SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
(Amendment No. )
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Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only (as permitted by Rule 14a-
6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material under Rule 14a-12
FNB Corp.
- -------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other than Registrant)
Payment of Filing Fee (check the appropriate box):
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Item 22(a)(2) of Schedule 14A.
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FNB CORP.
101 Sunset Avenue
Asheboro, North Carolina 27203
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 8, 2001
---------------------------------------------
Notice is hereby given that the regular Annual Meeting of Shareholders of
FNB Corp. (the "Corporation") will be held at the AVS Banquet Centre, 2045
North Fayetteville Street, Asheboro, North Carolina, on Tuesday, the 8th day of
May, 2001, at one o'clock p.m., preceded by a buffet luncheon beginning at
12:15 p.m., for the following purposes:
1. To elect four Class III Directors to serve for three-year terms expiring
at the Annual Meeting in 2004.
2. To consider and act upon any other business as may come before the
meeting or any adjournment thereof.
All shareholders are invited to attend the meeting. Only those shareholders
of record at the close of business on March 22, 2001, shall be entitled to
notice of the meeting and to vote at the meeting.
Information relating to the activities and operations of FNB Corp. during
the fiscal year ended December 31, 2000, is contained in the Corporation's
Annual Report, which is enclosed.
By Order of the Board of Directors
/s/ Jerry A. Little
Jerry A. Little
Treasurer and Secretary
April 12, 2001
YOUR BOARD OF DIRECTORS URGES YOU TO MARK, DATE, SIGN AND RETURN THE ENCLOSED
PROXY AS PROMPTLY AS POSSIBLE WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN
PERSON. THE PROXY MAY BE REVOKED AT ANY TIME BY NOTIFYING THE SECRETARY OF FNB
CORP. IN WRITING PRIOR TO THE VOTING OF THE PROXY.
FNB CORP.
101 Sunset Avenue
Asheboro, North Carolina 27203
----------------------
PROXY STATEMENT
----------------------
GENERAL INFORMATION
The following information is furnished in connection with the solicitation
of proxies by the Board of Directors of FNB Corp. (the "Corporation" or "FNB")
for use at the Annual Meeting of Shareholders to be held on May 8, 2001. The
principal executive offices of the Corporation are located at its wholly owned
subsidiary, First National Bank and Trust Company (the "Bank"), 101 Sunset
Avenue, Asheboro, North Carolina 27203 (Telephone: 336-626-8300). This proxy
statement and the enclosed form of proxy were first sent to shareholders on or
about April 12, 2001.
A proxy may be revoked by the person giving it by delivering a written
notice to the Corporation prior to the meeting or by personally requesting that
it be returned. The shares represented by all properly executed proxies
received by the Corporation in time to be taken to the meeting will be voted;
and, if a choice is specified on the proxy, the shares represented thereby will
be voted in accordance with such specification. If a specification is not made,
the proxy will be voted for the proposals set forth in the Notice of Annual
Meeting of Shareholders.
Solicitation of proxies may be made in person or by mail or telephone by
directors, officers and regular employees of the Corporation or the Bank
without additional compensation therefor. The Corporation may also request
banking institutions, brokerage firms, custodians, nominees and fiduciaries to
forward solicitation material to the beneficial owners of FNB Common Stock held
of record by such person, and the Corporation will reimburse such forwarding
expenses. The Corporation will pay the costs of solicitation of proxies.
VOTING SECURITIES OUTSTANDING AND PRINCIPAL SHAREHOLDERS
Only holders of record of FNB Common Stock at the close of business on March
22, 2001 (the "Record Date"), are entitled to a notice of and to vote on
matters to come before the Annual Meeting or any adjournment thereof. On the
Record Date, there were 5,065,942 shares of FNB Common Stock issued and
outstanding.
Each share is entitled to one vote on all matters. The presence, in person
or by proxy, of the holders of a majority of the outstanding shares of FNB
Common Stock entitled to vote is necessary to constitute a quorum.
The Corporation is not aware of any holders of more than 5% of the
outstanding shares of FNB Common Stock as of March 22, 2001.
EXECUTIVE OFFICERS
The following table sets forth the current executive officers of the
Corporation and also shows their positions with the Bank:
Name Age Position in Corporation Position in Bank
- ---- --- ----------------------- -----------------------------------
Michael C. Miller....... 50 Chairman and President Chairman and President
Jerry A. Little......... 57 Treasurer and Secretary Senior Vice President and Secretary
The above officers have held executive positions with the Corporation and
the Bank for at least the past five years. Officers are elected annually by the
Board of Directors.
