DEF 14A 1 ddef14a.htm DEFINITIVE NOTICE AND PROXY STATEMENT Definitive Notice and Proxy Statement

 

 

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:

 

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Preliminary Proxy Statement

 

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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

 

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Definitive Proxy Statement

 

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Definitive Additional Materials

 

¨

Soliciting Material under §240.14a-12

    UWHARRIE CAPITAL CORP    

(Name of registrant as specified in its charter)

 

(Name of person(s) filing proxy statement, if other than the registrant)

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x

No fee required.

 

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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

 

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Fee paid previously with preliminary materials.

 

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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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LOGO

 

 

 

 

April 8, 2011

Dear Shareholder:

Your Board of Directors is pleased to extend this invitation for you to join our corporate family at the Uwharrie Capital Corp Annual Meeting of Shareholders on Tuesday, May 10, 2011, at the Stanly County Agri-Civic Center, Albemarle.

 

¿    Buffet Dinner & Fellowship

   4:30 p.m. – 6:00 p.m.

¿    Recognitions

   6:00 p.m. – 6:30 p.m.

¿    Business Meeting

   6:30 p.m.

Our objective for the Annual Meeting is for us, as a corporate family of associates, directors, and shareholders, to reflect on what has been accomplished by everyone working together and to learn about our company’s future plans.

Enclosed you will find our 2010 Summary Annual Report, Proxy Statement, and Appointment of Proxy (Proxy Card). The Summary Annual Report communicates our mission, 2010 highlights, and condensed financial statements in an informative, easy to read format. Complete financial statements and notes are contained in the full Annual Report, which is a part of the Proxy Statement. This document explains the two items to be voted upon at the meeting: (1) Election of Directors, and (2) Advisory Vote on Executive Compensation.

Remember, we cannot conduct the legal meeting without a majority of votes, and this would cause unnecessary expense to your company. You may vote by Proxy Card or by the Internet (see Voting Instructions on enclosed Appointment of Proxy). If you are voting by Proxy Card, please return it in the enclosed postage-paid envelope addressed to First Shareholder Services in Raleigh, NC, our Stock Transfer Agent, who will be tabulating votes.

Along with your vote, please indicate your dinner reservation and any comment or question for management.

Thank you for your continued support as a member of our corporate family. You are making a difference! We look forward to seeing you Tuesday, May 10, 2011.

Sincerely,

UWHARRIE CAPITAL CORP

LOGO

Tamara M. Singletary

Executive Vice President - Investor Relations

and Corporate Secretary

Enclosures

 

P. O. Box 338, Albemarle, NC 28002-0338        Telephone: (704) 982-4415        Fax: (704) 982-4355

www.UwharrieCapitalCorp.com


Uwharrie Capital Corp

132 North First Street

Albemarle, North Carolina 28001

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

And

NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIALS

NOTICE is hereby given that the Annual Meeting of Shareholders of Uwharrie Capital Corp (the “Company”) will be held as follows:

 

  Place:     Stanly County Agri-Civic Center

    26032 Newt Road

    Albemarle, North Carolina

 

  Date:      Tuesday, May 10, 2011

 

  Time:      4:30 p.m. – 6:00 p.m.     Buffet Dinner & Fellowship

    6:00 p.m. – 6:30 p.m.     Recognitions

    6:30 p.m.                         Business Meeting

 

  The purposes of the meeting are:

 

  1. To elect six (6) directors to three (3) year terms and one (1) director to a two (2) year term;

 

  2. To ratify a non-binding shareholder resolution regarding executive compensation; and

 

  3. To transact such other business as may properly be presented for action at the meeting.

You are invited to attend the annual meeting in person. However, even if you plan to attend, you are requested to complete, sign and date the enclosed appointment of proxy and return it promptly in the envelope provided for that purpose or to vote via the internet in order to ensure that a quorum is present at the meeting. The giving of an appointment of proxy will not affect your right to revoke it or to attend the meeting and vote in person.

We have elected to furnish our proxy solicitation materials via U.S. mail and also to notify you of the availability of our proxy materials on the internet. The notice of annual meeting, proxy statement, proxy card and annual report are available at www.uwharrie.com/vote.

 

By Order of the Board of Directors
  /s/ Roger L. Dick
  Roger L. Dick
  President and Chief Executive Officer

March 31, 2011


Uwharrie Capital Corp

132 North First Street

Albemarle, North Carolina 28001

704-982-4415

PROXY STATEMENT

ANNUAL MEETING OF SHAREHOLDERS

This Proxy Statement is being furnished in connection with the solicitation by the Board of Directors of Uwharrie Capital Corp (the “Company”) of appointments of proxy for use at the annual meeting of the Company’s shareholders (the “Annual Meeting”) to be held on May 10, 2011, at 6:30 p.m., in the Stanly County Agri-Civic Center, 26032 Newt Road, Albemarle, North Carolina, and at any adjournments thereof. The Company’s proxy solicitation materials are being mailed on or about April 8, 2011 to shareholders of record as of March 7, 2011.

Voting of Proxies

Persons named in the enclosed appointment of proxy as proxies (the “Proxies”) to represent shareholders at the Annual Meeting are Roger L. Dick, Brendan P. Duffey and Christy D. Stoner. Shares represented by each appointment of proxy which is properly executed, returned and not revoked, will be voted in accordance with the directions contained therein. If no directions are given, such shares will be voted “FOR” the election of each of the seven (7) nominees for director named in Proposal 1 and “FOR” Proposal 2. If, at or before the time of the Annual Meeting, any nominee named in Proposal 1 has become unavailable for any reason, the Proxies will be authorized to vote for a substitute nominee. On such other matters as may come before the meeting, the Proxies will be authorized to vote in accordance with their best judgment.

Record Date

The close of business on March 7, 2011 has been fixed as the record date (the “Record Date”) for the determination of shareholders entitled to notice of and to vote at the Annual Meeting. Only shareholders of record on that date will be eligible to vote on the proposals described herein.

Voting Securities

The Company’s voting securities are the shares of its common stock, par value $1.25 per share, of which 20,000,000 shares are authorized and 7,593,929 shares were outstanding on March 7, 2011. There were approximately 3,471 shareholders of the Company’s common stock on March 7, 2011.

The Company’s Articles of Incorporation also authorize the issuance of up to 10,000,000 shares of preferred stock, no par value, having such rights, privileges and preferences as the Board of Directors shall from time to time designate. As of March 7, 2011 there were 10,000 shares of the

 

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Company’s fixed rate cumulative perpetual preferred stock, series A (the “Series A Preferred Stock”) outstanding. Holders of the Series A Preferred Stock are not entitled to vote at the Annual Meeting.

Voting Procedures; Quorum; Votes Required for Approval

At the Annual Meeting, each shareholder will be entitled to one vote for each share of common stock held of record on the Record Date on each matter submitted for voting and, in the election of directors, for each director to be elected. In accordance with North Carolina law, shareholders will not be entitled to vote cumulatively in the election of directors.

A majority of the shares of the Company’s common stock issued and outstanding on the Record Date must be present in person or by proxy to constitute a quorum for the conduct of business at the Annual Meeting.

Assuming a quorum is present, in the case of Proposal 1 below, the seven (7) nominees receiving the greatest number of votes shall be elected.

In the case of Proposal 2, for the proposal to be approved, the number of votes cast for approval must exceed the number of votes cast against the proposal. Abstentions and broker non-votes will have no effect.

Revocation of Appointment of Proxy

Any shareholder who executes an appointment of proxy has the right to revoke it at any time before it is exercised by filing with the Secretary of the Company either an instrument revoking it or a duly executed appointment of proxy bearing a later date, or by attending the Annual Meeting and announcing his or her intention to vote in person.

Expenses of Solicitation

The Company will pay the cost of preparing, assembling and mailing this Proxy Statement. Appointments of proxy also may be solicited personally or by telephone by the directors, officers and employees of the Company and its subsidiaries without additional compensation. The Company will reimburse banks, brokers and other custodians, nominees and fiduciaries for their costs in sending the proxy materials to beneficial owners.

Authorization to Vote on Adjournment and Other Matters

Unless the Secretary of the Company is instructed otherwise, by signing an appointment of proxy, shareholders will be authorizing the Proxies to vote in their discretion regarding any procedural motions that may come before the Annual Meeting. For example, this authority could be used to adjourn the Annual Meeting if the Company believes it is desirable to do so. Adjournment or other procedural matters could be used to obtain more time before a vote is taken in order to solicit additional appointments of proxy to establish a quorum or to provide additional information to shareholders. However, appointments of proxy voted against any one of the Proposals will not be used to adjourn the Annual Meeting. The Company does not have any

 

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plans to adjourn the meeting at this time, but intends to do so, if needed, to promote shareholder interests.

Beneficial Ownership of Securities by Directors, Nominees and Executive Officers

As of March 7, 2011, no shareholder known to management beneficially owned more than 5% of the company’s common stock, except as disclosed in the following table.

 

Name and Address
Of Beneficial Owner

   Amount and
Nature of
Beneficial
Ownership
    Percent
of Class
 

Uwharrie Capital Corp

     498,253 (1)      6.56   

Employee Stock Ownership

    

Plan and Trust

    

Albemarle, NC

    

 

(1) Robert O. Bratton, Roger L. Dick, Brendan P. Duffey, David C. Gaskin, Susan B. Gibson, J. Michael Massey, Christy D. Stoner, and Barbara S. Williams serve as trustees for the Uwharrie Capital Corp Employee Stock Ownership Plan and Trust (the “ESOP”).

The following table lists the individual beneficial ownership of the Company’s common stock as of March 7, 2011, by the Company’s current directors, nominees for director and executive officers, and by all current directors, nominees, and executive officers of the Company as a group. Current directors and executive officers as a group beneficially owned 12.19% of the Company’s common stock on such date.

 

Name and Address
of Beneficial Owner

   Amount and
Nature of
Beneficial
Ownership
(1)  (2)
    Percent
of Class
 

W. Stephen Aldridge, III

     14,829 (3)      0.20   

Albemarle, NC

    

Robert O. Bratton

     1,110        0.01   

Concord, NC

    

Joe S. Brooks

     24,066 (4)      0.32   

Albemarle, NC

    

Ronald T. Burleson

     21,693 (5)      0.29   

Richfield, NC

    

Bill C. Burnside

     12,875 (6)      0.17   

Albemarle, NC

    

Roger L. Dick

     63,308 (7)      0.83   

Albemarle, NC

    

Brendan P. Duffey

     88,315        1.15   

Harrisburg, NC

    

 

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Name and Address
of Beneficial Owner

   Amount and
Nature of
Beneficial
Ownership
(1)  (2)
    Percent
of Class
 

Charles F. Geschickter, III

     915        0.01   

Stanfield, NC

    

Thomas M. Hearne, Jr.

     19,123        0.25   

Albemarle, NC

    

Charles D. Horne

     913        0.01   

Wadesboro, NC

    

Patricia K. Horton

     7,964 (8)      0.10   

Concord, NC

    

W. Kenneth Huntley

     3,835        0.05   

Wadesboro, NC

    

Joseph R. Kluttz, Jr.

     7,390        0.10   

Albemarle, NC

    

W. D. “Bill” Lawhon, Jr.

     36,716 (9)      0.48   

Albemarle, NC

    

Lee Roy Lookabill, Jr.

