, Ms. Hollers - $0, Mr. Credle - $0, and Mr. Burns - $0. |
| 5. | Post-Termination Compensation |
Accelerated Vesting
Our current equity plan and the SERP have change in control provisions that automatically vest all participants in the benefits of each plan in the event of a change in the control of our company.Company. We believe that other companies with which we compete for executive talent provide a similar acceleration benefit, and that these provisions therefore assist us in attracting and retaining talent.
Employment Agreements
The employment agreement with our Chief Executive Officer has been previously described. See “Compensation of Richard H. Moore, Chief Executive Officer” above.
Each of our Other NEOs has a three-year employment agreement that automatically renewingrenews for a new three year term on each anniversary date unless either party gives written notice of non-renewal. During 2012, we provided written notice to each of our Other NEOs that their employment agreements with eachwould not automatically renew on their next anniversary date. We made this decision because we concluded that it had been many years since the employment agreements had been entered into, and we wanted an opportunity to review the terms of the NEOs. agreements and make any adjustments needed to align them with current market conditions. We are in the process of this review. Because of the notification provided, our Other NEOs employment agreements will expire in January 2015 for Mr. Ocheltree, in August 2014 for Ms. Hollers and Mr. Credle and in September 2014 for Mr. Burns.
Each of these agreements provides for the payment of certain severance benefits to the officer upon termination of employment in certain circumstances, including following a change in the control of our company. For more information about these benefits, see the section below captioned “Executive Compensation – Potential Payments Upon Termination.” Each agreement also contains non-competition and confidentiality covenants that protect our company if the officer leaves.
The original objectives of the Other NEO employment agreements arewere as follows:
| · | The multi-year term helps us attract and retain talented executive officers. |
| · | The non-competition covenant protects us by preventing an officer from leaving our company and immediately joining a competitor, which would likely result in the officer taking business away from us. |
| · | The confidentiality covenant protects us by preventing an officer from disclosing trade secrets or confidential information regarding our company or our customers for two years after the officer leaves his or her employment with the company. |
| · | The change-in-control severance payment provision benefits us by minimizing the uncertainty and distraction caused by the current climate of bank acquisitions, and by allowing our executive officers to focus on performance by providing transition assistance in the event of a change in control. |
| Page 24 |
The committeeCompensation Committee and the board believe the amount of the severance benefits potentially payable to each named executive officerOther NEO under these agreements is reasonable and consistent with industry standards.
The above discussion described the five primary components of our executive compensation program. The following section describes other guidelines and procedures affecting executive compensation.
Other Guidelines and Procedures Affecting Executive Compensation
Stock Option Grants
When we approve a stock option grant, we set a date in the future as the measurement date for the exercise price of the stock option. We do not “back-date” stock option grants. We do not have a policy or practice of making stock option grants during periods in which there is material non-public information about our company.
It has been and continues to be our intent that all incentive payments be deductible unless maintaining deductibility would undermine our ability to meet our primary compensation objectives or is otherwise not in our best interest. At this time, essentially all compensation we have paid to the NEOs is deductible under the federal tax code, except for income realized from exercise of incentive stock options by some executive officers. We are currently evaluating whether the $500,000 limit on tax deductible compensation resulting from our participation in the CPP will have any impact on the Company.
Share Ownership Guidelines for Named Executive Officers
We do not require our NEOs to own any minimum amount of our common stock. We may considerHowever, we are currently considering such a minimum stock ownership policypolicy.
Consideration of Prior-Year Shareholder Advisory Vote
At the 2012 annual meeting of shareholders, on the proposal approving, on an advisory basis, the compensation paid to our named executive officers as disclosed in the future, butproxy statement for that annual meeting, 95 percent of the committee does not currently believe that such a policy is necessary. We believevotes cast were cast in favor of the proposal. The Compensation Committee considered this high level of support as providing confirmation that the way we compensateshareholders support our NEOs aligns their interest sufficientlycompensation policies and decisions for our named executive officers, and determined that its approach to the 2013 compensation policies and decisions would remain generally consistent with that of the shareholders.approach in 2012.
| Page 25 |
COMPENSATION COMMITTEE REPORT
The Compensation Committee of First Bancorp has reviewed and discussed with management the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K. Based on its review and discussion, the Compensation Committee recommended to the board that the Compensation Discussion and Analysis be included in this proxy statement and in First Bancorp’s annual report on Form 10-K for filing with the Securities and Exchange Commission.
The Compensation Committee has conducted a risk-based assessment of the Company’s compensation plans, policies and practices to determine whether such plans, policies and practices create risks that are reasonably likely to have a material adverse effect on the Company. Based on this assessment, the Compensation Committee discussedhas concluded that the Company’s compensation plans, policies and practices do not create risks that are reasonably likely to have a material adverse effect on the Company. As part of its assessment, the Compensation Committee evaluated the Company’s compensation plans and whether any limits or restrictions were needed in orderprograms to minimize anydetermine their propensity to cause undue risk taking by employees, including senior executive officers, relative to the level of risk associated with:
| Threshold ($) | Target ($) | Maximum ($) | |
| 2008 | 1.53 | 1.70 | 1.87 |
| 2009 | 1.68 | 1.87 | 2.06 |
| 2010 | 1.85 | 2.06 | 2.27 |
Submitted by the Compensation Committee of First Bancorp’s board of directors.
| Jack D. Briggs | Thomas F. Phillips |
| David L. Burns | Frederick L. Taylor II |
| Virginia C. Thomasson | |
| James C. Crawford, III | John C. Willis |
| Page 26 |
Summary Compensation Table
The following table shows the compensation we paid in each of the last three fiscal years to the NEOs.