1
ELECTION OF DIRECTORS
The bylaws of the Corporation provide that the number of directors shall
consist of not less than nine nor more than twenty-five, with the exact number
of directors within such maximum and minimum limits to be fixed and determined
from time to time by resolution adopted by a majority of the full Board of
Directors or by resolution of the shareholders at any annual or special meeting
thereof. The Board of Directors has set the total number of directors at 12,
all of whom either will be elected at the 2001 Annual Meeting or were
previously elected and will remain in office after that meeting.
The Board of Directors is divided into three classes: Class I, Class II and
Class III. In accordance with this classification, the members of Class III of
the Board of Directors are to be elected at this Annual Meeting. It is intended
that the persons named in the accompanying form of proxy will vote for the four
nominees listed below for directors of the Corporation in Class III, unless
authority so to vote is withheld. Each nominee is at present a member of the
Board of Directors. Class III directors will serve for three-year terms
expiring at the 2004 Annual Meeting or until their successors shall be elected
and shall qualify. Directors are elected by a plurality of the votes cast.
Abstentions and broker nonvotes will not affect the election results if a
quorum is present.
The following information is furnished with respect to the nominees for
election as directors of the Corporation in Class III, and for the directors in
Classes I and II whose terms expire at the Annual Meetings occurring in 2002
and 2003, respectively. Each nominee for Class III director and each director
presently serving in Classes I and II also serves as a director of the Bank.
Nominees for Class III Directors to Serve for Three-Year Terms Expiring at the
Annual Meeting in 2004
Principal Occupation Director
Name Age During the Past Five Years Since
---- --- -------------------------- --------
James M. Campbell, Jr... 62 President and Treasurer, Sew Special, Inc. 1984
(Manufacturer of private label apparel)
R. Larry Campbell....... 56 Senior Vice President of the Bank (effective April 2000
2000), formerly President and Chief Executive
Officer, Carolina Fincorp, Inc. and Richmond Savings
Bank, Inc., SSB (1990-2000)
Thomas A. Jordan........ 61 President, Michael Thomas Furniture Company 1984
(Manufacturer of upholstered furniture)
Michael C. Miller....... 50 Chairman and President of FNB Corp. and First 1992
National Bank (Chairman effective January 1999);
Director, B. B. Walker Company
2
Class I Directors with Continuing Terms Expiring at the Annual Meeting in 2002
Principal Occupation Director
Name Age During the Past Five Years Since
---- --- -------------------------- --------
Darrell L. Frye......... 55 Vice President of Finance, Harriss & Covington 1999
Hosiery (Manufacturer of men's and ladies' athletic
socks)
J. M. Ramsay III........ 53 President, Elastic Therapy, Inc. (Manufacturer of 1989
medical and specialty hosiery)
Charles W. Stout, M.D... 68 Retired; Family Physician (in active practice until 1989
May 1996)
Earlene V. Ward......... 69 Secretary and Treasurer, Mid-State Motors, Inc. 1976
(Automobile dealer)
Class II Directors with Continuing Terms Expiring at the Annual Meeting in 2003
Principal Occupation Director
Name Age During the Past Five Years Since
---- --- -------------------------- --------
W. L. Hancock........... 65 President and Treasurer, Hancock Farms, Inc. 1973
(Purebred cattle)
Cooper M. McLaurin...... 57 Vice President, McLaurin Industries (Real estate 2001
holding company)
R. Reynolds Neely, Jr... 47 Planning Director, City of Asheboro Planning 1980
Department
Richard K. Pugh......... 66 Retired; Chairman (until retirement in December 1999), 1988
Pugh Oil Company, Inc. (Convenience stores and
petroleum products distribution)
In the event that any nominee should not be available to serve for any
reason (which is not anticipated), it is intended that the persons acting under
the proxy will vote for the election, in his stead, of such other persons as
the Board of Directors of the Corporation may recommend.
Committees of the Board
The Board of Directors holds regular monthly meetings to conduct the normal
business of the Corporation and meets on other occasions when required for
special circumstances. In addition, certain board members serve on standing
committees. Among these committees are the Audit and Compliance, Compensation
and Nominating Committees, whose members and principal functions are as
follows:
Audit and Compliance Committee. The Audit and Compliance Committee reviews
significant audit and accounting principles, policies and practices and meets
with the audit manager relative to internal audit functions and with the
independent auditors to review the performance of the audit manager and
internal controls and accounting procedures. The committee also reviews
significant regulatory compliance matters and meets with the compliance officer
relative to the compliance management function. Additionally, the committee
reviews regulatory reports filed with the Federal Reserve Board and Comptroller
of the Currency. Members of this committee are Directors Neely, Frye, Hancock
and Stout. The Audit and Compliance Committee met eight times during the 2000
fiscal year.
