UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. ______)
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|_| Preliminary Proxy Statement
|_| Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to ss.240.14A-12
FIRST BANCORP
(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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|_| Fee paid previously with preliminary materials.
|_| Check box if any part of the fee is offset as provided by Exchange Act
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First Bancorp
341 North Main Street
Troy, North Carolina 27371-0508
Telephone (910) 576-6171
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD THURSDAY, MAY 5, 2005
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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 and please note that the location
has changed from previous years) on Thursday, May 5 at 3:00 p.m. local time, for
the purpose of considering and acting on the following matters:
1. A proposal to elect eighteen (18) nominees to the Board of Directors to
serve until the 2006 annual meeting of shareholders, or until their
successors are elected and qualified.
2. Such other business as may properly come before the meeting, or any
adjournment or adjournments thereof.
Only shareholders of record as of the close of business on March 11, 2005
are entitled to notice of and to vote at the annual meeting and any adjournments
thereof.
Whether or not you expect to be present at the annual meeting, please
complete, date and sign the enclosed form of proxy and return it promptly in the
enclosed envelope. If you attend the meeting, your proxy will be returned to you
upon request. Alternative voting methods using the Internet and telephone also
are available and are described in the proxy statement.
Please note that the attached form of proxy includes a request from the
Company as to 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. See outside back cover for a map.
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 2004 Annual Report on Form 10-K, which includes the Company's
financial statements and other required disclosures. Also included in the
package is a 2004 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
Secretary
First Bancorp
341 North Main Street
Troy, North Carolina 27371-0508
Telephone (910) 576-6171
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PROXY STATEMENT
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INTRODUCTION
This proxy statement is furnished to the shareholders of First Bancorp
(hereinafter sometimes referred to as the "Company") by the Board of Directors
in connection with the solicitation of proxies for use at the annual meeting of
shareholders of the Company to be held on Thursday, May 5, 2005 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 please note that the location
has changed from previous years), and at any adjournment or adjournments
thereof. Action will be taken at the annual meeting on the items described in
this proxy statement and on any other business that properly comes before the
meeting.
This proxy statement and accompanying form of proxy are first being mailed
to shareholders on or about March 30, 2005.
The accompanying proxy is for use at the 2005 Annual Meeting if a
shareholder either will be unable to attend in person or will attend but wishes
to vote by proxy. Shares may be voted 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. Eastern
Daylight Time on May 5, 2005. Specific instructions to be followed by any
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 you are not the registered owner of the shares, please
complete and return the proxy card in the self-addressed, postage-paid envelope
provided.
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
intention to vote in person. Unless a contrary choice is specified, all shares
represented by valid proxies received pursuant to this solicitation, and not
revoked before they are exercised, will be voted as set forth in this proxy
statement. In addition, the proxy confers discretionary authority upon the
persons named therein, or their substitutes, with respect to any other business
that may properly come before the meeting.
The presence, in person or by proxy, of the holders of a majority of the
outstanding shares of the Company's common stock entitled to vote is necessary
to constitute a quorum at the annual meeting. If a quorum is not present or
represented at the annual meeting, the shareholders present and entitled to vote
have the power to adjourn the meeting from time to time, without notice other
than announcement at the meeting, until a quorum is present or represented. At
any such adjourned meeting at which a quorum is present or represented, any
business may be transacted that might have been transacted at the meeting as
originally notified. A shareholder abstaining from the vote on a particular
proposal and broker non-votes will be counted as present for purposes of
determining if a quorum is present, but will be counted as not having voted on
the proposal in question.
The Company will bear the entire cost of preparing this proxy statement
and of soliciting proxies. Proxies may be solicited by employees of the Company,
either personally, by special letter, or by telephone. The Company also will
request brokers and others to send solicitation material to beneficial owners of
stock and will reimburse them for this purpose.
Page 1 of 25
PRINCIPAL HOLDERS OF VOTING SECURITIES
Only shareholders of record as of the close of business on March 11, 2005
will be entitled to vote at the annual meeting or any adjournment or
adjournments thereof. The number of outstanding shares entitled to vote at the
shareholders meeting is 14,118,859. Shareholders are entitled to one vote for
each share of the Company's common stock.
The Company knows of no person or group who beneficially owns more than
five percent of the outstanding common stock of the Company. The Company's
directors, nominees for director, and executive officers as a group own
2,768,618 shares, or 19.61%, of the Company's common stock.
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.
Effective as of the 2005 Annual Meeting of Shareholders to be held May 5, 2005,
the size of the board has been fixed by the Board of Directors at 18 members.
In the absence of any specifications to the contrary, proxies will be
voted for the election of all 18 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 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.
NOMINATIONS FOR DIRECTOR
Nominees for election to the Board of Directors are selected by the
incumbent board prior to each annual meeting, based upon the recommendation of
the Nominating and Corporate Governance Committee of the Board of Directors, and
the nominees listed below were selected in that manner. Nominations from the
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.
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 72nd birthday, except
that if a director is elected to the Board of Directors prior to his or her 72nd
birthday and reaches the age of 72 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. Under
the terms of the Company's merger agreement with First Savings Bancorp, Inc.,
the applicable age for Mr. Samuels as it relates to the mandatory retirement
noted above is age 75. 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.
Page 2 of 25
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.
Page 3 of 25
DIRECTORS, NOMINEES AND EXECUTIVE OFFICERS
The following table sets forth certain information as of December 31,
2004, with respect to the eighteen nominees for election to the Board of
Directors, two current directors who are not standing for re-election, 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). Sixteen of
the eighteen nominees are current directors, whereas two nominees are first time
nominees. Each nominee was nominated for election to the Board of Directors by
the Nominating and Corporate Governance Committee as described in the section
below entitled "Corporate Governance Policies and Procedures - Director
Nomination Process."
TABLE OF DIRECTORS, NOMINEES AND EXECUTIVE OFFICERS
Common Stock
Beneficially Owned (1)
------------------------------
Current Director (D), Director
Nominee (N), or of Company Number of Percent
Name (Age) Position with Company Since Shares of Class
------------------------------- ---------------------------------- ------------ -------------------------------
Directors and Nominees
----------------------
James H. Garner (75) President and CEO (D) (N) 1995 55,945 (2) 0.40%
Jack D. Briggs (65) (D) (N) 1983 101,305 (3) 0.72%
R. Walton Brown (52) Executive Vice President (D) (N) 2003 31,154 (4) 0.22%
H. David Bruton, M.D. (70) (D) (N) 2000 114,688 (5) 0.81%
David L. Burns (66) (D) (N) 1988 72,948 (6) 0.52%
John F. Burns (57) Executive Vice President (D) (N) 2000 75,082 (7) 0.53%
Jesse S. Capel (72) (D) 1983 178,231 (8) 1.26%
Mary Clara Capel (46) (N) N/A 2,090 (9) 0.01%
Goldie H. Wallace-Gainey (58) (D) (N) 1997 252,881 (10) 1.79%
James G. Hudson, Jr. (65) Executive Vice President (D) (N) 2001 70,552 (11) 0.50%
George R. Perkins, Jr. (65) (D) (N) 1996 500,443 (12) 3.54%
Thomas F. Phillips (59) (D) (N) 2000 88,613 (13) 0.63%
William E. Samuels (74) (D) (N) 2000 149,631 (14) 1.06%
Edward T. Taws (70) (D) (N) 1986 33,982 (15) 0.24%
Frederick H. Taylor (65) (D) 1983 190,503 (16) 1.35%
Frederick L. Taylor II (35) (N) N/A 3,084 (17) 0.02%
Virginia C. Thomasson (53) (D) (N) 2000 22,065 (18) 0.16%
A. Jordan Washburn (68) (D) (N) 1995 41,447 (19) 0.29%
Dennis A. Wicker (52) (D) (N) 2001 14,934 (20) 0.11%
John C. Willis (62) (D) (N) 1983 494,375 (21) 3.50%
Non-Director
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Executive Officers
------------------
Anna G. Hollers (54) Executive Vice President n/a 91,210 (22) 0.65%
and Secretary
Teresa C. Nixon (47) Executive Vice President n/a 58,266 (23) 0.41%
& Compliance Officer, First Bank
David G. Grigg (54) President of Montgomery n/a 47,915 (24) 0.34%
Data Services, Inc.