     8,173 (10)      0.11   

Wadesboro, NC

    

W. Chester Lowder

     3,541 (11)      0.05   

Norwood, NC

    

Dana A. Maness

     9,207        0.12   

Oakboro, NC

    

Barry S. Moose

     3,314 (12)      0.04   

Mount Pleasant, NC

    

Cynthia L. Mynatt

     3,662 (13)      0.05   

Concord, NC

    

Timothy J. Propst

     11,639 (14)      0.15   

Concord, NC

    

Susan J. Rourke

     3,092        0.04   

Harrisburg, NC

    

Donald P. Scarborough

     9,262 (15)      0.12   

Polkton, NC

    

Christy D. Stoner

     47,939 (16)      0.63   

Albemarle, NC

    

S. Todd Swaringen

     1,100        0.01   

Norwood, NC

    

 

4


Name and Address
of Beneficial Owner

   Amount and
Nature of
Beneficial
Ownership
(1)  (2)
    Percent
of Class
 

Jeffrey M. Talley

     7,755 (17)      0.10   

Stanfield, NC

    

Edward B. Tyson

     6,869 (18)      0.09   

Kannapolis, NC

    

Barbara S. Williams

     21,973 (19)      0.29   

Albemarle, NC

    

All current directors, nominees

     938,831 (20)      12.19   

and executive officers as a group (27 persons)

    

 

(1) Except as otherwise noted, to the best knowledge of management of the Company, the individuals named or included in the group above exercise sole voting and investment power with respect to all shares shown as beneficially owned. The calculations of the percentage of class beneficially owned by each individual are based on a total of 7,593,929 shares outstanding on March 7, 2011 plus the number of shares capable of being issued to that individual (if any) within 60 days of March 7, 2011 upon the exercise of stock options held by that individual (if any).
(2) Includes shares over which the named individual shares voting and investment power as follows: Mr. Brooks – 9,467 shares; Dr. Burnside – 11,860 shares; Mr. Duffey – 1,091 shares; Mr. Geschickter – 915 shares; Ms. Horton – 108 shares; Mr. Huntley – 3,835 shares; Mr. Lawhon – 562 shares; Mr. Lookabill – 3,914 shares; Mr. Lowder – 2,284 shares; Mr. Moose – 243 shares; and Ms. Rourke – 2,009 shares.
(3) Includes 1,059 shares held by Mr. Aldridge as custodian for minor child and 12,429 shares held by Mr. Aldridge’s parents, for whom Mr. Aldridge holds Power of Attorney.
(4) Includes 327 shares held by Mr. Brooks’ adult child.
(5) Includes 935 shares held by Mr. Burleson’s spouse. Mr. Burleson disclaims beneficial ownership as to 2,829 shares owned by Mr. Burleson’s adult child.
(6) Includes 482 shares owned by Dr. Burnside’s spouse.
(7) Includes 11,085 shares held by the Uwharrie Capital Corp SERP Plan for the benefit of Roger L. Dick, with respect to which John R. Morgan serves as trustee.
(8) Includes 1,994 shares held by Ms. Horton’s spouse and 168 shares held by Ms. Horton’s spouse as custodian for grandchildren.
(9) Includes 121 shares held by Mr. Lawhon as custodian for grandchild.
(10) Includes 1,521 shares held by Mr. Lookabill as custodian for grandchildren.
(11) Includes 666 shares held by Mr. Lowder’s adult child.
(12) Includes 3,071 shares owned by Mr. Moose’s spouse and father-in-law jointly.
(13) Includes 647 shares held by Ms. Mynatt’s adult child for which she disclaims beneficial ownership.
(14) Includes 530 shares held by Mr. Propst as custodian for children and 2,168 shares held by Mr. Propst’s spouse.

 

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(15) Includes 6,892 shares held by Mr. Scarborough’s mother, for whom Mr. Scarborough holds Power of Attorney.
(16) Includes 4,019 shares held by Ms. Stoner as custodian for a minor child.
(17) Includes 887 shares held by Mr. Talley’s spouse.
(18) Includes 5,293 shares held by Dr. Tyson’s spouse.
(19) Includes 646 shares held by Ms. Williams’ spouse.
(20) Includes an aggregate of 109,984 shares that directors or executive officers included in the group could purchase under stock options exercisable within 60 days of March 7, 2011. Also includes 498,253 shares of the Uwharrie Capital Corp Employee Stock Ownership Plan and Trust for which Robert O. Bratton, Roger L. Dick, Brendan P. Duffey, David C. Gaskin, Susan B. Gibson, J. Michael Massey, Christy D. Stoner, and Barbara S. Williams serve as trustees.

Section 16(a) Beneficial Ownership Reporting Compliance

Directors and executive officers of the Company are required by federal law to file reports with the Securities and Exchange Commission (“SEC”) regarding the amount of and changes in their beneficial ownership of the Company’s common stock. To the knowledge of the management of the Company based upon information supplied to the Company by the directors and executive officers, all required reports of directors and executive officers of the Company have been timely filed.

PROPOSAL 1: ELECTION OF DIRECTORS

Nominees

The Company’s Bylaws provide for a Board of Directors composed of eighteen (18) members divided into three classes, each consisting of six (6) directors who are elected to terms of three (3) years. Each year the terms of six (6) directors expire and six (6) persons are elected as directors for new three (3) year terms. The Board of Directors has nominated the six (6) persons named in the following table for election by shareholders at the Annual Meeting as directors of the Company for three (3) year terms and one (1) person for a two (2) year term or, in each case, until their respective successors are duly elected and qualified.

 

Name and Age

   Position
with
Company
     Year
First  Elected/
Proposed
Term Expires(1)
    

Principal Occupation
and Business Experience
for the Past Five Years

Three-Year Term

        
Joe S. Brooks
(61)
     Director         1997/2014       Owner and Manager, Brothers Precision Tool Co., Albemarle, NC (tool and die machine shop)

 

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Name and Age

   Position
with
Company
     Year
First  Elected/
Proposed
Term Expires(1)
    

Principal Occupation
and Business Experience
for the Past Five Years

Ronald T. Burleson

(61)

     Director         1997/2014       Partner, Thurman Burleson & Sons Farm, Richfield, NC (cotton and grain farming operation and partner in cotton gin)

Charles F. (“Tad”) Geschickter, III

(48)

     Director         2005/2014       President and Chief Executive Officer, JTG Racing, Inc.; ST Motorsports, Inc., Harrisburg, NC

W. Chester Lowder

(62)

     Director         1995/2014       Director of Livestock Program, Public Policy Division, NC Farm Bureau Federation, Incorporated, Raleigh, NC

Barry S. Moose

(48)

     Director         2008/2014       Division Engineer, North Carolina Department of Transportation, Albemarle, NC

Susan J. Rourke

(65)

     Director         2003/2014       President and Owner, U.S. Land Management Co., Harrisburg, NC

Two-Year Term

        

Cynthia L. Mynatt

(55)

    
 
New
Nominee
  
  
     2003/2013       President, Ben Mynatt Buick – GMC Concord, NC

 

(1) The year first elected indicates the year in which each individual was first elected a director of the Bank of Stanly, Anson Bank & Trust Co., Cabarrus Bank & Trust Company or the Company, as applicable and does not reflect any break(s) in the named individuals’ tenures as directors of the Bank of Stanly, Anson Bank & Trust Co., Cabarrus Bank & Trust Company or the Company, as applicable.

THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE “FOR” EACH OF THE NOMINEES NAMED IN PROPOSAL 1 ABOVE.

Incumbent Directors

The Company’s current Board of Directors includes eleven (11) directors whose terms will continue after the Annual Meeting. The following table contains information about those eleven (11) incumbent directors.

 

Name and Age

   Position
with
Company
   Year
First  Elected/
Proposed
Term Expires(1)
  

Principal Occupation
and Business Experience
for the Past Five Years

W. Stephen Aldridge, III

(37)

   Director    2006/2012    President, Stanly Funeral Home, Inc., Albemarle, NC

 

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Name and Age

   Position
with
Company
   Year
First  Elected/
Proposed
Term Expires(1)
  

Principal Occupation
and Business Experience
for the Past Five Years

Bill C. Burnside

(61)

   Director    1998/2012    Owner, Bill C. Burnside, DDS, Albemarle, NC

Thomas M. Hearne, Jr.

(60)

   Director    2004/2013    Retired; previously Geopavement Engineer North Carolina Department of Transportation, Harrisburg, NC

Charles D. Horne

(59)

   Director    2007/2013    President, Hornwood, Inc., Lilesville, NC (textile manufacturing)

W. Kenneth Huntley

(62)

   Director    2000/2012    Owner and President, Huntley Oil & Gas Co., Inc., Wadesboro, NC

Joseph R. Kluttz, Jr.

(72)

   Director    2005/2012    Secretary and Treasurer, Albemarle Insurance Agency, Inc., Albemarle, NC

Lee Roy Lookabill, Jr.

(62)

   Director    2003/2012    President, Anson Real Estate and Insurance Company, Inc., Wadesboro, NC

Timothy J. Propst

(50)

   Director    2003/2013    Executive Vice President, Propst Construction Co., Inc., Concord, NC (utilities and soil stabilization construction)

Donald P. Scarborough

(59)

   Director    2004/2013    President and Broker Owner, Plank Road Realty, Inc., Wadesboro, NC

S. Todd Swaringen

(34)

   Director    2010/2013    Partner, Beane Swaringen & Company, PLLC, Albemarle, NC (certified public accountants)

Edward B. Tyson

(70)

   Director    2003/2011    Retired; previously, Superintendent of Kannapolis City Schools, Kannapolis, NC

 

(1) The year first elected indicates the year in which each individual was first elected a director of the Bank of Stanly, Anson Bank & Trust Co., Cabarrus Bank & Trust Company or the Company, as applicable, and does not reflect any break(s) in certain of the named individuals’ tenures as directors of the Bank of Stanly, Anson Bank & Trust Co., Cabarrus Bank & Trust Company or the Company, as applicable.

Qualifications of Directors

A description of the specific experience, qualifications, attributes, or skills that led to the conclusion that each of the nominees and incumbent directors listed above should serve as a director of the Company is presented below.

 

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W. Stephen Aldridge, III, Ph.D.

Mr. Aldridge has been employed with Stanly Funeral Home, Inc., Albemarle, NC since 2000 and has served as its President since 2003. He is the lead funeral director and funeral home manager. The company employs six full-time and over twenty part-time employees.

Mr. Aldridge earned a Bachelor of Science degree with Honors in Chemistry from Davidson College in 1996 and a Doctor of Philosophy degree in Chemistry in 2001 from the University of North Carolina at Chapel Hill.

Mr. Aldridge holds numerous leadership positions in the community including as a past Board member of the Stanly County Economic Development Commission, past Board member of the Stanly County Environmental Affairs Board, Board member of the John P. Murray Community Care Clinic, and member of the Albemarle Rotary Club since 2001. He has also served on the Board of the Albemarle Rotary Club and as Chairman of the Stanly County Chamber of Commerce in 2007.

He has attended multiple sessions of the North Carolina Bank Directors’ College and North Carolina Advanced Bank Directors’ College.

Mr. Aldridge has served as a member of the Uwharrie Capital Corp Board since 2009 and the subsidiary bank board of Bank of Stanly since 2006. He serves on the Examining Committee, Nominating Committee and Enterprise Risk Management Committee.

Joe S. Brooks

Mr. Brooks is the owner and manager of Brothers Precision Tool Co., a tool and die machine shop, in Albemarle, NC. He started the business in 1974 with other family members. The company currently employs five and specializes in high precision machine parts for a variety of industries. For over 13 years, he was also an instructor of Machine Technology at Stanly Community College, Albemarle, NC. Additionally, through Stanly Community College, he performed machine technology in-facility training at various companies.

Mr. Brooks served on the Stanly Regional Medical Center Foundation Board and served as Chairman from 2008 to 2010. He actively serves in his church on the council and executive committee and has served as church treasurer since 1998.

For over 20 years, Mr. Brooks was involved with cub scouts and boy scouts of Troop 82, serving as Assistant Scoutmaster for over 15 years. He has served as the scout committee chairman since 1990.

He has extensive experience in overall small business management, machine technology and processes.

Mr. Brooks has served on the Uwharrie Capital Corp Board since 2005, having served a previous six-year term beginning in 1997. He is also past Board Chairman, past Board Vice Chairman and past Chairman of the Examining Committee, Human Resources Committee, and Properties Committee. He currently serves as the Vice Chairman of the Uwharrie Capital Corp

 

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Board and is a member of the Executive Committee and Enterprise Risk Management Committee, and Chairman of the Examining Committee.

Ronald T. Burleson

Mr. Burleson is an employee and partner of the family business, Thurman Burleson & Sons Farm, cotton and grain farming operation, Richfield, NC. The farming operation currently farms over 3,500 acres of land in four counties. Since an early age, Mr. Burleson has been involved with every responsibility of the farming operation. He has also been involved with other family members in starting and operating Rolling Hills Gin, LLC, in Richfield, NC, a cotton gin operation begun in 1996.

Mr. Burleson earned an undergraduate degree in Agronomy from North Carolina State University. Mr. Burleson is involved in leadership roles on the local and state levels. He is a delegate to the National Cotton Council and the Corn Congress of the National Corn Growers Association, past board member of the North Carolina Soybean Production Association, Stanly County and NC State Farm Bureau board member, Corn Producers of North Carolina board member, Beltwide Cotton Cooperative board member and past Chairman, and board member of the Southern Southeast Cotton Producers Association.