3
Compensation Committee. The Compensation Committee deals in broad terms with
personnel matters and reviews the compensation of the senior officers of the
Corporation and the Bank. Members of this committee are Directors J. Campbell,
Neely, Pugh and Ward. The Compensation Committee met two times during the 2000
fiscal year.
Nominating Committee. The Board of Directors, as a group, serves as the
Nominating Committee and in that capacity recommends nominees for election to
the Board. Qualified candidates recommended by shareholders will be considered
by the Board. In order for a candidate recommended by a shareholder to be
considered as a nominee at the next annual meeting, the name of the candidate,
together with a written description of the candidate's qualifications, must be
received by the Secretary of FNB Corp., 101 Sunset Avenue, Asheboro, North
Carolina 27203, no later than December 13, 2001.
During the fiscal year ended December 31, 2000, the Board of Directors held
a total of 13 meetings. Each incumbent Director attended 75% or more of the
total number of meetings of the Board and of the committees of the Board on
which he or she served. Cooper M. McLaurin was elected to the Board on March 1,
2001 to serve for the remainder of the unexpired term of her husband, Joe M.
McLaurin, who resigned for health reasons.
EXECUTIVE COMPENSATION
Except as otherwise noted, the following table shows for the fiscal years
ended December 31, 2000, 1999 and 1998, the cash and certain other compensation
paid to or received or deferred by persons who were at December 31, 2000 the
chief executive officer of the Corporation and the other executive officers of
the Corporation or the Bank whose total salary and bonus in 2000 exceeded
$100,000.
Summary Compensation Table
Annual Long Term
Compensation Compensation
---------------- ------------
Securities
Underlying
Name and Principal Position Stock All Other
on December 31, 2000 Year Salary Bonus Options (#) Compensation
- --------------------------- ---- -------- ------- ------------ ------------
Michael C. Miller, Chairman and 2000 $192,500 $47,888 25,000 $6,930(1)
President of the Corporation 1999 192,500 34,192 7,500 6,680
and the Bank 1998 183,754 33,046 7,500 6,680
Jerry A. Little, Senior Vice President 2000 $ 87,305 $22,215 10,000 $5,391(2)
and Secretary of the Bank, Treasurer 1999 84,788 11,726 3,000 4,999
and Secretary of the Corporation 1998 82,924 11,599 3,000 4,937
R. Hooker Thomas III, Senior Vice 2000 $ 91,266 $17,881 10,000 $5,728(3)
President of the Bank, Commercial 1999 87,392 12,054 3,000 5,435
Lending and Retail Banking 1998 85,050 11,875 3,000 5,359
- --------
(1) Amount shown consists of $1,680 paid by the Bank pursuant to a Split Dollar
Insurance Program for executives and $5,250 contributed by the Corporation
to a 401(k) plan.
(2) Amount shown consists of $2,073 paid by the Bank pursuant to a Split Dollar
Insurance Program for executives and $3,318 contributed by the Corporation
to a 401(k) plan.
(3) Amount shown consists of $2,421 paid by the Bank pursuant to a Split Dollar
Insurance Program for executives and $3,307 contributed by the Corporation
to a 401(k) plan.
4
Stock Options
The following table provides details regarding stock options granted to the
executive officers named in the above Summary Compensation Table in the 2000
fiscal year. Information concerning stock options granted to directors is set
forth under the heading "Director Compensation." Except as otherwise noted, the
stock options were granted pursuant to the Corporation's Stock Compensation
Plan.
Option Grants in 2000
Potential
Realizable Value
% of at Assumed Annual
Number of Total Rates of Stock
Securities Options Price
Underlying Granted Exercise Appreciation for
Options to or Base Option Term(2)
Granted Employees Price Expiration -----------------
Name (#)(1) in 2000 ($/Sh) Date 5% 10%
- ---- ---------- --------- -------- ---------- -------- --------
Michael C. Miller....... 25,000 14.2% $11.75 12/20/10 $184,738 $468,162
Jerry A. Little......... 10,000 5.7 11.75 12/20/10 73,895 187,265
R. Hooker Thomas III.... 10,000 5.7 11.75 12/20/10 73,895 187,265
- --------
(1) Incentive Stock Options exercisable one year after the grant date (December
21, 2000), with 20% of the shares covered thereby becoming exercisable at
that time and an additional 20% of the option shares becoming exercisable
on each successive anniversary date. The price for shares that may be
purchased pursuant to the options is equal to the fair market value of the
Corporation's Common Stock on the date of grant.