2012 SUMMARY COMPENSATION TABLE
| Name and Principal Position | Year | Salary ($) | Bonus ($) (3) | Stock Awards ($) (4) | Option Awards ($) (4) | Non-Equity Incentive Plan Compensation ($) (5) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) (6) | All Other Compens- ation ($) (7) | Total ($) |
| (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) |
| Richard H. Moore (1) | 2012 | 267,256 | 300,000 | — | — | — | — | 41,357 | 608,613 |
| President and Chief | |||||||||
| Executive Officer | |||||||||
| Jerry L. Ocheltree (2) | 2012 | 511,704 | — | 30,765 | — | — | 118,000 | 54,677 | 715,146 |
| President of First Bank | 2011 | 511,704 | — | 32,453 | — | — | 373,000 | 55,700 | 972,857 |
| 2010 | 496,800 | — | — | — | — | 192,000 | 59,029 | 747,829 | |
| Anna G. Hollers | 2012 | 325,029 | — | 15,629 | — | — | (17,000) | 24,139 | 347,797 |
| Executive Vice President, | 2011 | 325,029 | — | 16,488 | — | — | 406,000 | 24,590 | 772,107 |
| Chief Operating Officer and | 2010 | 315,562 | — | — | — | — | 179,000 | 25,341 | 519,903 |
| Secretary | |||||||||
| Eric P. Credle | 2012 | 283,868 | 40,000 | 13,645 | — | — | 43,000 | 11,456 | 391,969 |
| Executive Vice President | 2011 | 283,868 | — | 14,395 | — | — | 107,000 | 13,533 | 418,796 |
| and Chief Financial Officer | 2010 | 275,600 | — | — | — | — | 38,000 | 13,621 | 327,221 |
| John F. Burns | 2012 | 224,100 | — | — | — | — | 13,000 | 27,642 | 264,742 |
| Executive Vice President | 2011 | 224,100 | — | — | — | 6,735 | 191,000 | 26,719 | 448,554 |
| 2010 | 17,502 | — | — | — | 4,839 | 123,000 | 26,958 | 372,299 |
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) (1) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) (2) | All Other Compens- ation ($) (3) | Total ($) | ||||||||||||||
| (a) | (b) | (c) | (d) | (e) | (g) | (h) | (i) | (j) | ||||||||||||||
| Jerry L. Ocheltree | 2009 | 409,500 | — | 173,870 | — | 144,000 | 43,454 | 770,824 | ||||||||||||||
| President and Chief | 2008 | 340,000 | — | — | 157,471 | 106,500 | 41,457 | 645,428 | ||||||||||||||
| Executive Officer | 2007 | 312,700 | — | — | 206,617 | 81,500 | 42,871 | 643,688 | ||||||||||||||
| Anna G. Hollers | 2009 | 280,602 | — | 78,890 | — | 204,000 | 29,726 | 593,218 | ||||||||||||||
| Executive Vice President, | 2008 | 265,356 | — | — | 98,320 | 153,600 | 26,951 | 544,227 | ||||||||||||||
| Chief Operating Officer and Secretary | 2007 | 255,150 | — | — | 134,872 | 138,800 | 32,878 | 561,700 | ||||||||||||||
| Teresa C. Nixon | 2009 | 266,950 | — | 76,240 | — | 87,000 | 16,246 | 446,436 | ||||||||||||||
| Executive Vice President & | 2008 | 245,676 | — | — | 91,028 | 78,100 | 14,493 | 429,297 | ||||||||||||||
| Chief Lending Officer | 2007 | 236,225 | — | — | 124,869 | 58,900 | 18,923 | 438,917 | ||||||||||||||
| Eric P. Credle | 2009 | 234,593 | — | 68,738 | — | 24,000 | 15,106 | 342,437 | ||||||||||||||
| Executive Vice President | 2008 | 214,000 | — | — | 79,291 | 25,700 | 12,787 | 331,778 | ||||||||||||||
| and Chief Financial Officer | 2007 | 200,000 | — | — | 105,720 | 20,800 | 16,133 | 342,653 | ||||||||||||||
| John F. Burns | 2009 | 209,442 | — | — | — | 107,000 | 30,761 | 347,203 | ||||||||||||||
| Executive Vice President | 2008 | 207,027 | — | — | 47,942 | 86,800 | 31,243 | 373,012 | ||||||||||||||
| 2007 | 200,997 | — | — | 66,404 | 88,200 | 33,937 | 389,538 | |||||||||||||||
Notes:
| (1) | Mr. Moore’s employment with the Company began in June 2012. |
| (2) | Mr. Ocheltree served as principle executive officer until June 2012. |
| (3) | Mr. Moore and Mr. Credle were awarded discretionary bonuses by the Compensation Committee primarily in recognition their efforts in the Company’s capital raise that occurred in December 2012 and the Company’s loan sale, which was substantially completed during that same period and became final on January 23, 2013. |
| (4) | On August 28, 2012, Mr. Moore was granted 75,000 stock options and 40,000 shares of restricted stock. The stock options vest on December 31, 2014 if the Company achieves a targeted amount of earnings in 2014 and the restricted stock vests on December 31, 2015 if the Company achieves a targeted amount of earnings in 2015. Based on the earnings targets set, as of the date of this proxy statement, the Company does not believe it is probable that either of the awards will vest, and accordingly, no value of the grants is included in this table. See the section of the Compensation and Discussion Analysis above entitled “Composition of Richard H. Moore, Chief Executive Officer” for further discussion of his stock option and restricted stock awards. |
As it relates to 19 senior officers, including eachthe amounts for Mr. Ocheltree, Ms. Hollers, and Mr. Credle, see the sections of our NEOs, comprisedthe Compensation and Discussion Analysis above entitled “Composition of Compensation” and “Equity Grants” for further discussion of stock options and performance units. Each performance unit represents the right to acquire one share of First Bancorp common stock upon satisfaction of the vesting conditions. The vesting of these awards is subject to both (1) our achievement of specific goals for earnings per share during the three annual performance periods ending on each of December 31, 2008, 2009 and 2010, and (2) in general, the executive’s continued employment for a period of two years beyond the annual performance period. The EPS goals were set based on the Company’s strategic plan that was established in 2006. At the time of the grant, because of challenges facing the banking industry (including the Company), it was determined that it was not probable that any of the minimum EPS targets necessary for vesting would be met. Therefore, in accordance with SEC Regulations, the value of this grant is not included in the table above. As expected, the Company did not achieve the minimum level of EPS for 2008 for vesting purposes and the portion of the grant related to the 2008 performance period was permanently forfeited.
| (5) | All amounts in this column were paid pursuant to our Annual Incentive Plan. |
| Page 27 |
| Named Executive Officer | Stock Options | Performance Units |
| Jerry L. Ocheltree | 16,602 | 5,142 |
| Anna G. Hollers | 7,774 | 2,408 |
| Teresa C. Nixon | 7,198 | 2,229 |
| Eric P. Credle | 6,270 | 1,942 |
| John F. Burns | 4,043 | 1,252 |
| All Other Compensation | |||||
| Name | Year | Defined Contribution Plan ($) | Director/ Committee Fees ($) | Club/Civic Dues ($) | Total ($) |
| Jerry L. Ocheltree | 2009 | 14,526 | 22,870 | 6,058 | 43,454 |
| 2008 | 11,184 | 22,810 | 7,463 | 41,457 | |
| 2007 | 19,621 | 23,250 | — | 42,871 | |
| Anna G. Hollers | 2009 | 14,526 | 15,200 | — | 29,726 |
| 2008 | 11,751 | 15,200 | — | 26,951 | |
| 2007 | 17,428 | 15,450 | — | 32,878 | |
| Teresa C. Nixon | 2009 | 14,526 | 1,720 | — | 16,246 |
| 2008 | 11,873 | 1,720 | 900 | 14,493 | |
| 2007 | 17,203 | 1,720 | — | 18,923 | |
| Eric P. Credle | 2009 | 14,526 | — | 580 | 15,106 |
| 2008 | 12,207 | — | 580 | 12,787 | |
| 2007 | 16,133 | — | — | 16,133 | |
| John F. Burns | 2009 | 13,481 | 16,800 | 480 | 30,761 |
| 2008 | 12,565 | 18,300 | 378 | 31,243 | |
| 2007 | 14,827 | 19,110 | — | 33,937 | |
| (6) | The amounts in this column reflect the annual change in the total actuarial net present value of the NEOs’ accrued benefits under our pension plan and SERP. The significantly higher amounts in 2011 compared to the other periods are primarily a result of decrease in the discount rate (from 5.59% to 4.39%) to compute the present value of the benefit, and not a result of any changes in the plans’ benefit formulas. Mr. Moore does not participate in these plans. |
| (7) | The following table shows the components of “All Other Compensation.” |
| All Other Compensation | ||||||||
| Name | Year | Defined Contribution Plan ($) | Director/ Committee Fees (1) ($) | Club/Civic Dues ($) | Interest Savings - Employee Loan Program (2) ($) | Dividends on Restricted Stock (3) ($) | Life Insurance (4) ($) | Total ($) |
| Richard H. Moore | 2012 | — | 34,957 | — | — | 6,400 | — | 41,357 |
| Jerry L. Ocheltree | 2012 | 10,000 | 21,640 | 13,155 | 7,780 | 1,612 | 490 | 54,677 |
| 2011 | 11,025 | 20,140 | 12,833 | 7,917 | 3,785 | — | 55,700 | |
| 2010 | 11,025 | 22,140 | 13,688 | 8,082 | 4,094 | — | 59,029 | |
| Anna G. Hollers | 2012 | 10,000 | 12,700 | — | — | 819 | 620 | 24,139 |
| 2011 | 11,025 | 11,450 | — | 8 | 2,107 | — | 24,590 | |
| 2010 | 11,025 | 12,450 | — | 8 | 1,858 | — | 25,341 | |
| Eric P. Credle | 2012 | 10,000 | — | 580 | — | 715 | 161 | 11,456 |
| 2011 | 11,025 | — | 580 | — | 1,928 | — | 13,533 | |
| 2010 | 11,025 | — | 580 | 397 | 1,619 | — | 13,621 | |
| John F. Burns | 2012 | 9,231 | 17,670 | — | — | — | 741 | 27,642 |
| 2011 | 10,299 | 16,420 | — | — | — | — | 26,719 | |
| 2010 | 9,788 | 17,170 | — | — | — | — | 26,958 | |
| (1) | For Mr. Moore, Director/Committee Fees includes cash of $18,850 received and restricted stock valued at $16,107. All other amounts in this column were paid in cash. |
| (2) | See “Perquisites” in the Compensation Discussion and Analysis section above for an explanation of our Employee Loan Program. The amount in this column is the amount of interest savings the NEO realized as a result of having an interest rate 1% lower than the interest rate available to non-employees. |
| (3) | The amounts in this column represent the amount of cash dividends earned on shares of unvested, restricted stock. |
| (4) | The amounts in the column represent the benefit associated with the life insurance provided by the bank-owned life insurance policies discussed in “Perquisites” in the Compensation Discussion and Analysis section above. |
We have entered into employment agreements with 2119 of our officers, including each of the NEOs. Each agreement has a two- or three-year term that automatically extends for an additional year on each anniversary date of the agreement unless we or the officer gives written notice that the extension will not occur. The term for each NEO is three years.