Jerry M. Arnold (64) Senior Vice President n/a 16,785 (25) 0.12%
of Operations, First Bank
Eric P. Credle (36) Senior Vice President and n/a 22,201 (26) 0.16%
Chief Financial Officer
Timothy S. Maples (44) Senior Vice President and n/a 23,703 (27) 0.17%
Investment Officer
Lee C. McLaurin (42) Senior Vice President & Controller n/a 14,585 (28) 0.10%
Page 4 of 25
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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 above table 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. Also included are shares
subject to options (exercisable as of December 31, 2004 or within 60 days
after December 31, 2004) granted under the Company's stock option plan.
(2) Mr. Garner's number of shares includes 113 shares held in the Company's
401(k) defined contribution plan, 9,341 shares held jointly with his
spouse and exercisable options to purchase 12,001 shares.
(3) Mr. Briggs' number of shares includes 1,289 shares held as custodian for
his daughter, 58,354 shares held jointly with his spouse, 800 shares held
by his spouse and exercisable options to purchase 11,250 shares.
(4) Mr. Brown's number of shares includes 596 shares held in the Company's
401(k) defined contribution plan and exercisable options to purchase 6,000
shares.
(5) Dr. Bruton's number of shares includes 6,732 shares held by his spouse,
3,374 shares held as custodian in a trust for a minor, and exercisable
options to purchase 9,000 shares.
(6) Mr. D. Burns' number of shares includes 35,448 shares held by Mr. Burns'
business interests and exercisable options to purchase 13,500 shares.
(7) Mr. J. Burns' number of shares includes 2,518 shares held in the Company's
401(k) defined contribution plan and exercisable options to purchase 9,750
shares.
(8) Mr. Capel's number of shares includes 55,656 shares held by Capel,
Incorporated of which Mr. Capel is principal owner and director and
exercisable options to purchase 20,250 shares.
(9) Ms. Capel, a nominee for director, owned 2,090 shares of the Company at
December 31, 2004.
(10) Mrs. Wallace-Gainey's number of shares includes 732 shares held by her
spouse, 35 shares held as custodian by her spouse for a minor, and
exercisable options to purchase 18,000 shares.
(11) Mr. Hudson's number of shares includes 2,429 shares held by his spouse,
1,780 shares held in the Company's 401(k) defined contribution plan, and
exercisable options to purchase 7,500 shares.
(12) Mr. Perkins' number of shares includes exercisable options to purchase
20,250 shares.
(13) Mr. Phillips' number of shares includes 1,965 shares held by his spouse,
186 shares jointly owned with a relative, and exercisable options to
purchase 9,000 shares.
(14) Mr. Samuels' number of shares includes 33,663 shares held by his spouse
and exercisable options to purchase 9,000 shares.
(15) Mr. Taws' number of shares includes 8,677 shares held by his spouse and
exercisable options to purchase 18,750 shares.
(16) Mr. Taylor's number of shares includes 104,082 shares held in trusts,
61,962 shares held by his spouse and exercisable options to purchase
20,250 shares.
(17) Mr. Taylor II, a nominee for director, owned 3,084 shares of the Company
at December 31, 2004.
(18) Mrs. Thomasson's number of shares includes exercisable options to purchase
15,765 shares.
(19) Mr. Washburn's number of shares includes exercisable options to purchase
6,750 shares.
Page 5 of 25
(20) Mr. Wicker's number of shares includes exercisable options to purchase
9,000 shares.
(21) Mr. Willis' number of shares includes 286,591 shares held by his spouse
and exercisable options to purchase 22,500 shares.
(22) Ms. Hollers' number of shares includes 1,043 shares held jointly with her
daughters, 15,947 shares held in the Company's 401(k) defined contribution
plan, 3,075 shares held by her spouse and exercisable options to purchase
24,751 shares.
(23) Ms. Nixon's number of shares includes 12,063 shares held in the Company's
401(k) defined contribution plan, 2,427 shares held by Ms. Nixon's
business interests, 37 shares held in trust for a minor, and exercisable
options to purchase 32,101 shares.
(24) Mr. Grigg's number of shares includes 234 shares held jointly with his
daughters, 117 shares held jointly with his son, 9,350 shares held in the
Company's 401(k) defined contribution plan and exercisable options to
purchase 9,871 shares.
(25) Mr. Arnold's number of shares includes 5,967 shares held in the Company's
401(k) defined contribution plan.
(26) Mr. Credle's number of shares includes 1,913 shares held in the Company's
401(k) defined contribution plan and exercisable options to purchase
17,851 shares.
(27) Mr. Maples' number of shares includes 103 shares held in the Company's
401(k) defined contribution plan.
(28) Mr. McLaurin's number of shares includes 235 shares held in the Company's
401(k) defined contribution plan and exercisable options to purchase 9,600
shares.
---------------------
Directors and Nominees
James H. Garner became President and Chief Executive Officer and a
director of the Company and First Bank in 1995. Mr. Garner has been employed by
First Bank since 1969, serving as Executive Vice President from 1989 until 1995.
Jack D. Briggs is a funeral director and retail furniture merchant and is
president and owner of J. Briggs, Inc., Davidson Funeral Home, Inc., and Carter
Funeral Home, Inc., and secretary of Piedmont Funeral Home. Mr. Briggs has been
a director of the Company since 1983 and a director of First Bank since 1976.
R. Walton 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, and now serves as Executive
Vice President of First Bank.
H. David Bruton, M.D. is a retired physician and served as the Secretary
of North Carolina's Department of Health and Human Services from 1997 until
2001. Until December 31, 1996, he was a practicing physician with Sandhills
Pediatric, Inc. He served as a director of First Savings Bancorp, Inc. from 1979
until First Savings' 2000 merger with the Company and has served as a director
of the Company and First Bank since that time.
David L. Burns is the chairman of the Board of Directors. He is president
of Z. V. Pate, Inc., a Laurel Hill-based holding company for agricultural,
timber, restaurants and retail sales. Mr. Burns has been a director of the
Company since 1988 and a director of First Bank since 1992.
John F. Burns served as a director and President and Chief Executive
Officer of First Savings Bancorp, Inc. at the time of the First Bancorp-First
Savings merger and had been employed by First Savings since 1972. Since the
merger, he has served as a director of the Company and First Bank. He is also
employed as an Executive Vice President of the Company and First Bank.
Page 6 of 25
Jesse S. Capel is the immediate past chairman of the Board of Directors.
He serves as an executive officer of Capel, Incorporated, a rug manufacturer,
importer and exporter located in Troy, North Carolina. Mr. Capel has been a
director of the Company since 1983 and a director of First Bank since 1959. Mr.
Capel is retiring from the Board of Directors at the 2005 Annual Shareholders'
Meeting.