(2) The potential realizable value of the options granted, assuming that the
market price of the underlying security appreciates in value at annualized
rates of 5% and 10%, respectively, over the ten-year life of the options.
The following table shows the number of shares covered by exercisable and
unexercisable options held by the executive officers named in the Summary
Compensation Table as of December 31, 2000. No options were exercised by these
executive officers in 2000.
Option Values at December 31, 2000
Number of Securities
Underlying Value of Unexercised
Unexercised Options at In-the-Money Options at
December 31, 2000(#) December 31, 2000(1)
------------------------- -------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ------------- ----------- -------------
Michael C. Miller........... 47,500 42,500 $59,613 $7,813
Jerry A. Little............. 16,400 16,600 23,783 3,125
R. Hooker Thomas III........ 17,400 16,600 23,845 3,125
- --------
(1) The closing price of the Corporation's Common Stock on December 31, 2000,
the last trading day of 2000, was $12.0625.
5
Pension Plan Table
The following table shows the estimated annual retirement benefits payable
at the normal retirement age of 65 to participants in the Corporation's
qualified and nonqualified defined benefit plans with salaries in the
classifications indicated.
Pension Plan Table
Approximate Annual Benefit upon Retirement
for Years of Service Indicated
Assumed Average ----------------------------------------------------------
Compensation for 15 20 25 30 35 40
Final Ten Years Years Years Years Years Years Years
- ---------------- ------- ------- ------- ------- ------- -------
$100,000 38,248 43,248 43,248 43,248 49,284 54,284
125,000 51,998 58,248 58,248 58,248 63,722 69,972
150,000 65,748 73,248 73,248 73,248 78,159 85,659
175,000 79,498 88,248 88,248 88,248 92,597 101,347
200,000 93,248 103,248 103,248 103,248 107,034 117,034
225,000 106,998 118,248 118,248 118,248 121,472 132,722
250,000 120,748 133,248 133,248 133,248 135,909 148,409
The Corporation's defined benefit plans include a noncontributory, qualified
Pension Plan and a noncontributory, nonqualified supplemental executive
retirement plan ("SERP"). The Pension Plan covers substantially all full-time
employees who qualify as to age and length of service. Benefits under the
Pension Plan are based on the employee's compensation, which is comprised of
total annual salary and bonus, total years of service and age at retirement.
Benefits payable under the Pension Plan are offset by full Social Security
benefits. As of January 1, 2001, the individuals named in the Summary
Compensation Table had the following credited years of service under the
Pension Plan: Mr. Miller, 15 years; Mr. Little, 16 years and Mr. Thomas, 9
years.
Effective in January 2000, the Corporation adopted the SERP for certain
executive employees, including the individuals named in the Summary
Compensation Table. Annual benefits payable under the SERP are based on factors
similar to those for the Pension Plan and are limited to 60% of Average
Compensation, offset by amounts payable under the Pension Plan and by full
Social Security benefits. Average Compensation for purposes of both the Pension
Plan and the SERP means the average annual compensation during the final ten
years of employment.
The benefit amounts listed in the above Pension Plan Table reflect a
straight life annuity. Due to limitations on benefits payable under the SERP,
the annual benefits in the table for 35 and 40 years of service result from
application of the Pension Plan. Annual retirement benefits over $140,000
exceed the current maximum benefits allowable for qualified plans under the
Internal Revenue Code.
Director Compensation
Directors who are not also employees of the Corporation or the Bank are paid
$400 for each Board meeting they attend and receive an additional $200 for each
committee meeting attended. In addition, each nonemployee director is paid a
monthly retainer of $400. Directors may elect to defer receipt of their fees
and monthly retainers until their retirement from the Board. Any deferred fees
and retainers become a general obligation of the Corporation to be credited
with interest at the Bank's deposit rate applied to individual retirement
accounts with a two-year term and priced on a monthly variable-rate basis,
subject to a minimum rate of 5.5% per annum.
6
On December 21, 2000, the Corporation granted a nonqualified stock option to
purchase 5,000 shares of Common Stock at the price of $11.75 per share to each
of the following nonemployee directors: Mr. J. Campbell, Mr. Frye, Mr. Hancock,
Mr. Jordan, Mr. Neely, Mr. Pugh, Mr. Ramsay, Dr. Stout and Ms. Ward. The price
for shares that may be purchased pursuant to the options is equal to the fair
market value of the Corporation's Common Stock on the date of grant. The stock
options first become exercisable on December 21, 2001, with 20% of the shares
covered thereby becoming exercisable at that time and an additional 20% of the
option shares becoming exercisable on each successive anniversary date. The
options expire on December 20, 2010.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee is responsible for setting the compensation for
the members of senior management of the Corporation and the Bank. The Committee
determines the compensation level of the President, which is reviewed and
ratified by the full Board of Directors, and acts upon the recommendations of
the President as to the compensation of the other senior management employees.
