0000950123-11-037704.txt : 20110421 0000950123-11-037704.hdr.sgml : 20110421 20110421141952 ACCESSION NUMBER: 0000950123-11-037704 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20110609 FILED AS OF DATE: 20110421 DATE AS OF CHANGE: 20110421 EFFECTIVENESS DATE: 20110421 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIRST CAROLINA INVESTORS INC CENTRAL INDEX KEY: 0000811040 IRS NUMBER: 561005066 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: 1934 Act SEC FILE NUMBER: 811-08942 FILM NUMBER: 11773098 BUSINESS ADDRESS: STREET 1: 9347A FOUNDERS STREET CITY: FORT MILL STATE: SC ZIP: 29708 BUSINESS PHONE: 8038020890 MAIL ADDRESS: STREET 1: P O BOX 1827 CITY: FORT MILL STATE: SC ZIP: 29716 DEF 14A 1 g26740def14a.htm DEF 14A def14a
Schedule 14A
(Rule 14A-101)
Information Required In Proxy Statement
SCHEDULE 14A INFORMATION
 
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
 
Filed by the Registrant þ
 
Filed by a Party other than the Registrant o
 
Check the appropriate box:
 
     
o Preliminary Proxy Statement
o Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
þ Definitive Proxy Statement
o Definitive Additional Materials
o Soliciting Material Under Rule 14a-12 		   
 
FIRST CAROLINA INVESTORS, INC.
(Name of Registrant as Specified In Its Charter)
 
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
 
PAYMENT OF FILING FEE (Check the appropriate box):
þ   No fee required
o   Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
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  2)   Aggregate number of securities to which transaction applies:
 
 
  3)   Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
 
 
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o   Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing
 
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FIRST CAROLINA INVESTORS, INC.
 
P.O. BOX 1827
FORT MILL, SOUTH CAROLINA 29716-1827
 
 
Notice of 2011 Annual Meeting of Shareholders
To Be Held on June 9, 2011
 
 
TO THE SHAREHOLDERS:
 
Notice is hereby given that the 2011 Annual Meeting of Shareholders (the “Meeting”), of First Carolina Investors, Inc. (the “Company”), will be held at the Hilton Garden Inn, 650 Tinsley Way, Rock Hill, South Carolina 29730 at 1:00 p.m., on June 9, 2011 for the following purposes:
 
  1.  To elect five directors of the Company to serve until the 2012 Annual Meeting of Shareholders.
 
  2.  To consider and act upon any other matters which may properly come before the Meeting.
 
Shareholders of record at the close of business on April 11, 2011 are entitled to notice of and to vote at the Meeting or any adjournment thereof.
 
Important Notice
 
Please complete, sign, date, and return the enclosed proxy card to ensure that your shares are voted at the Meeting. A return envelope addressed to Continental Stock Transfer & Trust Company, 17 Battery Place, 8th Floor, Proxy Department, New York, New York 10004 is enclosed. If you attend in person, you may withdraw your proxy and vote in person.
 
By Order of the Board of Directors
 
Cynthia J. Raby
Assistant Secretary
 
Dated: April 21, 2011

 

April 21, 2011
 
FIRST CAROLINA INVESTORS, INC.
 
 
PROXY STATEMENT
 
 
2011 Annual Meeting of Shareholders
To Be Held on June 9, 2011
 
GENERAL INFORMATION
 
This statement is furnished in connection with the solicitation by the Board of Directors of First Carolina Investors, Inc. (the “Company”) of proxies to be used at the Annual Meeting of Shareholders of First Carolina Investors, Inc. (the “Meeting”) to be held on June 9, 2011 at 1:00 p.m., and any adjournment thereof. The Meeting will be held at the Hilton Garden Inn, 650 Tinsley Way, Rock Hill, South Carolina 29730.
 
Certain financial statements of the Company and the related notes are contained in the Annual Report. A copy of the Annual Report is enclosed. A copy of our Report to Shareholders dated June 30, 2010 was mailed on August 30, 2010. If you have not received or do not receive the reports, a copy will be provided to shareholders without charge upon request directed to the Assistant Secretary, P.O. Box 1827, Fort Mill, South Carolina 29716. Copies are also available on the Securities and Exchange Commission’s web site at www.sec.gov. Shareholders may also use our toll-free number (1-855-258-4881) to request the reports. This Proxy Statement with Form of Proxy and the Company’s 2010 Annual Report to Shareholders are available to review online at www.proxydocs.com/fcar. This Proxy Statement and Form of Proxy will be sent to shareholders on or about April 21, 2011.
 