| Page 28 |
Grants of Plan-Based Awards
The amounts shown in the table below relate to equity grants made to Richard H. Moore in connection with the execution of an employment agreement on August 28, 2012. See the section of the Compensation and Discussion Analysis above entitled “Composition of Richard H. Moore, Chief Executive Officer” for further discussion of the stock option and restricted stock grants made in 2009. These awards generally vest based onawards.
| Estimated Future Payouts Under Equity Incentive Plan Awards | |||||
| Name | Grant Date | Target (#) | All Other Stock Awards: Number of Shares of stock or Units (#) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards ($) |
| (a) | (b) | (g) | (i) | (k) | (l) |
| Richard H. Moore | |||||
| Restricted stock | 8/28/2012 | 40,000 | 390,400 | ||
| Stock options | 8/28/2012 | 75,000 | 9.76 | 273,750 | |
| Jerry L. Ocheltree | — | — | — | — | — |
| Anna G. Hollers | — | — | — | — | — |
| Eric P. Credle | — | — | — | — | — |
| John F. Burns | — | — | — | — | — |
The restricted stock was valued at $9.76 per share, which was the latterclosing price of 1) the Company’s repayment of the CPP financial assistance, and 2) two years fromcommon stock on the date of grant. After two years from
The stock options were valued on the date of grant date, for each 25% of total financial assistance repaid, 25% ofat $3.65 per share using the total long-term restricted stock may become transferrable.Black-Scholes option pricing model with the following assumptions:
| Expected dividend yield | 3.28% |
| Risk-free interest rate | 1.64% |
| Expected life | Ten years |
| Expected volatility | 41.82% |
| Page 29 |
| Name | Grant Date | All Other Stock Awards: Number of Shares of stock or Units (#) | Grant Date Fair Value of Stock and Option Awards ($) |
| (a) | (b) | (i) | (l) |
| Jerry L. Ocheltree | |||
| Restricted Stock | 12/11/2009 | 12,794 | 173,870 |
| Anna G. Hollers | |||
| Restricted Stock | 12/11/2009 | 5,805 | 78,890 |
| Teresa C. Nixon | |||
| Restricted Stock | 12/11/2009 | 5,610 | 76,240 |
| Eric P. Credle | |||
| Restricted Stock | 12/11/2009 | 5,058 | 68,738 |
| John F. Burns | — | — | — |
Outstanding Equity Awards at Fiscal Year-End
The following table provides information about the equity awards our NEOs held as of the end of 2009.
| Option Awards | Stock Awards | ||||||||
| Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market Or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) |
| (a) | (b) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | |
| Richard H. Moore | 8/28/2012 (1) | 75,000 | 9.76 | 8/28/2022 | |||||
| 8/28/2012 (1) | 40,000 | 512,800 | |||||||
| Jerry L. Ocheltree | 4/1/2004 | 3,000 | 21.70 | 4/1/2014 | |||||
| 6/17/2008 | 16,602 | 16.53 | 6/17/2018 | ||||||
| 2/24/2011 (2) | 2,232 | 28,614 | |||||||
| 2/23/2012 (3) | 2,807 | ||||||||
| Anna G. Hollers | 4/1/2004 | 9,001 | 21.70 | 4/1/2014 | |||||
| 6/17/2008 | 7,774 | 16.53 | 6/17/2018 | ||||||
| 2/24/2011 (2) | 1,134 | 14,538 | |||||||
| 2/23/2012 (3) | 1,426 | 18,281 | |||||||
| Eric P. Credle | 4/1/2004 | 3,001 | 21.70 | 4/1/2014 | |||||
| 6/17/2008 | 6,270 | 16.53 | 6/17/2018 | ||||||
| 2/24/2011 (2) | 990 | 12,692 | |||||||
| 2/23/2012 (3) | 1,245 | 15,961 | |||||||
| John F. Burns | 6/17/2008 | 4,043 | 16.53 | 6/17/2018 | |||||
| Option Awards | Stock Awards | ||||||||
| Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market Or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) |
| (a) | (b) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | |
| Jerry L. Ocheltree | 4/1/2004 | 3,000 | 21.70 | 4/1/2014 | |||||
| 6/17/2008 (1) | 33,203 | 16.53 | 6/17/2018 | ||||||
| 6/17/2008 (1) | 10,284 | 143,667 | |||||||
| 12/11/2009 | 12,794 | 178,732 | |||||||
| Anna G. Hollers | 4/1/2004 | 9,001 | 21.70 | 4/1/2014 | |||||
| 6/17/2008 (1) | 15,548 | 16.53 | 6/17/2018 | ||||||
| 6/17/2008 (1) | 4,816 | 67,280 | |||||||
| 12/11/2009 | 5,805 | 81,096 | |||||||
| Teresa C. Nixon | 7/25/2001 | 6,000 | 15.33 | 7/25/2011 | |||||
| 4/1/2004 | 9,001 | 21.70 | 4/1/2014 | ||||||
| 6/17/2008 (1) | 14,396 | 16.53 | 6/17/2018 | ||||||
| 6/17/2008 (1) | 4,459 | 62,292 | |||||||
| 12/11/2009 | 5,610 | 78,372 | |||||||
| Eric P. Credle | 7/25/2001 | 15,000 | 15.33 | 7/25/2011 | |||||
| 4/1/2004 | 3,001 | 21.70 | 4/1/2014 | ||||||
| 6/17/2008 (1) | 12,539 | 16.53 | 6/17/2018 | ||||||
| 6/17/2008 (1) | 3,884 | 54,259 | |||||||
| 12/11/2009 | 5,058 | 70,660 | |||||||
| John F. Burns | 9/14/2000 | 1,667 | 9.75 | 9/14/2010 | |||||
| 6/17/2008 (1) | 8,087 | 16.53 | 6/17/2018 | ||||||
| 6/17/2008 (1) | 2,608 | 36,434 | |||||||
Notes:
| (1) |
| (2) | These awards vested on February 24, 2013. |
| (3) | These awards will vest on |
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Option Exercises and Stock Vested
None of our NEOs exercised stock option exercises byoptions during 2012, nor did any shares of stock vest during the NEOs in 2009.