Four nonemployee directors currently serve as members of the Committee: James
M. Campbell, Jr., Chairman, R. Reynolds Neely, Jr., Richard K. Pugh and Earlene
V. Ward.
Compensation Philosophy
The Corporation's compensation policies are designed to attract and retain
competent management. The Board's goal is to provide competitive base salaries
to the Corporation's and the Bank's management employees and to give them, as
well as all other employees of the Corporation and the Bank, performance
incentives to motivate superior performance on behalf of the Corporation and
its shareholders. The Corporation has generally used two types of incentive
compensation: annual cash bonuses based on the overall performance of the Bank
and long-term compensation in the form of stock options. The Committee believes
that linking long-term compensation to the value of the Corporation's Common
Stock is especially effective because it aligns the interests of management
with those of the Corporation's shareholders.
Executive Officer Compensation
Annual Compensation. The Committee's recommendations for base salary for the
President and other management employees are based on information available
through industry sources regarding the compensation of executives of other
institutions similar in size and in other respects to the Bank. Mr. R. Larry
Campbell's base salary was established under his Employment Agreement with the
Bank, which was entered into in connection with the Corporation's acquisition
of Carolina Fincorp, Inc. in April 2000. His base salary, initially set at
$100,000 per year, may be increased from time to time in accordance with the
same considerations the Committee affords to the compensation of all management
employees. The Committee considers annual cash bonuses as an integral part of
the Corporation's financial incentive package to achieve the Corporation's
goals. Bonuses are paid to all employees of the Bank based on the Bank's
operating results for the year in a number of specific areas, with each
employee receiving the same percentage of his or her base salary as every other
employee. The Committee generally adopts the goals for the year at the
beginning of the year. Goals are generally established for the growth in loans
and deposits, profit margins, noninterest income, loan quality and
productivity. Senior management employees generally receive an additional bonus
based on similar criteria in the discretion of the Board, based on the
Committee's recommendations.
Long-Term Compensation. The Corporation's long-term incentive compensation
awards are designed to encourage the retention of key executives and to align
their interests with the interests of shareholders. Long-term compensation for
the President and other management employees consists principally of stock
options. The Corporation currently has a Stock Compensation Plan (the "Plan"),
which provides for the grant of incentive and nonqualified options, stock
bonuses and restricted stock. The Corporation believes that stock
7
options granted under the Plan are performance-based and, therefore, deductible
by the Corporation under Section 162(m) of the Internal Revenue Code. The Plan
provides for other types of compensation, such as stock bonuses and restricted
stock, which will be performance-based only if performance goals are
established by the Committee in compliance with Section 162(m); no substantial
stock bonuses of restricted stock have ever been granted by the Committee. The
Committee administers the Plan and determines, in its discretion, what stock
grants will be made. Stock options have been granted to the President and to
other management employees on an annual basis since 1994. For further
information regarding the options granted to the President in 2000, see
"Executive Compensation--Stock Options" above. The Committee believes that all
grants to the President under the Plan are performance-based for purposes of
Section 162(m).
CEO Compensation. In setting Mr. Miller's 2000 base salary as President and
Chief Executive Officer of FNB, the Compensation Committee considered the
Bank's and the Corporation's achievement of various performance goals and
reviewed the compensation paid to chief executive officers of comparable
financial institutions of similar asset size. Return on assets and return on
equity were considered, as well as such factors as loan quality and
productivity, growth in loans and deposits, and profitability. The Committee
also reviewed national, regional, statewide and local peer group salary data to
determine a competitive and reasonable base salary. Mr. Miller's base salary
and total bonuses in 2000 are shown in the Summary Compensation Table above.
The Committee and the Board of Directors considered this base salary and these
bonuses appropriate in view of their overall assessment of the performance of
the President, the Corporation and the Bank.
Submitted by the Compensation Committee of the Board of Directors:
James M. Campbell, Jr., Chairman
R. Reynolds Neely, Jr.
Richard K. Pugh
Earlene V. Ward
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
None of the members of the Compensation Committee has ever been an officer
or employee of the Corporation or any of its subsidiaries or performs services
for the Corporation or its subsidiaries other than as a director.