VOTING, SOLICITATION AND REVOCABILITY OF PROXIES
 
The only voting securities of the Company are shares of common stock having no par value of which 3,500,000 are authorized. The total number of shares issued as of April 11, 2011 was 886,679, of which the Company holds 100 shares as treasury stock, leaving 886,579 shares outstanding and entitled to vote at the Meeting. The holders of common stock are generally entitled to one vote for each share of common stock on each matter submitted to a vote at a meeting of shareholders. The rights of appraisal or similar rights of dissenters with respect to any matter to be acted upon shall only exist to the extent they are provided by law. Shareholders of record on April 11, 2011 will be entitled to vote on the matters described herein.
 
The enclosed proxy for the Meeting is being solicited by the directors of the Company. The proxy may be revoked by a shareholder at any time prior to the exercise thereof by filing with the Secretary of the Company a written revocation or duly executed proxy bearing a later date. The proxy may also be revoked by a shareholder attending the Meeting, withdrawing such proxy and voting in person. Proxies relating to “street name” shares that are voted by brokers will be counted as shares present for purposes of determining the presence of a quorum, but will not be treated as shares having voted at the Meeting as to any proposal as to which the broker does not vote. Proxies will extend to, and will be voted at, any properly adjourned session of the Meeting.
 
The expense of solicitation of proxies will be borne by the Company. In addition to the use of mail, proxies may be solicited by the directors, officers, employees of the Company, and/or their agents (who will receive no additional compensation therefore) by means of personal interview, telephone, facsimile or other electronic means. It is anticipated that banks, brokerage houses and other institutions, nominees or fiduciaries will be requested to forward soliciting material to the shareholders and to obtain authorization for the execution of proxies. The Company may upon request reimburse banks, brokerage houses and other institutions, nominees or fiduciaries for their expenses in forwarding proxy materials to shareholders.

 

PRINCIPAL SHAREHOLDERS
 
The following table shows the stock ownership as of April 11, 2011 of the shareholders who are known to the Company to be beneficial owners of more than five percent of the Company’s common stock.
 
                 
    Amount and
 		       
    Nature of
 		       
Name and Address
 		  Beneficial
 		    Percent of
 		 
of Beneficial Owner
  Ownership     Class (1)  
 
Brent D. Baird,
    412,733 (2)     46.6%  
Bruce C. Baird, and 11 others
               
1350 One M&T Plaza
               
Buffalo, New York 14203
               
                 
 
(1)  Based on the number of shares of common stock of the Company outstanding as of April 11, 2011 which was 886,579.
(2)  Mr. Brent D. Baird and Mr. Bruce C. Baird disclaim beneficial ownership or interest in 297,149 and 380,601, respectively, of such shares. These shares are held in family trusts or custodianships and by relatives, entities owned and controlled by the Baird family and business associates.
 
STOCK OWNERSHIP OF DIRECTORS, NOMINEES AND OFFICERS
 
The following table represents the number of shares of common stock of the Company beneficially owned by the directors, nominees and officers of the Company as of April 11, 2011.
 
                 
          Percent of
 		 
Name of Director or Nominee
  Shares Owned     Class (1)  
 
Bruce C. Baird
    412,733 (2)     46.6 %
Theodore E. Dann, Jr. 
    200       *  
Patrick W.E. Hodgson
    7,128 (4)     *  
James E. Traynor
    6,212 (3)     *  
H. Thomas Webb III
    5,000       *  
                 
Name of Officer
               
                 
Brent D. Baird
    412,733 (2)     46.6 %
All directors and officers as a group
    431,273 (2)     48.6 %
 