Mary Clara Capel is a member of senior management as the director of
administration at Capel, Incorporated, a rug manufacturer, importer and exporter
located in Troy, North Carolina, where she has been employed since 1981. Ms.
Capel is a first time nominee for the Board of Directors of the Company and is
the daughter of Jesse S. Capel, an independent director of the Company. Mr.
Capel recommended Ms. Capel to the Nominating and Corporate Governance Committee
of the Company for consideration as a board member.
Goldie H. Wallace-Gainey is a private investor in the Company and other
business interests. Ms. Wallace-Gainey has been a director of the Company and
First Bank since 1997.
James G. Hudson, Jr. served as a director and President and Chief
Executive Officer of Century Bancorp, Inc., a bank holding company headquartered
in Thomasville, North Carolina, at the time of the May 2001 Century Bancorp
acquisition by the Company and had been employed with Century since 1972. Since
that time, he has served as a director of the Company and First Bank. He is also
employed as an Executive Vice President of First Bank.
George R. Perkins, Jr. is President and Chief Executive Officer of
Frontier Spinning Mills, Inc., a yarn manufacturer located in Sanford, North
Carolina, and has served in such capacity since 1996. Mr. Perkins has been a
director of the Company and First Bank since 1996.
Thomas F. Phillips is an automobile dealer and owner of Phillips Ford,
located in Carthage, North Carolina. He served as a director of First Savings
Bancorp, Inc. from 1985 until First Savings' 2000 merger with the Company and
has served as a director of the Company and First Bank since that time.
William E. Samuels is vice-chairman of the Board of Directors of the
Company and First Bank. He was the President and Chief Executive Officer of
First Savings Bancorp, Inc. until his retirement in 1998. He is the former
chairman of the Board of Directors of First Savings Bancorp, Inc. and served as
a director of First Savings from 1977 until First Savings' 2000 merger with the
Company. He has served as a director of the Company and First Bank since that
time.
Edward T. Taws, Jr. is Chairman of Fletcher Industries/Fletcher
International, a manufacturer of textile machinery located in Southern Pines,
North Carolina. Mr. Taws has been a director of the Company since 1986 and a
director of First Bank since 1992.
Frederick H. Taylor is President of Troy Lumber Company, located in Troy,
North Carolina. Mr. Taylor has been a director of the Company since 1983 and a
director of First Bank since 1978. Mr. Taylor is not standing for re-election as
a member of the Board of Directors.
Frederick L. Taylor II is a vice-president of Troy Lumber Company, located
in Troy, North Carolina where he has been employed since 1992. Mr. Taylor II is
a first time nominee for the Board of Directors of the Company and is the son of
Frederick H. Taylor, an independent director of the Company. Mr. Taylor
recommended Mr. Taylor II to the Nominating and Corporate Governance Committee
of the Company for consideration as a board member.
Virginia C. Thomasson is a Certified Public Accountant with the firm
Holden, Thomasson, & Longfellow, P.C., located in Southern Pines, North
Carolina. She served as a director of First Savings Bancorp, Inc. from 1997
until First Savings' 2000 merger with the Company and has served as a director
of the Company and First Bank since that time.
A. Jordan Washburn was a sales representative for Morrisette Paper Company
located in High Point, North Carolina until his retirement in 2001. Mr. Washburn
has been a director of the Company since 1995 and a director of First Bank since
1994.
Dennis A. Wicker is a partner with the law firm Helms Mulliss & Wicker,
LLP in Raleigh, North Carolina. Mr. Wicker served as Lieutenant Governor of
North Carolina from 1993 to 2000. Mr. Wicker is a member of the board of
directors of Coca-Cola Bottling Company Consolidated and Air T, Inc. Mr. Wicker
has been a director of the
Page 7 of 25
Company and First Bank since 2001.
John C. Willis is a private investor in restaurant and real estate
interests. Mr. Willis has been a director of the Company since 1983 and a
director of First Bank since 1980.
Executive Officers
In addition to Mr. Garner, Mr. Brown, Mr. J. Burns, and Mr. Hudson, the
executive officers of the Company are as follows:
Anna G. Hollers is Executive Vice President and Secretary of the Company
and Executive Vice President and Secretary of First Bank. She has been employed
by the Company since 1983 and by First Bank since 1972.
Teresa C. Nixon is Executive Vice President - Loan Administration and
Compliance of First Bank. She has been employed by First Bank since 1989.
David G. Grigg has served as President of Montgomery Data Services, Inc.
since its formation in 1984. He was employed by First Bank from 1972 until 1984.
Jerry M. Arnold is Senior Vice President - Operations of First Bank. He
has been employed by First Bank since 1986.
Eric P. Credle is Senior Vice President and Chief Financial Officer of the
Company and First Bank. He has been employed by the Company and First Bank since
1997.
Timothy S. Maples is Senior Vice President and Investment Officer of First
Bank. He was the Chief Financial Officer and Treasurer of First Savings Bancorp,
Inc. from 1993 until First Savings' 2000 merger with the Company.
Lee C. McLaurin is Senior Vice President and Controller of the Company and
First Bank. He has been employed by the Company since 1987.
BOARD COMMITTEES, ATTENDANCE AND COMPENSATION
Executive Committee
The Executive Committee is authorized, between meetings of the Board of
Directors, to perform all duties and exercise all authority of the Board of
Directors, except those duties and authorities exclusively reserved to the Board
of Directors by the Company's bylaws or by statute. The 2004 members of the
Committee were Mr. Briggs, Mr. Brown, Mr. D. Burns, Mr. J. Burns, Mr.
Capel-Chairman, Mr. Garner, Mr. Perkins, Mr. Samuels, Mr. Taws, Mr. Taylor, Mr.
Washburn and Mr. Willis. The Executive Committee held 12 meetings during 2004.
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. The 2004 members of the Audit Committee were Mr.
Briggs, Dr. Bruton, Mr. D. Burns, Mr. Capel-Chairman, Ms. Wallace-Gainey, Ms.
Thomasson, Mr. Wicker, and Mr. Willis, each of whom is independent, as defined
by the National Association of Securities Dealers ("NASD") and the Securities
Exchange Act. The Audit Committee held 11 meetings during 2004. The Board of
Directors has determined that Ms. Thomasson is an "audit committee financial
expert" within the meaning of SEC rules and regulations.
Page 8 of 25
Compensation Committee
The Compensation Committee is responsible for reviewing the compensation
policies and benefit plans of the Company and for making recommendations
regarding the compensation of its executive officers. The Committee also
administers the Company's stock option plan. The 2004 members of the Committee
were Mr. Briggs, Mr. D. Burns, Mr. Capel-Chairman, Mr. Taws, Mr. Washburn, and
Mr. Willis, each of whom is independent, as defined by the NASD. The
Compensation Committee held four meetings during 2004.
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 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. At its
February 2004 meeting, the Nominating and Corporate Governance Committee adopted
a charter, which is available on the Company's website at www.firstbancorp.com
under the tab "Investor Relations." The 2004 members of the Committee were Mr.
D. Burns, Mr. J. Capel-Chairman, Mr. Taws, Mr. Washburn and Mr. Willis, each of
whom is independent, as defined by the NASD. The Nominating and Corporate
Governance Committee held two meetings during 2004.
Attendance
The Board of Directors held 14 meetings during 2004. In 2004, all of the
directors and nominees for re-election, except for Mr. Perkins who attended 4 of
12 Executive Committee meetings and 13 of 14 Board of Directors meetings,
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 NASD.