Mr. Burleson is past president of the North Carolina Cotton Production Association and the Corn Growers Association of North Carolina. He is past President of the Richfield Civitan Club and past Chairman of his church administrative board.

He has extensive experience in overall farm operation management and is heavily involved with regulatory and environmental aspects of the business on the local, state and national levels.

Mr. Burleson has been a member of the Uwharrie Capital Corp Board since 2008, having served a previous six-year term beginning in 1997. He serves on the Examining Committee and Nominating Committee.

Bill C. Burnside, D.D.S.

Dr. Burnside has owned and operated a private dental practice in Albemarle, NC since 1978. He earned an undergraduate degree in Chemistry from the State University of New York in Binghamton, NY, and a Master of Arts in Teaching degree from the University of North Carolina at Chapel Hill. Dr. Burnside worked as a Research Assistant in the Department of Pathology of the Medical School at the University of North Carolina for one year. He earned a Doctor of Dental Surgery (DDS) degree from the University of North Carolina at Chapel Hill.

Dr. Burnside was recruited to join the North Carolina Air National Guard in 1992, and has served as a dentist at the Air Guard base in Charlotte, NC since that time. He currently holds the rank of Lieutenant Colonel, and serves as the Chief of Dental Services.

Dr. Burnside has been active in the community serving as a member of the Albemarle Rotary Club for over 30 years, having served as treasurer, board member and president. He was

 

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an assistant scoutmaster for Troop 82 of the Boy Scouts for nine years, and is a member and deacon of the First Baptist Church, Albemarle.

He has extensive experience in running a small business for three decades: meeting a monthly payroll for six employees, dealing with rising costs, regulations and taxes and meeting the demands of the public.

Dr. Burnside has served on the Uwharrie Capital Corp Board since 2009, having served a previous six-year term beginning in 1998. He serves on the Examining Committee.

Charles F. (“Tad”) Geschickter, III

Mr. Geschickter is the founder, co-owner, President and Chief Executive Officer of JTG Racing, Inc. and ST Motorsports Marketing, Inc. in Harrisburg, NC. Both companies are mainstays in Stanly and Cabarrus County and have operated in the NASCAR motorsports arena for 15 years. The company employs 140. Prior to founding JTG Racing and ST Motorsports, Mr. Geschickter spent 10 years at Procter & Gamble where he rose through corporate positions from Sales Representative to Senior Regional Sales Manager. At the end of his career with Proctor & Gamble, Mr. Geschickter was responsible for managing businesses totaling $300 million in annual revenue.

Mr. Geschickter earned a Bachelor of Arts degree from The College of William and Mary where he was also the captain of the baseball team and president of the College’s Catholic Students Association. In addition to his business, Mr. Geschickter is actively involved in the local community and volunteers much of his personal time with the Animal Adoption League charity.

He has extensive experience in sales, marketing, brand management, personnel management and strategic planning.

Mr. Geschickter has served on the Uwharrie Capital Corp Board since 2005. He serves on the Examining Committee.

Thomas M. Hearne, Jr.

Mr. Hearne recently retired after working for thirty years as a Geotechnical Engineer with the North Carolina Department of Transportation.

Mr. Hearne earned a Bachelor of Science degree in Civil Engineering from The Citadel, Charleston, SC, and a Master of Engineering degree from the University of Florida, Gainesville, FL. He is a registered Professional Engineer in the State of North Carolina. He has also published articles in the Journal of Geotechnical Engineering, Transportation Research Record, and Proceedings - 4th International Conference on Concrete Pavement Design and Rehabilitation. Throughout his career, Mr. Hearne has served as a member and chairman of numerous professional panels and committees at the local, state, and national levels.

Mr. Hearne has served as a member of the Albemarle Planning Board and First Lutheran Church Council. He currently manages an estate fund for First Lutheran Church. He is also a member of the Association of Citadel Men and the American Society of Civil Engineers.

 

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He is the inventor of the device currently used in North Carolina to test ride quality and smoothness of asphalt pavements during construction and has extensive experience in structural testing and evaluation of highway pavements.

Mr. Hearne has served on the Uwharrie Capital Corp Board since 2004. He serves on the Executive Committee, Examining Committee, and Enterprise Risk Management Committee.

Charles D. Horne

Mr. Horne has been President and co-owner of Hornwood, Inc., a textile manufacturing company in Lilesville, NC since 1983. He began employment with the family business in 1973 and was named Sales Manager in 1978. The company employs 360.

Mr. Horne earned a Bachelor of Science degree in Textile Technology from North Carolina State University.

Mr. Horne is the current Vice Chairman of the Anson County Economic Development Corporation. He was President of the Anson County Chamber of Commerce from 1989 – 1990 and was recognized as Anson County Industrialist of the Year in 1994. He has served as President of the Wadesboro Rotary Club, where he also served as Lt. Governor Rotary District from 1997 – 1999. Additionally, Mr. Horne held a position on the Anson County Board of Education from 1995 – 2006 and was a member of the All State School Board in 2000. He received the 2003 North Carolina State University College of Textiles Distinguished Alumni Award and the 2009 NCSU College of Textiles Textile Leader of the Year. Mr. Horne is also the current Vice President of the North Carolina Textile Foundation where he has served since 2009. He is also past President of the Twin Valley Country Club, and a former Trustee of Pfeiffer University in Misenheimer, NC.

He has extensive experience in management, personnel and manufacturing systems.

Mr. Horne has served on the Uwharrie Capital Corp Board since 2007 and the subsidiary bank board of Anson Bank & Trust Co. since 2008. He serves on the Nominating Committee and Enterprise Risk Management Committee.

W. Kenneth Huntley

Mr. Huntley is President of Huntley Oil & Gas Co., Inc. in Wadesboro, NC, which is a distributor of petroleum products. The company employs nine. He graduated with honors in 1971 from North Carolina State University with a degree in Textile Engineering. After graduating from NCSU, he joined Hornwood, Inc., a textile manufacturing company in Lilesville, NC for five years in research and development. In 1975, he joined the family business as Manager, Secretary and Treasurer. He became President of Huntley Oil & Gas Co. in 1986 and sole owner in 1992. Mr. Huntley is a lifelong resident of Anson County with family ties in the county for nine generations.

Mr. Huntley is Chairman of the Anson County Airport Authority and was largely responsible for the $8 million expansion of the airport. In 1986, he was awarded the Channel 9-Nine

 

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Who Care Award for his work on the airport project. Additionally, he was on the Anson County Economic Development Commission in 1985. Mr. Huntley is a past member of the Board of Trustees at First United Methodist Church in Wadesboro and has served prior terms there on the church Finance Committee as well as Treasurer.

He has extensive experience in management, budgeting, and regulatory compliance.

Mr. Huntley has served on the Uwharrie Capital Corp Board since 2009 and the subsidiary bank board of Anson Bank & Trust Co. from 2000 to 2010. He served as the Chairman of the Board of Anson Bank & Trust Co. for four years. He serves on the Nominating Committee and Human Resources & Compensation Committee.

Joseph R. Kluttz, Jr.

Mr. Kluttz is owner, secretary and treasurer of Albemarle Insurance Agency, Inc., Albemarle, NC. He served as President of the company from 1980 to 2010. The agency was formed to serve the insurance needs of Stanly County in 1905 and was incorporated as Albemarle Insurance Agency, Inc. in 1931. The agency has five employees.

Mr. Kluttz is a graduate of Pfeiffer University in Misenheimer, NC.

Mr. Kluttz currently serves as Chairman of the Public Officers and Other Employees Liability Insurance Commission for the State of North Carolina, and is past President and director of the Independent Insurance Agents of North Carolina, and past director of the Independent Insurance Agents of America. He is also the current Chairman of For Stanly, a funding mechanism for bringing and relocating businesses to Stanly County.

He has extensive experience in all areas of small business management.

Mr. Kluttz has served on the Uwharrie Capital Corp Board since 2005. He serves on the Executive Committee, Examining Committee, Enterprise Risk Management Committee and serves as Chairman of the Human Resources & Compensation Committee.

Lee Roy Lookabill, Jr.

Mr. Lookabill is President of Anson Real Estate and Insurance Co., Inc. in Wadesboro, NC, which employs four. He purchased the company in 1994 after having worked in banking for 23 years. He began his banking career with First National Bank of Anson County which later merged with Southern National Bank, where he served as a Vice President in the Trust Department for 10 years, managing trust operations for all of South Carolina and portions of North Carolina.

Mr. Lookabill is a graduate of Appalachian State University with a Bachelor of Science in Business Administration and has also completed numerous graduate courses in Trust through Northwestern University in Evanston, Illinois.

Mr. Lookabill currently serves as a member of the Budget and Finance Committee of First Baptist Church in Wadesboro, NC. He served 9 years on the Anson County School Board

 

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and has served in numerous leadership roles with community organizations. He has also been involved with pig, cattle, and hay farming since 1984.

He has extensive experience in banking, insurance, trust services, and overall small business management.

Mr. Lookabill has served on the Uwharrie Capital Corp Board since 2009 and the subsidiary bank board of Anson Bank & Trust Co. since 2003. He serves on the Human Resources & Compensation Committee.

W. Chester Lowder

Mr. Lowder is the Livestock Director – Public Policy Division for the North Carolina Farm Bureau Federation, Inc., Raleigh, NC. He represents NC Farm Bureau on livestock issues at the state and national level. In addition, he assists in covering many environmental issues and is the primary liaison on soil and water conservation matters. He joined the North Carolina Farm Bureau Federation staff in 1995. Prior to joining NCFB, Mr. Lowder ran a successful dairy operation in Stanly County for more than 25 years.

Mr. Lowder is a graduate of North Carolina State University where he earned a Bachelor of Science degree in Animal Science-Business.

Mr. Lowder has held numerous volunteer leadership positions within North Carolina Farm Bureau including state board, executive committee and vice president. Mr. Lowder has also served in other leadership roles with the Stanly County Farm Bureau, Stanly County Board of Commissioners, Stanly Community College (Albemarle, NC), and various civic and industry groups.

Mr. Lowder currently serves on various committees for the North Carolina Department of Agriculture and Consumer Services, the North Carolina State University College of Agriculture and Life Sciences, and the NC Department of Environmental and Natural Resources. Mr. Lowder is currently a member of committees working with the United States Department of Agriculture, Natural Resource Conservation Service, NC Dairy and Growth Industry Promotion Committee, the Southeast United Dairy Industry Association, and NC Dairy Stabilization, Inc. Board and Steering Committee. He currently serves as associate supervisor on the Stanly Soil and Water Conservation District. He has served on the Executive Committee for the NC Association of Soil and Water Districts and is on the Board of Directors for both the NC Dairy Producers Association as well as the State Animal Response Team where he serves as Chairman and Executive Director. Mr. Lowder is an active member of First United Methodist Church in Norwood, NC, where he serves on several church committees and councils.

He has extensive experience in the agriculture industry locally and at the state and national levels. Additionally, he is actively engaged in local and civic activities to benefit and grow the local community.

Mr. Lowder has served as a member of the Uwharrie Capital Corp Board since 2005, having served a previous six year term beginning in 1995. He serves on the Human Resources & Compensation Committee and the Nominating Committee.

 

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Barry S. Moose

Mr. Moose is a Division Engineer for the 10th Highway Division with the North Carolina Department of Transportation, Albemarle, NC. He has been employed with the NC Department of Transportation for 24 years. He manages 550 employees, as well as over $850 million in Transportation Assets. Prior to that, he worked as a consulting engineer with Law Engineering in Raleigh, NC. He is a registered Professional Engineer with the State of North Carolina.

He has a Bachelor of Science degree in Engineering and a Master of Business Administration from The University of North Carolina at Charlotte.

He is an active member of the American Society of Civil Engineers. He serves as Guest Lecturer at The University of North Carolina at Charlotte. He has received several national awards, most recently, the Transportation Research Board’s award for Outstanding HOV Project Management.

He volunteers for the Juvenile Diabetes Association and is a past boy scout leader. He serves in his church as a deacon, administrative team leader and teacher.

He has extensive experience in Transportation Finance and Policy. Currently, he serves on Executive Committee for Strategic Planning for the Department of Transportation.