  *  Less than one percent
 
(1)  Based on the number of shares of common stock of the Company outstanding as of April 11, 2011, which was 886,579.
(2)  Mr. Brent D. Baird and Mr. Bruce C. Baird disclaims beneficial ownership or interest in 297,149 and 380,601, respectively, of such shares. The remaining shares are held in family trusts or custodianships and by relatives, corporations and associated parties which have joined in filing a Schedule 13D pursuant to certain regulations of the Securities and Exchange Commission (Bruce C. Baird and 12 others). However, the shareholders disclaim that they constitute a “group” as defined in the Securities and Exchange Act of 1934, as amended.
(3)  Includes 212 shares owned by Mr. Traynor’s wife. Mr. James E. Traynor disclaims beneficial ownership with respect to the shares owned by his wife.
(4)  Mr. Patrick W.E. Hodgson disclaims beneficial ownership or interest in 7,128 shares. The shares are held in a family foundation.


2

 

PROPOSAL 1 — ELECTION OF DIRECTORS
 
NOMINEES
 
Five directors of the Company are to be elected to hold office until the next annual election of directors and until their successors have been duly elected and qualified. Certain information with respect to the nominees for election as directors is set forth below. Should any one or more of the persons named be unable or unwilling to serve (which is not expected) the proxies will be voted for such other person or persons as the directors may recommend.
 
Any shareholder is entitled to vote, in person or by proxy, the number of shares standing of record in the shareholder’s name on the record date for as many persons as there are directors to be elected. Cumulative voting is not permitted. The affirmative vote of a majority of shares outstanding and entitled to vote is required to elect directors. The Board has determined that a majority of its members and nominees satisfy the independence criteria currently required. The independent members of the Board are Messrs. Theodore E. Dann, Jr. Patrick W.E. Hodgson, James E. Traynor and H. Thomas Webb III. The directors of the Company recommend a vote FOR the nominees listed below. Each of the following nominees was elected as a director at the 2010 Annual Meeting of Shareholders.
 
The Company does not maintain a separate diversity policy at this time by which it measures nominees for consideration, but has considered the background, experience, skills, education and needs of the Company in recommending these nominees.
 
The following information is presented with respect to those nominees who are considered “interested persons” of the Company within the meaning of Section 2(a)(19) of the Investment Company Act of 1940, as amended.
 
                     
                Number of
 		  Other
                Portfolios in
 		  Directorships
        Term of
 		  Experience
 		  Fund Complex
 		  Held by Director
    Position(s)
 		  Office and
 		  and
 		  Overseen
 		  or Nominee for
    Held
 		  Length of
 		  Principal
 		  by Director
 		  Director
    With
 		  Time
 		  Occupation(s)
 		  or Nominee
 		  During Past
Name, Age and Address
  Fund   Served   During Past 5 Years   for Director   5 Years
 
Bruce C. Baird (1)(2), 65
215 Broadway
Buffalo, New York 14204 		  Vice-President, Secretary, and Director   Since June 19, 1991   Since 1975, Mr. Bruce C. Baird has been Chairman and owner of Belmont Management Co., Inc., a real estate development and management company. Since 1985, Mr. Bruce C. Baird has been President of Belmont Contracting Co., Inc., a construction company. Since 1990, Mr. Bruce C. Baird has been owner of Belmont Development Corp., predominately a developer of housing for the elderly.   Not Applicable   Belmont Management Co., Inc.
 (a real estate development and
 management company)
                     
 
(1)  Mr. Bruce C. Baird and Mr. Brent D. Baird, the Company’s President, are brothers. No other directors or officers are related.
(2)  As a member of the Company’s management and a principal shareholder, Mr. Bruce C. Baird is an “interested person” as defined in section 2(a)(19) of the Investment Company Act of 1940, as amended.


3

 

The following information is presented with respect to those nominees who are not considered “interested persons” of the Company within the meaning of Section 2(a)(19) of the Investment Company Act of 1940, as amended.
 
                 
                Other
            Experience
 		  Directorships
            and
 		  Held by Director
        Term of
 		  Principal
 		  or Nominee for
    Position(s)
 		  Office and
 		  Occupation(s)
 		  Director
    Held
 		  Length of
 		  During Past
 		  During Past
Name, Age and Address
  With Fund   Time Served   5 Years   5 Years
 
Theodore E. Dann, Jr., 58
5250 North Sherman Street
Denver, Colorado 90216 		  Director   Since January 17, 1995   Mr. Dann is President and CEO of ACH Foam Technologies, LLC. Licensed attorney in two states; CPA license; MBA degree   ACH Holdings, Inc.
                 