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 March 2005, based on the review of director
questionnaires designed to elicit information regarding independence. The Board
of Directors has determined that 12 of its 18 directors (assuming the Nominees
listed above are elected) will be independent as contemplated by NASD. The six
individuals who are not independent are Mr. Brown, Mr. J. Burns, Mr. Garner, Mr.
Hudson, Mr. Perkins and Mr. Samuels. Each of the directors who is not
independent, except Mr. Perkins, is a current or former employee of the Company.
Mr. Perkins is not considered independent under NASD criteria due to a
transaction between a business interest of his and the Company - see "Certain
Transactions" below.
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
Page 9 of 25
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.
Executive Sessions
At its February 2004 meeting, the Board of Directors 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 discusses
strategic or other key issues regarding the Company. Two of these executive
sessions were held in 2004.
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
reelection, the Committee also considers prior board contributions and
performance, as well as meeting attendance records.
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 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.
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.
Page 10 of 25
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 of Directors must either own, or commit to acquire, common stock of the
Company with a monetary value of at least $50,000. The Board believes that this
stock ownership policy substantially enhances shareholder value by materially
aligning the Board's interest 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 72nd birthday, except
that if a director is elected to the Board of Directors prior to his or her 72nd
birthday and reaches the age of 72 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 of Directors and its
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. All members of the board, with the exception of one, attended the
Company's 2004 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 product of the multiplication for a single candidate or can
distribute it in any manner among any number of candidates. For example, if 18
directors are to be elected, a shareholder who owns 1,000 shares with one vote
per share will have 18,000 votes. This shareholder can cast all of these votes
for one candidate, or 1,000 for 18 candidates, or 6,000 for each of three
candidates, or any other mathematically possible combination.
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
Page 11 of 25
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 above for more information regarding cumulative
voting.
Code of Conduct
The Company has had a written code of conduct for many years. In February
2004, the Board of Directors adopted a revised Code of Conduct 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. The Code of
Conduct is available upon written request to the following address: First
Bancorp, Attention: Corporate Secretary, PO Box 508, Troy, North Carolina 27371.
COMPENSATION OF DIRECTORS
In January 2004, the Company engaged an outside consultant to evaluate the
level of the Company's director compensation. The consultant's process of
assessing the appropriateness of compensation arrangements involved the use of
peer data to determine the extent to which the Company's director compensation
arrangements were competitive within both the Company's industry and
geographical area. As a part of this assessment, the consultant compared the
Company's arrangements, both in whole and in part, with those of other financial
institutions of similar size and performance both within the state and
nationally. This peer group was a subset of the broader peer group to which the
Company compares its total returns to shareholders. Based on this evaluation,
the Company set its monthly retainer at $500, and the fee for each board meeting
attended at $250. Normally, meetings are held monthly. Such directors who served
on the Executive Committee, Nominating and Corporate Governance Committee, Audit
Committee, or Compensation Committee received $250 for each committee meeting
attended.
In 2004, directors of the Company were also compensated $250 for each
meeting attended for their service as directors on the boards of the Company's
subsidiaries. As it relates to First Bank, the Company's most significant
subsidiary, all directors of the Company are members of the First Bank Board of
Directors. Various combinations of six to nine directors of the Company serve on
the boards of Montgomery Data Services and First Bancorp Financial Services,
subsidiaries of the Company, and First Bank Insurance Services, a subsidiary of
First Bank. The boards of First Bank and Montgomery Data Services normally meet
on a monthly basis, whereas the First Bancorp Financial Services and First Bank
Insurance Services boards normally meet on a quarterly basis.
In 2004, non-employee directors of the Company also participated in the
Company's stock option plan. The non-employee director portion of the stock
option plan in effect during 2004 provided that on June 1 of each year for a
five-year period beginning on June 1, 2004 and ending on June 1, 2009, each
non-employee director of the Company received or will receive an option to
acquire 2,250 shares (as adjusted for the November 2004 3-for-2 stock split) of
the Company's common stock over a 10 year term at an exercise price equal to the
fair market value of such stock on the date of grant. At December 31, 2004, the
fourteen directors who were not employees of the Company held aggregate options
to purchase 203,265 shares at exercise prices ranging from $4.83 to $19.69.
The Board of Directors has elected to maintain the fee structure described
above in 2005.
In addition to the compensation described above, the Company provides one
of its directors, Mr. Washburn, with approximately 100 square feet of office
space, which Mr. Washburn uses primarily in connection with his work with
various charitable organizations.
In addition to the compensation they receive for service as directors,
there are four board members who are also employees of the Company. Those
directors are Mr. Brown, Mr. J. Burns, Mr. Garner, and Mr. Hudson. Compensation
related to Mr. J. Burns and Mr. Garner is disclosed in the following section
entitled "Compensation of Executive Officers." Mr. Brown and Mr. Hudson each
have employment agreements with the Company that are consistent with those
described in the section below entitled "Compensation Of Executive Officers -
Employment
Page 12 of 25
Contracts and Change in Control Agreements." In 2004, Mr. Brown received cash
compensation (salary and bonus) of $183,750 for his service as an employee, and
the Company paid club memberships totaling $952 on his behalf. In 2004, Mr.
Hudson received cash compensation (salary and bonus) of $195,276 for his service
as an employee, and the Company paid club memberships totaling $2,315 on his
behalf.
COMPENSATION OF EXECUTIVE OFFICERS
Summary Compensation Table. The following table sets forth compensation
paid by the Company in the forms specified therein for the years ended December
31, 2004, 2003 and 2002 to (i) the chief executive officer of the Company and
(ii) the Company's four most highly compensated executive officers other than
the chief executive officer.
SUMMARY COMPENSATION TABLE
Long Term Compensation
------------------------------------------
Annual Compensation Awards Payouts
------------------------------------------ --------------------------- -------------
(a), (b) (c) (d) (e) (f) (g) (h) (i)
Other Securities All
Name, Annual Restricted Underlying Other
Principal Compen- Stock Options/ LTIP Compen-
Position Salary Bonus (1) sation Award (s) SARs Payouts sation (2)
and Year ($) ($) ($) ($) (# sh) ($) ($)
--------------- ------------- ------------ ------------- ------------ ------------- ------------- ------------
James H. Garner, President and Chief Executive Officer
2004 $275,000 $ 201,137 $ -- $ -- -- $ -- $ 66,090
2003 260,000 195,310 -- -- -- -- 31,418
2002 240,000 172,300 -- -- -- -- 30,127
Anna G. Hollers, Executive Vice President and Secretary
2004 $202,740 $ 87,000 $ -- $ -- 9,001 $ -- $ 24,208
2003 186,000 73,000 -- -- -- -- 19,123
2002 168,950 60,000 -- -- -- -- 19,432
Teresa C. Nixon, Executive Vice President and Compliance Officer
2004 $196,200 $ 87,000 $ -- $ -- 9,001 $ -- $ 12,256
2003 180,000 73,000 -- -- -- -- 11,380
2002 163,000 60,000 -- -- -- -- 10,616
John F. Burns, Executive Vice President
2004 $176,141 $ 44,035 $ -- $ -- -- $ -- $ 26,370
2003 167,754 44,000 -- -- -- -- 23,268
2002 159,766 43,936 -- -- -- -- 22,865
Eric P. Credle, Senior Vice President and Chief Financial Officer
2004 $165,000 $ 65,000 $ -- $ -- 3,001 $ -- $ 9,802
2003 150,000 60,000 -- -- -- -- 7,412
2002 130,000 50,000 -- -- -- -- 7,048
---------------------
Notes:
(1) The amounts in this column represent actual incentive cash bonuses accrued
during the year indicated.