Mr. Moose has served on the Uwharrie Capital Corp Board since 2008. He serves on the Human Resources & Compensation Committee.

Cynthia L. Mynatt

Cyndie Mynatt has served as the President of Ben Mynatt Buick-GMC in Concord, NC, since its inception in 1991; Ben Mynatt Nissan in Salisbury, NC since its beginning in 2002; and Ben Mynatt Pre-Owned in Kannapolis since its founding in 2003. In 2008, Ms. Mynatt became the owner, president and manager of Ben Mynatt Chevrolet-Cadillac in Concord, NC, which was founded by her father in 1976. The three automobile franchises and one independent dealership currently employ over 140.

Ms. Mynatt earned a Bachelor of Arts degree from Duke University. She is also a graduate of the NADA Dealer Candidate Academy, General Motors Dealership Management Academy, the American Leadership Forum (Charlotte Region, Senior Fellow) and the N.C. Commissioner of Banks Bank Directors’ College.

Ms. Mynatt is involved in many civic activities. Currently, she serves on the Rowan-Cabarrus Community College Board of Trustees, serving as the Vice Chair, and its Foundation Board. She also serves on the Ben Mynatt Children’s Foundation Board of Directors and has been a member of the Cabarrus Rotary Club since 1992, having served as Treasurer and honored as a Distinguished Rotarian and Paul Harris Fellow. Professionally, she serves on the Board of Directors of the North Carolina Automobile Dealers Association, the NCADA Charitable Foundation, serving as Chair, the Greater Charlotte Automobile Dealers Association Board of Directors, and the Charlotte Buick-GMC Local Marketing Groups Board of Directors, serving as Secretary-Treasurer. She has received numerous business awards for her professional achievements.

 

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In years past, she has been active and held leadership positions with the Cabarrus County Economic Development Corporation, the Cabarrus Regional Chamber of Commerce, the Cannon Memorial YMCA of Kannapolis, the University of North Carolina at Charlotte Board of Visitors and Foundation, the United Negro College Fund of Barber-Scotia College of Concord, the United Way of Central Carolinas, Providence Day School Board of Trustees, the Cabarrus County Community Foundation, the Cabarrus College of Health Sciences Board of Trustees and various business activities with General Motors.

Ms. Mynatt has extensive experience in the areas of business management, board involvement and governance, and civic involvement.

Ms. Mynatt has served as a director on the Cabarrus Bank & Trust Company Board of Directors since 2003 and is currently serving as the Board Chair. She has been a member of the Uwharrie Capital Corp Board since November of 2010, filling the unexpired term of John W. Shealy, Jr. She currently serves on the Executive Committee.

Timothy J. Propst

Mr. Propst is Executive Vice President and General Manager of Propst Construction Co., Inc., a utilities and soil stabilization construction company in Concord, NC, where he has been employed since 1984. He has served his entire career as construction manager for the firm. The company employs 40.

Mr. Propst is a graduate of Lenoir-Rhyne College, Hickory, NC, with a Bachelor of Arts degree in Business Administration.

Mr. Propst has served on the Board of Directors of Carolinas Associated General Contractors as well as past committee chairman of the CAGC Utility Division. He holds a General Contracting license for highway and public utility construction in the State of North Carolina. He is also involved in numerous community organizations.

Mr. Propst has extensive experience in construction and project management on highway and public utility projects in the State of North Carolina and all aspects of managing a business.

Mr. Propst has served as a member of the Uwharrie Capital Corp Board since 2004 and the subsidiary bank board of Cabarrus Bank & Trust Company since 2003. He serves on the Executive Committee and is Chairman of the Nominating Committee.

Susan J. Rourke

Mrs. Rourke has been owner and President of U.S. Land Management since 1999. The company is involved in all aspects of property management and construction from the beginning of the planning phase to completion of projects. The company has over 265,000 square feet of class-A office space, commercial and industrial space under management at the present time. Before opening her own business, Mrs. Rourke was employed in the accounting department of a large wholesaler of clothing and taught school.

 

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Mrs. Rourke is a licensed general contractor in the State of North Carolina, holds her real estate broker’s license for both North and South Carolina, and obtained a Bachelor’s degree from the University of South Florida in Tampa, Florida.

In addition, Mrs. Rourke holds professional memberships in National Real Estate Association, North Carolina Real Estate Association, Carolina Regional Realtors Association, Charlotte Commercial Property Exchange and Charlotte Multiple Listing Service. She has been a Rotarian since 1999 where she served in various positions, including President, President-Elect, Secretary and member of the Board of Directors. She has also received the Distinguished Rotarian Award and is a Paul Harris Fellow. Mrs. Rourke has also been a member of the CMC Northeast Medical Foundation Board since 2007. She has served on the Board of the Ben Mynatt Children’s Foundation since 2010.

She has extensive experience in management, finance/accounting relating to small business ownership and real estate brokerage relating to leasing of commercial properties.

Mrs. Rourke has served on the Uwharrie Capital Corp Board since 2004 and the subsidiary bank board of Cabarrus Bank & Trust Company from 2003 until 2010. She serves on the Nominating Committee and Human Resources & Compensation Committee

Donald P. Scarborough

Don Scarborough is President and owner of Plank Road Realty, Inc. in Wadesboro, NC, where he is involved in all aspects of real estate sales, brokerage, development and management of the company. The company employs six.

Mr. Scarborough was educated in Anson County Schools as well as Oak Hill Academy, Wingate University (Wingate, NC) and North Carolina State University (Raleigh, NC). During his childhood, he worked in the family-owned hardware store in Wadesboro. While attending North Carolina State University, he was employed by Carolina Power & Light Company, now Progress Energy, in the real estate department for nine years. He returned to Anson County in 1981 where he joined the family business until starting Plank Road Realty in 1984. Mr. Scarborough holds professional credentials of Accredited Buyer Representative (ABR), Certified Residential Broker (CRB), Certified Residential Specialist (CRS), Graduate of Real Estate Institute (GRI).

Mr. Scarborough’s community involvement includes serving as Chairman of the Anson County Economic Development Corporation, director of Anson County Chamber of Commerce, director of Uptown Wadesboro, Inc., member of Wadesboro Rotary Club, and the Personnel Committee of First Baptist Church, Wadesboro.

He has extensive experience in real estate development and small business management.

Mr. Scarborough has served on the Uwharrie Capital Corp Board since 2004 and the subsidiary bank board of Anson Bank & Trust Co. since 2008. He has served as Chairman of the Uwharrie Capital Corp Board of Directors since 2009 and is an ex-officio member of all committees.

 

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S. Todd Swaringen

Mr. Swaringen is a certified public accountant and partner with Beane Swaringen & Company, PLLC. He joined Cynthia H. Beane, CPA, in 1998 as a staff accountant and became a partner in the firm in January of 2006. The firm currently operates offices in Albemarle and Locust, NC, serving tax and accounting needs for small businesses, individuals, not-for-profit entities, estates and trusts. During peak times, the staff includes twelve, of which five are certified public accountants.

Mr. Swaringen earned a Bachelor of Science degree in accounting from the University of North Carolina at Wilmington. He is a member of the American Institute of Certified Public Accountants and the North Carolina Association of Certified Public Accountants.

Mr. Swaringen is past Chairman of the Stanly County Chamber of Commerce, Chairman of the Stanly Regional Medical Center Foundation Board, and member of the Albemarle Rotary Club. He is immediate past Chairman of the United Way of Stanly County Board of Directors. Mr. Swaringen is also an active member of his church.

He has extensive experience in personal and business income taxation. He enjoys working with his clients both to navigate existing tax law and to update them on new legislation that could impact their future returns.

Mr. Swaringen has served on the Uwharrie Capital Corp Board since 2010. He serves on the Examining Committee.

Edward B. Tyson, Ed.D.

Dr. Tyson is the retired superintendent for the Kannapolis City Schools in Kannapolis, NC. Since his retirement in 2001, he has been an adjunct professor in the Department of Educational Leadership Graduate Program at the University of North Carolina at Charlotte and has been a consultant with the firm Leadership Group for the Carolinas.

Dr. Tyson earned a Bachelor’s degree from Pfeiffer University (Misenheimer, NC), a Masters degree from the University of Georgia, and a Doctorate degree from Duke University (Durham, NC) in Educational Administration. Throughout his career, he has been a teacher, principal, associate superintendent and superintendent. He has been named Educator of the Year by six separate organizations including Superintendent of the Year by fellow superintendents of the Charlotte, NC area. He was also honored by the UNC Charlotte Department of Educational Leadership and alumni group as Professional Educator of the Year. He has served as chairman of the South Piedmont Educational Consortium, the Regional Superintendent’s Council, and the Southern Association of Colleges and School’s Elementary and Middle School Commission.

Dr. Tyson’s community involvement includes leadership in many organizations such as the Kannapolis Rotary Club where he served as President, is a Paul Harris Fellow and received the Distinguished Rotarian Award. He has also served on the CMC-NorthEast Medical Center Foundation Board, Kannapolis Education Foundation Board, Coltrane Life Center Board, Kannapolis History Associates and various leadership roles in his church. He has twice serviced as campaign chairman of the Cabarrus County United Way.

 

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Dr. Tyson has extensive experience and expertise in leadership development, communications, public relations, strategic planning, team building, and community involvement.

He has served on the Uwharrie Capital Corp Board since 2009 and the subsidiary bank board of Cabarrus Bank & Trust Company since 2003. He serves on the Nominating Committee and the Human Resources & Compensation Committee.

Director Independence

Each member of the Company’s Board of Directors and each nominee for election to the Board is “independent” as defined by NASDAQ listing standards and by the rules and regulations promulgated under the Securities Exchange Act of 1934 (the “Exchange Act”). In making this determination the Board considered any material insider transactions between directors or nominees for director and the Company or its subsidiaries. All such transactions were conducted at arm’s length upon terms no less favorable than those that would be available from an independent third party.

Director Relationships

No director is a director of any other company with a class of securities registered pursuant to Section 12 of the Exchange Act or subject to the requirements of Section 15(d) of the Exchange Act, or any company registered as an investment company under the Investment Company Act of 1940.

Meetings and Committees of the Board of Directors

The Board of Directors of the Company held seven (7) regular meetings during 2010. Each director attended 75% or more of the aggregate number of meetings of the Board of Directors and of any committees on which he or she served, except Susan J. Rourke and Edward B. Tyson, each of whom attended fewer than 75% of such meetings due to prior commitments.

It is the policy of the Company that directors attend each annual meeting and any special meetings of the Company’s shareholders. Seventeen (17) of the Company’s eighteen (18) directors attended the 2010 annual meeting of shareholders.

The Company’s Board of Directors has several standing committees, including a Human Resources & Compensation Committee, a Nominating Committee and an Examining (Audit) Committee.

Human Resources & Compensation Committee. The current members of the Human Resources & Compensation Committee are Joseph R. Kluttz, Jr. – Chairman, W. Kenneth Huntley, Lee Roy Lookabill, Jr., W. Chester Lowder, Barry S. Moose, Susan J. Rourke, and Edward B. Tyson. All members of the Human Resources & Compensation Committee are independent directors. The Human Resources & Compensation Committee reviews the compensation process for the Company and its subsidiaries to ensure it is consistent with corporate and board policy. The Human Resources & Compensation Committee serves as the catalyst for the development of compensation related recommendations for all officers of the

 

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Company and its subsidiaries and meets with representatives of the Company and each subsidiary to develop recommendations and input into the overall budget process for the Company. Each individual member of the Board of Directors is ultimately responsible for final decisions pertaining to compensation; however, this Committee makes recommendations to the various Boards based upon overall Company policy. The Human Resources & Compensation Committee met three (3) times during 2010.

The Human Resources & Compensation Committee meets on an as needed basis to review the salaries and compensation programs required to attract and retain the Company’s executive officers and those of its subsidiaries. The Committee participates in the budget process by recommending salary levels for executive and senior officers to be approved by the respective Boards of Directors of the Company and its subsidiaries. The Committee makes recommendations to each of the Boards of Directors regarding the compensation of executive and senior officers with the respective Boards of Directors ultimately determining such compensation. The salary of each of the Company’s executive and senior officers is determined based upon the officer’s experience, managerial effectiveness, contribution to the Company’s overall profitability, maintenance of regulatory compliance standards and professional leadership. The Committee also compares the compensation of the Company’s executive and senior officers with compensation paid to executives of similarly situated bank holding companies, other businesses in the Company’s market area and appropriate state and national salary data.