                 
                 
                 
Patrick W.E. Hodgson, 70
30 St. Clair Avenue West
Toronto, Ontario
Canada M5R 2K2 		  Director   Since June 17, 1992   Mr. Hodgson has been Chairman of the Board of Todd Shipyards Corporation from February, 1993 to February, 2011 and has been the President of Cinnamon Investments Ltd. since 1981. B.S. Economics from University of Pennsylvania.   Todd Shipyards Corporation
M&T Bank Corporation
Sonor Investments
                 
                 
James E. Traynor, 61
951 Market Street Suite 203
Fort Mill, South Carolina 29708 		  Director, Chairman, Audit Committee   Since May 29, 1998   Mr. Traynor is President of Clear Springs Development Co, LLC (real estate development). Former CPA with international public accounting firm experience    
                 
                 
H. Thomas Webb III, 63
621 Hungerford Place
Charlotte, North Carolina 28207 		  Chairman, Director, President   Since June 30, 1979   Mr. Webb is Principal of H T Webb LLC, a real estate advisory firm.    
 
DOLLAR RANGE OF EQUITY SECURITIES
 
The following table gives information regarding the dollar range of equity securities in the Company for the directors and nominees as of April 14, 2011.
 
         
        Aggregate Dollar Range
        of Equity Securities
        in all Funds
        Overseen or to
        be Overseen by
    Dollar Range of
 		  Director or Nominee
    Equity Securities
 		  in Family of
Name of Director or Nominee
  in the Fund (1)   Investment Companies
 
Bruce C. Baird
  over $100,000   Not Applicable
 
(1)  Based on the last sales price for a share of common stock of the Company on April 14, 2011, which was $4.85.
 
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
 
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires that directors, officers and persons who own more than 10 percent of a registered class of the Company’s securities file reports with the Securities and Exchange Commission of any purchase or sale of the Company’s common stock and provide the Company with a copy of the Section 16(a) forms they file. Based solely on a review of all such forms furnished to the Company, the Company believes that with respect to calendar year 2010, all such persons complied with all applicable Section 16(a) filing requirements.


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EXECUTIVE OFFICERS
 
The following is a listing of the Company’s executive officers:
 
                 
                Other
            Experience
 		  Directorships
            and
 		  Held by Director
        Term of
 		  Principal
 		  or Nominee for
    Position(s)
 		  Office and
 		  Occupation(s)
 		  Director
    Held
 		  Length of
 		  During Past
 		  During Past
Name, Age and Address
  With Fund   Time Served   5 Years   5 Years
 
H. Thomas Webb III, 63
621 Hungerford Place
Charlotte, North Carolina 28207 		  Chairman   Since May 19, 2004   Mr. Webb has been Chairman of the Company since 2004. From 1979 to 2000 Mr. Webb served as President of the Company. Mr. Webb is Principal of HTWebb.LLC, a real estate advisory firm.    
                 
                 
                 
Brent D. Baird (1)(2)(4), 72
1350 One M&T Plaza
Buffalo, New York 14203 		  President   Since July 25, 2001   Mr. Baird is primarily a private investor and a registered person with Trubee Collins & Co., Inc., a member of the National Association of Securities Dealers, Inc. Mr. Baird was Chairman of the Company from 1978 to 2004. Mr. Baird has served as President from 2001 to present.   M&T Bank Corporation
Todd Shipyards Corporation
Sun-Times Media Group, Inc
                 
                 
                 
Bruce C. Baird (3)(4), 65
215 Broadway
Buffalo, New York 14204 		  Vice-President, Secretary, and Director   Since June 19, 1991   Since 1975, Mr. Bruce C. Baird has been Chairman and owner of Belmont Management Co., Inc., a real estate development and management company. Since 1985, Mr. Bruce C. Baird has been President of Belmont Contracting Co., Inc., a construction company. Since 1990, Mr. Bruce C. Baird has been owner of Belmont Development Corp, predominately a developer of housing for the elderly.   Belmont Management Co., Inc.
 (a real estate development and
 management company)
                 