(2) The amounts in this column relate to four items: (1) Company contributions
to the Company's defined contribution plan under Section 401(k) of the
Internal Revenue Code that covers all Company employees, (2) the value of
certain life insurance provided for the indicated executives, based on the
term insurance value of such payments as calculated under IRS Table 2001
pursuant to IRS Notice 2002-8, (3) fees earned for service as a director
of the Company, or its subsidiaries, and committees thereof, and (4)
"Other," which is comprised of the vested value of policy premiums under
the Company's Long Term Care Insurance Plan for Mr. Garner and club
membership dues for Ms. Nixon. The following table presents the amounts of
those items:
Page 13 of 25
Defined Split-Dollar Director/
Contribution Insurance Committee
Plan Plan Fees Other
------------ -------------- ----------- ------------
James H. Garner 2004 $9,750 $ 1,652 $22,910 $31,778
2003 9,000 3,018 19,400 --
2002 8,250 2,757 19,120 --
Anna G. Hollers 2004 9,750 208 14,250 --
2003 7,403 320 11,400 --
2002 7,151 281 12,000 --
Teresa C. Nixon 2004 9,750 92 1,720 694
2003 9,000 167 1,520 693
2002 8,250 153 1,520 693
John F. Burns 2004 9,750 260 16,360 --
2003 9,000 468 13,800 --
2002 8,250 415 14,200 --
Eric P. Credle 2004 9,750 52 -- --
2003 7,313 99 -- --
2002 6,950 98 -- --
Option/SAR Grants in Last Fiscal Year
The information set forth below reflects the stock options granted during
2004 to the executive officers listed in the Summary Compensation Table above.
Mr. Garner and Mr. Burns did not receive option grants in 2004. No stock
appreciation rights have been granted to the executive officers listed.
Option/SAR Grants in Last Fiscal Year
Potential Realizable Value
at Assumed Annual Rates of
Stock Price Appreciation for
Individual Grants Option Term
--------------------------------------------------------------------------- ----------------------------
(a) (b) (c) (d) (e) (f) (g)
Percent of
Number of Total
Securities Options/SARs
Underlying Granted to Exercise or
Options/SARs Employees in Base Price Expiration 5% 10%
Name Granted (1) Fiscal Year ($/Sh) Date ($) ($)
----------------- ------------ -------------- ------------- ---------- ----------- -----------
Anna G. Hollers 9,001 4.91% $ 21.70 4/1/14 $ 122,837 $ 311,292
Teresa C. Nixon 9,001 4.91% 21.70 4/1/14 122,837 311,292
Eric P. Credle 3,001 1.64% 21.70 4/1/14 40,955 103,787
(1) All of the above options vested immediately.
Page 14 of 25
Aggregated Option/SAR Exercises in Last Fiscal Year and Fiscal Year-End
Option/SAR Values
Set forth below is information concerning the exercise of stock options
during the year ended December 31, 2004 and year-end value of unexercised
options by the executive officers listed in the Summary Compensation Table. No
stock appreciation rights have been granted to the executive officers listed.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Shares Options/SARs at Options/SARs at
Acquired Fiscal Year End (# sh) Fiscal Year End ($)
on Exercise Value ------------------------------ -----------------------------
Name (# sh) Realized Exercisable Unexercisable Exercisable Unexercisable
---------------- ------------ ------------ ------------- --------------- ------------- ---------------
James H. Garner 6,000 $ 65,952 12,001 -- $ 193,456 $ --
Anna G. Hollers 6,375 106,450 24,751 3,000 290,697 37,044
Teresa C. Nixon 1,500 21,951 32,101 2,400 443,280 29,635
John F. Burns 2,250 28,492 9,750 3,000 174,769 53,775
Eric P. Credle 5,400 54,000 17,851 6,000 218,814 74,088
Defined Benefit Plans
Retirement Plan. The following table sets forth the estimated annual
pension benefits payable at normal retirement age of 65 to a participant in the
Company's noncontributory defined benefit retirement plan.
TABLE OF ANNUAL BENEFITS PAYABLE ON RETIREMENT
UNDER THE RETIREMENT PLAN
Final
Average Years of Service
Annual --------------------------------------------------------------------------------
Compensation 15 20 25 30 35
------------ ------------ ------------- ------------- ------------ -----------
$ 100,000 $ 16,300 $ 21,700 $ 27,100 $ 32,500 $ 37,900
150,000 26,800 35,700 44,600 53,500 62,400
200,000 37,300 49,700 62,100 74,500 86,900
250,000 39,400 52,500 65,600 78,700 91,800
300,000 39,400 52,500 65,600 78,700 91,800
350,000 39,400 52,500 65,600 78,700 91,800
400,000 39,400 52,500 65,600 78,700 91,800
450,000 39,400 52,500 65,600 78,700 91,800
Final Average Annual Compensation is the average of the five highest
consecutive calendar years earnings out of the 10 calendar years of employment
preceding retirement. Benefits shown are estimated on the basis of "life
annuity" amounts, although participants in the retirement plan may choose from a
variety of benefit payment options. For executive officers, current annual
compensation for the purposes of the retirement plan may be estimated as the sum
of the "Salary" and "Bonus" amounts in the Summary Compensation Table. The
benefits listed above are not subject to any deduction for Social Security or
other offset amounts. The Company's executive officers appearing in the Summary
Compensation Table who are participants in the retirement plan and their
respective credited years of service are: Mr. Garner, 36 years; Ms. Hollers, 32
years; Ms. Nixon, 16 years; Mr. Burns, 4 years; and Mr. Credle, 7
Page 15 of 25
years.
Supplemental Executive Retirement Plan. The following table sets forth the
estimated annual pension benefits payable at normal retirement age of 65 to
executive officers, other than the CEO, in the Company's SERP. Benefits shown in
the table are prior to deductions for 50% of social security benefits and all
benefits paid under the retirement plan.
TABLE OF ANNUAL BENEFITS PAYABLE ON RETIREMENT
UNDER THE SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
Final
Average Years of Service
Annual ----------------------------------------------
Compensation 10 15 20 or more
----------------- ----------- ----------- ------------
$ 100,000 $ 30,000 $ 45,000 $ 60,000
150,000 45,000 67,500 90,000
200,000 60,000 90,000 120,000
250,000 75,000 112,500 150,000
300,000 90,000 135,000 180,000
350,000 105,000 157,500 210,000
400,000 120,000 180,000 240,000
450,000 135,000 202,500 270,000
Final Average Annual Compensation is the average of the five highest
consecutive calendar years earnings out of the 10 calendar years of employment
preceding retirement. Benefits shown are estimated on the basis of "life
annuity" amounts, although participants in the SERP may choose from a variety of
benefit payment options. For executive officers, current annual compensation for
the purposes of the SERP may be estimated as the sum of the "Salary" and "Bonus"
amounts in the Summary Compensation Table. As noted above, benefits shown in the
table are prior to deductions for 50% of social security benefits and all
benefits paid under the retirement plan. The Company's executive officers, other
than the CEO, appearing in the Summary Compensation Table who are participants
in the SERP and their respective credited years of service are: Ms. Hollers, 20
years (the maximum for participants other than the CEO); Ms. Nixon, 16 years;
Mr. Burns, 4 years; and Mr. Credle, 7 years.