Under regulations applicable to the Company as a result of its participation in the U.S. Department of the Treasury’s Capital Purchase Program, the Human Resources & Compensation Committee is required to meet on a semi-annual basis to review and approve the Uwharrie Capital Corp Compensation Policy and Guidelines and provide a certification of the review and approval. The Human Resources & Compensation Committee has adopted a formal charter, which is included as Exhibit B to this proxy statement.

Nominating Committee. The current members of the Nominating Committee are Timothy J. Propst – Chairman, W. Stephen Aldridge, III, Ronald T. Burleson, Charles D. Horne, W. Kenneth Huntley, W. Chester Lowder, Susan J. Rourke and Edward B. Tyson. The members of the Nominating Committee recommended the seven (7) nominees for election to the Board of Directors at the Annual Meeting and appointed Cynthia L. Mynatt to fill a vacancy on the Board of Directors in November 2010. The Nominating Committee did not meet independently during 2010.

The Company does not have a formal diversity policy in effect relative to the Director Nomination Process; however, the Nominating Committee considers diversity of race, gender, national origin, professional experience, skill, education, differences of viewpoint, leadership and involvement in the community, and other individual qualities and attributes that contribute to board heterogeneity. Since the Company’s inception, its rotating Board of Directors has been comprised of everyday people from all walks of life and expertise who represent the various constituents and needs for financial services of the communities we serve. The Nominating Committee actively seeks individuals who the Committee determines meet such criteria and standards for recommendation to the Board as nominees.

Recommendations of nominee candidates by shareholders for the 2012 annual meeting should be submitted in writing to the Chief Executive Officer of the Company by December 1,

 

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2011, and should be accompanied by a statement of each candidate’s qualifications and willingness to serve as a director. In order to stand for election to the Board of Directors, nominees must have economic, business or residential ties to one or more of the Company’s market areas and must be in compliance with the Company’s Policy Statement and Guidelines for Uwharrie Capital Corp Stock Ownership by Directors. A copy of the Policy Statement may be obtained free of charge upon written request made to the Secretary of the Company. The Nominating Committee has adopted a formal charter, which is included as Exhibit C to this proxy statement.

Examining Committee. The current members of the Examining Committee are Joe S. Brooks – Chairman, W. Stephen Aldridge, III, (also serves as Bank of Stanly’s representative), Ronald T. Burleson, Bill C. Burnside, Charles F. Geschickter, III, Thomas M. Hearne, Jr., Joseph R. Kluttz, Jr., and S. Todd Swaringen. Additionally, Emmett S. Patterson and Susan J. Smith, who are directors of Anson Bank & Trust Co. and Cabarrus Bank & Trust Company, respectively, also serve as members of the Committee. The members of the Examining Committee are both “independent” and “financially literate” under applicable standards. The Board of Directors has determined that S. Todd Swaringen, meets the requirements of the SEC for qualification as an “audit committee financial expert.” An audit committee financial expert is defined as a person who has the following attributes: (i) an understanding of generally accepted accounting principles and financial statements; (ii) the ability to assess the general application of GAAP in connection with the accounting for estimates, accruals and reserves; (iii) experience preparing, auditing, analyzing or evaluating financial statements that are of the same level of complexity that can be expected in the reporting company’s financial statements, or experience supervising people engaged in such activities; (iv) an understanding of internal controls and procedures for financial reporting; and (v) an understanding of audit committee functions.

The Examining Committee met six (6) times in 2010. The Report of the Examining Committee is included on page 32 of this proxy statement. The Examining Committee has adopted a formal charter, which is included as Exhibit A to this proxy statement.

Board Leadership Structure and Role in Risk Oversight

The Company’s Board of Directors is comprised of three classes of directors serving staggered three-year terms and includes several standing committees, the responsibilities and membership of which are described above. The Chairman of the Board is a rotating office and overall terms of directors are subject to term limits. The Company’s Chief Executive Officer is not a member of the Board of Directors. The Company has determined that this leadership structure is appropriate given the Company’s organizational structure, core values and the business activities of its subsidiaries.

Under North Carolina law, the Board of Directors is responsible for managing the business and affairs of the Company, including the oversight of risks that could affect the Company. Although the full board has responsibility for the general oversight of risks, it primarily conducts its risk oversight function through committees, including the examining committee and the human resources & compensation committee, as described above, as well as other committees, including the Banks’ Loan Committees, the Special Assets Division, the Enterprise Risk Management Committee, Senior Risk Management Committee, and the Information Technology Committee.

 

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During 2010, the Company established the Enterprise Risk Management Committee of the Board of Directors and Senior Risk Management Committee. The Enterprise Risk Management Committee is a formal risk management structure designed to anticipate and deal with uncertainties that have the capacity to positively, or negatively, influence the creation of value for the Company on an enterprise level. In establishing this committee, the Board of Directors wished to augment, rather than replace, the Company’s existing risk management practices. The Enterprise Risk Management Committee is comprised of three to five independent directors, plus the Company’s Chief Executive Officer, Chief Risk Officer, Chief Operating Officer, Chief Financial Officer, and Chief Marketing Officer. The Company has also established a Senior Risk Management Committee. This committee is a management level committee intended to augment the Company’s existing risk management practices and support the Board of Director’s Enterprise Risk Management Committee in its role. The Senior Risk Management Committee’s role is to develop tools and methodologies across all business units and subsidiaries to identify, assess, and evaluate risk stemming from strategy, operations, credit, market & interest rates, and reputation.

Each of the Company’s subsidiary banks has a Loan Committee comprised of executive management and Bank directors which meet monthly. Loan Committees are charged with making decisions on loan requests that exceed loan officer lending authority levels. The process includes participation in active discussion regarding the loans under consideration, including loan structure and risk tolerance. Loans that exceed the Loan Committee’s authority, along with insider loans, are recommended for approval to the respective Bank Board of Directors for further action. Each Loan Committee is also responsible for reviewing certain reports presented by Credit Administration to include asset quality reports to manage loan delinquency, non-performing assets, charge-offs and classified loans. In addition, each Loan Committee reviews exceptions for policy, documentation and loan-to-value along with the commercial real estate concentration reports and allowance of loan losses and lease methodology and quarterly calculations. Reports of activity for the subsidiary banks’ Loan Committees are made to the subsidiary banks’ Boards of Directors monthly.

The Special Assets Division (“SAD”), is an internal management committee comprised of executive management and members from credit administration which meet weekly. These meeting are sometimes attended by the Bank lending staff members. The SAD committee reviews loan requests for relationships that exceed $500,000 in exposure to review for structure and repayment terms, underwriting, collateral, and risk grading. While SAD does not have formal loan authority, it will make recommendations regarding these loan relationships which are presented to the respective Bank Loan Committee. SAD reviews the annual loan reviews prepared by Credit Administration for loan relationships with exposure of $1 million and greater. SAD also reviews loans and relationships that are potential problems, loans that are in or proceeding into foreclosure/collection status and other special circumstances as presented by loan officers of the banks.

Given the important role of information technology in the Company’s operations and customer service, the board has established an information technology committee to monitor risks associated with our information technology systems and to policies and procedures for information security.

 

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Information security is the process by which an organization protects and secures its systems, media, and facilities that process and maintains information vital to its operations. Protection of information assets is necessary to establish and maintain trust between a financial institution and its customers, maintain compliance with the law, and protect the reputation of the institution. Timely and reliable information is necessary to process transactions and support financial institution and customer decisions.

The security of the company’s systems and information is essential to its safety and soundness and to the privacy of customer financial information. These security programs must have strong board and senior management level support, integration of security activities and controls throughout the organization’s business processes, and clear accountability for carrying out security responsibilities.

A financial institution establishes and maintains truly effective information security when it continuously integrates processes, people, and technology to mitigate risk in accordance with risk assessment and acceptable risk tolerance levels. The company protects its information by instituting a security process that identifies risks, forms a strategy to manage the risks, implements the strategy, tests the implementation, and monitors the environment to control the risks. Risk management practices should promote effective, safe, and sound IT operations that ensure the continuity of operations and the reliability and availability of data.

The information technology committee also provides reports to the Examining (Audit) Committee.

 

23


Director Compensation

During 2010, each director received a fee of $200 for each Board of Directors meeting attended and $100 for attendance at each meeting of a committee. Directors also received an allowance for travel associated with their attendance at meetings of the Board of Directors and its committees and reimbursement of expenses for director education conferences.

The following table presents a summary of all compensation earned by the Company’s directors for their service as such during the year ended December 31, 2010.

DIRECTOR COMPENSATION TABLE

 

Name

   Fees Earned
or
Paid in Cash
     Stock
Awards
     Option
Awards
     All  Other
Compensation(2)
     Total  

W. Stephen Aldridge, III

   $ 1,700         —           —         $ 408       $ 2,108   

Joe S. Brooks

     2,400         —           —           160         2,560   

Ronald T. Burleson

     1,400         —           —           80         1,480   

Bill C. Burnside

     1,600         —           —           100         1,700   

Charles F. Geschickter, III

     1,200         —           —           80         1,280   

Thomas M. Hearne, Jr.

     2,400         —           —           320         2,720   

Charles D. Horne

     1,000         —           —           375         1,375   

W. Kenneth Huntley

     1,400         —           —           450         1,850   

Joseph R. Kluttz, Jr.

     2,500         —           —           330         2,830   

Lee Roy Lookabill, Jr.

     1,400         —           —           450         1,850   

W. Chester Lowder

     1,400         —           —           70         1,470   

Barry S. Moose

     1,200         —           —           70         1,270   

Timothy J. Propst

     1,600         —           —           300         1,900   

Susan J. Rourke

     1,000         —           —           180         1,180   

Donald P. Scarborough

     1,800         —           —           540         2,340   

John W. Shealy, Jr. (1)

     1,400         —           —           270         1,670   

S. Todd Swaringen

     1,600         —           —           80         1,680   

Edward B. Tyson

     1,200         —           —           180         1,380   

 

(1) Mr. Shealy resigned from the Board of Directors on November 15, 2010.
(2) Consists of a travel allowance for attendance at Board of Directors and committee meetings and reimbursement of expenses for director education conference.

 

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Executive Officers

The following table contains information about the executive officers of the Company and its direct and indirect subsidiaries.

 

Name and Age

  

Position with the Company
and/ or Subsidiary and Prior Experience

   Employed
Since
 

Roger L. Dick

(59)

   President and Chief Executive Officer, Uwharrie Capital Corp      1983   

Brendan P. Duffey

(62)

   Executive Vice President and Chief Operating Officer, Uwharrie Capital Corp; formerly, Vice President and General Manager, Global Knowledge Network, Inc., 1999 – 2004      2004   

Robert O. Bratton

(62)

   Chief Financial Officer, Uwharrie Capital Corp; formerly Executive Vice President and Chief Administrative Officer FNB United 2006-2007; Executive Vice President and Chief Financial Officer, First Charter Corp., 1974 – 2005      2008   

Barbara S. Williams

(67)

   Executive Vice President and Controller, Uwharrie Capital Corp      1995   

Christy D. Stoner

(46)

   President and Chief Executive Officer of The Strategic Alliance Corporation and BOS Agency, Inc.; Chief Executive Officer, Strategic Investment Advisors, Inc.; Executive Vice President of Marketing, Uwharrie Capital Corp      1991   

Jeffrey M. Talley

(37)

   President, Strategic Investment Advisors, Inc.      1997   

W. D. “Bill” Lawhon, Jr.

(59)

   President and Chief Executive Officer, Bank of Stanly; formerly, Senior Vice President, First Citizens Bank, 1990 – 2002      2002   

Dana A. Maness

(41)

   President, Anson Bank & Trust Co.; Formerly, Assistant Vice President, BB&T, 2002-2005, Assistant Vice President, The Fidelity Bank 1995-2002      2005   

Patricia K. Horton

(59)

   President and Chief Executive Officer, Cabarrus Bank & Trust Company; formerly, Senior Vice President, First Charter Bank, 1972 - 2004      2004   

Executive Compensation

The following Summary Compensation Table shows all cash and non-cash compensation paid to, received by or deferred by Roger L. Dick, Brendan P. Duffey, Robert O. Bratton, Barbara S. Williams, Christy D. Stoner, W.D. “Bill” Lawhon, Jr., Dana A. Maness, Patricia K. Horton and Jeffrey M. Talley (the “Named Executive Officers”) for services rendered in all capacities during the fiscal years ended December 31, 2010 and 2009. Compensation paid to the Named Executive Officers consisted of cash salary, bonus, equity compensation in the form of incentive stock option awards, 401(k) matching contributions, insurance premiums paid on behalf of each of the Named Executive Officers, commission-based compensation and certain perquisites. The following table summarizes the dollar amounts of each element of compensation and for incentive stock options, the aggregate grant date fair value computed in accordance with Accounting Standards Codification 718 issued by the Financial Accounting Standards Board. None of the Named Executive Officers received perquisites in an aggregate amount exceeding $10,000 during the fiscal years ended December 31, 2010 and 2009.