 
(1)  Mr. Brent D. Baird oversees the securities investments on behalf of the Company. As a member of the Company’s management and a principal shareholder, Mr. Brent D. Baird is an “interested person” as defined in section 2(a)(19) of the Investment Company Act of 1940, as amended.
(2)  Mr. Brent D. Baird disclaims beneficial ownership or interest in 297,149 of 380,601 shares previously disclosed. The remaining shares are held in family trusts or custodianships and by relatives, corporations and associated parties which have joined in filing a Schedule 13D pursuant to certain regulations of the Securities and Exchange Commission (Brent D. Baird and 12 others). However, the shareholders disclaim that they constitute a “group” as defined in the Securities and Exchange Act of 1934, as amended.
(3)  Mr. Bruce C. Baird disclaims beneficial ownership or interest in 297,149 of 380,601 shares previously disclosed. The remaining shares are held in family trusts or custodianships and by his wife, relatives, corporations and associated parties which have joined in filing a Schedule 13D pursuant to certain regulations of the Securities and Exchange Commission (Bruce C. Baird and 12 others). However, the shareholders disclaim that they constitute a “group” as defined in the Securities and Exchange Act of 1934, as amended.
(4)  Mr. Brent D. Baird and Mr. Bruce C. Baird are brothers. No other directors or officers are related.
 
BOARD LEADERSHIP STRUCTURE
 
The Company has chosen to separate the positions of President and Board Chairman. As disclosed, the President is an “interested person.” The separation of the roles of President and Chairman was implemented to promote independence and assist in internal controls for the benefit of shareholders.


5

 

EXECUTIVE OFFICERS’ AND DIRECTORS’ COMPENSATION
 
Each director received fees of $2,000 for each of the four meetings of directors attended in 2010 and $1,600 per audit committee meeting attended. Each director received an additional $5,000 annual retainer fee. The Chairman of the Audit Committee received an additional $2,500 annual retainer fee. The executive officers listed below do not receive compensation other than director fees. The Company has not entered into any employment agreements.
 
         
    Total
 		 
    Compensation
 		 
Name of Person, Position
  from the Company  
 
Bruce C. Baird
  $ 13,000  
Vice-President, Secretary and Director
       
         
H. Thomas Webb III
  $ 13,000  
Chairman, Director
       
         
Theodore E. Dann, Jr. 
  $ 19,400  
Director, Audit Committee Member
       
         
Patrick W. E. Hodgson
  $ 19,400  
Director, Audit Committee Member
       
         
James E. Traynor
  $ 21,900  
Director, Chairman of Audit Committee
       
 
DIRECTOR ATTENDANCE AT ANNUAL MEETING OF SHAREHOLDERS
 
The Company has not adopted a formal policy on Board member attendance at its Annual Meeting of Shareholders, although all Board members are encouraged to attend, and historically, most have done so. All Board members attended either personally or telephonically the Company’s 2010 Annual Meeting of Shareholders.
 
SHAREHOLDER COMMUNICATION WITH THE BOARD OF DIRECTORS
 
Shareholders may contact one or more members of the Board of Directors by writing to the Assistant Secretary at the address listed on the front page of this Proxy Statement.
 
MEETINGS AND COMMITTEES OF DIRECTORS
 
There are two committees of directors. They are the Pricing Committee and the Audit Committee. The Pricing Committee is composed of Brent D. Baird and H. Thomas Webb III. Mr. Brent D. Baird is considered an “interested person” as defined in section 2(a)(19) of the Investment Company Act of 1940. The Pricing Committee determines the fair value of certain securities that cannot be given a market value through market quotations which are readily available, either through a national pricing service approved by the Board or by independent broker-dealers or market makers, also in accordance with the valuation procedures approved by the Board. The Pricing Committee provides the value to be used for such securities until another valuation source is identified through one of the two sources outlined above. The Audit Committee is composed entirely of directors who are not interested persons of the Company (as defined in the 1940 Act). The independent members of the Audit Committee are James E. Traynor, Chairman, Theodore E. Dann, Jr. and Patrick W.E. Hodgson. The Audit Committee is charged with the duty of reviewing and considering the auditors’ fee estimates, billings and independence. The Audit Committee is available to the auditors during the audit and meets with the auditors after completion of the audit to review the financial statements of the Company, the auditors’ assessment of the correctness and quality of the financial statements and the recommendations of the auditors on internal controls. The Audit Committee also reviews and oversees internal accounting policies and practices. The Audit Committee held four meetings during 2010.
 