8
PERFORMANCE GRAPH
The following graph and table compare the cumulative total shareholder
return of FNB Common Stock for the five-year period ended December 31, 2000
with the SNL Southeast Bank Index and the Standard and Poor's 500 Stock Index,
assuming an investment of $100 at the beginning of the period and the
reinvestment of dividends.
[Line chart appears here with the following plot points:]
As of December 31,
-----------------------------------------------
1995 1996 1997 1998 1999 2000
------- ------- ------- ------- ------- -------
FNB Corp....................... $100.00 $129.50 $176.63 $256.08 $147.68 $116.37
SNL Southeast Bank Index....... 100.00 137.27 208.09 221.53 174.32 175.04
S&P 500 Index.................. 100.00 122.86 163.86 210.64 254.97 231.74
INDEBTEDNESS OF OFFICERS AND DIRECTORS
Certain of the directors and officers of the Corporation and the Bank and
companies with which they are affiliated were customers of and borrowers from
the Bank in the ordinary course of business in 2000. Similar banking
transactions are expected to take place in the future. In the opinion of
management, all outstanding loans and commitments included in such transactions
were made substantially on the same terms, including rate and collateral, as
those prevailing at the time in comparable transactions with other customers
and did not involve more than normal risk of collectibility or contain other
unfavorable features.
9
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth as of March 22, 2001, certain information
with respect to the beneficial ownership of FNB Common Stock by directors, by
the executive officers named in the Summary Compensation Table and by directors
and executive officers as a group.
Amount and Nature of
Beneficial Ownership Percent
Name and Address March 22, 2001(1)(2) of Class
- ---------------- -------------------- --------
James M. Campbell, Jr., Director................ 56,538 1.11
Randleman, NC
R. Larry Campbell, Director..................... 56,491 1.11
Rockingham, NC
Darrell L. Frye, Director....................... 1,500 *
Archdale, NC
W. L. Hancock, Director......................... 113,664 2.24
Franklinville, NC
Thomas A. Jordan, Director...................... 34,435 *
Liberty, NC
Cooper M. McLaurin, Director.................... 14,581 *
Rockingham, NC
Michael C. Miller, Chairman and President....... 76,148(3) 1.49
Asheboro, NC
R. Reynolds Neely, Jr., Director................ 160,540(4) 3.16
Asheboro, NC
Richard K. Pugh, Director....................... 11,700 *
Asheboro, NC
J. M. Ramsay III, Director...................... 32,730 *
Asheboro, NC
Charles W. Stout, M.D., Director................ 28,140 *
Asheboro, NC
Earlene V. Ward, Director....................... 30,912 *
Asheboro, NC
Jerry A. Little, Treasurer and Secretary........ 17,151 *
Asheboro, NC
R. Hooker Thomas III, Senior Vice President..... 18,192 *
Asheboro, NC
Directors and executive officers as a group (14
persons)....................................... 652,722(3)(4) 12.46
- --------
* Less than one percent.
(1) Includes shares held by directors' and executive officers' immediate
families, including spouse and/or children residing in same household. Does
not include 4,620 shares owned by the Ferree Educational and Welfare Fund,
of which Mr. Miller is a trustee and treasurer.
(2) Includes shares subject to stock options exercisable as of March 22, 2001
or within 60 days thereafter for Mr. J. Campbell (8,700 shares), Mr. R.
Campbell (24,490 shares), Mr. Frye (300 shares), Mr. Hancock (8,100
shares), Mr. Jordan (8,700 shares), Ms. McLaurin (4,701 shares, subject to
options granted to her husband, Joe M. McLaurin, a former director of the
Corporation), Mr. Miller (47,500 shares), Mr. Neely (8,700 shares), Mr.
Pugh (8,700 shares), Mr. Ramsay (8,700 shares), Dr. Stout (2,900 shares),
Ms. Ward (5,700 shares), Mr. Little (16,400 shares), Mr. Thomas (17,400
shares) and all directors and executive officers as a group (170,991
shares).
10
(3) Includes 18,600 shares held of record by the estate of Mr. Miller's mother
and over which Mr. Miller has voting and dispository control as executor of
the estate.
(4) Includes 82,292 shares held of record by Mr. Neely's mother and over which
Mr. Neely and his sister have joint voting and dispository control pursuant
to a revocable power of attorney.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under the securities laws of the United States, the Corporation's directors,
its executive officers, and any persons holding more than 10 percent of the
Corporation's stock are required to report their ownership of the Corporation's
stock and any changes in that ownership to the Securities and Exchange
Commission. Specific due dates for these reports have been established and the
Corporation is required to report in this proxy statement any failure to file
by these dates during 2000. All of these filing requirements were satisfied by
its directors, executive officers and 10 percent holders. In making these
statements, the Corporation has relied on the written representations of its
directors, executive officers and 10 percent holders and copies of the reports
that they have filed with the Commission.