| Option Awards | ||
| Name | Number of Shares Acquired on Exercise (#) | Value Realized On Exercise ($) |
| (a) | (b) | (c) |
| Jerry L. Ocheltree | — | — |
| Anna G. Hollers | — | — |
| Teresa C. Nixon | — | — |
| Eric P. Credle | — | — |
| John F. Burns | 1,500 | 13,380 |
Pension Benefits
The following table shows information about the NEOs’ accrued benefits under our tax-qualified pension plan and our supplemental executive retirement plan, or SERP.
| Name | Plan Name | Number of Years Credited Service (#) | Present Value of Accumulated Benefit ($) (1) |
| (a) | (b) | (c) | (d) |
| Jerry L. Ocheltree | Qualified Plan | 12 | 132,000 |
| SERP | 12 | 293,000 | |
| Anna G. Hollers | Qualified Plan | 37 | 746,000 |
| SERP | 23 | 572,000 | |
| Teresa C. Nixon | Qualified Plan | 21 | 272,000 |
| SERP | 21 | 289,000 | |
| Eric P. Credle | Qualified Plan | 12 | 79,000 |
| SERP | 12 | 37,000 | |
| John F. Burns | Qualified Plan | 9 | 217,000 |
| SERP | 9 | 259,000 |
| Name | Plan Name | Number of Years Credited Service (#) | Present Value of Accumulated Benefit ($) (2) |
| (a) | (b) | (c) | (d) |
| Richard H. Moore (1) | — | — | — |
| Jerry L. Ocheltree | Qualified Plan | 15 | 297,000 |
| SERP | 15 | 811,000 | |
| Anna G. Hollers | Qualified Plan | 40 | 1,154,000 |
| SERP | 26 | 732,000 | |
| Eric P. Credle | Qualified Plan | 15 | 214,000 |
| SERP | 15 | 90,000 | |
| John F. Burns | Qualified Plan | 12 | 357,000 |
| SERP | 12 | 446,000 |
| (1) | Mr. Moore is not a participant in either of our defined benefit pension plans. |
| (2) | The present value of each officer’s accumulated benefit under each plan was calculated using the following assumptions: The officer retires at age 65. At that time, the officer takes a lump sum based on his or her accrued benefit as of December 31, |
Pension Plan
Our tax-qualified pension plan covers all full-time employees hired on or before June 11, 2009 and provides each participant with an annual retirement benefit paid monthly in cash. Each of our NEOs is a participant in the plan. At normal retirement age of 65, this benefit is equal to the sum of:
| (1) | 0.75% of the participant’s final average compensation multiplied by his/her years of service (up to 40), and |
| (2) | 0.65% of the participant’s final average compensation in excess of “covered compensation” (the average of the Social Security taxable wage base during the 35-year period that ends with the year the participant reaches Social Security retirement age), multiplied by years of service (up to 35). |
“Final average compensation” means the average of the participant’s highest consecutive five years of compensation during his or her last 10 years of employment. For purposes of this plan, “compensation” generally means base salary plus bonuses. However, the federal tax code limits the amount of compensation we can take into account for purposes of the pension plan. The limit was $235,000$250,000 for 2009.2012.
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Each participant becomes fully vested in his or her plan benefits after five years of service. Early retirement, with reduced monthly benefits, is available to any participant who leaves the company at or after age 55 with 15 years of service. The plan also provides a death benefit to a vested participant’s surviving spouse.
As required by federal pension laws, benefits under the pension plan are funded by assets held in a tax-exempt trust.
SERP
Our SERP is for the benefit of our senior management, including the NEOs. The purpose of the SERP is to provide additional monthly pension benefits to ensure that each participant will receive lifetime pension benefits beyond the amounts that we can pay under our qualified pension plan. The SERP generally provides participants with an annual benefit at normal retirement age of 65, payable monthly in cash, equal to 3% of final average compensation multiplied by years of service (up to a maximum of 20 years). For purposes of the SERP, “final average compensation” has the same meaning as under our pension plan. The amount of a participant’s SERP benefit is reduced by (1) the amount payable under our qualified pension plan, and (2) 50% of the participant’s primary social security benefit.
Each participant becomes fully vested in his or her SERP benefits at retirement, death, disability or a change in control. Early retirement, with reduced monthly benefits, is available to any participant who leaves the company at or after age 55 with 15 years of service. The plan also provides a death benefit to a vested participant’s surviving spouse.
Because the SERP is a non-qualified plan, its benefits are unsecured, and a participant’s claim for benefits under the plan is no greater than the claim of a general creditor.
As a general rule, we do not grant extra years of credited service under either the pension plan or the SERP. On one occasion, we credited two officers of an acquired company with three extra years of service under the SERP. None of the NEOs has received any extra years of credited service under either plan.
Effective December 31, 2012, the Compensation Committee froze the benefits payable under the SERP.
Potential Payments Upon Termination or Change in Control
This section contains information about arrangements that provide for compensation to our NEOs in connection with their termination. Actual circumstances resulting in the departure of an NEO cannot be predicted and may differ from the assumptions used in the information outlined below. In addition, the additional limitations on compensation included in the Stimulus Act generally prohibit severance payments. As a result, the Company will be unable to pay its NEOs the severance or change of control payments outlined below during the period in which the Company retains TARP funds. Our NEOs have executed waivers waiving the rights to such payments to the extent such payments would violate the Stimulus Act.
Employment Agreements
As noted above, we are party to employment agreements with 2119 of our officers, including each of the NEOs. Under each of these agreements, we have agreed to pay the officer’s base salary for the remainder of the agreement term if we terminate the officer other than for cause. The agreement term for Mr. Moore is one year and it automatically renews for an additional one year on each anniversary date. The stated agreement term for Mr. Ocheltree, Ms. Hollers, Mr. Credle and Mr. Burns is three years, and each of the NEOsagreements automatically renew for a new three year term on each anniversary date unless written notice is three years.
We have also agreed to continue paying each officer his or her base salary for the remaindera period of the termtime if the officer’s employment ends due to a long-term disability. However, according toThe term that we will continue paying each of our NEOs in this circumstance is three months for Mr. Moore and for the remainder of the agreement we can deduct from this salary continuation any amount that he or she receives from our company-wide long-term disability plan.term for Mr. Ocheltree, Ms. Hollers, Mr. Credle and Mr. Burns. Also, as it relates to Mr. Ocheltree, Ms. Hollers, Mr. Credle and Mr. Burns, the officer must look for a job somewhere else, or we can stop paying him or her. If the officer finds another job, we can deduct any amounts that he or she earns in the new job from our payments.
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Each employment agreement also provides for severance to the officer if we or the officer terminates his/her employment within 12 months after a change in control (other than for cause or normal retirement). TheFor Mr. Moore, the amount of the severance payment is two times his annual salary, and in addition the Company will reimburse Mr. Moore for the costs he incurs to participate in the health plan of a previous employer for twelve months. For Mr. Ocheltree, Ms. Hollers, Mr. Credle and Mr. Burns, the amount of the severance payment, which we would be required to pay in cash within 10 days after termination following a change of control, is the lesser of:
| · | a specified multiple, ranging from 1 to 2.9 |
| · | 2.99 multiplied by the officer’s “base amount” under Section 280G(b)(3) of the Internal Revenue Code. |
In general, the number calculated according to the first formula will be the smaller number.