The Board does not maintain a standing nominating or compensation committee; however the independent directors on the Board function in the capacity of a nominating committee. To that end, the qualifications of candidates considered include: at all times a majority of the directors must be independent; all directors should have business experience that makes them qualified to serve as a director of the Company; the directors are often


6

 

shareholders with a personal stake in the growth and stability of the Company; and all individuals recommended for appointment to the Board must also meet the eligibility requirements specified in the Company’s Bylaws.
 
The independent directors will consider valid shareholder nominations for directors made in writing. In order to be considered for the next election of directors at the 2012 Annual Meeting, shareholder nominations must be received by the Secretary at the Company’s principal office on or before December 29, 2011. In order to be valid, a shareholder nomination must set forth: (1) the name and address, as they appear on the Company’s books, of the shareholder nominating the candidate; (2) the number of shares of the Company’s stock beneficially owned by the shareholder; (3) the name, age, business address, and residence address of the nominee; (4) the principal occupation or employment of the nominee; (5) the number of shares of the Company’s stock beneficially owned by the nominee, if any; (6) a description of all arrangements or understandings between the shareholder and the nominee and any other persons pursuant to which the shareholder is making the nomination; and (7) any other information required to be disclosed in solicitations of proxies for election of directors, relating to any person that the shareholder proposes to nominate for election or reelection as a director, including the nominee’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected.
 
The Board of Directors held four meetings during 2010. Each director attended all of the meetings of the Board of Directors and meetings held by the committees of the Board of Directors on which he served.
 
AUDIT MATTERS
 
Audit Committee Report. The Audit Committee of the Board of Directors is responsible for providing independent, objective oversight of the Company’s accounting and auditing functions and internal controls. The Audit Committee is composed of three directors, Messrs. Traynor, Dann and Hodgson, each of whom the Board of Directors has determined is independent within the established guidelines for independence and meet the financial literacy requirements for Audit Committee members. The Audit Committee operates under a written charter approved by the Board of Directors. The Board and the Audit Committee have not designated a financial expert on the Audit Committee. The Board and the Audit Committee believe that the combined educational and business experience of its members, in addition to outside experts available, provides adequate resources to address the varying areas of responsibility of the Audit Committee. The Board selects the independent certified public accountants for the Company and the engagement is approved by the Audit Committee pursuant to the Audit Committee Charter.
 
Management is responsible for the Company’s internal controls and financial reporting process. The independent accountants are responsible for performing an independent audit of the Company’s financial statements in accordance with auditing standards generally accepted in the United States and to issue a report thereon. The Audit Committee’s responsibility is to monitor and oversee these processes.
 
In this context, the Audit Committee has met and held discussions with management and the independent accountants. Management represented to the Audit Committee that the Company’s financial statements were prepared in accordance with generally accepted accounting principles, and the Audit Committee has reviewed and discussed the consolidated financial statements with management and the independent accountants. The Audit Committee also discussed with the independent accountants the matters required by Statement on Auditing Standards No. 114 (The Auditor’s Communication With Those Charged With Governance). The Audit Committee received written disclosures from the independent accountants required by Independence Standards Board Standard No. 1 (Independence Discussions with Audit Committees), and the Audit Committee discussed with the independent accountants that firm’s independence.
 
The members of the Audit Committee are not professionally engaged in the practice of auditing or accounting and are not experts in the fields of accounting or auditing, including auditor independence. Members of the Audit Committee rely without independent verification on the information provided to them and on the representations made by management and the independent registered public accounting firm. Accordingly, the Audit Committee’s oversight does not provide an independent basis to determine that management has maintained appropriate accounting and financial reporting principles or appropriate internal controls and procedures designed to assure compliance with accounting standards and applicable laws and regulations. Furthermore, the Audit Committee’s considerations and discussions referred to above do not assure that the audit of the Company’s financial statements


7

 

has been carried out in accordance with generally accepted auditing standards, that the financial statements are presented in accordance with generally accepted accounting principles or that the Company’s auditors are in fact “independent”.
 