 

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SUMMARY COMPENSATION TABLE

 

Name and
Principal Position

   Year      Salary(2)      Bonus      Option
Awards
     Non-Equity
Incentive Plan
Compensation(3)
     Nonqualified
Deferred
Compensation
Earnings
     All Other
Compensation(4,5)
     Total  

Roger L. Dick,

     2010       $ 248,455       $ —           —         $ —         $ 125,000       $ 28,551       $ 402,006   

President and Chief Executive

     2009         238,899         —           —           5,972         125,000         27,730         397,601   

Officer of the Company

                       

Brendan P. Duffey,

     2010         226,685         —           —           2,834         98,500         23,702         351,721   

Executive Vice President

     2009         217,966         —           —           5,449         98,500         40,507         362,422   

and Chief Operating

                       

Officer of the Company

                       

Robert O. Bratton,

     2010         110,430         —           —           1,350         —           12,597         124,377   

Chief Financial Officer

     2009         108,000         —           —           2,700         —           11,504         122,204   

of the Company

                       

Barbara S. Williams,

     2010         99,585         —           —           3,217         —           12,282         115,084   

Executive Vice President

     2009         97,394         —           —           2,435         —           11,586         111,415   

and Controller of the

                       

Company

                       

Christy D. Stoner,

     2010         152,376         —           —           2,007         43,000         49,855         247,238   

President and Chief

     2009         146,100         —           —           3,652         43,300         46,143         239,195   

Executive Officer of The

                       

Strategic Alliance

                       

Corporation and BOS

                       

Agency, Inc.; Chief

                       

Executive Officer,

                       

Strategic Investment

                       

Advisors, Inc.; Executive

                       

Vice President of

                       

Marketing of the Company

                       

Jeffrey M. Talley,

     2010         83,174         —           —           1,017         —           98,849         183,040   

President, Strategic

     2009         81,344         —           —           2,034         —           85,658         169,036   

Investment Advisors, Inc.

                       

W. D. “Bill” Lawhon, Jr.,

     2010         138,323         —           —           4,551         —           18,628         161,502   

President and Chief

     2009         133,779         —           —           3,344         —           19,720         156,843   

Executive Officer,

                       

Bank of Stanly

                       

Dana A. Maness, (1)

     2010         97,376         —           —           3,186         —           11,655         112,217   

President,

     2009         —           —           —           —           —           —           —     

Anson Bank & Trust Co.

                       

Patricia K. Horton

     2010         130,053         —           —           4,389         —           18,882         153,324   

President and Chief

     2009         127,191         —           —           3,180         —           17,887         148,258   

Executive Officer, Cabarrus

                       

Bank & Trust Company

                       

 

(1) Mr. Maness was appointed as President of Anson Bank & Trust Company on January 1, 2010.
(2) Includes amounts deferred at the officers’ election pursuant to the company’s Section 401(k).

 

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(3) The Company maintained an incentive plan under which, at the end of each calendar quarter, each of certain officers and employees are eligible to receive a cash bonus equal to 5.0% of their quarterly salary, if the Company’s financial performance for that quarter equaled or exceeded budgeted amounts.
(4) Includes 401(k) matching contributions and the dollar value of certain insurance premiums paid on behalf of the named officers for group term life and disability insurance. Also includes Company contributions allocated to each of the officers under the Company’s Employee Stock Ownership Plan and, to the extent applicable, payments made pursuant to commission or revenue sharing arrangements.
(5) Includes moving expenses per the Relocation Assistance Agreement dated February 27, 2009 for Brendan P. Duffey.

Stock Options and Incentives

At the 2006 annual meeting, the shareholders of the Company approved the Uwharrie Capital Corp 2006 Incentive Stock Option Plan. The 2006 Incentive Stock Option Plan provides for the issuance of up to 154,971 shares (as adjusted for stock dividends) of the Company’s common stock to officers and other full-time “key employees” of the Company and its subsidiaries upon the exercise of incentive stock options meeting the qualifications of Section 422 of the Internal Revenue Code.

The Shareholders also approved the Uwharrie Capital Corp 2006 Employee Stock Purchase Plan at the 2006 annual meeting. The Employee Stock Purchase Plan provides for the grant of purchase options of up to 103,234 shares of the Company’s common stock upon the exercise of purchase options meeting the qualifications of Section 423 of the Internal Revenue Code.

No incentive stock options or purchase options were granted to the Named Executive Officers during 2010 and 2009.

The following table sets forth information regarding vested and unvested incentive stock options outstanding as of December 31, 2010. All of the Company’s outstanding stock options have been granted at 100% of fair market value on the date of grant. The number of shares underlying all outstanding stock options, and the exercise prices associated with each option grant, have been adjusted for the effect of annual 3% stock dividends.

The Company has not adopted any plan providing for the grant of restricted stock or long-term compensation units to employees and, accordingly, all columns in the following table pertaining to restricted stock or long-term compensation have been omitted.

 

27


OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

 

Name

   No. of
Securities
Underlying
Unexercised
Options
Exercisable
     No. of
Securities
Underlying
Options
Unexercisable
     Equity
Incentive
Plan
Awards; No.

of Securities
Underlying
Unexercised
Unearned
Options
     Option
Exercise
Price
     Option
Expiration

Date
 

Roger L. Dick

     —           —           —         $ —           —     

Brendan P. Duffey

     80,133         —           —           5.35         May 19, 2014   

Robert. O. Bratton

     —           —           —           —           —     

Barbara S. Williams

     —           —           —           —           —     

Christy D. Stoner

     —           —           —           —           —     

Jeffrey M. Talley

     —           —           —           —           —     

Dana A. Maness

     —           —           —           —           —     

W. D. “Bill” Lawhon, Jr.

     29,851         —           —           4.61         Nov. 19, 2012   

Patricia K. Horton

     —           —           —           —           —     

Employee Stock Ownership Plan

The Uwharrie Capital Corp Employee Stock Ownership Plan and Trust (“ESOP”) became effective on January 1, 1999. Under the ESOP, all associates who were employed by the Company or any of its direct or indirect subsidiaries for at least 1,000 hours during a given plan year and who have attained the age of 18 are eligible to participate. All ESOP participants who were employed by the Company or any of its direct or indirect subsidiaries prior to January 1, 2007 are fully vested in their ESOP accounts. Participants who were hired on or after January 1, 2007 are subject to a three-year cliff vesting schedule with respect to their ESOP accounts. Pursuant to the ESOP, 498,253 dividend-adjusted shares are held in trust, with Robert O. Bratton, Roger L. Dick, Brendan P. Duffey, David C. Gaskin, Susan B. Gibson, J. Michael Massey, Christy D. Stoner, and Barbara S. Williams serving as trustees.

Supplemental Retirement Plan

The Company has implemented a non-qualifying deferred compensation plan for certain executive officers. Certain of the plan benefits will accrue and vest during the period of employment, and can be paid in one lump sum payment or will be paid in fixed monthly benefit payments for up to ten years commencing with the officer’s retirement at any time after attainment of the age specified in the officer’s plan agreement. The plan also provides for payment of death benefits and for payment of disability benefits in the event the officer becomes permanently disabled prior to attainment of retirement age.

Effective December 31, 2008, this plan was amended and restated to comply with Section 409A of the Internal Revenue Code. The participants’ account liability balances were transferred

 

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into a trust fund, where investments can be participant-directed. The plan is structured as a defined contribution plan and the Company’s expected annual funding contribution for the participant has been calculated through the participant’s expected retirement date. Under terms of the agreement, the Company has reserved the absolute right, at its sole discretion, to either fund or refrain from funding the plan. The plan also provides for payment of death benefits and for payment of disability benefits in the event the officer becomes permanently disabled prior to attainment of retirement age.

PENSION BENEFITS

 

Name

   Plan Name      No. of Years of
Credited Service
     Accumulated
Benefit
     Payments During
Last Fiscal Year
 

Roger L. Dick

     Sup. Exec Retirement         27       $ 674,244         -0-   

Brendan P. Duffey

     Sup. Exec. Retirement         6         444,190         -0-   

Robert O. Bratton

     —           —           -0-         -0-   

Barbara S. Williams

     —           —           -0-         -0-   

Christy D. Stoner

     Sup. Exec. Retirement         19         226,537         -0-   

Jeffrey M. Talley

     —           —           -0-         -0-   

Dana A. Maness

     —           —           -0-         -0-   

W. D. “Bill” Lawhon, Jr.

     —           —           -0-         -0-   

Patricia K. Horton

     —           —           -0-         -0-   

The Company has purchased life insurance policies on certain of its executive officers. The Company has entered into Endorsement Method Split-Dollar Plan Agreements (the “Split-Dollar Agreements”) with Roger L. Dick and Christy D. Stoner. Under the terms of the Split-Dollar Agreements, the proceeds from each policy are divided between the Company and the executive, with the executive’s designated beneficiary receiving 85% of the difference between the total proceeds of the policy and the policy’s cash value. As of December 31, 2010, the survivor’s benefit for the named beneficiaries of Mr. Dick, Mr. Duffey and Ms. Stoner under these life insurance policies was $2,592,506, $1,000,000 and $1,034,849 respectively.

Restrictions on Executive Compensation

The Company is a participant in the U.S. Department of the Treasury’s TARP Capital Purchase Program. On December 23, 2008, the Company issued and sold to the Treasury shares of its preferred stock and a warrant to purchase common stock for an aggregate purchase price of $10.0 million in cash. In connection with the Treasury’s investment, the Company is required to place limitations on the compensation of its senior executive officers, applicable in certain situations. In that regard, each of Messrs. Dick, Duffey, Bratton and Talley and Ms. Stoner executed a waiver whereby the executive voluntarily released the Company from any and all obligations to pay compensation prohibited by federal law and waived any present or future claims against the Company for any changes to the executive’s regular, bonus or incentive

 

29


compensation or benefit-related arrangements, agreements, or policies and any other changes required to be made by the Treasury. These officers have also entered into executive compensation modification agreements to ensure the Company’s compliance with the laws and regulations governing the Company’s participation in the TARP Capital Purchase Program. Furthermore, the American Recovery and Reinvestment Act of 2009 imposes additional restrictions on Mr. Dick as the Company’s most highly compensated employee. Specifically, the Company is prohibited from paying or accruing any bonus, retention award or incentive compensation to Mr. Dick during the time the Treasury holds its investment in the Company.

Transactions with Management

The Bank of Stanly, Anson Bank & Trust Co., Cabarrus Bank & Trust Company and The Strategic Alliance Corporation have had, and expect to have in the future, transactions in the ordinary course of business with certain of the directors and executive officers and their associates of the Company and its direct and indirect subsidiaries. All loans included in such transactions were made on substantially the same terms, including interest rates, repayment terms and collateral, as those prevailing at the time for comparable transactions with other persons, and do not involve more than the normal risk of collectibility or present other unfavorable features.

Loans made by the Company’s bank subsidiaries to directors and executive officers are subject to the requirements of Regulation O of the Board of Governors of the Federal Reserve System. Regulation O requires, among other things, prior approval of the Board of Directors with any “interested director” not participating, dollar limitations on amounts of certain loans and prohibits any favorable treatment being extended to any director or executive officer in any of the Bank’s lending matters. To the best knowledge of the management of the Company and its bank subsidiaries, Regulation O has been complied with in its entirety.