The agreements define “control” as the power, either directly or indirectly, to direct our management or policies or to vote 40% or more of any class of our securities. In general, any change in control of our company triggers the change in control provisions of the employment agreements. However, the agreements expressly exclude as a “change in control” any merger, consolidation or reorganization following which the owners of our capital stock who were previously entitled to vote in the election of our directors own 61% or more of the resulting entity’s voting stock.
The agreements for Mr. Ocheltree, Ms. Hollers, Mr. Credle and Mr. Burns also state that any of the following events will be considered to be a “change in control”:
| · | any person, entity or group becoming the beneficial owner, directly or indirectly, of 33% or more of any class of our voting stock; |
| · | during any period of two consecutive years, individuals who at the beginning of the period made up our board (we refer to these individuals as the “incumbent board”), or persons whose election was approved by at least three-quarters of the incumbent board, fail to make up at least a majority of the board; or |
| · | the sale of all or substantially all of our assets. |
The following table shows the lump sum cash severance amounts we would have owed our NEOs under their employment agreements if they had terminated employment on December 31, 20092012 under various circumstances.
| Name | Nature of Payment | Involuntary Termination for Cause or Voluntary Termination by Employee ($) | Involuntary Termination Without Cause ($) (1) | Termination due to Long-Term Disability ($) (2) | Change In Control ($) (3) |
| Jerry L. Ocheltree | Severance - Cash | — | 853,125 | 615,625 | 1,180,362 |
| Anna G. Hollers | Severance - Cash | — | 736,580 | 437,330 | 813,746 |
| Teresa C. Nixon | Severance - Cash | — | 700,744 | 401,494 | 774,155 |
| Eric P. Credle | Severance - Cash | — | 615,807 | 316,557 | 680,320 |
| John F. Burns | Severance - Cash | — | 567,239 | 258,489 | 607,382 |
| Name | Nature of Payment | Involuntary Termination for Cause or Voluntary Termination by Employee ($) | Involuntary Termination Without Cause ($) (1) | Termination due to Long-Term Disability ($) (2) | Change In Control ($) (3) |
| Richard H. Moore | Severance - Cash | — | 316,667 | 118,750 | 963,188 |
| Jerry L. Ocheltree | Severance - Cash | — | 1,058,929 | 823,015 | 1,483,942 |
| Anna G. Hollers | Severance - Cash | — | 528,172 | 342,922 | 942,584 |
| Eric P. Credle | Severance - Cash | — | 461,286 | 276,036 | 823,217 |
| John F. Burns | Severance - Cash | — | 382,838 | 188,088 | 649,890 |
| (1) | These amounts are equal to 1/12 of each officer’s base salary as of December 31, |
| Page 33 |
| (2) | This column shows the amounts due under the terms of the officers’ employment agreements, |
| (3) | Except for Mr. |
Our current equity plan and the SERP have change in control provisions that automatically vest all participants in the benefits of each plan in the event of a change in control of our Company. See “Outstanding Equity Awards at Fiscal Year End” for information about the equity awards that our NEOs held as of the end of 2012 that would be subject to accelerated vesting upon a change in control. See “Pension Benefits – SERP” for information about the NEO benefits that would be subject to accelerated vesting upon a change in control.
The employment agreements also contain non-competition and confidentiality covenants by the officers. The non-competition covenants prohibit each officer from:
| · | engaging, directly or indirectly, in any competing activity or business within a restricted territory for a certain period of time after leaving our company, which we call the restricted period; |
| · | soliciting or recruiting any of our employees during the restricted period; and |
| · | making sales contacts with or soliciting any of our customers for any products or services that we offer, in either case within the restricted territory during the restricted period. |
The restricted period is one year if we terminate the officer for cause or he or she terminates voluntarily. If we terminate him or her other than for cause, the restricted period is the remainder of the agreement term. The restricted territory for each officer is a 50-mile radius (60 miles for Mr. Moore) around his or her primary residence and/or work location.
The confidentiality covenants contained in each agreement prohibit the officer from disclosing any confidential business secrets or other confidential data both during the term of the employment agreement and for a period of two years after termination.
COMPENSATION OF DIRECTORS
The Board of Directors establishes compensation for Board members based primarily on consultation with an outside consultant, who assists the Board of Directors in evaluating whether its members are receiving fair compensation for the services they perform. This evaluation is based primarily on a comparison to other financial serviceservices companies of a similar size. The peer companies that were used in the most recent comparison were the same as those used during the evaluation of executive officerOther NEO compensation described on page 19 above.
Based on this evaluation, the Board set the following fees for 2009:
Monthly Retainer
| · | Baseline retainer for all directors - $600 |
| · | Additional retainer for the Chairman of the Board of the Company - |
| · | Additional retainer for the Chairman of the Board of First Bank - |
| · | Additional retainer for the Chairman of the Audit Committee - |
| Page 34 |
Meeting Fees
| · | Audit Committee meetings - $350 per meeting |
| · | All other Board meetings, including meetings of the Company’s subsidiaries, and Board committee meetings - $250 per meeting |
All directors of the Company are also directors of First Bank, the Company’s principal subsidiary. Different combinationsNine of ninethose directors of the Company currently serve on the boardsboard of Montgomery Data Services, a subsidiary of the Company, and First Bank Insurance Services, a subsidiary of First Bank. TheDuring 2012, the boards of the Company and First Bank and Montgomery Data Services normally meetmet on a monthly basis, and the First Bank Insurance Services board normally meetsmet on a quarterly basis. Some board members also serve on First Bank’s local advisory boards and receive fees of $60 for each monthly meeting attended.
Non-employee directors of the Company also participate in the Company’s equity plan. In June 2009,2012, each non-employee director of the Company received an option to acquire 2,2501,818 shares of the Company’s common stock. The number of shares of stock overgranted produced a 10-year term at an exercise price equalvalue that was approximately the same as stock option grants that each director had received in years prior to the fair market value of such stock on the date of grant.2010. The Board of Directors intends to make similar grants or grants of equity awards with comparable values,common stock, in June of each year, to non-employee directors.
In addition to the compensation they receive for service as directors, threefour Board members were also employees of the Company in 2009. The2012. These directors are Mr. Brown, Mr. J. Burns, Mr. Moore (became an employee on June 11, 2012) and Mr. Ocheltree. Compensation for Mr. OcheltreeJ. Burns, Mr. Moore, and Mr. BurnsOcheltree is discussed above. Mr. Brown has ana three-year employment agreement with the Company that is consistent with thosethe employment agreements described above.