Based upon the Audit Committee’s discussions with management and the independent accountants, and the Audit Committee’s review of the representations of management and the report of the independent accountants to the Audit Committee, the Audit Committee recommended that the Board of Directors include the audited financial statements in the Company’s Annual Report for the year ended December 31, 2010, filed with the Securities and Exchange Commission.
 
THE AUDIT COMMITTEE
 
JAMES E. TRAYNOR, CHAIRMAN
THEODORE E. DANN, JR.
PATRICK W.E. HODGSON
 
AUDIT AND RELATED FEES
 
Set forth below is information relating to the aggregate KPMG LLP fees for professional services rendered for the fiscal year ended December 31, 2010.
 
Audit Fees. The aggregate KPMG LLP fees billed for 2010 and 2009 were $71,600 respectively, for professional services rendered for the audit of the Registrant’s financial statements, review of N-SAR and filing of N17-f2 reports for the fiscal year ended December 31, 2010 and 2009.
 
Tax Fees. The aggregate KPMG LLP fees billed for 2010 and 2009 were $44,538 and $42,035 respectively, for professional services rendered to the Company for federal and state tax return preparation and research.
 
All Other Fees. There were no other fees billed by KPMG LLP to the Company.
 
Audit Committee Pre-Approved Policy.  The Audit Committee of the Company requires all audit, tax, audit-related fees and all other fees be proposed and pre-approved with the Audit Committee prior to the services being provided. The Audit Committee carefully considers the independence of the accountants and the reasonableness of the fees quoted in relation to the services anticipated. All of the above fees were pre-approved by the Audit Committee and all the services performed above were performed by KPMG LLP full-time permanent employees. The Audit Committee did not have to consider whether the provision of non-audit services to any other entity other than the Company, were compatible with maintaining KPMG LLP independence. The Audit Committee does not delegate its responsibility to pre-approved services performed by the independent registered public accountants to management.
 
LEGAL PROCEEDINGS
 
The Company has no known material pending legal proceedings to which any director or nominee for director or affiliated person of such director or nominee is a party, now, or in the past 10 years, adverse to the Company or any of its affiliated persons or has a material interest adverse to the Company or any of its affiliated persons.
 
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 
The Company has executed securities transactions through the brokerage firm of Trubee, Collins & Co., Inc. (“Trubee, Collins”), of which Brent D. Baird, President and an affiliated person of the Company, is a registered person. The total commissions paid by the Company to Trubee, Collins in the last three years were $0, $750, and $450 for 2010, 2009 and 2008, respectively.
 
BOARD ROLE IN RISK OVERSIGHT
 
Risk oversight is taken very seriously by the Board. The President oversees day-to-day management responsibilities and reports directly to the Board as a whole. Internal controls have been put in place to ensure corporate compliance with applicable regulations and laws, and to assist in the goal of protecting against fraud. Risk


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management is also utilized to address tax exposure for the Company and the shareholders. The action of the officers, the Board, management and outside vendors are reviewed annually with the intent of improving any procedures necessary to fully protect shareholders’ interests.
 
PROPOSAL 2 — OTHER MATTERS
 
The Board of Directors does not know of any business which will be presented at the Meeting other than the matters specifically set forth in the Notice of Meeting. If any other matters are properly presented to the Meeting for action, it is intended that the persons named in the accompanying Form of Proxy and acting thereunder will vote in accordance with their best judgment of such matters.
 
SHAREHOLDER PROPOSALS
 
PROPOSALS IN THE COMPANY’S PROXY STATEMENT
 
Shareholders having proposals which they desire to present at next year’s annual meeting should, if they desire that such proposals be included in the Board of Directors’ proxy and proxy statement relating to such meeting, submit such proposals in time to be received by the Company and its independent directors at its principal executive office in Fort Mill, South Carolina, not later than December 29, 2011. To be so included, all such submissions must comply with the requirements set forth in Rule 14a-8 of the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended. The Board of Directors directs the close attention of interested shareholders to such rule.
 