 

30


PROPOSAL 2: ADVISORY VOTE ON EXECUTIVE COMPENSATION

The American Recovery and Reinvestment Act of 2009 (“ARRA”) was enacted on February 17, 2009. This law requires that any proxy statement for an annual meeting of the shareholders of any participant in the U.S. Department of the Treasury’s TARP Capital Purchase Program include a separate proposal in its proxy statement for a non-binding shareholder vote on the compensation paid to its executive officers, as disclosed pursuant to the compensation disclosure rules of the SEC. This “say on pay” proposal is required during the period in which any obligation arising as a result of participation under the TARP Capital Purchase Program remains outstanding.

Accordingly, our Board of Directors has proposed the following resolution for shareholder consideration:

Resolved, that the compensation paid or provided to executive officers of Uwharrie Capital Corp (“the Company”) and its subsidiaries, and the Company’s and its subsidiaries’ executive compensation policies and practices, as described in the tabular and narrative compensation disclosures contained in the Company’s proxy statement for its 2011 Annual Meeting, hereby are ratified and approved.

As provided in ARRA, the vote by our shareholders will be a non-binding, advisory vote. The vote will not be binding on our Board of Directors or our Human Resources & Compensation Committee and will not overrule or affect any previous action or decision by the Board or Committee or any compensation previously paid or awarded, and it will not create or imply any additional duty on the part of the Board or Committee. However, the Board and the Human Resources & Compensation Committee will take the voting results on the proposed resolution into account when considering future executive compensation matters.

THE BOARD OF DIRECTORS BELIEVES THAT THE COMPANY’S EXECUTIVE COMPENSATION POLICIES AND PRACTICES ARE ALIGNED WITH OUR SHAREHOLDERS’ INTERESTS AND RECOMMENDS THAT SHAREHOLDERS VOTE “FOR” RATIFICATION OF THE RESOLUTION REGARDING EXECUTIVE COMPENSATION.

AUDIT FEES

The Company has paid Dixon Hughes Goodman LLP (formerly known as Dixon Hughes PLLC until March 31, 2011 and consummated a merger effective April 1, 2011 that changed the name to Dixon Hughes Goodman LLP and all references have been changed to the updated Firm name) fees in connection with its assistance in the Company’s annual audit and review of the Company’s financial statements. The Company also engages Dixon Hughes Goodman LLP (DHG) to provide other attest and audit related services. The following table sets forth the fees paid to DHG in various categories in 2010 and 2009. The change in audit fees reflected additional audit services related to the new allowance model. The changes in audit related fees were related to new SEC examination requirements applicable to our Registered Investment Advisory Company, Strategic Investment Advisors.

 

31


All services rendered by Dixon Hughes during 2010 and 2009 were subject to pre-approval by the Examining Committee.

The following table sets forth the fees paid to Dixon Hughes in various categories in 2010 and 2009.

 

Category

   Amount Paid 2010      Amount Paid 2009  

Audit Fees:

   $ 152,234       $ 128,600   

Audits of annual consolidated financial statements and reviews of interim financial statements

     

Audit-Related Fees:

     67,756         32,291   

Attest services related to benefit plans and routine accounting consultations and SAS 70 and RIA exam procedures

     

Tax Services:

     22,650         27,725   

Corporate tax compliance and tax-related advisory services

     

All Other Fees:

     -0-         -0-   
                 

Total Fees Paid:

   $ 242,640       $ 188,616   
                 

Report of the Examining Committee

The Examining Committee of the Company is responsible for receiving and reviewing the annual audit report of the Company’s independent auditors and reports of examinations by bank regulatory agencies, and helps formulate, implement, and review the Company’s and its subsidiaries’ internal audit programs. The Examining Committee assesses the performance and independence of the Company’s independent auditors and recommends their appointment and retention. The Examining Committee has in place pre-approval policies and procedures that involve an assessment of the performance and independence of the Company’s independent auditors, an evaluation of any conflicts of interest that may impair the independence of the independent auditors and pre-approval of an engagement letter that outlines all services to be rendered by the independent auditors.

During the course of its oversight of the Company’s audit process in 2010, the Examining Committee reviewed and discussed the audited consolidated financial statements with management. The Examining Committee, prior to approving the consolidated financial statements for inclusion in the Company’s Form 10-K, also discussed with the independent auditors, Dixon Hughes Goodman LLP, all matters required to be discussed by the auditing standards as adopted by the Public Company Accounting Oversight Board in Rule 3200T. Furthermore, the Examining Committee received from Dixon Hughes Goodman LLP disclosures regarding their independence and discussed such information with Dixon Hughes Goodman LLP.

Based on the review and discussions above, the Examining 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, 2010 for filing with the SEC.

 

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The Examining Committee has considered whether the principal accountant’s provision of other non-audit services to the Company is compatible with maintaining the independence of Dixon Hughes Goodman LLP. The Examining Committee has determined that it is compatible with maintaining the independence of Dixon Hughes Goodman LLP.

This report is submitted by the Examining Committee:

 

  

Joe S. Brooks – Chairman

W. Stephen Aldridge, III (also serves as Bank of Stanly representative)

Ronald T. Burleson

Bill C. Burnside

Charles F. Geschickter, III

Thomas M. Hearne, Jr.

Joseph R. Kluttz, Jr.

Emmett S. Patterson (Anson Bank & Trust Co. representative)

Susan J. Smith (Cabarrus Bank & Trust Company representative)

S. Todd Swaringen

OTHER MATTERS

The Board of Directors knows of no other business that will be brought before the Annual Meeting. Should other matters properly be presented for action at the Annual Meeting, the Proxies, or their substitutes, will be authorized to vote shares represented by appointments of proxy according to their best judgment.

PROPOSALS OF SHAREHOLDERS

Any proposal of a shareholder which is intended to be presented at the Company’s 2012 Annual Meeting must be received by the Company at its main office in Albemarle, North Carolina, no later than December 12, 2011, to be considered timely received for inclusion in the proxy statement and appointment of proxy to be distributed in connection with that meeting. If a proposal for the 2012 annual meeting is not expected to be included in the proxy statement for that meeting, the proposal must be received by the Company by February 23, 2012 for it to be timely received for consideration. The Company will use its discretionary authority for any proposals received thereafter.

SHAREHOLDER COMMUNICATIONS

The Company does not currently have a formal policy regarding shareholder communications with the Board of Directors, however, any shareholder may submit written communications to the Chairman of the Board of Directors, Uwharrie Capital Corp, P.O. Box 338, Albemarle, North Carolina 28002-0338, whereupon such communications will be forwarded to the Board of Directors if addressed to the Board of Directors as a group or to the individual director or directors addressed.

 

33


INTERNET AND ELECTRONIC AVAILABILITY OF PROXY MATERIALS

As required by applicable SEC rules and regulations, the Company has furnished a notice of internet availability of proxy materials to all shareholders as part of this proxy statement and all shareholders will have the ability to access this proxy statement and the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2010 as filed with the SEC, by logging on at www.uwharrie.com/vote.

ADDITIONAL INFORMATION

A COPY OF THE COMPANY’S 2010 ANNUAL REPORT ON FORM 10-K WILL BE PROVIDED WITHOUT CHARGE TO ANY SHAREHOLDER ENTITLED TO VOTE AT THE ANNUAL MEETING UPON THAT SHAREHOLDER’S WRITTEN REQUEST. REQUESTS FOR COPIES SHOULD BE DIRECTED TO TAMARA M. SINGLETARY, EXECUTIVE VICE PRESIDENT – INVESTOR RELATIONS AND CORPORATE SECRETARY, P.O. BOX 338, ALBEMARLE, NORTH CAROLINA 28002-0338.

 

34


Exhibit A

Uwharrie Capital Corp

Examining Committee Charter

Organization

There shall be a committee of the Board of Directors to be known as the Examining Committee. The Examining Committee shall be composed of directors who are independent of the management of the Company and are free of any relationship that, in the opinion of the Board of Directors, would interfere with their exercise of independent judgment as a committee member. The Company shall strive to have all its Examining Committee members meet the requirements for independence set forth in the NASDAQ listing rules. Members of the Examining Committee shall be financially literate or become financially literate within a reasonable period of time after appointment to the Examining Committee and at least one member shall have accounting, related financial management expertise, or other comparable experience or background that results in the individual’s financial sophistication.

Statement of Policy

The Examining Committee shall provide assistance to the corporate directors in fulfilling their responsibility to the shareholders, potential shareholders, and investment community relating to corporate accounting, reporting practices of the Company, and the quality and integrity of the financial reports and other operating controls of the Company. In so doing, it is the responsibility of the Examining Committee to maintain free and open means of communication between the directors, the independent auditors, the internal auditors, the financial management and other employees of the Company.

Responsibilities

In carrying out its responsibilities, the Examining Committee believes its policies and procedures should remain flexible, in order to best react to changing conditions and to ensure to the directors and shareholders that the corporate accounting and reporting practices and other operating controls of the Company are of high quality and are in accordance with all requirements.

In carrying out these responsibilities, the Examining Committee will:

 

   

Select, evaluate, and where appropriate, replace the independent auditors to audit the financial statements of the Company and its subsidiaries. In doing so, obtain the written disclosures and the letter from the independent auditor required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent auditor’s communications with the Examination Committee concerning independence, and discuss with the auditors the auditors’ independence. The independent auditors are to be accountable to the Board of Directors and the Examining Committee, as representatives of the shareholders.

 

   

Review the scope of the audit and the audit procedures utilized.

 

   

Review with the independent auditors, the internal auditor and the Company’s financial and accounting personnel the adequacy and effectiveness of the accounting and financial controls of the Company. Emphasis should be given to the adequacy of such internal controls to expose any payments, transactions, or procedures that might be deemed illegal or otherwise improper.

 

   

Provide sufficient opportunity for the independent auditors to meet with the members of the Examining Committee without members of management present. Among the items to be discussed in these meetings are the independent auditors’ evaluation of the Company’s financial, accounting, and auditing personnel, and the cooperation that the independent auditors received during the course of the audit.

 

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Be available to the independent auditors during the year for consultation purposes.

 

   

Discuss with the independent auditors the matters required to be discussed by Statement on Auditing Standards No. 61, as may be modified or supplemented.

 

   

Review with management and the independent accountants the Company’s financial disclosure documents, including all annual and quarterly financial statements and reports filed with the Securities and Exchange Commission or sent to stockholders. Following the satisfactory completion of each year-end review, recommend to the Board the inclusion of the audited financial statements in the Company’s filing on Form 10-K. The year-end review shall include any significant problems and material disputes between management and the independent accountants and a discussion with the independent accountants out of management’s presence of the quality of the Company’s accounting principles as applied in its financial reporting, the clarity of the Company’s financial disclosures and degree of aggressiveness or conservatism of the Company’s accounting principles and underlying estimates, and a frank and open discussion of other significant decisions made by management in, preparing the financial disclosure. With respect to the independent accountants’ reviews of quarterly reports on Form 10-Q, communication from the independent accountants may be received on behalf of the Examining Committee by the Committee Chair, who will report thereon to the full Examining Committee at its next meeting.

 

   

Review the internal audit function of the Company including the independence and authority of its reporting obligations, the proposed audit plans for the coming year, and the coordination of such plans with the independent auditors.

 

   

Receive reports or summaries of findings from completed internal audits, together with management responses, and monitor progress of the proposed internal audit plan, with explanations for any deviations from the original plan.

 

   

Prepare the reports required by the laws, rules, and regulations of the applicable regulatory authorities to be included in the Company’s annual proxy statement.

 

   

Submit the minutes of all meetings of the Examining Committee to, or discuss the matters discussed at each committee meeting with, the Board of Directors.

 

   

Investigate any matter brought to its attention within the scope of its duties, with the power to retain outside counsel for this purpose if, in its judgment, that is appropriate.

While the Examining Committee has the responsibilities and powers set forth in this Charter, it is not the duty of the Examining Committee to plan or conduct audits or to determine that the Company’s financial statements are complete and accurate and are in accordance with generally accepted accounting principles. This is the responsibility of management and the independent auditor. Nor is it the duty of the Examining Committee to conduct investigations, to resolve disagreements, if any, between management and the independent auditor or to assure compliance with laws and regulations.