The following table sets forth compensation we paid to our directors in 2009:
| Name | Fees Earned or Paid in Cash ($) | Option Awards ($) | All Other Compensation ($) | Total ($) |
| (a) | (b) | (d) (4) | (g) | (h) |
| Daniel T. Blue, Jr. (3) | — | — | — | — |
| Jack D. Briggs | 24,780 | 13,635 | — | 38,415 |
| R. Walton Brown (1) | 19,420 | — | 205,781 | 225,201 |
| David L. Burns | 29,280 | 13,635 | — | 42,915 |
| John F. Burns (2) | 16,800 | — | — | 16,800 |
| Mary Clara Capel | 29,700 | 13,635 | — | 43,335 |
| James C. Crawford, III | 20,050 | 13,635 | — | 33,685 |
| R. Winston Dozier (3) | — | — | — | — |
| James G. Hudson, Jr. | 16,240 | 13,635 | — | 29,875 |
| Richard H. Moore (3) | — | — | — | — |
| Jerry L. Ocheltree (2) | 22,870 | — | — | 22,870 |
| George R. Perkins, Jr. | 17,620 | 13,635 | — | 31,255 |
| Thomas F. Phillips | 33,000 | 13,635 | — | 46,635 |
| Frederick L. Taylor II | 24,650 | 13,635 | — | 38,285 |
| Virginia C. Thomasson | 27,850 | 13,635 | — | 41,485 |
| Goldie H. Wallace | 16,600 | 13,635 | — | 30,235 |
| Dennis A. Wicker | 19,450 | 13,635 | — | 33,085 |
| John C. Willis | 26,800 | 13,635 | — | 40,435 |
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value and Nonqualified Deferred Compensation Earnings | All Other Compensation ($) | Total ($) |
| (a) | (b) | (c) (3) | (e) | (f) | (g) | (h) |
| Daniel T. Blue, Jr. | 22,800 | 16,107 | — | — | — | 38,907 |
| Jack D. Briggs | 23,920 | 16,107 | — | — | — | 40,027 |
| R. Walton Brown (1) | 17,670 | — | — | (67,000) | 199,910 | 150,580 |
| David L. Burns | 27,520 | 16,107 | — | — | — | 43,627 |
| John F. Burns (2) | 17,670 | — | — | — | — | 17,670 |
| Mary Clara Capel | 29,950 | 16,107 | — | — | — | 46,057 |
| James C. Crawford, III | 27,270 | 16,107 | — | — | — | 43,377 |
| R. Winston Dozier | 24,770 | 16,107 | — | — | — | 40,877 |
| James G. Hudson, Jr. | 20,420 | 16,107 | — | — | — | 36,527 |
| Richard H. Moore (2) | 18,850 | 16,107 | — | — | — | 34,957 |
| Jerry L. Ocheltree (2) | 21,640 | — | — | — | — | 21,640 |
| George R. Perkins, Jr. | 20,170 | 16,107 | — | — | — | 36,277 |
| Thomas F. Phillips | 29,550 | 16,107 | — | — | — | 45,657 |
| Frederick L. Taylor II | 24,700 | 16,107 | — | — | — | 40,807 |
| Virginia C. Thomasson | 25,500 | 16,107 | — | — | — | 41,607 |
| Dennis A. Wicker | 17,950 | 16,107 | — | — | — | 34,057 |
| John C. Willis | 24,300 | 16,107 | — | — | — | 40,407 |
| (1) |
| (2) | We report Mr. |
| Page 35 |
| (3) |
| On June 1, |
The following table shows the number of stock options that each director held as of December 31, 2009:
| Aggregate Outstanding Equity Awards | |
| Name | Options Outstanding (#) |
| Daniel T. Blue, Jr. | — |
| Jack D. Briggs | |
| R. Walton Brown | |
| David L. Burns | 15,750 |
| John F. Burns | |
| Mary Clara Capel | 11,250 |
| James C. Crawford, III | 4,500 |
| R. Winston Dozier | — |
| James G. Hudson, Jr. | 4,500 |
| Richard H. Moore | — |
| Jerry L. Ocheltree | |
| George R. Perkins, Jr. | |
| Thomas F. Phillips | |
| Frederick L. Taylor II | 11,250 |
| Virginia C. Thomasson | |
| Dennis A. Wicker | |
| John C. Willis | |
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The 20092012 members of the Compensation Committee were Mr. Briggs, Mr. D. Burns, Ms. Capel, Mr. Crawford III, Mr. Phillips-Chairman, Mr. Perkins, Mr. Taylor II, Ms. Thomasson, Mr. Wicker, and Mr. Willis. None of these members has ever been an officer or employee of the Company. There are no Compensation Committee interlocks, as described in SEC rules and regulations.
CERTAIN TRANSACTIONS
In addition to the rules and regulations of the Securities and Exchange Commission, the Company and First Bank are subject to Federal Reserve Board Regulation O, which governs extensions of credit by First Bank to any executive officer, director or principal shareholder of the Company or First Bank. The Company has established processes for reviewing and approving extensions of credit and other related party transactions. Related party transactions are approved by the Board of Directors, and the related person does not participate in the deliberations or cast a vote. The Audit Committee also reviews all related party transactions and determines whether to ratify or approve such transactions.
The Company collects information about related party transactions from its officers and directors through annual questionnaires distributed to officers and directors, or when transactions or proposed transactions are reported throughout the year. Each director and officer agrees to abide by the Company's Code of Conduct,Ethics, which provides that officers and directors should avoid conflicts of interest and that any transaction or situation that could involve a conflict of interest between the Company and an officer or director must be reported and must be approved by the Audit Committee or the Board (or another committee thereof) if and when appropriate. The Code of ConductEthics identifies a non-exclusive list of situations that may present a conflict of interest, including significant dealings with a competitor, customer or supplier, similar dealings by an immediate family member, personal investments in entities that do business with the Company, and gifts and gratuities that influence a person’s business decisions, as well as other transactions between an individual and the Company. The Audit Committee’s charter provides that the Audit Committee will review, investigate and monitor matters pertaining to the integrity or independence of the Board, including related party transactions. The Audit Committee and the Board reviewsreview and makesmake determinations about related party transactions or other conflicts of interest as they arise, and in addition the Audit Committee conducts an annual review of all related party transactions early in each fiscal year, after director and officer questionnaires have been received from management and the Board.
Certain of the directors, nominees, principal shareholders and officers (and their affiliates) of the Company have deposit accounts and other transactions with First Bank, including loans in the ordinary course of business. AllExcept as discussed in the next sentence, all loans or other extensions of credit made by First Bank to directors, nominees, principal shareholders and officers of the Company and to affiliates 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 or present other unfavorable features. As discussed in “Perquisites” in the Compensation Discussion and Analysis section above, in accordance with applicable banking regulations, the Company has a home loan program that all of our employees are eligible to participate in that allows employees to borrow money for a loan on their primary residence, subject to our normal credit underwriting standards, at an interest rate that is 1% less than the interest rate offered to non-employees. At December 31, 2009,2012, the aggregate principal amount of loans to directors, nominees, principal shareholders and officers of the Company and to affiliates of such persons was approximately $5,389,000.$6,890,000. None of these loans are on nonaccrual status or are otherwise impaired.
| Page 36 |
The following paragraphs describe other related party transactions occurring during 2012 involving our directors or executive officers that exceeded $120,000.
Transactions related to Anna G. Hollers, Executive Officer
In 2012, the Company made payments to the law firm of Hollers & Atkinson totaling $203,638, of which $3,200 related to legal services rendered to the Company, $75,540 related to trustee fees paid in foreclosure proceedings, and $124,898 related to the reimbursement of costs advanced on behalf of the Company in foreclosure proceedings. One of the partners of Hollers & Atkinson is the spouse of Anna Hollers, an executive officer of the Company. The Company's review and approval policies stated above were followed for the transactions described in this paragraph.
Transactions related to Dennis A. Wicker, Director
In 2011, it was determined that, beginning in 2009, the Company engaged James Wicker or Wicker Properties, located in Wilmington, N.C., to act as sales agent for the marketing and sale of certain properties of the Company's foreclosed real estate and to perform property management duties related to such properties located in the Wilmington area. During this time, James Wicker earned industry-standard commissions for acting as the listing agent for these properties. In return, he provided property management services for these same properties free of charge, with James Wicker being reimbursed by the Company only for his out-of-pocket cost for performing these property management services.
James Wicker is the brother of Director Dennis Wicker. Director Wicker did not have any knowledge of the Company's relationship with James Wicker or Wicker Properties prior to 2011, and Director Wicker has not had any business or professional relationship with Wicker Properties or James Wicker since becoming a member of the Board.