PROPOSALS TO BE INTRODUCED AT THE MEETING BUT NOT INTENDED TO BE INCLUDED IN THE COMPANY’S PROXY MATERIAL
 
For any shareholder proposal to be presented in connection with the 2012 Annual Meeting of Shareholders, including any proposal relating to the nomination of a director to be elected to the Board of Directors of the Company, a shareholder must give timely written notice thereof to the Company. To be timely, a shareholder’s notice must be delivered to the Company not later than March 9, 2012.
 
Shareholders are urged to sign the enclosed Form of Proxy solicited on behalf of the Board of Directors and return it at once in the envelope enclosed for that purpose. Proxies will be voted in accordance with the shareholders’ direction.
 
By Order of the Board of Directors
 
Cynthia J. Raby
Assistant Secretary
 
Fort Mill, South Carolina


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APPENDIX A
 
FIRST RESTATED
PROXY VOTING POLICY
OF
FIRST CAROLINA INVESTORS, INC.
Adopted: MARCH 23, 2005
 
 
The following Proxy Voting Policy, originally adopted on May 21, 2003, by the Board of Directors of First Carolina Investors, Inc. is hereby restated as follows:
 
The Proxy Voting Policy of First Carolina Investors, Inc. (the “Fund”) will be procedurally for the President to vote according to “management’s recommendations” in the received proxies, provided the vote is in the best interest of the Fund, and to send a copy to the Assistant Secretary for filing in the business records at the Fund’s headquarters. If the President believes it is not in the Fund’s best interests to vote in accordance with “management’s recommendations” on a proxy received, he will prepare a memorandum disclosing such reasons for disagreeing with “management’s recommendations” which will be kept in the business records at the Fund’s headquarters. In the event of a conflict of interest, the President will contact the Pricing Committee and the full Board of Directors of the Fund to discuss the issues. Copies of all proxies received and voted on will be available for all Directors and Officers to review at any time.

 

FIRST CAROLINA INVESTORS, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF SHAREHOLDERS
June 9, 2011 at 1:00 p.m.
 
     KNOW ALL MEN BY THESE PRESENTS, that the undersigned shareholder of First Carolina Investors, Inc., a Delaware corporation, hereby constitutes and appoints JAMES E. TRAYNOR and H. THOMAS WEBB III or either of them, each with full powers of substitution, as attorneys and proxies for and on behalf of the undersigned, to act for and vote all of the shares of common stock of FIRST CAROLINA INVESTORS, INC. held or owned by the undersigned or standing in the name of the undersigned, at the Annual Meeting of Shareholders to be held at the Hilton Garden Inn, 650 Tinsley Way, Rock Hill, South Carolina 29730, on June 9, 2011 at 1:00 p.m., or any adjournment thereof, on the following matters:
 
     This proxy when properly executed will be voted in the manner directed herein by the undersigned shareholder. If no direction is made, this proxy will be voted FOR Proposal 1 and in the discretion of the proxies with respect to any matters under Proposal 2.
 
Item 1.  ELECTION OF DIRECTORS:
 
Bruce C. Baird Theodore E. Dann, Jr. Patrick W.E. Hodgson James E. Traynor H. Thomas Webb III
 
  (a) o FOR all nominees listed above (except as indicated below) (b) o WITHHOLD AUTHORITY to vote for all nominees listed above.
 
(INSTRUCTION: To withhold authority to vote for an individual nominee, write that nominee’s name in the space provided below):
 
 
Item 2.  In their discretion, the proxies are authorized to vote upon such other business as may properly come before the meeting.
 
PLEASE MARK, SIGN, DATE AND RETURN PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
 
(SEE REVERSE SIDE)

 

THE UNDERSIGNED hereby acknowledges receipt of the Notice of Annual Meeting of Shareholders dated April 21, 2011 and the Proxy Statement furnished herewith.
 
Dated: ­ ­ , 2011
 
Signature
 
Signature (if held jointly)
 
Please sign exactly as name appears on stock records. When shares are held by joint tenants both should sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. If a corporation, please sign in full corporate name by President or other authorized officer. If a partnership, please sign in partnership name by authorized person.