INDEPENDENT AUDITORS
The Board of Directors has appointed the firm of KPMG LLP independent
auditors for the Corporation for the 2001 fiscal year. A representative of KPMG
LLP is expected to be present at the Annual Meeting of Shareholders. The
representative will have the opportunity to make a statement if he or she
desires to do so, and will be available to respond to appropriate questions,
including those relating to the 2000 audit of the Corporation's financial
statements.
Disclosure of Auditor Fees
The following is a description of the fees billed to FNB by KPMG LLP during
or for the year ended December 31, 2000:
Audit Fees: Audit fees billed to the Corporation by KPMG LLP in connection
with KPMG's audit of the Corporation's annual financial statements for the year
ended December 31, 2000 and KPMG's review of the interim financial statements
included in the Corporation's quarterly reports on Form 10-Q for the year ended
December 31, 2000 totaled $63,500.
Financial Information Systems Design and Implementation Fees: The
Corporation did not engage KPMG LLP to provide advice to the Corporation
regarding financial information systems design and implementation during fiscal
year 2000.
All Other Fees: Fees billed to the Corporation by KPMG LLP during the
Corporation's 2000 fiscal year for all other services totaled $111,865. These
included tax-related services, employee benefit plan audits and merger-related
services.
11
REPORT OF THE AUDIT COMMITTEE
The Audit Committee of the Corporation's Board of Directors is comprised of
four directors who are not officers or employees of the Corporation. All
current members of the Committee are independent for purposes of the National
Association of Securities Dealers' listing standards. In accordance with its
written charter, which was approved in its current form by the Board of
Directors on June 22, 2000, the Audit Committee assists the Board in fulfilling
its oversight responsibilities by reviewing the financial information that will
be provided to the shareholders of the Corporation and others, the systems of
internal controls established by management and the Board of Directors, and the
audit process. A copy of the Audit Committee charter is attached to this proxy
statement as Appendix A.
In performing its oversight function, the Audit Committee reviewed and
discussed the audited consolidated financial statements of the Corporation as
of and for the year ended December 31, 2000 with management and KPMG LLP, the
Corporation's independent accountants. The Audit Committee also discussed with
the Corporation's independent auditors all matters required by generally
accepted auditing standards, including those described in Statement on Auditing
Standards No. 61, as amended, "Communication with Audit Committees" and, with
and without management present, discussed and reviewed the results of the
independent auditors' examination of the financial statements.
The Audit Committee obtained from the independent auditors a formal written
statement describing all relationships between the auditors and the Corporation
that might bear on the auditors' independence consistent with Independence
Standards Board Standard No. 1, "Independence Discussions with Audit
Committees." The Audit Committee discussed with the auditors any relationships
that may have an impact on their objectivity and independence and satisfied
itself as to the auditors' independence. The Audit Committee also determined
that the provision of the other non-audit services described under "Independent
Auditors--Disclosure of Audit Fees" by KPMG LLP to the Corporation is
compatible with maintaining KPMG's independence.
In reliance on the reviews and discussions referred to above, the Audit
Committee recommended to the Board of Directors, and the Board has approved,
that the Corporation's audited financial statements be included in the
Corporation's Annual Report on Form 10-K for the year ended December 31, 2000,
for filing with the Securities and Exchange Commission.
Audit Committee
R. Reynolds Neely, Jr., Chairman
Darrell L. Frye
W. L. Hancock
Charles W. Stout, M.D.
SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the next Annual
Meeting of Shareholders must be received by the Secretary of FNB Corp., 101
Sunset Avenue, Asheboro, North Carolina 27203, no later than December 13, 2001
for inclusion in the Corporation's proxy statement and form of proxy relating
to such meeting. If a shareholder notifies the Corporation any later than
February 26, 2002 of an intent to present a proposal at the next Annual Meeting
of Shareholders, the Corporation will have the right to exercise its
discretionary voting authority with respect to such proposal without including
information regarding such proposal in its proxy materials related to such
meeting.
12
OTHER MATTERS
There is no business other than as set forth, so far as now known, to be
presented for action by the shareholders at the meeting. It is intended that
the proxies will be exercised by the persons named therein upon matters that
may properly come before the meeting or any adjournment thereof, in accordance
with the recommendations of management.
By Order of the Board of Directors:
/s/ Michael C. Miller
Michael C. Miller
Chairman and President
Date: April 12, 2001
13
Appendix A
FNB CORP.