Because of the amount of payments made to James Wicker or Wicker Properties during 2011, it was determined that Director Wicker was not eligible to be considered an independent director. In late 2011, the Company acted to cease all business relationships with James Wicker and Wicker Properties. Most, but not all, of the business relationships and outstanding contracts were ceased by December 31, 2011. The Company made the following payments to James Wicker or Wicker Properties in early 2012: $88,334 related to commissions earned for acting as the Company’s sales agent or buyer’s agent on property sales, and $3,900 for reimbursement of out-of-pocket costs associated with property management services. The Company's review and approval policies stated above were not followed for these transactions.
In 2012, James Wicker filed a lawsuit against the Company that alleged that the Company acted improperly in ceasing the business relationships. In December 2012, the Company and James Wicker settled the lawsuit with the Company agreeing to pay Mr. Wicker $220,000 to compensate him for lost real estate commissions on properties in which he had expended significant effort prior to being terminated from the contract. Additionally, the Company agreed to provide Mr. Wicker with the opportunity to earn up to $325,000 over the next three years in the form of commissions from real estate sales and property management fees. The Company's review and approval policies stated above were followed for the transactions described in this paragraph. Because of the amount of the payments made in 2012, Dennis Wicker will not be eligible to be considered an independent director until the end of 2015.
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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 10% 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 2009.2012. Based upon a review of such reports and representations from the Company’s directors and executive officers, the Company believes that all such reports were filed on a timely basis in 2009.
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PROPOSAL 2 – RATIFICATION OF INDEPENDENT AUDITORS
The Company’s Articles of Incorporation currently sets the number of shares of authorized common stock at 20,000,000. The Company currently has outstanding 16,736,730. The board of directors believes that it is important to assure that an adequate supply of authorized, unissued shares of common stock is available for possible future acquisitions or general corporate needs, such as future stock splits, stock dividends, or issuance of shares under stock-based benefit plans. Accordingly the board of directors recommends an increase to the number of shares of authorized common stock to 40,000,000 shares. The new shares will have the same rights and preferences as the common stock of the Company currently outstanding. Holders of common stock of the Company do not have preemptive rights.
Representatives of Elliott Davis, PLLC are expected to be present at the annual meeting. The representatives will be available to respond to appropriate questions and will be given an opportunity to make any statement they consider appropriate.
AUDIT COMMITTEE REPORT
Management has the primary responsibility for the financial statements and the reporting process. The Company’s independent auditor, which was Elliott Davis, PLLC (“Elliott Davis”) for 2009,2012, is responsible for expressing an opinion on the conformity of the Company’s audited financial statements to accounting principles generally accepted in the United States of America and for attesting to the Company’s control over financial reporting. The Company’s Audit Committee pre-approves all audit services and permitted non-audit services (including the fees and terms thereof) to be performed by the independent auditors. The Audit Committee may delegate authority to subcommittees consisting of one or more members when appropriate, including the authority to grant pre-approvals of audit and permitted non-audit services, provided that decisions of such subcommittee to grant pre-approvals shall be presented to the full Audit Committee at its next scheduled meeting.
The Audit Committee has reviewed and discussed with management and Elliott Davis the audited financial statements as of and for the year ended December 31, 2009.2012. The Audit Committee has discussed with Elliott Davis the matters required to be discussed by Statement on Auditing Standards No. 61 (Communication with Audit Committees)AU Section 380 of the audit standards of the Public Company Accounting Oversight Board (“PCAOB”). In addition, the Audit Committee has received from Elliott Davis the written disclosures and letter required by the applicable requirements of the Public Company Accounting Oversight BoardPCAOB regarding Elliott Davis’ communications with the Audit Committee concerning independence and discussed with them their independence from the Company and its management. The Audit Committee also has considered whether Elliott Davis’ provision of any information technology services or other non-audit services to the Company is compatible with the concept of auditor independence. In this analysis, the Audit Committee reviewed the services and related fees provided by Elliott Davis in the following categories and amounts:
2009 | 2008 | |||||||
| Audit Fees | $ | 357,790 | 325,100 | |||||
| Audit-Related Fees | 18,000 | 16,000 | ||||||
| Tax Fees | - | 2,660 | ||||||
| All Other Fees | - | - | ||||||
| Total Fees | $ | 375,790 | 343,760 | |||||
| 2012 | 2011 | |||||||
| Audit Fees | $ | 373,750 | $ | 379,255 | ||||
| Audit-Related Fees | 18,000 | 18,000 | ||||||
| Tax Fees | — | — | ||||||
| All Other Fees | — | — | ||||||
| Total Fees | $ | 391,750 | $ | 397,255 | ||||
For 20082011 and 2009,2012, audit fees included fees for the integrated audit of the consolidated financial statements and internal control over financial reporting (Sarbanes-Oxley Section 404), quarterly reviews of the interim consolidated financial statements and an additional internal control attestation. In 2009,2011 and 2012, audit fees also included fees associated with the audit of a special-purpose statement of assets acquiredsupplementary financial and liabilities assumedcompliance information required by the Company as filed with the SecuritiesDepartment of Housing and Exchange Commission related to the Cooperative Bank acquisition. In 2008, audit fees also includedUrban Development’s (HUD) Uniform Financial Reporting Standards for HUD Housing Programs and fees associated with the issuancea certification that is required as a result of consents related to Securities and Exchange filings related to the Company’s dividend reinvestment plan and a stock option plan.participation in the U.S. Treasury’s Small Business Lending Fund. Audit-related fees for 20082011 and 20092012 consisted of audits of the financial statements of two employee benefit plans sponsored by the Company. The tax fees in 2008 related to consultation regarding the possible tax implications of selling a thrift charter assumed in a corporate acquisition. All services performed by Elliott Davis in 20092012 were pre-approved by the Audit Committee.
| Page 39 |
Based on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors that the audited consolidated financial statements be included in the Company's Annual Report on Form 10-K for the year ended December 31, 20092012 for filing with the Securities and Exchange Commission.
The Board of Directors has determined that Ms. Thomasson is an “audit committee financial expert” within the meaning of SEC rules and regulations.
The Board of Directors has adopted a written charter for the Audit Committee, which is reviewed and reassessed for adequacy on an annual basis. The Audit Committee charter is included as Exhibit A to this Proxy Statement.
RESPECTFULLY SUBMITTED BY THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS:
| Daniel T. Blue, Jr. | Thomas F. Phillips |
| Jack D. Briggs | Frederick L. Taylor II |
| David L. Burns | Virginia C. Thomasson – Chairman |
| Mary Clara Capel | |
| John C. Willis | |
| James C. Crawford, III |
The affirmative vote of the holders of a majority of shares of common stock represented and voting at the meeting (either in person or by proxy) is required for approval of this proposal. The board of directors recommends that shareholders vote “FOR” this proposal. Unless indicated to the contrary, proxies will be voted “FOR” this proposal.
| Page 40 |
PROPOSAL 3 – ADVISORY VOTE APPROVING “SAY ON PAY” PROPOSAL
The Securities and Exchange Commission rules adopted under the “Compensation DiscussionDodd-Frank Wall Street Reform and Analysis” section,Consumer Protection Act (the “Dodd-Frank Act”) require the American Recovery and Reinvestment Act (Stimulus Act) requires that ourCompany to provide shareholders be provided anwith the opportunity to castvote to approve, on a separate non-binding, advisory vote onbasis, the compensation of our named executives officers as disclosed in this proxy statement in accordance with the compensation disclosure rules of the Securities and Exchange Commission.
A description of the the compensation paid to our seniornamed executive officers as describedis included in the “Compensation Discussion and Analysis” section above and the tabular disclosures regarding named executive officer compensation (together with the accompanying narrative disclosure) contained in this proxy statement.
We believe that our executive compensation policies and procedures are strongly aligned with the long-term interests of our shareholders. We also believe that levels of compensation received by our senior executive officers are fair, reasonable and within the ranges of compensation paid by comparable financial institutions to similarly situated executives.