Mr. Garner, the Company's CEO, is also a participant in the SERP. The
provisions of the SERP applicable to him are the same as those described above,
except that his maximum benefit is 65% of Final Average Compensation compared to
60% for the other participants of the plan. Based on his years of service, Mr.
Garner has already reached the maximum benefit. Accordingly, his benefits under
the SERP, prior to deductions for 50% of social security benefits and benefits
paid under the retirement plan, will be determined by multiplying his Final
Average Compensation times 65%.
Employment Contracts and Change in Control Agreements
The Company has entered into employment agreements with 21 of its senior
officers, including each officer currently serving as an executive officer.
The employment agreements have two to three year terms that extend
automatically for an additional year on each anniversary of the date of the
agreement, unless either party gives the other written notice on or prior to
such anniversary date that the extension will not occur. The initial term for
each officer in the Summary Compensation Table is three years. The employment
agreements provide that the officers are guaranteed minimum annual salaries
equal to their current annualized base salaries, and will receive annual
increases that are at least as much as any percentage increase in the U.S.
Consumer Price Index during the preceding twelve months. The employment
agreements provide that each officer will be entitled to such insurance,
pension, profit-sharing and other benefit plans as are or may become available
generally to employees of the Company. The employment agreements provide that
each officer will be eligible for participation in the Company's Supplemental
Employee Retirement Plan and Stock Option Plan. The employment agreements also
provide that each officer will be entitled to reasonable time off
Page 16 of 25
for vacation, sick leave, bereavement leave, jury duty and military obligations
as are or may become available to employees of the Company in positions similar
to those of the officer.
The employment agreements provide the Company the right to terminate the
officer's employment "for cause" with no further accrual of compensation or
benefits if the Company finds that the officer (i) demonstrated gross negligence
or willful misconduct in the execution of the officer's duties, (ii) committed
an act of dishonesty or moral turpitude, or (iii) has been convicted of a felony
or other serious crime.
In the event that the Company terminates an officer for a reason other
than for cause, the Company is obligated to pay the officer's base salary for
the remainder of the agreement term. In addition, each officer may voluntarily
terminate employment by providing at least 45 days written notice to the
Company, in which case the officer's compensation, vested rights and employee
benefits will accrue through the date of termination of employment.
The employment agreements also contain noncompetition and confidentiality
covenants. The noncompetition covenants provide that upon termination of
employment with the Company, the officer may not engage directly, or indirectly,
in any activity or business that is in competition with the business of the
Company within the restricted territory, during the restricted period. The
restricted territory is a 50-mile radius of each officer's primary residence
and/or work location. The restricted period upon termination by the Company for
cause or voluntary employee termination is one year and for termination by the
Company other than for cause is the remainder of the agreement term. The
noncompetition covenant also prohibits solicitation or recruitment of any
employees of the Company during the restricted period, and prohibits sales
contacts or solicitation from any customer of the Company for any products or
services offered by the Company within the restricted territory during the
restricted period. The confidentiality covenants 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
following the termination of the agreement.
The employment agreements also provide that if there is a "change in
control" of the Company and the officer's employment is terminated by the
Company or the officer for any reason, or no reason (other than for cause), the
Company must pay the officer a severance payment equal to the officer's base
salary times a factor that ranges from 1 to 2.9. The multiple for each of the
officers listed in the Summary Compensation Table above is 2.9. Control means
the power, directly or indirectly, to direct the management or policies of the
Company or to vote 40% or more of any class of voting securities of the Company.
Change in control is defined as a change in control of the Company except that
any merger, consolidation or corporate reorganization in which the owners of the
capital stock entitled to vote in the election of directors of the Company prior
to the combination own 61% or more of the resulting entity's voting stock will
not be considered a change in control for the purpose of the employment
agreements; provided that a change in control will be deemed to have occurred if
(i) any "person" (as that term is used in Sections 13(d) and 14(d)(2) of the
Securities Exchange Act of 1934), other than a trustee or other fiduciary
holding securities under an employee benefit plan of the Company, is or becomes
the beneficial owner (as that term is used in Section 13(d) of the Securities
Exchange Act of 1934), directly or indirectly, of 33% or more of the voting
stock of the Company or its successors; (ii) during any period of two
consecutive years, individuals who at the beginning of such period constituted
the Board of Directors of the Company or its successors (the "Incumbent Board")
cease for any reason to constitute at least a majority of the board; provided,
that any person who becomes a director of the Company after the beginning of
such period whose election was approved by a vote of at least 3/4 of the
directors comprising the Incumbent Board will be considered a member of the
Incumbent Board; or (iii) there is a sale of all or substantially all of the
assets of the Company. Notwithstanding the foregoing, no change in control is
deemed to occur as a result of any transaction that results in the officer
subject to the employment agreement in question, or a group of persons including
such officer, acquiring, directly or indirectly, 33% or more of the combined
voting power of the Company's outstanding securities.
In addition to the employment agreement change in control provisions
discussed above, all memoranda of options granted under the Company's 1994 Stock
Option Plan and 2004 Stock Option Plan provide that in the event of a change in
control of the Company, which is defined the same as it is above, all options
become fully vested and immediately exercisable. Also, under the SERP, all
participants become fully vested in the event of a change in control, which is
defined the same as it is above.
Page 17 of 25
REPORT OF THE COMPENSATION COMMITTEE
The fundamental philosophy of the Company's compensation program is to
offer compensation arrangements that are (i) commensurate with individual
contributions to the performance of the Company and (ii) competitive with
publicly owned financial institutions of similar size and performance.
Compensation is designed to attract and retain individuals possessing the
specialized talents required by the Company to remain competitive in the
financial services industry.
In applying this philosophy, the Company's Compensation Committee,
comprised entirely of independent directors, develops compensation
recommendations to be considered by the entire Board of Directors. The
Compensation Committee directly determines the recommendation regarding the
compensation of the Chief Executive Officer. In addition, the Committee also
sets forth recommendations involving (i) compensation policies, (ii) incentive
compensation, (iii) long-term equity participation and (iv) benefit plans. Prior
to 2004, the Compensation Committee delegated to the Chief Executive Officer the
responsibility to determine appropriate levels of salaries and incentive bonuses
for the other executive officers of the Company. In 2004, the Compensation
Committee increased its role by reviewing and formally approving the
recommendations of the Company's Chief Executive Officer as they relate to the
compensation levels of the Company's other executive officers. In determining
appropriate compensation levels, both the Compensation Committee (with regard to
the Chief Executive Officer) and the Chief Executive Officer (with regard to the
other executive officers) consider the demonstration of the leadership skills
needed to enable the Company to achieve the business objectives set forth by the
Board of Directors. Periodically, including in 2004 as discussed below, the
Compensation Committee engages outside compensation consultants to evaluate and
provide recommendations regarding executive officer compensation.
In January 2004, the Compensation Committee engaged an outside consultant
to evaluate the compensation of the Chief Executive Officer and each other
executive officer. The consultant met with the Compensation Committee in January
2004, where he presented the Committee with his assessment of the compensation
arrangements for each of the Company's executive officers for 2003. The
consultant's process of assessing the appropriateness of compensation
arrangements involved the use of peer data to determine the extent to which the
Company's compensation arrangements were competitive within the Company's
industry and geographical area. As a part of this assessment, the consultant
compared the Company's arrangements, both in whole and in part, with those of
other financial institutions of similar size and performance both within the
state and nationally. This peer group was a subset of the broader peer group to
which the Company compares its total returns to shareholders. See "Shareholder
Return Performance." The results of this evaluation were used by the
Compensation Committee in recommending compensation levels for the Company's
executive officers for 2004.