 

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Exhibit B

Uwharrie Capital Corp

Human Resources and Compensation Committee Charter

Purpose

The Human Resources & Compensation Committee (the “Committee”) is appointed by the Board of Directors (the “Board”) of Uwharrie Capital Corp (the “Company”) to discharge the Board’s responsibilities relating to compensation of the Company’s directors and executive officers. The Committee has overall responsibility for establishing corporate goals and objectives relevant to determining director and executive officer compensation and for evaluating and approving or recommending for approval to the Board the director and officer compensation plans, policies and programs of the Company. In discharging its responsibility, the Committee shall, on an annual basis: (i) review and report on the performance of the President and Chief Executive Officer (the “CEO”); (ii) review and recommend all elements and amounts of CEO compensation; (iii) review and recommend Board and committee compensation; (iv) approve compensation of other executive officers; and (v) review and recommend any management incentive compensation plans.

Committee Membership

The Committee shall consist of no fewer than three members, each of whom shall be a director of the Company. The composition of the Committee’s membership shall reflect each of the Company’s primary market areas of Stanly County, Anson County and Cabarrus County. Each member of the Committee shall: (i) be “independent” as defined by applicable rules and regulations promulgated under the Securities Exchange Act of 1934; and (ii) shall meet all other applicable legal requirements. The Committee will also consider the absence or presence of material relationships with the Company which might impact independence. Members shall be appointed and removed by the Board. A majority of the members of the Committee shall constitute a quorum.

Operations

The Committee shall meet at least once a year. Additional meetings may occur as the Committee deems advisable. The Committee will cause to be kept adequate minutes of all its proceedings, and will report its actions to the next meeting of the Board. Board members will be furnished with copies of the minutes of each meeting and any action taken by unanimous consent. The Committee is governed by the same rules regarding meetings (including meetings by conference telephone or similar communications equipment), action without meetings, notice, waiver of notice, and quorum and voting requirements as are applicable to the Board.

Authority

The Committee shall have the resources and authority necessary to discharge its duties and responsibilities, including the authority to retain, as it deems appropriate and reasonably necessary, outside counsel or other experts or consultants at the Company’s sole expense. Any communications between the Committee and legal counsel in the course of obtaining legal advice will be considered privileged communications of the Company and the Committee will take all necessary steps to preserve the privileged nature of those communications.

The Committee, and each member of the Committee in his or her capacity as such, shall be entitled to rely, in good faith, on information, opinions, reports or statements, or other information prepared or presented to them by (i) officers and other employees of the Company or its subsidiaries,

 

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whom such member believes to be reliable and competent in the matters presented, and (ii) counsel, public accountants or other persons as to matters which the member believes to be within the professional competence of such person.

Committee Responsibilities

The Committee shall set corporate goals and objectives relevant to director and executive officer compensation. In setting these goals and objectives, the Committee should consider, at a minimum, the Company’s performance and relative stockholder return. The Committee shall annually review and evaluate the corporate goals and objectives and amend such goals in its discretion.

The Committee shall have the responsibility to review the performance of the CEO on an annual basis in light of the corporate goals and objectives. The Committee shall report its findings concerning the performance of the CEO to the Board, and shall make recommendations to the Board based on its findings.

The Committee shall have the responsibility to review all forms of compensation received by the CEO and the amounts thereof. The Committee shall also have the responsibility of recommending to the Board for approval any changes in form or amount of compensation received by the CEO.

The Committee shall have the responsibility of reviewing, and recommending for approval changes, if any, to, the compensation paid to Board members for their service on the Board and any committees thereof.

The Committee shall have the responsibility of approving the form and amount of compensation received by executive officers other than the CEO. The Committee may solicit and accept, reject or modify the recommendation of the CEO with respect to the compensation of other executive officers.

The Committee shall have the responsibility of reviewing any management incentive compensation plan, in effect or contemplated. The Committee shall also have the responsibility of recommending for approval the adoption of or any changes to any management incentive compensation plan. The Committee shall also be responsible for administering any incentive stock option plan adopted by the Company and approved by its shareholders. In reviewing incentive arrangements, the Committee shall consider any risk posed by such arrangements, and whether the incentive plans encourage participants to focus on proper goals and objectives.

The Committee shall make other reports to the Board when the Committee deems it appropriate or upon request of the Board. The Committee shall periodically review and update this Charter, as necessary, to ensure appropriate corporate governance.

 

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Exhibit C

Uwharrie Capital Corp

Nominating Committee Charter

Purpose

The Nominating Committee (the “Committee”) is appointed by the Board of Directors (the “Board”) of Uwharrie Capital Corp (the “Company”): (i) to assist the Board, on an annual basis, by identifying individuals qualified to become Board members, and to recommend to the Board the director nominees for the next meeting of shareholders at which directors are to be elected; (ii) to assist the Board in the event of any vacancy on the Board by identifying individuals qualified to become Board members, and to recommend to the Board qualified individuals to fill any such vacancy; and (iii) to recommend to the Board, on an annual basis, director nominees for each Board committee.

Committee Membership

The Committee shall consist of no fewer than three members, each of whom shall be a director of the Company. Each member of the Committee shall: (i) be “independent” as defined by applicable NASDAQ listing standards; and (ii) shall meet all other applicable legal requirements. The Committee will also consider the absence or presence of material relationships with the Company which might impact independence. Members shall be appointed by the Chairman of the Board, subject to Board approval. Committee members may be removed by the Board. A majority of the members of the Committee shall constitute a quorum.

Operations

The Committee shall meet at least once a year. Additional meetings may occur as the Committee deems advisable. The Committee will cause to be kept adequate minutes of all its proceedings, and will report its actions to the next meeting of the Board. Committee members will be furnished with copies of the minutes of each meeting and any action taken by unanimous consent. The Committee is governed by the same rules regarding meetings (including meetings by conference telephone or similar communications equipment), action without meetings, notice, waiver of notice, and quorum and voting requirements as are applicable to the Board.

Authority

The Committee will have the resources and authority necessary to discharge its duties and responsibilities, including the authority to retain outside counsel or other experts or consultants, as it deems appropriate. Any communications between the Committee and legal counsel in the course of obtaining legal advice will be considered privileged communications of the Company and the Committee will take all necessary steps to preserve the privileged nature of those communications.

The Committee shall have the authority to retain and terminate any search firm to be used to identify director candidates and shall have sole authority to approve the search firm’s fees and other retention terms, at the Company’s expense.

The Committee, and each member of the Committee in his or her capacity as such, shall be entitled to rely, in good faith, on information, opinions, reports or statements, or other information prepared or presented to them by (i) officers and other associates of the Company or its subsidiaries, whom such member believes to be reliable and competent in the matters presented, (ii) counsel, public

 

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accountants or other persons as to matters which the member believes to be within the professional competence of such person.

Committee Responsibilities

The Committee shall have the responsibility to develop and recommend criteria for the selection of new directors to the Board, which criteria shall include, but not be limited to, the criteria set forth in Article IV, Section 4 of the Company’s bylaws. The Committee shall have the power to apply the standards imposed by all applicable federal laws and the underlying purpose and intent thereof in connection with such identification process.

When vacancies occur on the Board or otherwise at the direction of the Board, the Committee shall actively seek individuals whom the Committee determines meet such criteria and standards for recommendation to the Board as nominee(s).

The Committee shall recommend to the Board, on an annual basis, nominees for election as directors for the next annual meeting of shareholders.

The Committee shall make other reports to the Board when the Committee deems it appropriate or upon request of the Board.

 

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UWHARRIE CAPITAL CORP

132 North First Street, Albemarle, North Carolina 28001

Voting Instructions

Read our proxy statement before you vote by proxy. Then, to ensure that your shares are represented at the Annual Meeting, we ask that you appoint the Proxies to vote your shares for you. You can do that in one of the following two ways.

Voting by Proxy Card

 

   

You can mark, sign and return the proxy card (this entire sheet) in the enclosed postage-paid envelope.

Voting by Internet

 

   

You can go to the Internet website www.uwharrie.com/vote. When you are prompted for your “control number,” enter the number printed to the right of your name on the reverse side of this proxy card, and then follow the instructions you will be given. You do not need to sign and return this proxy card when you vote by Internet. When you vote by Internet, you will be appointing the Proxies to vote your shares on the same terms and with the same authority as if you marked, signed and returned this proxy card. The authority you will be giving the Proxies is described in this proxy card and in our proxy statement for the Annual Meeting.

You should note that you may vote by the Internet until 5:00 p.m. on May 9, 2011, which is the day before the

Annual Meeting.

This is a “secured” web page site. Your software and/or Internet provider must be “enabled” to access this site.

Please call your software or Internet provider for further information if needed.

 

 

REVOCABLE PROXY

APPOINTMENT OF PROXY SOLICITED BY THE BOARD OF DIRECTORS

The undersigned hereby appoints Roger L. Dick, Brendan P. Duffey and Christy D. Stoner, (the “Proxies”), or any of them, as attorneys and proxies, with full power of substitution, to vote all outstanding shares of the common stock of Uwharrie Capital Corp (the “Company”) held of record by the undersigned on March 7, 2011, at the Annual Meeting of Shareholders of the Company to be held at the Stanly County Agri-Civic Center at 26032 Newt Road, Albemarle, North Carolina, at 6:30 p.m. on May 10, 2011, and at any adjournments thereof:

 

1.      ELECTION OF DIRECTORS:
         Election of seven (7) Directors, six
         for three (3) year terms and one for a
         two (2) year term or until their
         successors are duly elected and
         qualified.
  ¨   

FOR all nominees listed below.

(except as indicated otherwise below)

  

¨

  

WITHHOLD authority to vote for

all nominees listed below.

 

         Nominees for Three-Year Terms:  

Joe S. Brooks; Ronald T. Burleson; Charles F. (Tad) Geschickter, III; W. Chester Lowder;

Barry S. Moose; and Susan J. Rourke.

Nominee for Two-Year Term: Cynthia L. Mynatt.

Instruction: To withhold authority to vote for one or more nominees, write that nominee’s name on the line provided below.

 

 

 

2. ADVISORY VOTE ON EXECUTIVE COMPENSATION: To vote on a non-binding, advisory resolution to ratify and approve compensation paid or provided to our executive officers and our executive compensation policies and practices.

 

¨ FOR    ¨ AGAINST    ¨ ABSTAIN

 

3. OTHER BUSINESS: The Proxies are authorized to vote the shares represented by this Appointment of Proxy according to their best judgment on such other matters as may be presented for action at the Annual Meeting.

PLEASE DATE AND SIGN THIS APPOINTMENT OF PROXY ON THE REVERSE SIDE AND

RETURN IT IN THE BUSINESS REPLY ENVELOPE PROVIDED.


UWHARRIE CAPITAL CORP

The shareholders of Uwharrie Capital Corp are invited to attend a dinner preceding the business meeting of the 2011 Annual Meeting of Shareholders to be held Tuesday, May 10, 2011, at the Stanly County Agri-Civic Center at 26032 Newt Road, Albemarle, North Carolina. Dinner will begin at 4:30 p.m., and the business meeting will begin at 6:30 p.m.

DINNER RESERVATION:

Please mark the box to the right if you plan to attend the dinner: ¨ I (we) plan to attend the dinner; # attending             

If you are voting via the Internet and plan to attend the dinner, please indicate your attendance when prompted to do so on the voting site.

Please print name(s) of person(s) attending

 

 

 

 

 

 

COMMENTS and QUESTIONS:

 

 

 

 

 

 

Daytime telephone number:                                                          Email address:                                                                     

 

 

I (We) direct that the shares represented by this appointment of proxy be voted as instructed on the reverse side of this proxy. In the absence of any instruction, those shares may be voted “FOR” the election of each nominee named in Proposal 1 and “FOR” Proposal 2. If, before the Annual Meeting, any nominee listed in Proposal 1 becomes unable or unwilling to serve as a director for any reason, the Proxies are authorized to vote for a substitute nominee named by the Board of Directors. This appointment of proxy may be revoked by the undersigned at any time before the voting takes place at the Annual Meeting by filing with the Company’s Corporate Secretary a written instrument revoking it or a duly executed appointment of proxy bearing a later date, or by attending the Annual Meeting and announcing an intention to vote in person.

 

             Dated:                    , 2011
Signature       Signature (if held jointly)   

 

Instruction: Please sign above exactly as your name appears on this appointment of proxy. Joint owners of shares should both sign. Fiduciaries or other persons signing in a representative capacity should indicate the capacity in which they are signing.

IMPORTANT: To ensure your shares are represented and that a quorum is present at the Annual Meeting, please date, sign and return your appointment of proxy in the envelope provided whether or not you plan to attend the meeting.