This proposal, commonly known as a “Say-on-Pay,“Say on Pay,” gives you as a shareholder the opportunity to endorse or not endorse our executive compensation programs, policies and procedures through the following resolution:
“Resolved, that the shareholders approve the overall executive compensation programs, policies and procedures employed by First Bancorp, as described in the “Compensation Discussion and Analysis” section and the tabular disclosure regarding named executive officer compensation (together with the accompanying narrative disclosure) contained in the proxy statement provided to the shareholders of First Bancorp on or about April 8, 2010.2, 2013.”
Because your vote is advisory, it will not be binding upon the Company. However, the Compensation Committee and Board may take into account the outcome of the vote when considering future executive compensation arrangements.
The board of directors recommends that shareholders vote “FOR” this proposal. Unless indicated to the contrary, proxies will be voted “FOR” this proposal.
| Page 41 |
SHAREHOLDERS PROPOSALS FOR 2014 MEETING
Shareholders may submit proposals appropriate for shareholder action at the Company’s 20112014 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 20112014 annual meeting, they must be received by the Company no later than December 8, 2010.4, 2013. Such proposals should be directed to First Bancorp, Attn. Anna G. Hollers, 341 North Main Street, Troy, North Carolina 27371-0508.
The bylaws of the Company establish an advance notice procedure for shareholder proposals to be brought before a meeting of shareholders of the Company. Subject to any other applicable requirements, only such business may be conducted at a meeting of the shareholders as has been brought before the meeting by, or at the direction of, the Board of Directors or by a shareholder who has given to the Secretary of the Company timely written notice, in proper form, of the shareholder’s intention to bring that business before the meeting. The presiding officer at such meeting has the authority to make such determinations. To be timely, notice of other business to be brought before any meeting must generally be received by the Secretary of the Company not less than 60 nor more than 90 days in advance of the shareholders’ meeting. The notice of any shareholder proposal must set forth the various information required under the bylaws. The person submitting the notice must provide, among other things, the name and address under which such shareholder appears on the Company's books and the class and number of shares of the Company’s capital stock that are beneficially owned by such shareholder. Any shareholder desiring a copy of the Company’s bylaws will be furnished one without charge upon written request to the Secretary of the Company at the Company’s address noted above.
DELIVERY OF PROXY STATEMENTS AND
NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIALS
As permitted by the Securities Exchange Act of 1934, as amended, only one copy of the proxy statement and annual report is being delivered to shareholders residing at the same address, unless such shareholders have notified the Company of their desire to receive multiple copies of the proxy statement. Additionally, some shareholders have consented to be excluded from the mailing of the proxy statement and annual report, and instead only be notified of the internet web address where they can access the proxy statement and annual report electronically. The internet address where these documents can be accessed is www.cfpproxy.com/3958.
The Company will promptly deliver, upon oral or written request, a separate copy of the proxy statement and annual report to any shareholder residing at an address to which only one copy was mailed or to shareholders who originally consented to only receive notice of internet availability. Requests for additional copies and/or requests for multiple copies of the proxy statement and annual report in the future should be directed to First Bancorp, Attn. Anna G. Hollers, 341 North Main Street, Troy, North Carolina 27371-0508, e-mailing Ms. Hollers at ahollers@firstbancorp.com, or by calling 1-800-548-9377 and asking to speak to Anna Hollers.
Shareholders residing at the same address and currently receiving multiple copies of the proxy statement and annual report may contact the Company as noted above to request that only a single copy of the proxy statement and annual report be mailed in the future. Shareholders who prefer not to receive copies of the proxy statement and annual report, and instead to be notified of the internet address where the documents can be accessed can make that request by visiting www.cfpproxy.com/3958 and following the instructions.
OTHER MATTERS
As of the date of this proxy statement, the Board of Directors does not know of any other business to be presented for consideration or action at the annual meeting. If other matters properly come before the annual meeting, the enclosed proxy will be deemed to confer discretionary authority to the individuals named as proxies therein to vote the shares represented by such proxy as to any such matters.
By Order of the Board of Directors,
Anna G. Hollers
Secretary
April 2, 2013
| Page 42 |
Directions to the
James H. Garner Conference Center
211 Burnette Street, Troy, North Carolina 27371
Location of the 2010
First Bancorp Annual Shareholders’ Meeting
Thursday, May 13, 20109, 2013 - 3:00 PM
First Bancorp
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Jerry L. OcheltreeRichard H. Moore 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 23, 2010,20, 2013, at the annual meeting of shareholders to be held on May 13, 2010,9, 2013, or any adjournment or adjournments thereof.
| 1. | PROPOSAL to elect |
| FOR the | WITHHOLD AUTHORITY | |||
| (except as marked to the contrary below). | to vote for the |
| (Instruction: To withhold authority to vote for any individual nominee, strike a line through the nominee’s name in the list below). |
| Daniel T. Blue, Jr. | James | |
| Frederick L. Taylor II | ||
| Virginia C. Thomasson | ||
| David L. Burns | ||
| Dennis A. Wicker | ||
| Mary Clara Capel | John C. Willis | |
| James C. Crawford, III |
| PROPOSAL to ratify the appointment of Elliott Davis, PLLC, as the independent auditors of the Company for |
| 3. | PROPOSAL to consider and approve an advisory (non-binding) resolution on executive compensation, also known as “say on pay” (as more fully described in the accompanying proxy statement). |
| 4. | In their discretion, the proxies are authorized to vote on any other business that may properly come before the meeting. |
5. | Do you plan to attend the May |
This proxy when properly executed will be voted as directed herein. If no direction is made, this proxy will be voted “FOR” all nominees in Proposal 1, “FOR” Proposal 2, and “FOR” Proposals 2, 3 and 4.Proposal 3. 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.
| Dated | , | ||
| Signature | |||
| 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 officer. 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. If you wish to vote by telephone or internet, please read the instructions below.
INSTRUCTIONS FOR VOTING YOUR PROXY
Shareholders of record have three alternative ways of voting their proxies:
| 1. | By Mail (traditional method); or |
| 2. | By Telephone (using a Touch-Tone Phone); or |
| 3. | By Internet |
Your telephone or Internet vote authorizes the named proxies to vote your shares in the same manner as if you marked, signed, dated and returned your proxy card. Please note all votes cast via the telephone or Internet must be cast prior to 3:00 a.m.11:59 p.m., Eastern Daylight Time, on May 13, 2010.
| Vote by Telephone | Vote by Internet | ||
| It’s fast, convenient and immediate! | It’s fast, convenient, and your vote | ||
| Call Toll-Free on a Touch-Tone Phone: 1-866-627-2896 | immediately confirmed and posted. | ||
| Follow these four easy steps: | Follow these four easy steps: | ||
| 1. | Read the accompanying Proxy Statement and Proxy Card | 1. | Read the accompanying Proxy Statement and Proxy Card |
| 2. | Call the toll-free number: 1-866-627-2896 | 2. | Go to the website: https://www.rtcoproxy.com/fbnc |
| 3. | Enter the 9 digit Control Number located on your Proxy Card below. | 3. | Enter your 9 digit Control Number located on your Proxy Card below. |
| 4. | Follow the recorded instructions | 4. | Follow the instructions on the website. |
| Your vote is important! Call 1-866-627-2896 anytime | Your vote is important! Go to https://www.rtcoproxy.com/fbnc | ||
It is not necessary to return your proxy card if you are voting by telephone or internet.
Please note that the last vote received, whether by telephone, internet, or by mail, will be the vote counted.
For Telephone/Internet Voting:
Control Number
| Control Number Provided Here |