Annual compensation for the Company's Chief Executive Officer and its
other executive officers primarily consists of four types of compensation, as
set forth below:
o base salary;
o annual incentive bonus (linked directly to corporate earnings
and/or individual performance);
o long-term equity participation (through the periodic issuance
of stock options under the Company's stock option plan), in an
effort to more closely align the interests of the executive
officers with those of the Company's shareholders; and
o benefit plans for executive officers.
Base Salary. For the Company's executive officers, including the Chief
Executive Officer, base salaries are targeted to approximate average salaries
for individuals in similar positions with similar levels of responsibilities who
are employed by other publicly owned banking organizations of similar size and
performance. The Company frequently participates in salary/compensation surveys
and has access to other published salary/compensation data. The results of such
surveys are used in developing the appropriate levels of base salaries for
executive officers.
Annual Incentive Bonus. For the Company's executive officers, including
the Chief Executive Officer, annual incentive bonuses are directly and
indirectly linked to the Company's earnings and to the executive officer's
Page 18 of 25
individual performance as it relates to enabling the Company to achieve its
performance goals.
For 2004, as in prior years, the Committee set the Chief Executive
Officer's annual incentive bonus as a percentage of the net income earned by the
Company. Such percentage for 2004, 2003 and 2002 was 1% of consolidated net
income.
For the other executive officers, the 2004 annual incentive bonus was
based on a combination of (i) a percentage, as determined by the Chief Executive
Officer, of base salary related to the Company's achievement of predetermined
earnings targets and (ii) additional amounts, at the discretion of the Chief
Executive Officer, related to the executive officer's individual contribution to
the overall achievement of Company-wide earnings targets. In 2004, the Company
did not meet all of its earning targets set by the Board of Directors. The
Company met its return on equity target; however, the Company failed to meet the
2004 earnings target by approximately 2%. However the Compensation Committee
concluded that because of unanticipated expenses, such as Sarbanes-Oxley
compliance costs, Internet Banking start-up costs, higher external audit fees
and new branch start-up costs that were not included in the 2004 budget on which
the earnings target was based, bonuses should be paid under the Management
Incentive Plan as if the earnings target were met. Accordingly, the salary-based
portion of the 2004 incentive bonus for executive officers other than the Chief
Executive Officer ranged from 15% to 43% of the respective base salaries. Based
on the 1% of net income formula discussed above, the Chief Executive Officer's
incentive bonus amounted to 73% of his base salary.
Long-Term Equity Participation. For the Company's CEO and other executive
officers and key employees, stock options may be granted each year at the
discretion of the Board of Directors. Although no formal system is employed in
determining the number of options granted, either in the aggregate or to any one
individual, the Board considers the Company's current financial performance, the
individual's level of responsibility and the number of previously granted stock
options. Options are not intended to be an ongoing component of annual
compensation, but instead are typically granted to attract and retain new
employees, to recognize changes in responsibilities of existing employees, and
to periodically reward exemplary performance. In recognition of increasing
responsibilities associated with new regulations and the Company's growth, the
Compensation Committee granted stock options in 2004 to Ms. Hollers, Ms. Nixon,
and Mr. Credle, as reflected in the Summary Compensation Table.
Benefit Plans For Executive Officers. In addition to the aforementioned
methods of compensating executive officers, the Company provides executive
officers with the same benefits that are afforded to all Company employees,
including matching contributions under the Company's defined contribution plan,
retirement benefits under the Company's pension plan and group insurance
covering health, life and disability. Also, executive officers participate in
the Company's Supplemental Executive Retirement Plan. Until mid-2004, executive
officers also participated in a Split-Dollar Insurance Plan. However, due to
recently passed congressional and IRS regulations, the Company terminated the
Split-Dollar Insurance Plan in 2004.
In 2004, the Company adopted the First Bancorp Long Term Care Insurance
Plan ("Long Term Care Plan"). This plan is intended to provide for the payment
of insurance premiums for a long term care insurance policy and the delivery of
long term care benefits under the terms of such a policy for such employees that
the Compensation Committee directs. Mr. Garner is currently the only participant
in the Long Term Care Plan. In 2004, a long term care insurance policy was
obtained for his benefit. The policy calls for 10 annual payments of $22,880 per
year. Mr. Garner's right to have policy premiums paid by the Company vests as
follows: Upon the completion of one year of service (as defined in the plan),
the Company is obligated to pay one-third of the aggregate policy premiums; upon
the completion of two years of service, the Company is obligated to pay
two-thirds of the aggregate policy premiums; upon the completion of three years
of service, the Company is obligated to pay 100% of the aggregate Policy
premiums. However, upon the occurrence of disability of Mr. Garner (as defined
in the Plan), Mr. Garner's right to have 100% of the aggregate policy premiums
paid by the Company becomes fully vested.
Employment Agreements. Over the past several years, the Company has
entered into employment agreements with each executive officer, as well as ten
other senior officers. These agreements were determined to be in the best
interest of the Company, among other reasons, (i) to better compete in the
retention of executive and senior officers with peer banks that have similar
agreements, (ii) to provide certain protections to the Company, including
noncompetition and confidentiality covenants in the event that employment is
terminated, and (iii) to protect the Company, through change in control
provisions, from loss of executive and senior officers as a result of any change
in control possibilities that might arise. The provisions of the employment
agreements were previously described in more detail under the heading
"Employment Contracts and Change in Control Agreements."
Page 19 of 25
The above is a summary of current practice regarding CEO and executive
officer compensation matters considered by the Committee. Because CEO and
executive officer salaries are not currently (or in the foreseeable future)
expected to exceed those limitations provided under Section 162(m) of the
Internal Revenue Code, the Committee has no specific policy that addresses the
deductibility for income tax purposes of "qualified compensation" under said
code section.
RESPECTFULLY SUBMITTED BY THE COMPENSATION COMMITTEE OF
THE BOARD OF DIRECTORS:
Jack D. Briggs Edward T. Taws, Jr.
David L. Burns A. Jordan Washburn
Jesse S. Capel John C. Willis
Page 20 of 25
SHAREHOLDER RETURN PERFORMANCE
The performance graph shown below compares the Company's cumulative total
return to shareholders for the five-year period commencing December 31, 1999 and
ending December 31, 2004, with the cumulative total return of the Russell 2000
Index (reflecting overall stock market performance of small-capitalization
companies), and an index of banks with between $1 billion and $5 billion in
assets, as constructed by SNL Securities, LP (reflecting changes in banking
industry stocks). The graph and table assume that $100 was invested on December
31, 1999 in each of the Company's common stock, the Russell 2000 Index, and the
SNL Bank Index, and that all dividends were reinvested.
First Bancorp
Comparison of Five-Year Total Return Performances (1)
Five Years Ending December 31, 2004
[LINE GRAPH OMITTED]
Total Return Index Values (1)
December 31,
---------------------------------------------------------------------------
1999 2000 2001 2002 2003 2004
------- ------- ------- ------- ------- --------
First Bancorp $100.00 $100.00 $148.75 $160.85 $220.78 $ 296.65
Russell 2000 100.00 96.98 99.39 79.03 116.38 137.71
Index-Banks between $1
billion and $5 billion 100.00 113.48 137.88 159.16 216.44 267.12
Notes:
(1) Total return indices were provided from an independent source, SNL
Securities LP, Charlottesville, Virginia, and assume initial investment of
$100 on December 31, 1999, reinvestment of dividends, and changes in
market values. Total return index numerical values used in this example
are for illustrative purposes only.