AUDIT COMMITTEE CHARTER
Organization
There shall be a committee of the board of directors to be known as the
audit committee. The audit committee shall be composed of directors who are
independent of management and are free of any relationship that, in the opinion
of the board of directors, would interfere with their exercise of independent
judgement as a committee member.
Statement of Policy
The primary function of the audit committee is to assist the board in
fulfilling its oversight responsibilities by reviewing the financial
information which will be provided to the shareholders and others, the systems
of internal controls which management and the board of directors have
established, and the audit process.
Responsibilities
In meeting its responsibilities the committee will:
Provide an open avenue of communication between the internal auditors,
the external auditors and the board of directors.
Review and update the committee's charter annually.
Recommend to the board of directors the external auditors to be
nominated, approve the compensation of the external auditors and review
and approve the discharge of the external auditors.
Review and concur in the appointment, evaluation, replacement,
reassignment or dismissal of the audit manager.
Confirm and assure the independence of the internal and external
auditors.
Inquire of management, the internal audit manager, and the external
auditor about significant risks or exposures and assess the steps
management has taken to minimize such risks.
Approve, with recommendations from the external auditors and the
internal audit manager, the audit scope and plan of the internal and
external auditors.
Consider with management and the internal audit manager the need for
employing other firms for additional audit coverage.
Review with the internal audit manager and external auditors the
consideration of audit effort to assure completeness of coverage,
reduction of redundant efforts and the effective use of audit
resources.
Consider and review with the internal audit manager and the external
auditor the adequacy of the company's internal controls including
information systems and security.
Review the following items with management and the external auditor:
The company's annual financial statements and related footnotes.
The external auditor's audit of the financial statements and his or
her report thereon.
Any significant changes required in the external auditors' plan.
Any serious difficulties or disputes with management encountered
during the course of the audit process.
Other matters related to the conduct of the audit which are to be
communicated to the committee under generally accepted auditing
standards.
A-1
Consider and review with management and the internal audit manager the
following items:
Significant findings during the year and management's response
thereto.
Any difficulties encountered during the course of their audits,
including any restrictions on the scope of their work or access to
required information.
Any changes required in the planned scope of their audit plan.
The internal audit department charter.
Internal audit's compliance with The IIA's Standards for the
Professional Practice of Internal Auditing.
Review with the internal audit manager and the external auditor the
results of their review of the company's monitoring compliance with the
company's code of conduct.
Review legal and regulatory matters that may have a material impact on
the financial statements, related company compliance policies and
programs and reports received from regulators.
Meet with the internal audit manager, the external auditor and
management in separate executive sessions to discuss any matters that
the audit committee or these groups believe should be discussed
privately.
Report committee actions to the board of directors with such
recommendations, as the committee may deem appropriate.
Investigate any matter brought to its attention within the scope of its
duties, with the power to retain outside counsel for this purpose if,
in its judgement, that is appropriate.
The committee shall meet at least four times per year or more
frequently if necessary. Members of management and others may attend
the meeting and provide pertinent information as needed.
The committee will perform such other functions as assigned by law, the
company's charter or bylaws, or the board of directors.
A-2
FNB CORP.
101 Sunset Avenue
Asheboro, North Carolina 27203
Proxy for Annual Meeting of Shareholders--May 8, 2001
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints R. Reynolds Neely, Jr. and Charles W. Stout,
M.D., or either of them, proxies with full power of substitution to vote all
shares of FNB Corp. standing in the name of the undersigned at the above Annual
Meeting of Shareholders, and all adjournments thereof:
1. ELECTION OF CLASS III DIRECTORS TO SERVE FOR THREE-YEAR TERMS EXPIRING AT
THE ANNUAL MEETING IN 2004: James M. Campbell, Jr., R. Larry Campbell,
Thomas A. Jordan and Michael C. Miller
--- With authority to vote for all nominees listed above, except as
designated below.
--- Withhold authority to vote for all nominees listed above.
----------------------------------------------------------------------------
To withhold authority to vote for any individual nominee, write the
nominee's name in the space above.
2. With discretionary authority upon such other matters as may come before the
meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR AUTHORIZATION TO VOTE FOR THE
NOMINEES AND THE RATIFICATION OF THE SELECTION OF AUDITORS. THE PROXY WILL BE
VOTED ACCORDINGLY UNLESS OTHERWISE SPECIFIED.
Dated: , 2001 -------------------------------------
-------------- Signature of Shareholder
-------------------------------------
Signature of Shareholder
When signing as attorney, executor,
administrator, trustee or guardian,
please give full title. If more than
one trustee, all should sign. All
joint owners must sign.