Page 21 of 25
Shareholders should recognize that corporations often use a number of
other performance benchmarks (in addition to shareholder return) to set various
levels of executive officer compensation. Shareholders should thus consider
other relevant performance indicators in assessing performance, such as growth
in earnings per share, growth in book value per share, growth in cash dividends
per share, and other performance measures such as return on assets and return on
shareholders' equity.
Certain Transactions
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. 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. At December 31, 2004, the aggregate
principal amount of loans to directors, nominees, principal shareholders and
officers of the Company and to affiliates of such persons was approximately
$13,764,000.
Under the authority of the Company's share repurchase plan, the Company
made the following repurchases from directors of the Company. All amounts are
adjusted for the Company's November 2004 stock split. On February 23, 2004, the
Company repurchased 15,000 shares from Ms. Wallace-Gainey at a price of $22.21
per share, the prevailing market value at the time of the purchase. On August
24, 2004, the Company repurchased 3,750 shares from Dr. Bruton at a price of
$21.71 per share, the prevailing market value at the time of the purchase. On
October 27, 2004, the Company repurchased 12,251 from Mr. Garner at a price of
$24.47 per share, the prevailing market value at the time of the purchase.
On November 22, 2004, the Company purchased land located in Sanford, North
Carolina from a partnership in which Mr. Perkins, a director of the Company, is
a 50% owner. The purchase price of the land was $750,000. The purchase price was
negotiated by Mr. Perkins and by Ms. Nixon, an executive officer of the Company,
subject to board approval. The Board of Directors determined that $750,000 was a
fair price for the property based on a sale of adjacent land owned by the same
partnership, which had recently been sold to an independent third party, giving
effect to characteristics of the land under consideration that enhanced its
value. The Audit Committee also approved this transaction.
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 2004. To the Company's knowledge, during 2004 all of
these filing requirements were satisfied by the Company's directors and
officers.
Page 22 of 25
AUDIT COMMITTEE REPORT
Management has the primary responsibility for the financial statements and
the reporting process. The Company's independent auditor, which for the fiscal
year 2004 was KPMG LLP ("KPMG"), 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
Committee may form and 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 Committee at
its next scheduled meeting. The Audit Committee pre-approved all services for
which KPMG was engaged in 2004.
The Audit Committee has reviewed and discussed with management and KPMG
the audited financial statements as of and for the year ended December 31, 2004.
The Audit Committee has discussed with KPMG the matters required to be discussed
by Statement on Auditing Standards No. 61 (Communication with Audit Committees).
In addition, the Audit Committee has received from KPMG the written disclosures
and letter required by Independence Standards Board Standard No. 1 (Independence
Discussions with Audit Committees) and discussed with them their independence
from the Company and its management. The Audit Committee also has considered
whether KPMG's 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 KPMG in the following categories and amounts:
2004 2003
-------- -------
Audit Fees $620,500 135,891
Audit-Related Fees 16,400 15,400
Tax Fees 107,150 79,700
All Other Fees -- --
-------- -------
Total Fees $744,050 230,991
======== =======
In 2004, 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 2003,
audit fees included fees for the audit of the consolidated financial statements,
quarterly reviews of the interim consolidated financial statements and an
internal control attestation engagement. Audit-related fees for both years
consisted of audits of the financial statements of two employee benefit plans.
Tax fees for both years consisted of tax compliance and tax consulting.
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, 2004 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 was amended and restated in February 2004 and was
included as an exhibit to the 2004 Proxy Statement.
Representatives of KPMG LLP are expected to be present at the annual
meeting to respond to appropriate questions and will be given an opportunity to
make any statement they consider appropriate.
Page 23 of 25
The Audit Committee is currently evaluating audit firms to perform the
2005 integrated audit of the Company's consolidated financial statements and
internal control over financial reporting. No decision has been made yet, and
for this reason the Audit Committee has not recommended an auditor for
ratification in this proxy statement.
RESPECTFULLY SUBMITTED BY THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS:
Jack D. Briggs Thomas F. Phillips
H. David Bruton Virginia C. Thomasson
David L. Burns, Chairman Dennis A. Wicker
Jesse S. Capel John C. Willis
Goldie H. Wallace-Gainey
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 18
nominees as directors. Unless indicated to the contrary, proxies will be voted
"FOR" the 18 nominees listed above.
Page 24 of 25
SHAREHOLDERS PROPOSALS FOR 2006 MEETING
Shareholders may submit proposals appropriate for shareholder action at
the Company's 2006 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 2006 annual meeting, they must be received by the
Company no later than November 30, 2005. 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.
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
-------------------------
Page 25 of 25
Directions to the James H. Garner Conference Center
New Location of the
2005 First Bancorp Annual Shareholders' Meeting
Thursday, May 5, 2005 - 3:00 PM
[MAP]
(Please note that the location has changed from previous years.)
First Bancorp
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints James H. Garner and Anna G. Hollers, and
each of them, attorneys and proxies with full power of substitution, to act and
vote as designated below the shares of common stock of First Bancorp held of
record by the undersigned on March 11, 2005, at the annual meeting of
shareholders to be held on May 5, 2005, or any adjournment or adjournments
thereof.
1. PROPOSAL to elect eighteen (18) nominees to the Board of Directors
to serve until the 2006 Annual Meeting of Shareholders, or until
their successors are elected and qualified. The Board of Directors
recommends a vote "FOR" all nominees.
|_| FOR the 18 nominees listed below |_| WITHHOLD AUTHORITY
(except as marked to the contrary to vote for the 18 nominees below.
below).
(Instruction: To withhold authority to vote for any individual
nominee, strike a line through the nominee's name in the list
below).
Jack D. Briggs Goldie H. Wallace-Gainey Edward T. Taws, Jr.
R. Walton Brown James H. Garner Frederick L. Taylor II
H. David Bruton, M.D. James G. Hudson, Jr. Virginia C. Thomasson
David L. Burns George R. Perkins, Jr. A. Jordan Washburn
John F. Burns Thomas F. Phillips Dennis A. Wicker
Mary Clara Capel William E. Samuels John C. Willis
2. In their discretion, the proxies are authorized to vote on any other
business that may properly come before the meeting.
3. Do you plan to attend the May 5, 2005 annual meeting? |_| YES |_| NO
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.
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 , 2005
----------------------------
--------------------------------------------
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
officers. If a partnership, please sign in
partnership name by authorized person.)
Please mark, sign, date and return promptly in the envelope provided. If you
attend the meeting, you may withdraw your proxy and vote in person.
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 authorized 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. on May 5, 2005.
Vote by Telephone Vote by Internet
It's fast, convenient and immediate! It's fast, convenient, and your vote is
Call Toll-Free on a Touch-Tone Phone: 1-866-287-9707 immediately confirmed and posted.
Follow these four easy steps: Follow these four easy steps:
1. Read the accompanying Proxy Statement 1. Read the accompanying Proxy Statement
and Proxy Card and Proxy Card
2. Call the toll-free number: 2. Go to the website:
1-866-287-9707 https://www.proxyvotenow.com/fbnc
3. Enter the 9 digit Control Number located 3. Enter your 9 digit Control Number located on
on your Proxy Card below. your Proxy Card below.
4. Follow the recorded instructions 4. Follow the instructions on the website.
Your vote is important! Your vote is important!
Call 1-866-287-9707 anytime Go to https://www.proxyvotenow.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
----------------------------